Portfolio Guidelines

The Fund generally invests at least 80% of its net assets in a diversified portfolio of corporate debt securities that are rated below investment grade or are unrated.

Top Ten Issues As Of September 30, 2016

Popular, Inc. | 7.00% 07/01/19 5.0%
Nationstar Capital Corp. | 6.50% 07/01/21 4.9
Cincinnati Bell, Inc. | 7.00% 07/15/24 3.2
Kindred Healthcare, Inc. | 8.75% 01/15/23 3.0
Rent-A-Center, Inc. | 4.75% 05/01/21 3.0
Cimpress N.V. | 7.00% 04/01/22 3.0
Century Communities | 6.88% 05/15/22 2.9
Bankrate, Inc. | 6.13% 08/15/18 2.9
Energen Corp. | 7.13% 02/15/28 2.9
Bioscrip, Inc. | 8.88% 02/15/21 2.8
Total As % Of Net Assets 33.7%

Sector Allocation As Of September 30, 2016

High Yield
Fund
BofA ML
U.S. High Yield
Index
Corporate Bonds 94.1% 100.0%
Healthcare 12.7 9.6
Financial Services 10.0 2.9
Media 8.4 11.0
Transportation 8.2 1.0
Retail 7.4 4.9
Telecom 7.3 10.1
Energy 6.5 14.6
Basic Industry 6.4 12.2
Technology & Electronics 5.0 6.3
Banking 5.0 3.9
Leisure 4.9 4.1
Real Estate 4.4 0.8
Services 4.2 4.4
Insurance 2.2 0.8
Capital Goods 1.5 5.5
Utility 0.0 3.1
Consumer Goods 0.0 2.8
Automotive 0.0 2.0
Securitized 1.6 0.0
Cash & Other1 4.4 0.0

Credit Quality2 As Of September 30, 2016

QUALITY RATING % OF PORTFOLIO
Investment Grade3 10.2%
BB 22.1
B 51.8
CCC 10.1
CC & Below 0.0
Not Rated 1.3

The value of fixed-income securities varies inversely with interest rates; as interest rates rise, the market value of fixed-income securities will decline. Lower quality debt (ie: “High Yield”) securities involve greater risk of default or price changes due to potential changes in the issuer’s credit quality.

Fund holdings, sector allocations, and portfolio statistics subject to change without notice.

The BofA Merrill Lynch U.S. High Yield Index tracks the performance of U.S. dollar denominated below investment grade corporate debt publicly issued in the U.S. domestic market. This index does not incur fees and expenses (which would lower the return) and is not available for direct investment.

1 Cash & Other may include cash, treasuries, money market funds, and short duration fixed income funds.

2 Security quality ratings are derived from underlying portfolio securities as rated by Standard & Poor’s. For securities that are not rated by Standard & Poor’s, but are rated by Moody’s, the Moody’s rating will be used. Diamond Hill does not calculate a rating for securities that are not rated by Standard & Poor’s or Moody’s. The Standard & Poor’s and Moody’s ratings represent an opinion only, not a recommendation to buy or sell.  Unrated securities by both Standard & Poor’s and Moody’s will show in the “NR” category.

3 Investment Grade is a Bond Quality Rating of AAA, AA, A or BBB.

4 Effective duration measures the interest rate risk of the Fund. It is an estimate of the approximate percentage change in the Fund’s net asset value resulting from a one percentage point change in interest rates.

5 Weighted average maturity measures the weighted average of all maturities of the bonds in the portfolio, computed by weighting each maturity date by the market value of the security. Interest rate fluctuations have a greater impact on the price per share of funds holding bonds with longer average lives.

6 Distribution yield is the current dividend rate (annualized) received by a shareholder relative to the current value of the investment.

Risk Statistic Definitions: Standard Deviation measures the volatility of the Fund’s returns. Sharpe Ratio uses the Fund’s standard deviation and average excess return over the risk-free ratio to determine reward per unit of risk.