UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO
HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act File Number: 811-05379
| Name of Fund: | Royce Focus Trust, Inc. | |
| Fund Address: | 745 Fifth Avenue | |
| New York, NY 10151 |
Name and address of agent for service:
John E. Denneen, Esq.
Royce & Associates, LLC
745 Fifth Avenue
New
York, NY 10151
Registrant’s telephone number, including area code: (212) 508-4500
Date of fiscal year end: 12/31/2012
Date of reporting period: 9/30/2012
Item 1 - Schedule of Investments
| SCHEDULE OF INVESTMENTS | ||||||
| ROYCE FOCUS TRUST | ||||||
| SEPTEMBER 30, 2012 (UNAUDITED) | ||||||
| SHARES | VALUE | |||||
COMMON STOCKS – 99.2% |
||||||
Consumer Discretionary – 6.8% |
||||||
Automobiles - 1.5% |
||||||
Thor Industries |
70,000 | $ | 2,542,400 | |||
Specialty Retail - 5.3% |
||||||
Buckle (The) |
120,000 | 5,451,600 | ||||
GameStop Corporation Cl. A |
150,000 | 3,150,000 | ||||
| 8,601,600 | ||||||
Total |
11,144,000 | |||||
Consumer Staples – 5.1% |
||||||
Food Products - 3.7% |
||||||
Cal-Maine Foods |
50,000 | 2,247,000 | ||||
Industrias Bachoco ADR |
90,000 | 2,160,000 | ||||
Sanderson Farms |
35,000 | 1,552,950 | ||||
| 5,959,950 | ||||||
Personal Products - 1.4% |
||||||
Nu Skin Enterprises Cl. A |
60,000 | 2,329,800 | ||||
Total |
8,289,750 | |||||
Energy – 12.1% |
||||||
Energy Equipment & Services - 9.0% |
||||||
| 120,000 | 2,388,000 | |||||
Helmerich & Payne |
80,000 | 3,808,800 | ||||
Pason Systems |
180,000 | 3,004,577 | ||||
Trican Well Service |
270,000 | 3,512,664 | ||||
Unit Corporation 2 |
50,000 | 2,075,000 | ||||
| 14,789,041 | ||||||
Oil, Gas & Consumable Fuels - 3.1% |
||||||
Exxon Mobil |
55,000 | 5,029,750 | ||||
Total |
19,818,791 | |||||
Financials – 16.3% |
||||||
Capital Markets - 10.4% |
||||||
Affiliated Managers Group 2 |
15,000 | 1,845,000 | ||||
Ashmore Group |
600,000 | 3,299,035 | ||||
Franklin Resources |
40,000 | 5,002,800 | ||||
Partners Group Holding |
10,000 | 2,080,808 | ||||
Sprott |
500,000 | 2,410,742 | ||||
Value Partners Group |
4,900,000 | 2,395,006 | ||||
| 17,033,391 | ||||||
Insurance - 3.8% |
||||||
Berkshire Hathaway Cl. B 2 |
70,000 | 6,174,000 | ||||
Real Estate Management & Development - 2.1% |
||||||
Kennedy-Wilson Holdings |
240,000 | 3,352,800 | ||||
Total |
26,560,191 | |||||
Health Care – 2.2% |
||||||
Biotechnology - 2.2% |
||||||
Myriad Genetics 2 |
130,000 | 3,508,700 | ||||
Total |
3,508,700 | |||||
Industrials – 6.5% |
||||||
Construction & Engineering - 1.3% |
||||||
Jacobs Engineering Group 2 |
50,000 | 2,021,500 | ||||
Electrical Equipment - 0.8% |
||||||
GrafTech International 2 |
150,000 | 1,348,500 | ||||
Machinery - 2.9% |
||||||
Lincoln Electric Holdings |
50,000 | 1,952,500 | ||||
Semperit AG Holding |
70,000 | 2,734,586 | ||||
| 4,687,086 | ||||||
Road & Rail - 1.5% |
||||||
Patriot Transportation Holding 2 |
90,000 | 2,509,200 | ||||
Total |
10,566,286 | |||||
Information Technology – 17.6% |
||||||
Computers & Peripherals - 7.6% |
||||||
Apple |
6,000 | 4,003,560 | ||||
SanDisk Corporation 2 |
70,000 | 3,040,100 | ||||
Western Digital |
140,000 | 5,422,200 | ||||
| 12,465,860 | ||||||
Semiconductors & Semiconductor Equipment - 6.3% |
||||||
Analog Devices |
