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Long-Short Strategy

To estimate intrinsic value, the business must be understandable, and we must be able to reasonably forecast its cash flows. For long positions, we seek businesses trading at a discount to our estimate of intrinsic value with sustainable competitive advantages, conservative balance sheets and management with an ownership mentality. The inverse is often true for our short positions.

Composite Fact Sheet
Composite Commentary
All strategy documents

Team

Group Item Count: 3
set at runtime

Chris Bingaman, CFA

Portfolio Manager

Group Item Count: 3
set at runtime

Nate Palmer, CFA, CPA

Portfolio Manager

Group Item Count: 3
set at runtime

Brian Fontanella, CFA

Portfolio Specialist

Philosophy and process highlights

We aim to identify long positions that outperform the Russell 1000 Index and short positions that underperform the index. Under our intrinsic value philosophy, we:

Treat every investment as a partial ownership interest in that company

Seek to always invest with a margin of safety

Possess a long-term investment temperament

Recognize that market price and intrinsic value tend to converge over a reasonable period of time

Our approach to sustainability

Long-Short Composite

Returns

Period and Annualized Total Returns (%) As of 30 Sep 2024
Since Inception
(30 Jun 2000)		 20Y15Y10Y5Y3Y1YYTD3MOSep
Gross of Fees 8.57 8.51 8.97 8.18 9.16 7.88 21.21 12.89 1.60 0.00
Net of Fees 7.48 7.42 7.88 7.10 8.07 6.80 20.00 12.04 1.34 -0.08
Russell 1000 Index 7.94 10.76 14.03 13.10 15.64 10.83 35.68 21.18 6.08 2.14
60%/40% Blended Index 5.73 7.30 8.97 8.69 10.58 8.26 22.97 14.15 4.18 1.45
Russell 1000 Value Index 7.88 8.53 11.20 9.23 10.69 9.03 27.76 16.68 9.43 1.39
Swipe or scroll right for more data
Period and Annualized Total Returns (%) As of 30 Sep 2024
Since Inception
(30 Jun 2000)		 20Y15Y10Y5Y3Y1YYTD3Q24
Gross of Fees 8.57 8.51 8.97 8.18 9.16 7.88 21.21 12.89 1.60
Net of Fees 7.48 7.42 7.88 7.10 8.07 6.80 20.00 12.04 1.34
Russell 1000 Index 7.94 10.76 14.03 13.10 15.64 10.83 35.68 21.18 6.08
60%/40% Blended Index 5.73 7.30 8.97 8.69 10.58 8.26 22.97 14.15 4.18
Russell 1000 Value Index 7.88 8.53 11.20 9.23 10.69 9.03 27.76 16.68 9.43
Swipe or scroll right for more data

Past performance is not a guarantee of future results. Composite results reflect the reinvestment of dividends, capital gains and other earnings when appropriate. Net returns are calculated by reducing the gross returns by the highest stated fee in the composite fee schedule. Only transaction costs are deducted from gross of fees returns. To view a GIPS Report for all composites, click here.

Calendar Year Returns (%)

Year Gross of Fees Net of FeesRussell 1000 Index60%/40% Blended IndexRussell 1000 Value Index
2023 14.27 13.25 26.53 17.82 11.46
2022 -6.92 -7.75 -19.13 -10.86 -7.54
2021 21.40 20.30 26.45 15.35 25.16
2020 1.41 0.50 20.96 13.30 2.80
2019 25.15 24.02 31.43 19.15 26.54
2018 -5.46 -6.31 -4.78 -1.92 -8.27
2017 7.85 6.88 21.69 12.92 13.66
2016 12.34 11.33 12.05 7.33 17.34
2015 0.18 -0.72 0.92 0.75 -3.83
2014 9.24 8.26 13.24 7.86 13.45
2013 23.03 23.91 33.11 18.93 32.53
2012 10.30 9.30 16.42 9.75 17.51
2011 4.84 3.90 1.50 1.22 0.39
2010 1.51 0.60 16.10 9.90 15.51
2009 19.94 18.86 28.43 16.98 19.69

Statistics

Portfolio Characteristics vs Benchmark1 As of 30 Sep 2024

  Long Portfolio Russell 1000 IndexShort Portfolio
Inception 30 Jun 2000 ——
Status Open ——
Median Forward P/E 18.1x 21.2x24.6x
Median Trailing P/E 24.5x 25.2x26.5x
Median Price/Book 2.7x 3.4x6.5x
Median Price/Sales 2.3x 2.9x3.9x
Median Market Cap. $57.0B $15.3B$6.6BB
Weighted Average Market Cap. $432.6B $885.6B$40.9B
Portfolio Turnover (5-Year) 51% ——
Upside/Downside Capture Ratio vs Core Benchmark 119%/103% ——
Upside/Downside Capture Ratio vs Value Benchmark 74%/60% ——

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Portfolio

Top Five Long Equity Holdings2 As of 30 Sep 2024

  Sector % of Net Assets
American International Group, Inc. Financials 4.3
Meta Platforms, Inc. (Cl A) Communication Services 4.3
Citigroup, Inc. Financials 4.3
Microsoft Corp. Info. Technology 4.1
Alphabet, Inc. (Cl A) Communication Services 4.1

Top Five Short Equity Holdings2 As of 30 Sep 2024

  Sector % of Net Assets
International Business Machines Corp. Info. Technology (2.1)
WD-40 Co. Consumer Staples (2.1)
Mueller Industries, Inc. Industrials (1.8)
Doximity, Inc. (Cl A) Health Care (1.7)
Sweetgreen, Inc. (Cl A) Cons. Discretionary (1.3)

Sector Allocation3 (%) As of 30 Sep 2024

Long Portfolio
Russell 1000 Index
Short Portfolio

1 Source: FactSet. The Russell 1000 Index is the core benchmark. The Russell 1000 Value Index is the value benchmark. Upside/Downside Capture: Source: eVestment Analytics based on monthly returns (gross of fees) from 1 Jul 2000 – 30 Sep 2024. The blended benchmark represents a 60/40 weighted blend of the Russell 1000 Index and the Bloomberg US Treasury Bills 1-3 Month Index.

2 Securities referenced may not be representative of all portfolio holdings. The reader should not assume that an investment in the securities was or will be profitable.

3 Cash & Other may include cash, treasuries, money market funds and short duration fixed income funds.

Index data source: London Stock Exchange Group PLC. See diamond-hill.com/disclosures for index definitions, data sources and other definitions.

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