Health care stocks led mid-cap gains as diagnostics and life sciences outperformed, offsetting tech underweight headwinds in the quarter.
Illumina (ILMN) rose in Q2 2026 as strong clinical momentum bolstered health care holdings, the top-performing sector in Diamond Hill Capital’s Mid Cap Strategy. The fund returned 7.92%, trailing the Russell Midcap Index’s 13.83% gain, as an underweight in information technology and stock selection weighed on performance.
Technology led broader market gains, driven by AI-related stocks, while energy lagged amid declining oil prices. The strategy avoided high-valuation semiconductor and memory firms, citing concerns over sustained AI spending. Health care, including diagnostics and life sciences, contributed the most to returns.
Management maintained a focus on high-quality companies with attractive valuations and durable growth, while remaining cautious on concentrated market leadership and AI investment sustainability.