UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number | 811-3651 | |||||||
| ||||||||
Touchstone Strategic Trust | ||||||||
(Exact name of registrant as specified in charter) | ||||||||
| ||||||||
303 Broadway, Cincinnati, Ohio |
| 45202 | ||||||
(Address of principal executive offices) |
| (Zip code) | ||||||
| ||||||||
Jill T. McGruder, 303 Broadway, Cincinnati, Ohio 45202 | ||||||||
(Name and address of agent for service) | ||||||||
| ||||||||
Registrant’s telephone number, including area code: | (513) 878-4066 |
| ||||||
| ||||||||
Date of fiscal year end: | 3/31 |
| ||||||
| ||||||||
Date of reporting period: | 9/30/10 |
| ||||||
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
September 30, 2010
(Unaudited)
Semi-Annual Report
Touchstone Strategic Trust
Touchstone Diversified Small Cap Growth Fund
Touchstone Growth Opportunities Fund
Touchstone Large Cap Core Equity Fund
Touchstone Large Cap Growth Fund
Touchstone Mid Cap Growth Fund
Table of Contents
Page | |||||||
Tabular Presentation of Portfolios of Investments | 3 | ||||||
Statements of Assets and Liabilities | 4-7 | ||||||
Statements of Operations | 8-9 | ||||||
Statements of Changes in Net Assets | 10-12 | ||||||
Financial Highlights | 13-21 | ||||||
Notes to Financial Statements | 22-35 | ||||||
Portfolios of Investments: | |||||||
Touchstone Diversified Small Cap Growth Fund | 36-37 | ||||||
Touchstone Growth Opportunities Fund | 38-39 | ||||||
Touchstone Large Cap Core Equity Fund | 40-41 | ||||||
Touchstone Large Cap Growth Fund | 42 | ||||||
Touchstone Mid Cap Growth Fund | 43-44 | ||||||
Other Items | 45-47 | ||||||
Privacy Protection Policy | 48 | ||||||
2
Tabular Presentation of Portfolios of Investments
September 30, 2010
The illustrations below provide each Fund's sector allocation. We hope it will be useful to shareholders as it summarizes key information about each Fund's investments.
Touchstone Diversified Small Cap Growth Fund
Sector Allocation | (% of Net Assets) | ||||||
Information Technology | 28.5 | ||||||
Health Care | 22.6 | ||||||
Consumer Discretionary | 20.9 | ||||||
Industrials | 12.4 | ||||||
Financials | 7.2 | ||||||
Energy | 4.6 | ||||||
Materials | 2.5 | ||||||
Telecommunication Services | 1.2 | ||||||
Investment Funds | 22.7 | ||||||
Other Assets/Liabilities (Net) | (22.6 | ) | |||||
Total | 100.0 |
Touchstone Growth Opportunities Fund
Sector Allocation | (% of Net Assets) | ||||||
Information Technology | 34.4 | ||||||
Health Care | 19.2 | ||||||
Industrials | 15.1 | ||||||
Consumer Discretionary | 9.2 | ||||||
Energy | 8.6 | ||||||
Consumer Staples | 4.4 | ||||||
Materials | 4.3 | ||||||
Financials | 1.6 | ||||||
Investment Funds | 8.5 | ||||||
Other Assets/Liabilities (Net) | (5.3 | ) | |||||
Total | 100.0 |
Touchstone Large Cap Core Equity Fund
Sector Allocation | (% of Net Assets) | ||||||
Information Technology | 22.6 | ||||||
Consumer Discretionary | 14.9 | ||||||
Financials | 13.7 | ||||||
Industrials | 13.0 | ||||||
Health Care | 10.2 | ||||||
Energy | 9.2 | ||||||
Consumer Staples | 7.5 | ||||||
Materials | 3.5 | ||||||
Utilities | 2.5 | ||||||
Telecommunication Services | 1.6 | ||||||
Investment Funds | 4.0 | ||||||
Other Assets/Liabilities (Net) | (2.7 | ) | |||||
Total | 100.0 |
Touchstone Large Cap Growth Fund
Sector Allocation | (% of Net Assets) | ||||||
Information Technology | 37.4 | ||||||
Consumer Discretionary | 21.5 | ||||||
Health Care | 13.3 | ||||||
Consumer Staples | 11.4 | ||||||
Materials | 8.9 | ||||||
Industrials | 6.6 | ||||||
Investment Funds | 9.7 | ||||||
Other Assets/Liabilities (Net) | (8.8 | ) | |||||
Total | 100.0 |
Touchstone Mid Cap Growth Fund
Sector Allocation | (% of Net Assets) | ||||||
Information Technology | 19.8 | ||||||
Financials | 17.5 | ||||||
Industrials | 15.5 | ||||||
Consumer Discretionary | 11.5 | ||||||
Health Care | 10.7 | ||||||
Energy | 10.0 | ||||||
Materials | 7.0 | ||||||
Consumer Staples | 3.1 | ||||||
Utilities | 2.6 | ||||||
Telecommunication Services | 1.0 | ||||||
Investment Funds | 8.2 | ||||||
Other Assets/Liabilities (Net) | (6.9 | ) | |||||
Total | 100.0 |
3
Statements of Assets and Liabilities
September 30, 2010 (Unaudited)
Touchstone Diversified Small Cap Growth Fund | Touchstone Growth Opportunities Fund | Touchstone Large Cap Core Equity Fund | Touchstone Large Cap Growth Fund | ||||||||||||||||
Assets | |||||||||||||||||||
Investment securities: | |||||||||||||||||||
At cost | $ | 30,893,871 | $ | 82,612,584 | $ | 46,544,335 | $ | 584,518,185 | |||||||||||
Affiliated securities, at market value | $ | — | $ | 2,678,263 | $ | 728,329 | $ | 8,123,958 | |||||||||||
Non-affiliated securities, at market value | 35,277,664 | 86,232,795 | 50,144,601 | 746,780,516 | |||||||||||||||
At market value - including $6,323,679, $4,264,426, $1,238,099, and $57,841,373 of securities loaned for the Diversified Small Cap Growth Fund, Growth Opportunities Fund, Large Cap Core Equity Fund, and Large Cap Growth Fund, respectively. | $ | 35,277,664 | $ | 88,911,058 | $ | 50,872,930 | $ | 754,904,474 | |||||||||||
Cash | — | 2 | — | — | |||||||||||||||
Dividends and interest receivable | 2,968 | 51,821 | 77,126 | 405,239 | |||||||||||||||
Receivable for capital shares sold | 18,429 | 77,191 | 523 | 605,699 | |||||||||||||||
Receivable for securities sold | 675,381 | 473,555 | — | — | |||||||||||||||
Receivable for securities lending income | 6,362 | 383 | 80 | 4,056 | |||||||||||||||
Other assets | 27,680 | 36,344 | 8,968 | 68,414 | |||||||||||||||
Total Assets | 36,008,484 | 89,550,354 | 50,959,627 | 755,987,882 | |||||||||||||||
Liabilities | |||||||||||||||||||
Bank overdrafts | 6,300 | — | — | — | |||||||||||||||
Payable upon return of securities loaned | 6,534,533 | 4,468,421 | 1,270,442 | 59,270,298 | |||||||||||||||
Payable for capital shares redeemed | 76,731 | 68,260 | 29,664 | 1,740,729 | |||||||||||||||
Payable for securities purchased | 509,905 | 428,245 | — | — | |||||||||||||||
Payable to Advisor | 31,765 | 53,190 | 26,151 | 447,052 | |||||||||||||||
Payable to other affiliates | 24,185 | 47,148 | 38,199 | 700,813 | |||||||||||||||
Payable to Trustees | 4,589 | 4,598 | 4,598 | 4,683 | |||||||||||||||
Other accrued expenses and liabilities | 48,412 | 48,267 | 48,141 | 252,584 | |||||||||||||||
Total Liabilities | 7,236,420 | 5,118,129 | 1,417,195 | 62,416,159 | |||||||||||||||
Net Assets | $ | 28,772,064 | $ | 84,432,225 | $ | 49,542,432 | $ | 693,571,723 | |||||||||||
Net assets consist of: | |||||||||||||||||||
Paid-in capital | $ | 45,961,043 | $ | 123,356,260 | $ | 57,837,069 | $ | 818,937,910 | |||||||||||
Accumulated net investment income (loss) | (144,998 | ) | 563,418 | 740,579 | (1,139,580 | ) | |||||||||||||
Accumulated net realized losses from security transactions | (21,427,774 | ) | (45,785,927 | ) | (13,363,811 | ) | (294,612,896 | ) | |||||||||||
Net unrealized appreciation on investments | 4,383,793 | 6,298,474 | 4,328,595 | 170,386,289 | |||||||||||||||
Net Assets | $ | 28,772,064 | $ | 84,432,225 | $ | 49,542,432 | $ | 693,571,723 | |||||||||||
Pricing of Class A Shares | |||||||||||||||||||
Net assets attributable to Class A shares | $ | 11,621,925 | $ | 40,590,706 | $ | 48,041,765 | $ | 287,998,032 | |||||||||||
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | 1,267,950 | 1,953,252 | 5,623,914 | 13,412,503 | |||||||||||||||
Net asset value and redemption price per share | $ | 9.17 | $ | 20.78 | $ | 8.54 | $ | 21.47 | |||||||||||
Maximum offering price per share | $ | 9.73 | $ | 22.05 | $ | 9.06 | $ | 22.78 | |||||||||||
Pricing of Class B Shares | |||||||||||||||||||
Net assets attributable to Class B shares | $ | — | $ | — | $ | — | $ | 13,188,266 | |||||||||||
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | — | — | — | 641,386 | |||||||||||||||
Net asset value, offering price and redemption price per share* | $ | — | $ | — | $ | — | $ | 20.56 |
4
Statements of Assets and Liabilities (Continued)
Touchstone Diversified Small Cap Growth Fund | Touchstone Growth Opportunities Fund | Touchstone Large Cap Core Equity Fund | Touchstone Large Cap Growth Fund | ||||||||||||||||
Pricing of Class C Shares | |||||||||||||||||||
Net assets attributable to Class C shares | $ | 2,177,749 | $ | 7,487,197 | $ | 1,500,667 | $ | 123,688,666 | |||||||||||
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | 243,086 | 387,410 | 178,144 | 6,006,138 | |||||||||||||||
Net asset value, offering price and redemption price per share* | $ | 8.96 | $ | 19.33 | $ | 8.42 | $ | 20.59 | |||||||||||
Pricing of Class Y Shares | |||||||||||||||||||
Net assets attributable to Class Y shares | $ | 14,972,390 | $ | 2,100,645 | $ | — | $ | 268,696,759 | |||||||||||
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | 1,618,093 | 100,637 | — | 12,409,487 | |||||||||||||||
Net asset value, offering price and redemption price per share | $ | 9.25 | $ | 20.87 | $ | — | $ | 21.65 | |||||||||||
Pricing of Institutional Class Shares | |||||||||||||||||||
Net assets attributable to Institutional Class shares | $ | — | $ | 34,253,677 | $ | — | $ | — | |||||||||||
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | — | 1,636,790 | — | — | |||||||||||||||
Net asset value, offering price and redemption price per share | $ | — | $ | 20.93 | $ | — | $ | — |
* Redemption price per share varies by length of time shares are held.
See accompanying notes to financial statements.
5
Statements of Assets and Liabilities (Continued)
Touchstone Mid Cap Growth Fund | |||||||
Assets | |||||||
Investment securities: | |||||||
At cost | $ | 724,532,619 | |||||
Affiliated securities, at market value | $ | 11,317,765 | |||||
Non-affiliated securities, at market value | 821,554,629 | ||||||
At market value - including $51,089,676 of securities loaned. | $ | 832,872,394 | |||||
Cash | 4 | ||||||
Dividends and interest receivable | 670,921 | ||||||
Receivable for capital shares sold | 460,096 | ||||||
Receivable for securities sold | 1,617,669 | ||||||
Receivable for securities lending income | 54,601 | ||||||
Other assets | 61,742 | ||||||
Total Assets | 835,737,427 | ||||||
Liabilities | |||||||
Payable upon return of securities loaned | 52,488,794 | ||||||
Payable for capital shares redeemed | 1,605,039 | ||||||
Payable for securities purchased | 778,295 | ||||||
Payable to Advisor | 499,866 | ||||||
Payable to other affiliates | 936,637 | ||||||
Payable to Trustees | 4,598 | ||||||
Other accrued expenses and liabilities | 543,849 | ||||||
Total Liabilities | 56,857,078 | ||||||
Net Assets | $ | 778,880,349 | |||||
Net assets consist of: | |||||||
Paid-in capital | $ | 781,172,035 | |||||
Accumulated net investment income | 421,463 | ||||||
Accumulated net realized losses from security transactions | (111,052,924 | ) | |||||
Net unrealized appreciation on investments | 108,339,775 | ||||||
Net Assets | $ | 778,880,349 | |||||
Pricing of Class A Shares | |||||||
Net assets attributable to Class A shares | $ | 532,972,281 | |||||
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | 26,281,804 | ||||||
Net asset value and redemption price per share | $ | 20.28 | |||||
Maximum offering price per share | $ | 21.52 | |||||
Pricing of Class B Shares | |||||||
Net assets attributable to Class B shares | $ | 23,805,173 | |||||
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | 1,401,090 | ||||||
Net asset value, offering price and redemption price per share* | $ | 16.99 |
6
Statements of Assets and Liabilities (Continued)
Touchstone Mid Cap Growth Fund | |||||||
Pricing of Class C Shares | |||||||
Net assets attributable to Class C shares | $ | 198,451,712 | |||||
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | 11,665,200 | ||||||
Net asset value, offering price and redemption price per share* | $ | 17.01 | |||||
Pricing of Class Y Shares | |||||||
Net assets attributable to Class Y shares | $ | 23,651,183 | |||||
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | 1,159,522 | ||||||
Net asset value, offering price and redemption price per share | $ | 20.40 |
* Redemption price per share varies by length of time shares are held.
See accompanying notes to financial statements.
7
Statements of Operations
For the Period Ended September 30, 2010 (Unaudited)
Touchstone Diversified Small Cap Growth Fund | Touchstone Growth Opportunities Fund | Touchstone Large Cap Core Equity Fund | Touchstone Large Cap Growth Fund | ||||||||||||||||
Investment Income | |||||||||||||||||||
Dividends from affiliated securities | $ | 661 | $ | 2,557 | $ | 858 | $ | 15,554 | |||||||||||
Dividends from non-affiliated securities (A) | 30,166 | 954,286 | 509,959 | 3,585,738 | |||||||||||||||
Income from securities loaned | 44,552 | 1,984 | 315 | 26,175 | |||||||||||||||
Total Investment Income | 75,379 | 958,827 | 511,132 | 3,627,467 | |||||||||||||||
Expenses | |||||||||||||||||||
Investment advisory fees | 177,279 | 292,837 | 161,904 | 2,656,143 | |||||||||||||||
Distribution expenses, Class A | 14,939 | 41,356 | 60,135 | 368,898 | |||||||||||||||
Distribution expenses, Class B | — | — | — | 67,500 | |||||||||||||||
Distribution expenses, Class C | 11,514 | 37,099 | 8,543 | 634,073 | |||||||||||||||
Administration fees | 33,768 | 70,564 | 49,817 | 744,580 | |||||||||||||||
Transfer Agent fees, Class A | 15,036 | 31,469 | 13,569 | 225,954 | |||||||||||||||
Transfer Agent fees, Class B | — | — | — | 16,713 | |||||||||||||||
Transfer Agent fees, Class C | 4,494 | 9,634 | 2,892 | 106,235 | |||||||||||||||
Transfer Agent fees, Class Y | 3,146 | 68 | — | 138,958 | |||||||||||||||
Transfer Agent fees, Institutional Class | — | 83 | — | — | |||||||||||||||
Postage and supplies | 10,928 | 14,501 | 8,556 | 125,977 | |||||||||||||||
Reports to shareholders | 8,481 | 11,290 | 5,602 | 80,977 | |||||||||||||||
Registration fees, Class A | 800 | — | — | 8,166 | |||||||||||||||
Registration fees, Class C | — | 1,837 | 1,564 | — | |||||||||||||||
Registration fees, Class Y | 907 | 636 | — | 24,001 | |||||||||||||||
Registration fees, Institutional Class | — | 4,037 | — | — | |||||||||||||||
Professional fees | 26,708 | 26,965 | 27,425 | 46,803 | |||||||||||||||
Custodian fees | 2,105 | 3,649 | 2,868 | 15,608 | |||||||||||||||
Trustees' fees and expenses | 4,932 | 4,942 | 4,942 | 5,027 | |||||||||||||||
Compliance fees and expenses | 1,227 | 1,192 | 1,352 | 2,580 | |||||||||||||||
Other expenses | 1,034 | 479 | 572 | 7,836 | |||||||||||||||
Total Expenses | 317,298 | 552,638 | 349,741 | 5,276,029 | |||||||||||||||
Fees waived by the Administrator | (33,768 | ) | (70,564 | ) | (49,817 | ) | (508,983 | ) | |||||||||||
Fees waived and/or expenses reimbursed by the Advisor | (63,152 | ) | (86,665 | ) | (7,197 | ) | — | ||||||||||||
Net Expenses | 220,378 | 395,409 | 292,727 | 4,767,046 | |||||||||||||||
Net Investment Income (Loss) | (144,999 | ) | 563,418 | 218,405 | (1,139,579 | ) | |||||||||||||
Realized and Unrealized Gains (Losses) on Investments | |||||||||||||||||||
Net realized gains (losses) from security transactions | 1,729,449 | (612,069 | ) | (252,204 | ) | 46,045,218 | |||||||||||||
Net change in unrealized appreciation/(depreciation) on investments | (1,559,711 | ) | 778,597 | (1,067,046 | ) | (27,479,219 | ) | ||||||||||||
Net Realized and Unrealized Gains (Losses) on Investments | 169,738 | 166,528 | (1,319,250 | ) | 18,565,999 | ||||||||||||||
Net Increase (Decrease) in Net Assets from Operations | $ | 24,739 | $ | 729,946 | $ | (1,100,845 | ) | $ | 17,426,420 | ||||||||||
(A) Net of foreign tax withholding of: | $ | — | $ | 184 | $ | — | $ | 132,946 |
See accompanying notes to financial statements.
