Diamond Hill Small-Mid Cap Fund (DHMYX) N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-08061

Diamond Hill Funds

(Exact name of registrant as specified in charter)

325 John H. McConnell Boulevard, Suite 200, Columbus, Ohio 43215

(Address of principal executive offices) (Zip code)

Thomas E. Line, 325 John H. McConnell Boulevard, Suite 200, Columbus, Ohio 43215

(Name and address of agent for service)

Registrant’s telephone number, including area code: 614-255-3333

Date of fiscal year end: December 31

Date of reporting period: June 30, 2016

Item 1. Reports to Stockholders.

Semi-Annual Report

June 30, 2016

Small Cap Fund	Long-Short Fund
Small-Mid Cap Fund	Research Opportunities Fund
Mid Cap Fund	Financial Long-Short Fund
Large Cap Fund	Corporate Credit Fund
Select Fund	High Yield Fund

This material must be preceded or accompanied by a current prospectus.

Not FDIC Insured. May Lose Value. No Bank Guarantee.

Table of Contents

Letter to Shareholders	1
Mission Statement and Fundamental Principles	4
Financial Statements
Schedules of Investments	8
Statements of Assets & Liabilities	36
Statements of Operations	38
Statements of Changes in Net Assets	40
Financial Highlights	50
Notes to Financial Statements	70
Other Items	83
Schedule of Shareholder Expenses	86

Cautionary Statement: At Diamond Hill, we pledge that, “we will communicate with our clients about our investment performance in a manner that will allow them to properly assess whether we are deserving of their trust.” Our views and opinions regarding the investment prospects of our portfolio holdings and Funds are “forward looking statements” which may or may not be accurate over the long term. While we believe we have a reasonable basis for our opinions, actual results may differ materially from those we anticipate. Information provided in this report should not be considered a recommendation to purchase or sell any particular security.

You can identify forward looking statements by words like “believe,” “expect,” “anticipate,” or similar expressions when discussing prospects for particular portfolio holdings and/or one of the Funds. We cannot assure future results. You should not place undue reliance on forward-looking statements, which speak only as of the date of this report. We disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise.

This material is not authorized for distribution to prospective investors unless preceded or accompanied by a Prospectus. Investors should consider the investment objectives, risks, charges, and expenses of the Diamond Hill Funds carefully before investing. The prospectus or summary prospectus contain this and other important information about the Fund(s) and are available at diamond-hill.com or by calling 888.226.5595. Please read the prospectus or summary prospectus carefully before investing. The Diamond Hill Funds are distributed by BHIL Distributors, LLC (Member FINRA/SIPC). Diamond Hill Capital Management, Inc., a registered investment adviser, serves as Investment Adviser to the Diamond Hill Funds and is paid a fee for its services. Diamond Hill Funds are not FDIC insured, may lose value, and have no bank guarantee.

Letter to Shareholders

Dear Fellow Shareholder:

We are pleased to provide this 2016 mid-year update for the Diamond Hill Funds. At Diamond Hill, we believe in true active portfolio management, managing high conviction, concentrated portfolios constructed independent of benchmark weights. We have intentionally structured our firm to maximize the potential to generate returns for our clients in excess of a passive alternative. Our long-term investment horizon also allows us to focus on company fundamentals rather than short-term market noise.

Our primary focus is always on achieving value-added results for existing clients. We believe the best way to achieve that goal is to manage relatively concentrated portfolios, which becomes more difficult as the size of the portfolio increases. Our portfolio managers have the authority to close their strategies before they reach an asset size where they believe they can no longer add sufficient value over a passive alternative, helping to protect our existing clients. With this in mind, last June, we closed the Diamond Hill Long-Short Fund to most new investors. In December, we closed the Diamond Hill Small Cap Fund, and in April of this year, we closed the Diamond Hill Small-Mid Cap Fund to most new investors.

2016 Year-to-Date Market Review

Despite a tumultuous six months for global financial markets, year-to-date total returns for the Russell 1000 and Russell 3000 Indices were 3.74% and 3.62%, respectively.

U.S. equity markets experienced losses early in the year due to slow economic growth, weakness in the energy sector, and uncertainty around central bank policy. A solid recovery in March was driven primarily by a potential bottom in oil prices and increased investor confidence that the Federal Reserve would take a less aggressive approach than previously expected to raising interest rates in 2016. March’s gains were extended throughout most of the second quarter, but stock markets took a hit in late June with the U.K. Brexit vote. However, they rebounded in the following days to end the quarter near all-time highs.

During the second quarter, bond yields fell to record lows as demand for the safety of U.S. Treasuries increased. Bond returns outpaced equity returns, and the top-performing stocks were those that provided bond-like income and stability, such as utilities, telecommunications, and consumer staples.

Sector Results

Year-to-date within the Russell 1000 Index of primarily large cap stocks, the utilities sector (+24%) was the best performer as investors sought dividend-yielding stocks as an alternative source of income in a low interest rate environment. This is a sharp reversal from one year ago when utilities was the worst-performing sector. The worst performer year-to-date has been the financial services sector (-2%). Declining interest rates and the likelihood of fewer-than-expected Fed rate increases in 2016 have created a headwind for financial companies, primarily banks and life insurers.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 1

Letter to Shareholders

Market Outlook

While the U.S. economy appears to be continuing the healing process, the recent Brexit vote is the type of global political event that could exert near-term pressure on economic growth. The surprising event caused significant uncertainty in global financial markets, so we would expect the Federal Reserve to take a cautious approach towards normalizing monetary policy, causing U.S. interest rates to remain low in the near term.

The decline in the price of oil over the past two years has improved household budgets through moderating expenditures on gasoline. Thus far, it appears that the majority of savings have gone towards improving household balance sheets rather than increased spending. However, we would expect increases in household spending associated with lower gasoline prices to occur with a meaningful lag as consumers gain confidence that the decline is permanent.

The modest deleveraging of the U.S. household sector over the past several years continues to be a positive story. These lower debt levels combined with very low interest rates have allowed consumer debt-service burdens to improve to very low levels by historical standards. Clearly, this healthy debt service picture remains very much tied to historically low interest/mortgage rates, and any sharp, meaningful increase in those rates is likely to present an important headwind for growth.

We continue to expect positive but below-average equity market returns over the next five years. Our conclusion is primarily based on the combination of above average price/earnings multiples applied to already very strong levels of corporate profit margins, which likely tempers prospective returns. This expectation also seems consistent with the current interest rate environment.

On the credit side, we will likely continue to see global central bank policies remain supportive to credit through the remainder of 2016 in light of slowing global growth. We would expect ongoing bouts of volatility driven by uncertainty as the impact to broad credit fundamentals of the U.K. referendum evolves. We believe that by taking a longer-term view of valuations and fundamentals within credit, superior credit selection powered by individual credit analysis will ultimately drive returns in this type of environment.

Assessing the impact of macro-economic factors has been a more important part of estimating the long-term intrinsic value of companies in recent years; however, it is still just one of many factors that we consider. In our view, when stocks move for an extended period of time based on factors other than fundamental valuation, it generally creates investment opportunities as correlations eventually break down and individual stocks again trade on company fundamentals rather than macro-economic or headline news. Because a company’s stock market price tends to converge with its intrinsic value over sufficiently long periods of time (five years or longer), we believe the economic performance of the underlying business in relation to the price paid for its stock will determine long-term investment return. Our intrinsic value investment philosophy is shared by all of our

2 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Letter to Shareholders

portfolio managers and research analysts, allowing us to apply our investment discipline consistently across all equity and credit strategies.

Chris Welch, CFA Portfolio Manager, Co-Chief Investment Officer	Austin Hawley, CFA Portfolio Manager, Co-Chief Investment Officer

The views expressed are those of the portfolio managers as of June 30, 2016, are subject to change, and may differ from the views of other portfolio managers or the firm as a whole. These opinions are not intended to be a forecast of future events, a guarantee of future results, or investment advice. All data referenced are from sources deemed to be reliable but cannot be guaranteed. Securities and sectors referenced should not be construed as a solicitation or recommendation or be used as the sole basis for any investment decision.

The Russell 1000 Index is an unmanaged market capitalization-weighted index compromised of the largest 1,000 companies by total market capitalization in the Russell 3000 Index. The Russell 3000 Index is an unmanaged market capitalization-weighted index compromised of the 3,000 largest U.S. companies by total market capitalization. These indexes do not incur fees and expenses (which would lower the return) and are not available for direct investment.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 3

Our Mission

At Diamond Hill, we serve our clients by providing investment strategies that deliver lasting value through a shared commitment to our intrinsic value-based investment philosophy, long-term perspective, disciplined approach and alignment with our clients’ interests.

VALUE

We believe market price and intrinsic value are independent in the short-term but tend to converge over time.

LONG-TERM

We maintain a long-term focus both in investment analysis and management of our business.

DISCIPLINE

We invest with discipline to increase potential return and protect capital.

PARTNERSHIP

We align our interests with those of our clients through significant personal investment in our strategies.

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Fundamental Principles

The Importance of Valuation

We believe that a company’s intrinsic value is independent of its stock price and that intrinsic value can be reasonably estimated using a discounted cash flow methodology. Our entire investment team shares the same investment philosophy, which drives our investment process.

We focus on the fundamentals of intrinsic value, which are far less volatile than market price, and our actions are ultimately dictated by the price to intrinsic value relationship.

There is no guarantee that a discount to intrinsic value will be achieved or that market price and/or intrinsic value will increase over time.

¹  The inverse is true for short position

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 5

Fundamental Principles

Equity Investment Principles

Valuation

• We believe that every share of stock has an intrinsic value that is independent of its current market price, and at any point in time, the market price may be higher or lower than intrinsic value.

• Over short periods of time, the market price is heavily influenced by the emotions of market participants, which are far more difficult to predict than intrinsic value. While market prices may experience extreme fluctuations on a particular day, we believe intrinsic value is far less volatile.

• Over sufficiently long periods of time, five years or longer, the stock market price tends to converge with intrinsic value.

Intrinsic Value Estimate

• We believe that we can determine a reasonable approximation of intrinsic value if we are confident in projecting the future cash flows of a business and use an appropriate discount rate.

Suitable Investments

• We only invest when the market price is lower than our conservative assessment of per share intrinsic value (or at a premium for short positions).

• We concentrate our investments in businesses whose per share intrinsic value is likely to increase. We invest in businesses that possess a competitive advantage, conservative balance sheet, and outstanding managers and employees. For short positions, the inverse is often true, and a growing intrinsic value is a detriment to the performance of the position.

Risk & Return

• We intend to achieve our return from both the closing of the gap between our purchase price and intrinsic value and the increase in per share intrinsic value. For short positions, an increasing intrinsic value may shorten the holding period.

• We define risk as the permanent loss of capital rather than price volatility. We manage risk by investing in companies selling at a discount (premium for short positions) to our estimate of intrinsic value.

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Fundamental Principles

Fixed Income Investment Principles

Fundamental Credit Analysis

• We work closely with our research team to understand the fundamental economic drivers of the business and to assess whether there is adequate financial strength and flexibility to meet ongoing commitments.

• We evaluate the quality of a firm’s management and their treatment of bondholders and stockholders. We believe managements that focus on growth, without regard to return on invested capital or long-term cost of capital, are more likely to destroy value for bondholders and stockholders. In contrast, managements that understand the competitive dynamics of their business and employ prudent capital allocation often produce value for both bondholders and stockholders.

Valuation

• Bond investors are senior to equity investors in the capital structure, and the equity value of the company is the starting point for measuring our discount or premium to intrinsic value. To estimate the intrinsic value of the company, we look at discounted cash flows as well as private and public comparable firms.

• The liquidity and expected volatility of a corporate bond are also important factors in valuation. Because of our long-term time horizon, we will invest in less liquid or more volatile securities when we receive compensation that exceeds what we deem necessary.

Suitable Investments

• We generally invest in corporate bonds of companies with stable-to-improving fundamentals that are likely to meet our return objectives over the long term (five years).

• Our core competency is the evaluation of credit risk. We are committed to maintaining an asset level that will allow us to always be nimble in the secondary market and selective in the new issue market, even if that means closing strategies. We are comfortable owning (across all of our strategies) 5% of an issue but generally do not want to own more than 10%. We are willing to commit meaningful client capital to our best ideas.

Risk & Return

• We define risk as the permanent loss of capital rather than short-term price volatility. We also focus on limiting longer-term downside volatility and drawdowns.

• We expect to achieve our return objective by investing in corporate bonds when we believe the market price discounts a greater risk of default or a greater loss upon default than is warranted. An additional source of return exists when the market price provides attractive compensation for short-term illiquidity or volatility, both of which are of less concern to a long-term investor.

• Our primary focus is on valuing the underlying business and associated credit risk, rather than interest rate risk.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 7

Diamond Hill Small Cap Fund

Schedule of Investments

June 30, 2016 (Unaudited)

	Shares		Fair Value
Common Stocks — 82.0%
Consumer Discretionary — 9.4%
Aaron’s, Inc.		1,172,035	$	25,655,847
Callaway Golf Co.		375,583		3,834,702
Carter’s, Inc.		126,105		13,426,399
Global Sources Ltd.*		178,656		1,638,276
Horizon Global Corp.*		171,140		1,942,439
Live Nation Entertainment, Inc.*		1,504,290		35,350,815
Red Rock Resorts, Inc., Class A*		765,760		16,831,405
Tenneco, Inc.*		564,350		26,304,354
Vail Resorts, Inc.^		269,545		37,259,205
				162,243,442
Consumer Staples — 5.8%
B&G Foods, Inc.^		736,950		35,520,990
Edgewell Personal Care Co.*		158,880		13,411,061
Flowers Foods, Inc.^		1,136,289		21,305,419
Post Holdings, Inc.*^		372,670		30,816,082
				101,053,552
Energy — 2.8%
Carrizo Oil & Gas, Inc.*^		141,561		5,074,962
Cimarex Energy Co.		322,910		38,529,621
Noble Energy, Inc.		161,642		5,798,099
				49,402,682
Financials — 27.0%
Alleghany Corp.*		36,757		20,200,912
American Equity Investment Life Holding Co.		477,320		6,801,810
Assured Guaranty Ltd.		335,697		8,516,633
BankUnited, Inc.		908,705		27,915,418
BOK Financial Corp.^		186,835		11,714,555
Brown & Brown, Inc.		1,334,470		50,002,591
Colony Capital, Inc., Class A^		848,335		13,021,942
Endurance Specialty Holdings Ltd.		331,645		22,273,278
Enstar Group Ltd.*		213,307		34,553,601
First Horizon National Corp.^		817,415		11,263,979
First Niagara Financial Group, Inc.		658,720		6,415,933
First of Long Island Corp., The		265,980		7,625,647
Fortress Investment Group LLC, Class A		2,766,755		12,229,057

	Shares		Fair Value
Financials — 27.0% continued
Greenlight Capital Re Ltd., Class A*^		185,365	$	3,736,958
iStar Financial, Inc. REIT*^		3,417,105		32,770,037
Mid-America Apartment Communities, Inc. REIT^		177,749		18,912,493
Nationstar Mortgage Holdings, Inc.*^		1,086,530		12,234,327
Navigators Group, Inc.		556,258		51,159,048
Popular, Inc.		1,277,883		37,441,971
ProAssurance Corp.		459,670		24,615,329
Reinsurance Group of America		127,270		12,343,917
State Bank Financial Corp.		381,390		7,761,287
Sterling Bancorp^		709,860		11,144,802
Tanger Factory Outlet Center, Inc.		356,555		14,326,380
Winthrop Realty Trust REIT^		1,033,435		9,083,894
				468,065,799
Health Care — 8.5%
Alere, Inc.*		968,160		40,352,909
BioScrip, Inc.*^		4,487,945		11,444,260
Concordia International Corp.^		1,252,625		26,981,542
Greatbatch, Inc.*		354,530		10,965,613
LifePoint Hospitals, Inc.*		361,310		23,618,834
Natus Medical, Inc.*		571,060		21,586,068
Nuvectra Corp.*		34,222		253,243
Universal American Financial Corp.^		1,609,669		12,201,291
				147,403,760
Industrials — 18.0%
Aircastle Ltd.^		1,666,085		32,588,623
Alaska Air Group, Inc.		281,310		16,397,560
Avis Budget Group, Inc.*^		2,775,385		89,450,658
Brink’s Co., The		265,460		7,562,955
Colfax Corp.*^		422,385		11,176,307
Corrections Corp. of America		252,233		8,833,200
Hillenbrand, Inc.		444,955		13,366,448
Hub Group, Inc., Class A*		906,855		34,796,026
Hyster-Yale Materials Handling, Inc.		232,882		13,854,150
Kennametal, Inc.^		139,960		3,094,516
Kirby Corp.*^		268,195		16,732,686

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Diamond Hill Small Cap Fund

Schedule of Investments (Continued)

June 30, 2016 (Unaudited)

	Shares		Fair Value
Common Stocks — 82.0% continued
Industrials — 18.0% continued
SPX FLOW, Inc.*		465,890	$	12,145,752
Toro Co., The		188,380		16,615,116
TriMas Corp.*		427,850		7,701,300
Trinity Industries, Inc.^		1,514,860		28,130,951
				312,446,248
Information Technology — 7.2%
Anixter International, Inc.*		204,360		10,888,301
Broadridge Financial Solutions, Inc.		447,970		29,207,644
CommScope Holding, Inc.*^		925,575		28,720,592
CSG Systems International, Inc.^		36,982		1,490,744
DST Systems, Inc.		421,130		49,032,167
Rovi Corp.*^		361,885		5,659,881
				124,999,329
Telecommunication Services — 0.2%
Cincinnati Bell, Inc.*		923,250		4,219,253
Utilities — 3.1%
ITC Holdings Corp.		441,623		20,676,789
UGI Corp.		740,970		33,528,892
				54,205,681
Total Common Stocks			$	1,424,039,746
Registered Investment Companies — 29.0%
State Street Institutional Liquid Reserves Fund, Premier Class, 0.47%S		320,354,406		320,354,406
State Street Navigator Securities Lending Prime Portfolio, 0.51%†S		181,089,534		181,089,534
Total Registered Investment Companies			$	501,443,940
Total Investment Securities — 111.0%
(Cost $1,673,045,175)**			$	1,925,483,686
Net Other Assets (Liabilities) — (11.0)%				(192,015,944	)
Net Assets — 100.0%			$	1,733,467,742

* Non-income producing security.

^ All or a portion of the security is on loan. The total fair value of the securities on loan as of June 30, 2016 was $176,308,780.

^†  This security, which was purchased using cash collateral received from securities on loan, represents collateral for securities loaned as of June 30, 2016.

^S  Rate represents the daily yield on June 30, 2016.

** Represents cost for financial reporting purposes.

REIT – Real Estate Investment Trust

See accompanying Notes to Financial Statements

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 9

Diamond Hill Small-Mid Cap Fund

Schedule of Investments

June 30, 2016 (Unaudited)

	Shares		Fair Value
Common Stocks — 91.3%
Consumer Discretionary — 14.9%
Aaron’s, Inc.		1,752,676	$	38,366,078
BorgWarner, Inc.^		1,281,352		37,825,511
Goodyear Tire & Rubber Co., The		734,299		18,842,112
Hanesbrands, Inc.		955,300		24,006,689
Newell Brands, Inc.		890,301		43,241,919
NVR, Inc.*		11,803		21,013,353
Staples, Inc.		2,847,074		24,541,778
TEGNA, Inc.		1,580,811		36,627,391
Whirlpool Corp.		186,853		31,137,184
				275,602,015
Consumer Staples — 11.5%
B&G Foods, Inc.^		1,051,771		50,695,362
Coty, Inc., Class A^		379,493		9,863,023
Edgewell Personal Care Co.*		228,390		19,278,400
Flowers Foods, Inc.^		1,718,905		32,229,469
Molson Coors Brewing Co., Class B		456,068		46,122,157
Post Holdings, Inc.*		643,230		53,188,688
				211,377,099
Energy — 3.5%
Cimarex Energy Co.		534,036		63,721,176
Financials — 27.6%
BankUnited, Inc.		1,320,019		40,550,984
BOK Financial Corp.^		507,982		31,850,471
Brown & Brown, Inc.		1,179,545		44,197,550
Colony Capital, Inc., Class A^		856,818		13,152,156
Endurance Specialty Holdings Ltd.		440,807		29,604,598
Enstar Group Ltd.*^		61,927		10,031,555
First Horizon National Corp.^		1,790,920		24,678,878
First Republic Bank		552,910		38,698,170
Infinity Property & Casualty Corp.		99,972		8,063,742
iStar Financial, Inc. REIT*^		1,990,918		19,092,904
Mid-America Apartment Communities, Inc. REIT^		219,105		23,312,772
Nationstar Mortgage Holdings, Inc.*^		2,425,159		27,307,290
Navigators Group, Inc.		204,847		18,839,779
Popular, Inc.		951,529		27,879,800

	Shares		Fair Value
Financials — 27.6% continued
Reinsurance Group of America		239,510	$	23,230,075
SVB Financial Group*		147,630		14,048,471
Willis Towers Watson plc		785,646		97,663,653
XL Group plc		502,212		16,728,682
				508,931,530
Health Care — 8.3%
Boston Scientific Corp.*		2,637,860		61,646,789
LifePoint Hospitals, Inc.*		733,803		47,968,702
Orthofix International NV*		691,841		29,334,058
Universal American Financial Corp.		1,899,897		14,401,219
				153,350,768
Industrials — 11.2%
Aircastle Ltd.^		694,910		13,592,440
Avis Budget Group, Inc.*		642,175		20,697,300
Brink’s Co., The		432,104		12,310,643
Colfax Corp.*^		1,296,106		34,294,965
Dover Corp.		277,475		19,234,567
Hub Group, Inc., Class A*		1,277,913		49,033,522
Kirby Corp.*^		541,367		33,775,887
Parker Hannifin Corp.		91,703		9,908,509
SPX FLOW, Inc.*		546,873		14,256,979
				207,104,812
Information Technology — 9.2%
Anixter International, Inc.*		317,572		16,920,236
Broadridge Financial Solutions, Inc.		157,630		10,277,476
CommScope Holding, Inc.*^		960,369		29,800,250
Juniper Networks, Inc.		1,547,884		34,811,911
Keysight Technologies, Inc.*		420,610		12,235,545
Linear Technology Corp.^		658,788		30,653,406
Vantiv, Inc., Class A*		632,206		35,782,860
				170,481,684
Materials — 1.8%
Axalta Coating Systems Ltd.*		1,285,822		34,112,858

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Diamond Hill Small-Mid Cap Fund

Schedule of Investments (Continued)

June 30, 2016 (Unaudited)

Diamond Hill Mid Cap Fund

Schedule of Investments

June 30, 2016 (Unaudited)

	Shares		Fair Value
Common Stocks — 91.3% continued
Utilities — 3.3%
ITC Holdings Corp.		441,374	$	20,665,131
UGI Corp.		902,925		40,857,356
				61,522,487
Total Common Stocks			$	1,686,204,429
Registered Investment Companies — 17.1%
State Street Institutional Liquid Reserves Fund, Premier Class, 0.47%S		159,197,251		159,197,251
State Street Navigator Securities Lending Prime Portfolio, 0.51%†S		156,066,879		156,066,879
Total Registered Investment Companies			$	315,264,130
Total Investment Securities — 108.4%
(Cost $1,863,920,168)**			$	2,001,468,559
Net Other Assets (Liabilities) — (8.4)%				(156,504,907	)
Net Assets — 100.0%			$	1,844,963,652

* Non-income producing security.

^ All or a portion of the security is on loan. The total fair value of the securities on loan as of June 30, 2016 was $152,358,897.

^†  This security, which was purchased using cash collateral received from securities on loan, represents collateral for securities loaned as of June 30, 2016.

^S  Rate represents the daily yield on June 30, 2016.

** Represents cost for financial reporting purposes.

PLC – Public Limited Company

REIT – Real Estate Investment Trust

See accompanying Notes to Financial Statements

	Shares		Fair Value
Common Stocks — 92.7%
Consumer Discretionary — 17.5%
Aaron’s, Inc.^		26,074	$	570,760
BorgWarner, Inc.		25,450		751,284
Dollar General Corp.^		4,313		405,422
Goodyear Tire & Rubber Co., The		14,490		371,813
Hanesbrands, Inc.^		18,975		476,842
Newell Brands, Inc.^		15,501		752,884
NVR, Inc.*		235		418,380
Staples, Inc.^		54,245		467,592
TEGNA, Inc.^		25,435		589,329
VF Corp.		8,430		518,360
Whirlpool Corp.^		6,231		1,038,334
				6,361,000
Consumer Staples — 12.0%
B&G Foods, Inc.^		14,820		714,324
Coty, Inc., Class A^		7,915		205,711
Edgewell Personal Care Co.*^		2,270		191,611
Flowers Foods, Inc.^		31,371		588,206
Molson Coors Brewing Co., Class B		9,087		918,968
Post Holdings, Inc.*^		13,090		1,082,412
Sysco Corp.		12,830		650,994
				4,352,226
Energy — 3.5%
Cimarex Energy Co.		10,813		1,290,207
Financials — 28.2%
BankUnited, Inc.^		27,675		850,176
BOK Financial Corp.^		7,635		478,715
Brown & Brown, Inc.^		20,570		770,758
Discover Financial Services^		9,460		506,961
Endurance Specialty Holdings Ltd.		6,050		406,318
Enstar Group Ltd.*		1,895		306,971
First Horizon National Corp.^		25,865		356,420
First Republic Bank^		10,310		721,597
Franklin Resources, Inc.^		15,690		523,575
Loews Corp.		26,075		1,071,422
Mid-America Apartment Communities, Inc. REIT^		2,946		313,454
Nationstar Mortgage Holdings, Inc.*^		39,911		449,398
Popular, Inc.^		17,261		505,747
Reinsurance Group of America^		4,479		434,418
SVB Financial Group*		3,065		291,665
Willis Towers Watson plc^		15,589		1,937,868

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 11

Diamond Hill Mid Cap Fund

Schedule of Investments (Continued)

June 30, 2016 (Unaudited)

	Shares		Fair Value
Common Stocks — 92.7% continued
Financials — 28.2% continued
XL Group plc^		10,036	$	334,299
				10,259,762
Health Care — 6.2%
Boston Scientific Corp.*		53,648		1,253,754
LifePoint Hospitals, Inc.*^		15,375		1,005,064
				2,258,818
Industrials — 11.0%
Avis Budget Group, Inc.*^		11,685		376,608
Colfax Corp.*^		23,935		633,320
Deere & Co.^		6,275		508,526
Dover Corp.		4,675		324,071
Hub Group, Inc., Class A*^		15,560		597,037
Kirby Corp.*^		9,830		613,294
Parker Hannifin Corp.^		5,796		626,258
United Continental Holdings, Inc.*		8,085		331,808
				4,010,922
Information Technology — 8.4%
Broadridge Financial Solutions, Inc.		3,515		229,178
CommScope Holding, Inc.*^		18,765		582,278
Juniper Networks, Inc.^		31,736		713,743
Keysight Technologies, Inc.*		7,600		221,084
Linear Technology Corp.^		12,900		600,237
Vantiv, Inc., Class A*		12,350		699,010
				3,045,530
Materials — 2.7%
Axalta Coating Systems Ltd.*^		25,810		684,739
Eastman Chemical Co.^		4,470		303,513
				988,252
Utilities — 3.2%
ITC Holdings Corp.		8,004		374,747
UGI Corp.^		17,494		791,604
				1,166,351
Total Common Stocks			$	33,733,068

	Shares		Fair Value
Registered Investment Companies — 34.4%
State Street Institutional Liquid Reserves Fund, Premier Class, 0.47%S		2,479,173	$	2,479,173
State Street Navigator Securities Lending Prime Portfolio, 0.51%†S		10,020,993		10,020,993
Total Registered Investment Companies			$	12,500,166
Total Investment Securities — 127.1%
(Cost $44,092,177)**			$	46,233,234
Net Other Assets (Liabilities) — (27.1)%				(9,861,330	)
Net Assets — 100.0%			$	36,371,904

* Non-income producing security.

