ANIOY - Diamond Hill Small Cap Strategy Q4 2024 Market Commentary

2025-03-12 09:15:00 ET

Summary

• Markets rose unevenly in Q4, with the Russell 3000 up +2.6% and the Russell 2000 Value Index down -1.1%, reflecting growth outperformance.
• Information technology led sector gains in Q4, while health care and real estate declined; energy was the only sector in the red for the year.
• Portfolio outperformed the Russell 2000 Index, driven by strong industrials and consumer staples holdings; underweight in technology was a Q4 headwind.
• Despite market uncertainties, we remain committed to disciplined investing in undervalued, resilient companies to achieve above-average returns over the next five years.

Markets rose unevenly in Q4, concluding another nicely positive year for markets. Following the US election, stocks broadly gained, but some gave most or all of those gains back through the end of the year. For the quarter, the broad Russell 3000 rose +2.6%, bringing calendar-year returns to roughly +24%. The Russell 2000 Index ( RTY ) added more modestly (+0.3%) to a solid calendar-year return of +11.5%. From a style perspective, value underperformed growth across the cap spectrum in Q4, adding to the full-year divergence between growth and value stocks. In Q4, the Russell 2000 Value Index declined -1.1% while its growth counterpart rose +1.7%....

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