8
Statements of Operations (Continued)
Touchstone Mid Cap Growth Fund | |||||||
Investment Income | |||||||
Dividends from affiliated securities | $ | 12,097 | |||||
Dividends from non-affiliated securities (A) | 6,998,846 | ||||||
Income from securities loaned | 125,024 | ||||||
Total Investment Income | 7,135,967 | ||||||
Expenses | |||||||
Investment advisory fees | 3,167,919 | ||||||
Distribution expenses, Class A | 675,545 | ||||||
Distribution expenses, Class B | 132,853 | ||||||
Distribution expenses, Class C | 1,005,331 | ||||||
Administration fees | 791,987 | ||||||
Transfer Agent fees, Class A | 325,394 | ||||||
Transfer Agent fees, Class B | 37,032 | ||||||
Transfer Agent fees, Class C | 160,304 | ||||||
Transfer Agent fees, Class Y | 995 | ||||||
Postage and supplies | 211,794 | ||||||
Reports to shareholders | 136,512 | ||||||
Registration fees, Class B | 531 | ||||||
Registration fees, Class Y | 670 | ||||||
Professional fees | 53,023 | ||||||
Custodian fees | 22,202 | ||||||
Trustees' fees and expenses | 4,942 | ||||||
Compliance fees and expenses | 2,347 | ||||||
Other expenses | 7,548 | ||||||
Total Expenses | 6,736,929 | ||||||
Fees waived by the Administrator | (21,829 | ) | |||||
Net Expenses | 6,715,100 | ||||||
Net Investment Income | 420,867 | ||||||
Realized and Unrealized Gains (Losses) on Investments | |||||||
Net realized gains from security transactions | 27,460,498 | ||||||
Net change in unrealized appreciation/(depreciation) on investments | (30,052,414 | ) | |||||
Net Realized and Unrealized Losses on Investments | (2,591,916 | ) | |||||
Net Decrease in Net Assets from Operations | $ | (2,171,049 | ) | ||||
(A) Net of foreign tax withholding of: | $ | 2,977 |
See accompanying notes to financial statements.
9
Statements of Changes in Net Assets
Touchstone Diversified Small Cap Growth Fund | Touchstone Growth Opportunities Fund | ||||||||||||||||||
Six Months Ended September 30, 2010 (Unaudited) | Year Ended March 31, 2010 | Six Months Ended September 30, 2010 (Unaudited) | Year Ended March 31, 2010 | ||||||||||||||||
From Operations | |||||||||||||||||||
Net investment income (loss) | $ | (144,999 | ) | $ | (255,756 | ) | $ | 563,418 | $ | (114,116 | ) | ||||||||
Net realized gains (losses) from security transactions | 1,729,449 | (1,130,136 | ) | (612,069 | ) | 2,752,394 | |||||||||||||
Net change in unrealized appreciation/(depreciation) on investments | (1,559,711 | ) | 11,606,065 | 778,597 | 10,376,020 | ||||||||||||||
Net Increase in Net Assets from Operations | 24,739 | 10,220,173 | 729,946 | 13,014,298 | |||||||||||||||
From Capital Share Transactions | |||||||||||||||||||
Class A | |||||||||||||||||||
Proceeds from shares sold | 1,013,465 | 3,255,184 | 11,294,001 | 13,402,011 | |||||||||||||||
Payments for shares redeemed | (2,158,164 | ) | (3,533,945 | ) | (3,122,934 | ) | (7,570,719 | ) | |||||||||||
Net Increase (Decrease) in Net Assets from Class A Share Transactions | (1,144,699 | ) | (278,761 | ) | 8,171,067 | 5,831,292 | |||||||||||||
Class C | |||||||||||||||||||
Proceeds from shares sold | 17,571 | 67,262 | 444,286 | 852,852 | |||||||||||||||
Payments for shares redeemed | (412,416 | ) | (657,371 | ) | (934,948 | ) | (1,632,604 | ) | |||||||||||
Net Decrease in Net Assets from Class C Share Transactions | (394,845 | ) | (590,109 | ) | (490,662 | ) | (779,752 | ) | |||||||||||
Class Y | |||||||||||||||||||
Proceeds from shares sold | 1,260,208 | 9,339,912 | 215,138 | 2,269,092 | |||||||||||||||
Payments for shares redeemed | (7,113,144 | ) | (2,680,336 | ) | (318,251 | ) | (156,133 | ) | |||||||||||
Net Increase (Decrease) in Net Assets from Class Y Share Transactions | (5,852,936 | ) | 6,659,576 | (103,113 | ) | 2,112,959 | |||||||||||||
Institutional Class | |||||||||||||||||||
Proceeds from shares sold | — | — | 12,347,973 | 20,899,516 | |||||||||||||||
Payments for shares redeemed | — | — | (520,737 | ) | (1,021,376 | ) | |||||||||||||
Net Increase in Net Assets from Institutional Class Share Transactions | — | — | 11,827,236 | 19,878,140 | |||||||||||||||
Total Increase (Decrease) in Net Assets | (7,367,741 | ) | 16,010,879 | 20,134,474 | 40,056,937 | ||||||||||||||
Net Assets | |||||||||||||||||||
Beginning of period | 36,139,805 | 20,128,926 | 64,297,751 | 24,240,814 | |||||||||||||||
End of period | $ | 28,772,064 | $ | 36,139,805 | $ | 84,432,225 | $ | 64,297,751 | |||||||||||
Accumulated Net Investment Income (Loss) | $ | (144,998 | ) | $ | 1 | $ | 563,418 | $ | — |
See accompanying notes to financial statements.
10
Statements of Changes in Net Assets (Continued)
Touchstone Large Cap Core Equity Fund | Touchstone Large Cap Growth Fund | ||||||||||||||||||
Six Months Ended September 30, 2010 (Unaudited) | Year Ended March 31, 2010 | Six Months Ended September 30, 2010 (Unaudited) | Year Ended March 31, 2010 | ||||||||||||||||
From Operations | |||||||||||||||||||
Net investment income (loss) | $ | 218,405 | $ | 522,179 | $ | (1,139,579 | ) | $ | (3,026,486 | ) | |||||||||
Net realized gains (losses) from security transactions | (252,204 | ) | (3,667,576 | ) | 46,045,218 | 28,192,534 | |||||||||||||
Net change in unrealized appreciation/(depreciation) on investments | (1,067,046 | ) | 22,935,800 | (27,479,219 | ) | 259,377,852 | |||||||||||||
Net Increase (Decrease) in Net Assets from Operations | (1,100,845 | ) | 19,790,403 | 17,426,420 | 284,543,900 | ||||||||||||||
Distributions to Shareholders | |||||||||||||||||||
From net investment income, Class A | — | (263,434 | ) | — | (695,550 | ) | |||||||||||||
From net investment income, Class Y | — | — | — | (1,490,529 | ) | ||||||||||||||
Tax return of capital, Class A | — | — | — | (280,368 | ) | ||||||||||||||
Tax return of capital, Class Y | — | — | — | (220,290 | ) | ||||||||||||||
Decrease in Net Assets from Distributions to Shareholders | — | (263,434 | ) | — | (2,686,737 | ) | |||||||||||||
From Capital Share Transactions | |||||||||||||||||||
Class A | |||||||||||||||||||
Proceeds from shares sold | 902,263 | 2,924,182 | 17,865,990 | 54,719,163 | |||||||||||||||
Reinvested distributions | — | 259,282 | — | 798,447 | |||||||||||||||
Payments for shares redeemed | (3,201,520 | ) | (15,673,641 | ) | (72,349,744 | ) | (276,344,671 | ) | |||||||||||
Net Decrease in Net Assets from Class A Share Transactions | (2,299,257 | ) | (12,490,177 | ) | (54,483,754 | ) | (220,827,061 | ) | |||||||||||
Class B | |||||||||||||||||||
Proceeds from shares sold | — | — | — | 14,099 | |||||||||||||||
Payments for shares redeemed | — | — | (2,047,624 | ) | (4,424,854 | ) | |||||||||||||
Net Decrease in Net Assets from Class B Share Transactions | — | — | (2,047,624 | ) | (4,410,755 | ) | |||||||||||||
Class C | |||||||||||||||||||
Proceeds from shares sold | 72,936 | 232,027 | 2,323,117 | 11,544,805 | |||||||||||||||
Payments for shares redeemed | (531,585 | ) | (798,878 | ) | (23,900,013 | ) | (56,669,909 | ) | |||||||||||
Net Decrease in Net Assets from Class C Share Transactions | (458,649 | ) | (566,851 | ) | (21,576,896 | ) | (45,125,104 | ) | |||||||||||
Class Y | |||||||||||||||||||
Proceeds from shares sold | — | — | 12,825,578 | 131,293,090 | |||||||||||||||
Reinvested distributions | — | — | — | 1,653,838 | |||||||||||||||
Payments for shares redeemed | — | — | (102,959,463 | ) | (77,058,051 | ) | |||||||||||||
Net Increase (Decrease) in Net Assets from Class Y Share Transactions | — | — | (90,133,885 | ) | 55,888,877 | ||||||||||||||
Total Increase (Decrease) in Net Assets | (3,858,751 | ) | 6,469,941 | (150,815,739 | ) | 67,383,120 | |||||||||||||
Net Assets | |||||||||||||||||||
Beginning of period | 53,401,183 | 46,931,242 | 844,387,462 | 777,004,342 | |||||||||||||||
End of period | $ | 49,542,432 | $ | 53,401,183 | $ | 693,571,723 | $ | 844,387,462 | |||||||||||
Accumulated Net Investment Income (Loss) | $ | 740,579 | $ | 522,174 | $ | (1,139,580 | ) | $ | (1 | ) |
See accompanying notes to financial statements.
11
Statements of Changes in Net Assets (Continued)
Touchstone Mid Cap Growth Fund | |||||||||||
Six Months Ended September 30, 2010 (Unaudited) | Year Ended March 31, 2010 | ||||||||||
From Operations | |||||||||||
Net investment income (loss) | $ | 420,867 | $ | (2,844,618 | ) | ||||||
Net realized gains from security transactions | 27,460,498 | 27,987,013 | |||||||||
Net change in unrealized appreciation/(depreciation) on investments | (30,052,414 | ) | 296,748,610 | ||||||||
Net Increase (Decrease) in Net Assets from Operations | (2,171,049 | ) | 321,891,005 | ||||||||
From Capital Share Transactions | |||||||||||
Class A | |||||||||||
Proceeds from shares sold | 45,747,949 | 164,390,215 | |||||||||
Payments for shares redeemed | (95,383,099 | ) | (200,190,917 | ) | |||||||
Net Decrease in Net Assets from Class A Share Transactions | (49,635,150 | ) | (35,800,702 | ) | |||||||
Class B | |||||||||||
Proceeds from shares sold | 6,197 | 197,220 | |||||||||
Payments for shares redeemed | (8,609,203 | ) | (11,269,321 | ) | |||||||
Net Decrease in Net Assets from Class B Share Transactions | (8,603,006 | ) | (11,072,101 | ) | |||||||
Class C | |||||||||||
Proceeds from shares sold | 6,116,081 | 15,963,017 | |||||||||
Payments for shares redeemed | (25,184,991 | ) | (39,571,605 | ) | |||||||
Net Decrease in Net Assets from Class C Share Transactions | (19,068,910 | ) | (23,608,588 | ) | |||||||
Class Y | |||||||||||
Proceeds from shares sold | 5,238,807 | 34,029,321 | |||||||||
Payments for shares redeemed | (7,760,419 | ) | (10,620,896 | ) | |||||||
Net Increase (Decrease) in Net Assets from Class Y Share Transactions | (2,521,612 | ) | 23,408,425 | ||||||||
Total Increase (Decrease) in Net Assets | (81,999,727 | ) | 274,818,039 | ||||||||
Net Assets | |||||||||||
Beginning of period | 860,880,076 | 586,062,037 | |||||||||
End of period | $ | 778,880,349 | $ | 860,880,076 | |||||||
Accumulated Net Investment Income | $ | 421,463 | $ | 596 |
See accompanying notes to financial statements.
12
Financial Highlights
Touchstone Diversified Small Cap Growth Fund — Class A
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 | Year Ended March 31, | Period Ended March 31, | |||||||||||||||||||||
(Unaudited) | 2010 | 2009 | 2008 | 2007 (A) | |||||||||||||||||||
Net asset value at beginning of period | $ | 9.09 | $ | 6.27 | $ | 9.80 | $ | 11.64 | $ | 10.00 | |||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||
Net investment income (loss) | (0.04 | ) | (0.08 | ) | (0.02 | ) | 0.50 | (0.07 | ) | ||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.12 | 2.90 | (3.51 | ) | (1.15 | ) | 1.71 | ||||||||||||||||
Total from investment operations | 0.08 | 2.82 | (3.53 | ) | (0.65 | ) | 1.64 | ||||||||||||||||
Distributions from net realized gains | — | — | — | (1.19 | ) | — | |||||||||||||||||
Net asset value at end of period | $ | 9.17 | $ | 9.09 | $ | 6.27 | $ | 9.80 | $ | 11.64 | |||||||||||||
Total return (B) | 0.88 | % (C) | 44.98 | % | (36.02 | %) | (7.28 | %) | 16.40 | % (C) | |||||||||||||
Net assets at end of period (000's) | $ | 11,622 | $ | 12,708 | $ | 9,054 | $ | 22,955 | $ | 5,846 | |||||||||||||
Ratio of net expenses to average net assets | 1.40 | % (D) | 1.40 | % | 1.40 | % | 1.40 | % | 1.40 | % (D) | |||||||||||||
Ratio of net investment income (loss) to average net assets | (0.95 | %) (D) | (0.99 | %) | (0.22 | %) | 0.33 | % | (1.15 | %) (D) | |||||||||||||
Portfolio turnover rate | 35 | % (C) | 76 | % | 113 | % | 99 | % | 86 | % (C) |
Touchstone Diversified Small Cap Growth Fund — Class C
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 | Year Ended March 31, | Period Ended March 31, | |||||||||||||||||
(Unaudited) | 2010 | 2009 | 2008 (E) | ||||||||||||||||
Net asset value at beginning of period | $ | 8.91 | $ | 6.20 | $ | 9.75 | $ | 12.44 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||||
Net investment loss | (0.08 | ) | (0.15 | ) | (0.08 | ) | (0.22 | ) | |||||||||||
Net realized and unrealized gains (losses) on investments | 0.13 | 2.86 | (3.47 | ) | (1.28 | ) | |||||||||||||
Total from investment operations | 0.05 | 2.71 | (3.55 | ) | (1.50 | ) | |||||||||||||
Distributions from net realized gains | — | — | — | (1.19 | ) | ||||||||||||||
Net asset value at end of period | $ | 8.96 | $ | 8.91 | $ | 6.20 | $ | 9.75 | |||||||||||
Total return (B) | 0.56 | % (C) | 43.71 | % | (36.41 | %) | (13.66 | %) (C) | |||||||||||
Net assets at end of period (000's) | $ | 2,178 | $ | 2,576 | $ | 2,267 | $ | 4,228 | |||||||||||
Ratio of net expenses to average net assets | 2.15 | % (D) | 2.15 | % | 2.15 | % | 0.84 | % (D) | |||||||||||
Ratio of net investment loss to average net assets | (1.70 | %) (D) | (1.74 | %) | (0.98 | %) | (17.70 | %) (D) | |||||||||||
Portfolio turnover rate | 35 | % (C) | 76 | % | 113 | % | 99 | % (C) |
(A) Represents the period from commencement of operations (September 6, 2006) through March 31, 2007.
(B) Total returns shown exclude the effect of applicable sales loads.
(C) Not annualized.
(D) Annualized.
(E) Represents the period from commencement of operations (August 1, 2007) through March 31, 2008.
See accompanying notes to financial statements.
13
Financial Highlights (Continued)
Touchstone Diversified Small Cap Growth Fund — Class Y
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 | Year Ended March 31, | Period Ended March 31, | |||||||||||||||||||||
(Unaudited) | 2010 | 2009 | 2008 | 2007 (A) | |||||||||||||||||||
Net asset value at beginning of period | $ | 9.16 | $ | 6.30 | $ | 9.84 | $ | 11.66 | $ | 10.00 | |||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||
Net investment income (loss) | (0.04 | ) | (0.05 | ) | 0.00 | (B) | 0.04 | (0.05 | ) | ||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.13 | 2.91 | (3.54 | ) | (0.67 | ) | 1.71 | ||||||||||||||||
Total from investment operations | 0.09 | 2.86 | (3.54 | ) | (0.63 | ) | 1.66 | ||||||||||||||||
Distributions from net realized gains | — | — | — | (1.19 | ) | — | |||||||||||||||||
Net asset value at end of period | $ | 9.25 | $ | 9.16 | $ | 6.30 | $ | 9.84 | $ | 11.66 | |||||||||||||
Total return | 0.98 | % (C) | 45.40 | % | (35.98 | %) | (7.09 | %) | 16.60 | % (C) | |||||||||||||
Net assets at end of period (000's) | $ | 14,972 | $ | 20,856 | $ | 8,808 | $ | 14,509 | $ | 6,128 | |||||||||||||
Ratio of net expenses to average net assets | 1.15 | % (D) | 1.15 | % | 1.15 | % | 1.15 | % | 1.15 | % (D) | |||||||||||||
Ratio of net investment income (loss) to average net assets | (0.70 | %) (D) | (0.74 | %) | 0.02 | % | (0.52 | %) | (0.90 | %) (D) | |||||||||||||
Portfolio turnover rate | 35 | % (C) | 76 | % | 113 | % | 99 | % | 86 | % (C) |
(A) Represents the period from commencement of operations (September 6, 2006) through March 31, 2007.
(B) Amount rounds to less than $0.01 per share.
(C) Not annualized.
(D) Annualized.
See accompanying notes to financial statements.
