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Mid Cap Composite

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

Chris Welch, CFA

Portfolio Manager

Chris Bingaman, CFA

Assistant Portfolio Manager

Documents

Composite Fact Sheet

Composite Commentary

Returns

Quarterly

 Period and Annualized Total Returns as of 09/30/2020
Since Inception
(12/31/2013)		 5-YR 3-YR 1-YR YTD 3Q20
Gross of Fees 4.70 4.71 -1.25 -14.24 -19.20 6.52
Net of Fees 4.09 4.12 -1.77 -14.66 -19.49 6.39
Russell Midcap Index 8.43 11.75 10.26 14.43 11.86 12.32
Russell Midcap Value Index 5.59 8.06 4.22 3.37 0.32 12.50
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 Midcap IndexRussell Midcap Value Index
2019 26.73 26.12 30.54 27.06
2018 -9.55 -10.09 -9.06 -12.29
2017 11.30 10.65 18.52 13.34
2016 19.62 18.86 13.80 20.00
2015 1.62 0.95 -2.44 -4.78
2014 8.83 8.13 13.22 14.75

Peer Group Quartile Rankings1 as of September 30, 2020

  Since
Inception		5-YR3-YR1-YR
Diamond Hill Percentile 61st68th66th84th

1This is presented as supplemental information. Source: eVestment Analytics. Ranking within eVestment U.S. Mid 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

  Mid Cap Composite Russell Midcap IndexRussell Midcap Value Index
Inception December 31, 2013 ——
Status Open ——
Median Forward P/E 18.6x 22.5x20.7x
Median Trailing P/E 18.2x 25.0x23.1x
Weighted Average Dividend Yield 1.9% 1.8%2.5%
Median Price / Book 1.7x 2.9x2.3x
Median Price / Sales 1.6x 2.4x1.9x
Median Market Cap. $6.2B $7.7B$7.0B
Weighted Average Market Cap. $11.2B $17.1B$15.3B
Portfolio Turnover (5-Year) 33% ——
Active Share vs. Core / Value Benchmark 95% / 93% ——
Upside/Downside Capture Ratio vs. Core Benchmark 90% / 108% ——
Upside/Downside Capture Ratio vs. Value Benchmark 100% / 104% ——

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 25% of net assets
  • Maximum industry exposure is 20%
  • Maximum sector exposure is 30%

Market Capitalization

The portfolio typically invests at least 80% of its net assets in medium market capitalization companies, defined as those companies with a market capitalization between $1.5 billion and $20 billion (or, if greater, the maximum market capitalization of companies generally within the capitalization range of the Russell Midcap Index) at the time of purchase.

Top Ten Equity Holdings as of September 30, 2020

  Sector % of Net Assets
Post Holdings, Inc. Consumer Staples 4.1
Loews Corp. Financials 3.8
CubeSmart Real Estate 3.5
NVR, Inc. Cons. Discretionary 3.0
BorgWarner, Inc. Cons. Discretionary 2.9
Colfax Corp. Industrials 2.7
First Republic Bank Financials 2.7
Parker-Hannifin Corp. Industrials 2.6
Sensata Technologies Holding PLC Industrials 2.6
Check Point Software Technologies Ltd. Info. Technology 2.6
Total as % of Net Assets 30.3%
Total number of equity holdings 56

This is presented as supplemental information.

Sector Allocation3 as of September 30, 2020

Mid Cap Composite Russell Midcap IndexRussell Midcap Value Index
Financials 24.4 10.7 14.8
Cons. Discretionary 16.9 11.7 12.0
Industrials 15.6 15.5 17.4
Consumer Staples 8.7 4.3 4.4
Real Estate 8.1 7.1 10.4
Info. Technology 7.2 19.3 9.6
Utilities 3.7 5.8 9.0
Materials 3.4 5.3 7.1
Health Care 2.2 13.4 7.9
Communication Services 1.2 4.6 4.1
Energy 0.9 2.3 3.4
Cash & Other 7.5 0.0 0.0

This is presented as supplemental information.

Documents

2 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 Midcap Index is the core benchmark. The Russell Midcap Value Index is the value benchmark. Upside/Downside Capture: Source: eVestment Analytics based on monthly returns (gross of fees) from 1/1/14 – 9/30/20.

3 Cash & Other may include cash, treasuries, money market funds, and short duration fixed income funds. Includes a 0.2% investment in the Diamond Hill Short Duration Securitized Bond Strategy.

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