Skip to main content

Investment Strategy

  • To estimate intrinsic value, the business must be understandable, and we must be able to reasonably forecast its cash flows. We seek businesses with sustainable competitive advantages, conservative balance sheets, and management with an ownership mentality.
  • Investments are sold when the stock price reaches our estimate of intrinsic value, our estimate of intrinsic value is revised such that there is no longer a discount to intrinsic value, a holding reaches our stated maximum position size, or to raise proceeds for a more attractive opportunity.

Team

Chuck Bath, CFA

Portfolio Manager

Austin Hawley, CFA

Portfolio Manager

Returns

Quarterly

Period and Annualized Total Returns as of 09/30/2020
Since Inception
(06/30/2001)
15-YR10-YR5-YR 3-YR 1-YR YTD 3Q20
Gross of Fees 9.35 8.90 12.33 11.37 7.01 3.31 -4.55 9.88
Net of Fees 8.76 8.35 11.77 10.84 6.51 2.84 -4.88 9.76
Russell 1000 Index 7.75 9.77 14.27 14.23 13.66 19.41 16.06 5.09
Russell 1000 Value Index 6.33 7.11 10.93 8.44 5.25 1.72 -1.00 9.21
Swipe or scroll right for more data

Past performance is not a guarantee of future results. To view a compliant presentation for all composites, click here.

Calendar Year Returns

Year Gross of Fees Net of FeesRussell 1000 IndexRussell 1000 Value Index
2019 32.96 32.35 31.43 26.54
2018 -8.81 -9.25 -4.78 -8.27
2017 21.09 20.50 21.69 13.66
2016 15.27 14.71 12.05 17.34
2015 -0.18 -0.71 0.92 -3.83
2014 11.59 10.98 13.24 13.45
2013 37.79 37.06 33.11 32.53
2012 13.35 12.79 16.42 17.51
2011 3.60 3.11 1.50 0.39
2010 10.61 10.00 16.10 15.51

Peer Group Quartile Rankings1 as of September 30, 2020

  10-YR5-YR3-YR1-YR
Diamond Hill Percentile 9th12th18th18th

1This is presented as supplemental information. Source: eVestment Analytics. Ranking within eVestment U.S. Large Cap Value Equity universe based on monthly returns gross of fees. Ranking data calculated on 10/14/20 (as of 9/30/20) and is subject to change as additional firms within the category submit data.

Statistics

Portfolio Characteristics VS. Benchmark2 as of September 30, 2020

  Large Cap Composite Russell 1000 IndexRussell 1000 Value Index
Inception June 30, 2001
Status Open
Median Forward P/E 22.1x 22.8x20.8x
Median Trailing P/E 23.8x 25.7x23.5x
Weighted Average Dividend Yield 2.2% 1.7%2.7%
Median Price / Book 3.8x 3.2x2.5x
Median Price / Sales 3.0x 2.7x2.1x
Median Market Cap. $70.1B $10.7B$9.1B
Weighted Average Market Cap. $127.9B $401.7B$112.7B
Portfolio Turnover (5-Year) 26%
Active Share vs. Core / Value Benchmark 83% / 76%
Upside/Downside Capture Ratio vs. Core Benchmark 103% / 96%
Upside/Downside Capture Ratio vs. Value Benchmark 107% / 93%

This is presented as supplemental information.

Portfolio

Portfolio Guidelines

  • Typically 40–60 positions
  • Maximum position size is 7%
  • Top 10 holdings are typically greater than 30% of net assets
  • Maximum industry exposure is 20%
  • Maximum sector exposure is 30%

Market Capitalization

The portfolio typically invests in large-capitalization companies with a market capitalization of $5 billion or greater.

Top Ten Equity Holdings as of September 30, 2020

  Sector % of Net Assets
Abbott Laboratories Health Care 4.4
Berkshire Hathaway, Inc. (Cl B) Financials 3.7
American International Group, Inc. Financials 3.4
Procter & Gamble Co. Consumer Staples 3.3
PepsiCo, Inc. Consumer Staples 3.1
Mondelez International, Inc. (Cl A) Consumer Staples 3.0
Walt Disney Co. Communication Services 2.8
Citigroup, Inc. Financials 2.8
KKR & Co., Inc. (Cl A) Financials 2.7
Charles Schwab Corp. Financials 2.7
Total as % of Net Assets 31.9%
Total number of equity holdings 51

This is presented as supplemental information.

Sector Allocation3 as of September 30, 2020

Large Cap Composite Russell 1000 IndexRussell 1000 Value Index
Financials 24.2 9.6 18.1
Cons. Discretionary 15.0 12.3 7.6
Consumer Staples 14.0 6.5 8.4
Health Care 12.4 14.2 14.3
Communication Services 9.2 10.3 9.6
Industrials 8.1 8.6 13.1
Info. Technology 7.2 28.0 9.7
Materials 3.0 2.7 4.7
Real Estate 2.3 3.1 4.6
Energy 1.9 1.9 4.0
Utilities 0.5 2.8 6.0
Cash & Other 2.1 0.0 0.0

This is presented as supplemental information.

Documents

Active Share: Source: FactSet. Active share measures the difference between portfolio holdings and the benchmark. The higher the active share, the greater the difference. The Russell 1000 Index is the core benchmark. The Russell 1000 Value Index is the value benchmark. Upside/Downside Capture: Source: eVestment Analytics based on monthly returns (gross of fees) from 7/1/01 – 9/30/20.

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

Index data source: London Stock Exchange Group PLC. See diamond-hill.com/disclosures for a full copy of the disclaimer.