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 811-03651
Touchstone Strategic Trust – December Funds
(Exact name of registrant as specified in charter)
303 Broadway, Suite 1100
Cincinnati, Ohio 45202-4203
(Address of principal executive offices) (Zip code)
Jill T. McGruder
303 Broadway, Suite 1100
Cincinnati, Ohio 45202-4203
(Name and address of agent for service)
Registrant's telephone number, including area code: 800-638-8194
Date of fiscal year end: December 31
Date of reporting period: June 30, 2013
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, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
The Report to Shareholders is attached herewith.
June 30, 2013
(Unaudited)
Semi-Annual Report
Touchstone Strategic Trust
Touchstone Dynamic Equity Fund
Touchstone Balanced Allocation Fund
Touchstone Conservative Allocation Fund
Touchstone Growth Allocation Fund
Touchstone Moderate Growth Allocation Fund
Table of Contents
Page | |
Tabular Presentation of Portfolios of Investments | 3 - 4 |
Portfolios of Investments: | |
Touchstone Dynamic Equity Fund | 5 |
Touchstone Balanced Allocation Fund | 8 |
Touchstone Conservative Allocation Fund | 9 |
Touchstone Growth Allocation Fund | 10 |
Touchstone Moderate Growth Allocation Fund | 11 |
Statements of Assets and Liabilities | 12 - 15 |
Statements of Operations | 16 - 17 |
Statements of Changes in Net Assets | 18 - 21 |
Statements of Changes in Net Assets - Capital Stock Activity | 22 - 26 |
Statement of Cash Flows | 27 |
Financial Highlights | 28 - 47 |
Notes to Financial Statements | 48 - 70 |
Other Items | 71 - 75 |
Privacy Protection Policy | 79 |
2 |
Tabular Presentation of Portfolios of Investments (Unaudited)
June 30, 2013
The tables 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 Dynamic Equity Fund |
Sector Allocation* | (% of Net Assets) | |||
Long Positions | ||||
Information Technology | 22.4 | % | ||
Consumer Discretionary | 15.2 | |||
Health Care | 14.9 | |||
Financials | 14.7 | |||
Energy | 13.9 | |||
Consumer Staples | 11.9 | |||
Industrials | 10.6 | |||
Materials | 5.6 | |||
Telecommunication Services | 4.8 | |||
Utilities | 2.3 | |||
Investment Fund | 3.6 | |||
Other Assets/Liabilities (Net) | 0.0 | |||
119.9 | % | |||
Short Positions and Written Options | ||||
Information Technology | (4.9 | ) | ||
Energy | (3.6 | ) | ||
Consumer Discretionary | (3.1 | ) | ||
Health Care | (2.9 | ) | ||
Materials | (2.2 | ) | ||
Telecommunication Services | (2.2 | ) | ||
Call and Put Options | (0.6 | ) | ||
Consumer Staples | (0.4 | ) | ||
Industrials | 0.0 | |||
(19.9 | ) | |||
Total | 100.0 | % |
Touchstone Balanced Allocation Fund |
Sector Allocation | (% of Net Assets) | |||
Government/Corporate | 23.5 | % | ||
International Equity | 13.8 | |||
Value | 11.9 | |||
Growth | 9.1 | |||
Equity Income | 6.1 | |||
Balanced | 5.0 | |||
International Debt | 5.0 | |||
Blue Chip | 4.1 | |||
Emerging Market -Equity | 3.8 | |||
Various Assets | 3.1 | |||
Taxable -Money Market | 3.1 | |||
Value Small-Cap | 3.0 | |||
Corporate/Preferred -High Yield | 3.0 | |||
Sector Fund Real -Estate | 2.9 | |||
Growth Mid-Cap | 2.0 | |||
Growth Small- Cap | 1.0 | |||
Other Assets/Liabilities (Net) | (0.4 | ) | ||
Total | 100.0 | % |
* Sector classifications are based upon the Global Industry Classification Standard (GICS®).
3 |
Tabular Presentation of Portfolios of Investments (Unaudited) (Continued)
Touchstone Conservative Allocation Fund |
Sector Allocation | (% of Net Assets) | |||
Government/Corporate | 44.8 | % | ||
International Debt | 8.1 | |||
Balanced | 7.1 | |||
International Equity | 6.0 | |||
Equity Income | 5.1 | |||
Taxable-Money Market | 5.1 | |||
Growth | 5.1 | |||
Various Assets | 5.1 | |||
Value | 5.1 | |||
Blue Chip | 3.0 | |||
Corporate/Preferred-High Yield | 3.0 | |||
Sector Fund Real-Estate | 2.0 | |||
Value Small-Cap | 1.0 | |||
Emerging Market-Equity | 1.0 | |||
Other Assets/Liabilities (Net) | (1.5 | ) | ||
Total | 100.0 | % |
Touchstone Growth Allocation Fund |
Sector Allocation | (% of Net Assets) | |||
International Equity | 23.1 | % | ||
Value | 16.3 | |||
Growth | 11.2 | |||
Emerging Market-Equity | 8.6 | |||
Government/Corporate | 6.2 | |||
Equity Income | 6.1 | |||
Value Small-Cap | 6.1 | |||
Sector Fund Real-Estate | 5.8 | |||
Growth Mid-Cap | 5.1 | |||
Blue Chip | 4.1 | |||
Value Mid-Cap | 3.1 | |||
Growth Small-Cap | 3.1 | |||
Various Assets | 2.1 | |||
Other Assets/Liabilities (Net) | (0.9 | ) | ||
Total | 100.0 | % |
Touchstone Moderate Growth Allocation Fund |
Sector Allocation | (% of Net Assets) | |||
International Equity | 16.9 | % | ||
Government/Corporate | 15.2 | |||
Value | 14.2 | |||
Growth | 10.1 | |||
Emerging Market-Equity | 6.6 | |||
Equity Income | 6.1 | |||
Value Small-Cap | 5.1 | |||
Blue Chip | 4.1 | |||
Growth Mid-Cap | 4.1 | |||
Balanced | 4.0 | |||
Sector Fund Real-Estate | 3.8 | |||
Various Assets | 2.1 | |||
Value Mid-Cap | 2.0 | |||
Growth Small-Cap | 2.0 | |||
Corporate/Preferred-High Yield | 2.0 | |||
International Debt | 2.0 | |||
Other Assets/Liabilities (Net) | (0.3 | ) | ||
Total | 100.0 | % |
4 |
Portfolio of Investments
Touchstone Dynamic Equity Fund – June 30, 2013 (Unaudited)
Market | ||||||||
Shares | Value | |||||||
Common Stocks†— 116.3% | ||||||||
Information Technology — 22.4% | ||||||||
AOL, Inc. | 7,177 | $ | 261,817 | |||||
Apple, Inc. | 1,134 | 449,155 | ||||||
Arrow Electronics, Inc.* | 1,256 | 50,052 | ||||||
Avnet, Inc.* | 12,918 | 434,045 | ||||||
Booz Allen Hamilton Holding Corp. | 25,121 | 436,604 | ||||||
Cisco Systems, Inc. | 45,851 | 1,114,638 | ||||||
Computer Sciences Corp. | 27,065 | 1,184,635 | ||||||
Dell, Inc. | 4,456 | 59,488 | ||||||
Harris Corp. | 24,099 | 1,186,876 | ||||||
Hewlett-Packard Co. | 16,340 | 405,232 | ||||||
Ingram Micro, Inc. - Class A* | 30,732 | 583,601 | ||||||
International Business Machines Corp. | 13,774 | 2,632,349 | ||||||
Microsoft Corp. | 33,012 | 1,139,904 | ||||||
Oracle Corp. | 63,346 | 1,945,989 | ||||||
SAIC, Inc. | 53,256 | 741,856 | ||||||
Seagate Technology PLC (Ireland) | 6,242 | 279,829 | ||||||
Symantec Corp. | 25,221 | 566,716 | ||||||
Western Digital Corp. | 15,239 | 946,189 | ||||||
14,418,975 | ||||||||
Consumer Discretionary — 15.2% | ||||||||
AutoNation, Inc.* | 1,368 | 59,358 | ||||||
Best Buy Co., Inc. | 3,201 | 87,483 | ||||||
Brinker International, Inc. | 23,608 | 930,863 | ||||||
Cablevision Systems Corp. - Class A | 18,009 | 302,911 | ||||||
Charter Communications, Inc.* | 2,480 | 307,148 | ||||||
CST Brands, Inc.* | 2 | 62 | ||||||
Delphi Automotive PLC (Channel Islands) | 33,040 | 1,674,798 | ||||||
Ford Motor Co. | 32,893 | 508,855 | ||||||
Goodyear Tire & Rubber Co. (The)* | 78,359 | 1,198,109 | ||||||
Home Depot, Inc. (The) | 27,084 | 2,098,197 | ||||||
Kohl's Corp. | 1,119 | 56,521 | ||||||
Liberty Global PLC (United Kingdom)* | 1,650 | 122,232 | ||||||
Macy's, Inc. | 16,937 | 812,976 | ||||||
Regal Entertainment Group | 33,971 | 608,081 | ||||||
Sears Holdings Corp.* | 2,759 | 116,099 | ||||||
Staples, Inc. | 1,744 | 27,660 | ||||||
Target Corp. | 12,532 | 862,953 | ||||||
9,774,306 | ||||||||
Health Care — 14.9% | ||||||||
AbbVie, Inc. | 45,775 | 1,892,338 | ||||||
Amgen, Inc. | 21,012 | 2,073,044 | ||||||
Cardinal Health, Inc. | 35,255 | 1,664,036 | ||||||
Covance, Inc.* | 1,979 | 150,681 | ||||||
Eli Lilly & Co. | 23,401 | 1,149,457 | ||||||
HCA Holdings, Inc. | 15,724 | 567,007 | ||||||
Life Technologies Corp.* | 323 | 23,905 | ||||||
Mylan, Inc.* | 48,208 | 1,495,894 | ||||||
Pfizer, Inc. | 19,231 | 538,660 | ||||||
9,555,022 | ||||||||
Financials — 14.7% | ||||||||
Allstate Corp. (The) | 41,476 | 1,995,825 | ||||||
American Express Co. | 4,948 | 369,912 | ||||||
Bank of America Corp. | 55,526 | 714,064 | ||||||
CBRE Group, Inc. - Class A* | 2,503 | 58,470 | ||||||
Citigroup, Inc. | 28,101 | 1,348,005 | ||||||
Fidelity National Financial, Inc. | 7,474 | 177,956 | ||||||
Jones Lang LaSalle, Inc. | 4,117 | 375,223 | ||||||
Legg Mason, Inc. | 2,687 | 83,324 | ||||||
Morgan Stanley | 32,998 | 806,141 | ||||||
NYSE Euronext | 247 | 10,226 | ||||||
Popular, Inc. (Puerto Rico)* | 33,109 | 1,004,197 | ||||||
Realogy Holdings Corp.* | 5,928 | 284,781 | ||||||
US Bancorp | 60,451 | 2,185,304 | ||||||
9,413,428 | ||||||||
Energy — 13.9% | ||||||||
Anadarko Petroleum Corp. | 327 | 28,099 | ||||||
Chevron Corp. | 21,020 | 2,487,507 | ||||||
ConocoPhillips | 35,750 | 2,162,875 | ||||||
Marathon Petroleum Corp. | 9,986 | 709,605 | ||||||
Murphy Oil Corp. | 9,130 | 555,926 | ||||||
PBF Energy, Inc. | 10,380 | 268,842 | ||||||
Phillips 66 | 10,587 | 623,680 | ||||||
Tesoro Corp. | 19,074 | 997,952 | ||||||
Valero Energy Corp. | 31,932 | 1,110,276 | ||||||
8,944,762 | ||||||||
Consumer Staples — 11.9% | ||||||||
Altria Group, Inc. | 9,693 | 339,158 | ||||||
Archer-Daniels-Midland Co. | 24,105 | 817,401 | ||||||
Bunge Ltd. (Bermuda) | 16,263 | 1,150,933 | ||||||
Coca-Cola Enterprises, Inc. | 18,204 | 640,053 | ||||||
Herbalife Ltd. (Cayman Islands) | 204 | 9,209 | ||||||
Kroger Co. (The) | 12,494 | 431,543 | ||||||
Philip Morris International, Inc. | 13,195 | 1,142,951 | ||||||
Procter & Gamble Co. (The) | 996 | 76,682 | ||||||
Safeway, Inc. | 31,744 | 751,063 | ||||||
Wal-Mart Stores, Inc. | 30,384 | 2,263,304 | ||||||
WhiteWave Foods Co.* | 1 | 16 | ||||||
7,622,313 | ||||||||
Industrials — 10.6% | ||||||||
3M Co. | 16,809 | 1,838,064 | ||||||
Boeing Co. (The) | 6,795 | 696,080 | ||||||
CNH Global N.V. | 13,806 | 575,158 | ||||||
Delta Air Lines, Inc.* | 30,501 | 570,674 | ||||||
Emerson Electric Co. | 3,260 | 177,800 | ||||||
FedEx Corp. | 4,907 | 483,732 | ||||||
General Electric Co. | 7,961 | 184,616 | ||||||
Lockheed Martin Corp. | 5,514 | 598,048 | ||||||
Masco Corp. | 4,354 | 84,859 | ||||||
Northrop Grumman Corp. | 2,657 | 220,000 | ||||||
Pitney Bowes, Inc. | 87,352 | 1,282,327 | ||||||
RR Donnelley & Sons Co. | 3,115 | 43,641 | ||||||
Terex Corp.* | 1,271 | 33,427 | ||||||
6,788,426 | ||||||||
Materials — 5.6% | ||||||||
Freeport-McMoRan Copper & Gold, Inc. | 31,179 | 860,852 |
5 |
Touchstone Dynamic Equity Fund (Unaudited) (Continued)
Market | ||||||||
Shares | Value | |||||||
Common Stocks† — 116.3% (Continued) | ||||||||
Materials — (Continued) | ||||||||
Huntsman Corp. | 18,525 | $ | 306,774 | |||||
Lyondellbasell Industries N.V. | 23,194 | 1,536,834 | ||||||
Newmont Mining Corp. | 23,993 | 718,590 | ||||||
Southern Copper Corp. | 5,783 | 159,726 | ||||||
3,582,776 | ||||||||
Telecommunication Services — 4.8% | ||||||||
Sprint Nextel Corp.* | 111,541 | 783,018 | ||||||
Verizon Communications, Inc. | 45,466 | 2,288,758 | ||||||
3,071,776 | ||||||||
Utilities — 2.3% | ||||||||
Edison International | 28,901 | 1,391,872 | ||||||
Exelon Corp. | 2,614 | 80,720 | ||||||
1,472,592 | ||||||||
Total Common Stocks | $ | 74,644,376 | �� | |||||
Investment Fund — 3.6% | ||||||||
Touchstone Institutional Money Market Fund^ | 2,301,056 | 2,301,056 | ||||||
Total Long Positions | ||||||||
(Cost $69,390,129) | $ | 76,945,432 | ||||||
Securities Sold Short— (19.3%) | ||||||||
Common Stocks— (19.3%) | ||||||||
Information Technology — (4.9%) | ||||||||
F5 Networks, Inc.* | (4,201 | ) | (289,029 | ) | ||||
Fortinet, Inc.* | (549 | ) | (9,608 | ) | ||||
Fusion-io, Inc.* | (17,015 | ) | (242,294 | ) | ||||
Informatica Corp.* | (2,921 | ) | (102,177 | ) | ||||
IPG Photonics Corp. | (12,549 | ) | (762,101 | ) | ||||
JDS Uniphase Corp.* | (1,624 | ) | (23,353 | ) | ||||
Nuance Communications, Inc.* | (23,563 | ) | (433,088 | ) | ||||
Palo Alto Networks, Inc.* | (2,364 | ) | (99,666 | ) | ||||
Rackspace Hosting, Inc.* | (9,286 | ) | (351,846 | ) | ||||
Splunk, Inc.* | (4,506 | ) | (208,898 | ) | ||||
Stratasys Ltd. (Ireland)* | (4,889 | ) | (409,405 | ) | ||||
VeriFone Systems, Inc.* | (3,137 | ) | (52,732 | ) | ||||
Workday, Inc.* | (2,473 | ) | (158,495 | ) | ||||
Zynga, Inc.* | (5,106 | ) | (14,195 | ) | ||||
(3,156,887 | ) | |||||||
Energy — (3.6%) | ||||||||
Alpha Natural Resources, Inc.* | (53,309 | ) | (279,339 | ) | ||||
Cheniere Energy, Inc.* | (25,834 | ) | (717,152 | ) | ||||
EXCO Resources, Inc. | (7,569 | ) | (57,827 | ) | ||||
Golar LNG Ltd. | (22,510 | ) | (717,844 | ) | ||||
Peabody Energy Corp. | (22,070 | ) | (323,105 | ) | ||||
Pioneer Natural Resources Co. | (1,343 | ) | (194,399 | ) | ||||
(2,289,666 | ) | |||||||
Consumer Discretionary — (3.1%) | ||||||||
DreamWorks Animation SKG, Inc. - Class A* | (7,042 | ) | (180,698 | ) | ||||
DSW, Inc. | (5,468 | ) | (401,733 | ) | ||||
Gentex Corp. | (32,258 | ) | (743,547 | ) | ||||
JC Penney Co., Inc.* | (20,710 | ) | (353,727 | ) | ||||
Liberty Media Corp.* | (1,792 | ) | (227,154 | ) | ||||
Toll Brothers, Inc.* | (2,311 | ) | (75,408 | ) | ||||
(1,982,267 | ) | |||||||
Health Care — (2.9%) | ||||||||
Ariad Pharmaceuticals, Inc.* | (9,238 | ) | (161,573 | ) | ||||
Catamaran Corp. (Canada)* | (10,662 | ) | (519,453 | ) | ||||
Incyte Corp. Ltd.* | (30,231 | ) | (665,082 | ) | ||||
Salix Pharmaceuticals Ltd.* | (1,531 | ) | (101,276 | ) | ||||
Vertex Pharmaceuticals, Inc.* | (5,516 | ) | (440,563 | ) | ||||
(1,887,947 | ) | |||||||
Materials — (2.2%) | ||||||||
Cliffs Natural Resources, Inc. | (7,302 | ) | (118,657 | ) | ||||
Tahoe Resources, Inc. (Canada)* | (7,693 | ) | (108,856 | ) | ||||
United States Steel Corp. | (47,081 | ) | (825,330 | ) | ||||
Walter Energy, Inc. | (34,596 | ) | (359,798 | ) | ||||
(1,412,641 | ) | |||||||
Telecommunication Services — (2.2%) | ||||||||
Crown Castle International Corp.* | (13,407 | ) | (970,533 | ) | ||||
NII Holdings, Inc.* | (51,490 | ) | (343,438 | ) | ||||
SBA Communications Corp.* | (987 | ) | (73,156 | ) | ||||
(1,387,127 | ) | |||||||
Consumer Staples — (0.4%) | ||||||||
Fresh Market, Inc. (The)* | (5,286 | ) | (262,820 | ) | ||||
�� | ||||||||
Industrials — 0.0% | ||||||||
GrafTech International Ltd.* | (1,690 | ) | (12,303 | ) | ||||
Total Common Stocks | $ | (12,391,658 | ) | |||||
Total Securities Sold Short | ||||||||
(Proceeds $(13,605,418)) | $ | (12,391,658 | ) | |||||
Number | ||||||||
of | ||||||||
Contracts | ||||||||
Written Options Contracts†— (0.6%) | ||||||||
Call Options — (0.5%) | ||||||||
SPDR S&P 500 ETF Trust | ||||||||
July 2013 | ||||||||
Strike Price $161 | (3,285 | ) | (312,075 | ) | ||||
SPDR S&P 500 ETF Trust | ||||||||
July 2013 | ||||||||
Strike Price $162 | (765 | ) | (39,780 | ) | ||||
Total Call Options | (351,855 | ) |
6 |
Touchstone Dynamic Equity Fund (Unaudited) (Continued)
Number | ||||||||
of | Market | |||||||
Contracts | Value | |||||||
Put Options — (0.1%) | ||||||||
S&P 500 Index | ||||||||
July 2013 | ||||||||
Strike Price $1,590 | (30 | ) | $ | (52,200 | ) | |||
Total Written Options Contracts | ||||||||
(Proceeds $(488,538)) | $ | (404,055 | ) | |||||
Total Investment Securities —100.0% | ||||||||
(Cost $55,296,173) | $ | 64,149,719 | ||||||
Other Assets in Excess of Liabilities — 0.0% | 28,300 | |||||||
Net Assets — 100.0% | $ | 64,178,019 |
* | Non-income producing security. |
^ | Affiliated Fund. See Note 4 in Notes to Financial Statements. |
† | All or a portion of these securities are held as collateral for securities sold short and written options. The total value of the securities held as collateral as of June 30, 2013 was $74,644,376. |
Portfolio Abbreviations:
ETF - Exchange Traded Fund
PLC - Public Limited Company
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 | ||||||||||||
Assets: | ||||||||||||||||
Long Positions | ||||||||||||||||
Common Stocks | $ | 74,644,376 | $ | — | $ | — | $ | 74,644,376 | ||||||||
Investment Fund | 2,301,056 | — | — | 2,301,056 | ||||||||||||
$ | 76,945,432 | |||||||||||||||
Liabilities: | ||||||||||||||||
Securities Sold Short | ||||||||||||||||
Common Stocks | $ | (12,391,658 | ) | $ | — | $ | — | $ | (12,391,658 | ) | ||||||
Other Financial Instruments | ||||||||||||||||
Liabilities: | ||||||||||||||||
Written Option Equity Contracts | (404,055 | ) | — | — | (404,055 | ) | ||||||||||
$ | (12,795,713 | ) |
Transactions in written options for the period ended June 30, 2013
Number of | ||||||||
Contracts | Premium | |||||||
Beginning of Period, December 31, 2012 | 930 | $ | 1,799,847 | |||||
Call Options Written | 9,350 | 9,034,134 | ||||||
Put Options Written | 148 | 365,083 | ||||||
Call Options Closed | (5,018 | ) | (10,271,877 | ) | ||||
Put Options Closed | (70 | ) | (150,545 | ) | ||||
Call Options Expired | (1,182 | ) | (111,065 | ) | ||||
Put Options Expired | (78 | ) | (177,039 | ) | ||||
Call Options Exercised | — | — | ||||||
June 30, 2013 | 4,080 | $ | 488,538 |
See accompanying Notes to Financial Statements.
7 |
Portfolio of Investments
Touchstone Balanced Allocation Fund – June 30, 2013 (Unaudited)
Market | ||||||||
Shares | Value | |||||||
Affiliated Mutual Funds^— 100.4% | ||||||||
Government/Corporate—23.5% | ||||||||
Touchstone Core Bond Fund | 370,203 | $ | 3,816,791 | |||||
Touchstone Total Return Bond Fund | 1,282,699 | 13,032,222 | ||||||
Touchstone Ultra Short Duration Fixed Income Fund | 1,359,615 | 12,861,959 | ||||||
29,710,972 | ||||||||
International Equity — 13.8% | ||||||||
Touchstone International Small Cap Fund | 294,605 | 3,803,348 | ||||||
Touchstone International Value Fund | 1,797,390 | 13,696,109 | ||||||
17,499,457 | ||||||||
Value — 11.9% | ||||||||
Touchstone Focused Fund | 179,451 | 5,141,274 | ||||||
Touchstone Value Fund | 1,235,083 | 9,917,716 | ||||||
15,058,990 | ||||||||
Growth — 9.1% | ||||||||
Touchstone Growth Opportunities Fund | 91,672 | 2,547,555 | ||||||
Touchstone Sands Capital Institutional Growth Fund | 479,286 | 8,909,932 | ||||||
11,457,487 | ||||||||
Equity Income — 6.1% | ||||||||
Touchstone Premium Yield Equity Fund, Class Y | 886,564 | 7,695,373 | ||||||
Balanced — 5.0% | ||||||||
Touchstone Flexible Income Fund | 603,948 | 6,341,451 | ||||||
International Debt — 5.0% | ||||||||
Touchstone International Fixed Income Fund | 621,684 | 6,316,308 | ||||||
Blue Chip — 4.1% | ||||||||
Touchstone Dynamic Equity Fund* | 415,028 | 5,150,503 | ||||||
Emerging Market-Equity — 3.8% | ||||||||
Touchstone Emerging Markets Equity Fund | 423,503 | 4,861,816 | ||||||
Various Assets — 3.1% | ||||||||
Touchstone Merger Arbitrage Fund | 351,532 | 3,870,366 | ||||||
Taxable-Money Market — 3.1% | ||||||||
Touchstone Institutional Money Market Fund | 3,869,553 | 3,869,553 | ||||||
Value Small-Cap — 3.0% | ||||||||
Touchstone Small Cap Core Fund | 134,143 | 2,547,371 | ||||||
Touchstone Small Company Value Fund | 70,683 | 1,298,439 | ||||||
3,845,810 | ||||||||
Corporate/Preferred-High Yield — 3.0% | ||||||||
Touchstone High Yield Fund | 421,555 | 3,789,779 | ||||||
Sector Fund Real-Estate — 2.9% | ||||||||
Touchstone Global Real Estate Fund | 297,533 | 3,665,605 | ||||||
Growth Mid-Cap — 2.0% | ||||||||
Touchstone Mid Cap Fund | 125,627 | 2,553,997 | ||||||
Growth Small-Cap — 1.0% | ||||||||
Touchstone Small Cap Growth Fund | 236,749 | 1,290,280 | ||||||
Total Affiliated Mutual Funds | $ | 126,977,747 | ||||||
Total Investment Securities —100.4% | ||||||||
(Cost $122,143,048) | $ | 126,977,747 | ||||||
Liabilities in Excess of Other Assets — (0.4%) | (472,022 | ) | ||||||
Net Assets — 100.0% | $ | 126,505,725 |
* | Non-income producing security. |
^ | All affiliated fund investments are in Institutional Class shares, unless otherwise indicated. The financial statements of the underlying funds can be found on the SEC website. See Note 4 in Notes to Financial Statements. |
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 | ||||||||||||
Affiliated Mutual Funds | $ | 126,977,747 | $ | — | $ | — | $ | 126,977,747 |
See accompanying Notes to Financial Statements.
8 |
Portfolio of Investments
Touchstone Conservative Allocation Fund – June 30, 2013 (Unaudited)
Market | ||||||||
Shares | Value | |||||||
Affiliated Mutual Funds^— 101.5% | ||||||||
Government/Corporate—44.8% | ||||||||
Touchstone Core Bond Fund | 346,928 | $ | 3,576,823 | |||||
Touchstone Total Return Bond Fund | 1,336,710 | 13,580,971 | ||||||
Touchstone Ultra Short Duration Fixed Income Fund | 1,507,500 | 14,260,954 | ||||||
31,418,748 | ||||||||
International Debt — 8.1% | ||||||||
Touchstone International Fixed Income Fund | 560,190 | 5,691,528 | ||||||
Balanced — 7.1% | ||||||||
Touchstone Flexible Income Fund | 477,317 | 5,011,829 | ||||||
International Equity — 6.0% | ||||||||
Touchstone International Small Cap Fund | 55,061 | 710,842 | ||||||
Touchstone International Value Fund | 459,687 | 3,502,813 | ||||||
4,213,655 | ||||||||
Equity Income — 5.1% | ||||||||
Touchstone Premium Yield Equity Fund, Class Y | 411,985 | 3,576,034 | ||||||
Taxable-Money Market — 5.1% | ||||||||
Touchstone Institutional Money Market Fund | 3,568,896 | 3,568,896 | ||||||
Growth — 5.1% | ||||||||
Touchstone Growth Opportunities Fund | 25,623 | 712,062 | ||||||
Touchstone Sands Capital Institutional Growth Fund | 153,440 | 2,852,448 | ||||||
3,564,510 | ||||||||
Various Assets — 5.1% | ||||||||
Touchstone Merger Arbitrage Fund | 323,614 | 3,562,987 | ||||||
Value — 5.1% | ||||||||
Touchstone Value Fund | 442,200 | 3,550,864 | ||||||
Blue Chip — 3.0% | ||||||||
Touchstone Dynamic Equity Fund* | 172,278 | 2,137,973 | ||||||
Corporate/Preferred-High Yield — 3.0% | ||||||||
Touchstone High Yield Fund | 237,465 | 2,134,813 | ||||||
Sector Fund Real-Estate — 2.0% | ||||||||
Touchstone Global Real Estate Fund | 111,927 | 1,378,947 | ||||||
Value Small-Cap — 1.0% | ||||||||
Touchstone Small Cap Core Fund | 37,435 | 710,887 | ||||||
Emerging Market-Equity — 1.0% | ||||||||
Touchstone Emerging Markets Equity Fund | 59,987 | 688,655 | ||||||
Total Affiliated Mutual Funds | $ | 71,210,326 | ||||||
Total Investment Securities —101.5% | ||||||||
(Cost $69,714,199) | $ | 71,210,326 | ||||||
Liabilities in Excess of Other Assets — (1.5%) | (1,065,204 | ) | ||||||
Net Assets — 100.0% | $ | 70,145,122 |
* | Non-income producing security. |
^ | All affiliated fund investments are in Institutional Class shares, unless otherwise indicated. The financial statements of the underlying funds can be found on the SEC website. See Note 4 in Notes to Financial Statements. |
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 | ||||||||||||
Affiliated Mutual Funds | $ | 71,210,326 | $ | — | $ | — | $ | 71,210,326 |
See accompanying Notes to Financial Statements.
