SMCI - Diamond Hill Mid Cap Strategy Q1 2024 Market Commentary

2024-05-15 12:20:00 ET

Summary

• Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
• Our portfolio outperformed the Russell Midcap Index in Q1, starting the calendar year off on a positive note.
• We initiated four new positions in Q1: Generac Holdings, Diamondback Energy, Johnson Controls International and Humana.
• Corporate earnings are expected to grow at a double-digit rate in 2024, drivenby mega-cap tech stocks, a rebound in health care sector earnings after a largedecline in 2023, and continued strong growth among industrials.

Market Commentary

In a volatile first quarter of 2024, markets moved choppily higher, delivering positive returns across most regions and countries. US stocks rose +10% (as measured by the Russell 3000 Index), led by large-cap stocks, which were likewise up just over +10%, followed by mid caps (+9%) and small caps (+5%), as measured by their respective Russell indices. From a style perspective, growth continued leading - as it has for the last several quarters. Large-cap growth rose more than +11%, while value was up just shy of +9%; mid-cap growth gained over +9% versus mid-cap value up +8%; and small cap growth delivered shy of +8%, while small-cap value rose less than +3% (all returns as measured by the respective Russell indices)....

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