^ All or a portion of the security is on loan. The total fair value of the securities on loan as of June 30, 2016 was $9,791,680.

^†  This security, which was purchased using cash collateral received from securities on loan, represents collateral for securities loaned as of June 30, 2016.

^S  Rate represents the daily yield on June 30, 2016.

** Represents cost for financial reporting purposes.

PLC – Public Limited Company

REIT – Real Estate Investment Trust

See accompanying Notes to Financial Statements

12 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Large Cap Fund

Schedule of Investments

June 30, 2016 (Unaudited)

	Shares		Fair Value
Common Stocks — 97.8%
Consumer Discretionary — 19.1%
BorgWarner, Inc.		1,811,025	$	53,461,458
Charter Communications, Inc., Class A*^		178,470		40,805,381
Comcast Corp., Class A		1,158,555		75,526,199
Ford Motor Co.^		5,616,820		70,603,427
Goodyear Tire & Rubber Co., The^		1,480,385		37,986,679
Hanesbrands, Inc.^		1,898,339		47,705,259
TEGNA, Inc.^		1,904,920		44,136,996
TJX Cos., Inc., The^		1,281,660		98,982,602
Twenty-First Century Fox, Inc.		1,253,490		34,157,603
VF Corp.^		999,895		61,483,544
Walt Disney Co., The^		692,675		67,757,469
Whirlpool Corp.^		418,070		69,667,185
				702,273,802
Consumer Staples — 10.6%
Kimberly-Clark Corp.		733,875		100,893,135
Philip Morris International^		604,275		61,466,853
Procter & Gamble Co., The^		1,507,936		127,676,941
Sysco Corp.^		1,986,647		100,802,469
				390,839,398
Energy — 3.5%
Cimarex Energy Co.^		716,724		85,519,508
EOG Resources, Inc.^		533,351		44,492,140
				130,011,648
Financials — 25.7%
American International Group, Inc.^		1,127,871		59,653,097
Capital One Financial Corp.		1,545,445		98,151,212
Citigroup, Inc.^		2,769,965		117,418,817
Franklin Resources, Inc.^		1,322,565		44,133,994
JPMorgan Chase & Co.^		1,836,283		114,106,626
Loews Corp.^		1,251,155		51,409,959
Marsh & McLennan Cos., Inc.^		1,392,835		95,353,484
MetLife, Inc.^		1,725,935		68,743,991
Morgan Stanley		4,278,680		111,160,106
PNC Financial Services Group, Inc.^		525,970		42,808,698
Progressive Corp.^		2,241,065		75,075,678

	Shares		Fair Value
Financials — 25.7% continued
Wells Fargo & Co.		1,473,356	$	69,733,939
				947,749,601
Health Care — 13.6%
Abbott Laboratories^		3,437,405		135,124,392
Aetna, Inc.^		396,019		48,365,800
Medtronic plc^		952,072		82,611,287
Pfizer, Inc.^		3,862,252		135,989,893
Stryker Corp.^		435,405		52,174,581
Thermo Fisher Scientific, Inc.^		305,294		45,110,241
				499,376,194
Industrials — 8.2%
Illinois Tool Works, Inc.^		669,004		69,683,457
Parker Hannifin Corp.^		624,709		67,499,807
United Parcel Service, Inc.^		441,853		47,596,405
United Technologies Corp.^		1,153,672		118,309,064
				303,088,733
Information Technology — 14.8%
Alphabet, Inc., Class A*		123,559		86,927,463
Apple Computer, Inc.		828,262		79,181,847
Cisco Systems, Inc.^		3,735,603		107,174,450
International Business Machines Corp.^		361,340		54,844,185
Juniper Networks, Inc.^		1,466,035		32,971,127
Linear Technology Corp.^		1,102,050		51,278,387
Microsoft Corp.		1,468,715		75,154,147
Vantiv, Inc., Class A*^		1,016,410		57,528,806
				545,060,412
Materials — 2.3%
Eastman Chemical Co.^		466,194		31,654,573
Praxair, Inc.^		477,612		53,678,812
				85,333,385
Total Common Stocks			$	3,603,733,173

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 13

Diamond Hill Large Cap Fund

Schedule of Investments (Continued)

June 30, 2016 (Unaudited)

Diamond Hill Select Fund

Schedule of Investments

June 30, 2016 (Unaudited)

	Shares		Fair Value
Registered Investment Companies — 12.9%
State Street Institutional Liquid Reserves Fund, Premier Class, 0.47%S		57,302,851	$	57,302,851
State Street Navigator Securities Lending Prime Portfolio, 0.51%†S		419,942,141		419,942,141
Total Registered Investment Companies			$	477,244,992
Total Investment Securities — 110.7%
(Cost $3,488,297,282)**			$	4,080,978,165
Net Other Assets (Liabilities) — (10.7)%				(393,332,748	)
Net Assets — 100.0%			$	3,687,645,417

* Non-income producing security.

^ All or a portion of the security is on loan. The total fair value of the securities on loan as of June 30, 2016 was $403,527,235.

^†  This security, which was purchased using cash collateral received from securities on loan, represents collateral for securities loaned as of June 30, 2016.

^S  Rate represents the daily yield on June 30, 2016.

** Represents cost for financial reporting purposes.

PLC – Public Limited Company

See accompanying Notes to Financial Statements

	Shares		Fair Value
Common Stocks — 95.8%
Consumer Discretionary — 18.1%
BorgWarner, Inc.		152,225	$	4,493,682
Liberty Global plc, Class A*^		234,755		6,821,980
Newell Brands, Inc.		30,488		1,480,802
TJX Cos., Inc., The		36,292		2,802,831
Twenty-First Century Fox, Inc.		203,433		5,543,549
Whirlpool Corp.		25,732		4,287,981
				25,430,825
Consumer Staples — 1.7%
Post Holdings, Inc.*		29,616		2,448,947
Energy — 1.0%
Cimarex Energy Co.		11,788		1,406,544
Financials — 30.5%
BankUnited, Inc.		94,210		2,894,131
Berkshire Hathaway, Inc., Class B*		31,585		4,573,192
Brown & Brown, Inc.		13,996		524,430
Citigroup, Inc.		105,613		4,476,935
Franklin Resources, Inc.		153,553		5,124,064
Loews Corp.		113,688		4,671,440
MetLife, Inc.		144,672		5,762,286
Nationstar Mortgage Holdings, Inc.*^		682,660		7,686,752
Popular, Inc.		96,077		2,815,056
Willis Towers Watson plc		34,863		4,333,820
				42,862,106
Health Care — 11.6%
Abbott Laboratories		107,220		4,214,818
Allergan plc*		18,611		4,300,816
LifePoint Hospitals, Inc.*		68,706		4,491,311
Valeant Pharmaceuticals International, Inc.*^		164,443		3,311,882
				16,318,827
Industrials — 23.2%
Avis Budget Group, Inc.*^		217,875		7,022,111
Colfax Corp.*^		177,143		4,687,204
Deere & Co.^		63,005		5,105,925
Hub Group, Inc., Class A*		160,321		6,151,517
Parker Hannifin Corp.^		26,847		2,900,818
United Continental Holdings, Inc.*		93,125		3,821,850
United Technologies Corp.		27,554		2,825,663
				32,515,088

14 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Select Fund

Schedule of Investments (Continued)

June 30, 2016 (Unaudited)

Diamond Hill Long-Short Fund

Schedule of Investments

June 30, 2016 (Unaudited)

	Shares		Fair Value
Common Stocks — 95.8% continued
Information Technology — 9.7%
Alphabet, Inc., Class A*		5,100	$	3,588,003
Alphabet, Inc., Class C*		2,310		1,598,751
Apple Computer, Inc.		65,809		6,291,340
Linear Technology Corp.		45,315		2,108,507
				13,586,601
Total Common Stocks			$	134,568,938
Registered Investment Companies — 11.8%
State Street Institutional Liquid Reserves Fund, Premier Class, 0.47%S		959,749		959,749
State Street Navigator Securities Lending Prime Portfolio, 0.51%†S		15,478,929		15,478,929
Total Registered Investment Companies			$	16,438,678
Total Investment Securities — 107.6%
(Cost $154,815,257)**			$	151,007,616
Net Other Assets (Liabilities) — (7.6)%				(10,772,345	)
Net Assets — 100.0%			$	140,235,271

* Non-income producing security.

^ All or a portion of the security is on loan. The total fair value of the securities on loan as of June 30, 2016 was $15,124,192.

^†  This security, which was purchased using cash collateral received from securities on loan, represents collateral for securities loaned as of June 30, 2016.

^S  Rate represents the daily yield on June 30, 2016.

** Represents cost for financial reporting purposes.

PLC – Public Limited Company

See accompanying Notes to Financial Statements

	Shares		Fair Value
Common Stocks — 87.1%
Consumer Discretionary — 18.6%
BorgWarner, Inc.^		3,099,415	$	91,494,731
Comcast Corp., Class A		1,169,695		76,252,417
Goodyear Tire & Rubber Co., The^		1,811,895		46,493,226
Hanesbrands, Inc.		1,072,995		26,964,364
Newell Brands, Inc.^		1,313,742		63,808,449
TEGNA, Inc.^		3,000,388		69,518,990
TJX Cos., Inc., The		994,790		76,827,632
Twenty-First Century Fox, Inc.		3,592,620		97,898,894
VF Corp.^		1,063,055		65,367,253
Walt Disney Co., The^		670,326		65,571,289
Whirlpool Corp.^		581,445		96,891,994
				777,089,239
Consumer Staples — 4.3%
Kimberly-Clark Corp.^		398,810		54,828,399
Procter & Gamble Co., The^		823,770		69,748,606
Sysco Corp.^		1,069,587		54,270,844
				178,847,849
Energy — 2.9%
Cimarex Energy Co.^		713,134		85,091,149
EOG Resources, Inc.^		432,712		36,096,835
				121,187,984
Financials — 28.6%
BankUnited, Inc.^		2,113,415		64,924,109
Berkshire Hathaway, Inc., Class B*^		414,175		59,968,398
Brown & Brown, Inc.^		238,070		8,920,483
Capital One Financial Corp.^		1,868,795		118,687,169
Citigroup, Inc.^		3,922,064		166,256,294
Franklin Resources, Inc.^		2,571,190		85,800,610
JPMorgan Chase & Co.^		1,092,985		67,918,088
Loews Corp.^		1,604,480		65,928,083
MetLife, Inc.^		2,867,659		114,218,859
Morgan Stanley		2,974,470		77,276,731
PNC Financial Services Group, Inc.		299,370		24,365,724
Popular, Inc.^		3,337,163		97,778,876
Prudential Financial, Inc.^		479,918		34,237,350
Wells Fargo & Co.		1,789,177		84,681,747
Willis Towers Watson plc^		1,009,285		125,464,219
				1,196,426,740

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 15

Diamond Hill Long-Short Fund

Schedule of Investments (Continued)

June 30, 2016 (Unaudited)

	Shares		Fair Value
Common Stocks — 87.1% continued
Health Care — 8.7%
Abbott Laboratories^		4,001,550	$	157,300,932
Boston Scientific Corp.*^		899,493		21,021,151
Medtronic plc^		556,107		48,253,404
Pfizer, Inc.^		3,927,990		138,304,528
				364,880,015
Industrials — 10.6%
Avis Budget Group, Inc.*^		1,146,765		36,960,236
Colfax Corp.*^		1,834,105		48,530,418
Deere & Co.^		761,710		61,728,978
Illinois Tool Works, Inc.		418,625		43,603,980
Parker Hannifin Corp.^		761,400		82,269,271
United Continental Holdings, Inc.*		1,531,450		62,850,708
United Technologies Corp.^		1,033,685		106,004,397
				441,947,988
Information Technology — 12.8%
Alphabet, Inc., Class A*		172,470		121,337,818
Apple Computer, Inc.		1,059,116		101,251,490
Cisco Systems, Inc.^		2,955,650		84,797,599
International Business Machines Corp.^		415,270		63,029,681
Juniper Networks, Inc.^		1,794,266		40,353,042
Microsoft Corp.^		1,283,664		65,685,087
Vantiv, Inc., Class A*		1,037,925		58,746,555
				535,201,272
Materials — 0.6%
Axalta Coating Systems Ltd.*		1,041,690		27,636,036
Total Common Stocks			$	3,643,217,123

	Shares		Fair Value
Registered Investment Companies — 26.0%
State Street Institutional Liquid Reserves Fund, Premier Class, 0.47%S		539,852,167	$	539,852,167
State Street Navigator Securities Lending Prime Portfolio, 0.51%†S		548,681,030		548,681,030
Total Registered Investment Companies			$	1,088,533,197
Total Investment Securities — 113.1%
Cost ($4,245,103,364)**			$	4,731,750,318
Segregated Cash With Custodian — 30.4%				1,269,791,609
Securities Sold Short — (30.1)%
(Proceeds $1,115,523,564)				(1,258,946,572	)
Net Other Assets (Liabilities) — (13.4)%				(559,713,075	)
Net Assets — 100.0%			$	4,182,882,282

* Non-income producing security.

^ All or a portion of the security is on loan. The total fair value of the securities on loan as of June 30, 2016 was $536,558,016.

^†  This security, which was purchased using cash collateral received from securities on loan, represents collateral for securities loaned as of June 30, 2016.

^S  Rate represents the daily yield on June 30, 2016.

** Represents cost for financial reporting purposes.

PLC – Public Limited Company

See accompanying Notes to Financial Statements

16 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Long-Short Fund

Schedule of Investments Sold Short

June 30, 2016 (Unaudited)

	Shares		Fair Value
Common Stocks — 30.1%
Consumer Discretionary — 6.8%
American Eagle Outfitters, Inc.		852,580	$	13,581,599
Best Buy Co., Inc.		1,828,060		55,938,634
Big Lots, Inc.		247,110		12,382,682
lululemon athletica, Inc.*		495,210		36,576,211
McDonald’s Corp.		391,500		47,113,110
New York Times Co., The, Class A		237,934		2,879,001
Polaris Industries, Inc.		260,070		21,263,323
Tractor Supply Co.		302,453		27,577,665
Under Armour, Inc., Class A*		314,305		12,613,060
Wal-Mart Stores, Inc.		743,110		54,261,892
				284,187,177
Consumer Staples — 4.7%
Campbell Soup Co.		1,285,735		85,539,949
Coca-Cola Co., The		958,390		43,443,819
Colgate-Palmolive Co.		296,700		21,718,440
ConAgra Foods, Inc.		334,680		16,001,051
Kellogg Co.		373,415		30,489,335
				197,192,594
Energy — 0.5%
Southwestern Energy Co.*		1,676,325		21,088,169
Financials — 5.3%
Bank of Hawaii Corp.		274,090		18,857,392
Cincinnati Financial Corp.		1,284,730		96,213,429
First American Financial Corp.		727,035		29,241,348
Hanover Insurance Group, Inc.		327,990		27,754,514
Mercury General Corp.		203,968		10,842,939
Selective Insurance Group, Inc.		980,850		37,478,279
				220,387,901
Health Care — 3.4%
Abbvie, Inc.		278,210		17,223,981
Bristol-Myers Squibb Co.		751,100		55,243,405
DENTSPLY SIRONA, Inc.		339,735		21,077,159
IDEXX Laboratories, Inc.*		281,355		26,126,625
Illumina, Inc.*		60,215		8,452,982
Myriad Genetics, Inc.*		400,500		12,255,300
				140,379,452

	Shares		Fair Value
Industrials — 2.0%
Boeing Co., The		490,955	$	63,760,326
Cintas Corp.		193,375		18,975,889
				82,736,215
Information Technology — 3.4%
Arista Networks, Inc.*		282,235		18,170,289
LogMeIn, Inc.*		426,792		27,071,417
Mobileye NV*		756,895		34,923,135
NETGEAR, Inc.*		398,105		18,925,912
Ubiquiti Networks, Inc.*		573,978		22,189,989
Western Union Co.		1,183,700		22,703,366
				143,984,108
Materials — 0.3%
Bemis Co., Inc.		256,495		13,206,928
Telecommunication Services — 0.8%
AT&T, Inc.		793,090		34,269,419
Utilities — 1.7%
Consolidated Edison, Inc.		858,670		69,071,415
Total Common Stocks			$	1,206,503,378
Registered Investment Company — 1.2%
Industrials — 1.2%
Industrial Select Sector SPDR Fund 2.07%		937,155		52,443,194
Total Securities Sold Short — 30.1%
(Proceeds 1,115,523,564)			$	1,258,946,572

* Non-dividend expense producing security.

Percentages disclosed are based on total net assets of the Fund at June 30, 2016.

See accompanying Notes to Financial Statements

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 17

Diamond Hill Research Opportunities Fund

Schedule of Investments

June 30, 2016 (Unaudited)

	Shares		Fair Value
Common Stocks — 102.4%
Consumer Discretionary — 17.7%
Aaron’s, Inc.		24,350	$	533,022
Charter Communications, Inc., Class A*		2,137		488,604
Dollar General Corp.^		4,030		378,820
Hanesbrands, Inc.		10,200		256,326
Liberty Global plc, Class A*^		65,605		1,906,481
Liberty Lilac Group*		856		27,615
Newell Brands, Inc.^		19,300		937,401
Red Rock Resorts, Inc., Class A*		30,906		679,314
TJX Cos., Inc., The		5,276		407,465
Twenty-First Century Fox, Inc.		26,680		727,030
Vail Resorts, Inc.		11,800		1,631,114
VF Corp.^		12,000		737,881
				8,711,073
Consumer Staples — 4.0%
B&G Foods, Inc.^		10,165		489,953
Post Holdings, Inc.*^		8,928		738,256
Tesco plc ADR*		108,240		759,845
				1,988,054
Energy — 0.6%
Cimarex Energy Co.^		2,655		316,795
Financials — 19.2%
Capital One Financial Corp.^		14,050		892,315
Discover Financial Services		16,540		886,379
Fortress Investment Group LLC, Class A		131,931		583,135
Franklin Resources, Inc.^		25,701		857,642
iStar Financial, Inc. REIT*		69,685		668,279
Julius Baer Group, Ltd. (SW)		15,210		612,365
MetLife, Inc.		22,149		882,195
Nationstar Mortgage Holdings, Inc.*^		134,100		1,509,966
Popular, Inc.^		28,585		837,541
State Street Corp.^		14,325		772,404
SVB Financial Group*		2,800		266,448
Willis Towers Watson plc^		5,550		689,921
				9,458,590
Health Care — 16.5%
Alere, Inc.*		7,986		332,856
Allergan plc*^		1,425		329,303
BioScrip, Inc.*^		690,239		1,760,110
Concordia International Corp.^		9,200		198,168

	Shares		Fair Value
Health Care — 16.5% continued
Express Scripts Holding Co.*^		2,125	$	161,075
GlaxoSmithKline plc ADR		60,098		2,604,647
H. Lundbeck A/S (DK)*		9,096		341,038
LifePoint Hospitals, Inc.*^		7,620		498,119
McKesson Corp.		1,140		212,781
Stryker Corp.^		2,950		353,499
Thermo Fisher Scientific, Inc.		1,355		200,214
Universal American Financial Corp.		26,518		201,006
Valeant Pharmaceuticals International, Inc.*^		43,325		872,566
				8,065,382
Industrials — 16.7%
Aircastle Ltd.^		30,000		586,799
Avis Budget Group, Inc.*^		31,050		1,000,742
Colfax Corp.*^		19,940		527,613
Emerson Electric Co.		4,640		242,022
Hub Group, Inc., Class A*		74,755		2,868,350
Kirby Corp.*		23,280		1,452,439
SPX FLOW, Inc.*		11,360		296,155
United Continental Holdings, Inc.*		29,000		1,190,160
				8,164,280
Information Technology — 23.6%
Alphabet, Inc., Class A*		1,526		1,073,587
Anixter International, Inc.*		18,660		994,205
Apple Computer, Inc.		4,055		387,658
Cisco Systems, Inc.^		54,856		1,573,818
CommScope Holding, Inc.*		46,661		1,447,891
International Business Machines Corp.^		8,992		1,364,806
Juniper Networks, Inc.		65,999		1,484,318
Keysight Technologies, Inc.*^		35,205		1,024,113
Microsoft Corp.^		43,390		2,220,266
				11,570,662
Materials — 1.5%
Axalta Coating Systems Ltd.*^		15,410		408,827
Fuchs Petrolub SE (GE)		9,295		334,351
				743,178
Telecommunication Services — 2.6%
Cincinnati Bell, Inc.*		283,134		1,293,922
Total Common Stocks			$	50,311,936

18 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Research Opportunities Fund

Schedule of Investments (Continued)

June 30, 2016 (Unaudited)

	Shares		Fair Value
Corporate Bonds — 2.0%
Consumer Discretionary — 1.3%
Laureate Education, Inc., 10.00%, 09/01/19††		750,000	$	656,250
Energy — 0.7%
Energen Corp., 7.13%, 02/15/28		400,000		340,000
Total Corporate Bonds				996,250
Registered Investment Company — 22.6%
State Street Navigator Securities Lending Prime Portfolio, 0.51%†S		11,114,437	$	11,114,437
Total Investment Securities — 127.0%
Cost ($62,141,842)**			$	62,422,623
Segregated Cash With Custodian — 24.5%				11,993,082
Securities Sold Short — (30.2)%
(Proceeds $13,606,071)				(14,828,249	)
Net Other Assets (Liabilities) — (21.3)%				(10,458,075	)
Net Assets — 100.0%			$	49,129,381

* Non-income producing security.

^ All or a portion of the security is on loan. The total fair value of the securities on loan as of June 30, 2016 was $10,820,019.

^†  This security, which was purchased using cash collateral received from securities on loan, represents collateral for securities loaned as of June 30, 2016.

^††  Restricted securities not registered under the Securities Act of 1933 are as follows:

	Acquisition Date		Current Cost		Fair Value		Value as a % of Net Assets
Laureate Education, Inc.		April-15	$	670,180	$	656,250		1.3%

^S  Rate represents the daily yield on June 30, 2016.

** Represents cost for financial reporting purposes.

ADR – American Depositary Receipt

DK – Danish Security

GE – German Security

PLC – Public Limited Company

REIT – Real Estate Investment Trust

SW – Swiss Security

See accompanying Notes to Financial Statements

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 19

Diamond Hill Research Opportunities Fund

Schedule of Investments Sold Short

June 30, 2016 (Unaudited)

	Shares		Fair Value
Common Stocks — 30.2%
Consumer Discretionary — 6.7%
American Eagle Outfitters, Inc.		29,910	$	476,465
Best Buy Co., Inc.		33,185		1,015,461
Big Lots, Inc.		3,330		166,866
lululemon athletica, Inc.*		7,300		539,178
Polaris Industries, Inc.		7,120		582,131
Under Armour, Inc., Class A*		5,850		234,761
Wal-Mart Stores, Inc.		4,040		295,001
				3,309,863
Consumer Staples — 1.5%
Campbell Soup Co.		11,375		756,778
Energy — 1.4%
Southwestern Energy Co.*		54,695		688,064
Financials — 4.1%
Bank of Hawaii Corp.		4,635		318,888
Cincinnati Financial Corp.		9,016		675,208
First American Financial Corp.		3,880		156,054
Hanover Insurance Group, Inc.		2,764		233,890
Selective Insurance Group, Inc.		5,153		196,896
Westamerica BanCorp.		8,973		442,010
				2,022,946
Health Care — 4.3%
Abbvie, Inc.		4,133		255,874
Bristol-Myers Squibb Co.		2,700		198,585
Celgene Corp.*		1,698		167,474
DENTSPLY SIRONA, Inc.		9,924		615,685
IDEXX Laboratories, Inc.*		3,770		350,082
Illumina, Inc.*		1,130		158,629
Merck & Co., Inc.		3,290		189,537
Myriad Genetics, Inc.*		5,267		161,170
				2,097,036
Industrials — 1.8%
Boeing Co., The		3,400		441,558
Cintas Corp.		4,350		426,866
				868,424
Information Technology — 8.6%
Arista Networks, Inc.*		4,359		280,632
LogMeIn, Inc.*		15,948		1,011,582
Mobileye NV*		17,971		829,182
NETGEAR, Inc.*		16,515		785,123

	Shares		Fair Value
Information Technology — 8.6% continued
Ubiquiti Networks, Inc.*		15,690	$	606,575
Western Union Co.		37,764		724,314
				4,237,408
Materials — 0.7%
Bemis Co., Inc.		6,325		325,674
Utilities — 1.1%
Consolidated Edison, Inc.		6,490		522,056
Total Securities Sold Short — 30.2%
(Proceeds 13,606,071)			$	14,828,249

* Non-dividend expense producing security.

Percentages disclosed are based on total net assets of the Fund at June 30, 2016.

