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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

Kristen Sheffield, CFA, CIPM

Portfolio Specialist

Returns

Quarterly

Period and Annualized Total Returns as of 3/31/2021
Since Inception
(12/31/2005)
15-YR10-YR5-YR3-YR1-YRYTD1Q21
Gross of Fees 10.23 9.97 11.52 11.23 10.58 82.93 15.12 15.12
Net of Fees 9.44 9.18 10.76 10.44 9.79 81.68 14.93 14.93
Russell 2500 Index 10.13 9.53 12.20 15.93 15.34 89.40 10.93 10.93
Russell 2500 Value Index 8.45 7.87 10.23 12.15 10.88 87.47 16.83 16.83
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 2500 IndexRussell 2500 Value Index
2020 2.29 1.55 19.99 4.88
2019 28.84 27.94 27.77 23.56
2018 -11.71 -12.35 -10.00 -12.36
2017 9.64 8.86 16.81 10.36
2016 19.30 18.47 17.59 25.20
2015 2.44 1.76 -2.90 -5.49
2014 8.42 7.69 7.07 7.11
2013 43.32 42.39 36.80 33.32
2012 16.93 16.19 17.88 19.21
2011 -2.96 -3.62 -2.51 -3.36
2010 24.74 23.72 26.71 24.82
2009 41.71 40.52 34.39 27.68
2008 -29.38 -29.99 -36.79 -31.99
2007 0.52 -0.22 1.38 -7.27
2006 11.23 10.43 16.17 20.18

Peer Group Quartile Rankings1 as of March 31, 2021

  10-YR5-YR3-YR1-YR
Diamond Hill Percentile 36th74th61st62nd

1 This is presented as supplemental information. Source: eVestment Analytics. Ranking within eVestment U.S. Small-Mid Cap Value Equity universe based on monthly returns gross of fees. Ranking data calculated on 4/16/21 (as of 3/31/21) and is subject to change as additional firms within the category submit data.

Statistics

Portfolio Characteristics VS. Benchmark2 as of March 31, 2021

  Small-Mid Cap Composite Russell 2500 IndexRussell 2500 Value Index
Inception December 31, 2005
Status Closed to most new investors
Median Forward P/E 18.7x 19.4x17.4x
Median Trailing P/E 28.2x 24.0x21.4x
Weighted Average Dividend Yield 1.2% 1.1%1.5%
Median Price / Book 2.4x 2.7x2.1x
Median Price / Sales 2.0x 2.9x2.3x
Median Market Cap. $5.5B $1.5B$1.5B
Weighted Average Market Cap. $7.5B $7.1B$6.8B
Portfolio Turnover (5-Year) 25%
Active Share vs. Core / Value Benchmark 96%/94%
Upside/Downside Capture Ratio vs. Core Benchmark 92%/92%
Upside/Downside Capture Ratio vs. Value Benchmark 95%/90%

This is presented as supplemental information.

Portfolio

Portfolio Guidelines

  • Typically 50—70 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 in small- and mid-capitalization companies defined as those companies with a market capitalization between $500 million and $10 billion (or if greater, the maximum market capitalization of companies generally within the capitalization range of the Russell 2500 Index), at the time of purchase.

Vehicles Available

Top Ten Equity Holdings as of March 31, 2021

  Sector % of Net Assets
WESCO International, Inc. Industrials 4.1
Post Holdings, Inc. Consumer Staples 4.1
Sterling Bancorp Financials 3.6
Red Rock Resorts, Inc. (Cl A) Cons. Discretionary 3.3
Sensata Technologies Holding PLC Industrials 3.0
CubeSmart Real Estate 3.0
Colfax Corp. Industrials 2.9
UGI Corp. Utilities 2.5
Kirby Corp. Industrials 2.4
NVR, Inc. Cons. Discretionary 2.4
Total as % of Net Assets 31.3%
Total number of equity holdings 59

This is presented as supplemental information.

Sector Allocation3 as of March 31, 2021

Small-Mid Cap Composite Russell 2500 IndexRussell 2500 Value Index
Financials 26.1 14.5 21.1
Industrials 18.0 16.3 18.3
Cons. Discretionary 16.6 13.9 14.3
Consumer Staples 8.4 3.2 3.4
Real Estate 7.0 7.5 10.6
Info. Technology 4.4 16.3 8.3
Utilities 4.0 2.6 3.7
Materials 3.1 5.5 7.0
Health Care 2.9 14.8 6.2
Energy 2.1 2.5 4.0
Communication Services 1.1 2.9 3.2
Cash & Other 6.3 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 2500 Index is the core benchmark. The Russell 2500 Value Index is the value benchmark. Upside/Downside Capture: Source: eVestment Analytics based on monthly returns (gross of fees) from 1/1/06 – 3/31/21.

Cash & Other may include cash, treasuries, money market funds, and short duration fixed income funds. Includes a 1.0% 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.