DIAMOND HILL FUNDS

Diamond Hill Small Cap Fund

Diamond Hill Small-Mid Cap Fund

Diamond Hill Mid Cap Fund

Diamond Hill Large Cap Fund

Diamond Hill Select Fund

Diamond Hill Long-Short Fund

Diamond Hill Research Opportunities Fund

Diamond Hill Financial Long-Short Fund

Diamond Hill Strategic Income Fund

Supplement Dated December 31, 2015 to Prospectus Dated February 28, 2015

Effective January 1, 2016, Diamond Hill Capital Management, Inc., the Administrator for the Diamond Hill Funds (collectively, the “Funds”) will reduce its administrative service fee from an annual rate of 0.21% to 0.20% of each Fund’s average daily net assets of Class I Shares.

Effective January 1, 2016, Diamond Hill Capital Management, Inc., the Adviser for the Diamond Hill Funds will reduce its management fee for the Diamond Hill Large Cap Fund (the “Large Cap Fund”) from an annual rate of 0.55% to 0.50% of the Large Cap Fund’s average daily net assets.

Accordingly, the prospectus is updated as follows:

On pages 1, 4, 7, 10, 13, 16, 19, 23, and 26 the Annual Fund Operating Expenses table and the Expense Example section are each deleted in their entirety and replaced with the following:

Page 1 – Small Cap Fund

ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a percentage of the value of your investment)

	Class A			Class C			Class I			Class Y
Management fees		0.80	%		0.80	%		0.80	%		0.80	%
Distribution (12b-1) fees		0.25	%		1.00	%		None			None
Other expenses		0.24	%		0.24	%		0.20	%		0.10	%
Acquired fund fees and expenses		0.03	%		0.03	%		0.03	%		0.03	%
Total annual fund operating expenses		1.32	%		2.07	%		1.03	%		0.93	%

EXPENSE EXAMPLE

This Example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the fund for the time periods indicated. It also shows costs if you sold your shares at the end of the period or continued to hold them. The Example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held	$	628	$	897	$	1,187	$	2,011
Class C	Sold Held		310 210		649 649		1,114 1,114		2,400 2,400
Class I	Sold or Held		105		328		569		1,259
Class Y	Sold or Held		95		296		515		1,143

1

Page 4 – Small Mid-Cap Fund

ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a percentage of the value of your investment)

	Class A			Class C			Class I			Class Y
Management fees		0.75	%		0.75	%		0.75	%		0.75	%
Distribution (12b-1) fees		0.25	%		1.00	%		None			None
Other expenses		0.24	%		0.24	%		0.20	%		0.10	%
Acquired fund fees and expenses		0.01	%		0.01	%		0.01	%		0.01	%
Total annual fund operating expenses		1.25	%		2.00	%		0.96	%		0.86	%

EXPENSE EXAMPLE

This Example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the fund for the time periods indicated. It also shows costs if you sold your shares at the end of the period or continued to hold them. The Example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held	$	621	$	877	$	1,152	$	1,936
Class C	Sold Held		303 203		627 627		1,078 1,078		2,327 2,327
Class I	Sold or Held		98		306		531		1,178
Class Y	Sold or Held		88		274		477		1,061

Page 7 – Mid Cap Fund

ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a percentage of the value of your investment)

	Class A			Class C			Class I			Class Y
Management fees		0.65	%		0.65	%		0.65	%		0.65	%
Distribution (12b-1) fees		0.25	%		1.00	%		None			None
Other expenses		0.24	%		0.24	%		0.20	%		0.10	%
Acquired fund fees and expenses		0.01	%		0.01	%		0.01	%		0.01	%
Total annual fund operating expenses		1.15	%		1.90	%		0.86	%		0.76	%

EXPENSE EXAMPLE

This Example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the fund for the time periods indicated. It also shows costs if you sold your shares at the end of the period or continued to hold them. The Example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held	$	611	$	847	$	1,101	$	1,828
Class C	Sold Held		293 193		597 597		1,026 1,026		2,222 2,222
Class I	Sold or Held		88		274		477		1,061
Class Y	Sold or Held		78		243		422		942

Page 10 – Large Cap Fund

ANNUAL FUND OPERATING EXPENSE (expenses that you pay each year as a percentage of the value of your investment)

