Diamond Hill Demonstrates Fixed Income Edge
Columbus, OH – March 18, 2019 – Diamond Hill announced today that the firm’s High Yield Fund (DHHIX) received a 5-star Morningstar Rating1 and that its Corporate Credit Fund (DSIYX) has been awarded the 2019 Lipper Fund Award for best high yield fund for the 5-year period ending November 30, 2018, recognizing the Fund’s consistently strong risk-adjusted returns against its peers.
“We are proud that our High Yield Fund received a 5-star rating as its first rating from Morningstar and that our Corporate Credit Fund has been awarded this honor from Lipper,” said CEO Chris Bingaman. “Bill Zox and John McClain have delivered outstanding investment results to clients and these accolades are a testament to their disciplined approach to produce the best results over complete market cycles.”
Zox and McClain manage both funds using the same bottom-up, intrinsic value approach, evaluating the underlying business fundamentals and credit risk of bonds. “We are focused on continually improving our unique and sustainable structural advantages in the high yield market,” said Bill Zox, CIO – Fixed Income and Portfolio Manager. “And the market is becoming less efficient over time. We attribute the strong performance of both funds to the combination of these factors.”
Both funds are managed independent of benchmark weights and are concentrated in the team’s best ideas. Portfolio Manager John McClain notes, “Fundamental, intrinsic-value credit analysis is the core of Diamond Hill fixed income. What you own and what you don’t own are equally important at this point in the credit cycle. In both funds, credit quality has migrated higher as we balance slowing global economic data with recently improved financial conditions domestically.”
The team is uniquely positioned to benefit from corporate bond market volatility and illiquidity due to their long-term focus and emphasis on security selection. Additionally, strict capacity discipline enables the duo to be nimble in the secondary market and selective in the new issue market.
About Lipper Fund Awards From Refinitiv
The Lipper Fund Awards are a global family of awards honoring funds and fund management firms that have excelled in providing consistently strong risk-adjusted performance relative to their peers.
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.
Risk Disclosure: The Corporate Credit Fund and the High Yield Fund invest in fixed income securities; the value of fixed-income securities varies inversely with interest rates; that is, as interest rates rise, the market value of fixed-income securities will decline. Lower quality debt (i.e.: “High Yield”) securities involve greater risk of default or price changes due to potential changes in the issuer’s credit quality.
1 As of 2/28/19. The Overall Morningstar Rating™ is based on 609 high yield bond funds as of 2/28/19. The Fund’s Class I rating was 5 stars among 609 funds for the 3-year period ended 2/28/19.
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.
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