Royce Quant Small‑Cap Quality Value ETF

Royce Quant Small-Cap Quality Value ETF (SQLV) is an actively managed fund that uses Royce Investment Partners' rules-based scoring model to pick cheap, profitable small US companies. It weights its 321 holdings (as of June 30, 2026) by business measures such as revenue, book value and free cash flow rather than company size. Its 0.60% fee tops the 0.43% average of similar funds, and it is the smallest of them by assets.

• Over the year to Oct 27, 2026, SQLV returned +26.7%, 5th of 9 among similar funds.
• Its 5-year annualized return was +8.1%.
• In the 2020 COVID crash it fell 42.8% and regained its old high 8.2 months after the low.
• Its worst full calendar year was 2022 (-12.9%); its best was 2021 (+37.2%).
• The deepest fall in its price history was 48.3% (Aug 21, 2018 to Mar 18, 2020), recovered by Dec 23, 2020.

As of Jun 30, 2026, the fund held 321 securities; the ten largest made up 7.07% of assets.

• Over the three months to Jun 30, 2026, investors added a net $0.00 (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +8.94%, +2.12%, +6.50%.

Instead of tracking an index, SQLV relies on subadviser Royce Investment Partners' quantitative process: computer models applying set rules. It starts with US-headquartered companies on US exchanges, minus real estate investment trusts, stocks priced at $1 or less and thinly traded shares. “Small” means no bigger than the largest company in the Russell 2000, a small-company index ($9.586 billion as of May 31, 2026).

At least 80% of net assets go to what Royce calls “quality value” companies, which beat the Russell 2000 median on at least one measure of cheapness (free cash flow or earnings relative to share price) or profitability (return on invested capital or assets). Royce ranks stocks within each sector and holds the top scorers. Thirty-day price momentum sets timing: Royce may wait to add a stock that has surged, but exits a surging stock slated for removal quickly.

Weights reflect book value (assets minus liabilities), revenue, free cash flow and dividends, not market value, to limit exposure to overpriced stocks. Royce generally caps each stock at 3% and each sector at 25% when added. As of June 30, 2026, the 10 largest of 321 holdings made up 7.07% of assets. Turnover, the share of holdings replaced in a year, was 57%; trading costs come on top of the expense ratio.

• SQLV charges 0.6% a year, versus an average of 0.43% for the similar funds below (7th of 9, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $61 in the first year and $750 over 10 years (assuming a 5% annual return).

It offers a focused tilt toward small, cheap, profitable US companies but has fallen as much as 48.3%, so it fits better as a smaller add-on than a foundation.

SQLV could add a tilt toward cheap, profitable small US companies beside a broad core fund. Launched in 2017, it has no 2008 record. In the 2020 COVID crash it fell 42.8% in under a month and then needed about eight months to regain its high. In 2022 it dropped 22.4% and took about 15 months from its low to recover. Its worst calendar year was 2022, a 12.85% loss. Its deepest drop, 48.3% from August 2018 to March 2020, wasn't made up until December 2020. Anyone cashing out shares for spending in stretches like these would lock in losses.

Income is modest: the yield over the prior 12 months was 0.99% as of October 27, 2026, paid quarterly. The 0.60% expense ratio is above the 0.43% average of similar funds. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.