See accompanying Notes to Financial Statements

20 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Financial Long-Short Fund

Schedule of Investments

June 30, 2016 (Unaudited)

	Shares		Fair Value
Common Stocks — 98.1%
Banks, Thrifts & Mortgage Finance — 39.5%
Berkshire Hathaway, Inc., Class B*^		3,685	$	533,551
BOK Financial Corp.^		9,370		587,499
Bridge Bancorp, Inc.		17,480		496,432
Citigroup, Inc.^		44,395		1,881,905
Comerica, Inc.		8,355		343,641
First Horizon National Corp.^		24,155		332,856
First of Long Island Corp., The		14,002		401,437
First Republic Bank^		6,710		469,633
Nationstar Mortgage Holdings, Inc.*^		118,980		1,339,715
PNC Financial Services Group, Inc.^		1,034		84,157
Popular, Inc.^		59,840		1,753,312
State Bank Financial Corp.		26,475		538,766
Sterling Bancorp		18,148		284,924
SunTrust Banks, Inc.^		1,517		62,318
SVB Financial Group*^		8,175		777,933
Wells Fargo & Co.		18,495		875,368
				10,763,447
Capital Markets — 8.5%
Fortress Investment Group LLC, Class A		280,670		1,240,561
Franklin Resources, Inc.^		32,065		1,070,009
				2,310,570
Consumer Financial Services — 9.3%
American Express Co.		6,335		384,915
Capital One Financial Corp.^		19,785		1,256,545
Discover Financial Services		16,405		879,144
				2,520,604
Diversified Financial Services — 10.0%
BankUnited, Inc.		25,050		769,536
JPMorgan Chase & Co.^		10,530		654,334
Morgan Stanley^		33,990		883,060
State Street Corp.^		7,900		425,968
				2,732,898
Insurance — 20.4%
American Equity Investment Life Holding Co.		13,115		186,889
American International Group, Inc.^		1,180		62,410
Brown & Brown, Inc.^		6,965		260,979
Enstar Group Ltd.*		2,500		404,975
Loews Corp.^		31,680		1,301,731
MetLife, Inc.		33,685		1,341,674
ProAssurance Corp.		5,050		270,428
Progressive Corp.		2,250		75,375

	Shares		Fair Value
Insurance — 20.4% continued
Prudential Financial, Inc.		4,245	$	302,838
Willis Towers Watson plc^		10,858		1,349,758
				5,557,057
IT Services/Other — 0.8%
Vantiv, Inc., Class A*		4,085		231,211
REITs & Real Estate Management — 9.6%
Colony Capital, Inc., Class A^		68,330		1,048,866
iStar Financial, Inc. REIT*		131,733		1,263,319
Jones Lang LaSalle, Inc.		3,200		311,840
				2,624,025
Total Common Stocks			$	26,739,812
Registered Investment Companies — 33.3%
State Street Institutional Liquid Reserves Fund, Premier Class, 0.47%S		1,710,433		1,710,433
State Street Navigator Securities Lending Prime Portfolio, 0.51%†S		7,349,108		7,349,108
Total Registered Investment Companies			$	9,059,541
Total Investment Securities — 131.4%
(Cost $37,411,170)**			$	35,799,353
Segregated Cash With Custodian — 16.9%				4,606,883
Securities Sold Short — (17.2)%
(Proceeds $3,881,016)				(4,685,398	)
Net Other Assets (Liabilities) — (31.1)%				(8,471,974	)
Net Assets — 100.0%			$	27,248,864

* Non-income producing security.

^ All or a portion of the security is on loan. The total fair value of the securities on loan as of June 30, 2016 was $7,184,571.

^†  This security, which was purchased using cash collateral received from securities on loan, represents collateral for securities loaned as of June 30, 2016.

^S  Rate represents the daily yield on June 30, 2016.

** Represents cost for financial reporting purposes.

PLC – Public Limited Company

REIT – Real Estate Investment Trust

See accompanying Notes to Financial Statements

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 21

Diamond Hill Financial Long-Short Fund

Schedule of Investments Sold Short

June 30, 2016 (Unaudited)

Diamond Hill Corporate Credit Fund

Schedule of Investments

June 30, 2016 (Unaudited)

	Shares		Fair Value
Common Stocks — 17.2%
Banks, Thrifts & Mortgage Finance — 3.6%
Bank of Hawaii Corp.		3,725	$	256,280
Washington Federal, Inc.		5,270		127,850
Westamerica BanCorp.		12,100		596,046
				980,176
Insurance — 10.2%
Cincinnati Financial Corp.		12,850		962,337
First American Financial Corp.		10,610		426,734
Hanover Insurance Group, Inc.		6,950		588,109
Mercury General Corp.		4,710		250,384
Selective Insurance Group, Inc.		14,420		550,988
				2,778,552
IT Services/Other — 1.3%
Western Union Co.		18,245		349,939
REITs & Real Estate Management — 2.1%
Government Properties Income Trust		25,010		576,731
Total Securities Sold Short — 17.2%
(Proceeds $3,881,016)			$	4,685,398

Percentages disclosed are based on total net assets of the Fund at June 30, 2016.

See accompanying Notes to Financial Statements

	Shares/ Par Value		Fair Value
Collateralized Debt Obligations — 0.3%
Alesco Preferred Funding Ltd., Class PPNE, 3/23/35#*	$	336,608	$	122,966
Alesco Preferred Funding VI, Class PNN, 3/23/35#*		621,631		238,234
Fort Sheridan ABS CDO Ltd., Class PPN2, 11/5/41#*		611,948		280,309
Taberna Preferred Funding Ltd., Class PPN2, 7/5/35#*		1,175,564		449,959
Total Collateralized Debt Obligations			$	1,091,468
Corporate Bonds — 85.0%
Automotive — 0.7%
Optimas OE Solution Holding, 8.63%, 6/1/21††	$	4,375,000		3,062,500
Banking — 5.2%
Popular, Inc., 7.00%, 7/1/19		18,986,000		18,606,280
Synovus Financial Corp., 7.88%, 2/15/19		1,775,000		1,965,813
Synovus Financial Corp., 5.13%, 6/15/17		1,006,000		1,023,303
				21,595,396
Basic Industry — 7.3%
Axalta Coating Systems Dutch Holding, 7.38%, 5/1/21††		2,330,000		2,455,238
Cemex Finance LLC, 9.38%, 10/12/22^††		2,500,000		2,750,000
Century Communities, Inc., 6.88%, 5/15/22		5,995,000		5,755,199
GCP Applied Technologies, Inc., 9.50%, 2/1/23††		3,300,000		3,687,750
NCI Building Systems, Inc., 8.25%, 1/15/23††		2,597,000		2,791,230

22 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Corporate Credit Fund

Schedule of Investments (Continued)

June 30, 2016 (Unaudited)

	Shares/ Par Value		Fair Value
Corporate Bonds — 85.0% continued
Basic Industry — 7.3% continued
Platform Specialty Products Corp., 6.50%, 2/1/22^††	$	4,950,000	$	4,356,000
Platform Specialty Products Corp., 10.38%, 5/1/21††		335,000		337,513
Summit Materials LLC, 8.50%, 4/15/22††		7,725,000		8,178,843
				30,311,773
Energy — 6.0%
Carrizo Oil & Gas, Inc., 7.50%, 9/15/20		3,085,000		3,123,563
Cimarex Energy Co., 5.88%, 5/1/22		1,302,000		1,363,902
Diamondback Energy, Inc., 7.63%, 10/1/21^		5,876,000		6,206,525
Energen Corp., 4.63%, 9/1/21		780,000		733,200
Energen Corp., 7.13%, 2/15/28		950,000		807,500
McDermott International, Inc., 8.00%, 5/1/21††		4,594,000		3,950,840
Oceaneering International, Inc., 4.65%, 11/15/24		9,097,000		8,799,701
				24,985,231
Financial Services — 7.8%
Nationstar Mortgage/Capital Corp., 6.50%, 7/1/21		15,225,000		13,017,375
Nationstar Mortgage/Capital Corp., 9.63%, 5/1/19^		6,809,000		7,047,315
Quicken Loans, Inc., 5.75%, 5/1/25††		6,846,000		6,606,390
Springleaf Finance Corp., 8.25%, 12/15/20		5,825,000		5,839,563
				32,510,643
Health Care — 9.6%
BioScrip, Inc., 8.88%, 2/15/21		6,200,000		5,735,000
Centene Escrow Corp., 6.13%, 2/15/24††		2,725,000		2,897,016

	Shares/ Par Value		Fair Value
Health Care — 9.6% continued
Concordia Healthcare Corp., 9.50%, 10/21/22^††	$	2,800,000	$	2,611,000
Endo Finance LLC, 6.00%, 7/15/23^††		1,750,000		1,540,000
Greatbatch Ltd., 9.13%, 11/1/23††		4,840,000		4,821,850
Horizon Pharma plc, 6.63%, 5/1/23^		6,075,000		5,649,750
Kindred Healthcare, Inc., 8.75%, 1/15/23		7,800,000		7,697,663
Kindred Healthcare, Inc., 6.38%, 4/15/22		625,000		557,813
Valeant Pharmaceuticals International, Inc., 6.38%, 10/15/20††		10,415,000		8,956,899
				40,466,991
Insurance — 3.3%
Compass Investors, Inc., 7.75%, 1/15/21††		5,025,000		4,974,750
Radian Group, Inc., 5.25%, 6/15/20		8,545,000		8,609,088
				13,583,838
Leisure — 8.0%
Boyd Gaming Corp., 9.00%, 7/1/20		247,000		259,504
CCA Club Operations Holdings LLC, 8.25%, 12/15/23††		3,155,000		3,139,225
CCM Merger, Inc., 9.13%, 5/1/19††		6,055,000		6,342,613
Isle of Capri Casinos, Inc., 8.88%, 6/15/20		1,845,000		1,923,413
Live Nation Entertainment, 7.00%, 9/1/20††		6,329,000		6,590,071
Rivers Pittsburgh Borrower LP/Finance, 9.50%, 6/15/19††		13,450,000		13,786,249
Station Casinos LLC, 7.50%, 3/1/21		1,715,000		1,815,756
				33,856,831

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 23

Diamond Hill Corporate Credit Fund

Schedule of Investments (Continued)

June 30, 2016 (Unaudited)

	Shares/ Par Value		Fair Value
Corporate Bonds — 85.0% continued
Media — 6.1%
Activision Blizzard, Inc., 5.63%, 9/15/21††	$	2,250,000	$	2,356,875
Altice SA, 7.75%, 5/15/22^††		5,300,000		5,353,000
Cimpress NV, 7.00%, 4/1/22††		9,225,000		9,132,750
Liberty Interactive LLC, 8.25%, 2/1/30		4,305,000		4,466,438
Radio One, Inc., 7.38%, 10/15/22††		2,745,000		2,621,475
Radio One, Inc., 9.25%, 2/15/20††		1,528,000		1,352,280
				25,282,818
Real Estate — 2.7%
iStar Financial, Inc., 5.00%, 7/1/19		4,230,000		3,944,475
iStar Financial, Inc., 4.88%, 7/1/18		4,725,000		4,559,625
iStar, Inc., 6.50%, 7/1/21		2,750,000		2,598,750
				11,102,850
Retail — 3.0%
Rent-A-Center, Inc., 4.75%, 5/1/21		10,659,000		8,900,265
The Fresh Market, Inc., 9.75%, 5/1/23^††		3,810,000		3,579,019
				12,479,284
Services — 4.6%
Ashtead Capital, Inc., 6.50%, 7/15/22††		1,970,000		2,050,021
BlueLine Rental LLC, 7.00%, 2/1/19††		2,865,000		2,463,900
Casella Waste Systems, Inc., 7.75%, 2/15/19		9,883,000		10,086,837
Laureate Education, Inc., 10.00%, 9/1/19^††		5,125,000		4,484,375
				19,085,133
Technology & Electronics — 4.9%
Bankrate, Inc., 6.13%, 8/15/18††		9,998,000		10,053,789
Diebold, Inc., 8.50%, 4/15/24††		5,980,000		5,935,150

	Shares/ Par Value		Fair Value
Technology & Electronics — 4.9% continued
Interface Security Systems Holdings, Inc., 9.25%, 1/15/18	$	4,485,000	$	4,307,394
				20,296,333
Telecommunications — 7.8%
Cincinnati Bell, Inc., 8.38%, 10/15/20		10,515,000		10,966,199
Cogent Communications Finance, Inc., 5.63%, 4/15/21††		15,175,000		14,871,500
Frontier Communications Corp., 11.00%, 9/15/25		6,275,000		6,518,156
				32,355,855
Transportation — 7.0%
Air Canada 2013-1 Pass-Through Trust Class B, 5.38%, 11/15/22††		2,625,794		2,638,923
American Airlines, Inc., Class B, Series 2013-1, 5.63%, 1/15/21††		7,062,702		7,274,583
Norwegian Air Shuttle ASA 2016-1 Pass-Through Trust Class A Series 2016-1, 7.50%, 5/10/25††		1,800,000		1,755,144
U.S. Airways, 8.00%, 10/1/19		2,383,669		2,638,769
U.S. Airways 2012-1 Pass-Through Trust, Class B, Series 2012-2B, 6.75%, 6/3/21		4,174,595		4,466,817
U.S. Airways 2013-1 Pass-Through Trust, Class B, Series 2013-1, 5.38%, 5/15/23		1,536,786		1,577,127

24 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Corporate Credit Fund

Schedule of Investments (Continued)

June 30, 2016 (Unaudited)

	Shares/ Par Value		Fair Value
Corporate Bonds — 85.0% continued
Transportation — 7.0% continued
United Airlines, Inc., Class A, Series 2007-1, 6.64%, 7/2/22	$	4,360,124	$	4,621,731
XPO Logistics, Inc., 6.50%, 6/15/22^††		4,219,000		4,023,871
				28,996,965
Utilities — 1.0%
Source Gas LLC, 5.90%, 4/1/17††		4,000,000		4,095,992
Total Corporate Bonds			$	354,068,433
Registered Investment Companies — 20.3%
State Street Institutional Liquid Reserves Fund, Premier Class, 0.47%S		48,266,449		48,266,449
State Street Navigator Securities Lending Prime Portfolio, 0.51%†S		36,206,143		36,206,143
Total Registered Investment Companies			$	84,472,592
Total Investment Securities — 105.6%
(Cost $443,478,110)**			$	439,632,493
Net Other Assets (Liabilities) — (5.6)%				(23,394,243	)
Net Assets — 100.0%			$	416,238,250

* Non-income producing security.

** Represents cost for financial reporting purposes.

^††  Restricted securities not registered under the Securities Act of 1933 are as follows:

	Acquisition Date		Current Cost		Fair Value		Value as a % of Net Assets
Activision Blizzard, Inc.		August-14	$	2,360,100	$	2,356,875		0.6%
Air Canada 2013-1 Pass-Through Trust, Class B		April-16		2,615,947		2,638,923		0.7%
Altice SA		May-15		5,232,750		5,353,000		1.3%
American Airlines, Inc., Series 2013-1, Class B		October-14		7,220,970		7,274,583		1.7%
Ashtead Capital, Inc.		January-16		2,033,040		2,050,021		0.5%
Axalta Coating Systems Dutch Holding		September-15		2,431,655		2,455,238		0.6%
Bankrate, Inc.		September-14		9,871,235		10,053,789		2.5%
BlueLine Rental LLC		July-14		2,908,600		2,463,900		0.6%
CCA Club Operations Holdings LLC		January-16		3,084,978		3,139,225		0.8%
CCM Merger, Inc.		September-15		6,329,111		6,342,613		1.5%
Cemex Finance LLC		September-15		2,611,500		2,750,000		0.7%
Centene Escrow Corp.		January-16		2,775,000		2,897,016		0.7%
Cimpress NV		November-15		9,116,922		9,132,750		2.2%
Cogent Communications Finance, Inc.		April-14		14,815,548		14,871,500		3.6%
Compass Investors, Inc.		August-15		4,834,639		4,974,750		1.2%
Concordia Healthcare Corp.		October-15		2,721,923		2,611,000		0.6%
Diebold, Inc.		April-16		6,027,940		5,935,150		1.4%
Endo Finance LLC		June-15		1,750,000		1,540,000		0.4%
GCP Applied Technologies, Inc.		January-16		3,385,500		3,687,750		0.9%
Greatbatch Ltd.		October-15		4,840,350		4,821,850		1.2%
Laureate Education, Inc.		August-14		4,884,363		4,484,375		1.1%
Live Nation Entertainment		February-14		6,887,927		6,590,071		1.5%
McDermott International, Inc.		July-14		4,448,164		3,950,840		0.9%
NCI Building Systems, Inc.		January-15		2,657,087		2,791,230		0.7%
Norwegian Air Shuttle ASA 2016-1 Pass-Through Trust, Series 2016-1, Class A		May-16		1,761,894		1,755,144		0.4%
Optimas OE Solution Holding		April-15		4,417,375		3,062,500		0.7%
Platform Specialty Products Corp.		February-15		5,157,709		4,693,513		1.1%
Quicken Loans, Inc.		September-16		6,391,448		6,606,390		1.6%
Radio One, Inc.		July-14		4,294,494		3,973,755		0.9%
Rivers Pittsburgh Borrower LP/Finance		November-14		14,054,996		13,786,249		3.2%
Source Gas LLC		March-10		3,840,000		4,095,992		1.0%
Summit Materials LLC		February-16		7,882,187		8,178,843		1.9%

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 25

Diamond Hill Corporate Credit Fund

Schedule of Investments (Continued)

June 30, 2016 (Unaudited)

Diamond Hill High Yield Fund

Schedule of Investments

June 30, 2016 (Unaudited)

	Acquisition Date		Current Cost		Fair Value		Value as a % of Net Assets
The Fresh Market, Inc.		April-16	$	3,757,392	$	3,579,019		0.9%
Valeant Pharmaceuticals International, Inc.		April-14		9,481,339		8,956,899		2.1%
XPO Logistics, Inc.		June-15		4,054,378		4,023,871		1.0%
			$	180,938,461	$	177,878,624		42.7%

^#  Restricted and illiquid securities not registered under the Securities Act of 1933 and valued at fair value by the Fair Value Committee based on procedures approved by the Board of Trustees are as follows:

	Acquisition Date		Current Cost		Fair Value		Value as a % of Net Assets
Alesco Preferred Funding Ltd., Series 6A, Class PPNE		March-05	$	336,608	$	122,966		0.0%
Alesco Preferred Funding VI, Class PNN		December-04		621,631		238,234		0.1%
Fort Sheridan ABS CDO Ltd., Series 2005-1A, Class PPN2		March-05		509,448		280,309		0.1%
Taberna Preferred Funding Ltd., Series 2005-1A, Class PPN2		March-05		1,035,359		449,959		0.1%
			$	2,503,046	$	1,091,468		0.3%

^ All or a portion of the security is on loan. The total fair value of the securities on loan as of June 30, 2016 was $34,846,249.

^†  This security, which was purchased using cash collateral received from securities on loan, represents collateral for securities loaned as of June 30, 2016.

^S  Rate represents the daily yield on June 30, 2016.

See accompanying Notes to Financial Statements

	Shares/ Par Value		Fair Value
Corporate Bonds — 95.6%
Automotive — 0.6%
Optimas OE Solution Holding, 8.63%, 6/1/21††	$	225,000	$	157,500
Banking — 5.3%
Popular, Inc., 7.00%, 7/1/19^		1,310,000		1,283,800
Basic Industry — 10.1%
Allegheny Technologies, Inc., 7.88%, 8/15/23		500,000		417,500
Century Communities, Inc., 6.88%, 5/15/22		600,000		576,000
GCP Applied Technologies, Inc., 9.50%, 2/1/23^††		150,000		167,625
NCI Building Systems, Inc., 8.25%, 1/15/23††		205,000		220,332
Platform Specialty Products Corp., 10.38%, 5/1/21††		500,000		503,750
Summit Materials LLC, 8.50%, 4/15/22††		550,000		582,312
				2,467,519
Energy — 5.1%
Diamondback Energy, Inc., 7.63%, 10/1/21^		200,000		211,250
Energen Corp., 4.63%, 9/1/21		142,000		133,480
Energen Corp., 7.13%, 2/15/28		350,000		297,500
McDermott International, Inc., 8.00%, 5/1/21††		210,000		180,600
Oceaneering International, Inc., 4.65%, 11/15/24		425,000		411,111
				1,233,941
Financial Services — 9.2%
Nationstar Mortgage/Capital Corp., 6.50%, 7/1/21		1,475,000		1,261,125
Nationstar Mortgage/Capital Corp., 9.63%, 5/1/19^		144,000		149,040

26 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill High Yield Fund

Schedule of Investments (Continued)

June 30, 2016 (Unaudited)

	Shares/ Par Value		Fair Value
Corporate Bonds — 95.6% continued
Financial Services — 9.2% continued
Quicken Loans, Inc., 5.75%, 5/1/25††	$	300,000	$	289,500
Springleaf Finance Corp., 8.25%, 12/15/20^		550,000		551,375
				2,251,040
Health Care — 12.5%
BioScrip, Inc., 8.88%, 2/15/21		500,000		462,500
Centene Escrow Corp., 6.13%, 2/15/24††		50,000		53,156
Concordia Healthcare Corp., 9.50%, 10/21/22^††		200,000		186,500
Endo Finance LLC, 6.00%, 7/15/23^††		100,000		88,000
Greatbatch Ltd., 9.13%, 11/1/23††		326,000		324,778
Horizon Pharma plc, 6.63%, 5/1/23^		525,000		488,250
Kindred Healthcare, Inc., 8.75%, 1/15/23		600,000		592,127
Kindred Healthcare, Inc., 6.38%, 4/15/22^		275,000		245,438
Valeant Pharmaceuticals International, Inc., 7.25%, 7/15/22^††		100,000		85,770
Valeant Pharmaceuticals International, Inc., 6.38%, 10/15/20^††		600,000		515,999
				3,042,518
Insurance — 2.2%
Compass Investors, Inc., 7.75%, 1/15/21††		375,000		371,250
Radian Group, Inc., 5.25%, 6/15/20		175,000		176,313
				547,563
Leisure — 8.0%
Boyd Gaming Corp., 9.00%, 7/1/20		250,000		262,656
CCA Club Operations Holdings LLC, 8.25%, 12/15/23††		200,000		199,000
CCM Merger, Inc., 9.13%, 5/1/19††		325,000		340,438
Isle of Capri Casinos, Inc., 8.88%, 6/15/20		125,000		130,313

	Shares/ Par Value		Fair Value
Leisure — 8.0% continued
Live Nation Entertainment, 7.00%, 9/1/20††	$	75,000	$	78,094
Rivers Pittsburgh Borrower LP/Finance, 9.50%, 6/15/19††		800,000		819,999
Station Casinos LLC, 7.50%, 3/1/21		100,000		105,875
				1,936,375
Media — 7.4%
Activision Blizzard, Inc., 5.63%, 9/15/21††		110,000		115,225
Altice SA, 7.75%, 5/15/22^††		300,000		303,000
Cimpress NV, 7.00%, 4/1/22††		425,000		420,750
Liberty Interactive LLC, 8.25%, 2/1/30^		450,000		466,875
Quad Graphics, Inc., 7.00%, 5/1/22		135,000		119,138
Radio One, Inc., 7.38%, 10/15/22††		250,000		238,750
Radio One, Inc., 9.25%, 2/15/20††		160,000		141,600
				1,805,338
Real Estate — 2.3%
iStar Financial, Inc., 5.00%, 7/1/19		400,000		373,000
iStar, Inc., 6.50%, 7/1/21		200,000		189,000
				562,000
Retail — 4.5%
Rent-A-Center, Inc., 4.75%, 5/1/21		700,000		584,500
The Fresh Market, Inc., 9.75%, 5/1/23^††		550,000		516,656
				1,101,156
Services — 3.8%
BlueLine Rental LLC, 7.00%, 2/1/19††		50,000		43,000
Casella Waste Systems, Inc., 7.75%, 2/15/19		337,000		343,951
Laureate Education, Inc., 10.00%, 9/1/19^††		625,000		546,875
				933,826

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 27

Diamond Hill High Yield Fund

Schedule of Investments (Continued)

June 30, 2016 (Unaudited)

	Shares/ Par Value		Fair Value
Corporate Bonds — 95.6% continued
Technology & Electronics — 7.0%
Bankrate, Inc., 6.13%, 8/15/18††	$	825,000	$	829,604
Diebold, Inc., 8.50%, 4/15/24^††		600,000		595,500
Interface Security Systems Holdings, Inc., 9.25%, 1/15/18		300,000		288,120
				1,713,224
Telecommunications — 8.1%
CenturyLink, Inc., Series Y, 7.50%, 4/1/24^		300,000		303,000
Cincinnati Bell, Inc., 8.38%, 10/15/20		423,000		441,151
Cogent Communications Finance, Inc., 5.63%, 4/15/21††		640,000		627,200
Frontier Communications Corp., 11.00%, 9/15/25		560,000		581,700
				1,953,051
Transportation — 9.5%
Air Canada 2013-1 Pass-Through Trust Class B, 5.38%, 11/15/22††		201,984		202,994
American Airlines, Inc., Class B, Series 2013-1, 5.63%, 1/15/21††		449,445		462,928
Continental Airlines 2012-1, Class B, Series 2012-1, 6.25%, 4/11/20		24,358		25,917
Continental Airlines 2012-2, Class B, Series 2012-2, 5.50%, 4/29/22		161,836		166,691
Norwegian Air Shuttle ASA 2016-1 Pass-Through Trust Class A Series 2016-1, 7.50%, 5/10/25††		200,000		195,016
U.S. Airways 2011-1 Pass-Through Trust, Class A, Series 2011-1, 7.13%, 4/22/25		28,997		34,361

	Shares/ Par Value		Fair Value
Transportation — 9.5% continued
U.S. Airways 2012-1 Pass-Through Trust, Class B, Series 2012-2B, 6.75%, 6/3/21	$	179,698	$	192,277
U.S. Airways 2013-1 Pass-Through Trust, Class B, Series 2013-1, 5.38%, 5/15/23		135,999		139,569
United Airlines, Inc., Class B, Series 2013-1B, 5.38%, 2/15/23		82,037		84,908
United Airlines, Inc., Class A, Series 2007-1, 6.64%, 7/2/22		444,306		470,964
XPO Logistics, Inc., 6.50%, 6/15/22^††		350,000		333,813
				2,309,438
Total Corporate Bonds			$	23,298,289
Registered Investment Companies — 26.4%
State Street Institutional Liquid Reserves Fund, Premier Class, 0.47%S		732,610		732,610
State Street Navigator Securities Lending Prime Portfolio, 0.51%†S		5,694,157		5,694,157
Total Registered Investment Companies			$	6,426,767
Total Investment Securities 122.0%
(Cost $29,677,859)**			$	29,725,056
Net Other Assets (Liabilities) — (22.0)%				(5,359,778	)
Net Assets — 100.0%			$	24,365,278

** Represents cost for financial reporting purposes.

^††  Restricted securities not registered under the Securities Act of 1933 are as follows:

	Acquisition Date		Current Cost		Fair Value		Value as a % of Net Assets
Activision Blizzard, Inc.		December-14	$	115,200	$	115,225		0.5%
Air Canada 2013-1 Pass-Through Trust, Class B		April-16		201,227		202,994		0.8%

28 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill High Yield Fund

Schedule of Investments (Continued)

June 30, 2016 (Unaudited)

	Acquisition Date		Current Cost		Fair Value		Value as a % of Net Assets
Altice SA		January-15	$	300,500	$	303,000		1.2%
American Airlines, Inc., Series 2013-1, Class B		December-14		460,493		462,928		1.9%
Bankrate, Inc.		June-15		820,597		829,604		3.4%
BlueLine Rental LLC		March-16		40,500		43,000		0.2%
CCA Club Operations Holdings LLC		January-16		191,813		199,000		0.8%
CCM Merger, Inc.		July-15		341,704		340,438		1.4%
Centene Escrow Corp.		January-16		50,000		53,156		0.2%
Cimpress NV		November-15		421,028		420,750		1.7%
Cogent Communications Finance, Inc.		December-14		619,722		627,200		2.7%
Compass Investors, Inc.		December-14		357,024		371,250		1.5%
Concordia Healthcare Corp.		October-15		193,578		186,500		0.8%
Diebold, Inc.		April-16		606,250		595,500		2.4%
Endo Finance LLC		June-15		100,000		88,000		0.4%
GCP Applied Technologies, Inc.		January-16		153,000		167,625		0.7%
Greatbatch Ltd.		October-15		324,624		324,778		1.3%
Laureate Education, Inc.		December-14		530,983		546,875		2.2%
Live Nation Entertainment		December-14		78,904		78,094		0.3%
McDermott International, Inc.		December-14		154,950		180,600		0.7%
NCI Building Systems, Inc.		January-15		208,863		220,332		0.9%
Norwegian Air Shuttle ASA 2016-1 Pass-Through Trust, Series 2016-1, Class A		May-16		195,766		195,016		0.8%
Optimas OE Solution Holding		April-15		226,625		157,500		0.6%
Platform Specialty Products Corp.		November-15		490,750		503,750		2.1%
Quicken Loans, Inc.		January-16		278,708		289,500		1.2%
Radio One, Inc.		February-15		393,735		380,350		1.6%
Rivers Pittsburgh Borrower LP/Finance		December-14		832,980		819,999		3.5%
Summit Materials LLC		February-16		561,813		582,312		2.4%
The Fresh Market, Inc.		April-16		542,160		516,656		2.1%
Valeant Pharmaceuticals International, Inc.		October-15		619,288		601,769		2.5%
XPO Logistics, Inc.		June-15		333,564		333,813		1.4%
			$	10,746,349	$	10,737,514		44.2%

^ All or a portion of the security is on loan. The total fair value of the securities on loan as of June 30, 2016 was $5,469,406.

