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Royce Value Trust, Inc. Common Message Board

  • texasbroker2000 texasbroker2000 Aug 6, 2007 4:11 PM Flag

    dead money

    This one's been dead money over the last two years while the overall market is up over 25%...There's been a return but it's been a return of capital not earnings or appreciation.

    This mature fund will have a declining share price as distributions will out strip portfolio appreciation and that's why it's selling at a discount to NAV and that trend will continue until RVT is disolved.

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    • I see on average a 1-1 1/2 point swing every month, between high and low............. I see an over adjustment on ex-div every quarter...Also just do the numbers by buying 5-7% below the previous month's high, sell with the 5-7% upside move. DO NOT RE ENTER UNLESS IT IS 5-7% BELOW YOUR SELLING PRICE...........Nothing sweeter than the sound of the register opening every month for the monthly deposits

      • 2 Replies to optionman72
      • i see what you are referring to. also i see a yearly down turn around sept and oct, recovering in nov.however i dont see rvt living up to its past record and will be selling at the next upturn.

      • optionman...I've looked at the chart and am not seeing that Jan 06 to Jan 07 RVT share price traded at a discount...actually it looks to have touched parity briefly in Dec 06. It looks like RVT traded at a premium only during April 07.

        If you look at the longer chart RVT did trade at a premium from 2002 to 06....

        I agree not to enter when RVT share price is above NAV but I'm concerned that the long term trend will be that RVT trades at a discount.....indicating to me that the Chuck Royce factor (at least as perceived by the market) is gone.

        I've held this one for 20 years but am selling into viewing this as a liquidating trust in the mid term.

    • Hi texasbroker2000: You are taking too short a time frame. Yes, RVT has been disappointing over the last year or so.

      But pull up the 5 year stock price graph. It has moved from $13 to $19; that is steady/slow growth in price of 46% over the 5 year period. Note: 5 years ago was when the tech stocks were in the middle of their major slump. RVT does not invest much in what could be called "tech stocks".

      Also, over that 5 years, it has paid an 8%+ steady quarterly distribution. If you add the stock slow increase with the dividend distributions, you get 12%+. Dead money??? I think not!!!

      • 1 Reply to uofmich521
      • As I said "over the last two years". I've been an investor in RVT since the initial fund was formed in the late 80's so I'm well aware of the long term performance and it's been ok not great or beyond what many mutual funds have produced. What is better is the annual dividend that has been paid but if that's not important to you and those dividends are reinvested the total return is just comparable to many other funds.

        With the departure of Chuck Royce and the recent lack of price appreciation I believe that it may be time to liquidate....the share appreciation is not keeping pace with the distribution eventhough the market is moving up.
        If the market had not been moving up over the past few years I wouldn't have raised the issue but you can't argue that you would have been better off to have sold RVT in 05 and shifted to even an index fund.

        So no I'm not wrong ... over the past two years it's been dead money.

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