Inside Atrium

We employ a fully integrated and rigorous process for identifying and partnering with asset managers who sub-advise our mutual funds. This framework tends to result in funds managed with high conviction via concentrated portfolios and significant differentiation from their respective benchmarks.

About Touchstone's Actively Managed Mutual Funds

Touchstone Investments offers a diverse, focused selection of mutual funds that include mutual fund strategies and asset classes. Combined with our steadfast dedication to active management, we bring a fresh perspective to portfolio construction. We challenge you to take the time to look through a different lens. You will be surprised how you can truly discover the difference.


Differentiating With Active Management

Touchstone actively applies a rigorous, multi-faceted and fully integrated process to identify, evaluate and partner with the institutional asset managers who serve as sub-advisors of its mutual funds. Intensive evaluation is conducted with respect to these five vital areas of proficiency.

Touchstone’s Proprietary Model

Sub-Advisors Pyramid of QualitiesOrganizational Stability: This step focuses on the sustainability of the firm as well as the specific investment strategy.
Personnel: Touchstone concentrates on qualifications such as education, experience, credentials, structure and compensation of the team.
Investment Discipline: Touchstone looks for companies that demonstrate a consistent and repeatable investment process including evaluating the asset manager’s investment philosophy, selection process, and sell discipline.
Infrastructure: An asset manager’s administrative and operational capacity is key to the accurate and efficient application of a firm’s investment discipline.
Results: Performance results are the capstone of the Touchstone due diligence process.

This meticulous and thorough approach is designed to ensure that we deliver on our commitment of providing access to institutional asset management with the goal of achieving competitive long-term results.

Our Approach to Mutual Fund Investing

There are two things that differentiate Touchstone:

  • We hire institutional money managers who are experts in their respective asset class.
  • Selected portfolio managers employ investment strategies that are different from the benchmark.

For equity funds, we now have a concept that defines that—active share. In its simplest form active share is a measure of how different a fund is from its benchmark.

The Importance of Active Management in Investments

Steve Graziano talks about Active Share

There are two things that differentiate Touchstone. Number one, we hire institutional money managers, expert in their respective asset class. And, number two, those managers employ investment strategies that are very different from the benchmark.

We are very excited today to finally have a term, a concept, that defines that and that is Active Share. In its simplest form, Active Share is a measure of how different a fund is from its benchmark.

All of Touchstone's equity funds are high Active Share and are managed by high conviction managers. That is the employee strategy that is based on fundamental investments. Benchmark aware, but not benchmark constrained.

In the Touchstone Focused Fund, we own approximately 25 to 35 businesses. The reason why we do that is we really are trying to invest in our best ideas. We typically hold 30 to 40 securities in the portfolio which we think is very well diversified because we were buying very low beta hybrid terminal capital companies.

The Active Share concept was first introduced to the market in the mid 2000s by a couple of Yale professors. And it effectively tried to answer the question: Are all actively managed funds created equal?

We take a long-term business owners mindset. We don't consider us trading paper so we typically have a five-year horizon.

We don't know exactly how long our holding period is going to be. It's typically, on average, two to three years. We like to base our analysis on a private equity approach basing the shareholder creation factors on capital allocation. What's on the balance sheet? What management can control today? Versus trying to speculate on what the future of growth projections are for a company over time.

It was once believed that high conviction, highly concentrated portfolios are by definition more risky than diversified portfolios. Beyond seven stocks or 20 stocks, you're much more focused on looking at your downside protection. And that's where our disciplines come from.

Our approach to risk management is integrated into our investment process. Every business we buy in the portfolio is priced for very low returns on capital.

We then look at the business and if the business has a barrier to entry that increases the probability that the market has it wrong. And therefore we're interested in that that business.

You know, we're very excited about this Active Share concept. For the first time we have a measure that defines how we hire managers in the value proposition we bring to investors.

Touchstone and Its Sub-Advised Mutual Funds

Touchstone Investments offers a diverse yet focused selection of mutual funds actively managed by sub-advisors that meet our standards for active management.

Mutual Funds Overview

Our diverse selection of actively managed mutual funds may help you achieve your goals.
Explore mutual funds

Sub-Advisors At-A-Glance

Applying a rigorous, multi-faceted due diligence process, we evaluate each portfolio manager based on five broad criteria; each comprised of important components that leads to differentiation.
Meet Our Sub-Advisor Companies
Please consider the investment objectives, risks, charges and expenses of the fund carefully before investing. The prospectus and the summary prospectus contain this and other information about the fund. To obtain a prospectus or a summary prospectus, contact your financial advisor or download and/or request one at Resources & Tools. Please read the prospectus and/or summary prospectus carefully before investing.
Investment return and principal value of an investment in a Fund will fluctuate so that investor's shares, when redeemed, may be worth more or less than their original cost. All investing involves risk.

Touchstone Funds are distributed by Touchstone Securities, Inc., a registered broker-dealer and member FINRA/SIPC

Investment products offered are not FDIC insured, may lose value and have no bank guarantee.

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