9 |
Portfolio of Investments
Touchstone Growth Allocation Fund – June 30, 2013 (Unaudited)
Market | ||||||||
Shares | Value | |||||||
Affiliated Mutual Funds^— 100.9% | ||||||||
International Equity — 23.1% | ||||||||
Touchstone International Small Cap Fund | 432,225 | $ | 5,580,023 | |||||
Touchstone International Value Fund | 1,646,724 | 12,548,038 | ||||||
18,128,061 | ||||||||
Value — 16.3% | ||||||||
Touchstone Focused Fund | 224,628 | 6,435,599 | ||||||
Touchstone Value Fund | 796,223 | 6,393,668 | ||||||
12,829,267 | ||||||||
Growth — 11.2% | ||||||||
Touchstone Growth Opportunities Fund | 57,609 | 1,600,970 | ||||||
Touchstone Sands Capital Institutional Growth Fund | 388,174 | 7,216,152 | ||||||
8,817,122 | ||||||||
Emerging Market-Equity — 8.6% | ||||||||
Touchstone Emerging Markets Equity Fund | 587,730 | 6,747,143 | ||||||
Government/Corporate—6.2% | ||||||||
Touchstone Ultra Short Duration Fixed Income Fund | 511,136 | 4,835,349 | ||||||
Equity Income — 6.1% | ||||||||
Touchstone Premium Yield Equity Fund, Class Y | 556,902 | 4,833,912 | ||||||
Value Small-Cap — 6.1% | ||||||||
Touchstone Small Cap Core Fund | 168,315 | 3,196,299 | ||||||
Touchstone Small Company Value Fund | 88,155 | 1,619,407 | ||||||
4,815,706 | ||||||||
Sector Fund Real-Estate — 5.8% | ||||||||
Touchstone Global Real Estate Fund | 367,171 | 4,523,542 | ||||||
Growth Mid-Cap — 5.1% | ||||||||
Touchstone Mid Cap Fund | 78,898 | 1,603,987 | ||||||
Touchstone Mid Cap Growth Fund | 99,093 | 2,399,039 | ||||||
4,003,026 | ||||||||
Blue Chip — 4.1% | ||||||||
Touchstone Dynamic Equity Fund* | 259,690 | 3,222,752 | ||||||
Value Mid-Cap — 3.1% | ||||||||
Touchstone Mid Cap Value Fund | 157,854 | 2,424,639 | ||||||
Growth Small-Cap — 3.1% | ||||||||
Touchstone Small Cap Growth Fund | 442,360 | 2,410,861 | ||||||
Various Assets — 2.1% | ||||||||
Touchstone Merger Arbitrage Fund | 146,896 | 1,617,325 | ||||||
Total Affiliated Mutual Funds | $ | 79,208,705 | ||||||
Total Investment Securities —100.9% | ||||||||
(Cost $74,391,234) | $ | 79,208,705 | ||||||
Liabilities in Excess of Other Assets — (0.9%) | (674,039 | ) | ||||||
Net Assets — 100.0% | $ | 78,534,666 |
* | Non-income producing security. |
^ | All affiliated fund investments are in Institutional Class shares, unless otherwise indicated. The financial statements of the underlying funds can be found on the SEC website. See Note 4 in Notes to Financial Statements. |
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 | ||||||||||||
Affiliated Mutual Funds | $ | 79,208,705 | $ | — | $ | — | $ | 79,208,705 |
See accompanying Notes to Financial Statements.
10 |
Portfolio of Investments
Touchstone Moderate Growth Allocation Fund – June 30, 2013 (Unaudited)
Market | ||||||||
Shares | Value | |||||||
Affiliated Mutual Funds^— 100.3% | ||||||||
International Equity — 16.9% | ||||||||
Touchstone International Small Cap Fund | 474,820 | $ | 6,129,921 | |||||
Touchstone International Value Fund | 2,572,650 | 19,603,594 | ||||||
25,733,515 | ||||||||
Government/Corporate—15.2% | ||||||||
Touchstone Total Return Bond Fund | 1,478,133 | 15,017,829 | ||||||
Touchstone Ultra Short Duration Fixed Income Fund | 863,478 | 8,168,502 | ||||||
23,186,331 | ||||||||
Value — 14.2% | ||||||||
Touchstone Focused Fund | 324,645 | 9,301,092 | ||||||
Touchstone Value Fund | 1,536,818 | 12,340,651 | ||||||
21,641,743 | ||||||||
Growth — 10.1% | ||||||||
Touchstone Growth Opportunities Fund | 110,817 | 3,079,618 | ||||||
Touchstone Sands Capital Institutional Growth Fund | 664,140 | 12,346,359 | ||||||
15,425,977 | ||||||||
Emerging Market-Equity — 6.6% | ||||||||
Touchstone Emerging Markets Equity Fund | 869,571 | 9,982,675 | ||||||
Equity Income — 6.1% | ||||||||
Touchstone Premium Yield Equity Fund, Class Y | 1,072,872 | 9,312,533 | ||||||
Value Small-Cap — 5.1% | ||||||||
Touchstone Small Cap Core Fund | 243,718 | 4,628,210 | ||||||
Touchstone Small Company Value Fund | 170,027 | 3,123,389 | ||||||
7,751,599 | ||||||||
Blue Chip — 4.1% | ||||||||
Touchstone Dynamic Equity Fund* | 500,882 | 6,215,946 | ||||||
Growth Mid-Cap — 4.1% | ||||||||
Touchstone Mid Cap Fund | 151,932 | 3,088,779 | ||||||
Touchstone Mid Cap Growth Fund | 127,272 | 3,081,258 | ||||||
6,170,037 | ||||||||
Balanced — 4.0% | ||||||||
Touchstone Flexible Income Fund | 586,363 | 6,156,811 | ||||||
Sector Fund Real-Estate — 3.8% | ||||||||
Touchstone Global Real Estate Fund | 463,326 | 5,708,171 | ||||||
Various Assets — 2.1% | ||||||||
Touchstone Merger Arbitrage Fund | 283,073 | 3,116,634 | ||||||
Value Mid-Cap — 2.0% | ||||||||
Touchstone Mid Cap Value Fund | 202,711 | 3,113,642 | ||||||
Growth Small-Cap — 2.0% | ||||||||
Touchstone Small Cap Growth Fund | 568,819 | 3,100,065 | ||||||
Corporate/Preferred-High Yield — 2.0% | ||||||||
Touchstone High Yield Fund | 341,134 | 3,066,792 | ||||||
International Debt — 2.0% | ||||||||
Touchstone International Fixed Income Fund | 301,452 | 3,062,749 | ||||||
Total Affiliated Mutual Funds | $ | 152,745,220 | ||||||
Total Investment Securities —100.3% | ||||||||
(Cost $143,766,011) | $ | 152,745,220 | ||||||
Liabilities in Excess of Other Assets — (0.3%) | (468,173 | ) | ||||||
Net Assets — 100.0% | $ | 152,277,047 |
* | Non-income producing security. |
^ | All affiliated fund investments are in Institutional Class shares, unless otherwise indicated. The financial statements of the underlying funds can be found on the SEC website. See Note 4 in Notes to Financial Statements. |
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 | ||||||||||||
Affiliated Mutual Funds | $ | 152,745,220 | $ | — | $ | — | $ | 152,745,220 |
See accompanying Notes to Financial Statements.
11 |
Statements of Assets and Liabilities
June 30, 2013 (Unaudited)
Touchstone | Touchstone | Touchstone | ||||||||||
Dynamic | Balanced | Conservative | ||||||||||
Equity | Allocation | Allocation | ||||||||||
Fund | Fund | Fund | ||||||||||
Assets | ||||||||||||
Investments, at cost | $ | 69,390,129 | $ | 122,143,048 | $ | 69,714,199 | ||||||
Affiliated securities, at market value | $ | 2,301,056 | $ | 126,977,747 | $ | 71,210,326 | ||||||
Non-affiliated securities, at market value | 74,644,376 | — | — | |||||||||
Investments, at market value | $ | 76,945,432 | $ | 126,977,747 | $ | 71,210,326 | ||||||
Cash deposits held at prime broker | 125,527 | — | — | |||||||||
Dividends and interest receivable | 87,004 | 22,077 | 24,621 | |||||||||
Receivable for capital shares sold | 42,418 | 65,842 | 48,839 | |||||||||
Receivable from Investment Advisor | — | 11,803 | 4,857 | |||||||||
Other assets | 46,559 | 11,524 | 12,049 | |||||||||
Total Assets | 77,246,940 | 127,088,993 | 71,300,692 | |||||||||
Liabilities | ||||||||||||
Written options, at market value (A) | 404,055 | — | — | |||||||||
Securities sold short (B) | 12,391,658 | — | — | |||||||||
Dividends for securities sold short payable | 4,278 | — | — | |||||||||
Dividends payable | — | — | — | |||||||||
Payable to Transfer Agent | 25,197 | 30,300 | 26,016 | |||||||||
Payable for capital shares redeemed | 134,235 | 499,614 | 1,097,279 | |||||||||
Payable to Investment Advisor | 55,412 | — | — | |||||||||
Payable to other affiliates | 13,793 | 30,070 | 12,530 | |||||||||
Payable to Trustees | 1,502 | 1,262 | 1,253 | |||||||||
Payable for professional services | 6,491 | 8,097 | 7,037 | |||||||||
Other accrued expenses and liabilities | 32,300 | 13,925 | 11,455 | |||||||||
Total Liabilities | 13,068,921 | 583,268 | 1,155,570 | |||||||||
Net Assets | $ | 64,178,019 | $ | 126,505,725 | $ | 70,145,122 | ||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 200,570,784 | $ | 161,801,994 | $ | 72,773,594 | ||||||
Accumulated net investment income (loss) | 225,444 | (236 | ) | (210 | ) | |||||||
Accumulated net realized losses on investments, written options, foreign currency transactions and short positions | (145,471,755 | ) | (40,130,732 | ) | (4,124,389 | ) | ||||||
Net unrealized appreciation on investments, written options, foreign currency transactions and short positions | 8,853,546 | 4,834,699 | 1,496,127 | |||||||||
Net Assets | $ | 64,178,019 | $ | 126,505,725 | $ | 70,145,122 | ||||||
(A) Proceeds received for written options: | $ | 488,538 | $ | — | $ | — | ||||||
(B) Proceeds received for securities sold short: | $ | 13,605,418 | $ | — | $ | — |
See accompanying Notes to Financial Statements.
12 |
Statements of Assets and Liabilities (Unaudited) (Continued)
Touchstone | ||||||
Touchstone | Moderate | |||||
Growth | Growth | |||||
Allocation | Allocation | |||||
Fund | Fund | |||||
$ | 74,391,234 | $ | 143,766,011 | |||
$ | 79,208,705 | $ | 152,745,220 | |||
— | — | |||||
$ | 79,208,705 | $ | 152,745,220 | |||
— | — | |||||
8,272 | 13,945 | |||||
10,401 | 63,335 | |||||
6,132 | 239 | |||||
9,783 | 16,326 | |||||
79,243,293 | 152,839,065 | |||||
— | — | |||||
— | — | |||||
— | — | |||||
— | 65 | |||||
43,837 | 80,249 | |||||
623,555 | 429,938 | |||||
— | — | |||||
15,337 | 33,066 | |||||
807 | 1,567 | |||||
6,160 | 7,031 | |||||
18,931 | 10,102 | |||||
708,627 | 562,018 | |||||
$ | 78,534,666 | $ | 152,277,047 | |||
$ | 116,402,572 | $ | 185,275,388 | |||
(126 | ) | (197 | ) | |||
(42,685,251 | ) | (41,977,353 | ) | |||
4,817,471 | 8,979,209 | |||||
$ | 78,534,666 | $ | 152,277,047 | |||
$ | — | $ | — | |||
$ | — | $ | — |
13 |
Statements of Assets and Liabilities (Unaudited) (Continued)
Touchstone | Touchstone | Touchstone | ||||||||||
Dynamic | Balanced | Conservative | ||||||||||
Equity | Allocation | Allocation | ||||||||||
Fund | Fund | Fund | ||||||||||
Pricing of Class A Shares | ||||||||||||
Net assets applicable to Class A shares | $ | 15,532,979 | $ | 47,071,093 | $ | 24,442,236 | ||||||
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | 1,273,536 | 4,082,249 | 2,309,110 | |||||||||
Net asset value price per share* | $ | 12.20 | $ | 11.53 | $ | 10.59 | ||||||
Maximum offering price per share | $ | 12.94 | $ | 12.23 | $ | 11.24 | ||||||
Pricing of Class C Shares | ||||||||||||
Net assets applicable to Class C shares | $ | 10,196,116 | $ | 36,856,792 | $ | 17,190,114 | ||||||
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | 886,859 | 3,199,820 | 1,631,872 | |||||||||
Net asset value, offering price per share** | $ | 11.50 | $ | 11.52 | $ | 10.53 | ||||||
Pricing of Class Y Shares | ||||||||||||
Net assets applicable to Class Y shares | $ | 21,704,084 | $ | 42,545,497 | $ | 27,877,834 | ||||||
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | 1,751,415 | 3,683,860 | 2,632,987 | |||||||||
Net asset value, offering price and redemption price per share | $ | 12.39 | $ | 11.55 | $ | 10.59 | ||||||
Pricing of Institutional Class Shares | ||||||||||||
Net assets applicable to Institutional Class Shares | $ | 16,744,840 | $ | 32,343 | $ | 634,938 | ||||||
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | 1,348,876 | 2,813 | 59,940 | |||||||||
Net asset value, offering price and redemption price per share | $ | 12.41 | $ | 11.50 | $ | 10.59 |
* There is no sales load on subscriptions of $ 1 million or more. Redemptions that were part of a $ 1 million or more subscription may be subject to a contingent deferred sales load if redeemed within a one-year period from the date of purchase.
** Redemption price per share varies by length of time shares are held.
See accompanying Notes to Financial Statements.
14 |
Statements of Assets and Liabilities (Unaudited) (Continued)
Touchstone | ||||||
Touchstone | Moderate | |||||
Growth | Growth | |||||
Allocation | Allocation | |||||
Fund | Fund | |||||
$ | 29,368,068 | $ | 66,682,229 | |||
2,348,153 | 5,616,075 | |||||
$ | 12.51 | $ | 11.87 | |||
$ | 13.27 | $ | 12.59 | |||
$ | 23,957,784 | $ | 48,503,898 | |||
1,992,488 | 4,149,553 | |||||
$ | 12.02 | $ | 11.69 | |||
$ | 25,190,831 | $ | 37,081,801 | |||
1,994,999 | 3,100,569 | |||||
$ | 12.63 | $ | 11.96 | |||
$ | 17,983 | $ | 9,119 | |||
1,562 | 766 | |||||
$ | 11.51 | $ | 11.91 |
15 |
Statements of Operations
For the Six Months Ended June 30, 2013 (Unaudited)
Touchstone | Touchstone | Touchstone | ||||||||||
Dynamic | Balanced | Conservative | ||||||||||
Equity | Allocation | Allocation | ||||||||||
Fund | Fund | Fund | ||||||||||
Investment Income | ||||||||||||
Dividends from affiliated funds | $ | 519 | $ | 932,028 | $ | 716,437 | ||||||
Dividends from non-affiliated securities(A) | 801,514 | — | — | |||||||||
Total Investment Income | 802,033 | 932,028 | 716,437 | |||||||||
Expenses | ||||||||||||
Investment advisory fees | 273,623 | 131,370 | 75,975 | |||||||||
Administration fees | 54,752 | 111,743 | 64,637 | |||||||||
Compliance fees and expenses | 477 | 644 | 1,153 | |||||||||
Custody fees | 3,634 | 3,503 | 1,891 | |||||||||
Professional fees | 8,167 | 8,304 | 8,207 | |||||||||
Transfer Agent fees, Class A | 13,183 | 33,989 | 21,028 | |||||||||
Transfer Agent fees, Class C | 5,989 | 11,833 | 5,734 | |||||||||
Transfer Agent fees, Class Y | 10,041 | 21,576 | 13,660 | |||||||||
Transfer Agent fees, Institutional Class | 43 | 13 | 35 | |||||||||
Registration Fees, Class A | 5,942 | 11,691 | 11,609 | |||||||||
Registration Fees, Class C | 7,546 | 11,925 | 9,940 | |||||||||
Registration Fees, Class Y | 6,472 | 8,627 | 9,736 | |||||||||
Registration Fees, Institutional Class | 9,059 | 10,440 | 10,394 | |||||||||
Dividend expense on securities sold short | 106,623 | — | — | |||||||||
Reports to Shareholders, Class A | 9,141 | 3,971 | 2,985 | |||||||||
Reports to Shareholders, Class C | 5,293 | 5,856 | 3,617 | |||||||||
Reports to Shareholders, Class Y | 5,952 | 2,235 | 2,486 | |||||||||
Reports to Shareholders, Institutional Class | 3,058 | 3,260 | 3,201 | |||||||||
Distribution expenses, Class A | 20,057 | 60,585 | 34,295 | |||||||||
Distribution and shareholder servicing expenses, Class C | 51,505 | 189,604 | 89,445 | |||||||||
Trustee fees | 5,630 | 5,334 | 5,309 | |||||||||
Other expenses | 12,654 | 15,808 | 8,662 | |||||||||
Total Expenses | 618,841 | 652,311 | 383,999 | |||||||||
Fees waived and/or reimbursed by the Advisor and/or Affiliates(B) | (26,349 | ) | (349,554 | ) | (229,871 | ) | ||||||
Net Expenses | 592,492 | 302,757 | 154,128 | |||||||||
Net Investment Income | 209,541 | 629,271 | 562,309 | |||||||||
Realized and Unrealized Gain (Loss) on Investments | ||||||||||||
Net realized gain on investments from non-affiliated securities | 10,538,844 | — | — | |||||||||
Net realized gain on investments from affiliated securities | — | 4,299,137 | 1,007,429 | |||||||||
Net realized loss on written options | (2,513,889 | ) | — | — | ||||||||
Net realized loss on securities sold short | (2,891,807 | ) | — | — | ||||||||
Net change in unrealized appreciation (depreciation) on investments | (416,297 | ) | 564,436 | (202,289 | ) | |||||||
Net change in unrealized appreciation on written options | 59,616 | — | — | |||||||||
Net change in unrealized appreciation on securities sold short | 1,420,963 | — | — | |||||||||
Net Realized and Unrealized Gain on Investments | 6,197,430 | 4,863,573 | 805,140 | |||||||||
Change in Net Assets Resulting from Operations | $ | 6,406,971 | $ | 5,492,844 | $ | 1,367,449 | ||||||
(A) Net of foreign tax withholding of: | $ | 1,897 | $ | — | $ | — | ||||||
(B) See Note 4 in Notes to Financial Statements. |
See accompanying Notes to Financial Statements.
16 |
Statements of Operations (Unaudited) (Continued)
Touchstone | ||||||
Touchstone | Moderate | |||||
Growth | Growth | |||||
Allocation | Allocation | |||||
Fund | Fund | |||||
$ | 276,385 | $ | 930,211 | |||
— | — | |||||
276,385 | 930,211 | |||||
103,130 | 199,031 | |||||
70,167 | 135,425 | |||||
477 | 993 | |||||
2,292 | 3,265 | |||||
7,045 | 9,233 | |||||
39,369 | 75,966 | |||||
12,898 | 18,656 | |||||
9,908 | 10,163 | |||||
74 | 12 | |||||
11,929 | 12,199 | |||||
11,939 | 9,746 | |||||
9,197 | 6,192 | |||||
10,358 | 10,379 | |||||
— | — | |||||
4,208 | 4,391 | |||||
6,468 | 9,422 | |||||
2,300 | 2,038 | |||||
3,480 | 3,271 | |||||
38,972 | 87,971 | |||||
123,000 | 248,361 | |||||
4,944 | 5,642 | |||||
14,953 | 23,772 | |||||
487,108 | 876,128 | |||||
(292,078 | ) | (476,026 | ) | |||
195,030 | 400,102 | |||||
81,355 | 530,109 | |||||
— | — | |||||
4,089,152 | 6,508,840 | |||||
— | — | |||||
— | — | |||||
1,204,910 | 1,696,874 | |||||
— | — | |||||
— | — | |||||
5,294,062 | 8,205,714 | |||||
$ | 5,375,417 | $ | 8,735,823 | |||
$ | — | $ | — | |||
17 |
Statements of Changes in Net Assets
Touchstone | ||||||||||||
Dynamic Equity | ||||||||||||
Fund | ||||||||||||
For the | For the | |||||||||||
Six Months | Five Months | For the | ||||||||||
Ended | Ended | Year | ||||||||||
June 30, 2013 | December 31, | Ended | ||||||||||
(Unaudited) | 2012(B) | July 31, 2012 | ||||||||||
From Operations | ||||||||||||
Net investment income (loss) | $ | 209,541 | $ | 259,349 | $ | (409,958 | ) | |||||
Net realized gain (loss) on investments, written options, foreign currency transactions and securities sold short | 5,133,148 | (307,770 | ) | 3,827,422 | ||||||||
Net change in unrealized appreciation (depreciation) on investments, written options, foreign currency transactions and securities sold short | 1,064,282 | (1,019,180 | ) | 2,431,040 | ||||||||
Change in Net Assets from Operations | 6,406,971 | (1,067,601 | ) | 5,848,504 | ||||||||
Distributions to Shareholders from: | ||||||||||||
Net investment income, Class A | — | — | (151,828 | ) | ||||||||
Net investment income, Class C | — | — | (59,199 | ) | ||||||||
Net investment income, Class Y | — | — | — | |||||||||
Net investment income, Class Z | — | — | (303,846 | ) | ||||||||
Net investment income, Institutional Class | — | — | (17 | ) | ||||||||
Net realized gains, Class A | — | — | — | |||||||||
Net realized gains, Class C | — | — | — | |||||||||
Net realized gains, Class Y | — | — | — | |||||||||
Net realized gains, Institutional Class | — | — | — | |||||||||
Total Distributions | — | — | (514,890 | ) | ||||||||
Net Increase (Decrease) from Share Transactions(A) | (9,288,076 | ) | 8,301,265 | (13,768,800 | ) | |||||||
Total Increase (Decrease) in Net Assets | (2,881,105 | ) | 7,233,664 | (8,435,186 | ) | |||||||
Net Assets | ||||||||||||
Beginning of period | 67,059,124 | 59,825,460 | 68,260,646 | |||||||||
End of period | $ | 64,178,019 | $ | 67,059,124 | $ | 59,825,460 | ||||||
Accumulated Net Investment Income (Loss) | $ | 225,444 | $ | 15,903 | $ | (386,369 | ) |
(A) | For details on share transaction by class, see statements of changes in net assets - capital stock activity on pages 22 to 24. |
(B) | The Fund changed its fiscal year from July 31 to December 31. See Note 8 in the Notes to Financial Statements. |
See accompanying Notes to Financial Statements.
18 |
Statements of Changes in Net Assets (Continued)
Touchstone | Touchstone | |||||||||||||||||||||
Balanced Allocation | Conservative Allocation | |||||||||||||||||||||
Fund | Fund | |||||||||||||||||||||
For the | For the | For the | For the | |||||||||||||||||||
Six Months | Five Months | For the | Six Months | Five Months | For the | |||||||||||||||||
Ended | Ended | Year | Ended | Ended | Year | |||||||||||||||||
June 30, 2013 | December 31, | Ended | June 30, 2013 | December 31, | Ended | |||||||||||||||||
(Unaudited) | 2012(B) | July 31, 2012 | (Unaudited) | 2012(B) | July 31, 2012 | |||||||||||||||||
$ | 629,271 | $ | 1,417,962 | $ | 567,559 | $ | 562,309 | $ | 693,271 | $ | 535,072 | |||||||||||
4,299,137 | 5,632,070 | 5,462,607 | 1,007,429 | 3,844,351 | 3,112,528 | |||||||||||||||||
564,436 | (3,322,821 | ) | (5,042,105 | ) | (202,289 | ) | (3,335,699 | ) | (2,902,390 | ) | ||||||||||||
5,492,844 | 3,727,211 | 988,061 | 1,367,449 | 1,201,923 | 745,210 | |||||||||||||||||
(264,910 | ) | (751,006 | ) | (164,728 | ) | (206,573 | ) | (479,405 | ) | (135,704 | ) | |||||||||||
(70,103 | ) | (585,993 | ) | (414,996 | ) | (76,590 | ) | (376,396 | ) | (266,757 | ) | |||||||||||
(294,273 | ) | (998,571 | ) | — | (272,955 | ) | (456,004 | ) | (7,041 | ) | ||||||||||||
— | — | (27,150 | ) | — | — | (43,132 | ) | |||||||||||||||
(221 | ) | (707 | ) | (477 | ) | (6,401 | ) | (34,395 | ) | (136,455 | ) | |||||||||||
— | (1,250,595 | ) | — | — | (1,422,514 | ) | — | |||||||||||||||
— | (989,596 | ) | — | — | (773,349 | ) | — | |||||||||||||||
— | (1,701,479 | ) | — | — | (1,620,816 | ) | — | |||||||||||||||
— | (783 | ) | — | — | (52,524 | ) | — | |||||||||||||||
(629,507 | ) | (6,278,730 | ) | (607,351 | ) | (562,519 | ) | (5,215,403 | ) | (589,089 | ) | |||||||||||
(12,824,687 | ) | 87,474,773 | (15,492,104 | ) | (16,122,576 | ) | 60,408,531 | (10,055,229 | ) | |||||||||||||
(7,961,350 | ) | 84,923,254 | (15,111,394 | ) | (15,317,646 | ) | 56,395,051 | (9,899,108 | ) | |||||||||||||
134,467,075 | 49,543,821 | 64,655,215 | 85,462,768 | 29,067,717 | 38,966,825 | |||||||||||||||||
$ | 126,505,725 | $ | 134,467,075 | $ | 49,543,821 | $ | 70,145,122 | $ | 85,462,768 | $ | 29,067,717 | |||||||||||
$ | (236 | ) | $ | — | $ | 271,112 | $ | (210 | ) | $ | — | $ | 359,301 |
19 |
Statements of Changes in Net Assets (Continued)
Touchstone | ||||||||||||
Growth Allocation | ||||||||||||
Fund | ||||||||||||
For the | For the Five | |||||||||||
Six Months | Months | For the | ||||||||||
Ended | Ended | Year | ||||||||||
June 30, 2013 | December 31, | Ended | ||||||||||
(Unaudited) | 2012(B) | July 31, 2012 | ||||||||||
From Operations | ||||||||||||
Net investment income | $ | 81,355 | $ | 850,224 | $ | 269,656 | ||||||
Net realized gain on investments | 4,089,152 | 4,772,422 | 2,532,790 | |||||||||
Net change in unrealized appreciation (depreciation) on investments | 1,204,910 | (1,824,714 | ) | (3,917,579 | ) | |||||||
Change in Net Assets from Operations | 5,375,417 | 3,797,932 | (1,115,133 | ) | ||||||||
Distributions to Shareholders from: | ||||||||||||
Net investment income, Class A | (25,695 | ) | (646,035 | ) | (114,772 | ) | ||||||
Net investment income, Class C | — | (450,497 | ) | (44,632 | ) | |||||||
Net investment income, Class Y | (55,743 | ) | (503,325 | ) | — | |||||||
Net investment income, Class Z | — | — | (20,102 | ) | ||||||||
Net investment income, Institutional Class | (43 | ) | (901 | ) | (983 | ) | ||||||
Net realized gains, Class A | — | — | — | |||||||||
Net realized gains, Class C | — | — | — | |||||||||
Net realized gains, Class Y | — | — | — | |||||||||
Net realized gains, Institutional Class | — | — | — | |||||||||
Total Distributions | (81,481 | ) | (1,600,758 | ) | (180,489 | ) | ||||||
Net Increase (Decrease) from Share Transactions(A) | (10,158,185 | ) | 46,019,976 | (14,968,001 | ) | |||||||
Total Increase (Decrease) in Net Assets | (4,864,249 | ) | 48,217,150 | (16,263,623 | ) | |||||||
Net Assets | ||||||||||||
Beginning of period | 83,398,915 | 35,181,765 | 51,445,388 | |||||||||
End of period | $ | 78,534,666 | $ | 83,398,915 | $ | 35,181,765 | ||||||
Accumulated Net Investment Income (Loss) | $ | (126 | ) | $ | — | $ | 269,645 |
(A) | For details on share transaction by class, see statements of changes in net assets - capital stock activity on pages 25 and 26. |
(B) | The Fund changed its fiscal year from July 31 to December 31. See Note 8 in the Notes to Financial Statements. |
See accompanying Notes to Financial Statements.
