The investment committee completed its due diligence review of mutual funds offered to our client 401k participants by hiring Diamond Hill Investments to manage funds in the small cap value space. The new fund (Ticker: DHSIX) is truly both small cap and value oriented. The manager employs a fundamentally driven method of stock picking which has, in the past, led to low turnover and benchmark outperformance. One of the factors that very much interested us was the commitment by Diamond Hill’s portfolio managers to “eat their own cooking.” Does it make a difference if portfolio managers invest in the funds that they run? It surely does – see this Morningstar article.
This fund will replace Franklin Balance Sheet (FBSAX.) You can find out more about DHSIX here.