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110930 DHF Quarterly Guide - for Fact Sheets.indd

VIEWS: 9 PAGES: 2

									Strategic Income Fund
Investment Objective                                                                                    Investment Strategy                                                        on either an absolute basis or relative to other
                                                                                                                                                                                   opportunities available to the Fund.
 Providing current income and an attractive                                                            BUY STRATEGY The Fund selects income-
  total return.                                                                                         producing securities after performing a risk/                               INVESTMENT UNIVERSE The Fund invests
 Suitable for investors with a 3-5 year invest-                                                        reward analysis including an evaluation of inter-                          at least 80% of its total net assets in income-
  ment horizon.                                                                                         est rate, credit, and other risks. Securities are                          producing securities, including Treasury bills,
                                                                                                        purchased when the compensation received for                               Treasury/Agency securities, mortgage-backed
                                                                                                        bearing risk is attractive compared to the risks                           securities, investment grade and non-investment
      Portfolio Management                                                                              borne. The Fund allocates relatively more of its                           grade corporate bonds, trust preferreds, closed-
                                                                                                        investments to those sectors that are expected to                          end mutual funds, real estate investment trusts
                                                                                                        offer the best prospects for current income and                            and master limited partnerships.
                                                                                                        capital appreciation.
      Bill                             Chris                      Austin
      Zox, CFA                         Bingaman, CFA              Hawley, CFA                           SELL STRATEGY      Generally securities are held
                                                                  Assistant
      Manager                          Assistant
                                       Manager                    Manager                               until they mature or are called. Securities may                            The value of fixed-income securities varies inversely with interest
                                                                                                                                                                                   rates; that is, as interest rates rise, the market value of fixed-income
                                                                                                        also be sold because they are no longer attractive                         securities will decline. Lower quality debt securities involve greater
                                                                                                                                                                                   risk of default or price changes due to potential changes in the credit
                                                                                                                                                                                   quality of the issuer.

Performance Update
                                                                                                                                                                 Since                         The performance data quoted represents past
Period & Average Annual Total                                          Third               Year                  One           Three           Five            Inception         Total         performance; past performance does not guarantee
Returns as of September 30, 2011                                      Quarter             to Date                Year           Year           Year            (9/30/02)     Expense Ratio
                                                                                                                                                                                               future results. The investment return and principal
PERFORMANCE AT NAV                                   without sales charges                                                                                                                     value of an investment will fluctuate so that an
 Class A Shares                                                        -2.18%                  1.92%              3.30%        14.70%           5.16%             7.36%            1.02%       investor’s shares, when redeemed, may be worth
 Class C Shares                                                        -2.34%                  1.41%              2.48%        13.89%           4.39%             6.64%            1.77%       more or less than their original cost. The Fund’s
 Class I Shares                                                        -2.02%                  2.16%              3.54%        15.14%           5.55%             7.67%            0.75%       current performance may be lower or higher than
BENCHMARK                                                                                                                                                                                      the performance data quoted. Investors may obtain
 BofA ML U.S. Corporate,                                                                                                                                                                       performance information current to the most recent
                                                                        3.90%                  6.75%              5.23%            7.92%        6.62%             5.41%             —          month-end, within 7 business days, at www.
 Government & Mortgage Index
 BofA ML U.S. Corporate &                                                                                                                                                                      diamond-hill.com.
                                                                        0.32%                  3.99%              3.41%        12.32%           6.55%             6.87%             —
 High Yield Index
                                                                                                                                                                                        The Bank of America Merrill Lynch US Corpo-
PERFORMANCE AT POP                                    includes sales charges
                                                                                                                                                                                        rate, Government & Mortgage Index includes
 Class A Shares                                                        -5.61%              -1.61%                 -0.28%         13.35%           4.40%         6.94%         1.02%
                                                                                                                                                                                        a mixture of government bonds, corporate
 Class C Shares                                                        -3.30%                  0.43%               1.51%         13.89%           4.39%         6.64%         1.77%
                                                                                                                                                                                        bonds and mortgage pass through securities
                                                                                                                                                                                        of investment grade quality, having a matu-
                             40%                                                                                                                     rity greater than or equal to one year. The Bank of America Merrill Lynch US
 (Years ended December 31)




