UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANYInvestment Company Act file number: 811-05379
Name of Fund : Royce Focus Trust, Inc. Fund Address : 745 Fifth Avenue New York, NY 10151Name and address of agent for service:
John E. Denneen, Esq.
Royce & Associates, LLC
745 Fifth Avenue
New York, NY 10151Registrant’s telephone number, including area code: (212) 508-4500
Date of fiscal year end: 12/31/2009
Date of reporting period: 3/31/2009
Item 1 - Schedule of Investments
SCHEDULE OF INVESTMENTS
SHARES VALUE
ROYCE FOCUS TRUST
MARCH 31, 2009 (UNAUDITED)COMMON STOCKS – 95.7%
Consumer Products – 9.8%
Apparel, Shoes and Accessories - 3.2%
Fossil a
100,000 $ 1,570,000Timberland Company (The) Cl. A a
100,000 1,194,000
2,764,000
Food/Beverage/Tobacco - 2.9%
Industrias Bachoco ADR
100,000 1,124,000Sanderson Farms
35,000 1,314,250
2,438,250
Health, Beauty and Nutrition - 1.5%
Nu Skin Enterprises Cl. A
120,000 1,258,800
Sports and Recreation - 2.2%
Thor Industries
120,000 1,874,400
Total
8,335,450
Consumer Services – 1.4%
Retail Stores - 1.4%
Men’s Wearhouse (The)
80,000 1,211,200
Total
1,211,200
Diversified Investment Companies – 1.6%
Exchange Traded Funds - 1.6%
UltraShort 20+ Year Treasury ProShares a
30,000 1,309,200
Total
1,309,200
Financial Intermediaries – 4.3%
Banking - 1.0%
BB Holdings a
400,000 812,297
Securities Brokers - 3.1%
Knight Capital Group Cl. A a
180,000 2,653,200
Other Financial Intermediaries - 0.2%
KKR Financial Holdings a
200,000 178,000
Total
3,643,497
Financial Services – 5.8%
Investment Management - 5.8%
Endeavour Financial b
600,000 713,832Franklin Resources
25,000 1,346,750Sprott
500,000 1,804,410U.S. Global Investors Cl. A
226,000 1,100,620
Total
4,965,612
Health – 3.3%
Drugs and Biotech - 2.9%
Endo Pharmaceuticals Holdings a
100,000 1,768,000Lexicon Pharmaceuticals a
500,000 545,000ULURU a
1,000,009 180,002
2,493,002
Medical Products and Devices - 0.4%
Caliper Life Sciences a
352,300 348,777
Total
2,841,779
Industrial Products – 24.5%
Building Systems and Components - 1.7%
Simpson Manufacturing
80,000 1,441,600
Industrial Components - 1.4%
GrafTech International a
200,000 1,232,000
Machinery - 2.6%
Lincoln Electric Holdings
50,000 1,584,500Woodward Governor
60,000 670,800
2,255,300
Metal Fabrication and Distribution - 11.5%
Kennametal
100,000 1,621,000Nucor Corporation
25,000 954,250Reliance Steel & Aluminum
100,000 2,633,000Schnitzer Steel Industries Cl. A
50,500 1,585,195Sims Metal Management ADR
250,000 2,980,000
9,773,445
Miscellaneous Manufacturing - 1.9%
Rational
20,000 1,595,095
Pumps, Valves and Bearings - 2.9%
Gardner Denver a
60,000 1,304,400Pfeiffer Vacuum Technology
20,000 1,183,090
2,487,490
Specialty Chemicals and Materials - 2.5%
Mosaic Company (The)
50,000 2,099,000
Total
20,883,930
Industrial Services – 5.6%
Commercial Services - 2.2%
CRA International a
40,000 755,200Korn/Ferry International a
120,000 1,087,200
1,842,400
Food, Tobacco and Agriculture - 2.3%
CF Industries Holdings
15,000 1,066,950Intrepid Potash a
50,000 922,500
1,989,450
Transportation and Logistics - 1.1%
Arkansas Best
50,000 951,000
Total
4,782,850
Natural Resources – 28.7%
Energy Services - 10.8%
Ensign Energy Services
250,000 2,165,292Major Drilling Group International
120,000 1,149,746Pason Systems
180,000 1,359,137Tesco Corporation a
160,000 1,251,200Trican Well Service
240,000 1,225,888Unit Corporation a
100,300 2,098,276
9,249,539
Oil and Gas - 1.2%
Exxon Mobil
15,000 1,021,500
Precious Metals and Mining - 15.6%
Alamos Gold a
250,000 1,798,461Allied Nevada Gold a
200,000 1,170,000Fresnillo
200,000 1,311,243Gammon Gold a
250,000 1,617,500Ivanhoe Mines a
300,000 1,845,000Pan American Silver a
180,000 3,135,600Silver Standard Resources a
150,000 2,418,000
13,295,804
Real Estate - 1.1%
PICO Holdings a
30,000 902,100
Total
24,468,943
Technology – 9.0%
Aerospace and Defense - 1.7%
Ceradyne a
80,000 1,450,400
Components and Systems - 3.6%
Microsoft Corporation