20 |
Statements of Changes in Net Assets (Continued)
Touchstone | ||||||||||
Moderate Growth Allocation | ||||||||||
Fund | ||||||||||
For the | For the Five | |||||||||
Six Months | Months | For the | ||||||||
Ended | Ended | Year | ||||||||
June 30, 2013 | December 31, | Ended | ||||||||
(Unaudited) | 2012(B) | July 31, 2012 | ||||||||
$ | 530,109 | $ | 1,697,720 | $ | 569,460 | |||||
6,508,840 | 13,038,497 | 4,106,912 | ||||||||
1,696,874 | (8,653,626 | ) | (4,637,598 | ) | ||||||
8,735,823 | 6,082,591 | 38,774 | ||||||||
(265,530 | ) | (1,238,170 | ) | (237,914 | ) | |||||
(69,669 | ) | (772,314 | ) | (314,758 | ) | |||||
(195,060 | ) | (880,957 | ) | — | ||||||
— | — | (20,136 | ) | |||||||
(47 | ) | (254 | ) | (127 | ) | |||||
— | (1,119,959 | ) | — | |||||||
— | (769,189 | ) | — | |||||||
— | (855,859 | ) | — | |||||||
— | (131 | ) | — | |||||||
(530,306 | ) | (5,636,833 | ) | (572,935 | ) | |||||
(19,741,440 | ) | 99,907,478 | (17,225,588 | ) | ||||||
(11,535,923 | ) | 100,353,236 | (17,759,749 | ) | ||||||
�� | ||||||||||
163,812,970 | 63,459,734 | 81,219,483 | ||||||||
$ | 152,277,047 | $ | 163,812,970 | $ | 63,459,734 | |||||
$ | (197 | ) | $ | — | $ | 392,606 |
21 |
Statements of Changes in Net Assets - Capital Stock Activity
Touchstone Dynamic | ||||||||||||||||||||||||
Equity Fund | ||||||||||||||||||||||||
For the Six Months | ||||||||||||||||||||||||
Ended | For the Five Months | For the Year | ||||||||||||||||||||||
June 30, 2013 | Ended | Ended | ||||||||||||||||||||||
(Unaudited) | December 31, 2012(B) | July 31, 2012 | ||||||||||||||||||||||
Shares | Dollars | Shares | Dollars | Shares | Dollars | |||||||||||||||||||
Class A | ||||||||||||||||||||||||
Proceeds from Shares sold | 306,549 | $ | 3,635,060 | 113,667 | $ | 1,270,554 | 97,187 | $ | 1,023,913 | |||||||||||||||
Cost of Shares redeemed in connection with merger(A) | — | — | — | — | — | — | ||||||||||||||||||
Reinvestment of distributions | — | — | — | — | 12,141 | 127,964 | ||||||||||||||||||
Redemption fees | — | — | — | — | — | 22 | ||||||||||||||||||
Cost of Shares redeemed | (494,686 | ) | (5,838,237 | ) | (252,268 | ) | (2,812,907 | ) | (799,021 | ) | (8,368,813 | ) | ||||||||||||
Change in Net Assets from Class A Share Transactions | (188,137 | ) | (2,203,177 | ) | (138,601 | ) | (1,542,353 | ) | (689,693 | ) | (7,216,914 | ) | ||||||||||||
Class C | ||||||||||||||||||||||||
Proceeds from Shares sold | 24,168 | 274,815 | 11,073 | 118,005 | 38,462 | 411,299 | ||||||||||||||||||
Cost of Shares redeemed in connection with merger(A) | — | — | — | — | — | — | ||||||||||||||||||
Reinvestment of distributions | — | — | — | — | 2,418 | 24,273 | ||||||||||||||||||
Redemption fees | — | — | — | — | — | 14 | ||||||||||||||||||
Cost of Shares redeemed | (133,729 | ) | (1,484,420 | ) | (113,949 | ) | (1,211,134 | ) | (396,981 | ) | (3,980,527 | ) | ||||||||||||
Change in Net Assets from Class C Share Transactions | (109,561 | ) | (1,209,605 | ) | (102,876 | ) | (1,093,129 | ) | (356,101 | ) | (3,544,941 | ) | ||||||||||||
Class Y | ||||||||||||||||||||||||
Proceeds from Shares sold | 605,917 | 7,408,150 | 17,727 | 201,695 | 115,845 | 1,254,036 | ||||||||||||||||||
Proceeds from Shares issued in connection with merger(A) | — | — | — | — | 2,239,679 | 21,354,181 | ||||||||||||||||||
Reinvestment of distributions | — | — | — | — | — | — | ||||||||||||||||||
Cost of Shares redeemed | (673,011 | ) | (8,096,901 | ) | (318,203 | ) | (3,604,761 | ) | (236,539 | ) | (2,604,497 | ) | ||||||||||||
Change in Net Assets from Class Y Share Transactions | (67,094 | ) | (688,751 | ) | (300,476 | ) | (3,403,066 | ) | 2,118,985 | 20,003,720 | ||||||||||||||
Class Z | ||||||||||||||||||||||||
Proceeds from Shares sold | — | — | — | — | 685,868 | 7,058,978 | ||||||||||||||||||
Reinvestment of distributions | — | — | — | — | 26,540 | 283,182 | ||||||||||||||||||
Redemption fees | — | — | — | — | — | 30 | ||||||||||||||||||
Cost of Shares redeemed | — | — | — | — | (1,407,539 | ) | (14,954,589 | ) | ||||||||||||||||
Cost of Shares redeemed in connection with merger(A) | — | — | — | — | (2,239,679 | ) | (21,354,181 | ) | ||||||||||||||||
Change in Net Assets from Class Z Share Transactions | — | — | — | — | (2,934,810 | ) | (28,966,580 | ) | ||||||||||||||||
Institutional Class | ||||||||||||||||||||||||
Proceeds from Shares sold | 18,812 | 227,597 | 1,329,419 | 15,304,513 | 623,310 | 6,847,071 | ||||||||||||||||||
Reinvestment of distributions | — | — | — | — | 1 | 17 | ||||||||||||||||||
Redemption fees | — | — | — | — | — | 8 | ||||||||||||||||||
Cost of Shares redeemed | (457,938 | ) | (5,414,140 | ) | (84,149 | ) | (964,700 | ) | (80,747 | ) | (891,181 | ) | ||||||||||||
Change in Net Assets from Institutional Class Share Transactions | (439,126 | ) | (5,186,543 | ) | 1,245,270 | 14,339,813 | 542,564 | 5,955,915 | ||||||||||||||||
Net Increase (Decrease) from Share Transactions | (803,918 | ) | $ | (9,288,076 | ) | 703,317 | $ | 8,301,265 | (1,319,055 | ) | $ | (13,768,800 | ) |
(A) See Note 8 in the Notes to Financial Statements.
(B) The Fund changed its fiscal year from July 31 to December 31. See Note 8 in the Notes to Financial Statements.
See accompanying Notes to Financial Statements.
22 |
Statements of Changes in Net Assets - Capital Stock Activity (Continued)
Touchstone Balanced | ||||||||||||||||||||||
Allocation Fund | ||||||||||||||||||||||
For the Six Months | ||||||||||||||||||||||
Ended | For the Five Months | For the Year | ||||||||||||||||||||
June 30, 2013 | Ended | Ended | ||||||||||||||||||||
(Unaudited) | December 31, 2012(B) | July 31, 2012 | ||||||||||||||||||||
Shares | Dollars | Shares | Dollars | Shares | Dollars | |||||||||||||||||
183,869 | 2,141,121 | 133,156 | 1,512,715 | 51,372 | 555,561 | |||||||||||||||||
— | — | 3,650,589 | 41,600,137 | — | — | |||||||||||||||||
20,861 | 241,005 | 160,880 | 1,794,307 | 11,764 | 124,335 | |||||||||||||||||
— | — | — | — | — | — | |||||||||||||||||
(535,172 | ) | (6,195,996 | ) | (411,962 | ) | (4,677,019 | ) | (329,730 | ) | (3,549,105 | ) | |||||||||||
(330,442 | ) | (3,813,870 | ) | 3,532,663 | 40,230,140 | (266,594 | ) | (2,869,209 | ) | |||||||||||||
70,185 | 812,343 | 93,366 | 1,049,120 | 111,052 | 1,192,025 | |||||||||||||||||
— | — | 191,231 | 2,174,823 | — | — | |||||||||||||||||
3,983 | 45,926 | 91,476 | 1,018,509 | 24,035 | 254,301 | |||||||||||||||||
— | — | — | — | — | 9 | |||||||||||||||||
(312,037 | ) | (3,606,647 | ) | (385,238 | ) | (4,344,101 | ) | (1,239,184 | ) | (13,462,919 | ) | |||||||||||
(237,869 | ) | (2,748,378 | ) | (9,165 | ) | (101,649 | ) | (1,104,097 | ) | (12,016,584 | ) | |||||||||||
290,705 | 3,374,748 | 301,709 | 3,426,829 | 4,552 | 49,425 | |||||||||||||||||
— | — | 6,276,974 | 71,649,327 | 114,668 | 1,301,456 | |||||||||||||||||
24,048 | 278,174 | 234,665 | 2,620,777 | — | — | |||||||||||||||||
(854,683 | ) | (9,915,582 | ) | (2,704,435 | ) | (30,352,141 | ) | (4,343 | ) | (47,913 | ) | |||||||||||
(539,930 | ) | (6,262,660 | ) | 4,108,913 | 47,344,792 | 114,877 | 1,302,968 | |||||||||||||||
— | — | — | — | 8,853 | 96,418 | |||||||||||||||||
— | — | — | — | 1,293 | 13,562 | |||||||||||||||||
— | — | — | — | — | — | |||||||||||||||||
— | — | — | — | (64,331 | ) | (716,348 | ) | |||||||||||||||
— | — | — | — | (114,668 | ) | (1,301,456 | ) | |||||||||||||||
— | — | — | — | (168,853 | ) | (1,907,824 | ) | |||||||||||||||
— | — | — | — | 35 | 372 | |||||||||||||||||
19 | 221 | 134 | 1,490 | 19 | 205 | |||||||||||||||||
— | — | — | — | — | — | |||||||||||||||||
— | — | — | — | (197 | ) | (2,032 | ) | |||||||||||||||
19 | 221 | 134 | 1,490 | (143 | ) | (1,455 | ) | |||||||||||||||
(1,108,222 | ) | $ | (12,824,687 | ) | 7,632,545 | $ | 87,474,773 | (1,424,810 | ) | $ | (15,492,104 | ) |
23 |
Statements of Changes in Net Assets - Capital Stock Activity (Continued)
Touchstone Conservative | ||||||||||||||||||||||||
Allocation Fund | ||||||||||||||||||||||||
For the Six Months | ||||||||||||||||||||||||
Ended | For the Five Months | For the Year | ||||||||||||||||||||||
June 30, 2013 | Ended | Ended | ||||||||||||||||||||||
(Unaudited) | December 31, 2012(B) | July 31, 2012 | ||||||||||||||||||||||
Shares | Dollars | Shares | Dollars | Shares | Dollars | |||||||||||||||||||
Class A | ||||||||||||||||||||||||
Proceeds from Shares sold | 109,028 | $ | 1,166,319 | 182,352 | $ | 1,984,226 | 435,959 | $ | 4,679,336 | |||||||||||||||
Proceeds from Shares issued in connection with merger(A) | — | — | 2,370,245 | 26,062,498 | — | — | ||||||||||||||||||
Reinvestment of distributions | 17,458 | 185,696 | 140,042 | 1,482,044 | 8,431 | 89,062 | ||||||||||||||||||
Redemption fees | — | — | — | — | — | — | ||||||||||||||||||
Cost of Shares redeemed | (956,186 | ) | (10,223,737 | ) | (324,849 | ) | (3,545,483 | ) | (698,325 | ) | (7,410,892 | ) | ||||||||||||
Change in Net Assets from Class A Share Transactions | (829,700 | ) | (8,871,722 | ) | 2,367,790 | 25,983,285 | (253,935 | ) | (2,642,494 | ) | ||||||||||||||
Class C | ||||||||||||||||||||||||
Proceeds from Shares sold | 75,794 | 807,285 | 87,113 | 933,883 | 120,414 | 1,289,950 | ||||||||||||||||||
Proceeds from Shares issued in connection with merger(A) | — | — | 161,697 | 1,770,015 | — | — | ||||||||||||||||||
Reinvestment of distributions | 5,149 | 54,460 | 75,779 | 801,084 | 15,629 | 163,870 | ||||||||||||||||||
Cost of Shares redeemed | (168,392 | ) | (1,799,004 | ) | (170,909 | ) | (1,856,950 | ) | (419,692 | ) | (4,493,992 | ) | ||||||||||||
Change in Net Assets from Class C Share Transactions | (87,449 | ) | (937,259 | ) | 153,680 | 1,648,032 | (283,649 | ) | (3,040,172 | ) | ||||||||||||||
Class Y | ||||||||||||||||||||||||
Proceeds from Shares sold | 395,817 | 4,257,452 | 170,254 | 1,861,753 | 6,373 | 68,638 | ||||||||||||||||||
Proceeds from Shares issued in connection with merger(A) | — | — | 3,465,392 | 38,120,235 | 197,512 | 2,081,642 | ||||||||||||||||||
Reinvestment of distributions | 23,868 | 253,950 | 191,804 | 2,030,304 | 527 | 5,686 | ||||||||||||||||||
Cost of Shares redeemed | (958,802 | ) | (10,247,663 | ) | (851,598 | ) | (9,144,512 | ) | (8,160 | ) | (88,920 | ) | ||||||||||||
Change in Net Assets from Class Y Share Transactions | (539,117 | ) | (5,736,261 | ) | 2,975,852 | 32,867,780 | 196,252 | 2,067,046 | ||||||||||||||||
Class Z | ||||||||||||||||||||||||
Proceeds from Shares sold | — | — | — | — | 169,193 | 1,789,083 | ||||||||||||||||||
Reinvestment of distributions | — | — | — | — | 3,396 | 35,873 | ||||||||||||||||||
Cost of Shares redeemed | — | — | — | — | (101,097 | ) | (1,080,371 | ) | ||||||||||||||||
Cost of Shares redeemed in connection with merger(A) | — | — | — | — | (197,512 | ) | (2,081,642 | ) | ||||||||||||||||
Change in Net Assets from Class Z Share Transactions | — | — | — | — | (126,020 | ) | (1,337,057 | ) | ||||||||||||||||
Institutional Class | ||||||||||||||||||||||||
Proceeds from Shares sold | — | — | — | — | 12,061 | 130,383 | ||||||||||||||||||
Reinvestment of distributions | 557 | 5,937 | 8,105 | 86,416 | 12,914 | 136,455 | ||||||||||||||||||
Cost of Shares redeemed | (54,526 | ) | (583,271 | ) | (16,235 | ) | (176,982 | ) | (496,227 | ) | (5,369,390 | ) | ||||||||||||
Change in Net Assets from Institutional Class Share Transactions | (53,969 | ) | (577,334 | ) | (8,130 | ) | (90,566 | ) | (471,252 | ) | (5,102,552 | ) | ||||||||||||
Net Increase (Decrease) from Share Transactions | (1,510,235 | ) | $ | (16,122,576 | ) | 5,489,192 | $ | 60,408,531 | (938,604 | ) | $ | (10,055,229 | ) |
(A) See Note 8 in the Notes to Financial Statements.
(B) The Fund changed its fiscal year from July 31 to December 31. See Note 8 in the Notes to Financial Statements.
See accompanying Notes to Financial Statements.
24 |
Statements of Changes in Net Assets - Capital Stock Activity (Continued)
Touchstone Growth | ||||||||||||||||||||||
Allocation Fund | ||||||||||||||||||||||
For the Six Months | ||||||||||||||||||||||
Ended | For the Five Months | For the Year | ||||||||||||||||||||
June 30, 2013 | Ended | Ended | ||||||||||||||||||||
(Unaudited) | December 31, 2012(B) | July 31, 2012 | ||||||||||||||||||||
Shares | Dollars | Shares | Dollars | Shares | Dollars | |||||||||||||||||
77,725 | $ | 963,580 | 83,538 | $ | 975,036 | 55,210 | $ | 587,614 | ||||||||||||||
— | — | 1,982,555 | 23,010,705 | — | — | |||||||||||||||||
1,866 | 23,341 | 50,396 | 581,838 | 9,788 | 101,796 | |||||||||||||||||
— | — | — | — | — | 2 | |||||||||||||||||
(407,380 | ) | (5,091,333 | ) | (355,247 | ) | (4,130,048 | ) | (344,708 | ) | (3,716,622 | ) | |||||||||||
(327,789 | ) | (4,104,412 | ) | 1,761,242 | 20,437,531 | (279,710 | ) | (3,027,210 | ) | |||||||||||||
80,808 | 968,363 | 25,816 | 286,872 | 66,499 | 633,936 | |||||||||||||||||
— | — | 86,836 | 971,379 | — | — | |||||||||||||||||
— | — | 29,133 | 323,605 | 3,080 | 30,774 | |||||||||||||||||
(213,262 | ) | (2,556,154 | ) | (236,712 | ) | (2,642,774 | ) | (920,431 | ) | (9,388,471 | ) | |||||||||||
(132,454 | ) | (1,587,791 | ) | (94,927 | ) | (1,060,918 | ) | (850,852 | ) | (8,723,761 | ) | |||||||||||
263,339 | 3,345,580 | 92,145 | 1,085,271 | 9,691 | 107,236 | |||||||||||||||||
— | — | 2,547,823 | 29,855,473 | 68,967 | 732,300 | |||||||||||||||||
4,257 | 53,766 | 40,877 | 478,642 | — | — | |||||||||||||||||
(622,929 | ) | (7,852,615 | ) | (407,565 | ) | (4,791,580 | ) | (1,606 | ) | (17,612 | ) | |||||||||||
(355,333 | ) | (4,453,269 | ) | 2,273,280 | 26,627,806 | 77,052 | 821,924 | |||||||||||||||
— | — | — | — | 7,102 | 75,977 | |||||||||||||||||
— | — | — | — | 1,071 | 11,260 | |||||||||||||||||
— | — | — | — | (246,979 | ) | (2,681,751 | ) | |||||||||||||||
— | — | — | — | (68,967 | ) | (732,300 | ) | |||||||||||||||
— | — | — | — | (307,773 | ) | (3,326,814 | ) | |||||||||||||||
329 | 3,690 | 1,400 | 15,008 | 623 | 6,895 | |||||||||||||||||
4 | 43 | 85 | 901 | 100 | 983 | |||||||||||||||||
(1,454 | ) | (16,446 | ) | (32 | ) | (352 | ) | (67,704 | ) | (720,018 | ) | |||||||||||
(1,121 | ) | (12,713 | ) | 1,453 | 15,557 | (66,981 | ) | (712,140 | ) | |||||||||||||
(816,697 | ) | $ | (10,158,185 | ) | 3,941,048 | $ | 46,019,976 | (1,428,264 | ) | $ | (14,968,001 | ) |
25 |
Statements of Changes in Net Assets - Capital Stock Activity (Continued)
Touchstone Moderate Growth | ||||||||||||||||||||||||
Allocation Fund | ||||||||||||||||||||||||
For the Six Months | ||||||||||||||||||||||||
Ended | For the Five Months | For the Year | ||||||||||||||||||||||
June 30, 2013 | Ended | Ended | ||||||||||||||||||||||
(Unaudited) | December 31, 2012(B) | July 31, 2012 | ||||||||||||||||||||||
Shares | Dollars | Shares | Dollars | Shares | Dollars | |||||||||||||||||||
Class A | ||||||||||||||||||||||||
Proceeds from Shares sold | 127,788 | $ | 1,518,828 | 129,646 | $ | 1,475,971 | 97,822 | $ | 1,064,952 | |||||||||||||||
Proceeds from Shares issued in connection with merger(A) | — | — | 5,396,673 | 61,461,849 | — | — | ||||||||||||||||||
Reinvestment of distributions | 20,049 | 238,251 | 187,033 | 2,104,863 | 19,053 | 196,629 | ||||||||||||||||||
Redemption fees | — | — | — | — | — | 2 | ||||||||||||||||||
Cost of Shares redeemed | (838,121 | ) | (9,975,028 | ) | (771,111 | ) | (8,774,777 | ) | (448,546 | ) | (4,814,500 | ) | ||||||||||||
Change in Net Assets from Class A Share Transactions | (690,284 | ) | (8,217,949 | ) | 4,942,241 | 56,267,906 | (331,671 | ) | (3,552,917 | ) | ||||||||||||||
Class C | ||||||||||||||||||||||||
Proceeds from Shares sold | 52,583 | 614,473 | 106,912 | 1,194,059 | 133,586 | 1,407,737 | ||||||||||||||||||
Proceeds from Shares issued in connection with merger(A) | — | — | 221,281 | 2,482,569 | — | — | ||||||||||||||||||
Reinvestment of distributions | 3,883 | 45,392 | 88,949 | 985,199 | 18,947 | 192,127 | ||||||||||||||||||
Redemption fees | — | — | — | — | — | 1 | ||||||||||||||||||
Cost of Shares redeemed | (306,646 | ) | (3,590,845 | ) | (381,823 | ) | (4,268,695 | ) | (1,411,866 | ) | (14,742,597 | ) | ||||||||||||
Change in Net Assets from Class C Share Transactions | (250,180 | ) | (2,930,980 | ) | 35,319 | 393,132 | (1,259,333 | ) | (13,142,732 | ) | ||||||||||||||
Class Y | ||||||||||||||||||||||||
Proceeds from Shares sold | 316,497 | 3,805,501 | 214,196 | 2,459,768 | 14,400 | 155,956 | ||||||||||||||||||
Proceeds from Shares issued in connection with merger(A) | — | — | 4,909,444 | 56,310,746 | 59,133 | 690,081 | ||||||||||||||||||
Reinvestment of distributions | 15,167 | 181,470 | 146,774 | 1,665,234 | — | — | ||||||||||||||||||
Cost of Shares redeemed | (1,061,800 | ) | (12,579,529 | ) | (1,507,596 | ) | (17,189,693 | ) | (5,646 | ) | (61,748 | ) | ||||||||||||
Change in Net Assets from Class Y Share Transactions | (730,136 | ) | (8,592,558 | ) | 3,762,818 | 43,246,055 | 67,887 | 784,289 | ||||||||||||||||
Class Z | ||||||||||||||||||||||||
Proceeds from Shares sold | — | — | — | — | 5,102 | 56,108 | ||||||||||||||||||
Reinvestment of distributions | — | — | — | — | 1,101 | 11,461 | ||||||||||||||||||
Cost of Shares redeemed | — | — | — | — | (61,849 | ) | (691,938 | ) | ||||||||||||||||
Cost of Shares redeemed in connection with merger(A) | — | — | — | — | (59,133 | ) | (690,081 | ) | ||||||||||||||||
Change in Net Assets from Class Z Share Transactions | — | — | — | — | (114,779 | ) | (1,314,450 | ) | ||||||||||||||||
Institutional Class | ||||||||||||||||||||||||
Proceeds from Shares sold | — | — | — | — | 9 | 100 | ||||||||||||||||||
Reinvestment of distributions | 4 | 47 | 34 | 385 | 12 | 127 | ||||||||||||||||||
Cost of Shares redeemed | — | — | — | — | — | (5 | ) | |||||||||||||||||
Change in Net Assets from Institutional Class Share Transactions | 4 | 47 | 34 | 385 | 21 | 222 | ||||||||||||||||||
Net Increase (Decrease) from Share Transactions | (1,670,596 | ) | $ | (19,741,440 | ) | 8,740,412 | $ | 99,907,478 | (1,637,875 | ) | $ | (17,225,588 | ) |
(A)See Note 8 in the Notes to Financial Statements.
(B)The Fund changed its fiscal year from July 31 to December 31. See Note 8 in the Notes to Financial Statements.
See accompanying Notes to Financial Statements.
26 |
Statement of Cash Flows
For the Six Months Ended June 30, 2013 (Unaudited)
Touchstone | ||||
Dynamic | ||||
Equity | ||||
Fund | ||||
For the | ||||
Six Months | ||||
Ended | ||||
June 30, 2013 | ||||
Cash Flows Provided by Operating Activities | ||||
Change in net assets resulting from operations | $ | 6,406,971 | ||
Adjustments to reconcile net increase (decrease) in net assets derived from operations to net cash (used in) provided by operating activities: | ||||
Purchases of investments | (79,882,640 | ) | ||
Proceeds from disposition of investments | 94,829,812 | |||
Net purchases from purchased options | (601,980 | ) | ||
Premiums on call and put options written | 9,399,217 | |||
Costs to cover written options | (13,224,414 | ) | ||
Proceeds from securities sold short | 19,331,256 | |||
Covers of securities sold short | (21,662,164 | ) | ||
Net sales of short term securities | 684,493 | |||
Decrease in deposits with Prime Broker | 33,626 | |||
(Increase) decrease in dividends and interest receivable | (14,338 | ) | ||
Increase (decrease) in dividends for securities sold short payable | 162 | |||
Increase (decrease) in payable to Trustees | 606 | |||
Increase (decrease) in payable to Investment Advisor | 17,561 | |||
Increase (decrease) in payable to other affiliates | (9,451 | ) | ||
Increase (decrease) in other accrued expenses and liabilities | (2,656 | ) | ||
(Increase) decrease in other assets | (13,251 | ) | ||
Net realized (gain) from investments and warrants | (10,538,844 | ) | ||
Net realized (gain) loss from written options | 2,513,889 | |||
Net realized loss from securities sold short | 2,891,807 | |||
Net change in unrealized (appreciation) depreciation on investments and warrants | 416,297 | |||
Net change in unrealized (appreciation) depreciation on written options | (59,616 | ) | ||
Net change in unrealized (appreciation) depreciation on securities sold short | (1,420,963 | ) | ||
Net cash provided by operating activities | 9,095,380 | |||
Cash Flows from Financing Activities | ||||
Proceeds from shares sold | 11,648,574 | |||
Payment of shares redeemed | (20,743,954 | ) | ||
Net cash used in financing activities | (9,095,380 | ) | ||
Net change in cash | — | |||
Cash - beginning of the period | — | |||
Cash - end of period | $ | — |
See accompanying Notes to Financial Statements.
27 |
Financial Highlights
Touchstone Dynamic Equity Fund—Class A
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 11.05 | $ | 11.20 | $ | 10.26 | $ | 9.02 | $ | 8.68 | $ | 11.88 | $ | 14.51 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | 0.04 | 0.04 | (B) | (0.07 | )(B) | 0.06 | (B) | 0.05 | (B) | 0.02 | (B) | 0.05 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 1.11 | (0.19 | ) | 1.09 | 1.18 | 0.29 | (3.22 | ) | (1.80 | ) | ||||||||||||||||||
Total from investment operations | 1.15 | (0.15 | ) | 1.02 | 1.24 | 0.34 | (3.20 | ) | (1.75 | ) | ||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | — | — | (0.08 | ) | — | — | — | (0.18 | ) | |||||||||||||||||||
Realized capital gains | — | — | — | — | — | — | (0.70 | ) | ||||||||||||||||||||
Total distributions | — | — | (0.08 | ) | — | — | — | (0.88 | ) | |||||||||||||||||||
Net asset value at end of period | $ | 12.20 | $ | 11.05 | $ | 11.20 | $ | 10.26 | $ | 9.02 | $ | 8.68 | $ | 11.88 | ||||||||||||||
Total return(C) | 10.41 | %(D) | (1.34 | %)(D) | 10.00 | % | 13.75 | % | 3.92 | % | (26.94 | %) | (12.60 | %) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 15,533 | $ | 16,156 | $ | 17,919 | $ | 23,505 | $ | 38,274 | $ | 83,169 | $ | 285,305 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses (including dividend expense on securities sold short)(E) | 1.88 | %(F) | 2.46 | %(F) | 2.80 | % | 1.82 | % | 1.78 | % | 2.07 | % | 1.92 | % | ||||||||||||||
Gross expenses (including dividend expense on securities sold short)(G) | 2.05 | %(F) | 2.65 | %(F) | 3.08 | % | 2.16 | % | 2.27 | % | 2.41 | % | 2.13 | % | ||||||||||||||
Net investment income (loss) | 0.61 | %(F) | 0.88 | %(F) | (0.63 | %) | 0.66 | % | 0.52 | % | 0.24 | % | 0.40 | % | ||||||||||||||
Portfolio turnover rate | 103 | %(D) | 105 | %(D) | 234 | % | 231 | % | 168 | % | 195 | % | 172 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Total returns shown exclude the effect of applicable sales loads. If these charges were included, the returns would be lower. |
(D) | Not annualized. |
(E) | The ratio of net expenses to average net assets excluding dividend expense on securities sold short is 1.55%, 1.55%, 1.55%, 1.66%, 1.65%, 1.71% and 1.53% for the periods ended June 30, 2013 and December 31, 2012 and years ended July 2012, 2011, 2010, 2009 and 2008, respectively. |
(F) | Annualized. |
(G) | The ratio of gross expenses to average net assets excluding dividend expense on securities sold short is 1.72%, 1.74%, 1.82%, 2.00%, 2.14%, 2.05% and 1.74% for the periods ended June 30, 2013 and December 31, 2012 and years ended July 2012, 2011, 2010, 2009 and 2008, respectively. |
See accompanying Notes to Financial Statements.
