“Diamond Hill may be just the thing for investors seeking a more conservative high-yield fund.” – Barron’s

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“Diamond Hill Corporate Credit’s benchmark-agnostic, high-conviction approach and its avoidance of the junk-bond market’s lowest-quality names, make it a unique proposition within the high-yield bond Morningstar Category.” – Morningstar

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Diamond Hill Podcast

An interview with portfolio managers John McClain and Bill Zox. The team discusses their careers, hobbies and how they construct portfolios for Diamond Hill’s High Yield and Corporate Credit strategies.

Insights

Fixed Income Overview
Diamond Hill offers four fixed income strategies that span the market’s risk and volatility spectrum. Our talented team of over 30 research analysts and associates support both fixed income and equity strategies.

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Debunking the High Yield Index and High Yield ETFs
Investment Letter
The debate between active and passive management that has reverberated for years in equity markets is now shifting to fixed income. We believe it is critical for investors to understand the intricacies of passive management in high yield fixed income.

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Diamond Hill’s Corporate Bond Investment Philosophy, Process and Structural Advantages
Investment Letter
At Diamond Hill, our mission is to serve our clients by providing lasting value through a shared commitment to our intrinsic value-based investment philosophy, disciplined approach and alignment with our clients’ interests. To this end, we have carefully designed structural advantages that are unique and that should give us an edge over our peers.

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The Universal Benchmark for U.S. Fixed Income
Fixed Income Insights
Our fixed income team examines the evolution of the Bloomberg Barclays U.S. Aggregate Index and how the limitations of the index can lead to unique opportunities for diligent managers.

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Marketplace Lending
Fixed Income Insights
One of the newer categories of securitization is marketplace lending, which originated with a British firm, Zopa, in 2005. Zopa created an online marketplace for consumer loans, combining the financing aspects of the bond market with the innovation of the largest marketplace in the world, eBay.

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Property Assessed Clean Energy
Fixed Income Insights
One of the unique aspects of the Diamond Hill fixed income team is our focus on securitized products including, but not limited to, residential and commercial mortgage-backed securities and asset-backed securities (ABS). One of the newer types of ABS is property assessed clean energy (PACE) bonds.

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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 securities involve greater risk of default or price changes due to potential changes in the issuer’s credit quality.

An investor should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus or summary prospectus contain this and other important information about the Fund(s) and are available at diamond-hill.com or by calling 888.226.5595. Please read the prospectus or summary prospectus carefully before investing. The Diamond Hill Funds are distributed by Foreside Financial Services, LLC (Member FINRA). Diamond Hill Capital Management, Inc., a registered investment adviser, serves as investment adviser to the Diamond Hill Funds and is paid a fee for its services. Diamond Hill Funds are not FDIC insured, may lose value, and have no bank guarantee.

As of 12/31/19 there were 3 gold rated, 7 silver rated, 15 bronze rated, 21 neutral rated, 2 negative rated and 195 not rated funds in the U.S. High Yield Bond category. Morningstar Analyst ratings relative to the Morningstar Category are based on the cheapest share class for each fund as defined by Morningstar. The cheapest share class does not necessarily equate to the highest rated share class.

The Morningstar Analyst Rating™ is not a credit or risk rating. It is a subjective evaluation performed by Morningstar’s manager research group, which consists of various Morningstar, Inc. subsidiaries (“Manager Research Group”). In the United States, that subsidiary is Morningstar Research Services LLC, which is registered with and governed by the U.S. Securities and Exchange Commission. The Manager Research Group evaluates funds based on five key pillars, which are process, performance, people, parent, and price. The Manager Research Group uses this five pillar evaluation to determine how they believe funds are likely to perform relative to a benchmark, or in the case of exchange-traded funds and index mutual funds, a relevant peer group, over the long term on a risk-adjusted basis. They consider quantitative and qualitative factors in their research, and the weight of each pillar may vary. 

The Analyst Rating scale is Gold, Silver, Bronze, Neutral, and Negative. A Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s conviction in a fund’s prospects for outperformance. Analyst Ratings ultimately reflect the Manager Research Group’s overall assessment, are overseen by an Analyst Rating Committee, and are continuously monitored and reevaluated at least every 14 months. For more detailed information about Morningstar’s Analyst Rating, including its methodology, please go to global.morningstar.com/managerdisclosures/.

The Morningstar Analyst Rating (i) should not be used as the sole basis in evaluating a fund, (ii) involves unknown risks and uncertainties which may cause Analyst expectations not to occur or to differ significantly from what they expected, and (iii) should not be considered an offer or solicitation to buy or sell the fund.

The Overall Morningstar Rating™ is based on 616 high yield bond funds as of 12/31/19. The Fund’s Class I rating was 5 stars among 616, 5 stars among 539, and 4 stars among 339 high yield bond funds for the 3-, 5-, and 10-year periods ended 12/31/19, respectively.

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

The Morningstar Broad Fee Level data point compares the fund's net expense ratio to the net expense ratio of all the other funds within its Morningstar Category.

© 2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

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