^†  This security, which was purchased using cash collateral received from securities on loan, represents collateral for securities loaned as of June 30, 2016.

^S  Rate represents the daily yield on June 30, 2016.

See accompanying Notes to Financial Statements

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 29

Diamond Hill Funds

Tabular Presentation of Schedules of Investments June 30, 2016

Diamond Hill Small Cap Fund
Sector Allocation	% of Net Assets
Financials		27.0%
Industrials		18.0%
Consumer Discretionary		9.4%
Health Care		8.5%
Information Technology		7.2%
Consumer Staples		5.8%
Utilities		3.1%
Energy		2.8%
Telecommunication Services		0.2%
Cash and Cash Equivalents		29.0%
Other
Net Other Assets (Liabilities)		-11.0%
		100%
Russell 2000 Index Sector Allocation	% of Index
Financials		25.8%
Industrials		13.7%
Consumer Discretionary		13.6%
Health Care		13.8%
Information Technology		17.2%
Consumer Staples		3.1%
Utilities		4.3%
Energy		3.0%
Telecommunication Services		0.9%
Materials		4.6%
		100%

Diamond Hill Small-Mid Cap Fund
Sector Allocation	% of Net Assets
Financials		27.6%
Consumer Discretionary		14.9%
Consumer Staples		11.5%
Industrials		11.2%
Information Technology		9.2%
Health Care		8.3%
Energy		3.5%
Utilities		3.3%
Materials		1.8%
Cash and Cash Equivalents		17.1%
Other
Net Other Assets (Liabilities)		-8.4%
		100%
Russell 2500 Index Sector Allocation	% of Index
Financials		25.8%
Consumer Discretionary		12.9%
Consumer Staples		3.5%
Industrials		16.0%
Information Technology		14.6%
Health Care		11.3%
Energy		4.4%
Utilities		4.9%
Materials		5.8%
Telecom		0.8%
		100%

30 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Funds

Tabular Presentation of Schedules of Investments (Continued) June 30, 2016

Diamond Hill Mid Cap Fund
Sector Allocation	% of Net Assets
Financials		28.2%
Consumer Discretionary		17.5%
Consumer Staples		12.0%
Industrials		11.0%
Information Technology		8.4%
Health Care		6.2%
Energy		3.5%
Utilities		3.2%
Materials		2.7%
Cash and Cash Equivalents		34.4%
Other
Net Other Assets (Liabilities)		-27.1%
		100%
Russell Midcap Index Sector Allocation	% of Index
Financials		22.2%
Consumer Discretionary		15.4%
Consumer Staples		5.5%
Industrials		13.4%
Information Technology		13.9%
Health Care		9.7%
Energy		5.9%
Utilities		7.5%
Materials		5.5%
Telecom		1.0%
		100%

Diamond Hill Large Cap Fund
Sector Allocation	% of Net Assets
Financials		25.7%
Consumer Discretionary		19.1%
Information Technology		14.8%
Health Care		13.6%
Consumer Staples		10.6%
Industrials		8.2%
Energy		3.5%
Materials		2.3%
Cash and Cash Equivalents		12.9%
Other
Net Other Assets (Liabilities)		-10.7%
		100%
Russell 1000 Index Sector Allocation	% of Index
Financials		16.7%
Consumer Discretionary		13.3%
Information Technology		19.3%
Health Care		14.2%
Consumer Staples		9.3%
Industrials		10.5%
Energy		7.0%
Materials		3.2%
Utilities		3.7%
Telecom		2.8%
		100%

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 31

Diamond Hill Funds

Tabular Presentation of Schedules of Investments (Continued) June 30, 2016

Diamond Hill Select Fund
Sector Allocation	% of Net Assets
Financials		30.5%
Industrials		23.2%
Consumer Discretionary		18.1%
Health Care		11.6%
Information Technology		9.7%
Consumer Staples		1.7%
Energy		1.0%
Cash and Cash Equivalents		11.8%
Other
Net Other Assets (Liabilities)		-7.6%
		100%
Russell 3000 Index Sector Allocation	% of Index
Financials		17.4%
Industrials		10.8%
Consumer Discretionary		13.3%
Health Care		14.1%
Information Technology		19.2%
Consumer Staples		8.8%
Energy		6.7%
Utilities		3.8%
Materials		3.3%
Telecom		2.6%
		100%

Diamond Hill Long-Short Fund
Long Portfolio Sector Allocation	% of Net Assets
Financials		28.6%
Consumer Discretionary		18.6%
Information Technology		12.8%
Industrials		10.6%
Health Care		8.7%
Consumer Staples		4.3%
Energy		2.9%
Materials		0.6%
Cash and Cash Equivalents		26.0%
Short Portfolio Sector Allocation	% of Net Assets
Materials		-0.3%
Energy		-0.5%
Telecommunication Services		-0.8%
Utilities		-1.7%
Industrials		-3.2%
Information Technology		-3.4%
Health Care		-3.4%
Consumer Staples		-4.7%
Financials		-5.3%
Consumer Discretionary		-6.8%
Other
Segregated Cash With Brokers		30.4%
Net Other Assets (Liabilities)		-13.4%
		100%
Russell 1000 Index Sector Allocation	% of Index
Financials		16.7%
Consumer Discretionary		13.3%
Information Technology		19.3%
Industrials		10.5%
Health Care		14.2%
Consumer Staples		9.3%
Energy		7.0%
Materials		3.2%
Utilities		3.7%
Telecom		2.8%
		100%

32 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Funds

Tabular Presentation of Schedules of Investments (Continued) June 30, 2016

Diamond Hill Research Opportunities Fund
Long Portfolio Sector Allocation	% of Net Assets
Information Technology		23.6%
Financials		19.2%
Consumer Discretionary		19.0%
Industrials		16.7%
Health Care		16.5%
Consumer Staples		4.0%
Telecommunication Services		2.6%
Materials		1.5%
Energy		1.3%
Cash and Cash Equivalents		22.6%
Short Portfolio Sector Allocation	% of Net Assets
Materials		-0.7%
Utilities		-1.1%
Energy		-1.4%
Consumer Staples		-1.5%
Industrials		-1.8%
Financials		-4.1%
Health Care		-4.3%
Consumer Discretionary		-6.7%
Information Technology		-8.6%
Other
Segregated Cash With Brokers		24.5%
Net Other Assets (Liabilities)		-21.3%
		100%
Russell 3000 Index Sector Allocation	% of Index
Information Technology		19.2%
Financials		17.4%
Consumer Discretionary		13.3%
Industrials		10.8%
Health Care		14.1%
Consumer Staples		8.8%
Telecommunication Services		2.6%
Materials		3.3%
Energy		6.7%
Utilities		3.8%
		100%

Diamond Hill Financial Long-Short Fund
Long Portfolio Sector Allocation	% of Net Assets
Banks, Thrifts & Mortgage Finance		39.5%
Insurance		20.4%
Diversified Financial Services		10.0%
REITs & Real Estate Management		9.6%
Consumer Financial Services		9.3%
Capital Markets		8.5%
IT Services/Other		0.8%
Cash and Cash Equivalents		33.3%
Short Portfolio Sector Allocation	% of Net Assets
IT Services/Other		-1.3%
REITs & Real Estate Management		-2.1%
Banks, Thrifts & Mortgage Finance		-3.6%
Insurance		-10.2%
Other
Segregated Cash With Brokers		16.9%
Net Other Assets (Liabilities)		-31.1%
		100%
Russell 3000 Index Sector Allocation	% of Index
Banks, Thrifts & Mortgage Finance		27.7%
Insurance		14.4%
Diversified Financial Services		13.7%
REITs & Real Estate Management		24.1%
Consumer Financial Services		3.3%
Capital Markets		6.0%
IT Services/Other		10.8%
		100%

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 33

Diamond Hill Funds

Tabular Presentation of Schedules of Investments (Continued) June 30, 2016

Diamond Hill Corporate Credit Fund
Sector Allocation	% of Net Assets
Health Care		9.6%
Leisure		8.0%
Telecommunications		7.8%
Financial Services		7.8%
Basic Industry		7.3%
Transportation		7.0%
Media		6.1%
Energy		6.0%
Banking		5.2%
Technology & Electronics		4.9%
Services		4.6%
Insurance		3.3%
Retail		3.0%
Real Estate		2.7%
Utilities		1.0%
Automotive		0.7%
Collateralized Mortgage Obligations		0.3%
Cash and Cash Equivalents		20.3%
Other
Net Other Assets (Liabilities)		-5.6%
		100%

Diamond Hill High Yield
Sector Allocation	% of Net Assets
Health Care		12.5%
Basic Industry		10.1%
Financial Services		9.2%
Transportation		9.5%
Telecommunications		8.1%
Leisure		8.0%
Media		7.4%
Technology & Electronics		7.0%
Banking		5.3%
Energy		5.1%
Retail		4.5%
Services		3.8%
Real Estate		2.3%
Insurance		2.2%
Automotive		0.6%
Cash and Cash Equivalents		26.4%
Other
Net Other Assets (Liabilities)		-22.0%
		100%

34 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

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DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 35

Diamond Hill Funds

Statements of Assets & Liabilities

June 30, 2016 (Unaudited)

	Small Cap Fund			Small-Mid Cap Fund		Mid Cap Fund
Assets
Total investment securities, at cost	$	1,673,045,175		$	1,863,920,168	$	44,092,177
Investment securities, at fair value — including $176,308,780, $152,358,897, $9,791,680, $403,527,235, $15,124,192, $536,558,016, $10,820,019, $7,184,571, $34,846,249 and $5,469,406 of securities loaned	$	1,925,483,686		$	2,001,468,559	$	46,233,234
Cash		—			100,442		1,534
Cash deposits with custodian for securities sold short		—			—		—
Receivable for fund shares issued		1,740,642			2,960,419		56,531
Receivable for dividends and interest		3,295,192			2,519,656		51,970
Receivable for investments sold		2,488,309			—		108,938
Prepaid expenses and other assets		363			1,071		12
Total Assets		1,933,008,192			2,007,050,147		46,452,219
Liabilities
Securities sold short, at fair value (proceeds $—, $—, $—, $—, $—, $1,115,523,564, $13,606,071, $3,881,016, $— and $—)		—			—		—
Cash overdraft		—			—		—
Payable for securities purchased		15,088,337			3,036,692		32,244
Payable for expenses and fees on securities sold short		—			—		—
Payable for fund shares redeemed		1,787,497			1,521,885		1,917
Payable for return of collateral received		181,089,534			156,066,879		10,020,993
Payable to Investment Adviser		1,142,718			1,126,865		19,185
Payable to Administrator		284,049			248,628		4,823
Accrued distribution and service fees		145,802			85,546		1,153
Payable to accountant and custodian		2,513			—		—
Total Liabilities		199,540,450			162,086,495		10,080,315
Net Assets	$	1,733,467,742		$	1,844,963,652	$	36,371,904
Components of Net Assets
Paid-in capital	$	1,442,615,001		$	1,691,851,974	$	34,185,397
Accumulated net investment income (loss)		(266,411	)		2,938,148		99,158
Accumulated net realized gains (losses) from investment transactions		38,680,641			12,625,139		(53,708	)
Net unrealized appreciation (depreciation) on investments		252,438,511			137,548,391		2,141,057
Net Assets	$	1,733,467,742		$	1,844,963,652	$	36,371,904
Net Assets
Class A Shares	$	481,035,567		$	253,857,224	$	5,829,426
Class C Shares	$	55,692,927		$	40,520,107	$	—
Class I Shares	$	961,313,443		$	798,317,388	$	15,534,746
Class Y Shares	$	235,425,805		$	752,268,933	$	15,007,732
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value)
Class A Shares		15,213,516			13,204,355		516,677
Class C Shares		1,985,101			2,268,051		—
Class I Shares		29,978,556			41,098,565		1,371,748
Class Y Shares		7,336,349			38,664,375		1,322,761
Net Asset Value, offering (except Class A Shares) and redemption price per share:
Class A Shares	$	31.62		$	19.23	$	11.28
Class C Shares(A)	$	28.06		$	17.87	$	—
Class I Shares	$	32.07		$	19.42	$	11.32
Class Y Shares	$	32.09		$	19.46	$	11.35
Maximum Offering Price
Maximum sales charge — Class A Shares		5.00%			5.00%		5.00%
(100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent) per share — Class A Shares	$	33.28		$	20.24	$	11.87

^(A)  Redemption price per share varies based on the holding period.

See accompanying Notes to Financial Statements.

36 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Large Cap Fund		Select Fund			Long-Short Fund			Research Opportunities Fund			Financial Long-Short Fund			Corporate Credit Fund			High Yield Fund
$	3,488,297,282	$	154,815,257		$	4,245,103,364		$	62,141,842		$	37,411,170		$	443,478,110		$	29,677,859
$	4,080,978,165	$	151,007,616		$	4,731,750,318		$	62,422,623		$	35,799,353		$	439,632,493		$	29,725,056
	—		—			—			—			—			—			—
	—		—			1,269,791,609			11,993,082			4,606,883			—			—
	6,397,340		74,590			5,361,113			3,762			410			3,240,007			18,400
	3,267,137		116,083			3,308,715			111,303			54,059			7,505,036			519,665
	25,806,880		6,140,882			24,140,028			1,876,128			111,207			6,019,750			56,550
	466		98			201			518			140			—			—
	4,116,449,988		157,339,269			6,034,351,984			76,407,416			40,572,052			456,397,286			30,319,671
	—		—			1,258,946,572			14,828,249			4,685,398			—			—
	162		—			—			5,333			16			1,025			—
	3,230,112		650,635			31,644,690			1,201,002			1,248,481			3,220,544			246,834
	—		—			1,662,245			14,828			4,654			—			—
	3,228,499		848,385			6,440,479			61,536			6,753			476,876			—
	419,942,141		15,478,929			548,681,030			11,114,437			7,349,108			36,206,143			5,694,157
	1,504,898		85,899			3,145,422			41,198			20,962			151,362			9,939
	600,444		24,327			697,567			7,335			4,558			68,794			3,435
	297,880		15,823			227,515			4,117			3,258			34,214			28
	435		—			24,182			—			—			78			—
	428,804,571		17,103,998			1,851,469,702			27,278,035			13,323,188			40,159,036			5,954,393
$	3,687,645,417	$	140,235,271		$	4,182,882,282		$	49,129,381		$	27,248,864		$	416,238,250		$	24,365,278
$	2,917,713,457	$	154,830,645		$	3,728,299,778		$	51,854,769		$	34,991,080		$	430,560,211		$	24,232,930
	23,471,520		166,442			(2,718,158	)		(306,472	)		13,629			1,039,391			24,546
	153,779,557		(10,954,175	)		114,076,716			(1,477,500	)		(5,339,646	)		(11,515,735	)		60,605
	592,680,883		(3,807,641	)		343,223,946			(941,416	)		(2,416,199	)		(3,845,617	)		47,197
$	3,687,645,417	$	140,235,271		$	4,182,882,282		$	49,129,381		$	27,248,864		$	416,238,250		$	24,365,278
$	1,109,504,487	$	21,046,643		$	472,383,896		$	4,316,640		$	9,278,837		$	58,176,327		$	140,057
$	87,067,625	$	12,523,810		$	150,797,029		$	3,791,200		$	1,525,566		$	28,276,840		$	—
$	1,994,673,863	$	89,890,675		$	3,292,288,357		$	27,092,228		$	16,444,461		$	314,143,679		$	17,470,971
$	496,399,442	$	16,774,143		$	267,413,000		$	13,929,313		$	—		$	15,641,404		$	6,754,250
	50,676,319		1,828,099			20,496,376			222,294			547,067			5,351,785			13,325
	4,177,402		1,138,797			7,190,002			202,622			97,305			2,607,609			—
	90,503,812		7,779,668			140,222,771			1,386,011			969,643			28,990,295			1,662,279
	22,503,299		1,448,867			11,352,444			712,350			—			1,443,797			642,698
$	21.89	$	11.51		$	23.05		$	19.42		$	16.96		$	10.87		$	10.51
$	20.84	$	11.00		$	20.97		$	18.71		$	15.68		$	10.84		$	—
$	22.04	$	11.55		$	23.48		$	19.55		$	16.96		$	10.84		$	10.51
$	22.06	$	11.58		$	23.56		$	19.55		$	—		$	10.83		$	10.51
	5.00%		5.00%			5.00%			5.00%			5.00%			3.50%			3.50%
$	23.04	$	12.12		$	24.26		$	20.44		$	17.85		$	11.26		$	10.89

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 37

Diamond Hill Funds

Statements of Operations

For the period ended June 30, 2016 (Unaudited)

	Small Cap Fund			Small-Mid Cap Fund			Mid Cap Fund			Large Cap Fund			Select Fund
Investment Income
Dividends	$	16,427,385		$	10,326,018		$	179,634		$	37,213,632		$	760,121
Securities lending income		709,287			998,956			15,701			225,117			83,407
Foreign taxes withheld		(61,996	)		(26,598	)		(412	)		—			(3,178	)
Total Investment Income		17,074,676			11,298,376			194,923			37,438,749			840,350
Expenses
Investment advisory fees		6,598,381			5,811,299			79,310			8,704,891			536,014
Administration fees		1,648,323			1,277,970			18,518			3,495,480			155,203
Distribution fees — Class A		587,747			274,198			5,192			1,343,054			39,336
Distribution and service fees — Class C(A)		276,718			179,893			295			421,524			69,153
Other fees		2,791			3,615			2,478			2,280			4,072
Total Expenses		9,113,960			7,546,975			105,793			13,967,229			803,778
Net Investment Income (Loss)		7,960,716			3,751,401			89,130			23,471,520			36,572
Realized and Unrealized Gains (Losses) on Investments
Net realized gains (losses) on security sales		936,342			191,889			(9,168	)		108,512,637			(4,469,104	)
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations		34,060,326			91,874,864			1,297,850			(47,799,367	)		(5,277,867	)
Net Realized and Unrealized Gains (Losses) on Investments		34,996,668			92,066,753			1,288,682			60,713,270			(9,746,971	)
Change in Net Assets from Operations	$	42,957,384		$	95,818,154		$	1,377,812		$	84,184,790		$	(9,710,399	)

^(A)  The Mid Cap Fund Class C shares liquidated effective June 28, 2016.

See accompanying Notes to Financial Statements.

38 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Funds

Statements of Operations

For the period ended June 30, 2016 (Unaudited)

	Long-Short Fund			Research Opportunities Fund			Financial Long-Short Fund			Corporate Credit Fund			High Yield
Investment Income
Dividends	$	35,664,767		$	452,297		$	327,196		$	73,310		$	3,600
Interest		—			129,550			—			12,858,706			726,739
Securities lending income		383,233			6,635			3,529			82,645			4,075
Foreign taxes withheld		(107,160	)		(2,030	)		(1,835	)		—			—
Total Investment Income		35,940,840			586,452			328,890			13,014,661			734,414
Expenses
Investment advisory fees		19,093,692			244,214			126,545			829,901			46,536
Administration fees		4,250,363			43,654			27,589			376,380			14,535
Distribution fees — Class A		636,151			6,637			11,833			63,032			88
Distribution and service fees — Class C		798,479			20,301			8,043			125,725			—
Other fees		4,636			7,309			2,299			2,337			920
Expenses and fees on securities sold short		13,875,677			158,973			53,163			—			—
Total Expenses		38,658,998			481,088			229,472			1,397,375			62,079
Net Investment Income (Loss)		(2,718,158	)		105,364			99,418			11,617,286			672,335
Realized and Unrealized Gains (Losses) on Investments
Net realized gains (losses) on security sales		113,019,010			72,913			576,067			(670,688	)		60,605
Net realized gains (losses) on closed short positions		5,697,371			43,078			(12,886	)		—			—
Net realized gains (losses) on foreign currency transactions		—			(19	)		—			—			—
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations		(171,382,648	)		(1,415,202	)		(2,957,274	)		13,073,400			47,197
Net Realized and Unrealized Gains (Losses) on Investments		(52,666,267	)		(1,299,230	)		(2,394,093	)		12,402,712			107,802
Change in Net Assets from Operations	$	(55,384,425	)	$	(1,193,866	)	$	(2,294,675	)	$	24,019,998		$	780,137

See accompanying Notes to Financial Statements.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 39

Diamond Hill Funds

Statements of Changes in Net Assets

	Small Cap Fund						Small-Mid Cap Fund
	For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015			For the six months ended June 30, 2016 (Unaudited)		For the year ended December 31, 2015
From Operations
Net investment income (loss)	$	7,960,716		$	630,932		$	3,751,401	$	3,465,069
Net realized gains (losses) on security sales		936,342			61,854,520			191,889		24,745,917
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations		34,060,326			(124,772,396	)		91,874,864		(28,553,481	)
Change in Net Assets from Operations		42,957,384			(62,286,944	)		95,818,154		(342,495	)
Distributions to Shareholders
From net investment income:
Class A		—			(1,478,191	)		—		(235,006	)
Class I		—			(5,604,727	)		—		(1,681,410	)
Class Y		—			(1,670,446	)		—		(2,566,167	)
From net realized gains on investments
Class A		—			(6,430,005	)		—		(1,545,869	)
Class C		—			(854,771	)		—		(339,284	)
Class I		—			(10,939,941	)		—		(4,932,534	)
Class Y		—			(2,834,619	)		—		(5,285,728	)
Change in Net Assets from Distributions to Shareholders		—			(29,812,700	)		—		(16,585,998	)
Change in net assets from capital transactions		35,850,692			306,160,162			450,379,443		623,960,173
Total Change in Net Assets		78,808,076			214,060,518			546,197,597		607,031,680
Net Assets:
Beginning of period		1,654,659,666			1,440,599,148			1,298,766,055		691,734,375
End of period	$	1,733,467,742		$	1,654,659,666		$	1,844,963,652	$	1,298,766,055
Accumulated Net Investment Income (Loss)	$	(266,411	)	$	(8,227,127	)	$	2,938,148	$	(813,253	)

See accompanying Notes to Financial Statements.

40 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Funds

Statements of Changes in Net Assets

	Small Cap Fund						Small-Mid Cap Fund
	For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015			For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015
Capital Transactions:
Class A
Proceeds from shares sold	$	56,141,124		$	163,984,100		$	104,422,715		$	80,279,604
Reinvested distributions		—			7,080,943			—			1,710,659
Payments for shares redeemed		(78,384,625	)		(224,067,186	)		(25,555,631	)		(24,404,965	)
Change in Net Assets from Class A Share Transactions		(22,243,501	)		(53,002,143	)		78,867,084			57,585,298
Class C
Proceeds from shares sold		2,209,332			18,654,572			8,885,340			12,183,360
Reinvested distributions		—			806,755			—			301,197
Payments for shares redeemed		(5,419,378	)		(9,715,442	)		(3,177,515	)		(4,377,301	)
Change in Net Assets from Class C Share Transactions		(3,210,046	)		9,745,885			5,707,825			8,107,256
Class I
Proceeds from shares sold		154,863,738			460,433,412			313,053,399			334,255,108
Reinvested distributions		—			14,553,562			—			6,158,097
Payments for shares redeemed		(101,428,517	)		(204,740,459	)		(61,107,870	)		(90,731,981	)
Change in Net Assets from Class I Share Transactions		53,435,221			270,246,515			251,945,529			249,681,224
Class Y
Proceeds from shares sold		19,482,302			132,713,949			172,166,207			362,017,776
Reinvested distributions		—			4,505,061			—			7,525,610
Payments for shares redeemed		(11,613,284	)		(58,049,105	)		(58,307,202	)		(60,956,991	)
Change in Net Assets from Class Y Share Transactions		7,869,018			79,169,905			113,859,005			308,586,395
Change in net assets from capital transactions:	$	35,850,692		$	306,160,162		$	450,379,443		$	623,960,173
Share Transactions:
Class A
Issued		1,858,969			5,004,907			6,068,181			4,225,045
Reinvested		—			229,358			—			93,708
Redeemed		(2,598,805	)		(6,817,882	)		(1,398,388	)		(1,285,463	)
Change in shares outstanding		(739,836	)		(1,583,617	)		4,669,793			3,033,290
Class C
Issued		82,033			635,982			522,566			690,711
Reinvested		—			29,465			—			17,728
Redeemed		(200,605	)		(334,013	)		(186,395	)		(245,334	)
Change in shares outstanding		(118,572	)		331,434			336,171			463,105
Class I
Issued		5,089,397			13,937,293			17,018,584			17,539,516
Reinvested		—			463,830			—			333,524
Redeemed		(3,316,508	)		(6,144,341	)		(3,375,765	)		(4,753,680	)
Change in shares outstanding		1,772,889			8,256,782			13,642,819			13,119,360
Class Y
Issued		630,320			3,931,177			9,200,081			19,121,662
Reinvested		—			143,436			—			406,591
Redeemed		(376,819	)		(1,762,405	)		(3,168,790	)		(3,167,008	)
Change in shares outstanding		253,501			2,312,208			6,031,291			16,361,245
Change in shares		1,167,982			9,316,807			24,680,074			32,977,000

See accompanying Notes to Financial Statements.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 41

Diamond Hill Funds

Statements of Changes in Net Assets

	Mid Cap Fund						Large Cap Fund
	For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015			For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015
From Operations
Net investment income (loss)	$	89,130		$	115,633		$	23,471,520		$	34,358,640
Net realized gains (losses) on security sales		(9,168	)		17,349			108,512,637			153,357,141
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations		1,297,850			(53,554	)		(47,799,367	)		(219,309,609	)
Change in Net Assets from Operations		1,377,812			79,428			84,184,790			(31,593,828	)
Distributions to Shareholders
From net investment income:
Class A		—			(10,631	)		—			(9,117,086	)
Class C		—			(107	)		—			(145,150	)
Class I		—			(18,513	)		—			(19,842,489	)
Class Y		—			(78,987	)		—			(5,258,725	)
From net realized gains on investments
Class A		—			—			—			(42,511,645	)
Class C		—			—			—			(3,355,736	)
Class I		—			—			—			(67,211,166	)
Class Y		—			—			—			(16,037,907	)
Change in Net Assets from Distributions to Shareholders		—			(108,238	)		—			(163,479,904	)
Change in net assets from capital transactions		16,420,618			2,298,834			163,047,783			389,042,080
Total Change in Net Assets		17,798,430			2,270,024			247,232,573			193,968,348
Net Assets:
Beginning of period		18,573,474			16,303,450			3,440,412,844			3,246,444,496
End of period	$	36,371,904		$	18,573,474		$	3,687,645,417		$	3,440,412,844
Accumulated Net Investment Income (Loss)	$	99,158		$	10,028		$	23,471,520		$	—

See accompanying Notes to Financial Statements.