130,000 | 5,094,700 | ||||
MKS Instruments |
130,000 | 3,313,700 | ||||
| 60,000 | 1,801,200 | |||||
| 10,209,600 | ||||||
Software - 3.7% |
||||||
Microsoft Corporation |
200,000 | 5,956,000 | ||||
Total |
28,631,460 | |||||
Materials – 32.6% |
||||||
Chemicals - 7.6% |
||||||
LSB Industries 2 |
90,000 | 3,948,300 | ||||
Mosaic Company (The) |
85,000 | 4,896,850 | ||||
Westlake Chemical |
50,000 | 3,653,000 | ||||
| 12,498,150 | ||||||
Metals & Mining - 23.5% |
||||||
Alamos Gold |
120,000 | 2,332,621 | ||||
Allied Nevada Gold 2 |
150,000 | 5,859,000 | ||||
Centamin 2 |
1,000,000 | 1,474,926 | ||||
Endeavour Mining 2 |
450,000 | 1,016,174 | ||||
Fresnillo |
60,000 | 1,795,334 | ||||
Globe Specialty Metals |
200,000 | 3,044,000 | ||||
Major Drilling Group International |
250,000 | 2,553,148 | ||||
Newmont Mining |
75,000 | 4,200,750 | ||||
Nucor Corporation |
50,000 | 1,913,000 | ||||
Pan American Silver |
160,000 | 3,432,000 | ||||
Pretium Resources 2 |
200,000 | 2,606,000 | ||||
Reliance Steel & Aluminum |
70,000 | 3,664,500 | ||||
Schnitzer Steel Industries Cl. A |
75,000 | 2,111,250 | ||||
Seabridge Gold 2 |
120,000 | 2,328,000 | ||||
| 38,330,703 | ||||||
Paper & Forest Products - 1.5% |
||||||
Stella-Jones |
40,000 | 2,420,914 | ||||
Total |
53,249,767 | |||||
TOTAL COMMON STOCKS |
||||||
(Cost $137,129,621) |
161,768,945 | |||||
REPURCHASE AGREEMENT – 16.4% |
||||||
| Fixed Income Clearing Corporation, | ||||||
0.12% dated 9/28/12, due 10/1/12, |
||||||
maturity value $26,782,268 (collateralized |
||||||
by obligations of various U.S. Government |
||||||
Agencies, 0.25% due 6/30/14, valued at |
||||||
$27,320,000) |
||||||
(Cost $26,782,000) |
26,782,000 | |||||
COLLATERAL RECEIVED FOR SECURITIES |
||||||
LOANED – 1.9% |
||||||
| Money Market Funds | ||||||
Federated Government Obligations Fund |
||||||
(7 day yield-0.0161%) |
||||||
(Cost $3,060,360) |
3,060,360 | |||||
TOTAL INVESTMENTS – 117.5% |
||||||
(Cost $166,971,981) |
191,611,305 | |||||
LIABILITIES LESS CASH |
||||||
AND OTHER ASSETS – (2.2)% |
(3,470,856 | ) | ||||
PREFERRED STOCK – (15.3)% |
(25,000,000 | ) | ||||
NET ASSETS APPLICABLE TO COMMON |
||||||
STOCKHOLDERS – 100.0% |
$ | 163,140,449 | ||||
| 1 | All or
a portion of these securities were on loan at September 30, 2012. Total market value
of loaned securities at September 30, 2012, was $2,931,020. |
| 2 | Non-income
producing. |
TAX INFORMATION: The cost of total investments for Federal income tax purposes was $166,971,981. At September 30, 2012, net unrealized appreciation for all securities was $24,639,324, consisting of aggregate gross unrealized appreciation of $32,056,010 and aggregate gross unrealized depreciation of $7,416,686.
Valuation of Investments:
Investment
transactions are accounted for on the trade date. Securities are valued as of the
close of trading on the New York Stock Exchange (NYSE) (generally 4:00 p.m. Eastern
time) on the valuation date. Securities that trade on an exchange, and securities
traded on Nasdaq’s Electronic Bulletin Board, are valued at their last reported
sales price or Nasdaq official closing price taken from the primary market in which
each security trades or, if no sale is reported for such day, at their bid price.
