Fund Times: Frank Talk on Energy from Diamond Hill
Plus, news on new Matthews Japan managers, value managers buy Dell, and more.
We're always glad when we see fund companies communicate with shareholders in a straightforward manner, and Diamond Hill Capital Management's third-quarter shareholder letter is a fine example of good communication. Without sugar-coating performance, the letter begins by admitting that the "performance of our diversified stock funds in the third quarter of 2006 was not good," and it goes on to explain that the funds' sizable energy stake was largely responsible.
While the market rebounded strongly in the third quarter overall, crude oil futures dropped from more than $75 per barrel to near $60, sending many energy-focused equities into negative territory for the quarter. Both Diamond Hill Long-Short (DIAMX) and Diamond Hill Small Cap (DHSCX), which have energy stakes comprising more than 25% of assets, were hurt by these declines. In the third quarter, Long-Short declined a small 0.06% and Small Cap a more significant 4.69%. Despite these short-term troubles, however, management at both funds still believes its long-term positions in companies such as Cimarex Energy (XEC) are well founded.
Lawrence Jones has a position in the following securities mentioned above: OAKLX. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.