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Touchstone Credit Opportunities II Fund

(formerly the Touchstone Arbitrage Fund)

Touchstone Credit Opportunities II Fund

(formerly the Touchstone Arbitrage Fund)

Overview

Overview

Actively Managed and Sub-Advised by Ares Capital Management II LLC*

Objective

The fund seeks absolute total return, primarily from income and capital appreciation by investing primarily in global debt securities.

Investment Style

  • Employs flexibility by allocating assets among core investments and opportunistic investments as market conditions change
  • Identifies companies and securities that are believed to offer attractive relative values when compared to their fundamental credit risk
  • Actively hedges portfolio risks, including credit, interest rate, and currency, in an effort to preserve capital
  • Consists of several broad investment categories, including high yield bonds, bank loans, special situations, structured credit and hedges
A WORD ABOUT RISK

Certain Touchstone funds-of-funds may invest in the Fund. Purchases, redemptions, and underlying allocations may require the Fund to take actions when it otherwise would not do so. This could adversely affect performance. The Fund invests in debt securities which can lose their value as interest rates rise and are subject to credit risk which is the risk of deterioration in the financial condition of an issuer and/or general economic conditions that can cause the issuer to not make timely payments of principal and interest also causing the securities to decline in value and an investor can lose principal. When interest rates rise, the price of debt securities generally falls. Longer term securities are generally more volatile. The Fund invests in non-investment grade debt securities, distressed securities and corporate loans which are considered speculative with respect to the issuers’ ability to make timely payments of interest and principal, may lack liquidity and have more frequent and larger price changes than other debt securities. There is a high risk that the Fund could suffer losses from investments in non-investment grade debt securities caused by the default of an issuer. The Fund invests in Collateralized Loan Obligations (CLOs) that have risks that largely depend on the type of underlying collateral and risks may include illiquidity, limited active market, the possibility that distributions from collateral securities will be insufficient to make interest or other payments, the potential for a decline in the quality of the collateral, and can bear the risk of default by the loans. The Fund invests in convertible securities which are subject to the risks of both debt securities and equity securities. The Fund invests in equities which are subject to market volatility and loss. The Fund invests in preferred stocks which are relegated below bonds for payment should the issuer be liquidated. The fixed dividend may be less attractive in a rising interest rate market. The Fund invests in foreign securities which carry the associated risks of economic and political instability, market liquidity, currency volatility and differences in accounting standards. The Fund invests in derivatives such as forward currency exchange contracts, futures contracts, options and swap agreements. Derivatives can be highly volatile, illiquid and difficult to value, subject to counterparty and leverage risks and there is risk that changes in the value of a derivative held by the Fund will not correlate with the Fund’s other investments. Gains or losses from speculative positions in a derivative may be much greater than the original cost and potential losses may be substantial. The Fund is involved in short selling which may result in additional costs associated with covering short positions and a possibility of unlimited loss. 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. Current and future portfolio holdings are subject to risk. The Advisor engages a sub-advisor to make investment decisions for the Fund’s portfolio; it may be unable to identify and retain a sub-advisor who achieves superior investment returns relative to other similar sub-advisors.

Fund Facts

Fund Facts for Share Class
Symbol
CUSIP
Share Class Inception Date
Total Share Class Net Assets as of 03/31/2019
Total Fund Net Assets as of 03/31/2019 $55,605,630
Asset Class Multi-Asset / Alternative, Income
Morningstar Category Market Neutral
Benchmark ICE BofA Merrill Lynch 3-Month U.S. Treasury Bill Index
Distribution Frequency Quarterly
Portfolio Turnover Rate
Fiscal Year End
Prospectus Date 05/14/2019

Performance

Daily Returns as of
NAV NAV $ Change
Touchstone Credit Opportunities II Fund -
HISTORICAL DAILY NAV
as of 04/30/2019
1 Month 3 Month YTD 1 Year 3 Year 5 Year 10 Year Since Inception
Touchstone Credit Opportunities II Fund -
Including Sales Charge
Touchstone Credit Opportunities II Fund -
Excluding Sales Charge
ICE BofA Merrill Lynch 3-Month U.S. Treasury Bill Index 0.19% 0.59% 0.79% 2.18% 1.25% 0.78% 0.45% --
Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. From time to time, the investment advisor may waive some fees and/or reimburse expenses, which if not waived or reimbursed, will lower performance. Returns are not annualized for periods of less than one year. Assumes reinvestment of all dividends and capital gains. The maximum front-end sales charge for Class A Shares of Touchstone U.S. Equity, International/Global Equity and Multi-Asset/Alternative Investment Funds excluding Touchstone Flexible Income Fund is 5.00%.
Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. From time to time, the investment advisor may waive some fees and/or reimburse expenses, which if not waived or reimbursed, will lower performance. Returns are not annualized for periods of less than one year. Assumes reinvestment of all dividends and capital gains. Performance for Class C Shares is adjusted for the contingent deferred sales charges (CDSC) in effect at the end of the specified period. The CDSC for Class C Shares is 1.00% the first year you hold the shares and declines to 0% after the first year.
Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. From time to time, the investment advisor may waive some fees and/or reimburse expenses, which if not waived or reimbursed, will lower performance. Returns are not annualized for periods of less than one year. Assumes reinvestment of all dividends and capital gains. Class Y Shares are sold at net asset value (NAV), without an initial sales charge and are not subject to a 12b-1 fee or contingent deferred sales charges.
Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. From time to time, the investment advisor may waive some fees and/or reimburse expenses, which if not waived or reimbursed, will lower performance. Returns are not annualized for periods of less than one year. Assumes reinvestment of all dividends and capital gains. Class INST Shares are sold at net asset value (NAV), without an initial sales charge and are not subject to a 12b-1 fee or contingent deferred sales charges.
as of 03/31/2019
1 Year 3 Year 5 Year 10 Year Since Inception
Touchstone Credit Opportunities II Fund -
Including Sales Charge
Touchstone Credit Opportunities II Fund -
Excluding Sales Charge
ICE BofA Merrill Lynch 3-Month U.S. Treasury Bill Index 2.12% 1.19% 0.74% 0.43% --
Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. From time to time, the investment advisor may waive some fees and/or reimburse expenses, which if not waived or reimbursed, will lower performance. Returns are not annualized for periods of less than one year. Assumes reinvestment of all dividends and capital gains. The maximum front-end sales charge for Class A Shares of Touchstone U.S. Equity, International/Global Equity and Multi-Asset/Alternative Investment Funds excluding Touchstone Flexible Income Fund is 5.00%.
Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. From time to time, the investment advisor may waive some fees and/or reimburse expenses, which if not waived or reimbursed, will lower performance. Returns are not annualized for periods of less than one year. Assumes reinvestment of all dividends and capital gains. Performance for Class C Shares is adjusted for the contingent deferred sales charges (CDSC) in effect at the end of the specified period. The CDSC for Class C Shares is 1.00% the first year you hold the shares and declines to 0% after the first year.
Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. From time to time, the investment advisor may waive some fees and/or reimburse expenses, which if not waived or reimbursed, will lower performance. Returns are not annualized for periods of less than one year. Assumes reinvestment of all dividends and capital gains. Class Y Shares are sold at net asset value (NAV), without an initial sales charge and are not subject to a 12b-1 fee or contingent deferred sales charges.
Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. From time to time, the investment advisor may waive some fees and/or reimburse expenses, which if not waived or reimbursed, will lower performance. Returns are not annualized for periods of less than one year. Assumes reinvestment of all dividends and capital gains. Class INST Shares are sold at net asset value (NAV), without an initial sales charge and are not subject to a 12b-1 fee or contingent deferred sales charges.

