The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
As of Oct 26, 2026
The Diamond Hill Small Cap Strategy declined 6.90% net of fees in the third quarter of 2026, modestly outperforming the Russell 2000 Index benchmark return of -7.23% by 33 basis points, bringing year-to-date net performance to 19.41% net of fees. Relative outperformance was primarily driven by favorable stock selection within health care and consumer staples, as well as an underweight stance in information technology. These relative gains were partially offset by headwinds across industrials, financials, and energy holdings. The macroeconomic environment was characterized by rising interest rates following the Federal Reserve's first rate increase in three years, alongside upward pressure on oil and fuel prices driven by the ongoing conflict with Iran. These inflationary and monetary pressures weighed heavily on cyclical and rate-sensitive small-cap market segments. However, management views higher rates as partly reflective of robust capital competition for multi-year secular tailwinds, including power-grid investment, domestic reshoring, defense spending, and physical infrastructure development. Portfolio activity remained focused on identifying resilient, tangible-asset-oriented businesses selling below intrinsic value, especially companies with market capitalizations under $1 billion. During the quarter, the strategy initiated new positions in Bank7, Twin Disc, and Mayville Engineering, while taking advantage of acquisition activity to completely exit holdings in Utz Brands and BioLife Solutions after both reached intrinsic value estimates following buyout announcements.
Achieve long-term capital appreciation by deploying capital into resilient, cash-generative small-capitalization companies possessing durable competitive positions and trading at meaningful discounts to intrinsic value.
Management views recent small-cap market volatility as an attractive opportunity to deploy capital into resilient, asset-backed businesses supported by multi-year secular tailwinds in domestic infrastructure and power investment.
Moderate Conviction Bullish
Market Conviction
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Language Signal
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