Portfolio Guidelines

The portfolio 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 October 31, 2018

Popular, Inc. 7.00% 07/01/19 6.8%
Energen Corp. 7.13% 02/15/28 6.2
Cimpress N.V. 7.00% 06/15/26 4.9
Welltec A/S 9.50% 12/01/22 3.8
Alliance Data Systems Corp. 5.38% 08/01/22 3.6
Century Communities, Inc. 5.88% 07/15/25 3.2
Nathan's Famous, Inc. 6.63% 11/01/25 3.0
Pilgrim's Pride Corp. 5.88% 09/30/27 2.6
FirstCash, Inc. 5.38% 06/01/24 2.5
Mueller Industries, Inc. 6.00% 03/01/27 2.5
Total As % Of Net Assets 38.9%

Sector Allocation1
As Of September 30, 2018

High Yield
High Yield Index
Corporate Bonds 94.0% 100.0%
Energy 16.0 13.8
Basic Industry 13.2 12.1
Financial Services 11.0 3.8
Media 9.5 11.5
Retail 7.8 4.9
Banking 7.0 3.3
Consumer Goods 6.4 2.5
Leisure 4.6 4.4
Telecom 3.5 10.1
Transportation 3.2 0.9
Automotive 2.7 2.2
Healthcare 2.6 9.7
Technology & Electronics 2.4 6.1
Capital Goods 1.5 5.4
Real Estate 1.5 0.6
Services 0.8 5.0
Insurance 0.2 0.9
Utility 0.0 2.7
Securitized 3.0 0.0
Cash & Other 3.0 0.0

Portfolio Characteristics
As Of September 30, 2018

Number of Issues 77
Number of Issuers 70
Option-Adjusted Spread 300
Effective Duration 4.09
Spread Duration 3.97
Weighted Average Maturity (bonds only) 6.60
Yield to Maturity (%) 6.09
Current Yield (%) 5.38

Since Inception Risk Statistics
As Of September 30, 2018

Standard Deviation (%) 4.74
Beta (%)2 0.86
Sharpe Ratio 1.42

Credit Quality3
As Of September 30, 2018

Quality Rating % of Portfolio
Investment Grade 3.9%
BB 51.5
B 35.6
CCC & Lower 1.5
Not Rated 7.5

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

2 Relative to the ICE BofAML U.S. High Yield Index.

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

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.

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