28 |
Financial Highlights (Continued)
Touchstone Dynamic Equity Fund—Class C
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 10.46 | $ | 10.63 | $ | 9.79 | $ | 8.67 | $ | 8.40 | $ | 11.59 | $ | 14.32 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | (0.01 | ) | 0.01 | (B) | (0.14 | )(B) | (0.01 | )(B) | (0.02 | )(B) | (0.05 | )(B) | (0.04 | )(B) | ||||||||||||||
Net realized and unrealized gains (losses) on investments | 1.05 | (0.18 | ) | 1.03 | 1.13 | 0.29 | (3.14 | ) | (1.77 | ) | ||||||||||||||||||
Total from investment operations | 1.04 | (0.17 | ) | 0.89 | 1.12 | 0.27 | (3.19 | ) | (1.81 | ) | ||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | — | — | (0.05 | ) | — | — | — | (0.22 | ) | |||||||||||||||||||
Realized capital gains | — | — | — | — | — | — | (0.70 | ) | ||||||||||||||||||||
Total distributions | — | — | (0.05 | ) | — | — | — | (0.92 | ) | |||||||||||||||||||
Net asset value at end of period | $ | 11.50 | $ | 10.46 | $ | 10.63 | $ | 9.79 | $ | 8.67 | $ | 8.40 | $ | 11.59 | ||||||||||||||
Total return(C) | 9.94 | %(D) | (1.60 | %)(D) | 9.09 | % | 12.92 | % | 3.21 | % | (27.52 | %) | (13.23 | %) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 10,196 | $ | 10,420 | $ | 11,684 | $ | 14,243 | $ | 20,558 | $ | 51,879 | $ | 158,508 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses (including dividend expense on securities sold short)(E) | 2.63 | %(F) | 3.21 | %(F) | 3.55 | % | 2.57 | % | 2.53 | % | 2.82 | % | 2.65 | % | ||||||||||||||
Gross expenses (including dividend expense on securities sold short)(G) | 2.81 | %(F) | 3.48 | %(F) | 3.75 | % | 2.78 | % | 2.91 | % | 2.97 | % | 2.85 | % | ||||||||||||||
Net investment income (loss) | (0.14 | %)(F) | 0.13 | %(F) | (1.38 | %) | (0.10 | %) | (0.23 | %) | (0.52 | %) | (0.34 | %) | ||||||||||||||
Portfolio turnover rate | 103 | %(D) | 105 | %(D) | 234 | % | 231 | % | 168 | % | 195 | % | 172 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Total returns shown exclude the effect of applicable sales loads. If these charges were included, the returns would be lower. |
(D) | Not annualized. |
(E) | The ratio of net expenses to average net assets excluding dividend expense on securities sold short is 2.30%, 2.30%, 2.30%, 2.41%, 2.40%, 2.46% and 2.26% for the periods ended June 30, 2013 and December 31, 2012 and years ended July 2012, 2011, 2010, 2009 and 2008, respectively. |
(F) | Annualized. |
(G) | The ratio of gross expenses to average net assets excluding dividend expense on securities sold short is 2.48%, 2.57%, 2.50%, 2.62%, 2.78%, 2.61% and 2.46% for the periods ended June 30, 2013 and December 31, 2012 and years ended July 2012, 2011, 2010, 2009 and 2008, respectively. |
See accompanying Notes to Financial Statements.
29 |
Financial Highlights (Continued)
Touchstone Dynamic Equity Fund—Class Y
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 11.22 | $ | 11.35 | $ | 10.40 | $ | 9.11 | $ | 8.75 | $ | 11.94 | $ | 14.54 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | 0.05 | 0.05 | (B) | (0.04 | )(B) | 0.08 | (B) | 0.07 | (B) | 0.04 | (B) | 0.09 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 1.12 | (0.18 | ) | 1.09 | 1.21 | 0.29 | (3.23 | ) | (1.82 | ) | ||||||||||||||||||
Total from investment operations | 1.17 | (0.13 | ) | 1.05 | 1.29 | 0.36 | (3.19 | ) | (1.73 | ) | ||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | — | — | (0.10 | ) | — | — | — | (0.17 | ) | |||||||||||||||||||
Realized capital gains | — | — | — | — | — | — | (0.70 | ) | ||||||||||||||||||||
Total distributions | — | — | (0.10 | ) | — | — | — | (0.87 | ) | |||||||||||||||||||
Net asset value at end of period | $ | 12.39 | $ | 11.22 | $ | 11.35 | $ | 10.40 | $ | 9.11 | $ | 8.75 | $ | 11.94 | ||||||||||||||
Total return | 10.43 | %(C) | (1.15 | %)(C) | 10.14 | % | 14.16 | % | 4.11 | % | (26.72 | %) | (12.46 | %) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 21,704 | $ | 20,397 | $ | 24,054 | $ | 30,511 | $ | 22,347 | $ | 29,734 | $ | 58,107 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses (including dividend expense on securities sold short)(D) | 1.63 | %(E) | 2.21 | %(E) | 2.56 | % | 1.59 | % | 1.52 | % | 1.81 | % | 1.64 | % | ||||||||||||||
Gross expenses (including dividend expense on securities sold short)(F) | 1.67 | %(E) | 2.31 | %(E) | 2.60 | % | 1.68 | % | 1.68 | % | 1.97 | % | 1.86 | % | ||||||||||||||
Net investment income (loss) | 0.86 | %(E) | 1.13 | %(E) | (0.38 | %) | 0.77 | % | 0.81 | % | 0.45 | % | 0.68 | % | ||||||||||||||
Portfolio turnover rate | 103 | %(C) | 105 | %(C) | 234 | % | 231 | % | 168 | % | 195 | % | 172 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Not annualized. |
(D) | The ratio of net expenses to average net assets excluding dividend expense on securities sold short is 1.30%, 1.30%, 1.30%, 1.42%, 1.40%, 1.46% and 1.25% for the periods ended June 30, 2013 and December 31, 2012 and years ended July 2012, 2011, 2010, 2009 and 2008, respectively. |
(E) | Annualized. |
(F) | The ratio of gross expenses to average net assets excluding dividend expense on securities sold short is 1.34%, 1.40%, 1.35%, 1.51%, 1.56%, 1.62% and 1.47% for the periods ended June 30, 2013 and December 31, 2012 and years ended July 2012, 2011, 2010, 2009 and 2008, respectively. |
See accompanying Notes to Financial Statements.
30 |
Financial Highlights (Continued)
Touchstone Dynamic Equity Fund—Institutional Class
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 11.23 | $ | 11.36 | $ | 10.40 | $ | 9.12 | $ | 8.76 | $ | 11.96 | $ | 14.54 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | 0.06 | 0.06 | (B) | (0.04 | )(B) | 0.09 | (B) | 0.11 | (B) | 0.05 | (B) | 0.09 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 1.12 | (0.19 | ) | 1.10 | 1.19 | 0.25 | (3.25 | ) | (1.81 | ) | ||||||||||||||||||
Total from investment operations | 1.18 | (0.13 | ) | 1.06 | 1.28 | 0.36 | (3.20 | ) | (1.72 | ) | ||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | — | — | (0.10 | ) | — | — | — | (0.16 | ) | |||||||||||||||||||
Realized capital gains | — | — | — | — | — | — | (0.70 | ) | ||||||||||||||||||||
Total distributions | — | — | (0.10 | ) | — | — | — | (0.86 | ) | |||||||||||||||||||
Net asset value at end of period | $ | 12.41 | $ | 11.23 | $ | 11.36 | $ | 10.40 | $ | 9.12 | $ | 8.76 | $ | 11.96 | ||||||||||||||
Total return | 10.51 | %(C) | (1.15 | %)(C) | 10.27 | % | 14.04 | % | 4.11 | % | (26.76 | %) | (12.33 | %) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 16,745 | $ | 20,085 | $ | 6,168 | $ | 2 | $ | 2 | $ | 12,547 | $ | 29,025 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses (including dividend expense on securities sold short)(D) | 1.58 | %(E) | 2.16 | %(E) | 2.50 | % | 1.52 | % | 1.41 | % | 1.77 | % | 1.63 | % | ||||||||||||||
Gross expenses (including dividend expense on securities sold short)(F) | 1.58 | %(E) | 2.18 | %(E) | 2.95 | % | 816.82 | % | 2.84 | % | 1.87 | % | 1.89 | % | ||||||||||||||
Net investment income (loss) | 0.91 | %(E) | 1.18 | %(E) | (0.33 | %) | 0.92 | % | 1.31 | % | 0.55 | % | 0.70 | % | ||||||||||||||
Portfolio turnover rate | 103 | %(C) | 105 | %(C) | 234 | % | 231 | % | 168 | % | 195 | % | 172 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Not annualized. |
(D) | The ratio of net expenses to average net assets excluding dividend expense on securities sold short is 1.25%, 1.25%, 1.25%, 1.35%, 1.36%, 1.41% and 1.21% for the periods ended June 30, 2013 and December 31, 2012 and years ended July 2012, 2011, 2010, 2009 and 2008, respectively. |
(E) | Annualized. |
(F) | The ratio of gross expenses to average net assets excluding dividend expense on securities sold short is 1.25%, 1.27%, 1.70%, 816.65%, 2.79%, 1.51% and 1.47% for the periods ended June 30, 2013 and December 31, 2012 and years ended July 2012, 2011, 2010, 2009 and 2008, respectively. |
See accompanying Notes to Financial Statements.
31 |
Financial Highlights (Continued)
Touchstone Balanced Allocation Fund—Class A
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 11.13 | $ | 11.18 | $ | 11.03 | $ | 9.99 | $ | 9.28 | $ | 11.27 | $ | 12.68 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.06 | 0.13 | (B) | 0.17 | (B) | 0.18 | (B) | 0.22 | (B) | 0.29 | (B) | 0.21 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.40 | 0.35 | 0.14 | 1.13 | 0.80 | (1.46 | ) | (0.74 | )(C) | |||||||||||||||||||
Total from investment operations | 0.46 | 0.48 | 0.31 | 1.31 | 1.02 | (1.17 | ) | (0.53 | ) | |||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | (0.06 | ) | (0.24 | ) | (0.16 | ) | (0.27 | ) | (0.31 | ) | (0.36 | ) | (0.26 | ) | ||||||||||||||
Realized capital gains | — | (0.29 | ) | — | — | — | (0.46 | ) | (0.62 | ) | ||||||||||||||||||
Total distributions | (0.06 | ) | (0.53 | ) | (0.16 | ) | (0.27 | ) | (0.31 | ) | (0.82 | ) | (0.88 | ) | ||||||||||||||
Net asset value at end of period | $ | 11.53 | $ | 11.13 | $ | 11.18 | $ | 11.03 | $ | 9.99 | $ | 9.28 | $ | 11.27 | ||||||||||||||
Total return(D) | 4.17 | %(E) | 4.37 | %(E) | 2.89 | % | 13.21 | % | 10.99 | % | (9.30 | %) | (4.59 | %)(C) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 47,071 | $ | 49,118 | $ | 9,839 | $ | 12,650 | $ | 21,312 | $ | 25,356 | $ | 44,959 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses(F) | 0.33 | %(G) | 0.41 | %(G) | 0.64 | % | 0.64 | % | 0.64 | % | 0.65 | % | 0.94 | % | ||||||||||||||
Gross expenses(F) | 0.88 | %(G) | 0.83 | %(G) | 0.97 | % | 0.94 | % | 0.93 | % | 0.79 | % | 1.13 | % | ||||||||||||||
Net investment income(F) | 1.09 | %(G) | 2.75 | %(G) | 1.58 | % | 1.71 | % | 2.26 | % | 3.30 | % | 1.71 | % | ||||||||||||||
Portfolio turnover rate | 21 | %(E) | 74 | %(E)(H) | 76 | % | 6 | % | 33 | % | 30 | % | 52 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Impact of payment from affiliate was less than $0.01 per share and 0.01%, respectively. |
(D) | Total returns shown exclude the effect of applicable sales loads. If these charges were included, the returns would be lower. |
(E) | Not annualized. |
(F) | Ratio does not include income and expenses of the underlying funds. |
(G) | Annualized. |
(H) | Portfolio turnover excludes the purchases and sales of the Acquired Funds (see Note 8). If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
32 |
Financial Highlights (Continued)
Touchstone Balanced Allocation Fund—Class C
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 11.12 | $ | 11.14 | $ | 11.01 | $ | 9.97 | $ | 9.26 | $ | 11.17 | $ | 12.64 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.02 | 0.09 | (B) | 0.09 | (B) | 0.10 | (B) | 0.15 | (B) | 0.22 | (B) | 0.11 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.40 | 0.35 | 0.14 | 1.13 | 0.79 | (1.44 | ) | (0.73 | )(C) | |||||||||||||||||||
Total from investment operations | 0.42 | 0.44 | 0.23 | 1.23 | 0.94 | (1.22 | ) | (0.62 | ) | |||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | (0.02 | ) | (0.17 | ) | (0.10 | ) | (0.19 | ) | (0.23 | ) | (0.23 | ) | (0.23 | ) | ||||||||||||||
Realized capital gains | — | (0.29 | ) | — | — | — | (0.46 | ) | (0.62 | ) | ||||||||||||||||||
Total distributions | (0.02 | ) | (0.46 | ) | (0.10 | ) | (0.19 | ) | (0.23 | ) | (0.69 | ) | (0.85 | ) | ||||||||||||||
Net asset value at end of period | $ | 11.52 | $ | 11.12 | $ | 11.14 | $ | 11.01 | $ | 9.97 | $ | 9.26 | $ | 11.17 | ||||||||||||||
Total return(D) | 3.79 | %(E) | 4.03 | %(E) | 2.13 | % | 12.41 | % | 10.19 | % | (10.00 | %) | (5.34 | %)(C) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 36,857 | $ | 38,226 | $ | 38,388 | $ | 50,108 | $ | 59,480 | $ | 77,330 | $ | 120,085 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses(F) | 1.08 | %(G) | 1.16 | %(G) | 1.39 | % | 1.39 | % | 1.39 | % | 1.40 | % | 1.67. | % | ||||||||||||||
Gross expenses(F) | 1.58 | %(G) | 1.60 | %(G) | 1.59 | % | 1.59 | % | 1.62 | % | 1.51 | % | 1.85 | % | ||||||||||||||
Net investment income(F) | 0.34 | %(G) | 2.00 | %(G) | 0.84 | % | 0.98 | % | 1.51 | % | 2.46 | % | 0.92 | % | ||||||||||||||
Portfolio turnover rate | 21 | %(E) | 74 | %(E)(H) | 76 | % | 6 | % | 33 | % | 30 | % | 52 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Impact of payment from affiliate was less than $0.01 per share and 0.01%, respectively. |
(D) | Total returns shown exclude the effect of applicable sales loads. If these charges were included, the returns would be lower. |
(E) | Not annualized. |
(F) | Ratio does not include income and expenses of the underlying funds. |
(G) | Annualized. |
(H) | Portfolio turnover excludes the purchases and sales of the Acquired Funds (see Note 8). If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
33 |
Financial Highlights (Continued)
Touchstone Balanced Allocation Fund—Class Y
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 11.15 | $ | 11.21 | $ | 11.05 | $ | 10.01 | $ | 9.30 | $ | 11.31 | $ | 12.70 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.08 | 0.14 | (B) | 0.20 | (B) | 0.23 | (B) | 0.24 | (B) | 0.31 | (B) | 0.23 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.40 | 0.35 | 0.14 | 1.11 | 0.80 | (1.46 | ) | (0.74 | )(C) | |||||||||||||||||||
Total from investment operations | 0.48 | 0.49 | 0.34 | 1.34 | 1.04 | (1.15 | ) | (0.51 | ) | |||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | (0.08 | ) | (0.26 | ) | (0.18 | ) | (0.30 | ) | (0.33 | ) | (0.40 | ) | (0.26 | ) | ||||||||||||||
Realized capital gains | — | (0.29 | ) | — | — | — | (0.46 | ) | (0.62 | ) | ||||||||||||||||||
Total distributions | (0.08 | ) | (0.55 | ) | (0.18 | ) | (0.30 | ) | (0.33 | ) | (0.86 | ) | (0.88 | ) | ||||||||||||||
Net asset value at end of period | $ | 11.55 | $ | 11.15 | $ | 11.21 | $ | 11.05 | $ | 10.01 | $ | 9.30 | $ | 11.31 | ||||||||||||||
Total return | 4.30 | %(D) | 4.45 | %(D) | 3.18 | % | 13.49 | % | 11.25 | % | (9.00 | %) | (4.40 | %)(C) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 42,545 | $ | 47,092 | $ | 1,287 | $ | 1,866 | $ | 929 | $ | 672 | $ | 732 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses(E) | 0.08 | %(F) | 0.16 | %(F) | 0.39 | % | 0.39 | % | 0.39 | % | 0.40 | % | 0.65 | % | ||||||||||||||
Gross expenses(E) | 0.57 | %(F) | 0.52 | %(F) | 1.40 | % | 1.41 | % | 2.28 | % | 1.41 | % | 5.13 | % | ||||||||||||||
Net investment income(E) | 1.34 | %(F) | 3.00 | %(F) | 1.84 | % | 2.11 | % | 2.46 | % | 3.53 | % | 1.91 | % | ||||||||||||||
Portfolio turnover rate | 21 | %(D) | 74 | %(D)(G) | 76 | % | 6 | % | 33 | % | 30 | % | 52 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Impact of payment from affiliate was less than $0.01 per share and 0.01%, respectively. |
(D) | Not annualized. |
(E) | Ratio does not include income and expenses of the underlying funds. |
(F) | Annualized. |
(G) | Portfolio turnover excludes the purchases and sales of the Acquired Funds (see Note 8). If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
34 |
Financial Highlights (Continued)
Touchstone Balanced Allocation Fund—Institutional Class
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 11.10 | $ | 11.16 | $ | 11.00 | $ | 9.97 | $ | 9.26 | $ | 11.28 | 12.71 | |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.08 | 0.14 | (B) | 0.20 | (B) | 0.21 | (B) | 0.35 | (B) | 0.30 | (B) | 0.27 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.40 | 0.35 | 0.14 | 1.12 | 0.69 | (1.46 | ) | (0.78 | )(C) | |||||||||||||||||||
Total from investment operations | 0.48 | 0.49 | 0.34 | 1.33 | 1.04 | (1.16 | ) | (0.51 | ) | |||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | (0.08 | ) | (0.26 | ) | (0.18 | ) | (0.30 | ) | (0.33 | ) | (0.40 | ) | (0.30 | ) | ||||||||||||||
Realized capital gains | — | (0.29 | ) | — | — | — | (0.46 | ) | (0.62 | ) | ||||||||||||||||||
Total distributions | (0.08 | ) | (0.55 | ) | (0.18 | ) | (0.30 | ) | (0.33 | ) | (0.86 | ) | (0.92 | ) | ||||||||||||||
Net asset value at end of period | $ | 11.50 | $ | 11.10 | $ | 11.16 | $ | 11.00 | $ | 9.97 | $ | 9.26 | 11.28 | |||||||||||||||
Total return | 4.32 | %(D) | 4.47 | %(D) | 3.19 | % | 13.44 | % | 11.29 | % | (9.13 | %) | (4.46 | %)(C) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 32 | $ | 31 | $ | 30 | $ | 31 | $ | 27 | $ | 2,011 | $ | 6,196 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses(E) | 0.08 | %(F) | 0.16 | %(F) | 0.39 | % | 0.39 | % | 0.39 | % | 0.40 | % | 0.85 | % | ||||||||||||||
Gross expenses(E) | 85.94 | %(F) | 56.07 | %(F) | 28.86 | % | 46.94 | % | 2.29 | % | 0.58 | % | 1.41 | % | ||||||||||||||
Net investment income(E) | 1.34 | %(F) | 3.00 | %(F) | 1.85 | % | 1.97 | % | 3.55 | % | 3.35 | % | 2.24 | % | ||||||||||||||
Portfolio turnover rate | 21 | %(D) | 74 | %(D)(G) | 76 | % | 6 | % | 33 | % | 30 | % | 52 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Impact of payment from affiliate was less than $0.01 per share and 0.01%, respectively. |
(D) | Not annualized. |
(E) | Ratio does not include income and expenses of the underlying funds. |
(F) | Annualized. |
(G) | Portfolio turnover excludes the purchases and sales of the Acquired Funds (see Note 8). If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
35 |
Financial Highlights (Continued)
Touchstone Conservative Allocation Fund—Class A
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 10.50 | $ | 10.98 | $ | 10.87 | $ | 10.38 | $ | 9.84 | $ | 10.76 | $ | 11.30 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.09 | 0.10 | (B) | 0.21 | (B) | 0.26 | (B) | 0.34 | (B) | 0.48 | (B) | 0.29 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.09 | 0.17 | 0.13 | 0.64 | 0.66 | (0.61 | ) | (0.25 | ) | |||||||||||||||||||
Total from investment operations | 0.18 | 0.27 | 0.34 | 0.90 | 1.00 | (0.13 | ) | 0.04 | ||||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | (0.09 | ) | (0.28 | ) | (0.23 | ) | (0.41 | ) | (0.46 | ) | (0.57 | ) | (0.31 | ) | ||||||||||||||
Realized capital gains | — | (0.47 | ) | — | — | — | (0.22 | ) | (0.27 | ) | ||||||||||||||||||
Total distributions | (0.09 | ) | (0.75 | ) | �� | (0.23 | ) | (0.41 | ) | (0.46 | ) | (0.79 | ) | (0.58 | ) | |||||||||||||
Net asset value at end of period | $ | 10.59 | $ | 10.50 | $ | 10.98 | $ | 10.87 | $ | 10.38 | $ | 9.84 | $ | 10.76 | ||||||||||||||
Total return(C) | 1.68 | %(D) | 2.47 | %(D) | 3.23 | % | 8.81 | % | 10.27 | % | (0.49 | %) | 0.24 | % | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 24,442 | $ | 32,965 | $ | 8,466 | $ | 11,138 | $ | 12,141 | $ | 13,632 | $ | 15,858 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses(E) | 0.33 | %(F) | 0.40 | %(F) | 0.61 | % | 0.61 | % | 0.61 | % | 0.65 | % | 0.93 | % | ||||||||||||||
Gross expenses(E) | 0.95 | %(F) | 0.85 | %(F) | 1.02 | % | 0.91 | % | 0.94 | % | 0.86 | % | 1.31 | % | ||||||||||||||
Net investment income(E) | 1.56 | %(F) | 2.28 | %(F) | 1.95 | % | 2.43 | % | 3.36 | % | 5.09 | % | 2.62 | % | ||||||||||||||
Portfolio turnover rate | 14 | %(D) | 79 | %(D)(G) | 89 | % | 13 | % | 33 | % | 40 | % | 49 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Total returns shown exclude the effect of applicable sales loads. If these charges were included, the returns would be lower. |
(D) | Not annualized. |
(E) | Ratio does not include income and expenses of the underlying funds. |
(F) | Annualized. |
(G) | Portfolio turnover excludes the purchases and sales of the Acquired Funds (see Note 8). If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
36 |
Financial Highlights (Continued)
Touchstone Conservative Allocation Fund—Class C
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 10.45 | $ | 10.92 | $ | 10.81 | $ | 10.33 | $ | 9.80 | $ | 10.66 | $ | 11.25 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.05 | 0.07 | (B) | 0.13 | (B) | 0.18 | (B) | 0.27 | (B) | 0.39 | (B) | 0.21 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.08 | 0.17 | 0.13 | 0.63 | 0.64 | (0.58 | ) | (0.25 | ) | |||||||||||||||||||
Total from investment operations | 0.13 | 0.24 | 0.26 | 0.81 | 0.91 | (0.19 | ) | (0.04 | ) | |||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | (0.05 | ) | (0.24 | ) | (0.15 | ) | (0.33 | ) | (0.38 | ) | (0.45 | ) | (0.28 | ) | ||||||||||||||
Realized capital gains | — | (0.47 | ) | — | — | — | (0.22 | ) | (0.27 | ) | ||||||||||||||||||
Total distributions | (0.05 | ) | (0.71 | ) | (0.15 | ) | (0.33 | ) | (0.38 | ) | (0.67 | ) | (0.55 | ) | ||||||||||||||
Net asset value at end of period | $ | 10.53 | $ | 10.45 | $ | 10.92 | $ | 10.81 | $ | 10.33 | $ | 9.80 | $ | 10.66 | ||||||||||||||
Total return(C) | 1.21 | %(D) | 2.18 | %(D) | 2.50 | % | 7.93 | % | 9.37 | % | (1.20 | %) | (0.47 | %) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 17,190 | $ | 17,972 | $ | 17,104 | $ | 20,000 | $ | 23,985 | $ | 31,465 | $ | 34,242 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses(E) | 1.08 | %(F) | 1.15 | %(F) | 1.36 | % | 1.36 | % | 1.36 | % | 1.41 | % | 1.67 | % | ||||||||||||||
Gross expenses(E) | 1.65 | %(F) | 1.67 | %(F) | 1.70 | % | 1.61 | % | 1.65 | % | 1.54 | % | 1.95 | % | ||||||||||||||
Net investment income(E) | 0.81 | %(F) | 1.53 | %(F) | 1.20 | % | 1.72 | % | 2.61 | % | 4.23 | % | 1.86 | % | ||||||||||||||
Portfolio turnover rate | 14 | %(D) | 79 | %(D)(G) | 89 | % | 13 | % | 33 | % | 40 | % | 49 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Total returns shown exclude the effect of applicable sales loads. If these charges were included, the returns would be lower. |
(D) | Not annualized. |
(E) | Ratio does not include income and expenses of the underlying funds. |
(F) | Annualized. |
(G) | Portfolio turnover excludes the purchases and sales of the Acquired Funds (see Note 8). If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
37 |
Financial Highlights (Continued)
Touchstone Conservative Allocation Fund—Class Y
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 10.51 | $ | 10.99 | $ | 10.87 | $ | 10.39 | $ | 9.85 | $ | 10.78 | $ | 11.30 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.10 | 0.12 | (B) | 0.24 | (B) | 0.29 | (B) | 0.35 | (B) | 0.44 | (B) | 0.32 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.08 | 0.16 | 0.14 | 0.62 | 0.67 | (0.54 | ) | (0.25 | ) | |||||||||||||||||||
Total from investment operations | 0.18 | 0.28 | 0.38 | 0.91 | 1.02 | (0.10 | ) | 0.07 | ||||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | (0.10 | ) | (0.29 | ) | (0.26 | ) | (0.43 | ) | (0.48 | ) | (0.61 | ) | (0.32 | ) | ||||||||||||||
Realized capital gains | — | (0.47 | ) | — | — | — | (0.22 | ) | (0.27 | ) | ||||||||||||||||||
Total distributions | (0.10 | ) | (0.76 | ) | (0.26 | ) | (0.43 | ) | (0.48 | ) | (0.83 | ) | (0.59 | ) | ||||||||||||||
Net asset value at end of period | $ | 10.59 | $ | 10.51 | $ | 10.99 | $ | 10.87 | $ | 10.39 | $ | 9.85 | $ | 10.78 | ||||||||||||||
Total return | 1.71 | %(C) | 2.60 | %(C) | 3.60 | % | 8.97 | % | 10.54 | % | (0.17 | %) | 0.54 | % | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 27,878 | $ | 33,329 | $ | 2,156 | $ | 1,370 | $ | 1,129 | $ | 234 | $ | 640 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses(D) | 0.08 | %(E) | 0.15 | %(E) | 0.36 | % | 0.36 | % | 0.34 | % | 0.40 | % | 0.67 | % | ||||||||||||||
Gross expenses(D) | 0.61 | %(E) | 0.57 | %(E) | 1.38 | % | 1.65 | % | 1.65 | % | 7.77 | % | 4.34 | % | ||||||||||||||
Net investment income(D) | 1.81 | %(E) | 2.53 | %(E) | 2.20 | % | 2.72 | % | 3.40 | % | 4.56 | % | 2.86 | % | ||||||||||||||
Portfolio turnover rate | 14 | %(C) | 79 | %(C)(F) | 89 | % | 13 | % | 33 | % | 40 | % | 49 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Not annualized. |
(D) | Ratio does not include income and expenses of the underlying funds. |
(E) | Annualized. |
(F) | Portfolio turnover excludes the purchases and sales of the Acquired Funds (see Note 8). If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
38 |
Financial Highlights (Continued)
Touchstone Conservative Allocation Fund—Institutional Class
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 10.51 | $ | 10.99 | $ | 10.89 | $ | 10.40 | $ | 9.86 | $ | 10.79 | $ | 11.32 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.11 | 0.12 | (B) | 0.24 | (B) | 0.29 | (B) | 0.37 | (B) | 0.47 | (B) | 0.32 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.07 | 0.16 | 0.12 | 0.63 | 0.65 | (0.58 | ) | (0.26 | ) | |||||||||||||||||||
Total from investment operations | 0.18 | 0.28 | 0.36 | 0.92 | 1.02 | (0.11 | ) | 0.06 | ||||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | (0.10 | ) | (0.29 | ) | (0.26 | ) | (0.43 | ) | (0.48 | ) | (0.60 | ) | (0.32 | ) | ||||||||||||||
Realized capital gains | — | (0.47 | ) | — | — | — | (0.22 | ) | (0.27 | ) | ||||||||||||||||||
Total distributions | (0.10 | ) | (0.76 | ) | (0.26 | ) | (0.43 | ) | (0.48 | ) | (0.82 | ) | (0.59 | ) | ||||||||||||||
Net asset value at end of period | $ | 10.59 | $ | 10.51 | $ | 10.99 | $ | 10.89 | $ | 10.40 | $ | 9.86 | $ | 10.79 | ||||||||||||||
Total return | 1.71 | %(C) | 2.50 | %(C) | 3.52 | % | 9.06 | % | 10.52 | % | (0.19 | %) | 0.41 | % | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 635 | $ | 1,198 | $ | 1,342 | $ | 6,459 | $ | 6,158 | $ | 6,017 | $ | 6,816 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses(D) | 0.08 | %(E) | 0.15 | %(E) | 0.36 | % | 0.36 | % | 0.36 | % | 0.40 | % | 0.69 | % | ||||||||||||||
Gross expenses(D) | 3.92 | %(E) | 1.93 | %(E) | 0.66 | % | 0.63 | % | 0.56 | % | 1.43 | % | 1.05 | % | ||||||||||||||
Net investment income(D) | 1.81 | %(E) | 2.53 | %(E) | 2.20 | % | 2.70 | % | 3.62 | % | 4.85 | % | 2.87 | % | ||||||||||||||
Portfolio turnover rate | 14 | %(C) | 79 | %(C)(F) | 89 | % | 13 | % | 33 | % | 40 | % | 49 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Not annualized. |
(D) | Ratio does not include income and expenses of the underlying funds. |
(E) | Annualized. |
(F) | Portfolio turnover excludes the purchases and sales of the Acquired Funds (see Note 8). If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
39 |
Financial Highlights (Continued)
Touchstone Growth Allocation Fund—Class A
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 11.75 | $ | 11.28 | $ | 11.40 | $ | 9.58 | $ | 8.66 | $ | 12.33 | $ | 14.82 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.02 | 0.14 | (B) | 0.13 | (B) | 0.08 | (B) | 0.12 | (B) | 0.10 | (B) | 0.07 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.75 | 0.67 | (0.14 | ) | 1.80 | 0.99 | (3.12 | ) | (1.67 | )(C) | ||||||||||||||||||