42 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Funds

Statements of Changes in Net Assets

	Mid Cap Fund						Large Cap Fund
	For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015			For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015
Capital Transactions:
Class A
Proceeds from shares sold	$	2,790,396		$	1,108,834		$	80,900,060		$	264,797,180
Reinvested distributions		—			10,630			—			50,751,629
Payments for shares redeemed		(294,806	)		(132,759	)		(114,749,978	)		(311,900,741	)
Change in Net Assets from Class A Share Transactions		2,495,590			986,705			(33,849,918	)		3,648,068
Class C
Proceeds from shares sold		—			58,656			8,225,999			15,926,061
Reinvested distributions		—			92			—			3,293,098
Payments for shares redeemed		(80,186	)		—			(7,303,559	)		(13,413,048	)
Change in Net Assets from Class C Share Transactions		(80,186	)		58,748			922,440			5,806,111
Class I
Proceeds from shares sold		12,001,229			827,197			365,150,329			598,498,015
Reinvested distributions		—			18,242			—			75,414,430
Payments for shares redeemed		(167,711	)		(241,799	)		(222,945,893	)		(375,299,825	)
Change in Net Assets from Class I Share Transactions		11,833,518			603,640			142,204,436			298,612,620
Class Y
Proceeds from shares sold		2,572,193			650,076			105,640,757			138,505,316
Reinvested distributions		—			8,681			—			20,470,934
Payments for shares redeemed		(400,497	)		(9,016	)		(51,869,932	)		(78,000,969	)
Change in Net Assets from Class Y Share Transactions		2,171,696			649,741			53,770,825			80,975,281
Change in net assets from capital transactions:	$	16,420,618		$	2,298,834		$	163,047,783		$	389,042,080
Share Transactions:
Class A
Issued		259,033			100,678			3,832,301			11,692,415
Reinvested		—			985			—			2,338,656
Redeemed		(30,016	)		(12,137	)		(5,491,464	)		(13,741,083	)
Change in shares outstanding		229,017			89,526			(1,659,163	)		289,988
Class C
Issued		—			5,281			410,737			735,551
Reinvested		—			9			—			159,679
Redeemed		(7,311	)		—			(360,107	)		(616,874	)
Change in shares outstanding		(7,311	)		5,290			50,630			278,356
Class I
Issued		1,076,819			74,986			17,265,606			26,269,684
Reinvested		—			1,687			—			3,450,704
Redeemed		(15,856	)		(21,859	)		(10,420,844	)		(16,440,230	)
Change in shares outstanding		1,060,963			54,814			6,844,762			13,280,158
Class Y
Issued		236,944			58,896			4,925,653			6,087,546
Reinvested		—			801			—			935,616
Redeemed		(37,329	)		(815	)		(2,391,565	)		(3,418,942	)
Change in shares outstanding		199,615			58,882			2,534,088			3,604,220
Change in shares		1,482,284			208,512			7,770,317			17,452,722

See accompanying Notes to Financial Statements.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 43

Diamond Hill Funds

Statements of Changes in Net Assets

	Select Fund						Long-Short Fund
	For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015			For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015
From Operations
Net investment income (loss)	$	36,572		$	129,870		$	(2,718,158	)	$	(11,874,489	)
Net realized gains (losses) on security sales		(4,469,104	)		(1,306,472	)		113,019,010			282,565,938
Net realized gains (losses) on closed short positions		—			—			5,697,371			(145,044,409	)
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations		(5,277,867	)		(9,625,023	)		(171,382,648	)		(195,033,861	)
Change in Net Assets from Operations		(9,710,399	)		(10,801,625	)		(55,384,425	)		(69,386,821	)
Distributions to Shareholders
From net realized gains on investments
Class A		—			(1,452,241	)		—			(2,769,878	)
Class C		—			(502,498	)		—			(892,455	)
Class I		—			(2,650,605	)		—			(15,735,080	)
Class Y		—			(346,711	)		—			(1,388,802	)
Change in Net Assets from Distributions to Shareholders		—			(4,952,055	)		—			(20,786,215	)
Change in net assets from capital transactions		(825,782	)		104,552,163			(174,436,280	)		530,760,922
Total Change in Net Assets		(10,536,181	)		88,798,483			(229,820,705	)		440,587,886
Net Assets:
Beginning of period		150,771,452			61,972,969			4,412,702,987			3,972,115,101
End of period	$	140,235,271		$	150,771,452		$	4,182,882,282		$	4,412,702,987
Accumulated Net Investment Income (Loss)	$	166,442		$	129,870		$	(2,718,158	)	$	—

See accompanying Notes to Financial Statements.

44 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Funds

Statements of Changes in Net Assets

	Select Fund						Long-Short Fund
	For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015			For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015
Capital Transactions:
Class A
Proceeds from shares sold	$	3,315,264		$	46,758,363		$	29,688,927		$	206,033,175
Reinvested distributions		—			1,248,087			—			2,488,265
Payments for shares redeemed		(23,001,790	)		(12,804,427	)		(117,853,252	)		(329,536,806	)
Change in Net Assets from Class A Share Transactions		(19,686,526	)		35,202,023			(88,164,325	)		(121,015,366	)
Class C
Proceeds from shares sold		823,447			8,977,380			3,180,515			30,172,350
Reinvested distributions		—			400,489			—			768,315
Payments for shares redeemed		(2,218,976	)		(1,481,802	)		(19,422,016	)		(26,093,019	)
Change in Net Assets from Class C Share Transactions		(1,395,529	)		7,896,067			(16,241,501	)		4,847,646
Class I
Proceeds from shares sold		39,623,893			120,581,528			542,528,725			1,485,217,775
Reinvested distributions		—			2,542,802			—			12,003,836
Payments for shares redeemed		(26,269,830	)		(64,201,194	)		(592,976,615	)		(866,062,430	)
Change in Net Assets from Class I Share Transactions		13,354,063			58,923,136			(50,447,890	)		631,159,181
Class Y
Proceeds from shares sold		9,925,995			2,636,273			14,324,118			119,279,729
Reinvested distributions		—			346,711			—			836,382
Payments for shares redeemed		(3,023,785	)		(452,047	)		(33,906,682	)		(104,346,650	)
Change in Net Assets from Class Y Share Transactions		6,902,210			2,530,937			(19,582,564	)		15,769,461
Change in net assets from capital transactions:	$	(825,782	)	$	104,552,163		$	(174,436,280	)	$	530,760,922
Share Transactions:
Class A
Issued		287,314			3,409,632			1,298,432			8,726,389
Reinvested		—			101,553			—			106,291
Redeemed		(1,990,034	)		(980,738	)		(5,167,475	)		(13,940,659	)
Change in shares outstanding		(1,702,720	)		2,530,447			(3,869,043	)		(5,107,979	)
Class C
Issued		74,171			690,808			153,729			1,376,619
Reinvested		—			33,969			—			35,919
Redeemed		(202,934	)		(116,456	)		(924,028	)		(1,199,867	)
Change in shares outstanding		(128,763	)		608,321			(770,299	)		212,671
Class I
Issued		3,460,961			8,827,777			23,361,885			61,485,773
Reinvested		—			206,396			—			504,151
Redeemed		(2,253,268	)		(4,932,725	)		(25,478,455	)		(36,001,773	)
Change in shares outstanding		1,207,693			4,101,448			(2,116,570	)		25,988,151
Class Y
Issued		840,041			195,011			619,171			4,939,472
Reinvested		—			28,097			—			35,024
Redeemed		(253,872	)		(35,381	)		(1,474,869	)		(4,335,659	)
Change in shares outstanding		586,169			187,727			(855,698	)		638,837
Change in shares		(37,621	)		7,427,943			(7,611,610	)		21,731,680

See accompanying Notes to Financial Statements.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 45

Diamond Hill Funds

Statements of Changes in Net Assets

	Research Opportunities Fund						Financial Long-Short Fund
	For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015			For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015
From Operations
Net investment income (loss)	$	105,364		$	(68,791	)	$	99,418		$	26,945
Net realized gains (losses) on security sales		72,913			5,018,282			576,067			3,341,781
Net realized gains (losses) on closed short positions		43,078			(1,252,359	)		(12,886	)		(82,958	)
Net realized gains (losses) on foreign currency transactions		(19	)		(2,578	)		—			—
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations		(1,415,202	)		(9,014,463	)		(2,957,274	)		(4,875,135	)
Change in Net Assets from Operations		(1,193,866	)		(5,319,909	)		(2,294,675	)		(1,589,367	)
Distributions to Shareholders
From net investment income:
Class A		—			—			—			(43,179	)
Class I		—			(52,987	)		—			(91,032	)
Class Y		—			(77,016	)		—			—
From net realized gains on investments
Class A		—			(662,379	)		—			—
Class C		—			(360,854	)		—			—
Class I		—			(2,063,440	)		—			—
Class Y		—			(1,216,539	)		—			—
Change in Net Assets from Distributions to Shareholders		—			(4,433,215	)		—			(134,211	)
Change in net assets from capital transactions		(4,881,849	)		(12,428,112	)		2,127,072			(446,293	)
Total Change in Net Assets		(6,075,715	)		(22,181,236	)		(167,603	)		(2,169,871	)
Net Assets:
Beginning of period		55,205,096			77,386,332			27,416,467			29,586,338
End of period	$	49,129,381		$	55,205,096		$	27,248,864		$	27,416,467
Accumulated Net Investment Income (Loss)	$	(306,472	)	$	(411,836	)	$	13,629		$	(85,789	)

See accompanying Notes to Financial Statements.

46 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Funds

Statements of Changes in Net Assets

	Research Opportunities Fund						Financial Long-Short Fund
	For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015			For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015
Capital Transactions:
Class A
Proceeds from shares sold	$	559,128		$	7,998,672		$	254,187		$	2,028,899
Reinvested distributions		—			639,430			—			25,963
Payments for shares redeemed		(4,606,349	)		(7,702,776	)		(782,139	)		(2,753,690	)
Change in Net Assets from Class A Share Transactions		(4,047,221	)		935,326			(527,952	)		(698,828	)
Class C
Proceeds from shares sold		224,874			6,880,044			10,293			162,132
Reinvested distributions		—			341,164			—			—
Payments for shares redeemed		(1,398,058	)		(1,799,883	)		(158,164	)		(437,261	)
Change in Net Assets from Class C Share Transactions		(1,173,184	)		5,421,325			(147,871	)		(275,129	)
Class I
Proceeds from shares sold		8,039,701			16,175,668			4,618,476			10,129,768
Reinvested distributions		—			2,108,795			—			80,737
Payments for shares redeemed		(6,483,124	)		(37,170,502	)		(1,815,581	)		(9,682,841	)
Change in Net Assets from Class I Share Transactions		1,556,577			(18,886,039	)		2,802,895			527,664
Class Y
Proceeds from shares sold		995,307			1,523,034			—			—
Reinvested distributions		—			399,089			—			—
Payments for shares redeemed		(2,213,328	)		(1,820,847	)		—			—
Change in Net Assets from Class Y Share Transactions		(1,218,021	)		101,276			—			—
Change in net assets from capital transactions:	$	(4,881,849	)	$	(12,428,112	)	$	2,127,072		$	(446,293	)
Share Transactions:
Class A
Issued		29,101			344,138			14,719			104,825
Reinvested		—			32,657			—			1,388
Redeemed		(245,172	)		(359,951	)		(45,453	)		(142,522	)
Change in shares outstanding		(216,071	)		16,844			(30,734	)		(36,309	)
Class C
Issued		11,886			306,509			588			9,305
Reinvested		—			18,013			—			—
Redeemed		(76,725	)		(87,434	)		(10,067	)		(24,834	)
Change in shares outstanding		(64,839	)		237,088			(9,479	)		(15,529	)
Class I
Issued		407,530			697,619			280,006			518,918
Reinvested		—			106,915			—			4,322
Redeemed		(343,672	)		(1,690,625	)		(106,953	)		(508,801	)
Change in shares outstanding		63,858			(886,091	)		173,053			14,439
Class Y
Issued		52,034			65,960			—			—
Reinvested		—			20,180			—			—
Redeemed		(111,599	)		(78,760	)		—			—
Change in shares outstanding		(59,565	)		7,380			—			—
Change in shares		(276,617	)		(624,779	)		132,840			(37,399	)

See accompanying Notes to Financial Statements.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 47

Diamond Hill Funds

Statements of Changes in Net Assets

	Corporate Credit Fund						High Yield Fund
	For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015			For the period December 31,2015 through June 30, 2016 (Unaudited)(A)
From Operations
Net investment income (loss)	$	11,617,286		$	13,875,096		$	672,335
Net realized gains (losses) on security sales		(670,688	)		629,391			60,605
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations		13,073,400			(12,614,587	)		47,197
Change in Net Assets from Operations		24,019,998			1,889,900			780,137
Distributions to Shareholders
From net investment income:
Class A		(1,520,425	)		(1,772,505	)		(2,614	)
Class C		(671,109	)		(1,033,624	)		—
Class I		(8,765,261	)		(9,849,445	)		(384,313	)
Class Y		(530,461	)		(961,840	)		(260,862	)
Change in Net Assets from Distributions to Shareholders		(11,487,256	)		(13,617,414	)		(647,789	)
Change in net assets from capital transactions		70,167,732			125,326,622			24,232,930
Total Change in Net Assets		82,700,474			113,599,108			24,365,278
Net Assets:
Beginning of period		333,537,776			219,938,668			—
End of period	$	416,238,250		$	333,537,776		$	24,365,278
Accumulated Net Investment Income (Loss)	$	1,039,391		$	909,361		$	24,546

^(A)  Inception date of the Fund is December 31, 2015. The fund commenced public offering and investment operations on January 4, 2016.

See accompanying Notes to Financial Statements.

48 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Funds

Statements of Changes in Net Assets

	Corporate Credit Fund						High Yield Fund
	For the six months ended June 30, 2016 (Unaudited)			For the year ended December 31, 2015			For the period December 31,2015 through June 30, 2016 (Unaudited)(A)
Capital Transactions:
Class A
Proceeds from shares sold	$	24,562,084		$	25,002,825		$	139,940
Reinvested distributions		1,283,552			1,449,226			2,614
Payments for shares redeemed		(13,692,434	)		(11,790,094	)		(81	)
Change in Net Assets from Class A Share Transactions		12,153,202			14,661,957			142,473
Class C
Proceeds from shares sold		5,762,670			4,711,613			—
Reinvested distributions		455,389			617,137			—
Payments for shares redeemed		(2,405,040	)		(4,870,148	)		—
Change in Net Assets from Class C Share Transactions		3,813,019			458,602			—
Class I
Proceeds from shares sold		90,459,775			145,139,779			16,859,049
Reinvested distributions		8,019,570			8,919,431			379,679
Payments for shares redeemed		(41,284,897	)		(46,810,896	)		(349,673	)
Change in Net Assets from Class I Share Transactions		57,194,448			107,248,314			16,889,055
Class Y
Proceeds from shares sold		2,096,194			3,740,291			13,440,548
Reinvested distributions		530,461			961,840			260,862
Payments for shares redeemed		(5,619,592	)		(1,744,382	)		(6,500,008	)
Change in Net Assets from Class Y Share Transactions		(2,992,937	)		2,957,749			7,201,402
Change in net assets from capital transactions:	$	70,167,732		$	125,326,622		$	24,232,930
Share Transactions:
Class A
Issued		2,295,147			2,289,120			13,082
Reinvested		120,442			132,730			251
Redeemed		(1,274,881	)		(1,069,893	)		(8	)
Change in shares outstanding		1,140,708			1,351,957			13,325
Class C
Issued		541,204			432,305			—
Reinvested		42,878			56,561			—
Redeemed		(226,311	)		(444,919	)		—
Change in shares outstanding		357,771			43,947			—
Class I
Issued		8,554,826			13,431,461			1,659,443
Reinvested		755,176			819,468			36,432
Redeemed		(3,892,279	)		(4,308,315	)		(33,596	)
Change in shares outstanding		5,417,723			9,942,614			1,662,279
Class Y
Issued		203,159			340,930			1,258,116
Reinvested		50,140			88,211			25,681
Redeemed		(525,250	)		(164,616	)		(641,099	)
Change in shares outstanding		(271,951	)		264,525			642,698
Change in shares		6,644,251			11,603,043			2,318,302

^(A)  Inception date of the Fund is December 31, 2015. The fund commenced public offering and investment operations on January 4, 2016.

See accompanying Notes to Financial Statements.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 49

Small Cap Fund

Financial Highlights

Selected data for a share outstanding throughout the periods indicated

Small Cap Fund	Net asset value, beginning of period		Net investment income (loss)			Net realized and unrealized gains (losses) on investments			Total from investment operations
Class A
For the six months ended June 30, 2016 (Unaudited)		$30.89		0.12	(C)		0.61			0.73
For the year ended December 31, 2015		$32.61		(0.05	)(C)		(1.17	)		(1.22	)
For the year ended December 31, 2014		$32.72		(0.11	)(C)		1.57			1.46
For the year ended December 31, 2013		$24.95		—	(C)(F)		9.86			9.86
For the year ended December 31, 2012		$23.04		0.07	(C)		2.88			2.95
For the year ended December 31, 2011		$25.80		(0.08	)		(1.80	)		(1.88	)
Class C
For the six months ended June 30, 2016 (Unaudited)		$27.51		—	(C)(F)		0.55			0.55
For the year ended December 31, 2015		$29.23		(0.25	)(C)		(1.06	)		(1.31	)
For the year ended December 31, 2014		$29.70		(0.33	)(C)		1.43			1.10
For the year ended December 31, 2013		$22.94		(0.21	)(C)		9.03			8.82
For the year ended December 31, 2012		$21.34		(0.10	)(C)		2.65			2.55
For the year ended December 31, 2011		$24.14		(0.25	)		(1.67	)		(1.92	)
Class I
For the six months ended June 30, 2016 (Unaudited)		$31.28		0.17	(C)		0.62			0.79
For the year ended December 31, 2015		$33.04		0.05	(C)		(1.20	)		(1.15	)
For the year ended December 31, 2014		$33.10		(0.02	)(C)		1.59			1.57
For the year ended December 31, 2013		$25.21		0.07	(C)		9.98			10.05
For the year ended December 31, 2012		$23.27		0.14	(C)		2.90			3.04
For the year ended December 31, 2011		$26.01		(0.01	)		(1.82	)		(1.83	)
Class Y(G)
For the six months ended June 30, 2016 (Unaudited)		$31.29		0.18	(C)		0.62			0.80
For the year ended December 31, 2015		$33.05		0.12	(C)		(1.23	)		(1.11	)
For the year ended December 31, 2014		$33.09		0.03	(C)		1.60			1.63
For the year ended December 31, 2013		$25.20		0.12	(C)		9.97			10.09
For the year ended December 31, 2012		$23.27		0.20	(C)		2.88			3.08

^(A)  Total returns shown exclude the effect of applicable sales charges.

^(B)  Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

^(C)  Net investment income (loss) per share has been calculated using the average daily shares outstanding during the period.

See accompanying Notes to Financial Statements.

50 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Dividends from net investment income		Distributions from net realized gains			Total distributions			Net asset value at end of period		Total return(A)			Net assets at end of period (000’s)		Ratio of total expenses to average net assets			Ratio of net investment income (loss) to average net assets			Portfolio turnover rate(B)
	—		—			—			$31.62		2.36	%(D)		$481,036		1.29	%(E)		0.77	%(E)		6	%
	(0.09)		(0.41	)		(0.50	)		$30.89		(3.73	)%		$492,810		1.29	%		(0.15	)%		17	%
	—		(1.57	)		(1.57	)		$32.61		4.60	%		$571,941		1.30	%		(0.34	)%		16	%
	(0.03)		(2.06	)		(2.09	)		$32.72		39.70	%		$571,167		1.31	%		(0.01	)%		43	%
	(0.09)		(0.95	)		(1.04	)		$24.95		12.88	%		$390,371		1.31	%		0.30	%		13	%
	—		(0.88	)		(0.88	)		$23.04		(7.17	)%		$431,313		1.33	%		(0.32	)%		28	%
	—		—			—			$28.06		2.00	%(D)		$55,693		2.04	%(E)		0.01	%(E)		6	%
	—		(0.41	)		(0.41	)		$27.51		(4.47	)%		$57,875		2.04	%		(0.87	)%		17	%
	—		(1.57	)		(1.57	)		$29.23		3.86	%		$51,794		2.05	%		(1.07	)%		16	%
	—		(2.06	)		(2.06	)		$29.70		38.64	%		$46,476		2.06	%		(0.76	)%		43	%
	—		(0.95	)		(0.95	)		$22.94		12.04	%		$29,917		2.06	%		(0.45	)%		13	%
	—		(0.88	)		(0.88	)		$21.34		(7.83	)%		$31,664		2.08	%		(1.07	)%		28	%
	—		—			—			$32.07		2.53	%(D)		$961,313		1.00	%(E)		1.08	%(E)		6	%
	(0.20)		(0.41	)		(0.61	)		$31.28		(3.47	)%		$882,350		1.02	%		0.16	%		17	%
	(0.06)		(1.57	)		(1.63	)		$33.04		4.86	%		$659,199		1.05	%		(0.06	)%		16	%
	(0.10)		(2.06	)		(2.16	)		$33.10		40.08	%		$550,844		1.06	%		0.22	%		43	%
	(0.15)		(0.95	)		(1.10	)		$25.21		13.17	%		$298,473		1.06	%		0.56	%		13	%
	(0.03)		(0.88	)		(0.91	)		$23.27		(6.91	)%		$314,149		1.04	%		(0.03	)%		28	%
	—		—			—			$32.09		2.56	%(D)		$235,426		0.90	%(E)		1.17	%(E)		6	%
	(0.24)		(0.41	)		(0.65	)		$31.29		(3.36	)%		$221,624		0.90	%		0.37	%		17	%
	(0.10)		(1.57	)		(1.67	)		$33.05		5.06	%		$157,665		0.90	%		0.10	%		16	%
	(0.14)		(2.06	)		(2.20	)		$33.09		40.25	%		$101,026		0.91	%		0.40	%		43	%
	(0.20)		(0.95	)		(1.15	)		$25.20		13.34	%		$63,439		0.91	%		0.82	%		13	%

^(D)  Not annualized.

^(E)  Annualized.

^(F)  Amount is less than $0.005.

^(G)  Inception date of Class Y is December 30, 2011. Class Y commenced public offering on January 3, 2012.

See accompanying Notes to Financial Statements.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 51

Small-Mid Cap Fund

Financial Highlights

Selected data for a share outstanding throughout the periods indicated

Small-Mid Cap Fund	Net asset value, beginning of period		Net investment income (loss)			Net realized and unrealized gains (losses) on investments			Total from investment operations
Class A
For the six months ended June 30, 2016 (Unaudited)		$18.29		0.02	(C)		0.92			0.94
For the year ended December 31, 2015		$18.33		0.01	(C)		0.17			0.18
For the year ended December 31, 2014		$17.73		0.03	(C)		1.23			1.26
For the year ended December 31, 2013		$13.13		0.04	(C)		5.35			5.39
For the year ended December 31, 2012		$11.71		0.02	(C)		1.78			1.80
For the year ended December 31, 2011		$12.56		—	(F)		(0.53	)		(0.53	)
Class C
For the six months ended June 30, 2016 (Unaudited)		$17.06		(0.05	)(C)		0.86			0.81
For the year ended December 31, 2015		$17.21		(0.12	)(C)		0.16			0.04
For the year ended December 31, 2014		$16.80		(0.10	)(C)		1.15			1.05
For the year ended December 31, 2013		$12.54		(0.07	)(C)		5.09			5.02
For the year ended December 31, 2012		$11.28		(0.07	)(C)		1.71			1.64
For the year ended December 31, 2011		$12.21		(0.06	)		(0.55	)		(0.61	)
Class I
For the six months ended June 30, 2016 (Unaudited)		$18.46		0.05	(C)		0.91			0.96
For the year ended December 31, 2015		$18.47		0.07	(C)		0.17			0.24
For the year ended December 31, 2014		$17.87		0.08	(C)		1.22			1.30
For the year ended December 31, 2013		$13.21		0.09	(C)		5.38			5.47
For the year ended December 31, 2012		$11.78		0.05	(C)		1.80			1.85
For the year ended December 31, 2011		$12.61		0.04			(0.54	)		(0.50	)
Class Y(H)
For the six months ended June 30, 2016 (Unaudited)		$18.48		0.05	(C)		0.93			0.98
For the year ended December 31, 2015		$18.49		0.09	(C)		0.17			0.26
For the year ended December 31, 2014		$17.87		0.11	(C)		1.23			1.34
For the year ended December 31, 2013		$13.20		0.12	(C)		5.38			5.50
For the year ended December 31, 2012		$11.78		0.09	(C)		1.77			1.86

^(A)  Total returns shown exclude the effect of applicable sales charges.

^(B)  Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

^(C)  Net investment income (loss) per share has been calculated using the average daily shares outstanding during the period.

See accompanying Notes to Financial Statements.