14
Financial Highlights (Continued)
Touchstone Growth Opportunities Fund — Class A
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 | Year Ended March 31, | ||||||||||||||||||||||||||
(Unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 20.88 | $ | 14.41 | $ | 21.68 | $ | 20.75 | $ | 21.57 | $ | 17.92 | |||||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||||
Net investment gain (loss) | 0.12 | (0.03 | ) | (0.15 | ) | (0.24 | ) | (0.35 | ) | (0.21 | ) | ||||||||||||||||
Net realized and unrealized gains (losses) on investments | (0.22 | ) | 6.50 | (7.12 | ) | 1.17 | (0.47 | ) | 3.86 | ||||||||||||||||||
Total from investment operations | (0.10 | ) | 6.47 | (7.27 | ) | 0.93 | (0.82 | ) | 3.65 | ||||||||||||||||||
Net asset value at end of period | $ | 20.78 | $ | 20.88 | $ | 14.41 | $ | 21.68 | $ | 20.75 | $ | 21.57 | |||||||||||||||
Total return (A) | (0.48 | %) (B) | 44.90 | % | (33.53 | %) | 4.48 | % | (3.80 | %) | 20.37 | % | |||||||||||||||
Net assets at end of period (000's) | $ | 40,591 | $ | 32,182 | $ | 17,973 | $ | 26,349 | $ | 35,723 | $ | 98,004 | |||||||||||||||
Ratio of net expenses to average net assets | 1.21 | % (C) | 1.24 | % | 1.51 | % | 1.55 | % | 1.79 | % | 1.64 | % | |||||||||||||||
Ratio of net investment income (loss) to average net assets | 1.46 | % (C) | (0.22 | %) | (0.70 | %) | (0.89 | %) | (1.12 | %) | (1.09 | %) | |||||||||||||||
Portfolio turnover rate | 53 | % (B) | 100 | % | 60 | % | 82 | % | 161 | % | 80 | % |
Touchstone Growth Opportunities Fund — Class C
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 | Year Ended March 31, | ||||||||||||||||||||||||||
(Unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 19.49 | $ | 13.55 | $ | 20.42 | $ | 19.63 | $ | 20.60 | $ | 17.11 | |||||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||||
Net investment income (loss) | 0.06 | (0.17 | ) | (0.29 | ) | (0.35 | ) | (0.54 | ) | (0.40 | ) | ||||||||||||||||
Net realized and unrealized gains (losses) on investments | (0.22 | ) | 6.11 | (6.58 | ) | 1.14 | (0.43 | ) | 3.89 | ||||||||||||||||||
Total from investment operations | (0.16 | ) | 5.94 | (6.87 | ) | 0.79 | (0.97 | ) | 3.49 | ||||||||||||||||||
Net asset value at end of period | $ | 19.33 | $ | 19.49 | $ | 13.55 | $ | 20.42 | $ | 19.63 | $ | 20.60 | |||||||||||||||
Total return (A) | (0.82 | %) (B) | 43.84 | % | (33.64 | %) | 4.02 | % | (4.71 | %) | 20.40 | % | |||||||||||||||
Net assets at end of period (000's) | $ | 7,487 | $ | 8,085 | $ | 6,262 | $ | 11,115 | $ | 11,957 | $ | 22,412 | |||||||||||||||
Ratio of net expenses to average net assets | 1.96 | % (C) | 1.99 | % | 2.27 | % | 2.30 | % | 2.71 | % | 2.57 | % | |||||||||||||||
Ratio of net investment income (loss) to average net assets | 0.60 | % (C) | (0.96 | %) | (1.46 | %) | (1.60 | %) | (2.00 | %) | (2.01 | %) | |||||||||||||||
Portfolio turnover rate | 53 | % (B) | 100 | % | 60 | % | 82 | % | 161 | % | 80 | % |
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
15
Financial Highlights (Continued)
Touchstone Growth Opportunities Fund — Class Y
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 (Unaudited) | Year Ended March 31, 2010 | Period Ended March 31, 2009 (A) | |||||||||||||
Net asset value at beginning of period | $ | 20.94 | $ | 14.41 | $ | 14.37 | |||||||||
Income (loss) from investment operations: | |||||||||||||||
Net investment income (loss) | 0.17 | (0.00 | ) (B) | 0.00 | (B) | ||||||||||
Net realized and unrealized gains (losses) on investments | (0.24 | ) | 6.53 | 0.04 | |||||||||||
Total from investment operations | (0.07 | ) | 6.53 | 0.04 | |||||||||||
Net asset value at end of period | $ | 20.87 | $ | 20.94 | $ | 14.41 | |||||||||
Total return | (0.33 | %) (C) | 45.32 | % | 0.28 | % (C) | |||||||||
Net assets at end of period (000's) | $ | 2,101 | $ | 2,223 | $ | 3 | |||||||||
Ratio of net expenses to average net assets | 0.96 | % (D) | 0.98 | % | 0.97 | % (D) | |||||||||
Ratio of net investment income (loss) to average net assets | 1.61 | % (D) | (0.04 | %) | 0.21 | % (D) | |||||||||
Portfolio turnover rate | 53 | % (C) | 100 | % | 60 | % (C) |
Touchstone Growth Opportunities Fund — Institutional Class
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 (Unaudited) | Year Ended March 31, 2010 | Period Ended March 31, 2009 (A) | |||||||||||||
Net asset value at beginning of period | $ | 20.98 | $ | 14.42 | $ | 14.37 | |||||||||
Income (loss) from investment operations: | |||||||||||||||
Net investment income | 0.17 | 0.01 | 0.00 | (B) | |||||||||||
Net realized and unrealized gains (losses) on investments | (0.22 | ) | 6.55 | 0.05 | |||||||||||
Total from investment operations | (0.05 | ) | 6.56 | 0.05 | |||||||||||
Net asset value at end of period | $ | 20.93 | $ | 20.98 | $ | 14.42 | |||||||||
Total return | (0.24 | %) (C) | 45.49 | % | 0.35 | % (C) | |||||||||
Net assets at end of period (000's) | $ | 34,254 | $ | 21,807 | $ | 3 | |||||||||
Ratio of net expenses to average net assets | 0.80 | % (D) | 0.84 | % | 0.82 | % (D) | |||||||||
Ratio of net investment income to average net assets | 2.01 | % (D) | 0.15 | % | 0.36 | % (D) | |||||||||
Portfolio turnover rate | 53 | % (C) | 100 | % | 60 | % (C) |
(A) Represents the period from commencement of operations (February 2, 2009) through March 31, 2009.
(B) Amount rounds to less than $0.01.
(C) Not annualized.
(D) Annualized.
See accompanying notes to financial statements.
16
Financial Highlights (Continued)
Touchstone Large Cap Core Equity Fund — Class A
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 | Year Ended March 31, | ||||||||||||||||||||||||||
(Unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 8.70 | $ | 6.00 | $ | 10.36 | $ | 11.36 | $ | 10.49 | $ | 9.48 | |||||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||||
Net investment income | 0.04 | 0.10 | 0.12 | 0.10 | 0.11 | 0.06 | |||||||||||||||||||||
Net realized and unrealized gains (losses) on investments | (0.20 | ) | 2.64 | (3.77 | ) | (0.62 | ) | 0.91 | 0.96 | ||||||||||||||||||
Total from investment operations | (0.16 | ) | 2.74 | (3.65 | ) | (0.52 | ) | 1.02 | 1.02 | ||||||||||||||||||
Less distributions: | |||||||||||||||||||||||||||
Dividends from net investment income | — | (0.04 | ) | (0.11 | ) | (0.10 | ) | (0.15 | ) | (0.01 | ) | ||||||||||||||||
Distributions from net realized gains | — | — | (0.60 | ) | (0.38 | ) | — | — | |||||||||||||||||||
Total distributions | — | (0.04 | ) | (0.71 | ) | (0.48 | ) | (0.15 | ) | (0.01 | ) | ||||||||||||||||
Net asset value at end of period | $ | 8.54 | $ | 8.70 | $ | 6.00 | $ | 10.36 | $ | 11.36 | $ | 10.49 | |||||||||||||||
Total return (A) | (1.84 | %) (B) | 45.78 | % | (35.73 | %) | (5.03 | %) | 9.83 | % | 10.74 | % | |||||||||||||||
Net assets at end of period (000's) | $ | 48,042 | $ | 51,377 | $ | 45,073 | $ | 84,611 | $ | 95,175 | $ | 25,693 | |||||||||||||||
Ratio of net expenses to average net assets | 1.15 | % (C) | 1.15 | % | 1.15 | % | 1.15 | % | 1.15 | % | 1.00 | % | |||||||||||||||
Ratio of net investment income to average net assets | 0.90 | % (C) | 1.02 | % | 1.38 | % | 0.89 | % | 0.97 | % | 1.03 | % | |||||||||||||||
Portfolio turnover rate | 14 | % (B) | 24 | % | 51 | % | 52 | % | 54 | % | 6 | % |
Touchstone Large Cap Core Equity Fund — Class C
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 | Year Ended March 31, | ||||||||||||||||||||||||||
(Unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 8.61 | $ | 5.95 | $ | 10.29 | $ | 11.29 | $ | 10.39 | $ | 9.46 | |||||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||||
Net investment income (loss) | 0.00 | (D) | 0.01 | 0.04 | 0.01 | (0.02 | ) | 0.03 | |||||||||||||||||||
Net realized and unrealized gains (losses) on investments | (0.19 | ) | 2.65 | (3.72 | ) | (0.61 | ) | 0.96 | 0.91 | ||||||||||||||||||
Total from investment operations | (0.19 | ) | 2.66 | (3.68 | ) | (0.60 | ) | 0.94 | 0.94 | ||||||||||||||||||
Less distributions: | |||||||||||||||||||||||||||
Dividends from net investment income | — | — | (0.06 | ) | (0.02 | ) | (0.04 | ) | (0.01 | ) | |||||||||||||||||
Distributions from net realized gains | — | — | (0.60 | ) | (0.38 | ) | — | — | |||||||||||||||||||
Total distributions | — | — | (0.66 | ) | (0.40 | ) | (0.04 | ) | (0.01 | ) | |||||||||||||||||
Net asset value at end of period | $ | 8.42 | $ | 8.61 | $ | 5.95 | $ | 10.29 | $ | 11.29 | $ | 10.39 | |||||||||||||||
Total return (A) | (2.21 | %) (B) | 44.71 | % | (36.23 | %) | (5.72 | %) | 9.09 | % | 9.91 | % | |||||||||||||||
Net assets at end of period (000's) | $ | 1,501 | $ | 2,024 | $ | 1,858 | $ | 2,913 | $ | 4,231 | $ | 1,399 | |||||||||||||||
Ratio of net expenses to average net assets | 1.90 | % (C) | 1.90 | % | 1.90 | % | 1.90 | % | 1.90 | % | 1.75 | % | |||||||||||||||
Ratio of net investment income (loss) to average net assets | 0.13 | % (C) | 0.26 | % | 0.70 | % | 0.13 | % | (0.26 | %) | 0.26 | % | |||||||||||||||
Portfolio turnover rate | 14 | % (B) | 24 | % | 51 | % | 52 | % | 54 | % | 6 | % |
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
(D) Amount rounds to less than $0.01.
See accompanying notes to financial statements.
17
Financial Highlights (Continued)
Touchstone Large Cap Growth Fund — Class A
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 | Year Ended March 31, | ||||||||||||||||||||||||||
(Unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 20.74 | $ | 14.73 | $ | 24.45 | $ | 22.06 | $ | 23.26 | $ | 19.84 | |||||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||||
Net investment income (loss) | (0.03 | ) | (0.02 | ) | 0.09 | 0.02 | (0.04 | ) | (0.02 | ) | |||||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.76 | 6.08 | (9.80 | ) | 2.37 | (1.16 | ) | 3.44 | |||||||||||||||||||
Total from investment operations | 0.73 | 6.06 | (9.71 | ) | 2.39 | (1.20 | ) | 3.42 | |||||||||||||||||||
Less distributions: | |||||||||||||||||||||||||||
Dividends from net investment income | — | (0.04 | ) | (0.01 | ) | — | — | — | |||||||||||||||||||
Tax return of capital | — | (0.01 | ) | — | — | — | — | ||||||||||||||||||||
Total distributions | — | (0.05 | ) | (0.01 | ) | — | — | — | |||||||||||||||||||
Net asset value at end of period | $ | 21.47 | $ | 20.74 | $ | 14.73 | $ | 24.45 | $ | 22.06 | $ | 23.26 | |||||||||||||||
Total return (A) | 3.52 | % (B) | 41.15 | % | (39.71 | %) | 10.83 | % | (5.16 | %) | 17.24 | % | |||||||||||||||
Net assets at end of period (000's) | $ | 287,998 | $ | 334,465 | $ | 418,808 | $ | 719,488 | $ | 656,582 | $ | 838,120 | |||||||||||||||
Ratio of net expenses to average net assets | 1.25 | % (C) | 1.25 | % | 1.25 | % | 1.25 | % | 1.16 | % | 1.17 | % | |||||||||||||||
Ratio of net investment income (loss) to average net assets | (0.28 | %) (C) | (0.29 | %) | 0.41 | % | 0.06 | % | (0.16 | %) | (0.13 | %) | |||||||||||||||
Portfolio turnover | 43 | % (B) | 83 | % | 126 | % | 72 | % | 115 | % | 104 | % |
Touchstone Large Cap Growth Fund — Class B
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 | Year Ended March 31, | ||||||||||||||||||||||||||
(Unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 19.93 | $ | 14.22 | $ | 23.68 | $ | 21.46 | $ | 22.83 | $ | 19.60 | |||||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||||
Net investment loss | (0.10 | ) | (0.44 | ) | (0.08 | ) | (0.15 | ) | (0.21 | ) | (0.15 | ) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.73 | 6.15 | (9.38 | ) | 2.37 | (1.16 | ) | 3.38 | |||||||||||||||||||
Total from investment operations | 0.63 | 5.71 | (9.46 | ) | 2.22 | (1.37 | ) | 3.23 | |||||||||||||||||||
Net asset value at end of period | $ | 20.56 | $ | 19.93 | $ | 14.22 | $ | 23.68 | $ | 21.46 | $ | 22.83 | |||||||||||||||
Total return (A) | 3.16 | % (B) | 40.15 | % | (39.95 | %) | 10.34 | % | (6.00 | %) | 16.48 | % | |||||||||||||||
Net assets at end of period (000's) | $ | 13,188 | $ | 14,897 | $ | 14,186 | $ | 29,829 | $ | 26,669 | $ | 27,781 | |||||||||||||||
Ratio of net expenses to average net assets | 1.91 | % (C) | 2.00 | % | 2.00 | % | 2.00 | % | 2.02 | % | 2.08 | % | |||||||||||||||
Ratio of net investment loss to average net assets | (0.93 | %) (C) | (1.05 | %) | (0.35 | %) | (0.65 | %) | (0.98 | %) | (1.02 | %) | |||||||||||||||
Portfolio turnover rate | 43 | % (B) | 83 | % | 126 | % | 72 | % | 115 | % | 104 | % |
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
18
Financial Highlights (Continued)
Touchstone Large Cap Growth Fund — Class C
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 | Year Ended March 31, | ||||||||||||||||||||||||||
(Unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 19.97 | $ | 14.25 | $ | 23.74 | $ | 21.52 | $ | 22.88 | $ | 19.62 | |||||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||||
Net investment loss | (0.11 | ) | (0.22 | ) | (0.07 | ) | (0.14 | ) | (0.20 | ) | (0.11 | ) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.73 | 5.94 | (9.42 | ) | 2.36 | (1.16 | ) | 3.37 | |||||||||||||||||||
Total from investment operations | 0.62 | 5.72 | (9.49 | ) | 2.22 | (1.36 | ) | 3.26 | |||||||||||||||||||
Net asset value at end of period | $ | 20.59 | $ | 19.97 | $ | 14.25 | $ | 23.74 | $ | 21.52 | $ | 22.88 | |||||||||||||||
Total return (A) | 3.10 | % (B) | 40.14 | % | (39.97 | %) | 10.32 | % | (5.94 | %) | 16.62 | % | |||||||||||||||
Net assets at end of period (000's) | $ | 123,689 | $ | 142,179 | $ | 137,641 | $ | 236,582 | $ | 190,261 | $ | 188,810 | |||||||||||||||
Ratio of net expenses to average net assets | 2.00 | % (C) | 2.00 | % | 2.00 | % | 2.00 | % | 1.95 | % | 1.98 | % | |||||||||||||||
Ratio of net investment loss to average net assets | (1.03 | %) (C) | (1.05 | %) | (0.33 | %) | (0.66 | %) | (0.92 | %) | (0.93 | %) | |||||||||||||||
Portfolio turnover rate | 43 | % (B) | 83 | % | 126 | % | 72 | % | 115 | % | 104 | % |
Touchstone Large Cap Growth Fund — Class Y
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 | Year Ended March 31, | ||||||||||||||||||||||||||
(Unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 20.89 | $ | 14.84 | $ | 24.64 | $ | 22.19 | $ | 23.33 | $ | 19.86 | |||||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||||
Net investment income (loss) | (0.00 | ) (D) | (0.01 | ) | 0.10 | 0.05 | 0.06 | 0.03 | |||||||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.76 | 6.17 | (9.85 | ) | 2.40 | (1.20 | ) | 3.44 | |||||||||||||||||||
Total from investment operations | 0.76 | 6.16 | (9.75 | ) | 2.45 | (1.14 | ) | 3.47 | |||||||||||||||||||
Less distributions: | |||||||||||||||||||||||||||
Dividends from net investment income | — | (0.10 | ) | (0.05 | ) | — | — | — | |||||||||||||||||||
Tax return of capital | — | (0.01 | ) | — | — | — | — | ||||||||||||||||||||
Total distributions | — | (0.11 | ) | (0.05 | ) | — | — | — | |||||||||||||||||||
Net asset value at end of period | $ | 21.65 | $ | 20.89 | $ | 14.84 | $ | 24.64 | $ | 22.19 | $ | 23.33 | |||||||||||||||
Total return | 3.64 | % (B) | 41.53 | % | (39.58 | %) | 11.04 | % | (4.89 | %) | 17.47 | % | |||||||||||||||
Net assets at end of period (000's) | $ | 268,697 | $ | 352,847 | $ | 206,369 | $ | 31,679 | $ | 40,044 | $ | 66,655 | |||||||||||||||
Ratio of net expenses to average net assets | 0.99 | % (C) | 0.99 | % | 0.97 | % | 1.00 | % | 0.90 | % | 0.93 | % | |||||||||||||||
Ratio of net investment income (loss) to average net assets | (0.01 | %) (C) | (0.06 | %) | 0.95 | % | 0.21 | % | 0.13 | % | 0.12 | % | |||||||||||||||
Portfolio turnover | 43 | % (B) | 83 | % | 126 | % | 72 | % | 115 | % | 104 | % |
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
(D) Amount rounds to less than $0.01.
See accompanying notes to financial statements.