Total from investment operations | 0.77 | 0.81 | (0.01 | ) | 1.88 | 1.11 | (3.02 | ) | (1.60 | ) | ||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | (0.01 | ) | (0.34 | ) | (0.11 | ) | (0.06 | ) | (0.19 | ) | — | (0.20 | ) | |||||||||||||||
Realized capital gains | — | — | — | — | — | (0.65 | ) | (0.69 | ) | |||||||||||||||||||
Total distributions | (0.01 | ) | (0.34 | ) | (0.11 | ) | (0.06 | ) | (0.19 | ) | (0.65 | ) | (0.89 | ) | ||||||||||||||
Net asset value at end of period | $ | 12.51 | $ | 11.75 | $ | 11.28 | $ | 11.40 | $ | 9.58 | $ | 8.66 | $ | 12.33 | ||||||||||||||
Total return(D) | 6.56 | %(E) | 7.29 | %(E) | (0.04 | %) | 19.65 | % | 12.78 | % | (23.55 | %) | (11.45 | %)(C) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 29,368 | $ | 31,432 | $ | 10,320 | $ | 13,619 | $ | 16,721 | $ | 20,556 | $ | 43,129 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses(F) | 0.33 | %(G) | 0.39 | %(G) | 0.57 | % | 0.57 | % | 0.57 | % | 0.56 | % | 0.91 | % | ||||||||||||||
Gross expenses(F) | 1.10 | %(G) | 1.04 | %(G) | 1.21 | % | 1.13 | % | 1.18 | % | 1.03 | % | 1.26 | % | ||||||||||||||
Net investment income(F) | 0.34 | %(G) | 2.95 | %(G) | 1.17 | % | 0.77 | % | 1.26 | % | 1.14 | % | 0.48 | % | ||||||||||||||
Portfolio turnover rate | 34 | %(E) | 65 | %(E)(H) | 77 | % | 8 | % | 41 | % | 27 | % | 46 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Impact of payment from affiliate was less than $0.01 per share and 0.01%, respectively. |
(D) | Total returns shown exclude the effect of applicable sales loads. If these charges were included, the returns would be lower. |
(E) | Not annualized. |
(F) | Ratio does not include income and expenses of the underlying funds. |
(G) | Annualized. |
(H) | Portfolio turnover excludes the purchases and sales of the Acquired Funds (see Note 8). If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
40 |
Financial Highlights (Continued)
Touchstone Growth Allocation Fund—Class C
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 11.32 | $ | 10.80 | $ | 10.90 | $ | 9.18 | $ | 8.30 | $ | 11.95 | $ | 14.53 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | (0.03 | ) | 0.10 | (B) | 0.04 | (B) | — | (B)(C) | 0.04 | (B) | 0.03 | (B) | (0.04 | )(B) | ||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.73 | 0.63 | (0.12 | ) | 1.72 | 0.96 | (3.03 | ) | (1.61 | )(D) | ||||||||||||||||||
Total from investment operations | 0.70 | 0.73 | (0.08 | ) | 1.72 | 1.00 | (3.00 | ) | (1.65 | ) | ||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | — | (0.21 | ) | (0.02 | ) | — | (0.12 | ) | — | (0.24 | ) | |||||||||||||||||
Realized capital gains | — | — | — | — | — | (0.65 | ) | (0.69 | ) | |||||||||||||||||||
Total distributions | — | (0.21 | ) | (0.02 | ) | — | (0.12 | ) | (0.65 | ) | (0.93 | ) | ||||||||||||||||
Net asset value at end of period | $ | 12.02 | $ | 11.32 | $ | 10.80 | $ | 10.90 | $ | 9.18 | $ | 8.30 | $ | 11.95 | ||||||||||||||
Total return(E) | 6.18 | %(F) | 6.82 | %(F) | (0.75 | %) | 18.74 | % | 12.03 | % | (24.16 | %) | (12.08 | %)(D) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 23,958 | $ | 24,065 | $ | 23,968 | $ | 33,477 | $ | 36,655 | $ | 48,126 | $ | 83,127 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses(G) | 1.08 | %(H) | 1.14 | %(H) | 1.32 | % | 1.32 | % | 1.32 | % | 1.31 | % | 1.66 | % | ||||||||||||||
Gross expenses(G) | 1.75 | %(H) | 1.81 | %(H) | 1.87 | % | 1.75 | % | 1.84 | % | 1.75 | % | 2.01 | % | ||||||||||||||
Net investment income (loss)(G) | (0.41 | %)(H) | 2.20 | %(H) | 0.42 | % | 0.02 | % | 0.47 | % | 0.42 | % | (0.29 | %) | ||||||||||||||
Portfolio turnover rate | 34 | %(F) | 65 | %(F)(I) | 77 | % | 8 | % | 41 | % | 27 | % | 46 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Less than $0.005 per share. |
(D) | Impact of payment from affiliate was less than $0.01 per share and 0.01%, respectively. |
(E) | Total returns shown exclude the effect of applicable sales loads. If these charges were included, the returns would be lower. |
(F) | Not annualized. |
(G) | Ratio does not include income and expenses of the underlying funds. |
(H) | Annualized. |
(I) | Portfolio turnover excludes the purchases and sales of the Acquired Funds (see Note 8). If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
41 |
Financial Highlights (Continued)
Touchstone Growth Allocation Fund—Class Y
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 11.86 | $ | 11.43 | $ | 11.57 | $ | 9.72 | $ | 8.77 | $ | 12.45 | $ | 14.91 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.04 | 0.16 | (B) | 0.15 | (B) | 0.12 | (B) | 0.05 | (B) | 0.12 | (B) | 0.09 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.76 | 0.67 | (0.14 | ) | 1.81 | 1.11 | (3.15 | ) | (1.67 | )(C) | ||||||||||||||||||
Total from investment operations | 0.80 | 0.83 | 0.01 | 1.93 | 1.16 | (3.03 | ) | (1.58 | ) | |||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | (0.03 | ) | (0.40 | ) | (0.15 | ) | (0.08 | ) | (0.21 | ) | — | (0.19 | ) | |||||||||||||||
Realized capital gains | — | — | — | — | — | (0.65 | ) | (0.69 | ) | |||||||||||||||||||
Total distributions | (0.03 | ) | (0.40 | ) | (0.15 | ) | (0.08 | ) | (0.21 | ) | (0.65 | ) | (0.88 | ) | ||||||||||||||
Net asset value at end of period | $ | 12.63 | $ | 11.86 | $ | 11.43 | $ | 11.57 | $ | 9.72 | $ | 8.77 | $ | 12.45 | ||||||||||||||
Total return | 6.73 | %(D) | 7.35 | %(D) | 0.22 | % | 19.94 | % | 13.22 | % | (23.40 | %) | (11.25 | %)(C) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 25,191 | $ | 27,873 | $ | 881 | $ | 3,561 | $ | 2,322 | $ | 667 | $ | 750 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses(E) | 0.08 | %(F) | 0.14 | %(F) | 0.32 | % | 0.32 | % | 0.32 | % | 0.32 | % | 0.61 | % | ||||||||||||||
Gross expenses(E) | 0.65 | %(F) | 0.65 | %(F) | 1.62 | % | 1.13 | % | 1.33 | % | 3.50 | % | 5.47 | % | ||||||||||||||
Net investment income(E) | 0.59 | %(F) | 3.20 | %(F) | 1.42 | % | 1.11 | % | 0.56 | % | 1.46 | % | 0.68 | % | ||||||||||||||
Portfolio turnover rate | 34 | %(D) | 65 | %(D)(G) | 77 | % | 8 | % | 41 | % | 27 | % | 46 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Impact of payment from affiliate was less than $0.01 per share and 0.01%, respectively. |
(D) | Not annualized. |
(E) | Ratio does not include income and expenses of the underlying funds. |
(F) | Annualized. |
(G) | Portfolio turnover excludes the purchases and sales of the Acquired Funds (see Note 8). If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
42 |
Financial Highlights (Continued)
Touchstone Growth Allocation Fund—Institutional Class
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 10.82 | $ | 10.58 | $ | 11.56 | $ | 9.71 | $ | 8.77 | $ | 12.44 | $ | 14.91 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.04 | 0.14 | (B) | 0.15 | (B) | 0.11 | (B) | 0.32 | (B) | 0.12 | (B) | 0.09 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.68 | 0.61 | (0.25 | ) | 1.83 | 0.83 | (3.14 | ) | (1.68 | )(C) | ||||||||||||||||||
Total from investment operations | 0.72 | 0.75 | (0.10 | ) | 1.94 | 1.15 | (3.02 | ) | (1.59 | ) | ||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | (0.03 | ) | (0.51 | ) | (0.88 | ) | (0.09 | ) | (0.21 | ) | — | (0.19 | ) | |||||||||||||||
Realized capital gains | — | — | — | — | — | (0.65 | ) | (0.69 | ) | |||||||||||||||||||
Total distributions | (0.03 | ) | (0.51 | ) | (0.88 | ) | (0.09 | ) | (0.21 | ) | (0.65 | ) | (0.88 | ) | ||||||||||||||
Net asset value at end of period | $ | 11.51 | $ | 10.82 | $ | 10.58 | $ | 11.56 | $ | 9.71 | $ | 8.77 | $ | 12.44 | ||||||||||||||
Total return | 6.63 | %(D) | 7.30 | %(D) | (0.26 | %) | 20.01 | % | 13.10 | % | (23.34 | %) | (11.32 | %)(C) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 18 | $ | 29 | $ | 13 | $ | 788 | $ | 674 | $ | 17,845 | $ | 24,509 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses(E) | 0.08 | %(F) | 0.14 | %(F) | 0.32 | % | 0.32 | % | 0.32 | % | 0.31 | % | 0.64 | % | ||||||||||||||
Gross expenses(E) | 129.61 | %(F) | 94.73 | %(F) | 7.68 | % | 2.29 | % | 0.67 | % | 0.50 | % | 0.84 | % | ||||||||||||||
Net investment income(E) | 0.59 | %(F) | 3.20 | %(F) | 1.42 | % | 0.96 | % | 3.37 | % | 1.39 | % | 0.67 | % | ||||||||||||||
Portfolio turnover rate | 34 | %(D) | 65 | %(D)(G) | 77 | % | 8 | % | 41 | % | 27 | % | 46 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Impact of payment from affiliate was less than $0.01 per share and 0.01%, respectively. |
(D) | Not annualized. |
(E) | Ratio does not include income and expenses of the underlying funds. |
(F) | Annualized. |
(G) | Portfolio turnover excludes the purchases and sales of the Acquired Funds (see Note 8). If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
43 |
Financial Highlights (Continued)
Touchstone Moderate Growth Allocation Fund—Class A
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 11.30 | $ | 11.13 | $ | 11.11 | $ | 9.66 | $ | 8.87 | $ | 11.91 | $ | 13.76 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.06 | 0.14 | (B) | 0.15 | (B) | 0.12 | (B) | 0.15 | (B) | 0.17 | (B) | 0.10 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.56 | 0.51 | 0.02 | (C) | 1.47 | 0.87 | (2.37 | ) | (1.11 | )(D) | ||||||||||||||||||
Total from investment operations | 0.62 | 0.65 | 0.17 | 1.59 | 1.02 | (2.20 | ) | (1.01 | ) | |||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | (0.05 | ) | (0.30 | ) | (0.15 | ) | (0.14 | ) | (0.23 | ) | (0.16 | ) | (0.15 | ) | ||||||||||||||
Realized capital gains | — | (0.18 | ) | — | — | — | (0.68 | ) | (0.69 | ) | ||||||||||||||||||
Total distributions | (0.05 | ) | (0.48 | ) | (0.15 | ) | (0.14 | ) | (0.23 | ) | (0.84 | ) | (0.84 | ) | ||||||||||||||
Net asset value at end of period | $ | 11.87 | $ | 11.30 | $ | 11.13 | $ | 11.11 | $ | 9.66 | $ | 8.87 | $ | 11.91 | ||||||||||||||
Total return(E) | 5.46 | %(F) | 5.96 | %(F) | 1.65 | % | 16.56 | % | 11.52 | %(D) | (17.27 | %) | (7.86 | %)(D) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 66,682 | $ | 71,235 | $ | 15,181 | $ | 18,848 | $ | 22,740 | $ | 25,782 | $ | 52,854 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses(G) | 0.33 | %(H) | 0.39 | %(H) | 0.57 | % | 0.57 | % | 0.57 | % | 0.57 | % | 0.89 | % | ||||||||||||||
Gross expenses(G) | 0.99 | %(H) | 0.90 | %(H) | 1.03 | % | 1.01 | % | 1.08 | % | 0.99 | % | 1.26 | % | ||||||||||||||
Net investment income(G) | 0.84 | %(H) | 2.90 | %(H) | 1.38 | % | 1.17 | % | 1.53 | % | 2.00 | % | 0.74 | % | ||||||||||||||
Portfolio turnover rate | 25 | %(F) | 73 | %(F)(I) | 77 | % | 9 | % | 38 | % | 32 | % | 43 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | The amounts shown for a share outstanding throughout the period does not accord with the change in net realized and unrealized gains (losses) on investments for the period due to the timing of purchases and sales of fund shares in relation to fluctuating market values during the period. |
(D) | Impact of payment from affiliate was less than $0.01 per share and 0.01%, respectively. |
(E) | Total returns shown exclude the effect of applicable sales loads. If these charges were included, the returns would be lower. |
(F) | Not annualized. |
(G) | Ratio does not include income and expenses of the underlying funds. |
(H) | Annualized. |
(I) | Portfolio turnover excludes the purchases and sales of the Acquired Funds (see Note 8). If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
44 |
Financial Highlights (Continued)
Touchstone Moderate Growth Allocation Fund—Class C
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 11.13 | $ | 10.89 | $ | 10.86 | $ | 9.44 | $ | 8.67 | $ | 11.63 | $ | 13.59 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income (loss) | 0.01 | 0.10 | (B) | 0.07 | (B) | 0.05 | (B) | 0.07 | (B) | 0.11 | (B) | (— | )(B)(C) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.57 | 0.50 | 0.02 | (D) | 1.43 | 0.86 | (2.31 | ) | (1.08 | )(E) | ||||||||||||||||||
Total from investment operations | 0.58 | 0.60 | 0.09 | 1.48 | 0.93 | (2.20 | ) | (1.08 | ) | |||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | (0.02 | ) | (0.18 | ) | (0.06 | ) | (0.06 | ) | (0.16 | ) | (0.08 | ) | (0.19 | ) | ||||||||||||||
Realized capital gains | — | (0.18 | ) | — | — | — | (0.68 | ) | (0.69 | ) | ||||||||||||||||||
Total distributions | (0.02 | ) | (0.36 | ) | (0.06 | ) | (0.06 | ) | (0.16 | ) | (0.76 | ) | (0.88 | ) | ||||||||||||||
Net asset value at end of period | $ | 11.69 | $ | 11.13 | $ | 10.89 | $ | 10.86 | $ | 9.44 | $ | 8.67 | $ | 11.63 | ||||||||||||||
Total return(F) | 5.18 | %(G) | 5.52 | %(G) | 0.89 | % | 15.70 | % | 10.71 | % | (17.90 | %) | (8.55 | %)(E) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 48,504 | $ | 48,985 | $ | 47,508 | $ | 61,074 | $ | 70,934 | $ | 92,373 | $ | 154,281 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses(H) | 1.08 | %(I) | 1.14 | %(I) | 1.32 | % | 1.32 | % | 1.32 | % | 1.32 | % | 1.63 | % | ||||||||||||||
Gross expenses(H) | 1.63 | %(I) | 1.68 | %(I) | 1.74 | % | 1.69 | % | 1.74 | % | 1.69 | % | 1.88 | % | ||||||||||||||
Net investment income (loss)(H) | 0.09 | %(I) | 2.15 | %(I) | 0.63 | % | 0.46 | % | 0.78 | % | 1.33 | % | (0.02 | %) | ||||||||||||||
Portfolio turnover rate | 25 | %(G) | 73 | %(G)(J) | 77 | % | 9 | % | 38 | % | 32 | % | 43 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | Less than $0.005 per share. |
(D) | The amounts shown for a share outstanding throughout the period does not accord with the change in net realized and unrealized gains (losses) on investments for the period due to the timing of purchases and sales of fund shares in relation to fluctuating market values during the period. |
(E) | Impact of payment from affiliate was less than $0.01 per share and 0.01%, respectively. |
(F) | Total returns shown exclude the effect of applicable sales loads. If these charges were included, the returns would be lower. |
(G) | Not annualized. |
(H) | Ratio does not include income and expenses of the underlying funds. |
(I) | Annualized. |
(J) | Portfolio turnover excludes the purchases and sales of the Acquired Funds (see Note 8). If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
45 |
Financial Highlights (Continued)
Touchstone Moderate Growth Allocation Fund—Class Y
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 11.38 | $ | 11.24 | $ | 11.23 | $ | 9.75 | $ | 8.95 | $ | 12.02 | $ | 13.84 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.07 | 0.15 | (B) | 0.18 | (B) | 0.18 | (B) | 0.17 | (B) | 0.20 | (B) | 0.13 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.57 | 0.52 | 0.01 | (C) | 1.46 | 0.88 | (2.40 | ) | (1.11 | )(D) | ||||||||||||||||||
Total from investment operations | 0.64 | 0.67 | 0.19 | 1.64 | 1.05 | (2.20 | ) | (0.98 | ) | |||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | (0.06 | ) | (0.35 | ) | (0.18 | ) | (0.16 | ) | (0.25 | ) | (0.19 | ) | (0.15 | ) | ||||||||||||||
Realized capital gains | — | (0.18 | ) | — | — | — | (0.68 | ) | (0.69 | ) | ||||||||||||||||||
Total distributions | (0.06 | ) | (0.53 | ) | (0.18 | ) | (0.16 | ) | (0.25 | ) | (0.87 | ) | (0.84 | ) | ||||||||||||||
Net asset value at end of period | $ | 11.96 | $ | 11.38 | $ | 11.24 | $ | 11.23 | $ | 9.75 | $ | 8.95 | $ | 12.02 | ||||||||||||||
Total return | 5.64 | %(E) | 6.04 | %(E) | 1.84 | % | 16.93 | % | 11.77 | %(D) | (17.07 | %) | (7.64 | %)(D) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 37,082 | $ | 43,585 | $ | 763 | $ | 1,289 | $ | 635 | $ | 508 | $ | 600 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses(F) | 0.08 | %(G) | 0.14 | %(G) | 0.32 | % | 0.32 | % | 0.32 | % | 0.32 | % | 0.61 | % | ||||||||||||||
Gross expenses(F) | 0.57 | %(G) | 0.54 | %(G) | 1.89 | % | 1.65 | % | 2.59 | % | 2.64 | % | 4.40 | % | ||||||||||||||
Net investment income(F) | 1.09 | %(G) | 3.15 | %(G) | 1.63 | % | 1.63 | % | 1.72 | % | 2.34 | % | 0.97 | % | ||||||||||||||
Portfolio turnover rate | 25 | %(E) | 73 | %(E)(H) | 77 | % | 9 | % | 38 | % | 32 | % | 43 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | The amounts shown for a share outstanding throughout the period does not accord with the change in net realized and unrealized gains (losses) on investments for the period due to the timing of purchases and sales of fund shares in relation to fluctuating market values during the period. |
(D) | Impact of payment from affiliate was less than $0.01 per share and 0.01%, respectively. |
(E) | Not annualized. |
(F) | Ratio does not include income and expenses of the underlying funds. |
(G) | Annualized. |
(H) | Portfolio turnover excludes the purchases and sales of the Acquired Funds (see Note 8). If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
46 |
Financial Highlights (Continued)
Touchstone Moderate Growth Allocation Fund—Institutional Class
Selected Data for a Share Outstanding Throughout Each Period
Six | ||||||||||||||||||||||||||||
Months | Five | |||||||||||||||||||||||||||
Ended | Months | |||||||||||||||||||||||||||
June 30, | Ended | |||||||||||||||||||||||||||
2013 | December 31, | Year Ended July 31, | ||||||||||||||||||||||||||
(Unaudited) | 2012(A) | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Net asset value at beginning of period | $ | 11.33 | $ | 11.18 | $ | 11.16 | $ | 9.75 | $ | 8.95 | $ | 12.01 | $ | 13.82 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.06 | 0.15 | (B) | 0.18 | (B) | 0.15 | (B) | 0.28 | (B) | 0.19 | (B) | 0.13 | (B) | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.58 | 0.52 | 0.02 | (C) | 1.48 | 0.78 | (2.38 | ) | (1.11 | )(D) | ||||||||||||||||||
Total from investment operations | 0.64 | 0.67 | 0.20 | 1.63 | 1.06 | (2.19 | ) | (0.98 | ) | |||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||||||
Net investment income | (0.06 | ) | (0.34 | ) | (0.18 | ) | (0.22 | ) | (0.26 | ) | (0.19 | ) | (0.14 | ) | ||||||||||||||
Realized capital gains | — | (0.18 | ) | — | — | — | (0.68 | ) | (0.69 | ) | ||||||||||||||||||
Total distributions | (0.06 | ) | (0.52 | ) | (0.18 | ) | (0.22 | ) | (0.26 | ) | (0.87 | ) | (0.83 | ) | ||||||||||||||
Net asset value at end of period | $ | 11.91 | $ | 11.33 | $ | 11.18 | $ | 11.16 | $ | 9.75 | $ | 8.95 | $ | 12.01 | ||||||||||||||
Total return | 5.66 | %(E) | 6.11 | %(E) | 1.92 | % | 16.88 | % | 11.79 | %(D) | (16.99 | %) | (7.59 | %)(D) | ||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 9 | $ | 9 | $ | 8 | $ | 8 | $ | 7 | $ | 7,948 | $ | 8,836 | ||||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||||||
Net expenses(F) | 0.08 | %(G) | 0.14 | %(G) | 0.32 | % | 0.32 | % | 0.32 | % | 0.32 | % | 0.70 | % | ||||||||||||||
Gross expenses(F) | 303.36 | %(G) | 230.25 | %(G) | 111.34 | % | 183.59 | % | 0.99 | % | 0.61 | % | 0.99 | % | ||||||||||||||
Net investment income(F) | 1.09 | %(G) | 3.15 | %(G) | 1.63 | % | 1.43 | % | 2.99 | % | 2.21 | % | 0.98 | % | ||||||||||||||
Portfolio turnover rate | 25 | %(E) | 73 | %(E)(H) | 77 | % | 9 | % | 38 | % | 32 | % | 43 | % |
(A) | The Fund changed its fiscal year end from July 31 to December 31. See Note 8 in Notes to Financial Statements. |
(B) | The net investment income per share is based on average shares outstanding for the period. |
(C) | The amounts shown for a share outstanding throughout the period does not accord with the change in net realized and unrealized gains (losses) on investments for the period due to the timing of purchases and sales of fund shares in relation to fluctuating market values during the period. |
(D) | Impact of payment from affiliate was less than $0.01 per share and 0.01%, respectively. |
(E) | Not annualized. |
(F) | Ratio does not include income and expenses of the underlying funds. |
(G) | Annualized. |
(H) | Portfolio turnover excludes the purchases and sales of the Acquired Funds (see Note 8). If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
47 |
Notes to Financial Statements
June 30, 2013 (Unaudited)
1. Organization
The Touchstone Strategic Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Massachusetts business trust pursuant to a Declaration of Trust dated November 18, 1982. The Trust consists of nineteen funds, including the following five funds (individually, a “Fund”, and collectively, the “Funds”):
Touchstone Dynamic Equity Fund (“Dynamic Equity Fund”)
Touchstone Balanced Allocation Fund (“Balanced Allocation Fund”)
Touchstone Conservative Allocation Fund (“Conservative Allocation Fund”)
Touchstone Growth Allocation Fund (“Growth Allocation Fund”)
Touchstone Moderate Growth Allocation Fund (“Moderate Growth Allocation Fund”)
Each Fund is an open-end, diversified, management investment company. Additionally, the Balanced Allocation Fund, Conservative Allocation Fund, Growth Allocation Fund and Moderate Growth Allocation Fund (collectively, the “Allocation Funds”) are “Funds of Funds”, which seek to achieve their investment objective by primarily investing in a diversified portfolio of affiliated underlying equity and fixed income funds that are sub-advised by Ibbotson Associates, Inc. These underlying funds, in turn, invest in a variety of U.S. and foreign equity and fixed income securities. Under normal circumstances, the Allocation Funds expect to invest their assets among equity and fixed income funds in the following ranges:
Equity | Fixed Income | |||||||
Allocation Fund | Allocation Fund | |||||||
Balanced Allocation Fund | 50-70% | 30-50% | ||||||
Conservative Allocation Fund | 20-40% | 60-80% | ||||||
Growth Allocation Fund | 90-100% | 0-10% | ||||||
Moderate Growth Allocation Fund | 70-90% | 10-30% |
The investment goal of each of the underlying funds that the Allocation Funds invest in is as follows:
Fund | Investment Goal | |
Touchstone Core Bond Fund | Seeks to provide as high level of current income as is consistent with the preservation of capital. Capital appreciation is a secondary objective. | |
Touchstone Dynamic Equity Fund | Seeks to obtain long-term capital appreciation from hedged equity investments with less risk than a fully invested, unhedged equity portfolio. | |
Touchstone Emerging Markets Equity Fund | Seeks capital appreciation by primarily investing in equity securities of companies in emerging markets. | |
Touchstone Flexible Income Fund | Seeks a high level of income consistent with reasonable risk by investing primarily in income producing securities. Capital appreciation is a secondary goal. | |
Touchstone Focused Fund | Seeks capital appreciation by primarily investing in equity securities. | |
Touchstone Global Real Estate Fund | Seeks capital appreciation by primarily investing in common stocks and other equity securities of U.S. and foreign real estate companies without regard to market capitalization. | |
Touchstone Growth Opportunities Fund | Seeks long-term growth of capital by investing primarily in stocks of U.S. companies of any size. | |
Touchstone High Yield Fund | Seeks to achieve a high level of income by primarily investing in non-investment grade debt securities. Capital appreciation is a secondary consideration. | |
Touchstone Institutional Money Market Fund | Seeks high current income, consistent with liquidity and stability of principal. It invests in U.S. government securities and high quality money market instruments rated in one of the top two short-term rating categories or determined to be of comparable quality. | |
Touchstone International Fixed Income Fund | Seeks total return by investing primarily in fixed income securities of issuers located outside the United States. | |
Touchstone International Small Cap Fund | Seeks capital appreciation by primarily investing in equity securities of non-U.S. small capitalization companies, including companies located in countries with emerging markets. |
48 |
Notes to Financial Statements (Unaudited) (Continued)
Fund | Investment Goal | |
Touchstone International Value Fund | Seeks long-term capital growth by primarily investing in equity securities of non-U.S. companies. | |
Touchstone Merger Arbitrage Fund | Seeks to achieve positive absolute returns regardless of market conditions over the long-term. It primarily invests in equity securities of U.S. and foreign issuers. | |
Touchstone Mid Cap Fund | Seeks long-term capital growth by investing primarily in common stocks of mid-cap U.S. listed companies. | |
Touchstone Mid Cap Growth Fund | Seeks to increase the value of its shares as a primary goal and to earn income as a secondary goal by primarily investing in common stocks of mid capitalization U.S. companies. | |
Touchstone Mid Cap Value Fund | Seeks capital appreciation by primarily investing in common stocks of medium capitalization companies. | |
Touchstone Premium Yield Equity Fund | Seeks long-term growth of capital and high current income by investing primarily in equity securities of any size. | |
Touchstone Sands Capital Institutional Growth Fund | Seeks long-term capital appreciation by primarily investing in common stocks of U.S. companies believed to have above-average potential for earnings or revenue growth. | |
Touchstone Small Cap Core Fund | Seeks capital appreciation by primarily investing in common stocks of small capitalization U.S. companies. | |
Touchstone Small Cap Growth Fund | Seeks long-term capital growth by investing primarily in stocks of small-cap companies. | |
Touchstone Small Company Value Fund | Seeks long-term capital growth by investing primarily in stocks of small-cap companies. | |
Touchstone Total Return Bond Fund | Seeks to provide current income, by primarily investing in fixed-income securities. Capital appreciation is a secondary goal. | |
Touchstone Ultra Short Duration Fixed Income Fund | Seeks maximum total return consistent with the preservation of capital by investing primarily in fixed income securities. | |
Touchstone Value Fund | Seeks long-term capital growth by primarily investing in equity securities of large- and mid-capitalization companies believed to be undervalued. |
The Declaration of Trust permits the Trust to issue an unlimited number of shares of beneficial interest of each Fund. The Funds are registered to offer the following classes of shares: Class A 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 goals, policies, and strategies along with information on the classes of shares currently being offered.