52 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Dividends from net investment income			Distributions from net realized gains			Total distributions			Net asset value at end of period		Total return(A)			Net assets at end of period (000’s)		Ratio of total expenses to average net assets			Ratio of net investment income (loss) to average net assets			Portfolio turnover rate(B)
	—			—			—			$19.23		5.14	%(D)		$253,857		1.23	%(E)		0.24	%(E)		9	%
	(0.03)			(0.19	)		(0.22	)		$18.29		0.98	%		$156,122		1.24	%		0.06	%		21	%
	(0.02)			(0.64	)		(0.66	)		$18.33		7.17	%		$100,820		1.25	%		0.18	%		27	%
	(0.03)			(0.76	)		(0.79	)		$17.73		41.25	%		$61,563		1.26	%		0.27	%		35	%
	—	(F)		(0.38	)		(0.38	)		$13.13		15.43	%		$19,607		1.26	%		0.15	%		26	%
	—			(0.32	)		(0.32	)		$11.71		(4.19	)%		$17,461		1.28	%		—	%(G)		48	%
	—			—			—			$17.87		4.75	%(D)		$40,520		1.98	%(E)		(0.55	)%(E)		9	%
	—			(0.19	)		(0.19	)		$17.06		0.24	%		$32,963		1.99	%		(0.69	)%		21	%
	—			(0.64	)		(0.64	)		$17.21		6.33	%		$25,276		2.00	%		(0.59	)%		27	%
	—			(0.76	)		(0.76	)		$16.80		40.21	%		$19,184		2.01	%		(0.45	)%		35	%
	—			(0.38	)		(0.38	)		$12.54		14.57	%		$9,169		2.01	%		(0.59	)%		26	%
	—			(0.32	)		(0.32	)		$11.28		(4.89	)%		$8,110		2.02	%		(0.74	)%		48	%
	—			—			—			$19.42		5.20	%(D)		$798,317		0.95	%(E)		0.51	%(E)		9	%
	(0.06)			(0.19	)		(0.25	)		$18.46		1.32	%		$506,730		0.97	%		0.35	%		21	%
	(0.06)			(0.64	)		(0.70	)		$18.47		7.36	%		$264,824		1.00	%		0.42	%		27	%
	(0.05)			(0.76	)		(0.81	)		$17.87		41.64	%		$148,927		1.01	%		0.54	%		35	%
	(0.04)			(0.38	)		(0.42	)		$13.21		15.74	%		$53,514		1.01	%		0.42	%		26	%
	(0.01)			(0.32	)		(0.33	)		$11.78		(3.86	)%		$43,485		0.99	%		0.29	%		48	%
	—			—			—			$19.46		5.30	%(D)		$752,269		0.85	%(E)		0.59	%(E)		9	%
	(0.08)			(0.19	)		(0.27	)		$18.48		1.41	%		$602,951		0.85	%		0.48	%		21	%
	(0.08)			(0.64	)		(0.72	)		$18.49		7.60	%		$300,815		0.85	%		0.62	%		27	%
	(0.07)			(0.76	)		(0.83	)		$17.87		41.88	%		$106,068		0.86	%		0.73	%		35	%
	(0.06)			(0.38	)		(0.44	)		$13.20		15.84	%		$30,940		0.86	%		0.68	%		26	%

^(D)  Not annualized.

^(E)  Annualized.

^(F)  Amount is less than $0.005.

^(G)  Amount is less than 0.005%.

^(H)  Inception date of Class Y is December 30, 2011. Class Y commenced public offering on January 3, 2012.

See accompanying Notes to Financial Statements.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 53

Mid Cap Fund

Financial Highlights

Selected data for a share outstanding throughout the periods indicated

Mid Cap Fund(A)	Net asset value, beginning of period		Net investment income (loss)(B)		Net realized and unrealized gains (losses) on investments		Total from investment operations
Class A
For the six months ended June 30, 2016 (Unaudited)		$10.71		0.02		0.55		0.57
For the year ended December 31, 2015		$10.70		0.04		0.01		0.05
For the year ended December 31, 2014		$10.00		0.06		0.70		0.76
Class I
For the six months ended June 30, 2016 (Unaudited)		$10.74		0.05		0.53		0.58
For the year ended December 31, 2015		$10.72		0.07		0.01		0.08
For the year ended December 31, 2014		$10.00		0.09		0.70		0.79
Class Y
For the six months ended June 30, 2016 (Unaudited)		$10.75		0.04		0.56		0.60
For the year ended December 31, 2015		$10.73		0.08		0.01		0.09
For the year ended December 31, 2014		$10.00		0.09		0.71		0.80

^(A)  Inception date of the Fund is December 31, 2013. Fund commenced public offering on January 2, 2014.

^(B)  Net investment income (loss) per share has been calculated using the average daily shares outstanding during the period.

^(C)  Total returns shown exclude the effect of applicable sales charges.

See accompanying Notes to Financial Statements.

54 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Dividends from net investment income		Distributions from net realized gains		Total distributions			Net asset value at end of period		Total return(C)			Net assets at end of period (000’s)		Ratio of total expenses to average net assets			Ratio of net investment income (loss) to average net assets			Portfolio turnover rate(D)
	—		—		—			$11.28		5.32	%(E)		$5,829		1.16	%(F)		0.40	%(F)		8	%
	(0.04)		—		(0.04	)		$10.71		0.44	%		$3,082		1.14	%		0.35	%		29	%
	(0.06)		—		(0.06	)		$10.70		7.57	%		$2,120		1.15	%		0.59	%		28	%
	—		—		—			$11.32		5.40	%(E)		$15,535		0.87	%(F)		0.88	%(F)		8	%
	(0.06)		—		(0.06	)		$10.74		0.74	%		$3,337		0.87	%		0.61	%		29	%
	(0.07)		—		(0.07	)		$10.72		7.91	%		$2,743		0.90	%		0.87	%		28	%
	—		—		—			$11.35		5.58	%(E)		$15,008		0.77	%(F)		0.76	%(F)		8	%
	(0.07)		—		(0.07	)		$10.75		0.84	%		$12,077		0.75	%		0.72	%		29	%
	(0.07)		—		(0.07	)		$10.73		8.02	%		$11,419		0.75	%		0.87	%		28	%

^(D)  Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

^(E)  Not annualized.

^(F)  Annualized.

See accompanying Notes to Financial Statements.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 55

Large Cap Fund

Financial Highlights

Selected data for a share outstanding throughout the periods indicated

Large Cap Fund	Net asset value, beginning of period		Net investment income (loss)			Net realized and unrealized gains (losses) on investments			Total from investment operations
Class A
For the six months ended June 30, 2016 (Unaudited)		$21.44		0.12	(C)		0.33			0.45
For the year ended December 31, 2015		$22.71		0.19	(C)		(0.43	)		(0.24	)
For the year ended December 31, 2014		$21.49		0.21	(C)		2.01			2.22
For the year ended December 31, 2013		$16.54		0.18	(C)		5.79			5.97
For the year ended December 31, 2012		$14.96		0.22	(C)		1.62			1.84
For the year ended December 31, 2011		$14.78		0.18	(C)		0.17			0.35
Class C
For the six months ended June 30, 2016 (Unaudited)		$20.49		0.04	(C)		0.31			0.35
For the year ended December 31, 2015		$21.77		0.02	(C)		(0.41	)		(0.39	)
For the year ended December 31, 2014		$20.68		0.04	(C)		1.93			1.97
For the year ended December 31, 2013		$15.98		0.03	(C)		5.58			5.61
For the year ended December 31, 2012		$14.46		0.10	(C)		1.56			1.66
For the year ended December 31, 2011		$14.29		0.06			0.16			0.22
Class I
For the six months ended June 30, 2016 (Unaudited)		$21.55		0.15	(C)		0.34			0.49
For the year ended December 31, 2015		$22.83		0.25	(C)		(0.44	)		(0.19	)
For the year ended December 31, 2014		$21.58		0.27	(C)		2.03			2.30
For the year ended December 31, 2013		$16.61		0.24	(C)		5.80			6.04
For the year ended December 31, 2012		$15.01		0.26	(C)		1.63			1.89
For the year ended December 31, 2011		$14.82		0.22			0.17			0.39
Class Y(F)
For the six months ended June 30, 2016 (Unaudited)		$21.56		0.16	(C)		0.34			0.50
For the year ended December 31, 2015		$22.84		0.28	(C)		(0.44	)		(0.16	)
For the year ended December 31, 2014		$21.59		0.31	(C)		2.02			2.33
For the year ended December 31, 2013		$16.60		0.26	(C)		5.83			6.09
For the year ended December 31, 2012		$15.01		0.30	(C)		1.62			1.92

^(A)  Total returns shown exclude the effect of applicable sales charges.

^(B)  Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

^(C)  Net investment income (loss) per share has been calculated using the average daily shares outstanding during the period.

See accompanying Notes to Financial Statements.

56 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Dividends from net investment income		Distributions from net realized gains			Total distributions			Net asset value at end of period		Total return(A)			Net assets at end of period (000’s)		Ratio of total expenses to average net assets			Ratio of net investment income (loss) to average net assets			Portfolio turnover rate(B)
	—		—			—			$21.89		2.10	%(D)		$1,109,504		0.99	%(E)		1.17	%(E)		10	%
	(0.18)		(0.85	)		(1.03	)		$21.44		(1.10	)%		$1,122,165		1.04	%		0.85	%		20	%
	(0.19)		(0.81	)		(1.00	)		$22.71		10.42	%		$1,182,155		1.05	%		0.94	%		24	%
	(0.16)		(0.86	)		(1.02	)		$21.49		36.33	%		$878,903		1.06	%		0.92	%		21	%
	(0.21)		(0.05	)		(0.26	)		$16.54		12.29	%		$617,407		1.06	%		1.37	%		28	%
	(0.17)		—			(0.17	)		$14.96		2.35	%		$593,124		1.12	%		1.19	%		16	%
	—		—			—			$20.84		1.71	%(D)		$87,068		1.74	%(E)		0.41	%(E)		10	%
	(0.04)		(0.85	)		(0.89	)		$20.49		(1.83	)%		$84,550		1.79	%		0.10	%		20	%
	(0.07)		(0.81	)		(0.88	)		$21.77		9.60	%		$83,781		1.80	%		0.19	%		24	%
	(0.05)		(0.86	)		(0.91	)		$20.68		35.33	%		$53,241		1.81	%		0.18	%		21	%
	(0.09)		(0.05	)		(0.14	)		$15.98		11.49	%		$33,305		1.81	%		0.62	%		28	%
	(0.05)		—			(0.05	)		$14.46		1.55	%		$30,465		1.87	%		0.45	%		16	%
	—		—			—			$22.04		2.27	%(D)		$1,994,674		0.70	%(E)		1.45	%(E)		10	%
	(0.24)		(0.85	)		(1.09	)		$21.55		(0.85	)%		$1,803,130		0.77	%		1.11	%		20	%
	(0.24)		(0.81	)		(1.05	)		$22.83		10.74	%		$1,606,797		0.80	%		1.20	%		24	%
	(0.21)		(0.86	)		(1.07	)		$21.58		36.60	%		$1,295,477		0.81	%		1.18	%		21	%
	(0.24)		(0.05	)		(0.29	)		$16.61		12.62	%		$791,031		0.81	%		1.62	%		28	%
	(0.20)		—			(0.20	)		$15.01		2.60	%		$684,156		0.83	%		1.49	%		16	%
	—		—			—			$22.06		2.32	%(D)		$496,399		0.60	%(E)		1.54	%(E)		10	%
	(0.27)		(0.85	)		(1.12	)		$21.56		(0.74	)%		$430,568		0.65	%		1.23	%		20	%
	(0.27)		(0.81	)		(1.08	)		$22.84		10.89	%		$373,711		0.65	%		1.36	%		24	%
	(0.24)		(0.86	)		(1.10	)		$21.59		36.87	%		$302,458		0.66	%		1.32	%		21	%
	(0.28)		(0.05	)		(0.33	)		$16.60		12.79	%		$224,073		0.66	%		1.87	%		28	%

^(D)  Not annualized.

^(E)  Annualized.

^(F)  Inception date of Class Y is December 30, 2011. Class Y commenced public offering on January 3, 2012.

See accompanying Notes to Financial Statements.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 57

Select Fund

Financial Highlights

Selected data for a share outstanding throughout the periods indicated

Select Fund	Net asset value, beginning of period		Net investment income (loss)			Net realized and unrealized gains (losses) on investments			Total from investment operations
Class A
For the six months ended June 30, 2016 (Unaudited)		$12.36		(0.01	)(C)		(0.84	)		(0.85	)
For the year ended December 31, 2015		$12.96		—	(C)(F)		(0.19	)		(0.19	)
For the year ended December 31, 2014		$13.00		0.05	(C)		1.38			1.43
For the year ended December 31, 2013		$10.45		0.05	(C)		4.48			4.53
For the year ended December 31, 2012		$9.69		0.12	(C)		0.97			1.09
For the year ended December 31, 2011		$9.99		0.08			(0.33	)		(0.25	)
Class C
For the six months ended June 30, 2016 (Unaudited)		$11.85		(0.05	)(C)		(0.80	)		(0.85	)
For the year ended December 31, 2015		$12.54		(0.10	)(C)		(0.18	)		(0.28	)
For the year ended December 31, 2014		$12.67		(0.05	)(C)		1.34			1.29
For the year ended December 31, 2013		$10.25		(0.04	)(C)		4.38			4.34
For the year ended December 31, 2012		$9.51		0.04	(C)		0.95			0.99
For the year ended December 31, 2011		$9.83		0.02			(0.34	)		(0.32	)
Class I
For the six months ended June 30, 2016 (Unaudited)		$12.39		0.01	(C)		(0.85	)		(0.84	)
For the year ended December 31, 2015		$12.95		0.03	(C)		(0.18	)		(0.15	)
For the year ended December 31, 2014		$12.97		0.09	(C)		1.38			1.47
For the year ended December 31, 2013		$10.43		0.09	(C)		4.46			4.55
For the year ended December 31, 2012		$9.68		0.15	(C)		0.96			1.11
For the year ended December 31, 2011		$9.98		0.11			(0.33	)		(0.22	)
Class Y(G)
For the six months ended June 30, 2016 (Unaudited)		$12.41		0.02	(C)		(0.85	)		(0.83	)
For the year ended December 31, 2015		$12.96		0.05	(C)		(0.19	)		(0.14	)
For the year ended December 31, 2014		$12.99		0.10	(C)		1.39			1.49
For the year ended December 31, 2013		$10.43		0.11	(C)		4.48			4.59
For the year ended December 31, 2012		$9.68		0.17	(C)		0.96			1.13

^(A)  Total returns shown exclude the effect of applicable sales charges.

^(B)  Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

^(C)  Net investment income (loss) per share has been calculated using the average daily shares outstanding during the period.

See accompanying Notes to Financial Statements.

58 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Dividends from net investment income		Distributions from net realized gains			Total distributions			Net asset value at end of period		Total return(A)			Net assets at end of period (000’s)		Ratio of total expenses to average net assets			Ratio of net investment income (loss) to average net assets			Portfolio turnover rate(B)
	—		—			—			$11.51		(6.88	)%(D)		$21,047		1.19	%(E)		(0.12	)%(E)		40	%
	—		(0.41	)		(0.41	)		$12.36		(1.44	)%		$43,638		1.19	%		(0.01	)%		89	%
	(0.05)		(1.42	)		(1.47	)		$12.96		11.30	%		$12,963		1.20	%		0.36	%		53	%
	(0.09)		(1.89	)		(1.98	)		$13.00		44.04	%		$8,905		1.22	%		0.42	%		70	%
	(0.08)		(0.25	)		(0.33	)		$10.45		11.27	%		$7,778		1.21	%		1.15	%		38	%
	(0.05)		—			(0.05	)		$9.69		(2.53	)%		$8,071		1.23	%		0.92	%		26	%
	—		—			—			$11.00		(7.17	)%(D)		$12,524		1.95	%(E)		(0.86	)%(E)		40	%
	—		(0.41	)		(0.41	)		$11.85		(2.21	)%		$15,022		1.94	%		(0.78	)%		89	%
	—		(1.42	)		(1.42	)		$12.54		10.46	%		$8,265		1.95	%		(0.39	)%		53	%
	(0.03)		(1.89	)		(1.92	)		$12.67		43.08	%		$5,533		1.97	%		(0.35	)%		70	%
	—		(0.25	)		(0.25	)		$10.25		10.44	%		$3,271		1.96	%		0.41	%		38	%
	—		—			—			$9.51		(3.26	)%		$3,630		1.98	%		0.15	%		26	%
	—		—			—			$11.55		(6.78	)%(D)		$89,891		0.90	%(E)		0.20	%(E)		40	%
	—		(0.41	)		(0.41	)		$12.39		(1.14	)%		$81,408		0.92	%		0.25	%		89	%
	(0.07)		(1.42	)		(1.49	)		$12.95		11.57	%		$31,999		0.95	%		0.64	%		53	%
	(0.12)		(1.89	)		(2.01	)		$12.97		44.35	%		$46,787		0.97	%		0.66	%		70	%
	(0.11)		(0.25	)		(0.36	)		$10.43		11.54	%		$41,862		0.96	%		1.44	%		38	%
	(0.08)		—			(0.08	)		$9.68		(2.25	)%		$34,388		0.95	%		1.21	%		26	%
	—		—			—			$11.58		(6.69	)%(D)		$16,774		0.80	%(E)		0.32	%(E)		40	%
	—		(0.41	)		(0.41	)		$12.41		(1.06	)%		$10,703		0.80	%		0.35	%		89	%
	(0.10)		(1.42	)		(1.52	)		$12.96		11.74	%		$8,746		0.80	%		0.76	%		53	%
	(0.14)		(1.89	)		(2.03	)		$12.99		44.70	%		$6,534		0.82	%		0.82	%		70	%
	(0.13)		(0.25	)		(0.38	)		$10.43		11.69	%		$5,788		0.81	%		1.62	%		38	%

^(D)  Not annualized.

^(E)  Annualized.

^(F)  Amount is less than $0.005.

^(G)  Inception date of Class Y is December 30, 2011. Class Y commenced public offering on January 3, 2012.

See accompanying Notes to Financial Statements.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 59

Long-Short Fund

Financial Highlights

Selected data for a share outstanding throughout the periods indicated

Long-Short Fund	Net asset value, beginning of period		Net investment income (loss)(A)			Net realized and unrealized gains (losses) on investments			Total from investment operations
Class A
For the six months ended June 30, 2016 (Unaudited)		$23.36		(0.04	)		(0.27	)		(0.31	)
For the year ended December 31, 2015		$23.87		(0.11	)		(0.29	)		(0.40	)
For the year ended December 31, 2014		$22.26		(0.08	)		1.69			1.61
For the year ended December 31, 2013		$18.15		(0.05	)		4.21			4.16
For the year ended December 31, 2012		$16.75		0.06			1.36			1.42
For the year ended December 31, 2011		$16.26		0.03			0.46			0.49
Class C
For the six months ended June 30, 2016 (Unaudited)		$21.34		(0.11	)		(0.26	)		(0.37	)
For the year ended December 31, 2015		$21.98		(0.27	)		(0.26	)		(0.53	)
For the year ended December 31, 2014		$20.65		(0.23	)		1.56			1.33
For the year ended December 31, 2013		$16.93		(0.19	)		3.91			3.72
For the year ended December 31, 2012		$15.72		(0.07	)		1.28			1.21
For the year ended December 31, 2011		$15.37		(0.08	)		0.43			0.35
Class I
For the six months ended June 30, 2016 (Unaudited)		$23.77		(0.01	)		(0.28	)		(0.29	)
For the year ended December 31, 2015		$24.22		(0.05	)		(0.29	)		(0.34	)
For the year ended December 31, 2014		$22.52		(0.02	)		1.72			1.70
For the year ended December 31, 2013		$18.35		—	(H)		4.26			4.26
For the year ended December 31, 2012		$16.93		0.10			1.38			1.48
For the year ended December 31, 2011		$16.42		0.09			0.45			0.54
Class Y(J)
For the six months ended June 30, 2016 (Unaudited)		$23.83		0.01			(0.28	)		(0.27	)
For the year ended December 31, 2015		$24.25		(0.02	)		(0.29	)		(0.31	)
For the year ended December 31, 2014		$22.52		0.01			1.72			1.73
For the year ended December 31, 2013		$18.35		0.04			4.25			4.29
For the year ended December 31, 2012		$16.93		0.14			1.37			1.51

^(A)  Net investment income (loss) per share has been calculated using the average daily shares outstanding during the period.

^(B)  Total returns shown exclude the effect of applicable sales charges.

^(C)  The fund invests in short positions and as such incurs certain expenses and fees. If such expenses and fees had not occurred, the ratios of total expenses to average net assets would have been 1.39% for Class A, 2.14% for Class C, 1.10% for Class I and 1.00% for Class Y.

^(D)  Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

See accompanying Notes to Financial Statements.

60 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Dividends from net investment income			Distributions from net realized gains			Total distributions			Net asset value at end of period		Total return(B)			Net assets at end of period (000’s)		Ratio of total expenses to average net assets(C)			Ratio of net investment income (loss) to average net assets			Portfolio turnover rate(D)(E)
	—			—			—			$23.05		(1.33	)%(F)		$472,384		2.03	%(G)		(0.34	)%(G)		21	%
	—			(0.11	)		(0.11	)		$23.36		(1.67	)%		$569,218		1.89	%		(0.47	)%		81	%
	—			—			—			$23.87		7.23	%		$703,572		1.83	%		(0.33	)%		60	%
	(0.05)			—			(0.05	)		$22.26		22.92	%		$858,112		1.83	%		(0.25	)%		30	%
	(0.02)			—			(0.02	)		$18.15		8.46	%		$533,722		1.75	%		0.32	%		39	%
	—			—			—			$16.75		3.01	%		$512,870		1.67	%		0.21	%		50	%
	—			—			—			$20.97		(1.73	)%(F)		$150,797		2.77	%(G)		(1.10	)%(G)		21	%
	—			(0.11	)		(0.11	)		$21.34		(2.40	)%		$169,861		2.64	%		(1.22	)%		81	%
	—	��		—			—			$21.98		6.44	%		$170,278		2.58	%		(1.09	)%		60	%
	—			—			—			$20.65		21.97	%		$130,388		2.58	%		(0.99	)%		30	%
	—			—			—			$16.93		7.70	%		$103,393		2.50	%		(0.43	)%		39	%
	—			—			—			$15.72		2.28	%		$119,850		2.43	%		(0.54	)%		50	%
	—			—			—			$23.48		(1.22	)%(F)		$3,292,288		1.74	%(G)		(0.06	)%(G)		21	%
	—			(0.11	)		(0.11	)		$23.77		(1.40	)%		$3,382,697		1.62	%		(0.21	)%		81	%
	—			—			—			$24.22		7.55	%		$2,817,671		1.58	%		(0.09	)%		60	%
	(0.09)			—			(0.09	)		$22.52		23.19	%		$1,859,054		1.58	%		—	%(I)		30	%
	(0.06)			—			(0.06	)		$18.35		8.77	%		$1,554,623		1.50	%		0.58	%		39	%
	(0.03)			—			(0.03	)		$16.93		3.29	%		$1,213,122		1.39	%		0.52	%		50	%
	—			—			—			$23.56		(1.13	)%(F)		$267,413		1.64	%(G)		0.04	%(G)		21	%
	—			(0.11	)		(0.11	)		$23.83		(1.27	)%		$290,928		1.50	%		(0.08	)%		81	%
	—			—			—			$24.25		7.68	%		$280,595		1.43	%		0.06	%		60	%
	(0.12)			—			(0.12	)		$22.52		23.39	%		$168,835		1.43	%		0.18	%		30	%
	(0.09)			—			(0.09	)		$18.35		8.95	%		$83,409		1.35	%		0.79	%		39	%

^(E)  In 2016, the Funds changed the methodology for calculating the portfolio turnover rate to better reflect short selling activity. The portfolio turnover rates in the prior years ended in 2015, 2014, 2013, 2012 and 2011 would have been 47%, 39%, 24%, 32% and 37%, respectively, using this same calculation methodology.

^(F)  Not annualized.

^(G)  Annualized.

^(H)  Amount is less than $0.005.

^(I)  Amount is less than 0.005%.

^(J)  Inception date of Class Y is December 30, 2011. Class Y commenced public offering on January 3, 2012.

See accompanying Notes to Financial Statements.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 61

Research Opportunities Fund

Financial Highlights

Selected data for a share outstanding throughout the periods indicated

Research Opportunities Fund(A)	Net asset value, beginning of period		Net investment income (loss)(B)			Net realized and unrealized gains (losses) on investments			Total from investment operations
Class A
For the six months ended June 30, 2016 (Unaudited)		$19.70		0.02			(0.30	)		(0.28	)
For the year ended December 31, 2015		$22.52		(0.06	)		(1.14	)		(1.20	)
For the year ended December 31, 2014		$22.82		(0.07	)		1.62			1.55
For the year ended December 31, 2013		$18.34		(0.10	)		6.01			5.91
For the year ended December 31, 2012		$16.60		0.02			1.93			1.95
Class C
For the six months ended June 30, 2016 (Unaudited)		$19.06		(0.05	)		(0.30	)		(0.35	)
For the year ended December 31, 2015		$22.00		(0.21	)		(1.11	)		(1.32	)
For the year ended December 31, 2014		$22.49		(0.24	)		1.58			1.34
For the year ended December 31, 2013		$18.22		(0.26	)		5.96			5.70
For the year ended December 31, 2012		$16.60		(0.09	)		1.90			1.81
Class I
For the six months ended June 30, 2016 (Unaudited)		$19.81		0.05			(0.31	)		(0.26	)
For the year ended December 31, 2015		$22.61		(0.01	)		(1.13	)		(1.14	)
For the year ended December 31, 2014		$22.90		(0.01	)		1.62			1.61
For the year ended December 31, 2013		$18.36		(0.04	)		6.01			5.97
For the year ended December 31, 2012		$16.60		0.05			1.95			2.00
Class Y
For the six months ended June 30, 2016 (Unaudited)		$19.80		0.06			(0.31	)		(0.25	)
For the year ended December 31, 2015		$22.64		0.02			(1.14	)		(1.12	)
For the year ended December 31, 2014		$22.92		0.03			1.62			1.65
For the year ended December 31, 2013		$18.36		—	(I)		6.02			6.02
For the year ended December 31, 2012		$16.60		0.08			1.94			2.02

^(A)  Inception date of the Fund is December 30, 2011. The Fund commenced public offering on January 3, 2012.

^(B)  Net investment income (loss) per share has been calculated using the average daily shares outstanding during the period.

^(C)  Total returns shown exclude the effect of applicable sales charges.

See accompanying Notes to Financial Statements.