                                                                                                                            32.13
                                                                                                                                                     Corporate & High Yield Index tracks the performance of US dollar denomi-
 CLASS A ANNUAL TOTAL




                                                                                                                                                     nated investment grade and below investment grade corporate debt publicly
                                    20.70
                             20%                                                                                                                     issued in the US domestic market. Qualifying securities must be rated by either
                                                                                                                                       13.33
                                                                                10.26                                                                Moody’s, S&P or Fitch and must have an investment grade rated country of
                                                    7.47                                                 7.20
 RETURN (%)1




                                                                                                                                             6.43
                                             4.12          4.34                         4.31
                                                                                                                       6.20       5.24               risk, at least one year remaining term to final maturity, a fixed coupon schedule
                                                                  2.41 2.54
                              0%                                                                                                                     and a minimum amount outstanding of $250 million for investment grade
                                            Strategic Income Fund                               -4.78                                                securities and $100 million below investment grade securities. Index constitu-
                                            BofA ML US Corporate, Government, & Mortgage Index                                                       ents are capitalization weighted by outstanding issuance. One cannot invest
                                                                                                                -14.79
                             -20%                                                                                                                    directly in an index. Unlike mutual funds, the index does not incur expenses.
                                      2003            2004          2005           2006             2007            2008       2009       2010
                                                                                                                                                     If expenses were deducted, the actual returns of this index would be lower.
                                                                                                                                                        1
                                                                                                                                                            Figures do not reflect sales charges. If they did, the returns would be lower.




Security Type Allocation*

                                                                         Corporate                                  Asset-Backed                        Limited             Municipal        Government           Mutual
                                                                                                Preferreds                           Common Stocks                                                                                Cash & Equiv.
                                                                          Bonds                                       Securities                      Partnerships           Bonds             Bonds              Funds


Strategic Income Fund                                                      94.0%                  0.9%                  0.7%               —                 —                 —                  —                 —                4.5%

* Security type allocations may not total 100% due to rounding.



Diamond Hill Funds Quarterly Fact Sheet                                                                                                                                                                            Side One, Not Valid Without Side Two
Top Ten Holdings                                                                                                       Bond Quality Rating2
Security                                                                                     % of Portfolio                                     Quality Rating                                                 % of Portfolio

KLA Instruments Corp. 6.9% 5/1/18                                                               3.7%                                               AAA                                                             0.0%

Symetra Financial Corp. 6.125% 4/1/16                                                           3.6%                                               AA                                                              0.2%

BE Aerospace, Inc. 8.5% 7/1/18                                                                  3.5%                                               A                                                               0.0%

Anadarko Petroleum Corp. 5.95% 9/15/16                                                          3.4%                                               BBB                                                           31.6%

Cimarex Energy Co. 7.125% 5/1/17                                                                3.3%                                               BB                                                            31.1%

Zions Bancorp 7.75% 9/23/14                                                                     3.3%                                               B                                                             27.2%

United Rentals North Am. 10.875% 6/15/16                                                        3.2%                                               CCC                                                             5.0%

Avis Budget Car Rental 9.625% 3/15/18                                                           3.1%                                               CC                                                              0.0%

iSTAR Financial 5.7% 3/1/14                                                                     3.0%                                               C                                                               0.0%

Source Gas LLC 5.9% 4/1/17                                                                      3.0%                                               NR                                                              0.5%


Quarterly Dividend                                                                                                 Portfolio Statistics (Portfolio composition is subject to change)
Distribution per Share (paid monthly)                                                                              Total Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $140M
                                                                                                                   Portfolio Turnover Rate (12 months trailing) . . . . . . . . . . . . . . . . . . . . . 41%
                                                                Class A            Class C        Class I          Number of Holdings in Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
                                                                                                                   % of Net Assets in Cash & Cash Equivalents . . . . . . . . . . . . . . . . . . . . .4.5%
    Q4 2010                                                     0.166              0.145          0.176
                                                                                                                   Effective Duration3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.43
    Q1 2011                                                     0.153              0.134          0.162            Current 30-day Yield
                                                                                                                      A Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.30%
    Q2 2011                                                     0.159              0.140          0.167               C Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.72%
                                                                                                                      I Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.78%
    Q3 2011                                                     0.153              0.135          0.161

    Last Four Quarters                                          0.631              0.554          0.666            5-Year Risk Statistics (Class A Load Waived)
                                                                                                                   Annualized Standard Deviation (%). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.24
                                                                                                                   Beta (%). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.79†
                                                                                                                   Upside / Downside Capture Ratio (%). . . . . . . . . . . . . . . . . . . . . . . . 90 / 119†
                                                                                                                   †
                                                                                                                       Relative to the BofA ML U.S. Corporate, Government & Mortgage Index.