2. Significant Accounting Policies
The following is a summary of the Funds’ significant accounting policies:
Security valuation and fair value measurements — All investments in securities are recorded at their estimated fair value. The Funds define the term “market value”, as used throughout this report, as the estimated fair value. The Funds use various methods to measure fair value of their portfolio securities on a recurring basis. Generally accepted accounting principles in the United States (“U.S. GAAP”) establish a hierarchy that prioritizes inputs to valuation methods. 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 a Fund’s own assumptions in determining the fair value of investments) |
49 |
Notes to Financial Statements (Unaudited) (Continued)
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 instruments are valued using amortized cost, in accordance with rules under the 1940 Act. 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 June 30, 2013, for each Fund’s investments, as well as a reconciliation of assets for which significant unobservable inputs (Level 3) were used in determining value, if applicable, is included in each Fund’s Portfolio of Investments or Tabular Presentation, which also includes a breakdown of the Fund’s investments by sector allocation. There were no Level 3 securities for the Funds during the six months ended June 30, 2013.
All transfers in and out of the levels are recognized at the value at the end of the period. During the six months ended June 30, 2013, there were no transfers between Levels 1, 2 and 3 for all Funds.
The Funds’ portfolio securities are valued as of the close of the regular session of trading on the New York Stock Exchange (“NYSE”) (currently 4:00 p.m., Eastern time). Portfolio securities traded on stock exchanges are valued at the last sale price, and to the extent these securities are actively traded, they are categorized in Level 1 of the fair value hierarchy. 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 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 and are categorized in Level 2. Debt securities for which market quotations are readily available are valued at their most recent bid prices as obtained from one or more of the major market makers for such securities by an independent pricing service and are categorized in Level 2. 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 and are categorized in Level 2. While this method provides consistency in valuation (and may only be used if it approximates market value), it may result in periods during which value, as determined by amortized cost, is higher or lower than the price that would be received if the Fund sold the investment. Securities for which market quotations or the NOCP are not readily available are fair valued as determined by or under the direction of the Board of Trustees and are categorized in Level 3. Shares of open-end mutual funds in which the Funds invest are valued at their respective net asset values (“NAV”) as reported by the underlying funds and are categorized in Level 1. The prices for foreign securities are reported in local currency and translated into U.S. dollars using currency exchange rates.
Level 2 Valuation — Securities mainly traded on a non-U.S. exchange are generally valued according to the preceding closing values on that exchange. However, if an event that may change the value of a security occurs after the time that the closing value on the non-U.S. exchange was determined, but before the close of regular trading on the NYSE, the security may be priced based on fair value. This may cause the value of the security on the books of the Funds to be significantly different from the closing value on the non-U.S. exchange and may affect the calculation of the NAV of the Funds. Any debt securities held by the Funds for which market quotations are not readily available are generally priced at their most recent bid prices as obtained from one or more of the major market makers for such securities.
Level 3 Valuation — Securities held by the Funds that do not have readily available market quotations, or securities for which the available market quotations are not reliable, are priced at their fair value using procedures approved by the Funds’ Board of Trustees. The Funds may use fair value pricing under the following circumstances, among others:
• If the value of a security has been materially affected by events occurring before the Funds’ pricing time but after the close of the primary markets on which the security is traded.
• | If the exchange on which a portfolio security is principally traded closes early or if trading in a particular |
50 |
Notes to Financial Statements (Unaudited) (Continued)
portfolio security was halted during the day and did not resume prior to the Funds’ NAV calculation.
• | If a security is so thinly traded that reliable market quotations are unavailable due to infrequent trading. |
• | If the validity of market quotations is not reliable. |
The Allocation Funds invest in securities of affiliated mutual funds (the “Underlying Funds”). The value of an investment in the Allocation Funds is based on the performance of the Underlying Funds in which they invest and the allocation of their assets among those funds. Because the Allocation Funds invest in mutual funds, shareholders of the Allocation Funds indirectly bear a proportionate share of the expenses charged by the Underlying Funds in which they invest as well as their share of the Allocation Funds’ fees and expenses. The principal risks of an investment in the Allocation Funds include the principal risks of investing in the Underlying Funds. Investments in the Underlying Funds are valued at the NAV per share of each class of the Underlying Funds and are categorized as Level 1.
Certain Funds invest in securities of other investment companies, including exchange traded funds (“ETFs”), open-end funds, and closed-end funds. Open-end funds are investment companies that issue new shares continuously and redeem shares daily. Closed-end funds are investment companies that typically issue a fixed number of shares that trade on a securities exchange or over-the-counter. An ETF is an investment company that typically seeks to track the performance of an index by holding in its portfolio shares of all the companies, or a representative sample of the companies, that are components of a particular index. ETFs are traded on a securities exchange based on their market value. The risks of investment in other investment companies typically reflect the risks of the types of securities in which investment companies invest. Investments in ETFs and closed-end funds are subject to the additional risk that their shares may trade at a premium or discount to their NAV. When a Fund invests in another investment company, shareholders of the Fund indirectly bear their proportionate share of the other investment company’s fees and expenses, including operating, registration, trustee, licensing and marketing, as well as their share of the Funds’ fees and expenses.
Cash and cash equivalents — The Funds consider liquid assets deposited with a bank, money market funds, and certain short term debt instruments with maturities of 3 months or less to be cash equivalents and are included in the investments on the financial statements. These investments represent amounts held with financial institutions that are readily accessible to pay Fund expenses or investments. Cash and cash equivalents are valued at cost plus accrued interest, which approximates market value. The value of cash equivalents denominated in foreign currencies is determined by converting to U.S. dollars on the date of the Statement of Assets and Liabilities.
Securities sold short — The Dynamic Equity Fund periodically engages in selling securities short, which obligates the Fund to replace a security borrowed by purchasing the same security at the current market value. The Fund would incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund would realize a gain if the price of the security declines between those dates. As of June 30, 2013, the Dynamic Equity Fund held securities sold short with a fair value of $12,391,658 and had securities with a fair value of $74,644,376 held as collateral for both securities sold short and written options. Additionally, as of June 30, 2013, the Dynamic Equity Fund had cash collateral in the amount of $125,527 for both securities sold short and options written.
Options — The Funds may write or purchase financial option contracts primarily to hedge against changes in the value of equity securities (or securities that the Funds intend to purchase), against fluctuations in fair value caused by changes in prevailing market interest rates or foreign currency exchange rates and against changes in overall equity market volatility. In addition, the Funds may utilize options in an attempt to generate gains from option premiums or to reduce overall portfolio risk. The Funds’ option strategy primarily focuses on the use of writing call options on equity indexes. When the Funds write or purchase an option, an amount equal to the premium received or paid by the Funds is recorded as a liability or an asset and is subsequently
51 |
Notes to Financial Statements (Unaudited) (Continued)
adjusted to the current market value of the option written or purchased. Premiums received or paid from writing or purchasing options which expire unexercised are treated by the Funds on the expiration date as realized gains or losses. The difference between the premium and the amount paid or received on effecting a closing purchase or sale transaction, including brokerage commissions, is also treated as a realized gain or loss. If an option is exercised, the premium paid or received is added to the cost of the purchase or proceeds from the sale in determining whether the Funds have realized a gain or loss on investment transactions. The Funds, as writers of an option, may have no control over whether the underlying securities may be sold (call) or purchased (put) and as a result bear the market risk of an unfavorable change in the price of the security underlying the written option. The Funds, as purchasers of an option, bear the risk that the counterparties to the option may not have the ability to meet the terms of the option contracts. There is minimal counterparty credit risk involved in entering into option contracts since they are exchange-traded instruments and the exchange’s clearinghouse, as counterparty to all exchange-traded options, guarantees the options against default. Options are valued at the last quoted sales price. If there is no such reported sale on the valuation date, long option positions are valued at the most recent bid price, and short option positions are valued at the most recent ask price. As of June 30, 2013, the Dynamic Equity Fund held written options with a fair value of $404,055 and had securities with a fair value of $74,644,376 held as collateral for both securities sold short and options written. Additionally, as of June 30, 2013, the Dynamic Equity Fund also had cash collateral in the amount of $125,527 for both securities sold short and options written.
Derivative instruments and hedging activities — In order to better define its contractual rights and to secure rights that will help the Funds mitigate their counterparty risk, the Funds may enter into an International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreement” or “MNA”) or similar agreement with certain counterparties. An ISDA Master Agreement is a bilateral agreement between a Fund and a counterparty that governs over-the-counter (“OTC”) derivates and foreign exchange contracts, and typically contains, among other things, collateral posting terms and master netting provisions in the event of a default or termination. Under an ISDA Master Agreement, a party may, under certain circumstances, offset with the counterparty certain derivative financial instrument’s payables or receivables with collateral held or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default (close-out netting). These default events include bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset.
When entering into a derivative transaction, a Fund may be required to post and maintain collateral or margin (including both initial and maintenance margin). Collateral and margin requirements differ by type of derivative. Margin requirements are established by the broker or clearing house for exchange traded and centrally cleared derivatives (financial futures contracts, options, and centrally cleared swaps). Brokers can ask for margining in excess of the clearing house’s minimum in certain circumstances. Collateral terms are contract specific for OTC derivatives (foreign currency exchange contracts, options, and swaps). For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the marked-to-market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by the Fund and the counterparty. For financial reporting purposes, cash collateral that has been pledged to cover obligations of the Fund and cash collateral received from the counterparty, if any, is reported separately on the Statements of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by the Fund, if any, is noted in the Portfolio of Investments. To the extent amounts due to the Fund from its counterparties are not fully collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty non-performance. A Fund attempts to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.
52 |
Notes to Financial Statements (Unaudited) (Continued)
Certain ISDA Master Agreements allow counterparties to OTC derivatives transactions to terminate derivative contracts prior to maturity in the event the Fund’s net assets decline by a stated percentage or the Fund fails to meet the terms of their ISDA Master Agreement, which would cause the Fund to accelerate payment of any net liability owed to the counterparty.
For financial reporting purposes, the Funds do not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statements of Assets and Liabilities.
As of June 30, 2013, the Dynamic Equity Fund’s derivative assets and liabilities (by type) on a gross basis were as follows:
Assets | Liabilities | |||||||
Derivative Financial Instruments: | ||||||||
Written Options | $ | — | $ | 404,055 | ||||
Total gross amount of assets and liabilities subject to MNA | $ | — | $ | 404,055 |
The following table presents the Dynamic Equity Fund’s derivative liabilities net of amounts available for offset under a MNA and net of the related collateral pledged by the Fund as of June 30, 2013:
Gross Amounts | ||||||||||||||||||||
Offset in | ||||||||||||||||||||
Gross Amount of | Statement of | Non-cash | Net Amount of | |||||||||||||||||
Recognized | Assets and | Collateral | Cash Collateral | Derivative | ||||||||||||||||
Liabilities(A) | Liabilities | Pledged(B) | Pledged(B) | Liabilities(C) | ||||||||||||||||
Written Options | $ | 404,055 | $ | — | $ | (400,092 | ) | $ | (3,963 | ) | $ | — | ||||||||
Total | $ | 404,055 | $ | — | $ | (400,092 | ) | $ | (3,963 | ) | $ | — |
(A) | Gross and net amounts are equal. |
(B) | Pershing is the counterparty. |
(C) | Net amount represents the net amount payable due to the counterparty in the event of default. |
The following table sets forth the fair value of the Funds’ derivative financial instruments by primary risk exposure as of June 30, 2013:
Fair Value of Derivative Investments |
As of June 30, 2013 |
Derivatives not accounted for as hedging | Asset | Liability | ||||||||
Fund | instruments under ASC 815 | Derivatives* | Derivatives* | |||||||
Dynamic Equity Fund | Options - Equity Contracts | $ | — | $ | 404,055 |
* Statements of Assets and Liabilities Location: Written options, at market value.
53 |
Notes to Financial Statements (Unaudited) (Continued)
The following table sets forth the operations of the Funds’ derivative financial instruments by primary risk exposure as of June 30, 2013.
The Effect of Derivative Investments on the Statement of Operations |
for the Six Months Ended June 30, 2013 |
Change in | ||||||||||
Unrealized | ||||||||||
Derivatives not accounted for as hedging | Realized Loss | Appreciation | ||||||||
Fund | instruments under ASC 815 | on Derivatives | on Derivatives* | |||||||
Dynamic Equity Fund | Purchased Options - Equity Contacts | $ | (720,908 | )* | $ | — | ||||
Written Options - Equity Contacts | (2,513,889 | )** | 59,616 |
* | Statements of Operations Location: Net realized gain on investments from non-affiliated securities. |
** | Statements of Operations Location: Net realized loss on written options and net change in unrealized appreciation on written options. |
For the six months ended June 30, 2013, the average quarterly balances of outstanding derivative financial instruments were as follows:
Dynamic | ||||
Equity | ||||
Fund | ||||
Equity contracts: | ||||
Written Options - Average number of contracts | 1,866 |
Share valuation — The NAV 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 NAV per share plus a sales load equal to 6.10% of the NAV (or 5.75% of the offering price). There is no sales load on purchases of $1 million or more of Class A shares. The maximum offering price per share of Class C, Class Y, and Institutional Class shares of the Funds is equal to the NAV per share.
The redemption price per share of each class of shares of the Funds is generally equal to the NAV per share. However, Class A redemptions that were part of a no-load $1 million subscription may be subject to a contingent deferred sales charge (“CDSC”) of up to 1% if redeemed within a one-year period from the date of purchase. Additionally, purchases of Class C shares of the Funds are subject to a CDSC of 1.00% of the original purchase price if redeemed within a one-year period from the date of purchase.
Investment income — Dividend income from securities is recognized on the ex-dividend date, net of foreign withholding taxes, if any, which are reduced by any amounts reclaimable by the Funds, where applicable. Interest income from securities is recorded on the basis of interest accrued, premium amortized and discount accreted.
Distributions to shareholders — Each Fund intends to distribute to its shareholders substantially all of its income and capital gains. The Dynamic Equity Fund declares and distributes net investment income, if any, annually as a dividend to shareholders. The Balanced Allocation Fund, Conservative Allocation Fund, Growth Allocation Fund, and Moderate Growth Allocation Fund each declare and distribute net investment income, if any, quarterly as a dividend to shareholders. Each Fund makes distributions of capital gains, if any, at least annually, net of applicable capital loss carryforwards. Income distributions and capital gain distributions are determined in accordance with income tax regulations. Recognition of the Funds’ net investment income that invests in underlying funds is affected by the timing of dividend declarations by investee funds.
Allocations — Investment income earned, realized capital gains and losses, and unrealized appreciation and depreciation for a Fund are allocated daily to each class of shares based upon its proportionate share of total net assets of the Fund. Class-specific expenses are charged directly to the class incurring the expense. Common
54 |
Notes to Financial Statements (Unaudited) (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 in the Trust, and/or in Touchstone Investment Trust, Touchstone Institutional Funds Trust, Touchstone Variable Series Trust, Touchstone Funds Group Trust, and Touchstone Tax-Free Trust (“Touchstone Fund Complex”), daily in relation to net assets of each Fund or another reasonable measure.
Security transactions — Security transactions are reflected for financial reporting purposes as of the trade date. Realized gains and losses on sales of portfolio securities are calculated using the identified cost 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.
Redemption Fees — Prior to April 16, 2012, the Funds imposed a 2% redemption/exchange fee on total redemption proceeds (after applicable deferred sales charges) of any shareholder redeeming shares (including redemptions by exchange) of the Funds within 10 calendar days of their purchase. The Funds charged the redemption/exchange fee to discourage market timing by those shareholders initiating redemptions or exchanges to take advantage of short-term market movements. The redemption fee was imposed to the extent that the number of Fund shares redeemed exceeded the number of the Fund shares that had been held for more than 10 calendar days. In determining how long shares of the Fund had been held, shares held by the shareholder for the longest period of time were sold first. The Funds retained the redemption/exchange fee for the benefit of the remaining shareholders by crediting Paid-in Capital. The redemption fees can be found on the Statements of Changes in Net Assets - Capital Stock Activity. Effective April 16, 2012, the redemption fee plan was terminated.
3. Investment Transactions
Investment transactions (excluding short-term investments and U.S. Government securities) were as follows for the six months ended June 30, 2013:
Dynamic | Balanced | Conservative | ||||||||||
Equity | Allocation | Allocation | ||||||||||
Fund | Fund | Fund | ||||||||||
Purchases of investment securities | $ | 79,882,640 | $ | 28,074,479 | $ | 10,682,816 | ||||||
Proceeds from sales and maturities | $ | 94,829,812 | $ | 61,011,078 | $ | 28,518,398 | ||||||
Moderate | ||||||||||||
Growth | Growth | |||||||||||
Allocation | Allocation | |||||||||||
Fund | Fund | |||||||||||
Purchases of investment securities | $ | 27,900,309 | $ | 40,867,931 | ||||||||
Proceeds from sales and maturities | $ | 38,670,441 | $ | 73,215,351 |
There were no purchases or proceeds from sales and maturities of U.S. Government securities by the Funds for the six months ended June 30, 2013.
4. Transactions with Affiliates and Other Related Parties
Certain officers of the Trust are also officers of Touchstone Advisors, Inc. (the “Advisor”),Touchstone Securities, Inc. (the “Underwriter”) or BNY Mellon Investment Servicing (US) Inc. (“BNY Mellon”), the Sub-Administrator and Transfer Agent to the Funds. Such officers receive no compensation from the Trust. The Advisor and the Underwriter are each wholly-owned, indirect subsidiaries of The Western & Southern Financial Group, Inc.
55 |
Notes to Financial Statements (Unaudited) (Continued)
MANAGEMENT & EXPENSE LIMITATIONS AGREEMENTS
The Advisor provides general investment supervisory services for the Funds, under terms of an advisory agreement (the “Advisory Agreement”). Under the Advisory Agreement, each Fund pays the Advisor a fee, which is computed and accrued daily and paid monthly, at an annual rate based on average daily net assets of each Fund as shown in the table below.
Dynamic Equity Fund | 0.85% on the first $300 million of assets |
0.80% on the next $200 million of assets | |
0.75% on the next $250 million of assets | |
0.70% on the next $250 million of assets | |
0.65% on the next $500 million of assets | |
0.60% on the next $500 million of assets | |
0.55% on such assets in excess of $2 billion | |
Balanced Allocation Fund | 0.20% on the first $1 billion of assets |
0.175% on the next $1 billion of assets | |
0.150% on the next $1 billion of assets | |
0.125% of such assets in excess of $3 billion | |
Conservative Allocation Fund | 0.20% on the first $1 billion of assets |
0.175% on the next $1 billion of assets | |
0.150% on the next $1 billion of assets | |
0.125% of such assets in excess of $3 billion | |
Growth Allocation Fund | 0.25% on the first $1 billion of assets |
0.225% on the next $1 billion of assets | |
0.20% on the next $1 billion of assets | |
0.175% of such assets in excess of $3 billion | |
Moderate Growth Allocation Fund | 0.25% on the first $1 billion of assets |
0.225% on the next $1 billion of assets | |
0.20% on the next $1 billion of assets | |
0.175% of such assets in excess of $3 billion |
The Advisor has entered into investment sub-advisory agreements with the following parties (each, a “Sub-Advisor”):
Analytic Investors, LLC | Ibbotson Associates, Inc |
Dynamic Equity Fund | Balanced Allocation Fund |
Conservative Allocation Fund | |
Growth Allocation Fund | |
Moderate Growth Allocation Fund |
The Advisor, not the Funds, pays sub-advisory fees to each Sub-Advisor.
The Advisor entered into an Expense Limitation Agreement (the “Expense Limitation Agreement”), to contractually limit operating expenses of the Funds excluding: dividend expenses on short sales; interest; taxes; brokerage commissions; other expenditures which are capitalized in accordance with GAAP; the cost of “Acquired Fund Fees and Expenses”, if any; and other extraordinary expenses not incurred in the ordinary course of business. 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 separately waive class-level
56 |
Notes to Financial Statements (Unaudited) (Continued)
expenses, advisory fees, administration fees and to reimburse expenses in order to maintain the following expense limitations for the Funds:
Institutional | ||||||||||||||||
Fund | Class A | Class C | Class Y | Class | ||||||||||||
Dynamic Equity Fund | 1.55 | %** | 2.30 | %** | 1.30 | %** | 1.25 | %** | ||||||||
Balanced Allocation Fund | 0.33 | %* | 1.08 | %* | 0.08 | %* | 0.08 | %* | ||||||||
Balanced Allocation Fund | 0.41 | %** | 1.16 | %** | 0.16 | %** | 0.16 | %** | ||||||||
Conservative Allocation Fund | 0.33 | %* | 1.08 | %* | 0.08 | %* | 0.08 | %* | ||||||||
Conservative Allocation Fund | 0.41 | %** | 1.16 | %** | 0.16 | %** | 0.16 | %** | ||||||||
Growth Allocation Fund | 0.33 | %* | 1.08 | %* | 0.08 | %* | 0.08 | %* | ||||||||
Growth Allocation Fund | 0.41 | %** | 1.16 | %** | 0.16 | %** | 0.16 | %** | ||||||||
Moderate Growth Allocation Fund | 0.33 | %* | 1.08 | %* | 0.08 | %* | 0.08 | %* | ||||||||
Moderate Growth Allocation Fund | 0.41 | %** | 1.16 | %** | 0.16 | %** | 0.16 | %** |
* | These expense limitations will remain in effect until at least September 10, 2013. |
** | These expense limitations will remain in effect until at least April 29, 2014. |
Where multiple caps are in effect, the lower of the two amounts will apply.
During the six months ended June 30, 2013, the Advisor or affiliates waived investment advisory fees and administration fees or reimbursed expenses, including 12b-1 fees, of the Funds as follows:
Other | ||||||||||||
Investment | Operating | |||||||||||
Advisory | Administration | Expenses | ||||||||||
Fees Waived | Fees Waived | Reimbursed | ||||||||||
Dynamic Equity Fund | $ | — | $ | — | $ | 26,349 | ||||||
Balanced Allocation Fund | 112,653 | 111,743 | 125,158 | |||||||||
Conservative Allocation Fund | 71,181 | 64,637 | 94,053 | |||||||||
Growth Allocation Fund | 99,960 | 70,167 | 121,951 | |||||||||
Moderate Growth Allocation Fund | 178,567 | 135,425 | 162,034 |
Under the terms of the Expense Limitation Agreement the Advisor is entitled to recover, subject to approval by the Funds’ Board of Trustees, such amounts waived or reimbursed for a period of up to three years from the year in which the Advisor reduced its compensation or assumed expenses for the Funds. No recoupment will occur unless a Fund’s operating expenses are below the expense limitation amount.
As of June 30, 2013, the Advisor may seek recoupment of previously waived and reimbursed fees as follows:
Expiration | Expiration | Expiration | ||||||||||
July 31, | December | June | ||||||||||
Fund | 2015 | 31, 2015 | 30, 2016 | |||||||||
Dynamic Equity Fund | $ | - | $ | 10,969 | $ | 3,757 | ||||||
Balanced Allocation Fund | 18,241 | 172,469 | 270,433 | |||||||||
Conservative Allocation Fund | 24,108 | 115,995 | 176,366 | |||||||||
Growth Allocation Fund | 32,481 | 138,241 | 221,842 | |||||||||
Moderate Growth Allocation Fund | 31,679 | 231,358 | 350,327 |
The Advisor did not recoup any amounts it previously waived or reimbursed during the six months ended June 30, 2013.
ADMINISTRATION AGREEMENT
The Advisor entered into an Administration 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
57 |
Notes to Financial Statements (Unaudited) (Continued)
(“SEC”) and state securities authorities, as well as materials for meetings of the Board of Trustees; calculating the daily NAV per share; and maintaining the financial books and records of each Fund. For its services, the Advisor receives an annual fee of 0.20% on the first $6 billion of the aggregate average daily net assets of the Touchstone Fund Complex (excluding Touchstone Institutional Money Market Fund,Touchstone Institutional Funds Trust, and Touchstone Variable Series Trust); 0.16% of the next $4 billion of aggregate average daily net assets; and 0.12% of the aggregate average daily net assets over $10 billion. The fee is allocated among the funds of the Touchstone Fund Complex (excluding Touchstone Institutional Money Market Fund, Touchstone Institutional Funds Trust, and Touchstone Variable Series Trust) on the basis of relative daily net assets.
The Advisor has engaged BNY Mellon as the Sub-Administrator to the Trust. BNY Mellon provides administrative and accounting services to the Trust and is compensated directly by the Advisor, not the Trust.
TRANSFER AGENT AGREEMENT
Under the terms of the Transfer Agent Agreement between the Trust and BNY Mellon, BNY Mellon 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, BNY Mellon receives a monthly fee per shareholder account from each Fund. In addition, each Fund pays out-of-pocket expenses incurred by BNY Mellon, including, but not limited to, postage and supplies.
PLANS OF DISTRIBUTION AND SHAREHOLDER SERVICING FEE ARRANGEMENTS
The Trust has adopted distribution plans pursuant to Rule 12b-1 under the 1940 Act for each class of shares it offers that are subject to 12b-1 distribution fees. The plans allow each Fund to pay distribution and other fees for the sale and distribution of its shares and for services provided to shareholders. Under the Class A plan, each Fund pays an annual fee of up to 0.25% of average daily net assets that are attributable to Class A shares. Under the Class C plan, each Fund offering Class C shares pays an annual fee of up to 1.00% of average daily net assets that are attributable to Class C shares (of which up to 0.75% is a distribution fee and up to 0.25% is a shareholder servicing fee).