Consider Touchstone Credit Opportunities II Fund for Your Portfolio

Investing primarily in global debt securities, Touchstone Credit Opportunities II Fund allocates assets among core investments and opportunistic investments as market conditions change. It seeks absolute total return, primarily from income and capital appreciation.
Contact Us Now

Management

Management

Actively Managed and Sub-Advised by Ares Capital Management II LLC*
Brufsky

Seth Brufsky

Investment Experience since 1990

Career Summary 
Ares Capital Management II LLC
Merrill Lynch & Co.
Union Bank of Switzerland 

Education 
MBA - University of Southern California
BS - Cornell University
Jason Duko

Jason Duko

Investment Experience since 2000

Career Summary
Ares Capital Management II LLC
Pacific Investment Management Co. LLC
Lord Abbett & Co. LLC
Nomura Corporate Research and Asset Management Inc.
ING Pilgrim Research

Education 
BS - Arizona State University
Kapil Singh

Kapil Singh, CFA

Investment Experience since 1993

Career Summary 
Ares Capital Management II LLC
DoubleLine Capital LP
Post Advisory Group LLC
Four Corners Capital Management LLC
Bradford & Marzec LLC

Education 
MBA - Northwestern University
BS - University of Illinois

Fees

Expense Fees for Share Class
Total Annual Fund Operating Expense Ratio
Net Annual Fund Operating Expense Ratio
Touchstone Advisors has contractually agreed to waive a portion of its fees and/or reimburse certain Fund expenses in order to limit certain annual fund operating expenses (excluding Acquired Fund Fees and Expenses “AFFE,” and other expenses, if any) to 1.68% for Class A Shares, 2.43% for Class C Shares, 1.43% for Class Y Shares and 1.28% for Class INST Shares. These expense limitations will remain in effect until at least 01/29/2020.

Distributions

Capital Gain and Income Distribution as of
Pay Date Income Distribution Short Term Capital Gains Per Share Long Term Capital Gains Per Share Total Capital Gains Per Share

Resources

Consider Touchstone Credit Opportunities II Fund for Your Portfolio

Investing primarily in global debt securities, Touchstone Credit Opportunities II Fund allocates assets among core investments and opportunistic investments as market conditions change. It seeks absolute total return, primarily from income and capital appreciation.
Contact Us Now

*Ares does not endorse, approve, certify or control the content of this website and does not assume responsibility for its accuracy, completeness or timeliness of the information herein. An investment in the Touchstone Credit Opportunities Fund does not constitute an investment in the sub-advisor.An investment in the TCOF is not an investment in Ares or an Ares managed fund or strategy. There is no assurance that unrealized values within the Ares sub-advised strategies will be achieved or that past results are indicative of future results. Moreover, it should be noted that Ares manages a global diverse investment platform with differing investment strategies some of which may be inconsistent with the sub-advised strategies within the TCOF.

“The parent company is Ares Management, L.P. (NYSE: ARES), is a publicly traded, leading global alternative asset manager with approximately $112.5 billion of assets under management as of March 31, 2018, and 18 offices in the United States, Europe, Asia and Australia. Since its inception in 1997, Ares has adhered to a disciplined investment philosophy that focuses on delivering strong risk-adjusted investment returns throughout market cycles. Ares believes each of its three distinct but complementary investment groups in Credit, Private Equity, and Real Estate is a market leader based on assets under management and investment performance. Ares was built upon the fundamental principle that each group benefits from being part of the greater whole.”

Please consider the investment objectives, risks, charges and expenses of the fund carefully before investing. 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 on the resources section or call Touchstone at 800-638-8194. 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.

Not FDIC Insured | No Bank Guarantee | May Lose Value

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