Other over-the-counter securities for which market quotations are readily available
are valued at their highest bid price, except in the case of some bonds and other
fixed income securities which may be valued by reference to other securities with
comparable ratings, interest rates and maturities, using established independent
pricing services. The Fund values its non-U.S. dollar denominated securities in
U.S. dollars daily at the prevailing foreign currency exchange rates as quoted by
a major bank. Securities for which market quotations are not readily available are
valued at their fair value in accordance with the provisions of the 1940 Act, under
procedures approved by the Fund’s Board of Directors, and are reported as Level
3 securities. As a general principle, the fair value of a security is the amount
which the Fund might reasonably expect to receive for the security upon its current
sale. However, in light of the judgment involved in fair valuations, there can be
no assurance that a fair value assigned to a particular security will be the amount
which the Fund might be able to receive upon its current sale. In addition, if,
between the time trading ends on a particular security and the close of the customary
trading session on the NYSE, events occur that are significant and may make the
closing price unreliable, the Fund may fair value the security. The Fund uses an
independent pricing service to provide fair value estimates for relevant non-U.S.
equity securities on days when the U.S. market volatility exceeds a certain threshold.
This pricing service uses proprietary correlations it has developed between the
movement of prices of non-U.S. equity securities and indices of U.S.-traded securities,
futures contracts and other indications to estimate the fair value of relevant non-U.S.
securities. When fair value pricing is employed, the prices of securities used by
the Fund may differ from quoted or published prices for the same security. Investments
in money market funds are valued at net asset value per share.
| Various inputs are used in determining the value of the Fund’s investments, as noted above. These inputs are summarized in the three broad levels below: | |||
Level 1 |
– |
quoted
prices in active markets for identical securities. |
|
Level 2 |
– |
other significant
observable inputs (including quoted prices for similar securities, foreign securities
that may be fair valued and repurchase agreements). The table below includes all
Level 2 securities. Level 2 securities with values based on quoted prices for similar
securities would be noted in the Schedule of Investments. |
|
Level 3 |
– |
significant
unobservable inputs (including last trade price before trading was suspended, or
at a discount thereto for lack of marketability or otherwise, market price information
regarding other securities, information received from the company and/or published
documents, including SEC filings and financial statements, or other publicly available
information). |
|
| The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. | |||
| The following is a summary of the inputs used to value the Fund’s investments as of September 30, 2012. For a detailed breakout of common stocks by sector classification, please refer to the Schedule of Investments. | |||
| Level 1 | Level 2 | Level 3 | Total | |||||||||
| Common Stocks | $ | 161,768,945 | $ | – | $ | – | $ | 161,768,945 | ||||
| Cash Equivalents | 3,060,360 | 26,782,000 | – | 29,842,360 | ||||||||
Repurchase Agreements:
The Fund
may enter into repurchase agreements with institutions that the Fund’s investment
adviser has determined are creditworthy. The Fund restricts repurchase agreements
to maturities of no more than seven days. Securities pledged as collateral for repurchase
agreements, which are held until maturity of the repurchase agreements, are marked-to-market
daily and maintained at a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). Repurchase agreements could involve certain
risks in the event of default or insolvency of the counter-party, including possible
delays or restrictions upon the ability of the Fund to dispose of its underlying
securities.
Securities Lending:
The Fund loans securities through a
lending agent to qualified institutional investors for the purpose of realizing
additional income. Collateral for the Fund on all securities loaned is accepted
in cash and cash equivalents and invested temporarily by the custodian. The collateral
maintained is at least 100% of the current market value of the loaned securities.
The market value of the loaned securities is determined at the close of business
of the Fund and any additional required collateral is delivered to the Fund on the
next business day. The Fund retains the risk of any loss on the securities on loan
as well as incurring the potential loss on investments purchased with cash collateral
received for securities lending. The Fund’s securities lending income consists
of the income earned on investing cash collateral, plus any premium payments received
for lending certain securities, less any rebates paid to borrowers and lending agent
fees associated with the loan. The lending agent is not affiliated with Royce.
Other information regarding the Fund is available in the Fund’s most recent Report to Stockholders. This information is available through The Royce Funds (www.roycefunds.com) and on the Securities and Exchange Commission’s website (www.sec.gov).
Item 2 - Controls and Procedures
(a) The Registrant’s principal executive and principal financial officers have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report (as required by Rule 30a-3(b) under the Investment Company Act of 1940 (the “Act”)), that the Registrant’s disclosure controls and procedures (as defined by Rule 30a-3(c) under the Act) are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-Q is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-Q is accumulated and communicated to the Registrant’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) during the Registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting.
Item 3 - Exhibits
Certifications pursuant to Rule 30a-2(a) under the Act are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Royce Focus Trust, Inc.
By:
/s/ Charles M. Royce
Charles M. Royce
President, Royce
Focus Trust, Inc.
Date: November 20, 2012
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By:
/s/ Charles M. Royce
Charles M. Royce
President, Royce Focus Trust, Inc.
Date: November 20, 2012
By:
/s/ John D. Diederich
John D. Diederich
Treasurer, Royce Focus Trust, Inc.
Date: November 20, 2012