UNDERWRITING AGREEMENT
The Underwriter is the Funds’ principal underwriter and, as such, acts as exclusive agent for distribution of the Funds’ shares. Under the terms of the Underwriting Agreement between the Trust and the Underwriter, the Underwriter earned the following from underwriting and broker commissions on the sale of Class A shares of the Funds listed below during the six months ended June 30, 2013:
Fund | Amount | |||
Dynamic Equity Fund | $ | 15,581 | ||
Balanced Allocation Fund | 50,862 | |||
Conservative Allocation Fund | 13,909 | |||
Growth Allocation Fund | 13,505 | |||
Moderate Growth Allocation Fund | 40,202 |
58 |
Notes to Financial Statements (Unaudited) (Continued)
In addition, the Underwriter collected CDSCs on the redemption of Class C shares of the Funds listed below during the six months ended June 30, 2013:
Fund | Amount | |||
Dynamic Equity Fund | $ | 120 | ||
Balanced Allocation Fund | 153 | |||
Conservative Allocation Fund | 16 | |||
Growth Allocation Fund | 138 | |||
Moderate Growth Allocation Fund | 690 |
AFFILIATED INVESTMENTS
Each Fund may invest in the Touchstone Institutional Money Market Fund, subject to compliance with several conditions set forth in an exemptive order received by the Trust from the SEC. To the extent that the 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 the Dynamic Equity Fund’s investment in the Touchstone Institutional Money Market Fund for the six months ended June 30, 2013, is as follows:
Share Activity | ||||||||||||||||||||||||
Market | ||||||||||||||||||||||||
Balance | Balance | Value | ||||||||||||||||||||||
Fund | 12/31/12 | Purchases | Sales | 06/30/13 | Dividends | 06/30/13 | ||||||||||||||||||
Dynamic Equity Fund | 2,985,549 | 18,064,713 | (18,749,206 | ) | 2,301,056 | $ | 519 | $ | 2,301,056 |
A summary of each Allocation Fund’s transactions in affiliated underlying funds during the six months ended June 30, 2013 is as follows:
Balanced Allocation Fund | ||||||||||||||||||||
Purchases at | Proceeds | Market Value | Dividend | Net Realized | ||||||||||||||||
Underlying Fund | cost | from sale | 06/30/13 | Income | Gain/Loss | |||||||||||||||
Touchstone Core Bond Fund | $ | 186,330 | $ | 2,376,139 | $ | 3,816,791 | $ | 81,947 | $ | (13,380 | ) | |||||||||
Touchstone Total Return Bond Fund | 570,894 | 3,273,499 | 13,032,222 | 205,112 | 3,773 | |||||||||||||||
Touchstone Ultra Short Duration Fixed Income Fund ^ | 13,889,493 | 15,898,250 | 12,861,959 | 128,222 | (8,242 | ) | ||||||||||||||
Touchstone International Small Cap Fund | 59,385 | 1,295,845 | 3,803,348 | — | 78,121 | |||||||||||||||
Touchstone International Value Fund | 5,332,825 | 2,691,945 | 13,696,109 | — | (53,607 | ) | ||||||||||||||
Touchstone Focused Fund | 7,459,094 | 5,906,959 | 5,141,274 | 19,954 | 53,421 | |||||||||||||||
Touchstone Value Fund | 105,106 | 5,839,857 | 9,917,716 | 102,874 | 712,102 | |||||||||||||||
Touchstone Growth Opportunities Fund | 2,613,531 | 122,673 | 2,547,555 | — | 4,444 | |||||||||||||||
Touchstone Sands Capital Institutional Growth | 1,285,981 | 2,470,219 | 8,909,932 | — | (16,230 | ) | ||||||||||||||
Touchstone Premium Yield Equity Fund | 7,964,446 | 279,087 | 7,695,373 | 59,219 | 3,763 | |||||||||||||||
Touchstone Flexible Income Fund | 868,218 | 1,339,962 | 6,341,451 | 153,202 | (2,362 | ) | ||||||||||||||
Touchstone International Fixed Income Fund | 144,723 | 1,310,504 | 6,316,308 | — | (30,049 | ) | ||||||||||||||
Touchstone Dynamic Equity Fund | 3,477 | 1,558,939 | 5,150,503 | — | 23,735 |
59 |
Notes to Financial Statements (Unaudited) (Continued)
Balanced Allocation Fund
Purchases at | Proceeds | Market Value | Dividend | Net Realized | ||||||||||||||||
Underlying Fund | cost | from sale | 06/30/13 | Income | Gain/Loss | |||||||||||||||
Touchstone Emerging Markets Equity Fund | $ | 364,468 | $ | 1,193,485 | $ | 4,861,816 | $ | — | $ | 76,426 | ||||||||||
Touchstone Merger Arbitrage Fund | 65,949 | 968,184 | 3,870,366 | — | 5,494 | |||||||||||||||
Touchstone Institutional Money Market Fund | 87,815 | 843,143 | 3,869,553 | 1,219 | — | |||||||||||||||
Touchstone Small Cap Core Fund | 25,072 | 1,030,614 | 2,547,371 | — | 62,663 | |||||||||||||||
Touchstone Small Company Value Fund | 1,319,360 | 54,245 | 1,298,439 | 7,678 | 1,516 | |||||||||||||||
Touchstone High Yield Fund | 791,384 | 789,853 | 3,789,779 | 106,101 | 8,515 | |||||||||||||||
Touchstone Global Real Estate Fund | 235,624 | 1,301,411 | 3,665,605 | 60,547 | 48,888 | |||||||||||||||
Touchstone Mid Cap Fund | 14,994 | 1,061,362 | 2,553,997 | — | 86,776 | |||||||||||||||
Touchstone Small Cap Growth Fund | 1,365,438 | 65,874 | 1,290,280 | — | 187 | |||||||||||||||
Touchstone Mid Cap Growth Fund | 2,588 | 3,463,460 | — | — | 183,933 | |||||||||||||||
Touchstone Large Cap Relative Value Fund + | 3,462 | 5,849,641 | — | — | 213,433 | |||||||||||||||
Touchstone Mid Cap Value Fund | 2,335 | 3,480,220 | — | 5,953 | 371,207 | |||||||||||||||
Touchstone Global Equity Fund + | 4,481 | 3,300,698 | — | — | 243,051 | |||||||||||||||
Touchstone Large Cap Growth Fund, Class Y | — | 3,289,584 | — | — | 916,661 | |||||||||||||||
Touchstone International Equity Fund + | 3,977 | 6,623,697 | — | — | 1,297,198 | |||||||||||||||
Touchstone Small Cap Growth Fund | 1,356,551 | 1,384,251 | — | 27,700 | ||||||||||||||||
Total: | $ | 46,127,001 | $ | 79,063,600 | $ | 126,977,747 | $ | 932,028 | $ | 4,299,137 |
Conservative Allocation Fund
Purchases at | Proceeds | Market Value | Dividend | Net Realized | ||||||||||||||||
Underlying Fund | cost | from sale | 06/30/13 | Income | Gain/Loss | |||||||||||||||
Touchstone Core Bond Fund | $ | 181,731 | $ | 1,733,061 | $ | 3,576,823 | $ | 74,862 | $ | 48,437 | ||||||||||
Touchstone Total Return Bond Fund | 617,443 | 3,281,799 | 13,580,971 | 217,578 | (2,046 | ) | ||||||||||||||
Touchstone Ultra Short Duration Fixed Income Fund ^ | 15,597,333 | 18,805,128 | 14,260,954 | 149,954 | (16,162 | ) | ||||||||||||||
Touchstone International Fixed Income Fund | 253,482 | 1,372,459 | 5,691,528 | — | (33,166 | ) | ||||||||||||||
Touchstone Flexible Income Fund | 1,345,488 | 1,049,877 | 5,011,829 | 116,905 | 79 | |||||||||||||||
Touchstone International Small Cap Fund | 23,451 | 265,692 | 710,842 | — | 18,025 | |||||||||||||||
Touchstone International Value Fund | 996,673 | 1,075,526 | 3,502,813 | — | (7,015 | ) | ||||||||||||||
Touchstone Premium Yield Equity Fund | 3,917,988 | 373,308 | 3,576,034 | 29,141 | 6,517 | |||||||||||||||
Touchstone Institutional Money Market Fund | 84,348 | 914,600 | 3,568,896 | 1,202 | — |
60 |
Notes to Financial Statements (Unaudited) (Continued)
Conservative Allocation Fund
Purchases at | Proceeds | Market Value | Dividend | Net Realized | ||||||||||||||||
Underlying Fund | cost | from sale | 06/30/13 | Income | Gain/Loss | |||||||||||||||
Touchstone Growth Opportunities Fund | $ | 781,620 | $ | 86,379 | $ | 712,062 | $ | — | $ | 2,192 | ||||||||||
Touchstone Sands Capital Institutional Growth Fund | 293,445 | 2,221,779 | 2,852,448 | — | 5,292 | |||||||||||||||
Touchstone Merger Arbitrage Fund | 823,242 | 894,409 | 3,562,987 | — | 5,848 | |||||||||||||||
Touchstone Value Fund | 208,388 | 2,579,090 | 3,550,864 | 36,995 | 453,377 | |||||||||||||||
Touchstone Dynamic Equity Fund | 118,231 | 1,811,749 | 2,137,973 | — | 48,207 | |||||||||||||||
Touchstone High Yield Fund | 124,305 | 590,244 | 2,134,813 | 66,926 | 8,758 | |||||||||||||||
Touchstone Global Real Estate Fund | 150,622 | 547,556 | 1,378,947 | 22,874 | 22,175 | |||||||||||||||
Touchstone Small Cap Core Fund | 83,081 | 1,394,768 | 710,887 | — | 129,683 | |||||||||||||||
Touchstone Emerging Markets Equity Fund | 75,370 | 193,109 | 688,655 | — | 9,846 | |||||||||||||||
Touchstone Large Cap Relative Value Fund + | 25,310 | 2,404,253 | — | — | 94,292 | |||||||||||||||
Touchstone Global Equity Fund + | 8,500 | 946,568 | — | — | 73,625 | |||||||||||||||
Touchstone Mid Cap Fund | 14,181 | 1,018,460 | — | — | 139,465 | |||||||||||||||
Total: | $ | 25,724,232 | $ | 43,559,814 | $ | 71,210,326 | $ | 716,437 | $ | 1,007,429 |
Growth Allocation Fund
Purchases at | Proceeds | Market Value | Dividend | Net Realized | ||||||||||||||||
Underlying Fund | cost | from sale | 06/30/13 | Income | Gain/Loss | |||||||||||||||
Touchstone International Small Cap Fund | $ | 1,703,928 | $ | 705,267 | $ | 5,580,023 | $ | — | $ | 17,056 | ||||||||||
Touchstone International Value Fund | 6,148,715 | 1,386,409 | 12,548,038 | — | (35,142 | ) | ||||||||||||||
Touchstone Focused Fund | 8,643,990 | 7,129,306 | 6,435,599 | 25,543 | 46,165 | |||||||||||||||
Touchstone Value Fund | 129,182 | 2,434,404 | 6,393,668 | 66,212 | 337,483 | |||||||||||||||
Touchstone Growth Opportunities Fund | 2,519,876 | 988,585 | 1,600,970 | — | 36,841 | |||||||||||||||
Touchstone Sands Capital Institutional Growth Fund | 816,801 | 1,017,976 | 7,216,152 | — | 7,563 | |||||||||||||||
Touchstone Emerging Markets Equity Fund | 516,115 | 1,514,694 | 6,747,143 | — | 78,162 | |||||||||||||||
Touchstone Ultra Short Duration Fixed Income Fund ^ | 6,212,993 | 5,458,158 | 4,835,349 | 34,415 | (2,523 | ) | ||||||||||||||
Touchstone Premium Yield Equity Fund, Class Y | 5,106,283 | 277,916 | 4,833,912 | 37,461 | 613 | |||||||||||||||
Touchstone Small Cap Core Fund | 47,297 | 805,257 | 3,196,299 | — | 72,218 | |||||||||||||||
Touchstone Small Company Value Fund | 78,156 | 384,229 | 1,619,407 | 11,830 | 32,338 | |||||||||||||||
Touchstone Global Real Estate Fund | 182,312 | 827,201 | 4,523,542 | 75,159 | 43,169 | |||||||||||||||
Touchstone Mid Cap Fund | 32,010 | 1,460,331 | 1,603,987 | — | 223,459 | |||||||||||||||
Touchstone Mid Cap Growth Fund | 1,710,042 | 1,270,409 | 2,399,039 | — | 36,198 | |||||||||||||||
Touchstone Dynamic Equity Fund | 54,801 | 531,283 | 3,222,752 | — | 20,737 |
61 |
Notes to Financial Statements (Unaudited) (Continued)
Growth Allocation Fund
Purchases at | Proceeds | Market Value | Dividend | Net Realized | ||||||||||||||||
Underlying Fund | cost | from sale | 06/30/13 | Income | Gain/Loss | |||||||||||||||
Touchstone Mid Cap Value Fund | $ | 25,532 | $ | 1,514,470 | $ | 2,424,639 | $ | 14,185 | $ | 140,045 | ||||||||||
Touchstone Small Cap Growth Fund | 2,576,479 | 148,445 | 2,410,861 | — | 521 | |||||||||||||||
Touchstone Merger Arbitrage Fund | 60,930 | 170,357 | 1,617,325 | — | 2,519 | |||||||||||||||
Touchstone International Equity Fund + | — | 5,469,091 | — | — | 1,241,131 | |||||||||||||||
Touchstone Emerging Growth Fund + | — | 2,841,554 | — | — | 437,022 | |||||||||||||||
Touchstone Global Equity Fund + | — | 4,535,697 | — | — | 306,397 | |||||||||||||||
Touchstone Large Cap Relative Value Fund + | — | 3,680,357 | — | — | 176,932 | |||||||||||||||
Touchstone Large Cap Growth Fund | — | 2,732,356 | — | — | 818,427 | |||||||||||||||
Touchstone Small Cap Growth Fund | 2,532,668 | 2,584,490 | — | — | 51,821 | |||||||||||||||
Touchstone Total Return Bond Fund | — | — | — | 11,580 | — | |||||||||||||||
Total: | $ | 39,098,110 | $ | 49,868,242 | $ | 79,208,705 | $ | 276,385 | $ | 4,089,152 |
Moderate Growth Allocation Fund
Purchases at | Proceeds | Market Value | Dividend | Net Realized | ||||||||||||||||
Underlying Fund | cost | from sale | 06/30/13 | Income | Gain/Loss | |||||||||||||||
Touchstone International Small Cap Fund | $ | 1,555,785 | $ | 1,215,331 | $ | 6,129,921 | $ | — | $ | 32,159 | ||||||||||
Touchstone International Value Fund | 9,851,554 | 2,963,640 | 19,603,594 | — | (39,309 | ) | ||||||||||||||
Touchstone Total Return Bond Fund | 832,670 | 3,287,772 | 15,017,829 | 240,578 | 2,808 | |||||||||||||||
Touchstone Ultra Short Duration Fixed Income Fund ^ | 10,433,642 | 9,692,336 | 8,168,502 | 76,224 | (5,021 | ) | ||||||||||||||
Touchstone Focused Fund | 10,074,604 | 10,876,575 | 9,301,092 | 36,585 | 100,680 | |||||||||||||||
Touchstone Value Fund | 155,035 | 5,817,817 | 12,340,651 | 128,079 | 1,081,657 | |||||||||||||||
Touchstone Growth Opportunities Fund | 4,851,277 | 1,904,285 | 3,079,618 | — | 69,460 | |||||||||||||||
Touchstone Sands Capital Institutional Growth Fund | 41,348 | 3,114,471 | 12,346,359 | — | (11,251 | ) | ||||||||||||||
Touchstone Emerging Markets Equity Fund | 514,909 | 1,925,110 | 9,982,675 | — | 114,603 | |||||||||||||||
Touchstone Premium Yield Equity Fund, Class Y | 9,800,373 | 500,289 | 9,312,533 | 72,006 | 3,235 | |||||||||||||||
Touchstone Small Cap Core Fund | 12,648 | 1,527,581 | 4,628,210 | — | 107,550 | |||||||||||||||
Touchstone Small Company Value Fund | 1,704,007 | 627,991 | 3,123,389 | 20,704 | 29,388 | |||||||||||||||
Touchstone Dynamic Equity Fund | 51,088 | 1,512,059 | 6,215,946 | — | 35,196 | |||||||||||||||
Touchstone Mid Cap Fund | 8,986 | 3,192,982 | 3,088,779 | — | 441,721 | |||||||||||||||
Touchstone Mid Cap Growth Fund | 5,990 | 909,547 | 3,081,258 | — | 3,186 | |||||||||||||||
Touchstone Flexible Income Fund | 1,016,423 | 865,301 | 6,156,811 | 147,235 | (3,636 | ) |
62 |
Notes to Financial Statements (Unaudited) (Continued)
Moderate Growth Allocation Fund
Purchases at | Proceeds | Market Value | Dividend | Net Realized | ||||||||||||||||
Underlying Fund | cost | from sale | 06/30/13 | Income | Gain/Loss | |||||||||||||||
Touchstone Global Real Estate Fund | $ | 115,670 | $ | 1,663,657 | $ | 5,708,171 | $ | 95,217 | $ | 70,992 | ||||||||||
Touchstone Merger Arbitrage Fund | 101,890 | 626,214 | 3,116,634 | — | 5,346 | |||||||||||||||
Touchstone Mid Cap Value Fund | 25,649 | 3,011,571 | 3,113,642 | 19,659 | 247,609 | |||||||||||||||
Touchstone Small Cap Growth Fund | 3,273,801 | 151,589 | 3,100,065 | — | 606 | |||||||||||||||
Touchstone High Yield Fund | 153,049 | 568,866 | 3,066,792 | 93,924 | 7,341 | |||||||||||||||
Touchstone International Fixed Income Fund | 84,605 | 428,628 | 3,062,749 | — | (10,820 | ) | ||||||||||||||
Touchstone International Equity Fund + | — | 9,544,929 | — | — | 1,774,821 | |||||||||||||||
Touchstone Emerging Growth Fund + | — | 1,977,570 | — | — | 258,849 | |||||||||||||||
Touchstone Large Cap Relative Value Fund + | — | 7,716,921 | — | — | 315,137 | |||||||||||||||
Touchstone Global Equity Fund + | — | 7,564,889 | — | — | 437,063 | |||||||||||||||
Touchstone Large Cap Growth Fund | — | 3,758,535 | — | — | 1,373,503 | |||||||||||||||
Touchstone Small Cap Growth Fund | 3,223,959 | 3,289,925 | — | — | 65,967 | |||||||||||||||
Total: | $ | 57,888,962 | $ | 90,236,381 | $ | 152,745,220 | $ | 930,211 | $ | 6,508,840 |
^ | Includes activity of the Touchstone Short Duration Fixed Income Fund prior to merging into the Touchstone Ultra Short Duration Fixed Income Fund on May 17, 2013. |
+ | The Fund ceased operations on March 27, 2013. |
5. Federal Tax Information
Federal income tax — 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 investment company taxable income, the Fund (but not the shareholders) will be relieved of federal income tax on the income distributed. It is each Fund’s policy to distribute all of its taxable income and 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 investment company taxable income (earned during the calendar year) and 98.2% of its net realized capital gains (earned during the twelve months ending October 31) plus undistributed amounts from prior years.
63 |
Notes to Financial Statements (Unaudited) (Continued)
The tax character of distributions paid for the five months ended December 31, 2012 and fiscal years ended July 31, 2012 and July 31, 2011 was as follows:
Dynamic | Balanced | |||||||||||||||||||||||
Equity Fund | Allocation Fund | |||||||||||||||||||||||
Five Months | Five Months | |||||||||||||||||||||||
Ended | Year Ended | Year Ended | Ended | Year Ended | Year Ended | |||||||||||||||||||
December 31, | July 31, | July 31, | December 31, | July 31, | July 31, | |||||||||||||||||||
2012 | 2012 | 2011 | 2012 | 2012 | 2011 | |||||||||||||||||||
From ordinary income | $ | — | $ | 514,890 | $ | — | $ | 6,140,882 | $ | 607,351 | $ | 1,392,283 | ||||||||||||
From long-term capital gains | — | — | — | 137,848 | — | — | ||||||||||||||||||
Total distributions | $ | — | $ | 514,890 | $ | — | $ | 6,278,730 | $ | 607,351 | $ | 1,392,283 |
Conservative | Growth | |||||||||||||||||||||||
Allocation Fund | Allocation Fund | |||||||||||||||||||||||
Five Months | Five Months | |||||||||||||||||||||||
Ended | Year Ended | Year Ended | Ended | Year Ended | Year Ended | |||||||||||||||||||
December 31, | July 31, | July 31, | December 31, | July 31, | July 31, | |||||||||||||||||||
2012 | 2012 | 2011 | 2012 | 2012 | 2011 | |||||||||||||||||||
From ordinary income | $ | 5,215,403 | $ | 589,089 | $ | 1,437,898 | $ | 1,600,296 | $ | 180,489 | $ | 118,434 | ||||||||||||
From long-term capital gains | — | — | — | 462 | — | — | ||||||||||||||||||
Total distributions | $ | 5,215,403 | $ | 589,089 | $ | 1,437,898 | $ | 1,600,758 | $ | 180,489 | $ | 118,434 |
Moderate Growth | ||||||||||||||||||||||||
Allocation Fund | ||||||||||||||||||||||||
Five Months | ||||||||||||||||||||||||
Ended | Year Ended | Year Ended | ||||||||||||||||||||||
December 31, | July 31, | July 31, | ||||||||||||||||||||||
2012 | 2012 | 2011 | ||||||||||||||||||||||
From ordinary income | $ | 3,961,419 | $ | 572,935 | $ | 706,859 | ||||||||||||||||||
From long-term capital gains | 1,675,414 | — | — | |||||||||||||||||||||
Total distributions | $ | 5,636,833 | $ | 572,935 | $ | 706,859 |
The following information is computed on a tax basis for each item as of December 31, 2012:
Dynamic | Balanced | Conservative | ||||||||||
Equity Fund | Allocation Fund | Allocation Fund | ||||||||||
Tax cost of portfolio investments | $ | 74,694,953 | $ | 152,721,699 | $ | 88,036,474 | ||||||
Gross unrealized appreciation | 8,882,208 | 5,437,347 | 2,033,192 | |||||||||
Gross unrealized depreciation | (1,724,591 | ) | (3,107,835 | ) | (1,828,856 | ) | ||||||
Net unrealized appreciation (depreciation) | 7,157,617 | 2,329,512 | 204,336 | |||||||||
Net unrealized appreciation (depreciation) on written options and short sales | (182,336 | ) | — | — | ||||||||
Accumulated capital and other losses | (148,826,198 | ) | (42,487,158 | ) | (3,634,373 | ) | ||||||
Post-October and qualified late-year losses | (933,316 | ) | (1,960 | ) | (3,365 | ) | ||||||
Undistributed ordinary income | 15,903 | — | — | |||||||||
Undistributed capital gains | — | — | — | |||||||||
Other temporary differences | (31,406 | ) | — | — | ||||||||
Accumulated earnings (deficit) | $ | (142,799,736 | ) | $ | (40,159,606 | ) | $ | (3,433,402 | ) |
64 |
Notes to Financial Statements (Unaudited) (Continued)
Moderate | ||||||||
Growth | Growth | |||||||
Allocation Fund | Allocation Fund | |||||||
Tax cost of portfolio investments | $ | 83,860,637 | $ | 173,227,179 | ||||
Gross unrealized appreciation | 4,381,174 | 8,377,699 | ||||||
Gross unrealized depreciation | (3,556,478 | ) | (4,717,190 | ) | ||||
Net unrealized appreciation (depreciation) | 824,696 | 3,660,509 | ||||||
Accumulated capital and other losses | (44,481,926 | ) | (44,872,260 | ) | ||||
Post-October and qualified late-year losses | (2,937 | ) | (31,574 | ) | ||||
Undistributed ordinary income | — | — | ||||||
Undistributed capital gains | 498,325 | — | ||||||
Other temporary differences | — | 39,467 | ||||||
Accumulated earnings (deficit) | $ | (43,161,842 | ) | $ | (41,203,858 | ) |
The difference between the tax cost of portfolio investments and the financial statement cost is primarily due to wash sale loss deferrals and passive foreign investment company adjustment.
As of December 31, 2012, the Funds had the following capital loss carryforwards for federal income tax purposes:
No | ||||||||||||||||||||||||||||||||
Expiration | No | |||||||||||||||||||||||||||||||
Short Term Expiring On | Short | Expiration | ||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Term* | Long Term* | Total | |||||||||||||||||||||||||
Dynamic Equity Fund | $ | 39,657,235 | $ | 31,726,954 | $ | 77,442,009 | $ | — | $ | — | $ | — | $ | — | $ | 148,826,198 | ||||||||||||||||
Balanced Allocation Fund | — | 13,311,819 | 24,373,973 | ** | 4,801,366 | ** | — | — | — | 42,487,158 | ||||||||||||||||||||||
Conservative Allocation Fund | — | — | 3,611,052 | ** | 23,321 | — | — | — | 3,634,373 | |||||||||||||||||||||||
Growth Allocation Fund | — | 3,557,561 | ** | 30,260,646 | ** | 10,663,719 | ** | — | — | — | 44,481,926 | |||||||||||||||||||||
Moderate Growth Allocation Fund | — | — | 35,744,603 | ** | 9,127,657 | ** | — | — | — | 44,872,260 |
* The Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted on December 22, 2010. The Act makes changes to several tax rules impacting the Funds. The provisions of the Act became effective for the Funds’ fiscal year ending December 31, 2012. Although the Act provides several benefits, including the unlimited carryover of future capital losses, there may be a greater likelihood that all or a portion of each Fund’s pre-enactment capital loss carryovers may expire without being utilized due to the fact that post-enactment capital losses must be utilized before pre-enactment capital loss carryovers may be utilized. Under the Act, new capital losses may now be carried forward indefinitely, and retain the character of the original loss as compared with pre-enactment law, where capital losses could be carried forward for up to eight years, and carried forward as short-term capital losses, irrespective of the character of the original loss.
** Utilization may be limited by current income tax regulations.
The capital loss carryforwards may be utilized in future years to offset net realized capital gains, if any, prior to distributing such gains to shareholders.
The Funds have analyzed their tax positions taken on federal income tax returns for all open tax years (tax years ended December 31, 2012 and July 31, 2009 through 2012) and have concluded that no provision for income tax is required in their financial statements.
As of June 30, 2013, the Trust had the following federal tax cost resulting in net unrealized appreciation (depreciation) as follows:
Net | ||||||||||||||||
Gross | Gross | Unrealized | ||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation | |||||||||||||
Fund | Cost | Appreciation | Depreciation | (Depreciation) | ||||||||||||
Dynamic Equity Fund | $ | 69,390,129 | $ | 9,033,602 | $ | (1,478,299 | ) | $ | 7,555,303 | |||||||
Balanced Allocation Fund | 122,143,048 | 6,008,061 | (1,173,362 | ) | 4,834,699 | |||||||||||
Conservative Allocation Fund | 69,714,199 | 2,123,201 | (627,074 | ) | 1,496,127 |
65 |
Notes to Financial Statements (Unaudited) (Continued)
Net | ||||||||||||||||
Gross | Gross | Unrealized | ||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation | |||||||||||||
Fund | Cost | Appreciation | Depreciation | (Depreciation) | ||||||||||||
Growth Allocation Fund | $ | 74,391,234 | $ | 5,541,591 | $ | (724,120 | ) | $ | 4,817,471 | |||||||
Moderate Growth Allocation Fund | 143,766,011 | 10,061,406 | (1,082,197 | ) | 8,979,209 |
6. 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. However, based on experience, the Funds expect the risk of loss to be remote.
7. Risks Associated with Leverage
By investing the proceeds received from selling securities short, the Dynamic Equity Fund is employing leverage, which creates special risks. The use of leverage may increase the Fund’s exposure to long or short equity positions and may cause the Fund’s NAV to be more volatile than if the Fund had not used leverage. This could result in increased volatility of returns.
8. Fund Mergers
On February 10, 2012, the Shareholders of the Old Mutual Funds I (the “Reorganizing Funds”) approved an Agreement and Plan of Reorganization (the “Plan”) providing for the transfer of all assets and liabilities of each Reorganizing Fund to the corresponding Touchstone Fund as noted below. The merger took place on April 13, 2012. The fiscal year end of the Reorganizing Funds was July 31. After the fiscal year end July 31, 2012, the Funds year end changed to December 31.
Net | Shares | |||||||||
Reorganizing Funds* | Touchstone Funds | Assets | Outstanding | |||||||
Old Mutual Analytic Fund | Dynamic Equity Fund | $ | 56,128,406 | 5,182,646 | ||||||
Old Mutual Asset Allocation Balanced Portfolio | Balanced Allocation Fund | 54,581,260 | 4,909,161 | |||||||
Old Mutual Asset Allocation Conservative Portfolio | Conservative Allocation Fund | 35,536,596 | 3,274,555 | |||||||
Old Mutual Asset Allocation Growth Portfolio | Growth Allocation Fund | 38,970,804 | 3,527,780 | |||||||
Old Mutual Asset Allocation Moderate Growth Portfolio | Moderate Growth Allocation Fund | 68,462,430 | 6,232,923 |
* | Fund had Class Z shares outstanding immediately prior to the reorganization, which were exchanged for Class Y Shares of the corresponding Touchstone Fund. |
At the meeting held on March 13, 2012, the Board of Trustees of the Trust approved an Agreement and Plan of Reorganization (the “Plans”) providing for the transfer of all the assets and liabilities of the Fifth Third Life Model Moderate Fund, Fifth Third Life Model Conservative Fund, Fifth Third Life Model Moderately Conservative Fund, Fifth Third Life Model Aggressive Fund, and Fifth Third Life Model Moderately Aggressive Fund (the “Acquired Funds”) to the corresponding Touchstone Funds shown below. The merger took place on September 10, 2012.
