Diamond Hill Large Cap Fund Lags in Q3, Drops Lululemon and Highlights Caterpillar

Overview

• The Large Cap Fund declined in Q3 2025 and underperformed the Russell 1000 Value Index, even as the Russell 3000 gained 8% for the quarter.
• Lululemon and CarMax were named among the biggest detractors, and Diamond Hill exited Lululemon during the quarter.
• Reasons for leaving Lululemon included weak merchandise reception, a strategic plan reset, rising competition, shifting fashion trends, and tariff risk after removal of the de minimis import exemption.
• Caterpillar, L3Harris Technologies and Sysco were top contributors, with Caterpillar benefiting from stronger sentiment toward its power‑generation business tied to data‑center growth.
• Repositioning included new stakes in FedEx, Thermo Fisher Scientific, Zoetis and Equitable Holdings; as of Nov. 5, Lululemon was down 46.85% year over year while Caterpillar was up 39.98%.