Royce & Associates Q4 2025 13F Holdings and Activity Report

I. Institutional Overview

As of December 31, 2025, the reported portfolio value stands at approximately $9.86 billion . This scale positions Royce & Associates as a significant institutional force in the small-cap space. Unlike many "mega-funds" that are forced into large-cap stocks due to liquidity constraints, Royce has maintained a disciplined focus on the smaller end of the market capitalization spectrum. The institution's psychological portrait is one of meticulous diversification and risk mitigation . With 760 individual holdings , the portfolio is exceptionally broad. This "wide-net" approach suggests a strategy that seeks to capture the "small-cap premium" while insulating the total fund from the idiosyncratic risks inherent in any single small company. In the world of institutional finance, a portfolio with over 700 stocks usually signals a "quant-mental" approach—combining fundamental stock picking with a statistical desire for broad market exposure.

This section shows only part of the complete report. View the app for the full analysis, position-level detail, and quarter-over-quarter tracking.

II. Sector Allocation Analysis

The Industrials sector, at 25.89% , is the undisputed heavyweight of the portfolio. In the small-cap world, Industrials often represent the "backbone" of American infrastructure, manufacturing, and logistics. A quarter-weight allocation here suggests that Royce believes in the continued "reshoring" of American manufacturing and the long-term necessity of infrastructure upgrades. These are not speculative bets; they are investments in companies that make the "nuts and bolts" of the global economy.

From this allocation, we can infer that Royce & Associates is positioned for an "Industrial Renaissance." By overweighting Industrials and Materials (combined ~33%), the firm is betting on a tangible economy. The move away from high-duration assets (like speculative tech) toward "Quality Value" in Tech and Financials suggests a judgment that inflation may be persistent, and "real" businesses with pricing power will be the winners. The institution is not hiding in defensive sectors; it is leaning into the economic cycle, but doing so through the lens of valuation and balance sheet strength.

This section shows only part of the complete report. View the app for the full analysis, position-level detail, and quarter-over-quarter tracking.

III. Top 10 Holdings Deep Dive

Arcosa remains the #1 holding, a position it has occupied with high conviction for 7 years. Arcosa is a provider of infrastructure-related products and solutions with leading positions in construction, engineered structures, and transportation markets.

The Top 10 holdings reflect a "Barbell Strategy" within the small-cap space. On one side, you have high-growth industrial innovators (ACA, ESAB, JBTM); on the other, you have steady, cash-generative financial and service companies (AGO, SEIC). The average holding period for these names is exceptionally long (many >10 years), proving that Royce is a "business owner" rather than a "stock trader." The portfolio is built to capture the compounding power of high-quality small businesses over decades.

This section shows only part of the complete report. View the app for the full analysis, position-level detail, and quarter-over-quarter tracking.

IV. Major Buys/Additions

The total estimated addition scale across these top names is roughly $115M - $130M . Much of this capital appears to be recycled from the $33M+ recouped from the MKSI reduction and the complete exits of long-term holdings like TRN and NEU (discussed in Section V). This indicates a "Strategy Rotation" from "Mature Industrials" into "High-Growth Specialized Industrials" and "Consumer Turnarounds." Royce is moving capital from companies that have already realized their value into those with significant "internal" catalysts for growth.

By adding aggressively to names like EXPO and IPAR , Royce is positioning for a "K-shaped" recovery where high-end consumers and specialized B2B services thrive regardless of the macro backdrop. The addition to AAP and VVV provides a "counter-cyclical" hedge—if the economy slows, people fix their old cars instead of buying new ones. This is a sophisticated, multi-layered offensive strategy.

This section shows only part of the complete report. View the app for the full analysis, position-level detail, and quarter-over-quarter tracking.

V. Major Sells and Exits

The exits of NEU (NewMarket) and BZH (Beazer Homes) —both held for 9-10+ years—show a firm that is not afraid to say "goodbye" to old friends when the valuation reaches fair value. NEU shows a gain of 133% , and BZH a gain of 38% . These are "Mission Accomplished" exits. Royce is harvesting long-term gains to fund the new "offensive" positions discussed in Section IV.

The "Sell A, Buy B" logic is crystal clear this quarter: This rotation moves the portfolio away from "market-beta" and toward "idiosyncratic-alpha"—stocks that will move based on their own internal improvements rather than just the direction of the S&P 500.

This section shows only part of the complete report. View the app for the full analysis, position-level detail, and quarter-over-quarter tracking.

VI. Investment Insights and Risk Warnings

The logic chain is as follows: 1. Harvesting the Past : Sell mature semiconductor equipment (MKSI) and legacy rail (TRN) where the valuation reflects most of the future growth. 2. Recycling into Moats : Buy specialized chemical leaders (KWR) and engineering consultants (EXPO) that have high "switching costs" and pricing power. 3. Contrarian Turnarounds : Opportunistically build positions in "broken" but fundamentally sound consumer names (AAP) where operational improvements can lead to massive re-ratings.

Reference Value for Investors : For retail investors, Royce’s move into IPAR and EXPO suggests that "Quality" is becoming more important than "Value" alone. In a late-cycle economy, companies with no debt and specialized niches are the safest harbors. However, his move into AAP is a reminder that "Value" requires patience and a stomach for volatility—not all turnarounds succeed.

This section shows only part of the complete report. View the app for the full analysis, position-level detail, and quarter-over-quarter tracking.

Sources and limitations

This report uses public U.S. Securities and Exchange Commission Form 13F disclosures and structured data maintained by 13F Hub. A 13F filing is a quarter-end snapshot of reportable long positions, is normally published with a delay, and does not disclose every short position, cash balance, bond, derivative, or non-U.S. asset.

Narrative content is prepared from the same-period SEC disclosure and 13F Hub structured data, then checked before publication. This material is for research and education, not personalized investment advice.