Portfolio Guidelines

The portfolio generally invests at least 80% of its assets in investment grade and below investment grade (high yield) corporate bonds, and will typically maintain an effective duration of less than five.

Top Ten Issues As Of September 30, 2016

Popular, Inc. | 7.00% 07/01/19 4.7%
Nationstar Capital Corp. | 6.50% 07/01/21 3.2
MGIC Investment Corp. | 5.75% 08/15/23 3.2
Cogent Communications Finance, Inc. | 5.63% 04/15/21 3.2
Cimpress N.V. | 7.00% 04/01/22 3.1
Cincinnati Bell, Inc. | 7.00% 07/15/24 2.9
American Airlines 13-1 B Pass Through | 5.63% 01/15/21 2.7
Tesco PLC | 6.15% 11/15/37 2.5
Rent-A-Center, Inc. | 4.75% 05/01/21 2.4
Synovus Financial Corp. | 7.88% 02/15/19 2.1
Total As % Of Net Assets 30.0%

This is presented as supplemental information.

Sector Allocation1 As Of September 30, 2016

Corporate Credit
Composite
BofA ML U.S. Corporate
& High Yield Index
Corporate Bonds 90.5% 100.0%
Financial Services 12.1 2.2
Healthcare 8.8 9.3
Media 7.9 5.1
Telecom 7.3 5.7
Transportation 7.0 1.9
Banking 7.0 18.9
Basic Industry 6.4 5.7
Leisure 6.4 0.9
Energy 5.6 12.1
Retail 5.5 3.8
Services 4.2 1.7
Technology & Electronics 4.1 7.1
Real Estate 3.8 1.9
Insurance 3.3 3.7
Capital Goods 1.2 4.8
Utility 0.0 6.8
Consumer Goods 0.0 5.7
Automotive 0.0 2.6
Cash & Other2 9.5 0.0

This is presented as supplemental information.

Portfolio Characteristics As Of September 30, 2016

Number of Issues 77
Number of Issuers 61
Option-Adjusted Spread 430
Effective Duration 3.34
Spread Duration 3.12
Weighted Average Maturity (bonds only) 5.86
Yield to Maturity (%) 5.82
Current Yield (%) 6.35

This is presented as supplemental information.

Five-Year Risk Statistics As Of September 30, 2016

Standard Deviation (%) 3.60
Beta (%) 0.66
Sharpe Ratio 2.04

Relative to the BofA ML U.S. Corporate & High Yield Index.

This is presented as supplemental information.

Credit Quality As Of September 30, 2016

Quality Rating % of Bonds Held
AAA 0.0
AA 0.0
A 0.0
BBB 12.0
BB 23.4
B 53.8
CCC & Below 8.5
Not Rated 2.3

This is presented as supplemental information.

Duration Breakdown As Of September 30, 2016

% of Bonds Held
Less than one 15.1%
1-3 20.3
3-5 40.4
5-7 19.0
7-10 2.0
10-20 3.2

This is presented as supplemental information.

This is presented as supplemental information.

1 BofA Merrill Lynch is licensing the BofA Merrill Lynch indices “as is,” makes no warranties regarding same, does not guarantee the suitability, quality, accuracy, timeliness, and/or completeness of the BofA Merrill Lynch indices or any data included in, related to, or derived therefrom, assumes no liability in connection with their use, and does not sponsor, endorse, or recommend Diamond Hill Capital Management, Inc., or any of its products or services.

2 Cash & Other may include cash, treasuries, money market funds, collateralized debt obligations, and short duration fixed income funds.