62 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Dividends from net investment income			Distributions from net realized gains			Total distributions			Net asset value at end of period		Total return(C)			Net assets at end of period (000’s)		Ratio of total expenses to average net assets(D)			Ratio of net investment income (loss) to average net assets			Portfolio turnover rate(E)(F)
	—			—			—			$19.42		(1.42	)%(G)		$4,317		2.19	%(H)		0.26	%(H)		39	%
	—			(1.62	)		(1.62	)		$19.70		(5.29	)%		$8,637		1.83	%		(0.27	)%		147	%
	(0.02)			(1.83	)		(1.85	)		$22.52		6.96	%		$9,492		1.74	%		(0.29	)%		57	%
	—			(1.43	)		(1.43	)		$22.82		32.43	%		$6,836		1.77	%		(0.45	)%		72	%
	(0.02)			(0.19	)		(0.21	)		$18.34		11.73	%		$1,120		1.63	%		0.10	%		35	%
	—			—			—			$18.71		(1.84	)%(G)		$3,791		2.94	%(H)		(0.50	)%(H)		39	%
	—			(1.62	)		(1.62	)		$19.06		(5.96	)%		$5,097		2.58	%		(0.96	)%		147	%
	—			(1.83	)		(1.83	)		$22.00		6.17	%		$668		2.49	%		(1.03	)%		57	%
	—			(1.43	)		(1.43	)		$22.49		31.48	%		$494		2.52	%		(1.19	)%		72	%
	—			(0.19	)		(0.19	)		$18.22		10.91	%		$148		2.38	%		(0.51	)%		35	%
	—			—			—			$19.55		(1.31	)%(G)		$27,092		1.90	%(H)		0.50	%(H)		39	%
	(0.04)			(1.62	)		(1.66	)		$19.81		(5.00	)%		$26,186		1.57	%		(0.03	)%		147	%
	(0.07)			(1.83	)		(1.90	)		$22.61		7.21	%		$49,920		1.49	%		(0.05	)%		57	%
	—	(I)		(1.43	)		(1.43	)		$22.90		32.76	%		$43,018		1.52	%		(0.17	)%		72	%
	(0.05)			(0.19	)		(0.24	)		$18.36		12.03	%		$15,978		1.38	%		0.30	%		35	%
	—			—			—			$19.55		(1.26	)%(G)		$13,929		1.80	%(H)		0.65	%(H)		39	%
	(0.10)			(1.62	)		(1.72	)		$19.80		(4.91	)%		$15,285		1.44	%		0.10	%		147	%
	(0.10)			(1.83	)		(1.93	)		$22.64		7.37	%		$17,307		1.34	%		0.11	%		57	%
	(0.03)			(1.43	)		(1.46	)		$22.92		32.99	%		$15,468		1.37	%		0.02	%		72	%
	(0.07)			(0.19	)		(0.26	)		$18.36		12.17	%		$11,572		1.23	%		0.45	%		35	%

^(D)  The fund invests in short positions and as such incurs certain expenses and fees. If such expenses and fees had not occurred, the ratios of total expenses to average net assets would have been 1.52% for Class A, 2.27% for Class C, 1.23% for Class I and 1.13% for Class Y.

^(E)  Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

^(F)  In 2016, the Funds changed the methodology for calculating the portfolio turnover rate to better reflect short selling activity. The portfolio turnover rates in the prior years ended in 2015, 2014, 2013 and 2012 would have been 103%, 46%, 64% and 32%, respectively, using this same calculation methodology.

^(G)  Not annualized.

^(H)  Annualized.

^(I)  Amount is less than $0.005.

See accompanying Notes to Financial Statements.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 63

Financial Long-Short Fund

Financial Highlights

Selected data for a share outstanding throughout the periods indicated

Financial Long-Short Fund	Net asset value, beginning of period		Net investment income (loss)			Net realized and unrealized gains (losses) on investments			Total from investment operations
Class A
For the six months ended June 30, 2016 (Unaudited)		$18.62		0.05	(E)		(1.71	)		(1.66	)
For the year ended December 31, 2015		$19.61		—	(E)(H)		(0.92	)		(0.92	)
For the year ended December 31, 2014		$18.13		(0.02	)(E)		1.50			1.48
For the year ended December 31, 2013		$13.24		(0.05	)(E)		4.94			4.89
For the year ended December 31, 2012		$10.51		0.06	(E)		2.74			2.80
For the year ended December 31, 2011		$12.18		0.02			(1.65	)		(1.63	)
Class C
For the six months ended June 30, 2016 (Unaudited)		$17.28		(0.01	)(E)		(1.59	)		(1.60	)
For the year ended December 31, 2015		$18.26		(0.13	)(E)		(0.85	)		(0.98	)
For the year ended December 31, 2014		$17.00		(0.15	)(E)		1.41			1.26
For the year ended December 31, 2013		$12.51		(0.17	)(E)		4.66			4.49
For the year ended December 31, 2012		$9.96		(0.02	)(E)		2.57			2.55
For the year ended December 31, 2011		$11.58		(0.07	)(E)		(1.55	)		(1.62	)
Class I
For the six months ended June 30, 2016 (Unaudited)		$18.59		0.08	(E)		(1.71	)		(1.63	)
For the year ended December 31, 2015		$19.57		0.05	(E)		(0.91	)		(0.86	)
For the year ended December 31, 2014		$18.10		0.02	(E)		1.50			1.52
For the year ended December 31, 2013		$13.18		(0.02	)(E)		4.94			4.92
For the year ended December 31, 2012		$10.47		0.10	(E)		2.72			2.82
For the year ended December 31, 2011		$12.14		0.07			(1.67	)		(1.60	)

^(A)  Total returns shown exclude the effect of applicable sales charges.

^(B)  The fund invests in short positions and as such incurs certain expenses and fees. If such expenses and fees had not occurred, the ratios of total expenses to average net assets would have been 1.50% for Class A, 2.25% for Class C and 1.22% for Class I.

^(C)  Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

^(D)  In 2016, the Funds changed the methodology for calculating the portfolio turnover rate to better reflect short selling activity. The portfolio turnover rates in the prior years ended in 2015, 2014, 2013, 2012 and 2011 would have been 49%, 43%, 59%, 53% and 45%, respectively, using this same calculation methodology.

See accompanying Notes to Financial Statements.

64 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Dividends from net investment income		Distributions from net realized gains		Total distributions			Net asset value at end of period		Total return(A)			Net assets at end of period (000’s)		Ratio of total expenses to average net assets(B)			Ratio of net investment income (loss) to average net assets			Portfolio turnover rate(C)(D)
	—		—		—			$16.96		(8.92	)%(F)		$9,279		1.92	%(G)		0.64	%(G)		16	%
	(0.07)		—		(0.07	)		$18.62		(4.67	)%		$10,760		1.85	%		0.02	%		63	%
	—		—		—			$19.61		8.16	%		$12,043		1.74	%		(0.10	)%		51	%
	—		—		—			$18.13		36.93	%		$17,852		1.70	%		(0.31	)%		66	%
	(0.07)		—		(0.07	)		$13.24		26.62	%		$7,862		1.76	%		0.49	%		58	%
	(0.04)		—		(0.04	)		$10.51		(13.39	)%		$6,650		1.66	%		0.14	%		52	%
	—		—		—			$15.68		(9.26	)%(F)		$1,526		2.67	%(G)		(0.12	)%(G)		16	%
	—		—		—			$17.28		(5.37	)%		$1,845		2.60	%		(0.75	)%		63	%
	—		—		—			$18.26		7.41	%		$2,233		2.49	%		(0.86	)%		51	%
	—		—		—			$17.00		35.89	%		$2,958		2.45	%		(1.06	)%		66	%
	—		—		—			$12.51		25.60	%		$820		2.51	%		(0.20	)%		58	%
	—		—		—			$9.96		(13.99	)%		$795		2.41	%		(0.60	)%		52	%
	—		—		—			$16.96		(8.77	)%(F)		$16,444		1.63	%(G)		0.99	%(G)		16	%
	(0.12)		—		(0.12	)		$18.59		(4.40	)%		$14,812		1.58	%		0.24	%		63	%
	(0.05)		—		(0.05	)		$19.57		8.42	%		$15,310		1.49	%		0.12	%		51	%
	—		—		—			$18.10		37.33	%		$10,817		1.45	%		(0.12	)%		66	%
	(0.11)		—		(0.11	)		$13.18		26.94	%		$3,931		1.51	%		0.85	%		58	%
	(0.07)		—		(0.07	)		$10.47		(13.21	)%		$1,584		1.37	%		0.47	%		52	%

^(E)  Net investment income (loss) per share has been calculated using the average daily shares outstanding during the period.

^(F)  Not annualized.

^(G)  Annualized.

^(H)  Amount is less than $0.005.

See accompanying Notes to Financial Statements.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 65

Corporate Credit Fund

Financial Highlights

Selected data for a share outstanding throughout the periods indicated

Corporate Credit Fund	Net asset value, beginning of period		Net investment income (loss)			Net realized and unrealized gains (losses) on investments			Total from investment operations
Class A
For the six months ended June 30, 2016 (Unaudited)		$10.53		0.32	(C)		0.33			0.65
For the year ended December 31, 2015		$10.94		0.58	(C)		(0.44	)		0.14
For the year ended December 31, 2014		$11.19		0.51	(C)		(0.28	)		0.23
For the year ended December 31, 2013		$11.18		0.56	(C)		—	(F)		0.56
For the year ended December 31, 2012		$10.79		0.62	(C)		0.39			1.01
For the year ended December 31, 2011		$10.86		0.65			(0.09	)		0.56
Class C
For the six months ended June 30, 2016 (Unaudited)		$10.51		0.28	(C)		0.33			0.61
For the year ended December 31, 2015		$10.92		0.49	(C)		(0.43	)		0.06
For the year ended December 31, 2014		$11.17		0.42	(C)		(0.27	)		0.15
For the year ended December 31, 2013		$11.17		0.47	(C)		—	(F)		0.47
For the year ended December 31, 2012		$10.78		0.53	(C)		0.40			0.93
For the year ended December 31, 2011		$10.85		0.56			(0.08	)		0.48
Class I
For the six months ended June 30, 2016 (Unaudited)		$10.50		0.34	(C)		0.33			0.67
For the year ended December 31, 2015		$10.91		0.60	(C)		(0.43	)		0.17
For the year ended December 31, 2014		$11.16		0.54	(C)		(0.27	)		0.27
For the year ended December 31, 2013		$11.16		0.58	(C)		—	(F)		0.58
For the year ended December 31, 2012		$10.77		0.64	(C)		0.40			1.04
For the year ended December 31, 2011		$10.84		0.67			(0.08	)		0.59
Class Y(G)
For the six months ended June 30, 2016 (Unaudited)		$10.50		0.34	(C)		0.32			0.66
For the year ended December 31, 2015		$10.91		0.62	(C)		(0.44	)		0.18
For the year ended December 31, 2014		$11.16		0.55	(C)		(0.27	)		0.28
For the year ended December 31, 2013		$11.15		0.60	(C)		—	(F)		0.60
For the year ended December 31, 2012		$10.77		0.66	(C)		0.38			1.04

^(A)  Total returns shown exclude the effect of applicable sales charges.

^(B)  Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

^(C)  Net investment income (loss) per share has been calculated using the average daily shares outstanding during the period.

See accompanying Notes to Financial Statements.

66 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Dividends from net investment income		Distributions from net realized gains		Total distributions			Net asset value at end of period		Total return(A)			Net assets at end of period (000’s)		Ratio of total expenses to average net assets			Ratio of net investment income (loss) to average net assets			Portfolio turnover rate(B)
	(0.31)		—		(0.31	)		$10.87		6.31	%(D)		$58,176		0.94	%(E)		6.10	%(E)		33	%
	(0.55)		—		(0.55	)		$10.53		1.19	%		$44,354		0.95	%		5.24	%		48	%
	(0.48)		—		(0.48	)		$10.94		2.10	%		$31,282		1.00	%		4.52	%		56	%
	(0.55)		—		(0.55	)		$11.19		5.13	%		$39,801		1.02	%		5.00	%		60	%
	(0.62)		—		(0.62	)		$11.18		9.55	%		$44,374		1.02	%		5.57	%		33	%
	(0.63)		—		(0.63	)		$10.79		5.21	%		$38,895		1.02	%		5.80	%		36	%
	(0.28)		—		(0.28	)		$10.84		5.87	%(D)		$28,277		1.69	%(E)		5.36	%(E)		33	%
	(0.47)		—		(0.47	)		$10.51		0.44	%		$23,649		1.70	%		4.47	%		48	%
	(0.40)		—		(0.40	)		$10.92		1.37	%		$24,088		1.75	%		3.80	%		56	%
	(0.47)		—		(0.47	)		$11.17		4.26	%		$26,126		1.77	%		4.25	%		60	%
	(0.54)		—		(0.54	)		$11.17		8.76	%		$27,801		1.77	%		4.81	%		33	%
	(0.55)		—		(0.55	)		$10.78		4.48	%		$23,717		1.77	%		5.06	%		36	%
	(0.33)		—		(0.33	)		$10.84		6.48	%(D)		$314,144		0.65	%(E)		6.40	%(E)		33	%
	(0.58)		—		(0.58	)		$10.50		1.49	%		$247,522		0.68	%		5.51	%		48	%
	(0.52)		—		(0.52	)		$10.91		2.38	%		$148,737		0.75	%		4.82	%		56	%
	(0.58)		—		(0.58	)		$11.16		5.30	%		$117,009		0.77	%		5.24	%		60	%
	(0.65)		—		(0.65	)		$11.16		9.83	%		$103,738		0.77	%		5.81	%		33	%
	(0.66)		—		(0.66	)		$10.77		5.53	%		$83,418		0.73	%		6.10	%		36	%
	(0.33)		—		(0.33	)		$10.83		6.44	%(D)		$15,641		0.55	%(E)		6.51	%(E)		33	%
	(0.59)		—		(0.59	)		$10.50		1.60	%		$18,013		0.56	%		5.62	%		48	%
	(0.53)		—		(0.53	)		$10.91		2.54	%		$15,831		0.60	%		4.96	%		56	%
	(0.59)		—		(0.59	)		$11.16		5.55	%		$3,927		0.62	%		5.35	%		60	%
	(0.66)		—		(0.66	)		$11.15		9.90	%		$2,515		0.62	%		5.95	%		33	%

^(D)  Not annualized.

^(E)  Annualized.

^(F)  Amount is less than $0.005.

^(G)  Inception date of Class Y is December 30, 2011. Class Y commenced public offering on January 3, 2012.

See accompanying Notes to Financial Statements.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 67

High Yield Fund

Financial Highlights

Selected data for a share outstanding throughout the periods indicated

High Yield Fund(A)	Net asset value, beginning of period		Net investment income (loss)(B)		Net realized and unrealized gains (losses) on investments		Total from investment operations
Class A
December 31, 2015 through June 30, 2016 (Unaudited)		$10.14		0.36		0.32		0.68
Class I
December 31, 2015 through June 30, 2016 (Unaudited)		$10.14		0.37		0.33		0.70
Class Y
December 31, 2015 through June 30, 2016 (Unaudited)		$10.14		0.37		0.33		0.70

^(A)  Inception date of the Fund is December 31, 2015. The Fund commenced public offering and operations on January 4, 2016.

^(B)  Net investment income (loss) per share has been calculated using the average daily shares outstanding during the period.

^(C)  Total returns shown exclude the effect of applicable sales charges.

See accompanying Notes to Financial Statements.

68 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Dividends from net investment income		Distributions from net realized gains		Total distributions			Net asset value at end of period		Total return(C)(D)			Net assets at end of period (000’s)		Ratio of total expenses to average net assets(E)			Ratio of net investment income (loss) to average net assets(E)			Portfolio turnover rate(F)
	(0.31)		—		(0.31	)		$10.51		6.86	%		$140		1.00	%		6.85	%		41	%
	(0.33)		—		(0.33	)		$10.51		7.02	%		$17,471		0.71	%		7.09	%		41	%
	(0.33)		—		(0.33	)		$10.51		7.06	%		$6,754		0.61	%		7.33	%		41	%

^(D)  Not annualized.

^(E)  Annualized.

^(F)  Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

See accompanying Notes to Financial Statements.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 69

Diamond Hill Funds

Notes to Financial Statements

June 30, 2016 (Unaudited)

Organization

The Diamond Hill Small Cap Fund (“Small Cap Fund”), Diamond Hill Small-Mid Cap Fund (“Small-Mid Cap Fund”), Diamond Hill Mid Cap Fund (“Mid Cap Fund”), Diamond Hill Large Cap Fund (“Large Cap Fund”), Diamond Hill Select Fund (“Select Fund”), Diamond Hill Long-Short Fund (“Long-Short Fund”), Diamond Hill Research Opportunities Fund (“Research Opportunities Fund”), Diamond Hill Financial Long-Short Fund (“Financial Long-Short Fund”), Diamond Hill Corporate Credit Fund (“Corporate Credit Fund”), formerly Strategic Income Fund, and the Diamond Hill High Yield Fund (“High Yield Fund”) are each a series of the Diamond Hill Funds (the “Trust”) (each a “Fund” and collectively the “Funds”). The Trust is an Ohio business trust, which is registered under the Investment Company Act of 1940, as amended, (the “1940 Act”) as an open-end, management investment company and thus follows accounting and reporting guidance for investment companies. Each Fund is a diversified series of the Trust.

Effective June 12, 2015, the Long-Short Fund closed to most new investors. Effective December 31, 2015, the Small Cap Fund closed to most new investors. Effective April 30, 2016, the Small-Mid Cap Fund closed to most new investors.

With the exception of the Financial Long-Short Fund and the High Yield Fund, the Funds offer four classes of shares: Class A, Class C, Class I and Class Y. The Financial Long-Short Fund offers three classes of shares: Class A, Class C and Class I. The High Yield Fund offers three classes of shares: Class A, Class I and Class Y. Each class of shares for each Fund has identical rights and privileges except with respect to distribution (12b-1) and service fees, voting rights on matters affecting a single class of shares, exchange privileges of each class of shares and sales charges. Class A has a maximum sales charge on purchases of 5.00% as a percentage of the original purchase price with the exception of the Corporate Credit Fund and the High Yield Fund which are 3.50%. Class C has a contingent deferred sales charge of 1.00% for shares redeemed within a year of the purchase date.

Significant Accounting Policies

The following is a summary of the Funds’ significant accounting policies:

Estimates — The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

Security valuation — The Funds record their investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques

70 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Funds

Notes to Financial Statements (Continued)

June 30, 2016 (Unaudited)

used by the Funds maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. These inputs are summarized in the three broad levels listed below:

• Level 1 — quoted prices in active markets for identical securities

• Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 — significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments)

Listed securities for which market quotations are readily available are valued at the closing prices as determined by the primary exchange where the securities are traded. Unlisted securities or listed securities for which the latest sales prices are not readily available are valued at the closing bid price in the principal market where such securities are normally traded. Investments in other investment companies are valued at their reported net asset value. In each of these types of situations, valuations are typically categorized as Level 1 in the fair value hierarchy.

Debt securities are valued on the basis of valuations provided by dealers or by an independent pricing service that determines valuations based upon market transactions for normal, institutional-size trading units of similar securities. Short-term debt investments of sufficient credit quality maturing in less than 61 days may be valued at amortized cost, which may approximate fair value. In each of these situations, valuations are typically categorized as Level 2 in the fair value hierarchy.

Securities for which market quotations are not readily available (e.g., an approved pricing service does not provide a price, certain stale prices, or an event occurs that materially affects the furnished price) are valued by the Fair Value Committee. In these cases, the Fair Value Committee, established and appointed by the Trustees, determines in good faith, subject to Trust procedures, the fair value of portfolio securities held by a Fund (“good faith fair valuation”). When a good faith fair valuation of a security is required, consideration is generally given to a number of factors, including, but not limited to the following: dealer quotes, published analyses by dealers or analysts of the situation at issue, transactions implicitly valuing the security (such as a merger, tender offer, etc.), the value of other securities or contracts which derive their value from the security at issue, and the implications (whether negative or positive) of the circumstances which have caused trading in the security to halt. Depending on the source and relative significance of the valuation inputs in these instances, the valuations for these securities may be classified as Level 2 or Level 3 in the fair value hierarchy.

In accordance with procedures adopted by the Board of Trustees, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 71

Diamond Hill Funds

Notes to Financial Statements (Continued)

June 30, 2016 (Unaudited)

exchange on which they are traded closes and the time the Funds’ net asset values are calculated. The Funds use a systematic valuation model, provided daily by an independent third party to fair value their international equity securities. These valuations are considered as Level 2 in the fair value hierarchy.

Approximately 0.3% of the Corporate Credit Fund’s June 30, 2016 net assets are being valued using estimates provided by the Fair Value Committee.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The Trust determines transfers between fair value hierarchy levels at the reporting period end. There were no transfers between Levels 1, 2 or 3 as of June 30, 2016 based on input levels assigned at December 31, 2015.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For example, short-term debt securities of sufficient credit quality maturing in less than 61 days may be valued using amortized cost in accordance with rules under the 1940 Act. Generally, amortized cost approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.

The following is a summary of the inputs used to value the Funds’ investments as of June 30, 2016:

	Level 1 – Quoted Prices		Level 2 – Other Significant Observable Inputs
Investments in Securities: (Assets)
Small Cap Fund
Common Stocks*	$	1,424,039,746	$	—
Registered Investment Companies		501,443,940		—
Total		1,925,483,686		—
Small-Mid Cap Fund
Common Stocks*		1,686,204,429		—
Registered Investment Companies		315,264,130		—
Total		2,001,468,559		—
Mid Cap Fund
Common Stocks*		33,733,068		—
Registered Investment Companies		12,500,166		—
Total		46,233,234		—

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Diamond Hill Funds

Notes to Financial Statements (Continued)

June 30, 2016 (Unaudited)

	Level 1 – Quoted Prices		Level 2 – Other Significant Observable Inputs
Large Cap Fund
Common Stocks*	$	3,603,733,173	$	—
Registered Investment Companies		477,244,992		—
Total		4,080,978,165		—
Select Fund
Common Stocks*		134,568,938		—
Registered Investment Companies		16,438,678		—
Total		151,007,616		—
Long-Short Fund
Common Stocks*		3,643,217,123		—
Registered Investment Companies		1,088,533,197		—
Total		4,731,750,320		—
Research Opportunities Fund
Common Stocks*		49,024,182		1,287,754
Corporate Bonds*		—		996,250
Registered Investment Company		11,114,437		—
Total		60,138,619		2,284,004
Financial Long-Short Fund
Common Stocks*		26,739,812		—
Registered Investment Companies		9,059,541		—
Total		35,799,353		—
Corporate Credit Fund
Collateralized Debt Obligations		—		1,091,468
Corporate Bonds*		—		354,068,433
Registered Investment Companies		84,472,592		—
Total		84,472,592		355,159,901
High Yield
Corporate Bonds*		—		23,298,289
Registered Investment Companies		6,426,767		—
Total		6,426,767		23,298,289

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Diamond Hill Funds

Notes to Financial Statements (Continued)

June 30, 2016 (Unaudited)

	Level 1 – Quoted Prices			Level 2 – Other Significant Observable Inputs
Investments in Securities Sold Short: (Liabilities)
Long-Short Fund
Common Stocks*	$	(1,206,503,378	)	$	—
Registered Investment Company		(52,443,194	)		—
Total		(1,258,946,572	)		—
Research Opportunities Fund
Common Stocks*		(14,828,249	)		—
Total		(14,828,249	)		—
Financial Long-Short Fund
Common Stocks*		(4,685,398	)		—
Total		(4,685,398	)		—

* See Schedule of Investments and Schedule of Investments Sold Short for industry classification.

The Funds did not hold any Level 3 securities during the six months ended June 30, 2016.

Short sales — The Long-Short Fund, Research Opportunities Fund, Financial Long-Short Fund, Corporate Credit Fund and High Yield Fund are permitted to make short sales of securities. Short sales are effective when it is believed that the price of a particular security will decline, and involves the sale of a security which the Fund does not own in hope of purchasing the same security at a later date at a lower price. To make delivery to the buyer, a Fund must borrow the security, and the Fund is obligated to return the security to the lender, which is accomplished by a later purchase of the security by the Fund. Cash received from short sales is maintained by the custodian and is used as collateral. It is included as “Cash deposits with custodian for securities sold short” on the Statements of Assets & Liabilities and “Segregated Cash With Custodian” on the Schedules of Investments.

A Fund will incur a loss as a result of a short sale if the price of the security increases between the date of the short sale and the date on which the Fund purchases the security to replace the borrowed security. The use of short sales may cause a Fund to have higher expenses (especially dividend expenses) than those of other equity mutual funds. Short sales are speculative transactions and involve special risks, including greater reliance on the ability of the Funds’ investment advisor, Diamond Hill Capital Management, Inc. (“DHCM”) to accurately anticipate the future value of a security.

Securities lending — Under the terms of the securities lending agreements with State Street Bank and Trust Company (“State Street”), State Street is authorized to loan securities on

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Diamond Hill Funds

Notes to Financial Statements (Continued)

June 30, 2016 (Unaudited)

behalf of the Funds to approved borrowers. The contractual maturity of securities lending transactions are on an overnight and continuous basis. In exchange, the Funds receive cash collateral in the amount of at least 100% of the value of the securities loaned. Any collateral shortfalls due to changes in security market prices are adjusted the next business day. The cash collateral is invested in short-term instruments as noted in each Fund’s Schedule of Investments. Although risk is mitigated by the collateral, the Funds could experience a delay in recovering their securities and possible loss of income or value if the borrower fails to return them. The agreements provide that after predetermined rebates to borrowers, the Funds each retain a portion of their respective net securities lending income and pay State Street the remaining portion.

As of June 30, 2016, the fair value of securities loaned and the collateral held were as follows:

	Fair Value of Securities Loaned		Fair Value of Collateral Received
Small Cap Fund	$	176,308,780	$	181,089,534
Small-Mid Cap Fund		152,358,897		156,066,879
Mid Cap Fund		9,791,680		10,020,993
Large Cap Fund		403,527,235		419,942,141
Select Fund		15,124,192		15,478,929
Long-Short Fund		536,558,016		548,681,030
Research Opportunities Fund		10,820,019		11,114,437
Financial Long-Short Fund		7,184,571		7,349,108
Corporate Credit Fund		34,846,249		36,206,143
High Yield Fund		5,469,406		5,694,157

Security transactions — Throughout the reporting period, investment transactions are recorded no later than the first business day following trade date. For financial reporting purposes, investments are reported on trade date on the last business day of the reporting period. The specific identification method is used for determining realized gains or losses for financial statements and income tax purposes. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Discounts and premiums on securities purchased are amortized using the daily effective yield method. The Funds record distributions received from investments in Real Estate Investment Trusts (“REITS”) in excess of income from underlying investments as a reduction of cost of investments and/or realized gain. Such amounts are based on estimates if actual amounts are not available and actual amounts of income, realized gain and return of capital may differ from the estimated amounts. The Funds adjust the estimated amounts once the issuers provide information about the actual composition of the distributions.

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Diamond Hill Funds

Notes to Financial Statements (Continued)

June 30, 2016 (Unaudited)

Share valuation — The net asset value per share of each class of shares of each Fund is calculated daily by dividing the total value of a Fund’s assets attributable to that class, less liabilities attributable to that class, by the number of shares of that class outstanding.

Federal income taxes — Each Fund’s policy is to continue to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies and to distribute substantially all of its taxable net investment income and any net realized capital gains to its shareholders. The Funds have analyzed their tax positions taken on Federal income tax returns for all open tax years (tax years ended December 31, 2012 through 2015) and have concluded that no provision for income tax is required in their financial statements.

