Tim Paulin
Hi, I'm Tim Paulin and this is Active Talks where we dive into what makes Touchtone Funds distinctively active.
Matt what role does Touchstone’s distinctively active philosophy play in portfolio construction, and how does this influence outcomes for investors?
Matt Barry
Distinctively active is really key to what we do at Touchstone. Our portfolio managers are building high conviction portfolios of their best ideas that typically look very different from the benchmarks. Our philosophy here is based on academic research, it’s looked at what are the characteristics of active managers that had historically been associated with future outperformance. So the types of strategies we call distinctively active have higher active share, more conviction in their best ideas, and a willingness to let those best ideas play out over time. Overall, we believe in order to beat the benchmark, you've got to be different from benchmark.
Tim Paulin
Matt, how does Touchstone ensure that its active ETFs are aligned with emerging trends, while maintaining the discipline required for long term success and consistency with Touchstone’s distinctively active philosophy?
Matt Barry
Yeah, so we are constantly monitoring the marketplace for evolving trends. We do that in a couple different ways. First is looking at the data where it flows going, which categories are investors expressing interest in and the second is just talking to our clients. We listen to them where they express interest in terms of different categories or where they see a need for more good product. At the same time, we think it's critical that we stick to our bread and butter and distinctively active strategies and those types of managers and strategies that we're known for.
A good example of this recently is our Emerging Markets ex-China ETF. That's a space where we've heard a lot of interest from clients over the past few years, and we're able to partner with Sands Capital, best in class asset manager that we've had a relationship with as a firm for nearly two decades to bring together, bring to market a high conviction, actively managed, Emerging Markets ex-China ETF.