Portfolio Guidelines

The Fund generally invests at least 80% of its net assets in a diversified portfolio of corporate debt securities that are rated below investment grade or are unrated.

Top Ten Issues
As Of September 30, 2019

Nationstar Mortgage/Capital Corp.
6.50% 07/01/2021
Energen Corp.
7.125% 02/15/2028
Cimpress NV
7.0% 06/15/2026
Welltec A/S
9.50% 12/01/2022
Credit Acceptance Corp.
6.125% 02/15/2021
Century Communities, Inc.
6.750% 06/01/2027
Mueller Industries, Inc.
6.0% 03/01/2027
Apergy Corp.
6.375% 05/01/2026
Nathan's Famous, Inc.
6.625% 11/01/2025
Jack Ohio Finance, LLC
6.750% 11/15/2021
Total As % Of Net Assets 32.3%

Sector Allocation
As Of September 30, 2019

High Yield Fund ICE BofAML
U.S. High Yield
Corporate Bonds 91.9% 100.0%
Energy 15.3 12.9
Financial Services 14.4 4.2
Basic Industry 12.0 10.6
Media 6.1 10.6
Healthcare 5.7 9.8
Services 5.4 5.9
Capital Goods 5.4 6.5
Insurance 4.8 1.1
Leisure 4.1 5.0
Real Estate 3.7 1.8
Retail 3.7 4.6
Telecom 3.0 10.9
Automotive 2.9 2.0
Technology & Electronics 2.8 5.2
Banking 1.1 2.4
Consumer Goods 1.0 3.2
Transportation 0.4 1.0
Utility 0.0 2.4
Securitized 2.1 0.0
Cash & Other1 6.0 0.0

Credit Quality2 As Of September 30, 2019

Investment Grade3 20.4%
BB 30.3
B 41.2
CCC & Lower 4.8
Not Rated 3.2

The value of fixed-income securities varies inversely with interest rates; as interest rates rise, the market value of fixed-income securities will decline. Lower quality debt (ie: “High Yield”) securities involve greater risk of default or price changes due to potential changes in the issuer’s credit quality.

Risk statistics are relative to the ICE BofAML U.S. High Yield Index.

Fund holdings, sector allocations, and portfolio statistics subject to change without notice.

The ICE BofAML U.S. High Yield Index tracks the performance of U.S. dollar denominated below investment grade corporate debt publicly issued in the U.S. domestic market. This index does not incur fees and expenses (which would lower the return) and is not available for direct investment.

Source ICE Data Indices, LLC (“ICE Data”), is used with permission. ICE Data, its affiliates and their respective third party suppliers disclaim any and all warranties and representations, express and/or implied, including any warranties of merchantability or fitness for a particular purpose or use, including the indices, index data and any data included in, related to, or derived therefrom. Neither ICE Data, its affiliates or their respective third party providers shall not be subject to any damages or liability with respect to the adequacy, accuracy, timeliness or completeness of the indices or the index data or any component thereof, and the indices and index data and all components thereof are provided on an “as is” basis and your use is at your own risk. ICE Data, its affiliates and their respective third party suppliers do not sponsor, endorse, or recommend Diamond Hill Capital Management, Inc., or any of its products or services.

Analytics provided by The Yield Book® Software.

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

2 Security quality ratings are derived from underlying portfolio securities by using the middle rating of Standard & Poor’s, Moody’s, and Fitch. If only two of Standard & Poor’s, Moody’s, and Fitch rates a security the higher of the two is selected. If only one of Standard & Poor’s, Moody’s, and Fitch rates a security the available rating is used. For securities that are not rated by Standard & Poor’s, Moody’s, or Fitch a rating from a secondary Nationally Recognized Statistical Rating Organization (“NRSRO”) may be used. Ratings by any agency represent an opinion only, not a recommendation to buy or sell. Securities that are not rated by any agencies are reflected as Not Rated “NR”.

3 Investment Grade is a Bond Quality Rating of AAA, AA, A or BBB.

4 Effective duration measures the interest rate risk of the Fund. It is an estimate of the approximate percentage change in the Fund’s net asset value resulting from a one percentage point change in interest rates.

5 Weighted average maturity measures the weighted average of all maturities of the bonds in the portfolio, computed by weighting each maturity date by the market value of the security. Interest rate fluctuations have a greater impact on the price per share of funds holding bonds with longer average lives.

6 Yield to Worst is calculated based on call structures of the underlying securities and represents the least favorable yield to the bond holder.

The Overall Morningstar Rating™ is based on 613 high yield bond funds as of 9/30/19. The Fund’s Class I rating was 5 stars among 613 funds for the 3-year period ended 9/30/19.

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.

The Morningstar Broad Fee Level data point compares the fund's net expense ratio to the net expense ratio of all the other funds within its Morningstar Category.

© 2019 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

7 Risk Statistic Definitions: Standard Deviation measures the volatility of the Fund’s returns. Sharpe Ratio uses the Fund’s standard deviation and average excess return over the risk-free rate to determine reward per unit of risk. Statistics for periods less than one year are not annualized. Risk statistics are relative to the ICE BofAML U.S. High Yield Index.

Since inception risk statistics are calculated using monthly returns beginning on the first day of the Fund’s first full month of performance.
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