19
Financial Highlights (Continued)
Touchstone Mid Cap Growth Fund — Class A
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 | Year Ended March 31, | ||||||||||||||||||||||||||
(Unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 20.18 | $ | 12.95 | $ | 21.16 | $ | 24.17 | $ | 24.02 | $ | 21.42 | |||||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||||
Net investment income (loss) | 0.03 | (0.03 | ) | (0.01 | ) | (0.12 | ) | (0.14 | ) | (0.12 | ) | ||||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.07 | 7.26 | (7.96 | ) | 0.01 | 2.20 | 4.70 | ||||||||||||||||||||
Total from investment operations | 0.10 | 7.23 | (7.97 | ) | (0.11 | ) | 2.06 | 4.58 | |||||||||||||||||||
Distributions from net realized gains | — | — | (0.24 | ) | (2.90 | ) | (1.91 | ) | (1.98 | ) | |||||||||||||||||
Net asset value at end of period | $ | 20.28 | $ | 20.18 | $ | 12.95 | $ | 21.16 | $ | 24.17 | $ | 24.02 | |||||||||||||||
Total return (A) | 0.50 | % (B) | 55.83 | % | (37.67 | %) | (1.53 | %) | 8.84 | % | 22.21 | % | |||||||||||||||
Net assets at end of period (000's) | $ | 532,972 | $ | 583,543 | $ | 397,756 | $ | 649,891 | $ | 713,666 | $ | 639,501 | |||||||||||||||
Ratio of net expenses to average net assets | 1.50 | % (C) | 1.50 | % | 1.50 | % | 1.47 | % | 1.50 | % | 1.50 | % | |||||||||||||||
Ratio of net investment income (loss) to average net assets | 0.32 | % (C) | (0.15 | %) | (0.07 | %) | (0.53 | %) | (0.66 | %) | (0.57 | %) | |||||||||||||||
Portfolio turnover | 33 | % (B) | 62 | % | 71 | % | 64 | % | 58 | % | 69 | % |
Touchstone Mid Cap Growth Fund — Class B
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 | Year Ended March 31, | ||||||||||||||||||||||||||
(Unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 16.98 | $ | 10.98 | $ | 18.13 | $ | 21.25 | $ | 21.49 | $ | 19.50 | |||||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||||
Net investment loss | (0.05 | ) | (0.16 | ) | (0.15 | ) | (0.28 | ) | (0.30 | ) | (0.26 | ) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.06 | 6.16 | (6.76 | ) | 0.06 | 1.97 | 4.23 | ||||||||||||||||||||
Total from investment operations | 0.01 | 6.00 | (6.91 | ) | (0.22 | ) | 1.67 | 3.97 | |||||||||||||||||||
Distributions from net realized gains | — | — | (0.24 | ) | (2.90 | ) | (1.91 | ) | (1.98 | ) | |||||||||||||||||
Net asset value at end of period | $ | 16.99 | $ | 16.98 | $ | 10.98 | $ | 18.13 | $ | 21.25 | $ | 21.49 | |||||||||||||||
Total return (A) | 0.06 | % (B) | 54.64 | % | (38.12 | %) | (2.29 | %) | 8.04 | % | 21.24 | % | |||||||||||||||
Net assets at end of period (000's) | $ | 23,805 | $ | 32,762 | $ | 29,521 | $ | 61,977 | $ | 74,935 | $ | 79,552 | |||||||||||||||
Ratio of net expenses to average net assets | 2.25 | % (C) | 2.25 | % | 2.25 | % | 2.25 | % | 2.25 | % | 2.25 | % | |||||||||||||||
Ratio of net investment loss to average net assets | (0.53 | %) (C) | (0.90 | %) | (0.85 | %) | (1.31 | %) | (1.42 | %) | (1.32 | %) | |||||||||||||||
Portfolio turnover rate | 33 | % (B) | 62 | % | 71 | % | 64 | % | 58 | % | 69 | % |
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
20
Financial Highlights (Continued)
Touchstone Mid Cap Growth Fund — Class C
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 | Year Ended March 31, | ||||||||||||||||||||||||||
(Unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 17.00 | $ | 10.99 | $ | 18.15 | $ | 21.27 | $ | 21.51 | $ | 19.51 | |||||||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||||||
Net investment loss | (0.04 | ) | (0.14 | ) | (0.14 | ) | (0.27 | ) | (0.28 | ) | (0.25 | ) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.05 | 6.15 | (6.78 | ) | 0.05 | 1.95 | 4.23 | ||||||||||||||||||||
Total from investment operations | 0.01 | 6.01 | (6.92 | ) | (0.22 | ) | 1.67 | 3.98 | |||||||||||||||||||
Distributions from net realized gains | — | — | (0.24 | ) | (2.90 | ) | (1.91 | ) | (1.98 | ) | |||||||||||||||||
Net asset value at end of period | $ | 17.01 | $ | 17.00 | $ | 10.99 | $ | 18.15 | $ | 21.27 | $ | 21.51 | |||||||||||||||
Total return (A) | 0.06 | % (B) | 54.69 | % | (38.14 | %) | (2.28 | %) | 8.04 | % | 21.28 | % | |||||||||||||||
Net assets at end of period (000's) | $ | 198,452 | $ | 218,413 | $ | 158,782 | $ | 302,422 | $ | 345,997 | $ | 327,867 | |||||||||||||||
Ratio of net expenses to average net assets | 2.25 | % (C) | 2.25 | % | 2.25 | % | 2.24 | % | 2.25 | % | 2.25 | % | |||||||||||||||
Ratio of net investment loss to average net assets | (0.44 | %) (C) | (0.90 | %) | (0.84 | %) | (1.30 | %) | (1.41 | %) | (1.32 | %) | |||||||||||||||
Portfolio turnover | 33 | % (B) | 62 | % | 71 | % | 64 | % | 58 | % | 69 | % |
Touchstone Mid Cap Growth Fund — Class Y
Per Share Data for a Share Outstanding Throughout Each Period
Six Months Ended September 30, 2010 (Unaudited) | Year Ended March 31, 2010 | Period Ended March 31, 2009 (D) | |||||||||||||
Net asset value at beginning of period | $ | 20.27 | $ | 12.96 | $ | 13.20 | |||||||||
Income (loss) from investment operations: | |||||||||||||||
Net investment income | 0.07 | 0.01 | 0.02 | ||||||||||||
Net realized and unrealized gains (losses) on investments | 0.06 | 7.30 | (0.26 | ) | |||||||||||
Total from investment operations | 0.13 | 7.31 | (0.24 | ) | |||||||||||
Net asset value at end of period | $ | 20.40 | $ | 20.27 | $ | 12.96 | |||||||||
Total return | 0.64 | % (B) | 56.40 | % | (1.82 | %) (B) | |||||||||
Net assets at end of period (000's) | $ | 23,651 | $ | 26,162 | $ | 3 | |||||||||
Ratio of net expenses to average net assets | 1.13 | % (C) | 1.25 | % | 1.25 | % (C) | |||||||||
Ratio of net investment income to average net assets | 0.66 | % (C) | 0.14 | % | 1.11 | % (C) | |||||||||
Portfolio turnover | 33 | % (B) | 62 | % | 71 | % (B) |
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
(D) Represents the period from commencement of operations (February 2, 2009) through March 31, 2009.
See accompanying notes to financial statements.
21
Notes to Financial Statements
September 30, 2010 (Unaudited)
1. Organization
The Touchstone Diversified Small Cap Growth Fund ("Diversified Small Cap Growth Fund"), Touchstone Growth Opportunities Fund ("Growth Opportunities Fund"), Touchstone Large Cap Core Equity Fund ("Large Cap Core Equity Fund"), Touchstone Large Cap Growth Fund ("Large Cap Growth Fund"), and Touchstone Mid Cap Growth Fund ("Mid Cap Growth Fund") (individually, a Fund, and collectively, the Funds) are each a series of Touchstone Strategic Trust (the Trust). The Trust is registered under the Investment Company Act of 1940, as amended (the Act), as an open-end management investment company. The Trust was established as a Massachusetts business trust under a Declaration of Trust dated November 18, 1982. The Declaration of Trust, as amended, permits the Trustees to issue an unlimited number of shares of each Fund.
The Funds are registered to offer certain of the following Classes of shares: Class A shares, Class B shares, Class C shares, Class Y shares, and Institutional Class shares. The assets of each Fund are segregated, and a shareholder's interest is limited to the Fund in which shares are held.
The Funds' prospectus provides a description of each Fund's investment objectives, policies, and strategies along with information on the Classes of shares currently being offered as outlined below:
Class A (1) | Class B (2) | Class C (3) | Class Y (4) | Institutional Class (5) | |||||||||||||||||||
Diversified Small Cap Growth Fund | X | X | X | ||||||||||||||||||||
Growth Opportunities Fund | X | X | X | X | |||||||||||||||||||
Large Cap Core Equity Fund | X | X | |||||||||||||||||||||
Large Cap Growth Fund | X | X | X | X | |||||||||||||||||||
Mid Cap Growth Fund | X | X | X | X | |||||||||||||||||||
(1) Currently sold subject to a maximum front-end sales load of 5.75% and a maximum distribution fee of up to 0.25% of average daily net assets.
(2) Sold subject to a maximum contingent deferred sales load of 5.00% for a one-year period and incrementally reduced over time and a maximum distribution fee of up to 1.00% of average daily net assets; closed to new investors effective February 2, 2009.
(3) Sold subject to a 1.00% contingent deferred sales load for a one-year period and a maximum distribution fee of up to 1.00% of average daily net assets.
(4) Sold without a distribution fee or sales charge, but offered only through selected dealers.
(5) Sold without a distribution fee or sales charge, and subject to a higher minimum initial investment.
Each Class A, Class B, Class C, Class Y, and Institutional Class share of a Fund represents identical interests in the investment portfolio of such Fund and has the same rights, except that (i) Class B and Class C shares bear the expenses of higher distribution fees, which is expected to cause Class B and Class C shares to have a higher expense ratio and to pay lower dividends than Class A, Class Y, and Institutional Class shares; (ii) certain other Class specific expenses will be borne solely by the Class to which such expenses are attributable; and (iii) each Class has exclusive voting rights with respect to matters relating to its own distribution arrangements.
2. Significant Accounting Policies
The following is a summary of the Funds' significant accounting policies:
Security valuation — The Funds' portfolio securities are valued as of the close of the regular session of trading on the New York Stock Exchange (currently 4:00 p.m., Eastern time). Portfolio securities traded on stock exchanges are valued at the last sale price and portfolio securities quoted by NASDAQ are valued at the NASDAQ Official Closing Price (NOCP). Securities not traded on a particular day, or for which the last sale price is not
22
Notes to Financial Statements (Continued)
readily available, are valued at their last broker-quoted bid prices as obtained from one or more of the major market makers for such securities by an independent pricing service. Securities for which market quotations or the NOCP are not readily available are valued based on fair value as determined by or under the direction of the Board of Trustees. Money market instruments and other debt securities with a remaining maturity of less than 60 days are valued at amortized cost, which approximates market value. Shares of open-end mutual funds in which the Funds invest are valued at their respective net asset values as reported by the underlying funds.
The Funds have adopted FASB ASC 820 "Fair Value Measurements". This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. Fair Value Measurements applies to fair value measurements already required or permitted by existing standards. The changes to current generally accepted accounting principles (GAAP) from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements.
Various inputs are used in determining the value of the Funds investments. These inputs are summarized in the three broad levels listed below:
• Level 1 – quoted prices in active markets for identical securities
• Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
• Level 3 – significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For example, money market securities are valued using amortized cost, in accordance with rules under the Investment Company Act of 1940. Generally, amortized cost approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.
The aggregate value by input level, as of September 30 2010, for each Fund's investments, is included in each Fund's Portfolio of Investments, which also includes a breakdown of the Fund's investments by geographic/industry concentration. The Funds did not hold any Level 3 categorized securities during the six months ended or at September 30, 2010.
New Accounting Pronouncements — In January 2010, the Financial Accounting Standards Board ("FASB") issued new guidance as an amendment to fair value measurements and disclosures. The new guidance adds new requirements for disclosure about transfers into and out of level 1 and level 2 fair value measurements and separate disclosures about purchases, sales, issuances, and settlements relating to level 3 measurements. The guidance also clarifies existing fair value disclosures about the level of disaggregation and about inputs and valuation techniques in level 2 and level 3 fair value measurements. The amendment is effective for interim and annual reporting periods beginning after December 15, 2009, except for Level 3 reconciliation disclosures which are effective for interim and annual periods beginning after December 15, 2010. The Funds do not expect the impli cations of this guidance to have a material impact on their financial statements.
Portfolio securities loaned — Each Fund may lend its portfolio securities. Lending portfolio securities exposes a Fund to the risk that the borrower may fail to return the loaned securities or may not be able to provide additional collateral or that the Fund may experience delays in recovery of the loaned securities or loss of rights in the collateral if the borrower fails financially. To minimize these risks, the borrower must agree to maintain
23
Notes to Financial Statements (Continued)
cash collateral with the Funds' custodian in an amount at least equal to the market value of the loaned securities. The cash collateral is reinvested by the Funds' custodian into approved investment vehicles.
As of September 30, 2010, the following Funds loaned common stocks and received collateral as follows:
Market Value of Common Stocks Loaned | Value of Collateral Received | ||||||||||
Diversified Small Cap Growth Fund | $ | 6,323,679 | $ | 6,534,533 | |||||||
Growth Opportunities Fund | $ | 4,264,426 | $ | 4,468,421 | |||||||
Large Cap Core Equity Fund | $ | 1,238,099 | $ | 1,270,442 | |||||||
Large Cap Growth Fund | $ | 57,841,373 | $ | 59,270,298 | |||||||
Mid Cap Growth Fund | $ | 51,089,676 | $ | 52,488,794 |
All collateral received as cash and securities is received, held, and administered by the Funds' custodian for the benefit of the Funds in the applicable custody account or other account established for the purpose of holding collateral.
Funds participating in securities lending receive compensation in the form of fees, or retain a portion of interest or dividends on the investment of any cash received as collateral. The Funds also continue to receive interest or dividends on the securities loaned. The loans are secured by collateral valued at least equal, at all times, to the fair value of the securities loaned plus accrued interest. Unrealized gain or loss on the fair value of the securities loaned that may occur during the term of the loan is recognized by the Funds. The Funds have the right under the lending agreement to recover the securities from the borrower on demand.
Share valuation — The net asset value per share of each Class of shares of each Fund is calculated daily by dividing the total value of a Fund's assets attributable to that Class, less liabilities attributable to that Class, by the number of outstanding shares of that Class.
The maximum offering price per share of Class A shares of the Funds is equal to the net asset value per share plus a sales load equal to 6.10% of the net asset value (or 5.75% of the offering price). The maximum offering price per share of Class B, Class C, Class Y, and Institutional Class shares of the Funds is equal to the net asset value per share.
Class B shares of the Funds are subject to a contingent deferred sales load of 5.00% in the event of a shareholder redemption within a one-year period of purchase. The contingent deferred sales load will be incrementally reduced over time. After the 6th year, there is no contingent deferred sales load. Class C shares of the Funds are subject to a contingent deferred sales load of 1.00% in the event of shareholder redemption with a one-year period of purchase.
Investment income — Interest income is accrued as earned. Dividend income is recorded on the ex-dividend date. Discounts and premiums on securities purchased are accreted or amortized into income using the effective yield method.
Distributions to shareholders — Dividends arising from net investment income, if any, are declared and paid to shareholders annually for each Fund. With respect to each Fund, net realized short-term capital gains, if any, may be distributed throughout the year and net realized long-term capital gains, if any, are distributed at least once each year. Income dividends and capital gain distributions are determined in accordance with income tax regulations.
Allocations — Investment income earned, realized capital gains and losses, and unrealized appreciation and depreciation for the Funds are allocated daily to each Class of shares based upon their proportionate share of total net assets of the Fund. Class specific expenses are charged directly to the Class incurring the expense. Common
24
Notes to Financial Statements (Continued)
expenses, which are not attributable to a specific Class, are allocated daily to each Class of shares based upon their proportionate share of total net assets of the Fund. Expenses not directly billed to a Fund are allocated proportionally among all Funds daily in relation to net assets of each Fund or another reasonable measure.
Security transactions — Security transactions are accounted for on the trade date. Securities sold are determined on a specific identification basis.
Estimates — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
3. Federal Tax Information
It is each Fund's policy to continue to comply with the special provisions of the Internal Revenue Code applicable to regulated investment companies. As provided therein, in any fiscal year in which a Fund so qualifies and distributes at least 90% of its taxable net income, the Fund (but not the shareholders) will be relieved of federal income tax on the income distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated investment companies, it is also each Fund's intention to declare and pay as dividends in each calendar year at least 98% of its net investment income (earned during the calendar year) and 98% of its net realized capital gains (earned during the twelve months ending October 31) plus undistributed amounts from prior years.
The tax character of distributions paid for the years ended March 31, 2010 and 2009 was as follows:
Diversified Small Cap Growth Fund | Growth Opportunities Fund | Large Cap Core Equity Fund | |||||||||||||||||||||||||
Year Ended March 31, 2010 | Year Ended March 31, 2009 | Year Ended March 31, 2010 | Year Ended March 31, 2009 | Year Ended March 31, 2010 | Year Ended March 31, 2009 | ||||||||||||||||||||||
From ordinary income | $ | — | $ | — | $ | — | $ | — | $ | 263,434 | $ | 850,456 | |||||||||||||||
From long-term capital gains | — | — | — | — | — | 4,426,626 | |||||||||||||||||||||
$ | — | $ | — | $ | — | $ | — | $ | 263,434 | $ | 5,277,082 |
Large Cap Growth Fund | Mid Cap Growth Fund | ||||||||||||||||||
Year Ended March 31, 2010 | Year Ended March 31, 2009 | Year Ended March 31, 2010 | Year Ended March 31, 2009 | ||||||||||||||||
From ordinary income | $ | 2,186,079 | $ | 1,128,574 | $ | — | $ | — | |||||||||||
From long-term capital gains | — | — | — | 11,814,206 | |||||||||||||||
From tax return of capital | 500,658 | — | — | — | |||||||||||||||
$ | 2,686,737 | $ | 1,128,574 | $ | — | $ | 11,814,206 |
25
Notes to Financial Statements (Continued)
The following information is computed on a tax basis for each item as of March 31, 2010:
Diversified Small Cap Growth Fund | Growth Opportunities Fund | Large Cap Core Equity Fund | |||||||||||||
Tax cost of portfolio of investments | $ | 40,587,652 | $ | 65,696,671 | $ | 55,133,120 | |||||||||
Gross unrealized appreciation | 5,201,095 | 6,283,822 | 3,905,705 | ||||||||||||
Gross unrealized depreciation | (973,402 | ) | (1,077,160 | ) | (1,374,404 | ) | |||||||||
Net unrealized appreciation (depreciation) | 4,227,693 | 5,206,662 | 2,531,301 | ||||||||||||
Undistributed ordinary income | 1 | — | 522,174 | ||||||||||||
Capital loss carryforward | (20,995,910 | ) | (44,860,643 | ) | (10,096,769 | ) | |||||||||
Post-October losses | (445,502 | ) | — | (150,498 | ) | ||||||||||
Accumulated defcit | $ | (17,213,718 | ) | $ | (39,653,981 | ) | $ | (7,193,792 | ) |
Large Cap Growth Fund | Mid Cap Growth Fund | ||||||||||
Tax cost of portfolio of investments | $ | 804,613,220 | $ | 872,795,379 | |||||||
Gross unrealized appreciation | 201,801,062 | 151,825,869 | |||||||||
Gross unrealized depreciation | (6,514,295 | ) | (20,394,234 | ) | |||||||
Net unrealized appreciation (depreciation) | 195,286,767 | 131,431,635 | |||||||||
Undistributed ordinary income | (1 | ) | — | ||||||||
Capital loss carryforward | (338,079,373 | ) | (131,553,464 | ) | |||||||
Post-October losses | — | — | |||||||||
Accumulated defcit | $ | (142,792,607 | ) | $ | (121,829 | ) |
The difference between the tax cost of portfolio investments and the financial statement cost is primarily due to wash sales.
