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In the third quarter of 2025, Diamond Hill Capital Management's small-cap investment strategy saw its portfolio returns lag behind the broader Russell 2000 Index. Nevertheless, the portfolio managed to deliver favorable absolute returns during this period.

Detailed Report on Q3 2025 Portfolio Performance

The recent quarter, Q3 2025, concluded with Diamond Hill Capital Management's small-cap portfolio not quite matching the performance benchmarks set by the Russell 2000 Index. However, investors can still take solace in the fact that the portfolio yielded positive returns overall. A significant uplift to the portfolio's performance came from Centrus Energy, a key player in nuclear fuel and services. This company benefited from a resurgence of interest in nuclear power within the United States, a trend fueled by the escalating demand for energy, particularly from the booming artificial intelligence sector. Other notable companies that contributed positively to the portfolio's results during this quarter included Red Rock Resorts, US Lime & Minerals, and Ducommun. On the other side of the ledger, certain holdings experienced headwinds, with FTAI Infrastructure and Mesa Laboratories being identified as the primary underperformers.

This quarterly review highlights the dynamic nature of market forces and the importance of a diversified investment approach. While some sectors flourish due to emerging technological trends like AI, others may face challenges, underscoring the necessity for vigilant portfolio management and strategic adjustments to navigate evolving economic landscapes. For investors, understanding these movements is crucial for informed decision-making and for maintaining long-term financial health.