Diamond Hill Capital, a First Eagle Investment Management company, issued its Q2 2026 investor letter for its "Mid Cap Strategy". A copy of the Q2 2026 investor letter can be downloaded here. In the quarter, equity markets posted strong returns as resilient economic growth and robust corporate earnings supported investor sentiment, although AI-related companies continued to dominate market leadership. Technology was the strongest-performing sector, while industrials also advanced and energy lagged as oil prices declined. The Fund returned 7.92% and the Russell Midcap Index returned 13.83%. Health care holdings were the largest positive contributor, supported by strength across managed care, diagnostics, and life sciences. However, stock selection and an underweight position in information technology remained the main relative headwinds. The strategy maintained limited exposure to highly valued semiconductor and memory companies, reflecting concerns that current valuations ***** ume an extended period of elevated AI spending. It also continued to ***** s software and services businesses individually based on how AI may affect their long-term competitive positions. Management emphasized higher-quality companies, attractive valuations, capital preservation, and durable long-term compounding while remaining cautious about elevated valuations, concentrated leadership, and the sustainability of the current AI investment cycle. Please review the Strategy's top five holdings for its key selections.
In its second-quarter 2026 investor letter, Diamond Hill Capital Mid Cap Strategy highlighted Illumina, Inc. (NASDAQ:ILMN). Illumina, Inc. (NASDAQ:ILMN) is a biotechnology company that focuses on sequencing- and array-based solutions for genetic and genomic ***** ysis. On August 4, 2026, Illumina, Inc. (NASDAQ:ILMN) closed at $203.01 per share. One-month return of Illumina, Inc. (NASDAQ:ILMN) was 6.92% and its shares gained 112.65% over the past 52 weeks. Illumina, Inc. (NASDAQ:ILMN) has a market capitalization of $30.65 billion with a 52-week trading range between $88.00 - $207.00.
Diamond Hill Capital Mid Cap Strategy stated the following regarding Illumina, Inc. (NASDAQ:ILMN) in its Q2 2026 investor letter:
"Biotechnology company Illumina, Inc. (NASDAQ:ILMN) is the leading producer of next generation sequencing systems, which are used to sequence DNA for research and are increasingly important in cancer diagnosis and treatment. Shares rose during the quarter after better-than-expected clinical growth, while competitor Roche's comparable product launch appeared underwhelming."

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