As of March 31, 2010, the Funds had the following capital loss carryforwards for federal income tax purposes.
Fund | Amount | Expires March 31, | |||||||||
Diversified Small Cap Growth Fund | $ | 11,436,443 | 2014 | ||||||||
3,627,106 | 2017 | ||||||||||
5,932,361 | 2018 | ||||||||||
$ | 20,995,910 | ||||||||||
Growth Opportunities Fund | $ | 21,887,780 | 2011 | ||||||||
17,098,132 | 2012 | ||||||||||
1,976,702 | 2013 | ||||||||||
3,131,509 | 2017 | ||||||||||
766,520 | 2018 | ||||||||||
$ | 44,860,643 | ||||||||||
Large Cap Core Equity Fund | $ | 1,053,666 | 2017 | ||||||||
9,043,103 | 2018 | ||||||||||
$ | 10,096,769 |
26
Notes to Financial Statements (Continued)
Fund | Amount | Expires March 31, | |||||||||
Large Cap Growth Fund | $ | 26,177,120 | 2015 | ||||||||
41,526,594 | 2017 | ||||||||||
270,375,659 | 2018 | ||||||||||
$ | 338,079,373 | ||||||||||
Mid Cap Growth Fund | $ | 55,424,720 | 2017 | ||||||||
76,128,744 | 2018 | ||||||||||
$ | 131,553,464 |
The capital loss carryforwards and Post-October losses may be utilized in future years to offset net realized capital gains, if any, prior to distributing such gains to shareholders.
Certain reclassifications, the result of permanent differences between financial statement and income tax reporting requirements have been made to the components of capital. These reclassifications have no impact on the net assets or net asset value per share of the Funds and are designed to present the Fund's capital accounts on a tax basis. The following reclassifications of net investment loss have been made to the following Funds for the year ended March 31, 2010:
Paid-In Capital | Accumulated Net Investment Income | Accumulated Net Realized Gains | |||||||||||||
Diversified Small Cap Growth Fund | $ | (255,757 | ) | $ | 255,757 | $ | — | ||||||||
Growth Opportunities Fund | $ | (114,116 | ) | $ | 114,116 | $ | — | ||||||||
Large Cap Core Equity Fund | $ | — | $ | — | $ | — | |||||||||
Large Cap Growth Fund | $ | (3,026,486 | ) | $ | 3,026,486 | $ | — | ||||||||
Mid Cap Growth Fund | $ | (2,845,214 | ) | $ | 2,845,214 | $ | — |
For the six months ended September 30, 2010, the Trust had the following federal tax cost resulting in net unrealized appreciation (depreciation) as follows:
Federal Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||||||
Diversified Small Cap Growth Fund | $ | 31,751,777 | $ | 4,385,149 | $ | (859,262 | ) | $ | 3,525,887 | ||||||||||
Growth Opportunities Fund | $ | 82,769,192 | $ | 7,620,841 | $ | (1,478,975 | ) | $ | 6,141,866 | ||||||||||
Large Cap Core Equity Fund | $ | 47,976,505 | $ | 4,423,430 | $ | (1,527,005 | ) | $ | 2,896,425 | ||||||||||
Large Cap Growth Fund | $ | 585,807,556 | $ | 178,011,588 | $ | (8,914,670 | ) | $ | 169,096,918 | ||||||||||
Mid Cap Growth Fund | $ | 728,012,598 | $ | 124,839,742 | $ | (19,979,946 | ) | $ | 104,859,796 |
The Funds have analyzed their tax positions taken on Federal income tax returns for all open tax years (tax years ended March 31, 2007 through 2010) and have concluded that no provision for income tax is required in their financial statements.
27
Notes to Financial Statements (Continued)
4. Investment Transactions
Investment transactions (excluding short-term investments and U.S. Government securities) were as follows for the six months ended September 30 2010:
Diversified Small Cap Growth Fund | Growth Opportunities Fund | Large Cap Core Equity Fund | |||||||||||||
Purchases of investment securities | $ | 11,530,117 | $ | 53,939,822 | $ | 6,774,082 | |||||||||
Proceeds from sales and maturities | $ | 18,253,165 | $ | 36,195,140 | $ | 8,873,067 |
Large Cap Growth Fund | Mid Cap Growth Fund | ||||||||||
Purchases of investment securities | $ | 312,489,347 | $ | 254,841,878 | |||||||
Proceeds from sales and maturities | $ | 480,583,109 | $ | 333,365,977 |
5. Transactions with Affiliates
Certain officers of the Trust are also officers of the Advisor (Touchstone Advisors, Inc.), the Underwriter (Touchstone Securities, Inc.), and/or JPMorgan Chase Bank, N.A. (JPMorgan) the Sub-Administrator and Transfer Agent to the Funds. The Advisor and Underwriter are each wholly owned indirect subsidiaries of The Western and Southern Life Insurance Company (Western-Southern).
MANAGEMENT AGREEMENTS
The Advisor provides general investment supervisory services for the Funds, under the terms of an Advisory Agreement. Under the Advisory Agreement, the Funds pay the Advisor a fee, which is computed and accrued daily and paid monthly, at an annual rate based on average daily net assets as follows:
Diversified Small Cap Growth Fund | 1.05% | ||||||
Growth Opportunities Fund | 0.83% on the first $500 million 0.80% on the next $500 million 0.75% of such assets in excess of $1 billion | ||||||
Large Cap Core Equity Fund | 0.65% on the first $100 million 0.60% on the next $100 million 0.55% on the next $100 million 0.50% of such assets in excess of $300 million | ||||||
Large Cap Growth Fund | 0.75% on the first $200 million 0.70% on the next $800 million 0.65% of such assets in excess of $1 billion | ||||||
Mid Cap Growth Fund | 0.80% | ||||||
The Advisor has retained various Sub-Advisors to manage the investments of the Funds under the terms of a Sub-Advisory Agreement. The Advisor (not the Funds) pays the Sub-Advisors a fee for these services.
Fort Washington Investment Advisors, Inc., an affiliate of the Advisor, has been retained by the Advisor to manage the investments of the Diversified Small Cap Growth Fund.
Westfield Capital Management Company, LP has been retained by the Advisor to manage the investments of the Growth Opportunities Fund and a portion of the investments of the Mid Cap Growth Fund.
28
Notes to Financial Statements (Continued)
Todd/Veredus Asset Management, LLC has been retained by the Advisor to manage the investments of the Large Cap Core Equity Fund.
Navellier & Associates, Inc. has been retained by the Advisor to manage the investments of the Large Cap Growth Fund.
TCW Investment Management Company has been retained by the Advisor to manage a portion of the investments of the Mid Cap Growth Fund.
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
The Advisor entered into an Administration and Accounting Services Agreement with the Trust, whereby the Advisor is responsible for supplying executive and regulatory compliance services, supervising the preparation of tax returns, coordinating the preparation of reports to shareholders and reports to, and filings with, the Securities and Exchange Commission and state securities authorities, preparing materials for meetings of the Board of Trustees, calculating the daily net asset value per share and maintaining the financial books and records of each Fund. For its services, the Advisor receives an annual fee of 0.20% of the aggregate average daily net assets of the Trust, Touchstone Funds Group Trust, Touchstone Investment Trust (excluding Institutional Money Market Fund), and Touchstone Tax-Free Trust up to and including $6 billion; 0.16% of the next $4 billion of aggregate average daily net assets; and 0.12% of the aggregate average daily net assets of all such assets in excess of $10 billion. The fee is allocated among the Funds on the basis of relative daily net assets.
The Advisor has engaged JPMorgan as the Sub-Administrator to the Trust. JPMorgan provides administrative and accounting services to the Trust and is compensated directly by the Advisor, not the Trust.
EXPENSE LIMITATION AGREEMENT
The Trust and the Advisor have entered into an Expense Limitation Agreement to contractually limit operating expenses of the Funds. The maximum operating expense limit in any year with respect to the Funds is based on a percentage of the average daily net assets of the Funds. The Advisor has agreed to waive advisory fees and reimburse expenses in order to maintain expense limitations for the Funds as follows through at least July 28, 2011:
Class A | Class B | Class C | Class Y | Institutional Class | |||||||||||||||||||
Diversified Small Cap Growth Fund | 1.40 | % | — | 2.15 | % | 1.15 | % | — | |||||||||||||||
Growth Opportunities Fund* | 1.15 | % | — | 1.90 | % | 0.90 | % | 0.75 | % | ||||||||||||||
Large Cap Core Equity Fund | 1.15 | % | — | 1.90 | % | — | — | ||||||||||||||||
Large Cap Growth Fund | 1.25 | % | 2.00 | % | 2.00 | % | 0.99 | % | — | ||||||||||||||
Mid Cap Growth Fund | 1.50 | % | 2.25 | % | 2.25 | % | 1.25 | % | — |
* Prior to July 28, 2010, the expense limitations for Class A, Class C, Class Y, and Institutional Class shares of Growth Opportunities Fund were 1.24%, 1.99%, 0.99%, and 0.84%, respectively.
For the six months ended September 30 2010, the Advisor waived investment advisory fees, administration fees, and/or reimbursed expenses as follows:
Investment Advisory Fees Waived | Administration Fees Waived | Other Operating Expenses Reimbursed | |||||||||||||
Diversified Small Cap Growth Fund | $ | 36,699 | $ | 33,768 | $ | 26,453 | |||||||||
Growth Opportunities Fund | $ | 8,210 | $ | 70,564 | $ | 78,455 | |||||||||
Large Cap Core Equity Fund | $ | — | $ | 49,817 | $ | 7,197 | |||||||||
Large Cap Growth Fund | $ | — | $ | 508,983 | $ | — | |||||||||
Mid Cap Growth Fund | $ | — | $ | 21,829 | $ | — |
29
Notes to Financial Statements (Continued)
TRANSFER AGENT AGREEMENT
Under the terms of the Transfer Agent Agreement between the Trust and JPMorgan, JPMorgan maintains the records of each shareholder's account, answers shareholders' inquiries concerning their accounts, processes purchases and redemptions of each Fund's shares, acts as dividend and distribution disbursing agent and performs other shareholder service functions. For these services, JPMorgan receives a monthly fee per shareholder account from each Fund. In addition, each Fund pays JPMorgan out-of-pocket expenses including, but not limited to, postage and supplies.
For the six months ended September 30 2010, the following Funds reimbursed the Advisor for amounts paid to third parties that provide sub-transfer agency and other administrative services to the Funds. These amounts are included in transfer agent fees on the Statements of Operations:
Amount | |||||||
Diversified Small Cap Growth Fund | $ | 4,145 | |||||
Growth Opportunities Fund | $ | 3,654 | |||||
Large Cap Core Equity Fund | $ | 1,370 | |||||
Large Cap Growth Fund | $ | 265,018 | |||||
Mid Cap Growth Fund | $ | 188,093 |
UNDERWRITING AGREEMENT
The Underwriter is the Funds' principal underwriter and, as such, acts as the exclusive agent for distribution of the Funds' shares. Under the terms of the Underwriting Agreement between the Trust and Underwriter, the Underwriter earned the following from underwriting and broker commissions on the sale of shares of the following Funds for the six months ended September 30 2010:
Amount | |||||||
Diversified Small Cap Growth Fund | $ | 476 | |||||
Growth Opportunities Fund | $ | 1,701 | |||||
Large Cap Core Equity Fund | $ | 785 | |||||
Large Cap Growth Fund | $ | 12,436 | |||||
Mid Cap Growth Fund | $ | 21,259 |
In addition, the Underwriter collected the following contingent deferred sales charges on the redemption of Class B and Class C shares of the following Funds during the six months ended September 30 2010:
Amount | |||||||
Diversified Small Cap Growth Fund | $ | — | |||||
Growth Opportunities Fund | $ | 96 | |||||
Large Cap Core Equity Fund | $ | 53 | |||||
Large Cap Growth Fund | $ | 13,836 | |||||
Mid Cap Growth Fund | $ | 12,573 |
PLANS OF DISTRIBUTION
The Trust has a Plan of Distribution (Class A Plan) under which Class A shares of each Fund may directly incur or reimburse the Advisor or the Underwriter for expenses related to the distribution and promotion of shares. The annual limitation for payment of such expenses under the Class A Plan is 0.25% of average daily net assets attributable to such shares.
30
Notes to Financial Statements (Continued)
The Trust also has a Plan of Distribution (Class B and Class C Plan) under which Class B and Class C shares of each Fund may directly incur or reimburse the Advisor or the Underwriter for expenses related to the distribution and promotion of shares. The annual limitation for payment of such expenses under the Class B and Class C Plan is 1.00% of average daily net assets attributable to Class B and Class C shares.
COMPLIANCE SERVICES AGREEMENT
Under the terms of the Compliance Services Agreement between the Trust and JPMorgan, JPMorgan provides certain compliance services to the Trust and provides administrative support services to the Funds' Compliance Program and Chief Compliance Officer. For these services, JPMorgan receives a quarterly fee from each Fund.
AFFILIATED INVESTMENTS
Each Fund may invest in the Touchstone Institutional Money Market Fund, subject to compliance with the several conditions set forth in an order received by the Trust from the Securities and Exchange Commission. To the extent that the other Touchstone Funds are invested in the Touchstone Institutional Money Market Fund, the Advisor and Administrator will be paid additional fees from the Touchstone Institutional Money Market Fund that will not be waived or reimbursed.
A summary of each Fund's investment in the Touchstone Institutional Money Market Fund, for the six months ended September 30 2010, is noted below:
Share Activity | |||||||||||||||||||||||||||
Balance 03/31/10 | Purchases | Sales | Balance 09/30/10 | Dividends | Value 09/30/10 | ||||||||||||||||||||||
Diversified Small Cap Growth Fund | 552,905 | 4,675,325 | (5,228,230 | ) | — | $ | 661 | $ | — | ||||||||||||||||||
Growth Opportunities Fund | 3,037,764 | 31,683,500 | (32,043,001 | ) | 2,678,263 | $ | 2,557 | $ | 2,678,263 | ||||||||||||||||||
Large Cap Core Equity Fund | 1,091,219 | 5,432,508 | (5,795,398 | ) | 728,329 | $ | 858 | $ | 728,329 | ||||||||||||||||||
Large Cap Growth Fund | 10,189,005 | 282,780,052 | (284,845,099 | ) | 8,123,958 | $ | 15,554 | $ | 8,123,958 | ||||||||||||||||||
Mid Cap Growth Fund | 167,739 | 164,901,879 | (153,751,853 | ) | 11,317,765 | $ | 12,097 | $ | 11,317,765 |
As of September 30, 2010, approximately 55% of the Large Cap Core Equity Fund was owned by Western-Southern and subsidiaries.
31
Notes to Financial Statements (Continued)
6. Capital Share Transactions
Proceeds and payments on capital shares as shown in the Statements of Changes in Net Assets are the result of the following capital share transactions for the periods shown:
Diversified Small Cap Growth Fund | Growth Opportunities Fund | ||||||||||||||||||
Six Months Ended September 30, 2010 (Unaudited) | Year Ended March 31, 2010 | Six Months Ended September 30, 2010 (Unaudited) | Year Ended March 31, 2010 | ||||||||||||||||
Class A | |||||||||||||||||||
Shares sold | 114,222 | 401,883 | 566,757 | 698,951 | |||||||||||||||
Shares redeemed | (244,918 | ) | (447,487 | ) | (155,145 | ) | (404,810 | ) | |||||||||||
Net increase (decrease) in shares outstanding | (130,696 | ) | (45,604 | ) | 411,612 | 294,141 | |||||||||||||
Shares outstanding, beginning of period | 1,398,646 | 1,444,250 | 1,541,640 | 1,247,499 | |||||||||||||||
Shares outstanding, end of period | 1,267,950 | 1,398,646 | 1,953,252 | 1,541,640 | |||||||||||||||
Class C | |||||||||||||||||||
Shares sold | 1,945 | 8,851 | 23,106 | 49,028 | |||||||||||||||
Shares redeemed | (47,876 | ) | (85,721 | ) | (50,636 | ) | (96,167 | ) | |||||||||||
Net decrease in shares outstanding | (45,931 | ) | (76,870 | ) | (27,530 | ) | (47,139 | ) | |||||||||||
Shares outstanding, beginning of period | 289,017 | 365,887 | 414,940 | 462,079 | |||||||||||||||
Shares outstanding, end of period | 243,086 | 289,017 | 387,410 | 414,940 | |||||||||||||||
Class Y | |||||||||||||||||||
Shares sold | 140,559 | 1,219,487 | 10,996 | 113,986 | |||||||||||||||
Shares redeemed | (799,805 | ) | (339,541 | ) | (16,525 | ) | (7,994 | ) | |||||||||||
Net increase (decrease) in shares outstanding | (659,246 | ) | 879,946 | (5,529 | ) | 105,992 | |||||||||||||
Shares outstanding, beginning of period | 2,277,339 | 1,397,393 | 106,166 | 174 | |||||||||||||||
Shares outstanding, end of period | 1,618,093 | 2,277,339 | 100,637 | 106,166 | |||||||||||||||
Institutional Class | |||||||||||||||||||
Shares sold | — | — | 623,630 | 1,104,600 | |||||||||||||||
Shares redeemed | — | — | (26,309 | ) | (65,305 | ) | |||||||||||||
Net increase in shares outstanding | — | — | 597,321 | 1,039,295 | |||||||||||||||
Shares outstanding, beginning of period | — | — | 1,039,469 | 174 | |||||||||||||||
Shares outstanding, end of period | — | — | 1,636,790 | 1,039,469 |
32
Notes to Financial Statements (Continued)
Large Cap Core Equity Fund | Large Cap Growth Fund | ||||||||||||||||||
Six Months Ended September 30, 2010 (Unaudited) | Year Ended March 31, 2010 | Six Months Ended September 30, 2010 (Unaudited) | Year Ended March 31, 2010 | ||||||||||||||||
Class A | |||||||||||||||||||
Shares sold | 108,351 | 382,755 | 886,903 | 3,067,281 | |||||||||||||||
Shares reinvested | — | 31,314 | — | 39,843 | |||||||||||||||
Shares redeemed | (389,992 | ) | (2,026,290 | ) | (3,600,459 | ) | (15,414,647 | ) | |||||||||||
Net decrease in shares outstanding | (281,641 | ) | (1,612,221 | ) | (2,713,556 | ) | (12,307,523 | ) | |||||||||||
Shares outstanding, beginning of period | 5,905,555 | 7,517,776 | 16,126,059 | 28,433,582 | |||||||||||||||
Shares outstanding, end of period | 5,623,914 | 5,905,555 | 13,412,503 | 16,126,059 | |||||||||||||||
Class B | |||||||||||||||||||
Shares sold | — | — | 514 | 787 | |||||||||||||||
Shares redeemed | — | — | (106,701 | ) | (250,663 | ) | |||||||||||||
Net decrease in shares outstanding | — | — | (106,187 | ) | (249,876 | ) | |||||||||||||
Shares outstanding, beginning of period | — | — | 747,573 | 997,449 | |||||||||||||||
Shares outstanding, end of period | — | — | 641,386 | 747,573 | |||||||||||||||
Class C | |||||||||||||||||||
Shares sold | 8,878 | 29,779 | 118,728 | 667,999 | |||||||||||||||
Shares redeemed | (65,720 | ) | (107,144 | ) | (1,233,126 | ) | (3,205,389 | ) | |||||||||||
Net decrease in shares outstanding | (56,842 | ) | (77,365 | ) | (1,114,398 | ) | (2,537,390 | ) | |||||||||||
Shares outstanding, beginning of period | 234,986 | 312,351 | 7,120,536 | 9,657,926 | |||||||||||||||
Shares outstanding, end of period | 178,144 | 234,986 | 6,006,138 | 7,120,536 | |||||||||||||||
Class Y | |||||||||||||||||||
Shares sold | — | — | 630,318 | 6,986,425 | |||||||||||||||
Shares reinvested | — | — | — | 81,995 | |||||||||||||||
Shares redeemed | — | — | (5,113,469 | ) | (4,083,242 | ) | |||||||||||||
Net increase (decrease) in shares outstanding | — | — | (4,483,151 | ) | 2,985,178 | ||||||||||||||
Shares outstanding, beginning of period | — | — | 16,892,638 | 13,907,460 | |||||||||||||||
Shares outstanding, end of period | — | — | 12,409,487 | 16,892,638 |
33
Notes to Financial Statements (Continued)
Mid Cap Growth Fund | |||||||||||
Six Months Ended September 30, 2010 (Unaudited) | Year Ended March 31, 2010 | ||||||||||
Class A | |||||||||||
Shares sold | 2,353,665 | 9,450,111 | |||||||||
Shares redeemed | (4,982,302 | ) | (11,246,950 | ) | |||||||
Net decrease in shares outstanding | (2,628,637 | ) | (1,796,839 | ) | |||||||
Shares outstanding, beginning of period | 28,910,441 | 30,707,280 | |||||||||
Shares outstanding, end of period | 26,281,804 | 28,910,441 | |||||||||
Class B | |||||||||||
Shares sold | 378 | 11,658 | |||||||||
Shares redeemed | (528,618 | ) | (770,301 | ) | |||||||
Net decrease in shares outstanding | (528,240 | ) | (758,643 | ) | |||||||
Shares outstanding, beginning of period | 1,929,330 | 2,687,973 | |||||||||
Shares outstanding, end of period | 1,401,090 | 1,929,330 | |||||||||
Class C | |||||||||||
Shares sold | 372,215 | 1,099,323 | |||||||||
Shares redeemed | (1,556,095 | ) | (2,694,366 | ) | |||||||
Net decrease in shares outstanding | (1,183,880 | ) | (1,595,043 | ) | |||||||
Shares outstanding, beginning of period | 12,849,080 | 14,444,123 | |||||||||
Shares outstanding, end of period | 11,665,200 | 12,849,080 | |||||||||
Class Y | |||||||||||
Shares sold | 266,557 | 1,818,788 | |||||||||
Shares redeemed | (397,654 | ) | (528,358 | ) | |||||||
Net increase (decrease) in shares outstanding | (131,097 | ) | 1,290,430 | ||||||||
Shares outstanding, beginning of period | 1,290,619 | 189 | |||||||||
Shares outstanding, end of period | 1,159,522 | 1,290,619 |
7. Commitments and Contingencies
The Funds indemnify the Trust's officers and Trustees for certain liabilities that might arise from their performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.
