The fund underperformed the Russell Midcap Index as tech underweight and stock selection weighed on returns despite strong health care performance.
Diamond Hill Capital’s Mid Cap Strategy returned 7.92% in Q2 2026, trailing the Russell Midcap Index’s 13.83% gain. Health care holdings drove performance, led by managed care, diagnostics, and life sciences sectors.
Equity markets rallied on resilient economic growth and corporate earnings, with technology leading sector gains. The fund’s limited exposure to high-valuation semiconductor and AI-related stocks, along with an underweight in information technology, dragged on relative returns.
Management maintained a focus on high-quality companies, attractive valuations, and capital preservation while expressing caution over elevated valuations and the sustainability of AI-driven spending.