70,000 1,285,900MKS Instruments a
120,000 1,760,400
3,046,300
Semiconductors and Equipment - 1.4%
Sigma Designs a
100,325 1,248,043
Telecommunications - 2.3%
ADTRAN
120,000 1,945,200
Total
7,689,943
Miscellaneous c – 1.7%
Total
1,435,332
TOTAL COMMON STOCKS
(Cost $115,234,383)
81,567,736
PREFERRED STOCK – 6.9%
Kennedy-Wilson Conv. d,e
(Cost $9,000,000)
9,000 5,892,849
REPURCHASE AGREEMENT – 25.9%
State Street Bank & Trust Company,0.13% dated 3/31/09, due 4/1/09,
maturity value $22,075,080 (collateralized
by obligations of various U.S. Government
Agencies, 5.25% due 6/12/09, valued at
$22,630,578)
(Cost $22,075,000)
22,075,000
COLLATERAL RECEIVED FOR SECURITIES LOANED – 0.2%
Money Market FundsFederated Government Obligations Fund
(7 day yield-0.371%)
(Cost $113,476)
113,476
TOTAL INVESTMENTS – 128.7%
(Cost $146,422,859)
109,649,061CASH AND OTHER ASSETS LESS LIABILITIES – 0.6%
555,810PREFERRED STOCK – (29.3)%
(25,000,000 )
NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS – 100.0%
$ 85,204,871
a Non-income producing. bAll or a portion of these securities were on loan at March 31, 2009. Total market value of loaned securities at March 31, 2009 was $108,238.
c Includes securities first acquired in 2009 and less than 1% of net assets applicable to Common Stockholders. dA security for which market quotations are not readily available represents 6.9% of net assets. This security has been valued at its fair value under procedures established by the Fund’s Board of Directors.
eThis security, and the common stock into which the security is convertible, are not and will not be registered under the Securities Act of 1933 and related rules (“restricted security”). Accordingly, such securities may not be offered, sold, transferred or delivered, directly or indirectly, unless (i) such shares are registered under the Securities Act and any other applicable state securities laws, or (ii) an exemption from registration under the Securities Act and any other applicable state securities laws is available.
Number Acquisition Fair Value at Percent of Net Distributions Security of Shares Date Cost 3/31/09 Assets Received
Kennedy-Wilson Conv. 9,000 5/08 $9,000,000 $5,892,849 6.9% $157,500
TAX INFORMATION: The cost of total investments for Federal income tax purposes was $146,422,859. At March 31, 2009, net unrealized depreciation for all securities was $(36,773,798), consisting of aggregate gross unrealized appreciation of $5,737,082 and aggregate gross unrealized depreciation of $42,510,880. The primary difference between book and tax basis cost is the timing of the recognition of losses on securities sold.
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 under procedures established by the Fund’s Board of Directors. 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 securitiesLevel 2 – other significant observable inputs (including quoted prices for similar securities, foreign securities that may be fair valued and repurchase agreements)
Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) 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 March 31, 2009:
Level 1 Level 2 Level 3 Total
$65,735,412 $38,020,800 $5,892,849 $109,649,061
Level 3 Reconciliation:
Change in unrealized appreciation Balance as of 12/31/08 (depreciation) Purchases Balance as of 3/31/09
$7,285,707 $(1,392,858) $0 $5,892,849
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 to qualified institutional investors for the purpose of realizing additional income. Collateral on all securities loaned for the Fund 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.
Other information regarding the Fund is available in the Fund’s most recent Prospectus and 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: May 26, 2009Pursuant 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: May 26, 2009By:
/s/ John D. Diederich
John D. Diederich
Treasurer, Royce Focus Trust, Inc.
Date: May 26, 2009