34
Notes to Financial Statements (Continued)
8. Subsequent Events
On October 8, 2010, a Special Meeting of Shareholders was held to approve or disapprove an Agreement and Plan of Reorganization providing for the transfer of all of assets and liabilities of the Large Cap Core Equity Fund to the Growth Opportunities Fund in exchange for shares of the Growth Opportunities Fund and the subsequent liquidation of the Large Cap Core Equity Fund. The Agreement and Plan of Reorganization was approved and the merger took place on October 24, 2010.
The merger was approved as follows:
Number of Votes | |||||||||||||||
For | Against | Abstain | |||||||||||||
Large Cap Core Equity Fund | 3,045,776 | 22,222 | 699,621 |
The following is a summary of shares outstanding, net assets, net asset value per share, unrealized appreciation (depreciation) and realized gain (loss) immediately before and after the reorganization:
Before Reorganization | After Reorganization | ||||||||||||||
Large Cap Core Equity Fund | Growth Opportunities Fund | Growth Opportunities Fund | |||||||||||||
Shares | 5,507,436 | 4,221,102 | 6,432,968 | ||||||||||||
Net Assets | $ | 47,429,798 | $ | 90,373,406 | $ | 137,803,204 | |||||||||
Net Asset Value | $ | 8.61 | $ | 21.41 | $ | 21.42 | |||||||||
Unrealized Appreciation (Depreciation) | $ | 5,752,014 | $ | 8,993,620 | $ | 14,745,634 | |||||||||
Accumulated Net Realized Gain (Loss) | $ | (19,856 | ) | $ | 133,833 | $ | 113,977 |
35
Portfolio of Investments
Touchstone Diversified Small Cap Growth Fund – September 30, 2010 (Unaudited)
Common Stocks — 99.9% | Shares | Market Value | |||||||||
Information Technology — 28.5% | |||||||||||
Ariba, Inc.* | 18,520 | $ | 350,028 | ||||||||
Atheros Communications, Inc.* | 9,852 | 259,600 | |||||||||
Avnet, Inc.* | 11,111 | 300,108 | |||||||||
Cavium Networks, Inc.* † | 5,197 | 149,466 | |||||||||
comScore, Inc.* | 15,184 | 357,128 | |||||||||
F5 Networks, Inc.* | 1,733 | 179,903 | |||||||||
Finisar Corp.* † | 29,656 | 557,236 | |||||||||
j2 Global Communications, Inc.* † | 11,335 | 269,660 | |||||||||
Mantech International Corp. - Class A* | 5,875 | 232,650 | |||||||||
MAXIMUS, Inc. | 3,865 | 238,007 | |||||||||
Mellanox Technologies Ltd.* † | 10,605 | 208,282 | |||||||||
MICROS Systems, Inc.* | 5,243 | 221,936 | |||||||||
Microsemi Corp.* † | 23,027 | 394,913 | |||||||||
Multi-Fineline Electronix, Inc.* | 7,915 | 174,051 | |||||||||
Netscout Systems, Inc.* | 19,634 | 402,693 | |||||||||
Nuance Communications, Inc.* | 11,027 | 172,462 | |||||||||
Oclaro, Inc.* | 5,280 | 84,533 | |||||||||
Oplink Communications, Inc.* | 17,266 | 342,557 | |||||||||
Parametric Technology Corp.* | 9,770 | 190,906 | |||||||||
Polycom, Inc.* | 6,425 | 175,274 | |||||||||
Progress Software Corp.* | 8,820 | 291,942 | |||||||||
RF Micro Devices, Inc.* | 19,421 | 119,245 | |||||||||
Riverbed Technology, Inc.* | 11,301 | 515,100 | |||||||||
Skyworks Solutions, Inc.* | 20,812 | 430,392 | |||||||||
Taleo Corp. - Class A* | 10,901 | 316,020 | |||||||||
Veeco Instruments, Inc.* † | 7,525 | 262,397 | |||||||||
VeriFone Holdings, Inc.* | 12,090 | 375,636 | |||||||||
Virtusa Corp.* | 16,871 | 163,480 | |||||||||
VistaPrint NV* † | 7,090 | 274,028 | |||||||||
Wright Express Corp.* | 5,234 | 186,906 | |||||||||
8,196,539 | |||||||||||
Health Care — 22.6% | |||||||||||
Acorda Therapeutics, Inc.* | 16,585 | 547,637 | |||||||||
Alexion Pharmaceuticals, Inc.* | 8,183 | 526,658 | |||||||||
Auxilium Pharmaceuticals, Inc.* † | 17,145 | 424,853 | |||||||||
BioMarin Pharmaceutical, Inc.* † | 22,491 | 502,674 | |||||||||
CryoLife, Inc.* | 31,995 | 194,210 | |||||||||
eResearchTechnology, Inc.* | 40,613 | 303,785 | |||||||||
Genomic Health, Inc.* † | 24,038 | 321,148 | |||||||||
HMS Holdings Corp.* | 5,240 | 308,845 | |||||||||
Inspire Pharmaceuticals, Inc.* | 78,739 | 468,497 | |||||||||
Insulet Corp.* † | 22,781 | 322,123 | |||||||||
NuVasive, Inc.* † | 7,255 | 254,941 | |||||||||
NxStage Medical, Inc.* | 20,809 | 397,452 | |||||||||
RTI Biologics, Inc.* | 76,200 | 200,406 | |||||||||
Salix Pharmaceuticals Ltd.* | 10,215 | 405,740 | |||||||||
SonoSite, Inc.* | 12,320 | 412,843 | |||||||||
Spectranetics Corp. (The)* | 49,695 | 269,347 | |||||||||
United Therapeutics Corp.* | 7,015 | 392,910 | |||||||||
Wright Medical Group, Inc.* | 16,635 | 239,710 | |||||||||
6,493,779 |
Shares | Market Value | ||||||||||
Consumer Discretionary — 20.9% | |||||||||||
99 Cents Only Stores* | 22,701 | $ | 428,595 | ||||||||
American Public Education, Inc.* | 5,218 | 171,463 | |||||||||
Big Lots, Inc.* | 12,713 | 422,707 | |||||||||
BJ's Restaurants, Inc.* † | 6,161 | 173,494 | |||||||||
Capella Education Co.* † | 4,052 | 314,516 | |||||||||
Cato Corp. (The) - Class A | 7,891 | 211,163 | |||||||||
Chico's FAS, Inc. | 26,390 | 277,623 | |||||||||
Chipotle Mexican Grill, Inc. - Class A* | 1,235 | 212,420 | |||||||||
Coinstar, Inc.* † | 7,303 | 313,956 | |||||||||
Deckers Outdoor Corp.* | 7,063 | 352,867 | |||||||||
DSW, Inc. - Class A* † | 12,405 | 356,024 | |||||||||
Fuel Systems Solutions, Inc.* † | 5,510 | 215,496 | |||||||||
hhgregg, Inc.* † | 13,520 | 334,755 | |||||||||
LKQ Corp.* | 14,780 | 307,424 | |||||||||
Morningstar, Inc.* | 5,155 | 229,707 | |||||||||
Netflix, Inc.* † | 2,248 | 364,536 | |||||||||
Panera Bread Co. - Class A* | 2,415 | 213,993 | |||||||||
PetMed Express, Inc. † | 19,423 | 339,903 | |||||||||
Steiner Leisure Ltd.* | 6,519 | 248,374 | |||||||||
Tractor Supply Co. | 7,317 | 290,192 | |||||||||
Tupperware Brands Corp. | 4,950 | 226,512 | |||||||||
6,005,720 | |||||||||||
Industrials — 12.4% | |||||||||||
American Science & Engineering, Inc. | 4,035 | 297,178 | |||||||||
Applied Industrial Technologies, Inc. | 7,975 | 244,035 | |||||||||
CLARCOR, Inc. | 10,010 | 386,686 | |||||||||
EnPro Industries, Inc.* | 6,079 | 190,151 | |||||||||
General Cable Corp.* | 6,140 | 166,517 | |||||||||
GrafTech International Ltd.* | 14,020 | 219,133 | |||||||||
Hexcel Corp.* | 6,630 | 117,948 | |||||||||
HUB Group, Inc. - Class A* | 7,074 | 206,985 | |||||||||
Kforce, Inc.* | 14,536 | 199,434 | |||||||||
LaBarge, Inc.* | 11,633 | 145,296 | |||||||||
Landstar System, Inc. | 5,630 | 217,431 | |||||||||
Rollins, Inc. | 8,395 | 196,275 | |||||||||
Sykes Enterprises, Inc.* | 5,473 | 74,323 | |||||||||
Toro Co. | 4,640 | 260,907 | |||||||||
Wabtec Corp. | 5,313 | 253,908 | |||||||||
Woodward Governor Co. | 12,052 | 390,726 | |||||||||
3,566,933 | |||||||||||
Financials — 7.2% | |||||||||||
Cash America International, Inc. | 8,120 | 284,200 | |||||||||
Encore Capital Group, Inc.* | 15,318 | 276,030 | |||||||||
Ezcorp, Inc. - Class A* | 23,815 | 477,253 | |||||||||
First Cash Financial Services, Inc.* | 15,190 | 421,522 | |||||||||
Portfolio Recovery Associates, Inc.* † | 6,469 | 418,221 | |||||||||
World Acceptance Corp.* † | 4,725 | 208,656 | |||||||||
2,085,882 | |||||||||||
Energy — 4.6% | |||||||||||
Brigham Exploration Co.* | 7,975 | 149,531 | |||||||||
CARBO Ceramics, Inc. | 2,681 | 217,161 |
36
Touchstone Diversified Small Cap Growth Fund (Continued)
Common Stocks — 99.9% (Continued) | Shares | Market Value | |||||||||
Dril-Quip, Inc.* | 1,150 | $ | 71,427 | ||||||||
Lufkin Industries, Inc. | 6,060 | 266,034 | |||||||||
Natural Gas Services Group, Inc.* | 6,241 | 92,180 | |||||||||
T-3 Energy Services, Inc.* | 7,825 | 204,624 | |||||||||
World Fuel Services Corp. | 12,729 | 331,081 | |||||||||
1,332,038 | |||||||||||
Materials — 2.5% | |||||||||||
Balchem Corp. | 7,607 | 234,752 | |||||||||
LSB Industries, Inc.* | 9,679 | 179,739 | |||||||||
Rock-Tenn Co. - Class A | 2,545 | 126,766 | |||||||||
Worthington Industries, Inc. | 12,385 | 186,147 | |||||||||
727,404 | |||||||||||
Telecommunication Services — 1.2% | |||||||||||
Syniverse Holdings, Inc.* | 14,770 | 334,836 | |||||||||
Total Common Stocks | $ | 28,743,131 | |||||||||
Investment Fund — 22.7% | |||||||||||
Invesco Liquid Assets Portfolio ** | 6,534,533 | 6,534,533 | |||||||||
Total Investment Securities — 122.6% (Cost $30,893,871) | $ | 35,277,664 | |||||||||
Liabilities in Excess of Other Assets — (22.6%) | (6,505,600 | ) | |||||||||
Net Assets — 100.0% | $ | 28,772,064 |
* Non-income producing security.
† All or a portion of the security is on loan. The total value of the securities on loan as of September 30, 2010, was $6,323,679.
** Represents collateral for securities loaned.
Other Information:
The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the security valuation section in the accompanying notes to financial statements.
Valuation Inputs at Reporting Date:
Description | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
Common Stocks | $ | 28,743,131 | $ | — | $ | — | $ | 28,743,131 | |||||||||||
Investment Funds | 6,534,533 | — | — | 6,534,533 | |||||||||||||||
$ | 35,277,664 |
See accompanying notes to financial statements.
37
Portfolio of Investments
Touchstone Growth Opportunities Fund – September 30, 2010 (Unaudited)
Common Stocks — 96.8% | Shares | Market Value | |||||||||
Information Technology — 34.4% | |||||||||||
Adobe Systems, Inc.* | 35,800 | $ | 936,170 | ||||||||
Akamai Technologies, Inc.* | 26,950 | 1,352,351 | |||||||||
Alliance Data Systems Corp.* † | 23,450 | 1,530,347 | |||||||||
Apple, Inc.* | 12,340 | 3,501,475 | |||||||||
Atmel Corp.* | 201,500 | 1,603,940 | |||||||||
Autodesk, Inc.* | 55,300 | 1,767,941 | |||||||||
Cadence Design Systems, Inc.* | 170,350 | 1,299,770 | |||||||||
Cavium Networks, Inc.* | 29,850 | 858,486 | |||||||||
Cisco Systems, Inc.* | 73,800 | 1,616,220 | |||||||||
EMC Corp.* | 58,200 | 1,182,042 | |||||||||
EZchip Semiconductor Ltd.* | 32,499 | 820,600 | |||||||||
Google, Inc. - Class A* | 4,820 | 2,534,308 | |||||||||
Longtop Financial Technologies Ltd. ADR* | 32,400 | 1,274,940 | |||||||||
LSI Corp.* | 185,277 | 844,863 | |||||||||
NICE Systems Ltd. ADR* | 55,397 | 1,733,372 | |||||||||
Nuance Communications, Inc.* | 90,800 | 1,420,112 | |||||||||
Oracle Corp. | 93,000 | 2,497,050 | |||||||||
QUALCOMM, Inc. | 50,000 | 2,256,000 | |||||||||
29,029,987 | |||||||||||
Health Care — 19.2% | |||||||||||
Acorda Therapeutics, Inc.* | 51,900 | 1,713,738 | |||||||||
Celgene Corp.* | 45,975 | 2,648,620 | |||||||||
Covidien PLC | 36,200 | 1,454,878 | |||||||||
Gilead Sciences, Inc.* | 59,600 | 2,122,356 | |||||||||
Life Technologies Corp.* | 32,600 | 1,522,094 | |||||||||
Santarus, Inc.* | 130,600 | 393,106 | |||||||||
Shire PLC ADR | 27,650 | 1,860,292 | |||||||||
United Therapeutics Corp.* | 22,700 | 1,271,427 | |||||||||
Vertex Pharmaceuticals, Inc.* † | 38,300 | 1,324,031 | |||||||||
Warner Chilcott PLC - Class A | 83,050 | 1,863,642 | |||||||||
16,174,184 | |||||||||||
Industrials — 15.1% | |||||||||||
AMETEK, Inc. | 38,350 | 1,831,980 | |||||||||
BE Aerospace, Inc.* | 55,300 | 1,676,143 | |||||||||
Cooper Industries PLC | 33,400 | 1,634,262 | |||||||||
Dover Corp. | 38,300 | 1,999,643 | |||||||||
FedEx Corp. | 28,660 | 2,450,430 | |||||||||
Goodrich Corp. | 19,850 | 1,463,540 | |||||||||
IDEX Corp. | 49,000 | 1,739,990 | |||||||||
12,795,988 | |||||||||||
Consumer Discretionary — 9.2% | |||||||||||
Bed Bath & Beyond, Inc.* | 29,800 | 1,293,618 | |||||||||
Netflix, Inc.* † | 9,330 | 1,512,952 | |||||||||
NIKE, Inc. - Class B | 21,300 | 1,706,982 | |||||||||
Target Corp. | 26,950 | 1,440,208 | |||||||||
Tenneco, Inc.* | 62,406 | 1,807,902 | |||||||||
7,761,662 |
Shares | Market Value | ||||||||||
Energy — 8.6% | |||||||||||
CONSOL Energy, Inc. | 36,900 | $ | 1,363,824 | ||||||||
Ensco PLC ADR | 38,350 | 1,715,396 | |||||||||
Massey Energy Co. | 64,600 | 2,003,892 | |||||||||
National-Oilwell Varco, Inc. | 48,250 | 2,145,677 | |||||||||
7,228,789 | |||||||||||
Consumer Staples — 4.4% | |||||||||||
PepsiCo, Inc. | 30,800 | 2,046,352 | |||||||||
Ralcorp Holdings, Inc.* | 29,100 | 1,701,768 | |||||||||
3,748,120 | |||||||||||
Materials — 4.3% | |||||||||||
Air Products & Chemicals, Inc. | 21,550 | 1,784,771 | |||||||||
Celanese Corp. | 57,450 | 1,844,145 | |||||||||
3,628,916 | |||||||||||
Financials — 1.6% | |||||||||||
Waddell & Reed Financial, Inc. - Class A | 51,050 | 1,396,728 | |||||||||
Total Common Stocks | $ | 81,764,374 | |||||||||
Investment Funds — 8.5% | |||||||||||
Invesco Liquid Assets Portfolio ** | 4,468,421 | 4,468,421 | |||||||||
Touchstone Institutional Money Market Fund^ | 2,678,263 | 2,678,263 | |||||||||
Total Investment Funds | $ | 7,146,684 | |||||||||
Total Investment Securities — 105.3% (Cost $82,612,584) | $ | 88,911,058 | |||||||||
Liabilities in Excess of Other Assets — (5.3%) | (4,478,833 | ) | |||||||||
Net Assets — 100.0% | $ | 84,432,225 |
* Non-income producing security.
