Tony Thomas: Bronze-rated Royce Opportunity is an intriguing small-cap value option. But let's be clear: It's best for patient, risk-tolerant investors. The fund targets deeply undervalued businesses and turnaround stories, so it can bounce around wildly. For example, its annual returns have been top- or bottom-quartile in its category for 12 straight years.
So why does such a volatile fund earn a Bronze rating? For one thing, lead manager Bill Hench can keep things steady at the helm. He recently took over for longtime manager Buzz Zaino after working at Zaino's side since 2004. Hench has since added two assistant managers who are familiar with the strategy.
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Tony Thomas does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.