Distributions to shareholders — Dividends from net investment income are declared and paid monthly for the Corporate Credit Fund and High Yield Fund. Dividends from net investment income are declared and paid on an annual basis for the Small Cap Fund, Small-Mid Cap Fund, Mid Cap Fund, Large Cap Fund, Select Fund, Long-Short Fund, Research Opportunities Fund, and Financial Long-Short Fund. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share rates are due to differences in separate class expenses. Net realized capital gains, if any, are distributed at least annually. Distributions from net investment income and from net capital gains are determined in accordance with U.S. income tax regulations, which may differ from GAAP. These differences are primarily due to differing treatments for paydown gains and losses on mortgage-backed securities, expiring capital loss carry-forwards and deferrals of certain losses. Permanent book and tax basis differences are reclassified among the components of net assets. Certain Funds may utilize earnings and profits distributed to shareholders on redemption of shares as part of the dividends paid deduction for income tax purposes.

Allocations — Investment income earned, realized capital gains and losses, and unrealized appreciation and depreciation for the Funds are allocated daily to each class of shares based upon its proportionate share of total net assets of the Fund. Class specific expenses are charged directly to the class incurring the expense. Common expenses, which are not attributable to a specific class, are allocated daily to each class of shares based upon its proportionate share of total net assets of the Fund. Expenses not directly billed to a Fund are allocated proportionally among all Funds daily in relation to net assets of each Fund or another reasonable measure.

Foreign securities country risk — Investing in non-U.S. securities may entail risk due to foreign economic and political developments; this risk may be higher when investing in emerging markets. Changes in currency exchange rates and differences in accounting and taxation policies outside the U.S. can raise or lower returns.

Foreign currency translation — The books and records of the Funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign

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Diamond Hill Funds

Notes to Financial Statements (Continued)

June 30, 2016 (Unaudited)

currency are translated into U.S. dollars on the date of valuation. The Funds do not isolate that portion of realized or unrealized gains and losses resulting from changes in the foreign exchange rate from fluctuations arising from changes in the market prices of the securities. These gains and losses are included in net realized and unrealized gains and losses on investments in the Statements of Operations. Net realized and unrealized gains and losses on foreign currency transactions represent net foreign exchange gains or losses from foreign currency exchange contracts, disposition of foreign currencies, currency gains or losses realized between trade and settlement dates on securities transactions and the difference between the amount of the investment income and foreign withholding taxes recorded on the Funds’ books and the U.S. dollar equivalent amounts actually received or paid.

Investment Transactions

For the six months ended June 30, 2016, purchases and sales (including maturities) of investment securities (excluding short-term securities and U.S. government obligations) were as follows:

	Purchases		Sales
Small Cap Fund	$	142,972,703	$	78,363,541
Small-Mid Cap Fund		540,837,160		125,773,423
Mid Cap Fund		17,302,771		1,958,375
Large Cap Fund		485,958,283		346,882,753
Select Fund		59,310,103		62,113,105
Long-Short Fund		1,012,999,397		1,269,723,436
Research Opportunities Fund		25,724,287		33,650,532
Financial Long-Short Fund		6,785,005		4,813,667
Corporate Credit Fund		178,153,333		108,184,965
High Yield Fund		19,847,830		7,118,924

The Funds pay commissions on the purchase and sale of investment securities. The commissions are treated as transaction costs and, therefore, are included as part of the cost of purchases or net proceeds on the sale of investment securities and are not included in the presentation of Fund expenses on the Statements of Operations. The Funds paid the following commissions during the six months ended June 30, 2016:

	Total Commissions		Commissions as a % of Average Net Assets
Small Cap Fund	$	153,155		0.01	%
Small-Mid Cap Fund		37,376		0.02	%
Mid Cap Fund		6,182		0.03	%

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Diamond Hill Funds

Notes to Financial Statements (Continued)

June 30, 2016 (Unaudited)

	Total Commissions		Commissions as a % of Average Net Assets
Large Cap Fund	$	455,502		0.01	%
Select Fund		46,389		0.03	%
Long-Short Fund		1,145,856		0.03	%
Research Opportunities Fund		28,373		0.06	%
Financial Long-Short Fund		4,286		0.02	%

Investment Advisory Fees and Other Transactions with Affiliates

As of June 30, 2016, the Small Cap Fund, Small-Mid Cap Fund, Mid Cap Fund, Large Cap Fund, Select Fund, Long-Short Fund, Research Opportunities Fund, Financial Long-Short Fund, Corporate Credit Fund and High Yield Fund each receive investment management and advisory services from DHCM under management agreements that provide for fees to be paid at an annual rate of 0.80%, 0.75%, 0.65%, 0.50%, 0.70%, 0.90%, 1.00%, 1.00%, 0.45% and 0.50% of the Fund’s average daily net assets, respectively. Prior to January 1, 2016, the annual rate for the Large Cap Fund was 0.55% of the Fund’s average daily net assets. The advisory agreements are subject to annual approval by the Board of Trustees. In addition, each Fund entered into an administrative services agreement whereby DHCM is paid a fee at an annual rate of 0.24% for Class A Shares and Class C Shares, 0.20% for Class I Shares and 0.10% for Class Y shares of each class’ average daily net assets. Prior to January 1, 2016, the fees paid by Class I shares under the administrative services agreement were 0.21% of each class’ average daily net assets. These administrative fees are used to pay most of the Funds’ operating expenses except advisory fees, distribution fees, custody fees, brokerage fees, taxes, interest and dividend expense on securities sold short and extraordinary expenses.

Pursuant to Rule 12b-1 under the 1940 Act, the Trust has adopted a distribution plan on behalf of each Fund’s Class A and Class C Shares (the “Plan”). Under the Plan, Class A shares pay a distribution fee at an annual rate of 0.25% of Class A average daily net assets. Class C shares pay distribution and shareholder-servicing fees at an annual rate of 0.75% and 0.25%, respectively, of Class C’s average daily net assets. Class I and Class Y shares are not subject to any distribution or shareholder-servicing fees. The Trust entered into a Distribution Agreement on behalf of the Funds with BHIL Distributors, LLC (“Distributor”). Pursuant to the Distribution Agreement, the Distributor acts as principal underwriter of each Fund’s shares.

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Diamond Hill Funds

Notes to Financial Statements (Continued)

June 30, 2016 (Unaudited)

For the six months ended June 30, 2016, the Distributor retained the following amounts in sales commissions from the sales of Class A shares of the Funds as follows:

Small Cap Fund	$	7,184
Small-Mid Cap Fund		13,600
Mid Cap Fund		2,625
Large Cap Fund		15,213
Select Fund		960
Long-Short Fund		3,431
Financial Long-Short Fund		223
Corporate Credit Fund		3,279

DHCM, as the financing agent for Class C shares, received contingent deferred sales charges relating to the redemptions of Class C shares of the Funds for the six months ended June 30, 2016 as follows:

Small Cap Fund	$	755
Small-Mid Cap Fund		1,204
Large Cap Fund		975
Select Fund		741
Long-Short Fund		1,762
Research Opportunities Fund		148

Certain Officers of the Trust are affiliated with DHCM or the Distributor. Such Officers receive no compensation from the Funds for serving in their respective roles.

Trustee Fees

The Independent Trustees are compensated for their services to the Funds by DHCM as part of the administration services agreement. Collectively, the Independent Trustees were paid $161,000 in fees during the six months ended June 30, 2016.

Commitments and Contingencies

The Funds indemnify the Trust’s Officers and Trustees for certain liabilities that might arise from their performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 79

Diamond Hill Funds

Notes to Financial Statements (Continued)

June 30, 2016 (Unaudited)

Federal Tax Information

The amount and character of income and capital gain distributions paid by the Funds are determined in accordance with Federal income tax regulations which may differ from GAAP. The tax character of distributions paid may differ from the character of distributions shown on the Statements of Changes in Net Assets, as items such as short-term capital gains are treated as ordinary income for tax purposes.

The tax character of distributions paid during 2015 was as follows:

	Small Cap Fund		Small-Mid Cap Fund		Mid Cap Fund		Large Cap Fund		Select Fund
Distributions paid from:
Ordinary income	$	8,403,924	$	3,498,225	$	108,238	$	34,363,450	$	359,589
Long-term capital gains		21,408,776		13,087,774		—		129,116,454		4,592,466
Total distributions	$	29,812,700	$	16,585,999	$	108,238	$	163,479,904	$	4,952,055
			Long-Short Fund		Research Opportunities Fund		Financial Long-Short Fund		Corporate Credit Fund
Distributions paid from:
Ordinary income			$	—	$	340,851	$	134,211	$	13,617,414
Long-term capital gains				20,786,215		4,092,364		—		—
Total distributions			$	20,786,215	$	4,433,215	$	134,211	$	13,617,414

The following information is computed on a tax basis for each item as of December 31, 2015:

	Small Cap Fund			Small-Mid Cap Fund		Mid Cap Fund			Large Cap Fund		Select Fund
Net unrealized appreciation (depreciation) on portfolio investments	$	212,255,508		$	44,137,744	$	845,840		$	639,704,687	$	(6,758,361	)
Undistributed ordinary income		—			—		7,395			2,113,996		666,648
Undistributed capital gains		38,108,187			13,155,779		—			43,928,487		1,206,738
Capital loss carryforwards		—			—		(44,539	)		—		—
Late-year ordinary losses deferred		(2,468,339	)		—		—			—		—
Accumulated earnings (deficit)	$	247,895,356		$	57,293,523	$	808,696		$	685,747,170	$	(4,884,975	)

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Diamond Hill Funds

Notes to Financial Statements (Continued)

June 30, 2016 (Unaudited)

	Long-Short Fund			Research Opportunities Fund			Financial Long-Short Fund			Corporate Credit Fund
Net unrealized appreciation (depreciation) on portfolio investments	$	512,410,508		$	(1,070,244	)	$	282,885		$	(16,992,688	)
Undistributed ordinary income		—			—			31,152			943,989
Undistributed capital gains		—			10,325			—			—
Capital loss carryforwards		—			—			(5,761,578	)		(10,806,004	)
Post-October capital losses deferred		(2,443,579	)		(356,313	)		—			—
Late-year ordinary losses deferred		—			(115,290	)		—			—
Accumulated earnings (deficit)	$	509,966,929		$	(1,531,522	)	$	(5,447,541	)	$	(26,854,703	)

Qualified late-year losses (Late-year Ordinary losses and Post October Capital losses listed above) incurred after October 31, 2015 and within the taxable year, are deemed to arise on the first day of the Funds’ next taxable year.

As of June 30, 2016, the Funds’ federal tax cost of investment securities and net unrealized appreciation (depreciation) were as follows:

	Small Cap Fund			Small-Mid Cap Fund			Mid Cap Fund			Large Cap Fund			Select Fund
Tax cost of portfolio investments	$	1,672,609,623		$	1,867,171,207		$	44,093,806		$	3,487,743,787		$	166,850,051
Gross unrealized appreciation		329,259,919			209,681,935			3,334,250			728,849,908			10,488,680
Gross unrealized depreciation		(76,385,856	)		(75,384,583	)		(1,194,822	)		(135,615,530	)		(26,331,115	)
Net unrealized appreciation (depreciation) on portfolio investments	$	252,874,063		$	134,297,352		$	2,139,428		$	593,234,378		$	(15,842,435	)
	Long-Short Fund			Research Opportunities Fund			Financial Long-Short Fund			Corporate Credit Fund			High Yield Fund
Tax cost of long portfolio investments	$	4,247,433,720		$	63,701,218		$	37,470,705		$	443,789,475		$	29,684,062
Gross unrealized appreciation		643,502,558			6,033,985			1,669,471			5,175,328			374,020
Gross unrealized depreciation		(159,185,960	)		(7,312,580	)		(3,340,823	)		(9,332,310	)		(333,026	)
Net unrealized appreciation (depreciation) on long portfolio investments	$	484,316,598		$	(1,278,595	)	$	(1,671,352	)	$	(4,156,982	)	$	40,994

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Diamond Hill Funds

Notes to Financial Statements (Continued)

June 30, 2016 (Unaudited)

The difference between book basis and tax basis net unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.

As of the latest tax year ended December 31, 2015, the following Funds have capital loss carry forwards (“CLCFs”) as summarized in the tables below. CLCFs subject to expiration are applied as short-term capital loss regardless of whether the originating capital loss was short-term or long-term. CLCFs that are not subject to expiration must be utilized before those that are subject to expire. The Mid Cap Fund has a short-term CLCF of $44,539 that is not subject to expiration. As of December 31, 2015, the following CLCFs were subject to expiration:

	Amount		Expires December 31,
Financial Long-Short Fund	$	5,761,578		2017
	$	5,761,578
Corporate Credit Fund	$	5,534,150		2016
		5,271,854		2017
	$	10,806,004

As of the latest tax year ended December 31, 2015, the following funds utilized CLCFs:

	Amount of CLCFs
Mid Cap Fund	$	18,308
Long-Short Fund		118,576,181
Financial Long-Short Fund		3,311,081
Corporate Credit Fund		668,171

The tax character of current year distributions paid and the tax basis of the current components of accumulated earnings (deficit) and any net CLCFs will be determined at the end of the current tax year.

Subsequent Events

The Funds evaluated events from June 30, 2016 through the date that these financial statements were issued. There were no subsequent events to report that would have a material impact on the Funds’ financial statements, other than disclosed below.

On July 5, 2016, the Diamond Hill Core Bond Fund and the Diamond Hill Short Duration Total Return Bond Fund commenced operations.

Effective August 1, 2016, the administrative fee for all Class I shares decreased from 0.20% to 0.19% and for all Class Y shares from 0.10% to 0.09%.

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Diamond Hill Funds

Other Items

June 30, 2016 (Unaudited)

Trustee Approval of Investment Advisory Agreement

The Trustees of Diamond Hill Funds (the “Trust”) considered a broad range of information specifically requested and relating to its consideration of the approval of the investment advisory agreement for the Diamond Hill High Yield Fund (“HY Fund”) at a regularly scheduled meeting on November 19, 2015. By a unanimous vote, the Trustees approved the Amended and Restated Investment Management Agreement (“Management Agreement”) between the Trust and Diamond Hill Capital Management, Inc. (the “Adviser”), for the HY Fund. The Trustees discussed the following factors, in connection with the Trust’s Management Agreement:

a) Nature, Extent and Quality of Services. The Trustees considered the nature, extent and quality of the services provided by the Adviser under the Management Agreement, including a review of the services provided thereunder, the proposed management fee for the HY Fund, and the expenses that will be assumed. The Trustees noted that they had previously considered the Adviser’s overall reputation, integrity and mission to serve its clients through a disciplined intrinsic-value-based approach to investment that aligns the Adviser’s interests with those of its clients in connection with the annual renewal of the Management Agreement for the other funds in the Trust at a meeting held on August 20, 2015. At that same meeting, the Trustees noted the qualifications of the investment staff and other key personnel of the Adviser and that the Adviser continues to invest significant resources in human capital to attract and retain top talent. The Trustees also reviewed the Adviser’s succession plan for key investment and management staff. In addition, the Trustees reviewed information related to the compensation structure for portfolio managers and other key investment personnel. The Adviser represented that the information reviewed at the August 20, 2015, meeting was applicable to the HY Fund and had not materially changed.

In evaluating performance, the Trustees reviewed the Adviser’s absolute and relative return goals for the HY Fund and performance information for the Diamond Hill High Yield Fund, L.P. (“HY LP”), noting that the HY LP will be converted into the HY Fund. The Trustees also received performance information for the Diamond Hill Corporate Credit Fund (“Corporate Credit Fund”) that is managed by the same portfolio managers and discussed similarities and differences between the HY Fund and the Corporate Credit Fund. The Trustees determined that because the HY Fund has not commenced operations, the Trustees would review performance over time.

b) Reasonableness of Investment Advisory Fees. The Trustees noted that the contractual fee rate under the Management Agreement was below both the average and median rates of the Morningstar High Yield Bond Category.

c) Reasonableness of Total Expenses. The Trustees noted that the estimated total expenses of each class of shares of the HY Fund were below both the average and median total expenses of the Morningstar High Yield Bond Category.

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Diamond Hill Funds

Other Items

June 30, 2016 (Unaudited) (Continued)

d) Profitability. The Trustees considered the profitability of the Adviser’s future relationship with the HY Fund. The Adviser discussed the level of assets the HY Fund will need to reach before becoming profitable. As such, the Adviser represented that the HY Fund will likely not generate a profit until a performance track-record has been established and asset growth begins to increase in line with expectations. After discussion, the Trustees determined that they would continue to evaluate the Adviser’s profitability in connection with the next annual renewal of the Management Agreement, and concluded that the time frame to achieve profitability was reasonable. The Trustees noted that the Adviser is also the administrator to the HY Fund (under the Amended and Restated Administrative, Fund Accounting and Transfer Agency Services Agreement (“Administrative Agreement”)). At the August 20, 2015 meeting, the Trustees had reviewed a separate profitability analysis relating to the administrative services provided to all the funds of the Trust and concluded that the Adviser’s pre-tax profit margin under the Management Agreement and the administration margin and pro-forma administration margin under the Administrative Agreement represented a fair and entrepreneurial profit for managing and providing administrative services to the Funds. The Adviser represented that the information reviewed at the August 20, 2015, meeting was applicable to the HY Fund and had not materially changed.

e) Economies of Scale. The Trustees noted that in connection with the annual renewal of the Management Agreement for the other funds in the Trust on August 20, 2015, they reviewed the potential extent to which economies of scale would be realized as each of the other funds in the Trust grow and whether fee levels reflect these economies of scale for the benefit of shareholders of those funds. They noted that while many advisory firms reduce fees as assets under management increase with predetermined break points, the Adviser has adopted a different strategy. The Trustees considered that rather than instituting break points, the Adviser has targeted its advisory fees to correspond to its mission to add value, meaning that rather than charging a lower fee on assets above a certain level, the Adviser prefers to close a strategy to new investors so that it can efficiently manage the assets of these funds and attempt to fulfill its responsibility to add value to existing investors. The Trustees also noted that the Adviser has a history of voluntarily reducing its fees under the Amended and Restated Administrative, Fund Accounting and Transfer Agency Services Agreement when asset growth allows for the sharing of economies of scale. The Adviser represented that the strategy for the HY Fund will be the same as the other funds in the Trust.

f) Ancillary Benefits. The Trustees considered ancillary benefits received by the Adviser as a result of its relationship with all the funds in the Trust on August 20, 2015, including the ability to negotiate favorable commissions rates and have access to research that benefits all of the Adviser’s clients, the ability to serve as sub-adviser to other mutual funds, and the ability to launch an exchange-traded fund.

84 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Funds

Other Items

June 30, 2016 (Unaudited) (Continued)

In their deliberations, there was a comprehensive consideration of each of the factors above in connection with the HY Fund, and the Trustees, all of whom qualify as Independent Trustees under the Investment Company Act of 1940, as amended, concluded the compensation to be received by the Adviser from the HY Fund was fair and reasonable and the approval of the Management Agreement for the HY Fund was in the best interests of the HY Fund and its shareholders.

Proxy Voting

The investment advisor is responsible for exercising the voting rights associated with the securities purchased and held by the Funds. A description of the policies and procedures that the investment advisor uses in fulfilling this responsibility and information regarding how those proxies were voted during the twelve month period ended June 30 are available without charge upon request by calling toll free 1-888-226-5595 or on the Securities and Exchange Commission’s website at www.sec.gov.

Portfolio Disclosure

The Trust files a complete listing of portfolio holdings for each Fund as of the end of the first and third quarters of each fiscal year on Form N-Q and each second and fourth quarters of each fiscal year on Form N-CSR. The complete listing (i) is available on the Commission’s website; (ii) may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC; and (iii) will be made available to shareholders upon request by calling 1-888-226-5595. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Monthly portfolio holdings are also available on www.diamond-hill.com.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 85

Diamond Hill Funds

Schedule of Shareholder Expenses

Hypothetical Example of a $1,000 Investment at Beginning of Period

(Unaudited)

As a Fund shareholder, you may incur two types of costs: (1) transaction costs, including wire redemption fees and sales charges (loads) as applicable; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs or other fees that may apply, such as fees for low balance accounts. Therefore, the examples are useful in comparing ongoing costs only and will not help you determine the relative total cost of owning different funds. In addition, if these transactional costs and other fees were included, your costs would have been higher.

These examples are based on an investment of $1,000 invested at January 1, 2016 and held for the entire period from January 1, 2016 through June 30, 2016.

The Actual Expense example below provides information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Expenses paid during the period” to estimate the expenses you paid on your account during this period.

The Hypothetical Expense example below provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not each Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in this Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

	Account value at the beginning of the period ($)				Account value at the end of the period ($)				Expenses paid during the period ($)*				Funds annualized expense ratio (%)
	Actual		Hypothetical		Actual		Hypothetical		Actual		Hypothetical		Actual
Small Cap Fund
Class A		1,000.00		1,000.00		1,023.60		1,018.45		6.49		6.47		1.29
Class C		1,000.00		1,000.00		1,020.00		1,014.72		10.25		10.22		2.04
Class I		1,000.00		1,000.00		1,025.30		1,019.89		5.04		5.02		1.00
Class Y		1,000.00		1,000.00		1,025.60		1,020.39		4.53		4.52		0.90
Small-Mid Cap Fund
Class A		1,000.00		1,000.00		1,051.40		1,018.75		6.27		6.17		1.23
Class C		1,000.00		1,000.00		1,047.50		1,015.02		10.08		9.92		1.98
Class I		1,000.00		1,000.00		1,052.00		1,020.14		4.85		4.77		0.95
Class Y		1,000.00		1,000.00		1,053.00		1,020.64		4.34		4.27		0.85

86 DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM

Diamond Hill Funds

Schedule of Shareholder Expenses

Hypothetical Example of a $1,000 Investments at Beginning of Period

(Unaudited) (Continued)

	Account value at the beginning of the period ($)				Account value at the end of the period ($)				Expenses paid during the period ($)*				Funds annualized expense ratio (%)
	Actual		Hypothetical		Actual		Hypothetical		Actual		Hypothetical		Actual
Mid Cap Fund Class
Class A		1,000.00		1,000.00		1,053.20		1,019.10		5.92		5.82		1.16
Class I		1,000.00		1,000.00		1,054.00		1,020.54		4.44		4.37		0.87
Class Y		1,000.00		1,000.00		1,055.80		1,021.03		3.94		3.87		0.77
Large Cap Fund
Class A		1,000.00		1,000.00		1,021.00		1,019.94		4.97		4.97		0.99
Class C		1,000.00		1,000.00		1,017.10		1,016.21		8.73		8.72		1.74
Class I		1,000.00		1,000.00		1,022.70		1,021.38		3.52		3.52		0.70
Class Y		1,000.00		1,000.00		1,023.20		1,021.88		3.02		3.02		0.60
Select Fund
Class A		1,000.00		1,000.00		931.20		1,018.95		5.71		5.97		1.19
Class C		1,000.00		1,000.00		928.30		1,015.17		9.35		9.77		1.95
Class I		1,000.00		1,000.00		932.20		1,020.39		4.32		4.52		0.90
Class Y		1,000.00		1,000.00		933.10		1,020.89		3.85		4.02		0.80
Long-Short Fund
Class A		1,000.00		1,000.00		986.70		1,014.77		10.03		10.17		2.03
Class C		1,000.00		1,000.00		982.70		1,011.09		13.66		13.85		2.77
Class I		1,000.00		1,000.00		987.80		1,016.21		8.60		8.72		1.74
Class Y		1,000.00		1,000.00		988.70		1,016.71		8.11		8.22		1.64
Research Opportunities Fund
Class A		1,000.00		1,000.00		985.80		1,013.97		10.81		10.97		2.19
Class C		1,000.00		1,000.00		981.60		1,010.24		14.49		14.69		2.94
Class I		1,000.00		1,000.00		986.90		1,015.42		9.39		9.52		1.90
Class Y		1,000.00		1,000.00		987.40		1,015.91		8.89		9.02		1.80
Financial Long-Short Fund
Class A		1,000.00		1,000.00		910.80		1,015.32		9.12		9.62		1.92
Class C		1,000.00		1,000.00		907.40		1,011.59		12.66		13.35		2.67
Class I		1,000.00		1,000.00		912.30		1,016.76		7.75		8.17		1.63
Corporate Credit Fund
Class A		1,000.00		1,000.00		1,063.10		1,020.19		4.82		4.72		0.94
Class C		1,000.00		1,000.00		1,058.70		1,016.46		8.65		8.47		1.69
Class I		1,000.00		1,000.00		1,064.80		1,021.63		3.34		3.27		0.65
Class Y		1,000.00		1,000.00		1,064.40		1,022.13		2.82		2.77		0.55
High Yield Fund
Class A		1,000.00		1,000.00		1,068.60		1,019.89		5.14		5.02		1.00
Class I		1,000.00		1,000.00		1,070.20		1,021.33		3.65		3.57		0.71
Class Y		1,000.00		1,000.00		1,070.60		1,021.83		3.14		3.07		0.61

* Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year (to reflect the one-half year period).

You can find more information about the Fund’s expenses, including annual expense ratios for historical periods in the Financial Statements section of this report. For additional information on operating expenses and other shareholder costs, please refer to the Fund’s prospectus. The prospectus presents hypothetical shareholder costs over various time periods based upon a $10,000 investment and a return of 5% a year. The standardized example, which appears in all mutual fund prospectuses, may be useful to you in comparing the costs of investing in different funds.

DIAMOND HILL FUNDS | SEMI-ANNUAL REPORT | JUNE 30, 2016 | DIAMOND-HILL.COM 87

INVESTMENT ADVISER: DIAMOND HILL CAPITAL MANAGEMENT, INC.

DISTRIBUTOR: BHIL DISTRIBUTORS, LLC (MEMBER FINRA/SIPC), AN AFFILIATE OF THE DIAMOND HILL FUNDS

DIAMOND-HILL.COM | 855.255.8955 | 325 JOHN H. MCCONNELL BLVD | SUITE 200 | COLUMBUS, OHIO | 43215

DH-SAR063016

Item 2. Code of Ethics.

Not applicable.

Item 3. Audit Committee Financial Expert.

Not applicable.

Item 4. Principal Accountant Fees and Services.

Not applicable.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Schedule of Investments.

(a) Not applicable.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

Not applicable.

Item 11. Controls and Procedures.

(a)The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant’s disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

(b)There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d))) that occurred during the second fiscal quarter of the period covered by this report that have materially affected or are reasonably likely to be materially affected, the registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)(1)	Not applicable.
(a)(2)	Certifications required by Item 12(a) of Form N-CSR are filed herewith.
(a)(3)	Not applicable.
(b)	Certification required by Item 12(b) of Form N-CSR is furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant	Diamond Hill Funds
By (Signature and Title)	/s/ Thomas E. Line
	Thomas E. Line, Chief Executive Officer
Date September 1, 2016

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)	/s/ Thomas E. Line
	Thomas E. Line, Chief Executive Officer
Date September 1, 2016
By (Signature and Title)	/s/ Trent M. Statczar
	Trent M. Statczar, Treasurer
Date September 1, 2016