	Class A			Class C			Class I			Class Y
Management fees		0.50	%		0.50	%		0.50	%		0.50	%
Distribution (12b-1) fees		0.25	%		1.00	%		None			None
Other expenses		0.24	%		0.24	%		0.20	%		0.10	%
Total annual fund operating expenses		0.99	%		1.74	%		0.70	%		0.60	%

2

EXPENSE EXAMPLE

This Example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the fund for the time periods indicated. It also shows costs if you sold your shares at the end of the period or continued to hold them. The Example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held	$	596	$	800	$	1,020	$	1,652
Class C	Sold Held		277 177		548 548		944 944		2,052 2,052
Class I	Sold or Held		72		224		390		871
Class Y	Sold or Held		61		192		335		750

Page 13 – Select Fund

ANNUAL FUND OPERATING EXPENSE (expenses that you pay each year as a percentage of the value of your investment)

	Class A			Class C			Class I			Class Y
Management fees		0.70	%		0.70	%		0.70	%		0.70	%
Distribution (12b-1) fees		0.25	%		1.00	%		None			None
Other expenses		0.24	%		0.24	%		0.20	%		0.10	%
Total annual fund operating expenses		1.19	%		1.94	%		0.90	%		0.80	%

EXPENSE EXAMPLE

This Example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the fund for the time periods indicated. It also shows costs if you sold your shares at the end of the period or continued to hold them. The Example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held	$	615	$	859	$	1,122	$	1,871
Class C	Sold Held		297 197		609 609		1,047 1,047		2,264 2,264
Class I	Sold or Held		92		287		498		1,108
Class Y	Sold or Held		82		255		444		990

Page 16 - Long-Short Fund

ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a percentage of the value of your investment)

	Class A			Class C			Class I			Class Y
Management fees		0.90	%		0.90	%		0.90	%		0.90	%
Distribution (12b-1) fees		0.25	%		1.00	%		None			None
Other expenses
Administration fees		0.24	%		0.24	%		0.20	%		0.10	%
Dividend expenses and fees on short sales		0.43	%		0.43	%		0.43	%		0.43	%
Total other expenses		0.67	%		0.67	%		0.63	%		0.53	%
Acquired fund fees and expenses		0.02	%		0.02	%		0.02	%		0.02	%
Total annual fund operating expenses		1.84	%		2.59	%		1.55	%		1.45	%

3

EXPENSE EXAMPLE

This Example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the fund for the time periods indicated. It also shows costs if you sold your shares at the end of the period or continued to hold them. The Example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held	$	678	$	1,050	$	1,446	$	2,551
Class C	Sold Held		362 262		805 805		1,375 1,375		2,925 2,925
Class I	Sold or Held		158		490		845		1,845
Class Y	Sold or Held		148		459		792		1,735

Page 19 – Research Opportunities Fund

ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a percentage of the value of your investment)

	Class A			Class C			Class I			Class Y
Management fees		1.00	%		1.00	%		1.00	%		1.00	%
Distribution (12b-1) fees		0.25	%		1.00	%		None			None
Other expenses
Administration fees		0.24	%		0.24	%		0.20	%		0.10	%
Dividend expenses and fees on short sales		0.24	%		0.24	%		0.24	%		0.24	%
Total other expenses		0.48	%		0.48	%		0.44	%		0.34	%
Acquired fund fees and expenses		0.02	%		0.02	%		0.02	%		0.02	%
Total annual fund operating expenses		1.75	%		2.50	%		1.46	%		1.36	%

EXPENSE EXAMPLE

This Example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the fund for the time periods indicated. It also shows costs if you sold your shares at the end of the period or continued to hold them. The Example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held	$	669	$	1,024	$	1,401	$	2,459
Class C	Sold Held		353 253		779 779		1,331 1,331		2,836 2,836
Class I	Sold or Held		149		462		797		1,746
Class Y	Sold or Held		138		431		745		1,635

Page 23 – Financial Long-Short Fund

ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a percentage of the value of your investment)