† All or a portion of the security is on loan. The total value of the securities on loan as of September 30, 2010, was $4,264,426.
** Represents collateral for securities loaned.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc. See Note 5.
Portfolio Abbreviations:
ADR – American Depositary Receipt
PLC – Public Limited Company
38
Touchstone Growth Opportunities Fund (Continued)
Other Information:
The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the security valuation section in the accompanying notes to financial statements.
Valuation Inputs at Reporting Date:
Description | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
Common Stocks | $ | 81,764,374 | $ | — | $ | — | $ | 81,764,374 | |||||||||||
Investment Funds | 7,146,684 | — | — | 7,146,684 | |||||||||||||||
$ | 88,911,058 |
See accompanying notes to financial statements.
39
Portfolio of Investments
Touchstone Large Cap Core Equity Fund – September 30, 2010 (Unaudited)
Common Stocks — 98.7% | Shares | Market Value | |||||||||
Information Technology — 22.6% | |||||||||||
Cisco Systems, Inc.* | 44,728 | $ | 979,543 | ||||||||
Fiserv, Inc.* | 9,620 | 517,749 | |||||||||
Google, Inc. - Class A* | 1,950 | 1,025,291 | |||||||||
Hewlett-Packard Co. | 23,943 | 1,007,282 | |||||||||
Intel Corp. | 51,719 | 994,556 | |||||||||
International Business Machines Corp. | 7,600 | 1,019,464 | |||||||||
Microsoft Corp. | 36,531 | 894,644 | |||||||||
Oracle Corp. | 54,485 | 1,462,922 | |||||||||
QUALCOMM, Inc. | 25,779 | 1,163,149 | |||||||||
Tyco Electronics Ltd. | 36,915 | 1,078,656 | |||||||||
Western Digital Corp.* | 19,820 | 562,690 | |||||||||
Xilinx, Inc. | 19,190 | 510,646 | |||||||||
11,216,592 | |||||||||||
Consumer Discretionary — 14.9% | |||||||||||
Best Buy Co., Inc. | 21,189 | 865,147 | |||||||||
Dollar Tree, Inc.* | 19,845 | 967,642 | |||||||||
Genuine Parts Co. | 11,900 | 530,621 | |||||||||
Home Depot, Inc. | 15,360 | 486,605 | |||||||||
Honda Motor Co. Ltd. ADR | 22,540 | 802,199 | |||||||||
McDonald's Corp. | 12,600 | 938,826 | |||||||||
Ross Stores, Inc. | 27,240 | 1,487,849 | |||||||||
Target Corp. | 24,476 | 1,307,997 | |||||||||
7,386,886 | |||||||||||
Financials — 13.7% | |||||||||||
Aflac, Inc. | 27,668 | 1,430,712 | |||||||||
Allstate Corp. | 29,566 | 932,807 | |||||||||
American Express Co. | 24,418 | 1,026,289 | |||||||||
MetLife, Inc. | 22,100 | 849,745 | |||||||||
Morgan Stanley | 34,279 | 846,006 | |||||||||
NYSE Euronext | 31,630 | 903,669 | |||||||||
State Street Corp. | 21,140 | 796,132 | |||||||||
6,785,360 | |||||||||||
Industrials — 13.0% | |||||||||||
Danaher Corp. | 19,130 | 776,869 | |||||||||
Eaton Corp. | 6,260 | 516,387 | |||||||||
Emerson Electric Co. | 16,482 | 867,942 | |||||||||
Honeywell International, Inc. | 11,226 | 493,271 | |||||||||
Illinois Tool Works, Inc. | 20,549 | 966,214 | |||||||||
Union Pacific Corp. | 15,868 | 1,298,003 | |||||||||
United Technologies Corp. | 21,147 | 1,506,301 | |||||||||
6,424,987 | |||||||||||
Health Care — 10.2% | |||||||||||
Bristol-Myers Squibb Co. | 25,840 | 700,522 | |||||||||
Johnson & Johnson | 7,817 | 484,341 | |||||||||
Laboratory Corp. of America Holdings* | 6,353 | 498,266 | |||||||||
McKesson Corp. | 15,831 | 978,039 | |||||||||
Merck & Co., Inc. | 13,261 | 488,137 | |||||||||
Novartis AG ADR † | 21,422 | 1,235,407 | |||||||||
Teva Pharmaceutical Industries Ltd. ADR | 12,770 | 673,618 | |||||||||
5,058,330 |
Shares | Market Value | ||||||||||
Energy — 9.2% | |||||||||||
Chesapeake Energy Corp. | 32,580 | $ | 737,937 | ||||||||
Chevron Corp. | 15,131 | 1,226,367 | |||||||||
Ensco PLC ADR | 20,052 | 896,926 | |||||||||
Marathon Oil Corp. | 24,427 | 808,534 | |||||||||
Pride International, Inc.* | 30,170 | 887,903 | |||||||||
4,557,667 | |||||||||||
Consumer Staples — 7.5% | |||||||||||
Altria Group, Inc. | 32,465 | 779,810 | |||||||||
Kimberly-Clark Corp. | 7,901 | 513,960 | |||||||||
PepsiCo, Inc. | 14,280 | 948,763 | |||||||||
Philip Morris International, Inc. | 26,348 | 1,476,015 | |||||||||
3,718,548 | |||||||||||
Materials — 3.5% | |||||||||||
BHP Billiton Ltd. ADR † | 6,710 | 512,107 | |||||||||
Praxair, Inc. | 13,212 | 1,192,515 | |||||||||
1,704,622 | |||||||||||
Utilities — 2.5% | |||||||||||
Dominion Resources, Inc. | 27,854 | 1,216,106 | �� | ||||||||
Telecommunication Services — 1.6% | |||||||||||
AT&T, Inc. | 28,149 | 805,061 | |||||||||
Total Common Stocks | $ | 48,874,159 | |||||||||
Investment Funds — 4.0% | |||||||||||
Invesco Liquid Assets Portfolio ** | 1,270,442 | 1,270,442 | |||||||||
Touchstone Institutional Money Market Fund^ | 728,329 | 728,329 | |||||||||
Total Investment Funds | $ | 1,998,771 | |||||||||
Total Investment Securities — 102.7% (Cost $46,544,335) | $ | 50,872,930 | |||||||||
Liabilities in Excess of Other Assets — (2.7%) | (1,330,498 | ) | |||||||||
Net Assets — 100.0% | $ | 49,542,432 |
* Non-income producing security.
† All or a portion of the security is on loan. The total value of the securities on loan as of September 30, 2010, was $1,238,099.
** Represents collateral for securities loaned.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc. See Note 5.
Portfolio Abbreviations:
ADR – American Depositary Receipt
PLC – Public Limited Company
40
Touchstone Large Cap Core Equity Fund (Continued)
Other Information:
The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the security valuation section in the accompanying notes to financial statements.
Valuation Inputs at Reporting Date:
Description | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
Common Stocks | $ | 48,874,159 | $ | — | $ | — | $ | 48,874,159 | |||||||||||
Investment Funds | 1,998,771 | — | — | 1,998,771 | |||||||||||||||
$ | 50,872,930 |
See accompanying notes to financial statements.
41
Portfolio of Investments
Touchstone Large Cap Growth Fund – September 30, 2010 (Unaudited)
Common Stocks — 99.1% | Shares | Market Value | |||||||||
Information Technology — 37.4% | |||||||||||
Akamai Technologies, Inc.* † | 267,500 | $ | 13,423,150 | ||||||||
Apple, Inc.* | 54,345 | 15,420,394 | |||||||||
Baidu, Inc. ADR* | 366,600 | 37,620,492 | |||||||||
Broadcom Corp. - Class A | 611,000 | 21,623,290 | |||||||||
Citrix Systems, Inc.* | 279,690 | 19,086,046 | |||||||||
Cognizant Technology Solutions Corp. - Class A* | 336,070 | 21,666,433 | |||||||||
F5 Networks, Inc.* | 207,040 | 21,492,822 | |||||||||
Infosys Technologies Ltd. ADR | 285,125 | 19,191,764 | |||||||||
International Business Machines Corp. | 145,940 | 19,576,392 | |||||||||
Marvell Technology Group Ltd.* | 794,283 | 13,907,895 | |||||||||
NetApp, Inc.* | 490,150 | 24,404,568 | |||||||||
Salesforce.com, Inc.* | 183,300 | 20,492,940 | |||||||||
SanDisk Corp.* | 319,100 | 11,695,015 | |||||||||
259,601,201 | |||||||||||
Consumer Discretionary — 21.5% | |||||||||||
Amazon.com, Inc.* | 86,907 | 13,649,613 | |||||||||
AutoZone, Inc.* | 74,670 | 17,092,710 | |||||||||
Chipotle Mexican Grill, Inc. - Class A* | 82,110 | 14,122,920 | |||||||||
DIRECTV Group, Inc. - Class A* | 437,895 | 18,229,569 | |||||||||
Family Dollar Stores, Inc. | 314,900 | 13,905,984 | |||||||||
Ford Motor Co.* † | 984,400 | 12,049,056 | |||||||||
Las Vegas Sands Corp.* † | 461,600 | 16,086,760 | |||||||||
McDonald's Corp. | 207,100 | 15,431,021 | |||||||||
Netflix, Inc.* † | 88,225 | 14,306,566 | |||||||||
TJX Cos., Inc. | 315,700 | 14,089,691 | |||||||||
148,963,890 | |||||||||||
Health Care — 13.3% | |||||||||||
Alcon, Inc. | 81,436 | 13,582,710 | |||||||||
AmerisourceBergen Corp. | 451,400 | 13,839,924 | |||||||||
Cerner Corp.* † | 156,100 | 13,110,839 | |||||||||
Edwards Lifesciences Corp.* | 179,900 | 12,062,295 | |||||||||
Express Scripts, Inc.* | 359,820 | 17,523,234 | |||||||||
Merck & Co., Inc. | 302,785 | 11,145,516 | |||||||||
Perrigo Co. | 166,300 | 10,679,786 | |||||||||
91,944,304 | |||||||||||
Consumer Staples — 11.4% | |||||||||||
Dr Pepper Snapple Group, Inc. | 465,000 | 16,516,800 | |||||||||
Estee Lauder Cos., Inc. (The) - Class A | 227,400 | 14,378,502 | |||||||||
General Mills, Inc. | 475,200 | 17,363,808 | |||||||||
Kellogg Co. | 319,100 | 16,117,741 | |||||||||
Mead Johnson Nutrition Co. - Class A | 264,800 | 15,069,768 | |||||||||
79,446,619 | |||||||||||
Materials — 8.9% | |||||||||||
Companhia Siderurgica Nacional SA ADR † | 879,800 | 15,546,066 | |||||||||
Lubrizol Corp. | 162,949 | 17,267,706 | |||||||||
Newmont Mining Corp. | 190,100 | 11,940,181 | |||||||||
Teck Resources Ltd. - Class B | 410,730 | 16,905,647 | |||||||||
61,659,600 |
Shares | Market Value | ||||||||||
Industrials — 6.6% | |||||||||||
Cummins, Inc. | 158,200 | $ | 14,329,756 | ||||||||
Deere & Co. | 192,100 | 13,404,738 | |||||||||
Precision Castparts Corp. | 142,600 | 18,160,110 | |||||||||
45,894,604 | |||||||||||
Total Common Stocks | $ | 687,510,218 | |||||||||
Investment Funds — 9.7% | |||||||||||
Invesco Liquid Assets Portfolio ** | 59,270,298 | 59,270,298 | |||||||||
Touchstone Institutional Money Market Fund^ | 8,123,958 | 8,123,958 | |||||||||
Total Investment Funds | $ | 67,394,256 | |||||||||
Total Investment Securities — 108.8% (Cost $584,518,185) | $ | 754,904,474 | |||||||||
Liabilities in Excess of Other Assets — (8.8%) | (61,332,751 | ) | |||||||||
Net Assets — 100.0% | $ | 693,571,723 |
† All or a portion of the security is on loan. The total value of the securities on loan as of September 30, 2010, was $57,841,373.
* Non-income producing security.
** Represents collateral for securities loaned.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc. See Note 5.
Portfolio Abbreviations:
ADR – American Depositary Receipt
Other Information:
The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the security valuation section in the accompanying notes to financial statements.
Valuation Inputs at Reporting Date:
Description | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
Common Stocks | $ | 687,510,218 | $ | — | $ | — | $ | 687,510,218 | |||||||||||
Investment Funds | 67,394,256 | — | — | 67,394,256 | |||||||||||||||
$ | 754,904,474 |
See accompanying notes to financial statements.