Fund Identification & Expenses                                                                                                                                                 Fund Inception: 9/30/2002
                                                         Maximum              Contingent                                                                                       Minimum Initial Investment:
                    Ticker                               Front-End            Deferred          Management    Distribution           Other                Total Expense        Classes A & C: $2,500
                    Symbol          CUSIP                Sales Charge         Sales Charge      Fee           Fee (12b-1)            Expenses             Ratio                Class I: $50,000

A Shares            DSIAX           25264S882            3.50%                None              0.50%         0.25%                  0.27%                1.02%                  Distributions: Monthly
C Shares            DSICX           25264S874            None                 1.00%             0.50%         1.00%                  0.27%                1.77%                  Lipper Classification: Flexible Income
I Shares            DHSTX           25264S866            None                 None              0.50%         None                   0.25%                0.75%                  Morningstar Classification: Multi-sector Bond

2
 The above security quality ratings are derived from the underlying securities of the portfolio, and are rated by Standard & Poor’s. The ratings are historical and are based upon the
credit quality, market exposure, and management of the underlying securities. The Standard & Poor’s ratings represent an opinion only, not a recommendation to buy or sell. Diamond
Hill Funds does not calculate a rating for securities that are not rated by Standard & Poor’s. Unrated securities will show in the "NR" category.
3
 Effective duration is a measure of the interest rate risk of the Fund. Effective Duration is an estimate of the approximate percentage change in the Fund’s net asset value that will
result from a one percentage point change in its yield.

Performance is not guaranteed. Performance returns assume                        An investor should consider the Fund’s investment                               Risk Statistic Definitions: Standard Deviation is
reinvestment of all distributions. Returns for the periods less than             objectives, risks, and charges and expenses carefully                           a statistical measure of the historical volatility of the portfolio.
one year are not annualized. Class I and Class C shares include                  before investing or sending any money. This and other                           Beta is a measure of the volatility of a portfolio relative to
performance based on Class A shares, which was achieved prior to the             important information about the Fund(s) can be found                            the overall market. Upside/Downside Capture Ratio
creation of Class I and Class C shares. These total return figures may           in the Fund’s(s) prospectus or summary prospectus                               measures a manager's ability to generate excess return above
reflect the waiver of a portion of a Fund’s advisory or administrative fees      which can be obtained at www.diamond-hill.com or                                the benchmark return in up markets and retain more of the
for certain periods. In such instances, and without such waiver of fees,         by calling 888-226-5595. Please read the prospectus
                                                                                 or summary prospectus carefully before investing. The                           excess return in down markets. The upside/downside capture
the total returns would have been lower. Average annual total returns                                                                                            ratio is the Fund’s up/down market return divided by the index’s
illustrate the annual compounded returns that would have produced                Diamond Hill Funds are distributed by BHIL Distributors,
                                                                                 Inc. (Member FINRA), an affiliated company. Diamond                             up/down market return. The up/down market return equals the
the cumulative total return if the Fund’s performance had remained               Hill Capital Management, Inc., a registered investment                          linked returns for all quarters in which the index return was
constant throughout the period indicated. The maximum sales charge               adviser, serves as Investment Adviser to the Diamond                            greater /less than zero.
for A shares is 3.50%; C shares have a maximum contingent deferred               Hill Funds and is paid a fee for its services. Like all
sales charge (CDSC) of 1.00% for redemptions within the first year of            mutual funds, Diamond Hill Funds are not FDIC insured,
purchase; I shares have no sales charge. Fund holdings and sector                may lose value, and have no bank guarantee.
allocations are subject to change without notice.

Side Two, Not Valid Without Side One                                                                                                                                                                                            September 30, 2011

								
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