	Class A			Class C			Class I
Management fees		1.00	%		1.00	%		1.00	%
Distribution (12b-1) fees		0.25	%		1.00	%		None
Other expenses
Administration fees		0.24	%		0.24	%		0.20	%
Dividend expenses and fees on short sales		0.24	%		0.24	%		0.24	%
Total other expenses		0.48	%		0.48	%		0.44	%
Acquired fund fees and expenses		0.02	%		0.02	%		0.02	%
Total annual fund operating expenses		1.75	%		2.50	%		1.46	%

4

EXPENSE EXAMPLE

This Example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the fund for the time periods indicated. It also shows costs if you sold your shares at the end of the period or continued to hold them. The Example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held	$	669	$	1,024	$	1,401	$	2,459
Class C	Sold Held		353 253		779 779		1,331 1,331		2,836 2,836
Class I	Sold or Held		149		462		797		1,746

Page 26 – Strategic Income Fund

ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a percentage of the value of your investment)

	Class A			Class C			Class I			Class Y
Management fees		0.45	%		0.45	%		0.45	%		0.45	%
Distribution (12b-1) fees		0.25	%		1.00	%		None			None
Other expenses		0.24	%		0.24	%		0.20	%		0.10	%
Total annual fund operating expenses		0.94	%		1.69	%		0.65	%		0.55	%

EXPENSE EXAMPLE

This Example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the fund for the time periods indicated. It also shows costs if you sold your shares at the end of the period or continued to hold them. The Example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	Share Status	1 Year		3 Years		5 Years		10 Years
Class A	Sold or Held	$	443	$	639	$	852	$	1,464
Class C	Sold Held		272 172		533 533		918 918		1,998 1,998
Class I	Sold or Held		66		208		362		810
Class Y	Sold or Held		56		176		307		689

On page 34, the table reflecting the annual fee that each of the Funds is authorized to pay the Adviser for its management services is updated to change the management fee for the Large Cap Fund from 0.55% to 0.50%.

This Supplement and the Statutory Prospectus dated February 28, 2015, provide the information a prospective investor ought to know before investing and should be retained for future reference.

5

DIAMOND HILL FUNDS

Diamond Hill Small Cap Fund

Diamond Hill Small-Mid Cap Fund

Diamond Hill Mid Cap Fund

Diamond Hill Large Cap Fund

Diamond Hill Select Fund

Diamond Hill Long-Short Fund

Diamond Hill Research Opportunities Fund

Diamond Hill Financial Long-Short Fund

Diamond Hill Strategic Income Fund

(Each a Fund or Series of Diamond Hill Funds)

Supplement Dated December 31, 2015 to

Statement of Additional Information Dated February 28, 2015

Effective January 1, 2016, Diamond Hill Capital Management, Inc., the Administrator for the Diamond Hill Funds (collectively, the “Funds”) reduced its administrative service fee from an annual rate of 0.21% to 0.20% of each Fund’s average daily net assets of Class I Shares.

Effective January 1, 2016, Diamond Hill Capital Management, Inc., the Adviser for the Diamond Hill Funds reduced its management fee for the Diamond Hill Large Cap Fund (the “Large Cap Fund”) from an annual rate of 0.55% to 0.50% of the Large Cap Fund’s average daily net assets.

Accordingly, this Statement of Additional Information is revised as follows:

Under the section titled “The Investment Adviser,” the table reflecting the annual fee that each of the Funds is obligated to pay the Adviser as compensation for its management services on page 31 is updated to change the management fee for the Large Cap Fund from 0.55% to 0.50%.

Under the section titled “The Investment Adviser,” the first two sentences in the second full paragraph on page 32 are deleted in their entirety and replaced with the following:

Pursuant to the Administration Agreement, effective January 1, 2016, the Administrator receives a fee, which is paid monthly at an annual rate of 0.24% of each Fund’s average daily net assets of Class A and Class C Shares, 0.20% of each Fund’s average daily net assets of Class I Shares, and 0.10% of the average daily net assets of Class Y Shares. Previously, effective July 1, 2015, the Administrator received a fee at an annual rate of 0.24% of each Fund’s average daily net assets of Class A and Class C Shares, 0.21% of each Fund’s average daily net assets of Class I Shares, and 0.10% of the average daily net assets of Class Y Shares.

This Supplement and the prospectus dated February 28, 2015, and Statement of Additional Information dated February 28, 2015, provide the information a prospective investor ought to know before investing and should be retained for future reference.