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Diamond Hill Large Cap Fund Lags in Q4 as AI Rally Lifts Tech Leaders

The manager strikes a cautious stance on AI exuberance, citing AIG alongside Capital One as contributors, with Labcorp a key detractor.

Overview

  • Diamond Hill reported a 1.41% fourth-quarter return, trailing the Russell 1000 Value Index’s 3.8%.
  • Information technology gained about 11% and communication services rose about 9% in the quarter on AI-driven optimism.
  • American International Group lifted results on better-than-expected earnings, disciplined expenses, share repurchases, and reports that Chubb is exploring a potential acquisition.
  • Capital One was a material positive as strong Q3 results, improving revenue and expense trends, clarity on faster buybacks, and supportive economic data bolstered sentiment.
  • Labcorp weighed on performance after lower guidance tied to delayed deal closings and a weaker development pipeline that prompted a restructuring.