Hello, I’m Tom Trentman, one of the four portfolio managers of the Touchstone Sands Capital Select Growth Fund.
Our Select Growth strategy focuses primarily on U.S. businesses at the forefront of the most vital areas of positive structural change in our economy. These businesses are often built on disruptive innovation, and generate growth by inspiring profound change within existing industries or creating entirely new ones.
Underpinning the Select Growth strategy is our philosophy and approach. We believe that over time, common stock prices will reflect the earnings power and growth of the underlying businesses. To be successful investors, we must:
- Identify the few, truly exceptional businesses with the capacity to generate sustainable, above-average earnings growth over time;
- Construct a concentrated, conviction-weighted portfolio—we typically only own 25 to 30 of these exceptional businesses; and…
- Accept short-term market volatility in exchange for long-term wealth creation—on average we own each portfolio business for five years. This is a much longer time period than the typical growth fund, and enables investors to potentially benefit from the power of compounding growth over time.
At Sands Capital, the sub-advisor to the Fund, we focus exclusively on active, long-term investing in leading growth businesses globally. Leading us to these special businesses is deep, fundamental, business-focused research. This research is conducted by a team of 50 investment professionals who have developed substantial domain knowledge in business spaces where innovation and growth are rampant.
Since the inception of the Select Growth strategy nearly 30 years ago, we have consistently applied six investment criteria to identify businesses for our portfolio. A business must meet all six of these criteria to be considered for investment. If we decide to purchase a business, its fit with the criteria is continually monitored. These six criteria are:
- Sustainable above-average earnings growth;
- Leadership position in a promising business space;
- Significant competitive advantage or a unique business franchise;
- Clear mission and value-added focus;
- Financial strength; and finally
- Rational valuation relative to the market and business prospects
We believe our investment criteria are equally effective at identifying growth opportunities and actively managing risk. Included in the scope of these criteria is our analysis of corporate governance, social, environmental practices.
We are also active owners of our portfolio businesses. We regularly engage with the management teams on issues that we believe may materially affect long-term shareholder value creation. Likewise, we carefully evaluate ballot proposals and vote shares according to the long-term shareholder interests.
Today’s portfolio consists of a thoughtfully curated, select group of high quality, well-managed growth businesses. Many are the vital facilitators and primary beneficiaries of digital transformations. These transformations are enabling businesses to operate more efficiently and effectively, improving the quality of people’s life, and advancing society and the global economy. We know each one intimately and are excited about their potential to create wealth for investors.
I hope this brief introduction to the Touchstone Sands Capital Select Growth Fund has been informative. Thank you very much for your interest.
The Fund invests in equities which are subject to market volatility and loss. The Fund invests in stocks of large-cap companies which may be unable to respond quickly to new competitive challenges. The Fund invests in growth stocks which may be more volatile than investing in other stocks and may underperform when value investing is in favor. The Fund may focus its investments in specific sectors and therefore is subject to the risk that adverse circumstances will have greater impact on the fund than on the fund that does not do so. Banks and financial services companies could suffer losses if interest rates rise or economic conditions deteriorate. The Fund is non-diversified, which means that it may invest a greater percentage of its assets in the securities of a limited number of issuers and may be subject to greater risks. The Fund's environmental, social and corporate governance criteria may cause the Fund to forgo opportunities to buy certain securities and/or gain exposure to certain industries, sectors, regions and countries. The Fund may be required to sell a security when it could be disadvantageous to do so.
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 professional or download and/or request one at TouchstoneInvestments.com/resources or call Touchstone at 800.638.8194. Please read the prospectus and/or summary prospectus carefully before investing.
Past performance is not indicative of future results. This should not be construed as investment advice.
Touchstone Funds are distributed by Touchstone Securities, Inc.*
*A registered broker-dealer and member FINRA and SIPC