Acquired Funds | Touchstone Funds |
Fifth Third Life Model Moderate Fund | Balanced Allocation Fund |
Fifth Third Life Model Conservative Fund | Conservative Allocation Fund |
Fifth Third Life Model Moderately Conservative Fund | Conservative Allocation Fund |
Fifth Third Life Model Aggressive Fund | Growth Allocation Fund |
66 |
Notes to Financial Statements (Unaudited) (Continued)
Acquired Funds | Touchstone Funds |
Fifth Third Life Model Moderately Aggressive Fund | Moderate Growth Allocation Fund |
The following is a summary of shares outstanding, net assets, net assets value per share and unrealized appreciation (depreciation) immediately before and after the September 10, 2012 reorganization for the Allocation Funds:
After | ||||||||||||
Before Reorganization | Reorganization | |||||||||||
Fifth Third | ||||||||||||
LifeModel | Touchstone | Touchstone | ||||||||||
Moderate | Balanced | Balanced | ||||||||||
Fund | Allocation Fund | Allocation Fund | ||||||||||
Class A* | ||||||||||||
Shares | 3,650,589 | (A) | 856,628 | 4,507,217 | ||||||||
Net Assets | $ | 41,600,137 | $ | 9,761,746 | $ | 51,361,883 | ||||||
Net Asset Value | $ | 11.40 | (A) | $ | 11.40 | $ | 11.40 | |||||
Class C | ||||||||||||
Shares | 191,231 | (B) | 3,356,100 | 3,547,331 | ||||||||
Net Assets | $ | 2,174,823 | $ | 38,167,906 | $ | 40,342,729 | ||||||
Net Asset Value | $ | 11.37 | (B) | $ | 11.37 | $ | 11.37 | |||||
Class Y** | ||||||||||||
Shares | 6,276,974 | (C) | 132,241 | 6,409,215 | ||||||||
Net Assets | $ | 71,649,327 | $ | 1,509,480 | $ | 73,158,807 | ||||||
Net Asset Value | $ | 11.41 | (C) | $ | 11.41 | $ | 11.41 | |||||
Institutional Class | ||||||||||||
Shares | — | 2,683 | 2,683 | |||||||||
Net Assets | $ | — | $ | 30,489 | $ | 30,489 | ||||||
Net Asset Value | $ | — | $ | 11.36 | $ | 11.36 | ||||||
Fund Total | ||||||||||||
Shares Outstanding | 10,277,468 | 4,347,652 | 14,466,446 | |||||||||
Net Assets | $ | 115,424,287 | $ | 49,469,621 | $ | 164,893,908 | ||||||
Unrealized Appreciation (Depreciation) | $ | 5,211,794 | $ | 3,570,090 | $ | 8,781,884 |
(A) Reflects a 0.9853:1 stock split on Class A Shares and a 0.9807:1 stock split on Class B Shares which occurred on the date of reorganization, September 10, 2012.
(B) Reflects a 0.9820:1 stock split which occurred on the date of reorganization, September 10, 2012.
(C) Reflects a 0.9845:1 stock split which occurred on the date of reorganization, September 10, 2012.
* The Acquired Fund had Class B Shares outstanding immediately prior to the reorganization, which were exchanged for Class A Shares of the corresponding Touchstone Fund.
** The Acquired Fund had Institutional Class Shares outstanding immediately prior to the reorganization, which were exchanged for Class Y Shares of the corresponding Touchstone Fund.
After | ||||||||||||||||
Before Reorganization | Reorganization | |||||||||||||||
Fifth Third | ||||||||||||||||
Fifth Third | LifeModel | Touchstone | Touchstone | |||||||||||||
LifeModel | Moderately | Conservative | Conservative | |||||||||||||
Conservative | Conservative | Allocation | Allocation | |||||||||||||
Fund | Fund | Fund | Fund | |||||||||||||
Class A* | ||||||||||||||||
Shares | 912,961 | (A) | 1,457,284 | (B) | 778,704 | 3,148,949 | ||||||||||
Net Assets | $ | 10,038,678 | $ | 16,023,820 | $ | 8,562,424 | $ | 34,624,922 | ||||||||
Net Asset Value | $ | 11.00 | (A) | $ | 11.00 | (B) | $ | 11.00 | $ | 11.00 | ||||||
Class C | ||||||||||||||||
Shares | 72,314 | (C) | 89,383 | (D) | 1,541,709 | 1,703,406 | ||||||||||
Net Assets | $ | 791,586 | $ | 978,429 | $ | 16,876,314 | $ | 18,646,329 | ||||||||
Net Asset Value | $ | 10.95 | (C) | $ | 10.95 | (D) | $ | 10.95 | $ | 10.95 |
67 |
Notes to Financial Statements (Unaudited) (Continued)
After | ||||||||||||||||
Before Reorganization | Reorganization | |||||||||||||||
Fifth Third | ||||||||||||||||
Fifth Third | LifeModel | Touchstone | Touchstone | |||||||||||||
LifeModel | Moderately | Conservative | Conservative | |||||||||||||
Conservative | Conservative | Allocation | Allocation | |||||||||||||
Fund | Fund | Fund | Fund | |||||||||||||
Class Y** | ||||||||||||||||
Shares | 1,658,986 | (E) | 1,806,406 | (F) | 198,245 | 3,663,637 | ||||||||||
Net Assets | $ | 18,249,300 | $ | 19,870,935 | $ | 2,180,756 | $ | 40,300,991 | ||||||||
Net Asset Value | $ | 11.00 | (E) | $ | 11.00 | (F) | $ | 11.00 | $ | 11.00 | ||||||
Institutional Class | ||||||||||||||||
Shares | — | — | 119,726 | 119,726 | ||||||||||||
Net Assets | $ | — | $ | — | $ | 1,318,057 | $ | 1,318,057 | ||||||||
Net Asset Value | $ | — | $ | — | $ | 11.01 | $ | 11.01 | ||||||||
Fund Total | ||||||||||||||||
Shares Outstanding | 2,869,464 | 3,603,186 | 2,638,384 | 8,635,718 | ||||||||||||
Net Assets | $ | 29,079,564 | $ | 36,873,184 | $ | 28,937,551 | $ | 94,890,299 | ||||||||
Unrealized Appreciation (Depreciation) | $ | 705,303 | $ | 3,126,125 | $ | 1,614,689 | $ | 5,446,117 |
(A) Reflects a 0.9206:1 stock split on Class A Shares and a 0.9190:1 stock split on Class B Shares which occurred on the date of reorganization, September 10, 2012.
(B) Reflects a 0.9301:1 stock split on Class A Shares and a 0.9270:1 stock split on Class B Shares which occurred on the date of reorganization, September 10, 2012.
(C) Reflects a 0.9235:1 stock split which occurred on the date of reorganization, September 10, 2012.
(D) Reflects a 0.9309:1 stock split which occurred on the date of reorganization, September 10, 2012.
(E) Reflects a 0.92200:1 stock split which occurred on the date of reorganization, September 10, 2012.
(F) Reflects a 0.9311:1 stock split which occurred on the date of reorganization, September 10, 2012.
* The Acquired Fund had Class B Shares outstanding immediately prior to the reorganization, which were exchanged for Class A Shares of the corresponding Touchstone Fund.
** The Acquired Fund had Institutional Class Shares outstanding immediately prior to the reorganization, which were exchanged for Class Y Shares of the corresponding Touchstone Fund.
After | ||||||||||||
Before Reorganization | Reorganization | |||||||||||
Fifth Third | Touchstone | Touchstone | ||||||||||
LifeModel | Growth | Growth | ||||||||||
Aggressive | Allocation | Allocation | ||||||||||
Fund | Fund | Fund | ||||||||||
Class A* | ||||||||||||
Shares | 1,982,555 | (A) | 905,293 | 2,887,848 | ||||||||
Net Assets | $ | 23,010,705 | $ | 10,507,403 | $ | 33,518,108 | ||||||
Net Asset Value | $ | 11.61 | (A) | $ | 11.61 | $ | 11.61 | |||||
Class C | ||||||||||||
Shares | 86,836 | (B) | 2,187,151 | 2,273,987 | ||||||||
Net Assets | $ | 971,379 | $ | 24,466,210 | $ | 25,437,589 | ||||||
Net Asset Value | $ | 11.19 | (B) | $ | 11.19 | $ | 11.19 | |||||
Class Y** | ||||||||||||
Shares | 2,547,823 | (C) | 73,550 | 2,621,373 | ||||||||
Net Assets | $ | 29,855,473 | $ | 861,864 | $ | 30,717,337 | ||||||
Net Asset Value | $ | 11.72 | (C) | $ | 11.72 | $ | 11.72 | |||||
Institutional Class | ||||||||||||
Shares | — | 1,267 | 1,267 | |||||||||
Net Assets | $ | — | $ | 13,568 | $ | 13,568 | ||||||
Net Asset Value | $ | — | $ | 10.71 | $ | 10.71 |
68 |
Notes to Financial Statements (Unaudited) (Continued)
After | ||||||||||||
Before Reorganization | Reorganization | |||||||||||
Fifth Third | Touchstone | Touchstone | ||||||||||
Life Model | Growth | Growth | ||||||||||
Aggressive | Allocation | Allocation | ||||||||||
Fund | Fund | Fund | ||||||||||
Fund Total | ||||||||||||
Shares Outstanding | 4,576,737 | 3,167,261 | 7,784,475 | |||||||||
Net Assets | $ | 53,837,557 | $ | 35,849,045 | $ | 89,686,602 | ||||||
Unrealized Appreciation (Depreciation) | $ | 3,817,238 | $ | 3,056,427 | $ | 6,873,665 |
(A) Reflects a 1.0117:1 reverse stock on Class A Shares and a 0.9675:1 stock split on Class B Shares which occurred on the date of reorganization, September 10, 2012.
(B) Reflects a 1.0019:1 reverse stock split which occurred on the date of reorganization, September 10, 2012.
(C) Reflects a 1.010:1 reverse stock split which occurred on the date of reorganization, September 10, 2012.
* The Acquired Fund had Class B Shares outstanding immediately prior to the reorganization, which were exchanged for Class A Shares of the corresponding Touchstone Fund.
** The Acquired Fund had Institutional Class Shares outstanding immediately prior to the reorganization, which were exchanged for Class Y Shares of the corresponding Touchstone Fund.
After | ||||||||||||
Before Reorganization | Reorganization | |||||||||||
Fifth Third | Touchstone | Touchstone | ||||||||||
Life Model | Moderate | Moderate | ||||||||||
Moderately | Growth | Growth | ||||||||||
Aggressive | Allocation | Allocation | ||||||||||
Fund | Fund | Fund | ||||||||||
Class A* | ||||||||||||
Shares | 5,396,673 | (A) | 1,340,687 | 6,737,360 | ||||||||
Net Assets | $ | 61,461,849 | $ | 15,268,777 | $ | 76,730,626 | ||||||
Net Asset Value | $ | 11.39 | (A) | $ | 11.39 | $ | 11.39 | |||||
Class C | ||||||||||||
Shares | 221,281 | (B) | 4,305,668 | 4,526,949 | ||||||||
Net Assets | $ | 2,482,569 | $ | 48,305,735 | $ | 50,788,304 | ||||||
Net Asset Value | $ | 11.22 | (B) | $ | 11.22 | $ | 11.22 | |||||
Class Y** | ||||||||||||
Shares | 4,909,444 | (C) | 78,182 | 4,987,626 | ||||||||
Net Assets | $ | 56,310,746 | $ | 896,739 | $ | 57,207,485 | ||||||
Net Asset Value | $ | 11.47 | (C) | $ | 11.47 | $ | 11.47 | |||||
Institutional Class | ||||||||||||
Shares | — | 738 | 738 | |||||||||
Net Assets | $ | — | $ | 8,431 | $ | 8,431 | ||||||
Net Asset Value | $ | — | $ | 11.42 | $ | 11.42 | ||||||
Fund Total | ||||||||||||
Shares Outstanding | 10,118,280 | 5,725,275 | 16,252,673 | |||||||||
Net Assets | $ | 120,255,164 | $ | 64,479,682 | $ | 184,734,846 | ||||||
Unrealized Appreciation (Depreciation) | $ | 13,091,873 | $ | 5,016,633 | $ | 18,108,506 |
(A) Reflects a 1.0437:1 reverse stock split on Class A Shares and a 1.0329:1 reverse stock split on Class B Shares which occurred on the date of reorganization, September 10, 2012.
(B) Reflects a 1.0475:1 reverse stock split which occurred on the date of reorganization, September 10, 2012.
(C) Reflects a 1.0378:1 reverse stock split which occurred on the date of reorganization, September 10, 2012.
* The Acquired Fund had Class B Shares outstanding immediately prior to the reorganization, which were exchanged for Class A Shares of the corresponding Touchstone Fund.
** The Acquired Fund had Institutional Class Shares outstanding immediately prior to the reorganization, which were exchanged for Class Y Shares of the corresponding Touchstone Fund.
69 |
Notes to Financial Statements (Unaudited) (Continued)
Assuming these September 10, 2012 reorganizations had been completed on August 1, 2012, the Balanced Allocation Fund, Conservative Allocation Fund, Growth Allocation Fund and Moderate Growth Allocation Fund results of operations for the five months ended December 31, 2012, would have been as follows:
Touchstone | ||||||||||||||||
Touchstone | Touchstone | Touchstone | Moderate | |||||||||||||
Balanced | Conservative | Growth | Growth | |||||||||||||
Allocation | Allocation | Allocation | Allocation | |||||||||||||
(Unaudited) | Fund | Fund | Fund | Fund | ||||||||||||
Net investment income | $ | 2,451,480 | $ | 1,210,897 | $ | 1,323,552 | $ | 2,716,948 | ||||||||
Net realized and unrealized gain (loss) on investments | 11,632,977 | 5,230,795 | 10,153,370 | 22,183,410 | ||||||||||||
Net increase (decrease) in asset from operations | 14,084,457 | 6,441,692 | 11,476,922 | 24,900,358 |
Because the combined investment portfolios have been managed as single portfolios since the reorganizations were completed, it is not practical to separate the amounts of revenue and earnings to the Acquiring Funds that have been included in their statements of operations since the reorganizations.
9. Subsequent Events
Subsequent events occurring after the date of this report have been evaluated for potential impact to this report through the date the financial statements were issued. There were no subsequent events that necessitated recognition or disclosure on the Funds’ financial statements.
70 |
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 is available as an appendix to the most recent Statement of Additional Information, which can be obtained without charge upon request by calling toll free 1.800.543.0407 or by visiting the Touchstone website at www.touchstoneinvestments.com or on the Securities and Exchange Commission’s (the “Commission”) website at www.sec.gov. Information regarding how those proxies were voted during the most recent twelve-month period ended June 30 is also available without charge by calling toll free 1.800.543.0407 or on the Commission’s website at 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; (iii) will be made available to shareholders upon request by calling 1.800.543.0407; or (iv) can be obtained on the Touchstone website at www.touchstoneinvestments.com. 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, (January 1, 2013 through June 30, 2013).
Actual Expenses
The first line of the table below for each share class of a Fund 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 June 30, 2013” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below for each share class of a Fund 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line for each share class of a Fund in the table below is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
71 |
Other Items (Unaudited) (Continued)
Net Expense | Beginning | Ending | Expenses | |||||||||||||||
Ratio | Account | Account | Paid During | |||||||||||||||
Annualized | Value | Value | the Period | |||||||||||||||
June 30, | January 1, | June 30, | Ended | |||||||||||||||
2013 | 2013 | 2013 | June 30, 2013* | |||||||||||||||
Touchstone Dynamic Equity Fund | ||||||||||||||||||
Class A | Actual | 1.88 | % | $ | 1,000.00 | $ | 1,015.47 | $ | 9.81 | ** | ||||||||
Class A | Hypothetical | 1.88 | % | $ | 1,000.00 | $ | 1,012.80 | $ | 9.39 | |||||||||
Class C | Actual | 2.63 | % | $ | 1,000.00 | $ | 1,099.40 | $ | 13.69 | ** | ||||||||
Class C | Hypothetical | 2.63 | % | $ | 1,000.00 | $ | 1,011.75 | $ | 13.12 | |||||||||
Class Y | Actual | 1.63 | % | $ | 1,000.00 | $ | 1,104.30 | $ | 8.50 | ** | ||||||||
Class Y | Hypothetical | 1.63 | % | $ | 1,000.00 | $ | 1,016.71 | $ | 8.15 | |||||||||
Institutional Class | Actual | 1.58 | % | $ | 1,000.00 | $ | 1,105.10 | $ | 8.25 | ** | ||||||||
Institutional Class | Hypothetical | 1.58 | % | $ | 1,000.00 | $ | 1,016.96 | $ | 7.90 | |||||||||
Touchstone Balanced Allocation Fund*** | ||||||||||||||||||
Class A | Actual | 0.33 | % | $ | 1,000.00 | $ | 1,041.70 | $ | 1.67 | |||||||||
Class A | Hypothetical | 0.33 | % | $ | 1,000.00 | $ | 1,023.16 | $ | 1.66 | |||||||||
Class C | Actual | 1.08 | % | $ | 1,000.00 | $ | 1,037.90 | $ | 5.46 | |||||||||
Class C | Hypothetical | 1.08 | % | $ | 1,000.00 | $ | 1,019.44 | $ | 5.41 | |||||||||
Class Y | Actual | 0.08 | % | $ | 1,000.00 | $ | 1,043.00 | $ | 0.41 | |||||||||
Class Y | Hypothetical | 0.08 | % | $ | 1,000.00 | $ | 1,024.40 | $ | 0.40 | |||||||||
Institutional Class | Actual | 0.08 | % | $ | 1,000.00 | $ | 1,043.20 | $ | 0.41 | |||||||||
Institutional Class | Hypothetical | 0.08 | % | $ | 1,000.00 | $ | 1,024.40 | $ | 0.40 | |||||||||
Touchstone Conservative Allocation Fund*** | ||||||||||||||||||
Class A | Actual | 0.33 | % | $ | 1,000.00 | $ | 1,016.80 | $ | 1.65 | |||||||||
Class A | Hypothetical | 0.33 | % | $ | 1,000.00 | $ | 1,023.16 | $ | 1.66 | |||||||||
Class C | Actual | 1.08 | % | $ | 1,000.00 | $ | 1,012.10 | $ | 5.39 | |||||||||
Class C | Hypothetical | 1.08 | % | $ | 1,000.00 | $ | 1,019.44 | $ | 5.41 | |||||||||
Class Y | Actual | 0.08 | % | $ | 1,000.00 | $ | 1,017.10 | $ | 0.40 | |||||||||
Class Y | Hypothetical | 0.08 | % | $ | 1,000.00 | $ | 1,024.40 | $ | 0.40 | |||||||||
Institutional Class | Actual | 0.08 | % | $ | 1,000.00 | $ | 1,017.10 | $ | 0.40 | |||||||||
Institutional Class | Hypothetical | 0.08 | % | $ | 1,000.00 | $ | 1,024.40 | $ | 0.40 | |||||||||
Touchstone Growth Allocation Fund*** | ||||||||||||||||||
Class A | Actual | 0.33 | % | $ | 1,000.00 | $ | 1,065.60 | $ | 1.69 | |||||||||
Class A | Hypothetical | 0.33 | % | $ | 1,000.00 | $ | 1,023.16 | $ | 1.66 | |||||||||
Class C | Actual | 1.08 | % | $ | 1,000.00 | $ | 1,061.80 | $ | 5.52 | |||||||||
Class C | Hypothetical | 1.08 | % | $ | 1,000.00 | $ | 1,019.44 | $ | 5.41 |
72 |
Other Items (Unaudited) (Continued)
Net Expense | Beginning | Ending | Expenses | |||||||||||||||
Ratio | Account | Account | Paid During | |||||||||||||||
Annualized | Value | Value | the Period | |||||||||||||||
June 30, | January 1, | June 30, | Ended | |||||||||||||||
2013 | 2013 | 2013 | June 30, 2013* | |||||||||||||||
Touchstone Growth Allocation Fund*** (Continued) | ||||||||||||||||||
Class Y | Actual | 0.08 | % | $ | 1,000.00 | $ | 1,067.30 | $ | 0.41 | |||||||||
Class Y | Hypothetical | 0.08 | % | $ | 1,000.00 | $ | 1,024.40 | $ | 0.40 | |||||||||
Institutional Class | Actual | 0.08 | % | $ | 1,000.00 | $ | 1,066.30 | $ | 0.41 | |||||||||
Institutional Class | Hypothetical | 0.08 | % | $ | 1,000.00 | $ | 1,024.40 | $ | 0.40 | |||||||||
Touchstone Moderate Growth Allocation Fund*** | ||||||||||||||||||
Class A | Actual | 0.33 | % | $ | 1,000.00 | $ | 1,054.60 | $ | 1.68 | |||||||||
Class A | Hypothetical | 0.33 | % | $ | 1,000.00 | $ | 1,023.16 | $ | 1.66 | |||||||||
Class C | Actual | 1.08 | % | $ | 1,000.00 | $ | 1,051.80 | $ | 5.49 | |||||||||
Class C | Hypothetical | 1.08 | % | $ | 1,000.00 | $ | 1,019.44 | $ | 5.41 | |||||||||
Class Y | Actual | 0.08 | % | $ | 1,000.00 | $ | 1,056.40 | $ | 0.41 | |||||||||
Class Y | Hypothetical | 0.08 | % | $ | 1,000.00 | $ | 1,024.40 | $ | 0.40 | |||||||||
Institutional Class | Actual | 0.08 | % | $ | 1,000.00 | $ | 1,056.60 | $ | 0.41 | |||||||||
Institutional Class | Hypothetical | 0.08 | % | $ | 1,000.00 | $ | 1,024.40 | $ | 0.40 |
* | Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect one-half year period). |
** | Excluding interest and dividend expenses on securities sold short, your actual cost of investment in Class A, Class C, Class Y and Institutional Class would be $8.09, $11.97, $6.52 and $6.78, respectively. |
*** | The annualized expense ratios for the Allocation Funds do not include fees and expenses of the Underlying Funds in which the Allocation Funds invest. |
Advisory Agreement Approval Disclosure
At a meeting held on November 15, 2012, the Board of Trustees (the “Board”) of the Touchstone Strategic Trust (the “Trust”), and by a separate vote, the Independent Trustees of the Trust, considered and approved a new sub-advisory agreement (the “New Sub-Advisory Agreement”) between Touchstone Advisors, Inc. (“Touchstone”) and Analytic Investors, LLC (“Analytic”) with respect to Touchstone Dynamic Equity Fund (the “Fund”), a series of the Trust, to be effective on January 1, 2013. At the meeting, Touchstone informed the Board that the current sub-advisory agreement, dated April 16, 2012, as amended, between Touchstone and Analytic (the “Prior Sub-Advisory Agreement”) was expected to be automatically terminated on or about December 31, 2012 due to an expected change in control at Analytic. Analytic was expected to undergo a restructuring in which its employees would purchase the shares owned by Old Mutual Intermediary, LLC, a subsidiary of Old Mutual (US) Holdings, Inc., which was the majority owner of Analytic. Touchstone recommended the Fund continue to use Analytic as its sub-advisor. Touchstone reported the change in control would not affect Analytic’s management of the Fund. Analytic’s management team and key investment personnel would continue to manage the Fund and Analytic would operate the Fund under the same terms and conditions as previously agreed to by the Board.
Touchstone and Analytic provided the Board with various written materials in advance of the meeting to assist with the Board’s consideration of Analytic as sub-advisor to the Fund. Touchstone provided written and oral information stating the basis for its recommendation to continue engaging Analytic. The information also included details regarding Analytic’s: (a) investment philosophy and investment process; (b) investment management services proposed to be provided to the Fund; (c) investment management personnel; (d) operating history, infrastructure, and financial condition; (e) proposed sub-advisory fee that would be paid to Analytic by Touchstone;
73 |
Other Items (Unaudited) (Continued)
and (f) reputation, expertise, and resources as an investment advisor. The Board then discussed the written materials that it received before the meeting and all other information that it received at the meeting.
In approving the New Sub-Advisory Agreement, the Board considered various factors, among them: (1) the nature, extent, and quality of services to be provided to the Fund, including the personnel who would be providing such services; (2) the Sub-Advisor’s proposed compensation; (3) the Sub-Advisor’s past performance; and (4) the terms of the New Sub-Advisory Agreement. The Board’s analysis of these factors is set forth below. The Independent Trustees were advised by independent legal counsel throughout the process.
Nature, Extent, and Quality of Services Provided; Investment Personnel. The Board considered information provided by Touchstone regarding the services to be provided by Analytic. The Board considered Analytic’s level of knowledge and investment style. The Board reviewed the experience and credentials of the investment personnel who would continue to be responsible for managing the investment of portfolio securities with respect to the Fund. The Board also noted that it is familiar with Analytic, as the sub-advisor already served as investment manager to the Fund. The Board also recognized that there would be no personnel change relating to the management of the Fund. The Board also took into account certain information and materials it received and considered in connection with its initial approval of the Prior Sub-Advisory Agreement between Touchstone and Analytic with respect to the Fund at a meeting held in February 2012.
Analytic’s Compensation. The Board took into consideration the financial condition of Analytic and any direct and indirect benefits to be derived by Analytic and its affiliates from Analytic’s relationship with the Fund. In considering the anticipated level of profitability to Analytic and its affiliates, the Board noted the proposed contractual undertaking of Touchstone to maintain expense limitations for the Fund. The Board also noted that the sub-advisory fee under the New Sub-Advisory Agreement would be paid by Touchstone out of the advisory fee that Touchstone receives from the Fund, and that the sub-advisory fee is negotiated at arm’s length. Finally, the Board noted that the proposed sub-advisory fee schedule contains breakpoints that would reduce the sub-advisory fee rate on Fund assets above specified levels.
The Board also considered certain comparative fee information concerning the current sub-advisory fee paid to Analytic for managing the Fund. The proposed sub-advisory fee was identical to the fee previously approved by the Board and shareholders of the Fund. The Board considered the amount of the advisory fee to be retained by Touchstone and the amount to be paid to Analytic with respect to the various services to be provided by each. Finally, the Board noted that from April 16, 2012 through the fiscal year end July 31, 2012, Analytic received from Touchstone sub-advisory fees totaling $149,381. Based upon their review, theTrustees concluded that the Fund’s proposed sub-advisory fee under the New Sub-Advisory Agreement was reasonable in light of Analytic’s services to the Fund.
Fund Performance. The Board also considered Analytic’s investment performance and the Fund’s performance under Analytic’s management. The Trustees reviewed Analytic’s investment performance across various sectors, highlighting its strong performance in the large-cap value universe. The Board was mindful of Touchstone’s focus on the performance of sub-advisors, including Analytic, and Touchstone’s ways of addressing underperformance.
Conclusion. The Board reached the following conclusions regarding the New Sub-Advisory Agreement: (a) Analytic is qualified to continue managing the Fund’s assets in accordance with the Fund’s investment goal and policies; (b) Analytic maintains an appropriate compliance program; (c) the Fund’s proposed sub-advisory fee is reasonable in relation to the fees of similar funds and the services to be provided by Analytic; and (d) Analytic’s proposed investment strategies are appropriate for pursuing the investment goal of the Fund. In considering the approval
74 |
Other Items (Unaudited) (Continued)
of the New Sub-Advisory Agreement, the Board, including the Independent Trustees, did not identify any single factor as controlling, and each Trustee attributed different weights to the various factors. Based on its conclusions, the Board determined that approval of the New Sub-Advisory Agreement was in the best interests of the Fund and its shareholders.
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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.* 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.
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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
BNY Mellon Investment Servicing (US) Inc.
4400 Computer Drive
West borough, MA 01581
Shareholder Service
800.543.0407
* A Member of Western & Southern Financial Group
TSF-54CC-TST-SAR-1306
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed registrants.
Not applicable.
Item 6. Investments.
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. |
(b) | Not applicable. |
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.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. Controls and Procedures.
(a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
(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 (17 CFR 270.30a-3(d)) that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Exhibits.
(a)(1) | Not applicable. |
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
(a)(3) | Not applicable. |
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
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 | ||
(principal executive officer) |
Date | 08/29/13 |
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 | ||
(principal executive officer) |
Date | 08/29/13 |
By (Signature and Title)* | /s/ Terrie A. Wiedenheft | |
Terrie A. Wiedenheft, Controller and Treasurer | ||
(principal financial officer) |
Date | 08/29/13 |
* Print the name and title of each signing officer under his or her signature.