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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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Buyside Digest is not affiliated with, and does not endorse, Diamond Hill Mid Cap. This analysis is provided for institutional research purposes only and is not investment advice.
"Diamond Hill Mid Cap underperformed in Q2 2026 as AI infrastructure spending drove concentrated market leadership. The managers maintained discipline, limiting exposure to highest-valued semiconductors and memory companies while believing current valuations leave little room for disappointment."
Diamond Hill Mid Cap returned 8.03% net in Q2 2026, underperforming the Russell Midcap Index's 13.83% return as AI-related beneficiaries continued to dominate market leadership. Health care holdings were the largest positive contributor, while an underweight to information technology and limited exposure to highest-valued semiconductor and memory companies remained primary headwinds. The managers maintained discipline on valuations, believing current prices for several AI-related businesses imply an extended period of elevated demand with little room for disappointment. Where AI meaningfully changes competitive dynamics, positions were exited including Wix.com and SS&C Technologies. Conversely, where concerns became overly pessimistic, the managers selectively added to holdings. New positions were initiated in managed care providers Humana and Centene, data and analytics providers Equifax and Verisk Analytics, and water treatment provider Veralto. The portfolio continues to emphasize higher-quality businesses positioned to protect capital during market stress while compounding value over the long term. Despite remaining somewhat cautious given elevated valuations and concentrated leadership, the managers believe the portfolio is well positioned to navigate a more challenging environment.
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