Bill Zox and John McClain are co-portfolio managers on our Corporate Credit and High Yield strategies. Bill Zox started his career as a lawyer, graduated from Williams College, received a degree in taxation from the University of Florida, and received his law degree from The Ohio State University. Bill has been an employee since 2001 and is the Chief Investment Officer for Fixed Income. John McClain started in the industry in 2007 focusing on distressed debt and corporate workouts, and has been with Diamond Hill since 2014. He graduated from the University of Kentucky and received his MBA from Carnegie Mellon.


The views expressed are those of Diamond Hill as of May 2018 and are subject to change. These opinions are not intended to be a forecast of future events, a guarantee of results, or investment advice.

Property Assessed Clean Energy
Fixed Income Perspectives: An Educational Series | April 2018
By Douglas Gimple
  • Property assessed clean energy (PACE) programs are a way for property owners to finance energy-efficient renovations.
  • Residential and commercial PACE programs have grown substantially over the past several years, though the securitization of these loans is still in the early stages.
  • Looking beyond the standard lineup of asset-backed securities allows Diamond Hill to add value for our clients.
Marketplace Lending
Fixed Income Perspectives: An Educational Series | February 2018
By Douglas Gimple
  • The asset-backed securities market has expanded since 2008, with new types of securitization including marketplace lending.
  • The marketplace lending industry offers a yield advantage for investors who can exploit inefficiencies in this new and growing market.
  • Looking beyond the standard lineup of asset-backed securities allows us to add value for our clients.
Debunking the High Yield Index and High Yield ETFs
Investment Letters | February 1, 2017
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....
Variable Equity Management Fees and Alignment of Interests
Investment Letters | January 18, 2017
The Diamond Hill Mission Statement calls on us to serve our clients by providing investment strategies that deliver lasting value through a shared commitment to our intrinsic value-based investment philosophy, long-term perspective, disciplined approach, and alignment with our clients’ interests....
Mechanics and Benefits of Securitization
Fixed Income Perspectives: An Educational Series | November 2016
  • Securitization is not a new concept. In its most basic form, securitization dates back to the late 18th century. The first modern residential mortgage-backed security was issued by the Government National Mortgage Association in 1970, fueling a dramatic expansion in the housing market.
  • A securitized deal begins with an agreement between a lender and a borrower as to the amount borrowed, interest rate paid, collateral to secure the loan, and loan maturity. The borrower’s obligation is then sold or pledged to a trust along with a variety of other similar loans, creating the securitized product.
  • Securitized issues are split into tranches, which are categorized into varying degrees of subordination. Each tranche is separate and distinct from the other tranches, and each has a different level of credit protection or risk exposure.
  • The primary benefit of securitization is to reduce funding costs. Through securitization, a company that is rated BB but maintains assets that are very high in quality (AAA or AA) can borrow at significantly lower rates, using the high quality assets as collateral, as opposed to issuing unsecured debt.
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...
We described our approach to setting investment management fees and how we link those fees to our internal return goals in our 2011 white paper, “Active Management Fees and Alignment of Interests”, available on our website ( Specifically, we noted...
Valuing U.S. Equities: A Historical Perspective
Investment Letters | September 26, 2014
Executive Summary Using history as a guide, we considered the appropriate price-to-earnings (P/E) ratio that will provide investors a sufficient return on investment, relative to current interest rates, and reward them for equity market risks. We examined periods of extreme...
The Rationale For An Absolute Return Goal
Investment Letters | January 23, 2013
At Diamond Hill, all of our portfolio managers have a five-year absolute return objective for their strategies. Those absolute return goals are one of three quantitative inputs in our portfolio manager incentive compensation calculations, along with five-year return relative to...
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