42
Portfolio of Investments
Touchstone Mid Cap Growth Fund – September 30, 2010 (Unaudited)
Common Stocks — 98.7% | Shares | Market Value | |||||||||
Information Technology — 19.8% | |||||||||||
Agilent Technologies, Inc.* | 132,400 | $ | 4,418,188 | ||||||||
Akamai Technologies, Inc.* | 146,842 | 7,368,532 | |||||||||
Alliance Data Systems Corp.* † | 127,300 | 8,307,598 | |||||||||
Atmel Corp.* | 1,162,756 | 9,255,538 | |||||||||
Autodesk, Inc.* | 306,050 | 9,784,418 | |||||||||
Avago Technologies Ltd.* | 216,425 | 4,871,727 | |||||||||
Avnet, Inc.* | 135,800 | 3,667,958 | |||||||||
BMC Software, Inc.* | 215,500 | 8,723,440 | |||||||||
Broadcom Corp. - Class A | 115,000 | 4,069,850 | |||||||||
Brocade Communications Systems, Inc.* | 1,473,700 | 8,606,408 | |||||||||
Ciena Corp.* † | 239,115 | 3,723,021 | |||||||||
Gartner, Inc.* | 274,200 | 8,072,448 | |||||||||
Global Payments, Inc. | 178,800 | 7,668,732 | |||||||||
Lam Research Corp.* | 156,950 | 6,568,357 | |||||||||
Longtop Financial Technologies Ltd. ADR* † | 181,375 | 7,137,106 | |||||||||
LSI Corp.* | 1,659,849 | 7,568,911 | |||||||||
Maxim Integrated Products, Inc. | 199,845 | 3,699,131 | |||||||||
NICE Systems Ltd. ADR* | 332,900 | 10,416,441 | |||||||||
ON Semiconductor Corp.* | 1,351,370 | 9,743,378 | |||||||||
QLogic Corp.* | 191,900 | 3,385,116 | |||||||||
Red Hat, Inc.* | 180,100 | 7,384,100 | |||||||||
Salesforce.com, Inc.* | 65,665 | 7,341,347 | |||||||||
Verigy Ltd.* | 333,651 | 2,712,583 | |||||||||
154,494,328 | |||||||||||
Financials — 17.5% | |||||||||||
Ameriprise Financial, Inc. | 204,600 | 9,683,718 | |||||||||
Arch Capital Group Ltd.* | 65,500 | 5,488,900 | |||||||||
Assurant, Inc. | 133,480 | 5,432,636 | |||||||||
Blackstone Group LP | 597,400 | 7,581,006 | |||||||||
Boston Properties, Inc. REIT | 55,200 | 4,588,224 | |||||||||
Comerica, Inc. | 130,180 | 4,836,187 | |||||||||
Digital Realty Trust, Inc. REIT † | 61,465 | 3,792,390 | |||||||||
Discover Financial Services | 626,700 | 10,453,356 | |||||||||
Federal Realty Investment Trust REIT | 51,900 | 4,238,154 | |||||||||
First Horizon National Corp.* | 301,452 | 3,439,569 | |||||||||
Fulton Financial Corp. | 478,926 | 4,339,070 | |||||||||
Health Care REIT, Inc. REIT | 96,545 | 4,570,440 | |||||||||
Home Properties, Inc. REIT | 15,100 | 798,790 | |||||||||
Invesco, Ltd. | 301,220 | 6,394,901 | |||||||||
KeyCorp | 674,800 | 5,371,408 | |||||||||
Kilroy Realty Corp. REIT | 144,632 | 4,793,104 | |||||||||
Knight Capital Group, Inc. - Class A* | 423,325 | 5,244,997 | |||||||||
Liberty Property Trust REIT † | 149,220 | 4,760,118 | |||||||||
New York Community Bancorp, Inc. | 249,873 | 4,060,436 | |||||||||
Northern Trust Corp. | 97,700 | 4,713,048 | |||||||||
NYSE Euronext | 281,550 | 8,043,884 | |||||||||
PartnerRe Ltd. | 51,900 | 4,161,342 | |||||||||
Synovus Financial Corp. † | 2,163,060 | 5,321,128 | |||||||||
TCF Financial Corp. | 339,200 | 5,491,648 | |||||||||
Willis Group Holdings PLC | 172,389 | 5,313,029 | |||||||||
Wilmington Trust Corp. † | 402,795 | 3,617,099 | |||||||||
136,528,582 |
Shares | Market Value | ||||||||||
Industrials — 15.5% | |||||||||||
AMETEK, Inc. | 195,850 | $ | 9,355,754 | ||||||||
Cooper Industries PLC | 195,900 | 9,585,387 | |||||||||
Delta Air Lines, Inc.* | 475,000 | 5,529,000 | |||||||||
Dover Corp. | 293,890 | 15,343,997 | |||||||||
Hexcel Corp.* | 330,695 | 5,883,064 | |||||||||
IDEX Corp. | 271,700 | 9,648,067 | |||||||||
Jacobs Engineering Group, Inc.* | 91,002 | 3,521,777 | |||||||||
Joy Global, Inc. | 91,730 | 6,450,454 | |||||||||
Kennametal, Inc. | 148,400 | 4,590,012 | |||||||||
MSC Industrial Direct Co. - Class A | 190,950 | 10,318,938 | |||||||||
Precision Castparts Corp. | 98,850 | 12,588,548 | |||||||||
Rockwell Collins, Inc. | 84,445 | 4,918,921 | |||||||||
Roper Industries, Inc. | 161,500 | 10,526,570 | |||||||||
SPX Corp. | 88,975 | 5,630,338 | |||||||||
WABCO Holdings, Inc.* | 152,830 | 6,409,690 | |||||||||
120,300,517 | |||||||||||
Consumer Discretionary — 11.5% | |||||||||||
Abercrombie & Fitch Co. - Class A | 154,100 | 6,059,212 | |||||||||
American Eagle Outfitters, Inc. | 391,200 | 5,852,352 | |||||||||
Bed Bath & Beyond, Inc.* | 223,700 | 9,710,817 | |||||||||
Coach, Inc. | 230,121 | 9,885,998 | |||||||||
Discovery Communications, Inc. - Class A* | 190,950 | 8,315,872 | |||||||||
Foot Locker, Inc. | 406,800 | 5,910,804 | |||||||||
Fortune Brands, Inc. | 112,200 | 5,523,606 | |||||||||
International Speedway Corp. - Class A | 170,400 | 4,157,760 | |||||||||
Lear Corp.* | 144,950 | 11,440,904 | |||||||||
Lennar Corp. - Class A | 195,500 | 3,006,790 | |||||||||
Macy's, Inc. | 198,274 | 4,578,147 | |||||||||
Marriott International, Inc. - Class A | 135,113 | 4,841,099 | |||||||||
Strayer Education, Inc. † | 43,137 | 7,527,406 | |||||||||
Toll Brothers, Inc.* | 157,600 | 2,997,552 | |||||||||
89,808,319 | |||||||||||
Health Care — 10.7% | |||||||||||
Beckman Coulter, Inc. | 60,700 | 2,961,553 | |||||||||
Covance, Inc.* † | 119,500 | 5,591,405 | |||||||||
Dendreon Corp.* † | 188,500 | 7,762,430 | |||||||||
Life Technologies Corp.* | 217,900 | 10,173,751 | |||||||||
Mettler-Toledo International, Inc.* | 54,280 | 6,754,603 | |||||||||
Shire PLC ADR | 166,450 | 11,198,756 | |||||||||
Thermo Fisher Scientific, Inc.* | 99,195 | 4,749,457 | |||||||||
United Therapeutics Corp.* | 127,300 | 7,130,073 | |||||||||
Varian Medical Systems, Inc.* | 154,291 | 9,334,605 | |||||||||
Vertex Pharmaceuticals, Inc.* † | 293,800 | 10,156,666 | |||||||||
Warner Chilcott PLC - Class A | 335,350 | 7,525,254 | |||||||||
83,338,553 | |||||||||||
Energy — 10.0% | |||||||||||
Cameron International Corp.* | 147,700 | 6,345,192 | |||||||||
CONSOL Energy, Inc. | 324,650 | 11,999,064 | |||||||||
Denbury Resources, Inc.* | 741,860 | 11,788,155 | |||||||||
Massey Energy Co. | 357,450 | 11,088,099 | |||||||||
Murphy Oil Corp. | 80,320 | 4,973,414 |
43
Touchstone Mid Cap Growth Fund (Continued)
Common Stocks — 98.7% (Continued) | Shares | Market Value | |||||||||
National-Oilwell Varco, Inc. | 270,380 | $ | 12,023,799 | ||||||||
Petrohawk Energy Corp.* | 264,800 | 4,273,872 | |||||||||
Weatherford International Ltd.* | 889,700 | 15,213,870 | |||||||||
77,705,465 | |||||||||||
Materials — 7.0% | |||||||||||
Commercial Metals Co. | 332,445 | 4,817,128 | |||||||||
Crown Holdings, Inc.* | 350,000 | 10,031,000 | |||||||||
Cytec Industries, Inc. | 94,825 | 5,346,233 | |||||||||
Ecolab, Inc. | 173,800 | 8,818,612 | |||||||||
Greif, Inc. - Class A | 123,330 | 7,256,737 | |||||||||
International Flavors & Fragrances, Inc. | 120,435 | 5,843,506 | |||||||||
Scotts Miracle-Gro Co. (The) - Class A | 141,950 | 7,343,074 | |||||||||
Yamana Gold, Inc. | 450,500 | 5,135,700 | |||||||||
54,591,990 | |||||||||||
Consumer Staples — 3.1% | |||||||||||
BJ's Wholesale Club, Inc.* | 97,400 | 4,042,100 | |||||||||
J.M. Smucker Co. (The) | 81,850 | 4,954,381 | |||||||||
Molson Coors Brewing Co. - Class B | 123,600 | 5,836,392 | |||||||||
Ralcorp Holdings, Inc.* | 159,050 | 9,301,244 | |||||||||
24,134,117 | |||||||||||
Utilities — 2.6% | |||||||||||
Consolidated Edison, Inc. | 106,770 | 5,148,450 | |||||||||
Hawaiian Electric Industries, Inc. | 227,139 | 5,119,713 | |||||||||
PG&E Corp. | 76,000 | 3,451,920 | |||||||||
Wisconsin Energy Corp. | 110,595 | 6,392,391 | |||||||||
20,112,474 | |||||||||||
Telecommunication Services — 1.0% | |||||||||||
NII Holdings, Inc.* | 195,900 | 8,051,490 | |||||||||
Total Common Stocks | $ | 769,065,835 | |||||||||
Investment Funds — 8.2% | |||||||||||
Invesco Liquid Assets Portfolio ** | 52,488,794 | 52,488,794 | |||||||||
Touchstone Institutional Money Market Fund^ | 11,317,765 | 11,317,765 | |||||||||
Total Investment Funds | $ | 63,806,559 | |||||||||
Total Investment Securities — 106.9% (Cost $724,532,619) | $ | 832,872,394 | |||||||||
Liabilities in Excess of Other Assets — (6.9%) | (53,992,045 | ) | |||||||||
Net Assets — 100.0% | $ | 778,880,349 |
* Non-income producing security.
† All or a portion of the security is on loan. The total value of the securities on loan as of September 30, 2010, was $51,089,676.
** Represents collateral for securities loaned.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc. See Note 5.
Portfolio Abbreviations:
ADR – American Depositary Receipt
PLC – Public Limited Company
REIT – Real Estate Investment Trust
Other Information:
The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the security valuation section in the accompanying notes to financial statements.
Valuation Inputs at Reporting Date:
Description | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
Common Stocks | $ | 769,065,835 | $ | — | $ | — | $ | 769,065,835 | |||||||||||
Investment Funds | 63,806,559 | — | — | 63,806,559 | |||||||||||||||
$ | 832,872,394 |
See accompanying notes to financial statements.
44
Other Items (Unaudited)
Proxy Voting Guidelines
The Sub-Advisors are responsible for exercising the voting rights associated with the securities purchased and held by the Funds. A description of the policies and procedures that the Sub-Advisors use in fulfilling this responsibility and information regarding how those proxies were voted during the twelve month period ended June 30 are available without charge upon request by calling toll free 1.800.543.0407. These items are also available on the Securities and Exchange Commission's (the Commission) website at http://www.sec.gov.
Quarterly Portfolio Disclosure
The Trust files a complete listing of portfolio holdings for each Fund as of the end of the first and third quarters of each fiscal year on Form N-Q. The complete listing (i) is available on the Commission's website; (ii) may be reviewed and copied at the Commission's Public Reference Room in Washington, DC; and (iii) will be made available to shareholders upon request by calling 1.800.543.0407. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Schedule of Shareholder Expenses
As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including reinvested dividends or other distributions; and (2) ongoing costs, including investment advisory fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (April 1, 2010 through September 30, 2010).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During the Six Months Ended September 30, 2010" to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Funds' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
45
Other Items (Continued)
Schedule of Shareholder Expenses (Continued)
Net Expense Ratio Annualized September 30, 2010 | Beginning Account Value April 1, 2010 | Ending Account Value September 30, 2010 | Expenses Paid During the Six Months Ended September 30, 2010 | ||||||||||||||||
Touchstone Diversified Small Cap Growth Fund | |||||||||||||||||||
Class A Actual | 1.40 | % | $ | 1,000.00 | $ | 1,008.80 | $ | 7.05 | |||||||||||
Class A Hypothetical | 1.40 | % | $ | 1,000.00 | $ | 1,018.05 | $ | 7.08 | |||||||||||
Class C Actual | 2.15 | % | $ | 1,000.00 | $ | 1,005.60 | $ | 10.81 | |||||||||||
Class C Hypothetical | 2.15 | % | $ | 1,000.00 | $ | 1,014.29 | $ | 10.86 | |||||||||||
Class Y Actual | 1.15 | % | $ | 1,000.00 | $ | 1,009.80 | $ | 5.79 | |||||||||||
Class Y Hypothetical | 1.15 | % | $ | 1,000.00 | $ | 1,019.30 | $ | 5.82 | |||||||||||
Touchstone Growth Opportunities Fund | |||||||||||||||||||
Class A Actual | 1.21 | % | $ | 1,000.00 | $ | 995.20 | $ | 6.05 | |||||||||||
Class A Hypothetical | 1.21 | % | $ | 1,000.00 | $ | 1,019.00 | $ | 6.12 | |||||||||||
Class C Actual | 1.96 | % | $ | 1,000.00 | $ | 991.80 | $ | 9.79 | |||||||||||
Class C Hypothetical | 1.96 | % | $ | 1,000.00 | $ | 1,015.24 | $ | 9.90 | |||||||||||
Class Y Actual | 0.96 | % | $ | 1,000.00 | $ | 996.70 | $ | 4.81 | |||||||||||
Class Y Hypothetical | 0.96 | % | $ | 1,000.00 | $ | 1,020.26 | $ | 4.86 | |||||||||||
Institutional Class Actual | 0.80 | % | $ | 1,000.00 | $ | 997.60 | $ | 4.01 | |||||||||||
Institutional Class Hypothetical | 0.80 | % | $ | 1,000.00 | $ | 1,021.06 | $ | 4.05 | |||||||||||
Touchstone Large Cap Core Equity Fund | |||||||||||||||||||
Class A Actual | 1.15 | % | $ | 1,000.00 | $ | 981.60 | $ | 5.71 | |||||||||||
Class A Hypothetical | 1.15 | % | $ | 1,000.00 | $ | 1,019.30 | $ | 5.82 | |||||||||||
Class C Actual | 1.90 | % | $ | 1,000.00 | $ | 977.90 | $ | 9.42 | |||||||||||
Class C Hypothetical | 1.90 | % | $ | 1,000.00 | $ | 1,015.54 | $ | 9.60 | |||||||||||
Touchstone Large Cap Growth Fund | |||||||||||||||||||
Class A Actual | 1.25 | % | $ | 1,000.00 | $ | 1,035.20 | $ | 6.38 | |||||||||||
Class A Hypothetical | 1.25 | % | $ | 1,000.00 | $ | 1,018.80 | $ | 6.33 | |||||||||||
Class B Actual | 1.91 | % | $ | 1,000.00 | $ | 1,031.60 | $ | 9.73 | |||||||||||
Class B Hypothetical | 1.91 | % | $ | 1,000.00 | $ | 1,015.49 | $ | 9.65 | |||||||||||
Class C Actual | 2.00 | % | $ | 1,000.00 | $ | 1,031.00 | $ | 10.18 | |||||||||||
Class C Hypothetical | 2.00 | % | $ | 1,000.00 | $ | 1,015.04 | $ | 10.10 | |||||||||||
Class Y Actual | 0.99 | % | $ | 1,000.00 | $ | 1,036.40 | $ | 5.05 | |||||||||||
Class Y Hypothetical | 0.99 | % | $ | 1,000.00 | $ | 1,020.10 | $ | 5.01 |
46
Other Items (Continued)
Schedule of Shareholder Expenses (Continued)
Net Expense Ratio Annualized September 30, 2010 | Beginning Account Value April 1, 2010 | Ending Account Value September 30, 2010 | Expenses Paid During the Six Months Ended September 30, 2010 | ||||||||||||||||
Touchstone Mid Cap Growth Fund | |||||||||||||||||||
Class A Actual | 1.49 | % | $ | 1,000.00 | $ | 1,005.00 | $ | 7.49 | |||||||||||
Class A Hypothetical | 1.49 | % | $ | 1,000.00 | $ | 1,017.60 | $ | 7.54 | |||||||||||
Class B Actual | 2.25 | % | $ | 1,000.00 | $ | 1,000.60 | $ | 11.28 | |||||||||||
Class B Hypothetical | 2.25 | % | $ | 1,000.00 | $ | 1,013.79 | $ | 11.36 | |||||||||||
Class C Actual | 2.25 | % | $ | 1,000.00 | $ | 1,000.60 | $ | 11.28 | |||||||||||
Class C Hypothetical | 2.25 | % | $ | 1,000.00 | $ | 1,013.79 | $ | 11.36 | |||||||||||
Class Y Actual | 1.13 | % | $ | 1,000.00 | $ | 1,006.40 | $ | 5.68 | |||||||||||
Class Y Hypothetical | 1.13 | % | $ | 1,000.00 | $ | 1,019.40 | $ | 5.72 |
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by [number of days in most recent fiscal half-year/365 [or 366]] (to reflect one-half year period).
47
PRIVACY PROTECTION POLICY
We Respect Your Privacy
Thank you for your decision to invest with us. Touchstone and its affiliates have always placed a high value on the trust and confidence our clients place in us. We believe that confidence must be earned and validated through time. In today's world, when technology allows the sharing of information at light speeds, trust must be reinforced by our sincere pledge to take the steps necessary to ensure that the information you share with us is treated with respect and confidentiality.
Our Pledge to Our Clients
• We collect only the information we need to service your account and administer our business.
• We are committed to keeping your information confidential and we place strict limits and controls on the use and sharing of your information.
• We make every effort to ensure the accuracy of your information.
We Collect the Following Nonpublic Personal Information About You:
• Information we receive from you on or in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income and date of birth; and
• Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payment history, parties to transactions, cost basis information, and other financial information.
Categories of Information We Disclose and Parties to Whom We Disclose
We do not disclose any nonpublic personal information about our current or former clients to nonaffiliated third parties, except as required or permitted by law.
We Place Strict Limits and Controls on the Use and Sharing of Your Information
• We restrict access to nonpublic personal information about you to authorized employees who need the information to administer your business.
• We maintain physical, electronic and procedural safeguards that comply with federal standards to protect this information.
• We do not disclose any nonpublic personal information about our current or former clients to anyone, except as required or permitted by law or as described in this document.
• We will not sell your personal information to anyone.
We May Provide Information to Service Your Account
Sometimes it is necessary to provide information about you to various companies such as transfer agents, custodians, broker-dealers and marketing service firms to facilitate the servicing of your account. These organizations have a legitimate business need to see some of your personal information in order for us to provide service to you. We may disclose to these various companies the information that we collect as described above. We require that these companies, including our own subsidiaries and affiliates, strictly maintain the confidentiality of this information and abide by all applicable laws. Companies within our corporate family that may receive this information are financial service providers and insurance companies. We do not permit these associated companies to sell the information for their own purposes, and we never sell our customer information.
This policy is applicable to the following affiliated companies: Touchstone Funds Group Trust, Touchstone Investment Trust, Touchstone Strategic Trust, Touchstone Tax-Free Trust, Touchstone Variable Series Trust, Touchstone Institutional Funds Trust, Touchstone Securities, Inc.,* Capital Analysts Incorporated and W&S Brokerage Services, Inc.
* Touchstone Securities, Inc. serves as the underwriter to the Touchstone Funds.
A Member of Western & Southern Financial Group®
The Privacy Protection Policy is not part of the Semi-Annual Report.
48
This page intentionally left blank.
This page intentionally left blank.
This page intentionally left blank.
303 Broadway, Suite 1100
Cincinnati, OH 45202-4203
Touchstone Investments
Distributor
Touchstone Securities, Inc.*
303 Broadway
Cincinnati, Ohio 45202-4203 800.638.8194
www.touchstoneinvestments.com
Investment Advisor
Touchstone Advisors, Inc.*
303 Broadway
Cincinnati, Ohio 45202-4203
Transfer Agent
JPMorgan Chase Bank, N.A.
P.O. Box 5354
Cincinnati, Ohio 45201-5354
Shareholder Service
800.543.0407
* A Member of Western & Southern Financial Group
TSF-54-TST-SAR-1010
Item 2. Code of Ethics.
Not required for Semiannual Reports.
Item 3. Audit Committee Financial Expert.
Not required for Semiannual Reports.
Item 4. Principal Accountant Fees and Services.
Not required for Semiannual Reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable
Item 6. Schedule of Investments.
The Schedule of Investments in securities of unaffiliated issuers is included in the Semiannual Report.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
The Governance Committee will consider shareholder recommendations for nomination to the Board only in the event that there is a vacancy on the Board. Shareholders who wish to submit recommendations for nominations to the Board to fill the vacancy must submit their recommendations in writing to John P. Zanotti, Chairman of the Governance Committee, c/o Touchstone, 303 Broadway, Suite 1100, Cincinnati, OH 45202. Shareholders should include appropriate information on the background and qualifications of any person recommended to the Governance Committee (e.g., a resume), as well as the candidate’s contact information and a written consent from the candidate to serve if nominated and elected. Shareholder recommendations for nominations to the Board will be accepted on an ongoing basis and such recommendations will be kept on file for consideration in the event of a future vacancy on the Board.
Item 11. Controls and Procedures.
(a) Based on an evaluation of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act) the registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures are effective as of a date within 90 days of the filing date of this report.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s second fiscal half-year that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a)(2) Certifications required by Item 12(a)(2) of Form N-CSR are filed herewith.
(b) Certification required by Item 11(b) of Form N-CSR is filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) | Touchstone Strategic Trust |
|
|
| |
By (Signature and Title) |
| |
|
| |
/s/ Jill T. McGruder |
| |
Jill T. McGruder |
| |
President |
| |
|
| |
Date: December 3, 2010 |
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) |
|
|
|
/s/ Jill T. McGruder |
|
Jill T. McGruder |
|
President |
|
|
|
Date: December 3, 2010 |
|
|
|
/s/ Terrie A. Wiedenheft |
|
Terrie A. Wiedenheft |
|
Controller & Treasurer |
|
|
|
Date: December 3, 2010 |
|