August 1, 2003
Navellier Large Cap Growth Portfolio
The Navellier Millenium Funds
One East Liberty Street, Third Floor
Reno, Nevada 89501
Touchstone Large Cap Growth Fund
Touchstone Strategic Trust
221 East Fourth Street, Suite 300
Cincinnati, Ohio 45202
Re: Acquisition of Assets of Navellier Large Cap Growth Portfolio
Ladies and Gentlemen:
You have asked for our opinion as to certain Federal income tax
consequences of the transaction described below.
Parties to the Transaction
--------------------------
Navellier Large Cap Growth Portfolio ("Target Fund") is a series of The
Navellier Millenium Funds ( "Millenium Funds"), a Delaware business trust.
Touchstone Large Cap Growth Fund ("Acquiring Fund") is a series of
Touchstone Strategic Trust ("Touchstone Trust"), a Massachusetts business trust.
Description of Proposed Transaction
-----------------------------------
In the proposed transaction (the "Reorganization"), Acquiring Fund will
acquire all of the assets of Target Fund in exchange for shares of Acquiring
Fund of equivalent value and the assumption of all valid liabilities of Target
Fund. Target Fund will then liquidate and distribute all of the Acquiring Fund
shares which it holds to its shareholders pro rata in proportion to their
shareholdings in Target Fund, in complete redemption of all outstanding shares
of Target Fund, and promptly thereafter will proceed to dissolve.
Scope of Review and Assumptions
-------------------------------
In rendering our opinion, we have reviewed and relied upon the Agreement
and Plan of Reorganization signed by the Touchstone Trust with respect to and on
behalf of Acquiring Fund and by Millenium Funds with respect to and on behalf of
Target Fund dated as of June 30, 2003 (the "Reorganization Agreement") and on a
prospectus/proxy statement submitted to the Securities and Exchange Commission
on or about July 3, 2003, file number 333-106815, which describes the proposed
transactions, and on the information provided in such prospectus/proxy
statement. We
Navellier Millenium Funds
Touchstone Strategic Trust
Page 2
have relied, without independent verification, upon the factual statements made
therein, and assume that there will be no change in material facts disclosed
therein between the date of this letter and the date of the closing of the
transaction. We further assume that the transaction will be carried out in
accordance with the Reorganization Agreement.
Representations
---------------
Written representations, copies of which are attached hereto, have been
made to us by the appropriate officers of Target Fund and Acquiring Fund, and we
have without independent verification relied upon such representations in
rendering our opinions.
Opinions
--------
Based on and subject to the foregoing, and our examination of the legal
authority we have deemed to be relevant, we have the following opinions:
1. The transfer of all of the assets of Target Fund in exchange for shares
of Acquiring Fund and assumption by Acquiring Fund of all valid liabilities of
Target Fund followed by the distribution of said Acquiring Fund shares pro rata
to the shareholders of Target Fund in liquidation of Target Fund will constitute
a "reorganization" within the meaning of ss. 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended (the "Code"), and Acquiring Fund and Target
Fund will each be "a party to a reorganization" within the meaning of ss. 368(b)
of the Code.
2. No gain or loss will be recognized by Acquiring Fund upon the receipt of
the assets of Target Fund solely in exchange for Acquiring Fund shares and the
assumption by Acquiring Fund of all valid liabilities of Target Fund.
3. No gain or loss will be recognized by Target Fund upon the transfer of
its assets to Acquiring Fund in exchange for Acquiring Fund shares and the
assumption by Acquiring Fund of all valid liabilities of Target Fund, or upon
the distribution (whether actual or constructive) of such Acquiring Fund shares
to the shareholders of Target Fund in exchange for their Target Fund shares.
4. The shareholders of Target Fund will recognize no gain or loss upon the
exchange of their Target Fund shares for Acquiring Fund shares in liquidation of
Target Fund.
5. The aggregate tax basis of the Acquiring Fund shares received by each
Target Fund shareholder pursuant to the Reorganization will be the same as the
aggregate tax basis of the Target Fund shares held by such shareholder
immediately prior to the Reorganization, and the holding period of the Acquiring
Fund shares received by each Target Fund shareholder will include the period
during which the Target Fund shares exchanged therefor were held by such
shareholder, provided the Target Fund shares were held as a capital asset on the
date of the Reorganization.
6. The tax basis of the assets of Target Fund acquired by Acquiring Fund
will be the same as the tax basis of those assets to the Target Fund immediately
prior to the Reorganization, and the holding period of the assets of Target Fund
in the hands of Acquiring Fund will include the period during which those assets
were held by Target Fund.
Navellier Millenium Funds
Touchstone Strategic Trust
Page 3
The foregoing opinions are based on the Code as in effect on the date
hereof and administrative and judicial interpretations of it. No assurance can
be given that the Code will not change or that such interpretations will not be
revised or amended adversely, possibly with retroactive effect. This opinion
letter is delivered to you in satisfaction of the requirements of Section 8.5 of
the Reorganization Agreement. We hereby consent to the filing of this opinion as
an exhibit to the Registration Statement on Form N-14 relating to the
Reorganization and to use of our name and any reference to our firm in such
Registration Statement or in the prospectus/proxy statement constituting a part
thereof. In giving such consent, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
/s/ Sullivan & Worcester LLP
SULLIVAN & WORCESTER LLP