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Small-Mid Cap Strategy

We are long-term, intrinsic value investors who treat each share of stock as a true ownership interest. We look to buy what we believe are good businesses we can understand at a discount to our estimate of intrinsic value.

Fact Sheet
Commentary
All strategy documents

Team

Group Item Count: 3
set at runtime

Anthony Philipp

Portfolio Manager

Group Item Count: 3
set at runtime

Chris Welch, CFA

Portfolio Manager

Group Item Count: 3
set at runtime

Kristen Sheffield, CFA, CIPM

Portfolio Specialist

Philosophy and process highlights

Under our intrinsic value philosophy, we:

Treat every investment as a partial ownership interest in that company

Seek to invest at a discount to intrinsic value

Possess a long-term investment temperament

Recognize that market price and intrinsic value tend to converge over a reasonable period of time

Related insights

Small-Mid Cap Composite

Returns

Period and Annualized Total Returns (%) As of 31 Jan 2026
Since Inception
(31 Dec 2005)		 20Y15Y10Y5Y3Y1YYTD3MOJan
Gross of Fees 9.45 9.21 10.28 10.00 9.81 7.55 10.22 3.03 6.56 3.03
Net of Fees 8.45 8.22 9.29 9.04 8.88 6.63 9.28 2.95 6.33 2.95
Russell 2500 Index 9.20 8.86 10.64 11.87 7.79 11.99 13.46 4.98 6.60 4.98
Russell 2500 Value Index 8.38 8.07 9.87 11.06 10.80 11.80 15.47 5.91 9.53 5.91
Swipe or scroll right for more data
Period and Annualized Total Returns (%) As of 31 Dec 2025
Since Inception
(31 Dec 2005)		 20Y15Y10Y5Y3Y1YYTD4Q25
Gross of Fees 9.33 9.33 10.15 8.98 9.19 10.38 9.47 9.47 1.41
Net of Fees 8.33 8.33 9.16 8.02 8.26 9.44 8.54 8.54 1.19
Russell 2500 Index 8.97 8.97 10.38 10.40 7.26 13.75 11.91 11.91 2.22
Russell 2500 Value Index 8.10 8.10 9.56 9.72 10.02 13.21 12.73 12.73 3.15
Swipe or scroll right for more data

Past performance is not a guarantee of future results. Composite results reflect the reinvestment of dividends, capital gains and other earnings when appropriate. Net returns are calculated by reducing the gross returns by the highest stated fee in the composite fee schedule. Only transaction costs are deducted from gross of fees returns. Prior to 30 September 2022, actual fees were used in calculating net returns. All net returns were changed retroactively to reflect the highest fee in the composite fee schedule. To view a GIPS Report for all composites, click here.

Calendar Year Returns (%)

Year Gross of Fees Net of FeesRussell 2500 IndexRussell 2500 Value Index
2025 9.47 8.54 11.91 12.73
2024 9.24 8.31 12.00 10.98
2023 12.45 11.50 17.42 15.98
2022 -12.80 -13.54 -18.37 -13.08
2021 32.34 31.22 18.18 27.78
2020 2.29 1.42 19.99 4.88
2019 28.84 27.75 27.77 23.56
2018 -11.71 -12.51 -10.00 -12.36
2017 9.63 8.59 16.81 10.36
2016 19.30 18.17 17.59 25.20
2015 2.45 1.47 -2.90 -5.49
2014 8.42 7.39 7.07 7.11
2013 43.32 41.96 36.80 33.32
2012 16.93 15.82 17.88 19.21
2011 -2.96 -3.88 -2.51 -3.36

Peer Group Quartile Rankings1 As of 31 Dec 2025

Diamond
Hill
Percentile
76th
65th
68th
40th

Statistics

Portfolio Characteristics vs Benchmark2,3 As of 31 Dec 2025

  Small-Mid Cap Composite Russell 2500 IndexRussell 2500 Value Index
Inception 31 Dec 2005 ——
Status Open ——
Median Forward P/E 18.1x 16.6x14.8x
Median Trailing P/E 24.2x 19.2x16.9x
Median Price/Book 2.4x 1.9x1.5x
Median Price/Sales 1.9x 2.1x1.8x
Median Market Cap. $9.8B $1.5B$1.4B
Weighted Average Market Cap. $12.1B $9.2B$9.3B
Portfolio Turnover (5-Year) 22% ——
Active Share vs Core/Value Benchmark 96%/95% ——
Upside/Downside Capture Ratio vs Core Benchmark 92%/92% ——
Upside/Downside Capture Ratio vs Value Benchmark 94%/91% ——

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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 35%

Market Capitalization

The portfolio typically invests in 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.

Top Ten Equity Holdings4 As of 31 Dec 2025

  Sector % of Net Assets
Huntington Ingalls Industries, Inc. Industrials 4.3
Post Holdings, Inc. Consumer Staples 4.0
Regal Rexnord Corp. Industrials 3.6
CubeSmart Real Estate 3.2
Gates Industrial Corp. PLC Industrials 3.0
Red Rock Resorts, Inc. (Cl A) Cons. Discretionary 2.9
Mid-America Apartment Communities, Inc. Real Estate 2.8
SS&C Technologies Holdings, Inc. Industrials 2.7
Rocket Companies, Inc. (Cl A) Financials 2.6
Webster Financial Corp. Financials 2.4
Total as % of Net Assets 31.5%
Total number of equity holdings 64

Sector Allocation5 (%) As of 31 Dec 2025

Russell 2500 Index
Russell 2500 Value Index

1 Source: eVestment Analytics. Ranking within eVestment US Small-Mid Cap Value Equity universe based on monthly returns gross of fees. Ranking data calculated on 21 Jan 2026 (as of 31 Dec 2025) and is subject to change as additional firms within the category submit data. Diamond Hill pays an annual fee to eVestment to access their platform and to use their data, including peer group rankings, in marketing materials. Diamond Hill does not pay for the ranking.

2 Source: FactSet. 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 from 1 Jan 2006 – 31 Dec 2025.

3 Data, where applicable, is shown gross of fees and should be viewed in conjunction with the net of fee returns included in this document.

4 Securities referenced may not be representative of all portfolio holdings. The reader should not assume that an investment in the securities was or will be profitable.

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

Index data source: London Stock Exchange Group PLC. See diamond-hill.com/disclosures for index definitions, data sources and other definitions.

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