Royce Special Equity Fund

Manager's tenure: 5 yrs. 9 mos.

Fund started: May 1, 1998

Min. initial investment: $2,000

Load (front-end): 0.00%

12(b)-1 fee: 0.00%

Net assets: $788.29 million

P/E ratio: 14.74

P/B ratio: 1.91

Median market cap: $630.0 mil.

Expense ratio: 1.20%

Turnover: 41.0%

3-year alpha: 1.92%

3-year beta: 0.45%

3-year r-squared: 0.37%

3-year stand. deviation: 13.62%

Returns

2003: 27.64%

2002: 15.32%

2001: 30.75%

12-month (annualized): 33.85%

3-year (annualized): 22.85%

5-year (annualized): 16.02%

Top Five Holdings*

1. Banta Corp.3.2%

2. Bob Evans Farms2.9%

3. Lubrizol Corp.2.9%

4. Borders Group2.6%

5. Lancaster Colony2.6%

Source: Standard & Poor's and Royce Funds as of January 31, 2004

*As of December 31, 2003