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
During the third quarter of 2026, the Diamond Hill Small-Mid Cap Strategy declined 4.56% net of fees, outperforming its benchmark, the Russell 2500 Index, which fell 6.37%. Year-to-date, the strategy has delivered a net return of 2.13%. Health care was the primary source of relative outperformance, driven by favorable stock selection and an overweight posture, whereas industrials served as the main relative drag due to adverse stock selection and overweight allocation. Portfolio trading activity moderated following elevated volume in the first half of the year, with new capital deployment tilting toward the lower third of the strategy's market capitalization range. The broader market backdrop deteriorated sharply in September after the Federal Reserve initiated its first interest rate hike in three years, driving Treasury yields higher. Compounding rate pressure, geopolitical conflict with Iran propelled oil and fuel prices upward, heightening concerns for economically sensitive businesses and consumers. While energy and health care generated positive absolute returns, technology and rate-sensitive cyclical sectors retrenched. In response, the strategy continued reducing exposure to consumer-sensitive areas while concentrating holdings in businesses with resilient demand and cash flows. Portfolio activity featured new long positions in offshore drilling contractor Transocean, biopharmaceutical royalty firm AnaptysBio, and industrial supplier United States Lime & Minerals. Conversely, the managers fully eliminated their position in auto parts manufacturer Gates Industrial to fund higher-conviction opportunities. Key positive contributors included Illumina, Revvity, and Waystar, while Regal Rexnord, Knife River, and Red Rock Resorts detracted from performance.
Achieve long-term capital appreciation by investing in high-quality small- and mid-capitalization companies trading at attractive valuations relative to intrinsic value with cash flows less sensitive to economic cycles.
The managers remain somewhat cautious given elevated broad-market valuations and macroeconomic uncertainties, planning to remain patient and allocate capital selectively where risk/reward is favorable.
Moderate Conviction Bullish
Market Conviction
Growth Outlook
Risk Appetite
Capital Deployment
Forward Guidance
Language Signal
Perceived Risk
Opportunity Density
Time Horizon
Top Conviction Themes
Key Catalysts
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