Skip to Content

Diamond Hill Mid Cap Y DHPYX

Medalist Rating as of | See Diamond Hill Investment Hub
  • NAV / 1-Day Return 15.14  /  1.41 %
  • Total Assets 147.3 Mil
  • Adj. Expense Ratio
  • Expense Ratio 0.650%
  • Distribution Fee Level Low
  • Share Class Type Institutional
  • Category Mid-Cap Value
  • Investment Style Mid Value
  • Min. Initial Investment 500,000
  • Status Open
  • TTM Yield 1.11%
  • Turnover 19%

Morningstar’s Analysis DHPYX

Will DHPYX outperform in future?

Get our overall rating based on a fundamental assessment of the pillars below.

Bank Imbroglio Bruises Some Diamond Hill Funds

null Dan Culloton

Dan Culloton

Analyst Note

The collapse of Silicon Valley Bank SIVB and subsequent plunge of other regional bank stocks have pummeled a couple of Diamond Hill Investments' stock funds. Diamond Hill Mid Cap DHPYX had the family’s biggest stake in SVB at 3.4% of assets as of February 2023. It was the 55-stock portfolio’s third-largest holding, a big bet on a company that the government has now taken over. The stake is now worthless. The fund, which has long had more financials exposure than the Morningstar US Mid Cap Broad Value Index, has owned the stock since 2016. Lead manager Chris Welch has said he and his team were aware of the balance sheet risks that did SVB in, but they thought the lender still had a strong, profitable, niche franchise with little credit risk and access to other liquidity sources to meet withdrawals should it need them. Welch said he underestimated the risks of uninsured depositors fleeing faster than the bank could raise capital from its alternative sources. Diamond Hill Mid Cap also has been a longtime owner of First Republic Bank FRC, another stock that has been volatile. Welch and Diamond Hill Large Cap DHLRX manager Austin Hawley have noted that First Republic (a 2.3% position in Mid Cap and 1.2% stake in Large Cap in February) faced similar risks as SVB in that it had a large percentage of uninsured deposits and unrealized losses in its bond portfolio but also had significant differences. First Republic has strong, long-term relationships with wealthy individuals, and its uninsured deposit levels and unrecognized bond portfolio losses are lower than SVB’s were, they said. On Thursday, March 16, the nation’s biggest banks, including JPMorgan JPM, Citigroup C, and Bank of America BAC, pledged $30 billion in deposits to support the beleaguered bank. “We think (First Republic is) much better positioned to weather the storm that we are in right now than Silicon Valley,” Hawley said in a conference call earlier in the week. Still, it, SVB, and other regional banks stung Diamond Hill Mid Cap and Large Cap, which lost between 5% and 6% for the year through March 15 and ranked in the bottom fourth of their respective categories. Diamond Hill Small-Mid Cap DHMIX, which had 2.7% of assets across the two companies, lost less and ranked in its peer group’s top quartile. Diamond Hill Small Cap DHSIX, which did not own SVB or First Republic, had gained 2.5% for the year through March 15 and was beating 95% of its peers. Diamond Hill says it is looking closely at its bank holdings, including the mix of insured versus uninsured deposits, the quality and stability of banks’ deposit bases, and what types of unrealized losses exist on their books. This financial sector turmoil is unique, however, since rising interest rates rather than deteriorating credit quality are the main culprit, the firm said. It has done some modest buying and selling in the sector but has neither abandoned it, nor aggressively snapped up beaten-down shares. Welch said he will be more circumspect about taking large positions in highly leveraged financials in the future. Note: After Morningstar published this note, Diamond Hill disclosed that, as of March 16, its strategies had sold their First Republic stakes. The firm had not disclosed that information in earlier interviews for compliance reasons.

Published on

Unlock our full analysis with Morningstar Investor

Portfolio Holdings DHPYX

  • Current Portfolio Date
  • Equity Holdings 54
  • Bond Holdings 0
  • Other Holdings 1
  • % Assets in Top 10 Holdings 36.2
Top 10 Holdings
% Portfolio Weight
Market Value USD
Consumer Cyclical
Consumer Cyclical
Consumer Defensive


Real Estate
Basic Materials
Financial Services