TOUCHSTONE INVESTMENT TRUST
TOUCHSTONE STRATEGIC TRUST
TOUCHSTONE TAX-FREE TRUST
TOUCHSTONE VARIABLE SERIES TRUST
CODE OF ETHICS
FOR
SENIOR FINANCIAL OFFICERS
I. INTRODUCTION
The Board of Trustees of Touchstone Investment Trust, Touchstone
Strategic Trust, Touchstone Tax-Free Trust and Touchstone Variable Series Trust
(the "Trusts") has adopted this code of ethics (the "Code") applicable to its
Principal Executive Officer and Principal Financial Officer (the "Covered
Officers") to promote:
o honest and ethical conduct, including the ethical handling of conflicts
of interest;
o full, fair, accurate, timely and understandable disclosure;
o compliance with applicable laws and governmental rules and regulations;
o the prompt internal reporting to an appropriate person or persons
identified in the Code of violations of the Code; and
o accountability for adherence to the Code.
II. COVERED OFFICERS SHOULD ACT HONESTLY AND CANDIDLY
Each Covered Officer owes a duty to the Trusts to act with integrity.
Integrity requires, among other things, being honest and candid. Deceit and
subordination of principle are inconsistent with integrity.
Each Covered Officer must:
o act with integrity, including being honest and candid while still
maintaining the confidentiality of information where required by law or
the Trusts' policies;
o observe both the form and spirit of laws and governmental rules and
regulations, accounting standards and the Trusts policies;
o adhere to a high standard of business ethics; and
o place the interests of the Trusts before the Covered Officer's own
personal interests.
All activities of Covered Officers should be guided by and adhere
to these fiduciary standards.
III. COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS
OF INTEREST
GUIDING PRINCIPLES. A "conflict of interest" occurs when an
individual's private interest interferes with the interests of the Trusts. A
conflict of interest can arise when a Covered Officer takes actions or has
interests that may make it difficult to perform the Trusts' work objectively and
effectively. For example, a conflict of interest would arise if a Covered
Officer, or a member of his family, receives improper personal benefits as a
result of his or her position with the Trusts. In addition, investment companies
should be sensitive to situations that create apparent, not actual, conflicts of
interest. Service to the Trusts should never be subordinated to personal gain
and advantage.
Certain conflicts of interest covered by this Code arise out of
the relationships between Covered Officers and the Trusts that already are
subject to conflict of interest provisions in the Investment Company Act and the
Investment Advisers Act. For example, Covered Officers may not individually
engage in certain transactions (such as the purchase or sale of securities or
other property) with the Trusts because of their status as "affiliated persons"
of the Trusts. Therefore, as to the existing statutory and regulatory
prohibitions on individual behavior they will be deemed to be incorporated in
this Code and therefore any such violation will also be deemed a violation of
the Code. Covered Officers must in all cases comply with applicable statutes and
regulations.
As to conflicts arising from, or as a result of the contract
relationship between, the Trusts and Touchstone Advisors, Inc. (the "Advisor"),
the Trusts' investment advisor, of which the Covered Officers are also officers
or employees, it is recognized by the Board that, subject to the Advisor's
fiduciary duties to the Trusts, the Covered Officers will in the normal course
of their duties (whether formally for the Trusts or for the Advisor, or for
both) be involved in establishing policies and implementing decisions which will
have different effects on the Advisor and the Trusts. The Board recognizes that
the participation of the Covered Officers in such activities is inherent in the
contract relationship between the Trusts and the Advisor and is consistent with
the expectation of the Board of the performance by the Covered Officers of their
duties as officers of the Trusts.
Each Covered Officer must:
o avoid conflicts of interest wherever possible;
o handle any actual or apparent conflict of interest ethically;
o not use his or her personal influence or personal relationships to
influence investment decisions or financial reporting by an
investment company whereby the Covered Officer would benefit
personally to the detriment of the investment company;
o not cause an investment company to take action, or fail to take
action, for the personal benefit of the Covered Officer rather than
the benefit such company;
o not use knowledge of portfolio transactions made or contemplated for
an investment company to profit or cause others to profit, by the
market effect of such transactions;
o as described in more detail below, discuss any material transaction
or relationship that could reasonably be expected to give rise to a
conflict of interest with the Trusts' Compliance Officer;
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o report at least annually any affiliations or other relationships
related to conflicts of interest that the Trusts' Directors
and Officers Questionnaire covers;
Some conflict of interest situations that should always, be discussed
with the Compliance Officer, if material, include the following;
o any outside business activity;
o service as a director on the board of any public or private company;
o the receipt of any gifts;
o the receipt of any entertainment from any company with which
the Trusts have current or prospective business dealings
unless such entertainment is business related, reasonable in
cost, appropriate as to time and place, and not so frequent as
to raise any question of impropriety;
o being in the position of supervising, reviewing or having any
influence on the job evaluation, pay or benefit of any immediate
family member;
o any ownership interest in, or any consulting or employment
relationship with, any of the Trusts' service providers, other
than the Advisor;
o a direct or indirect financial interest in commissions, transaction
charges or spreads paid by the Trusts for effecting portfolio
transactions or for selling or redeeming shares other than an
interest arising from the Covered Officer's employment, such as
compensation or equity ownership.
IV. DISCLOSURE
Each Covered Officer is required to be familiar, and comply, with the
Trusts' disclosure controls and procedures so that the Trusts' subject reports
and documents filed with the Securities and Exchange Commission (the "SEC")
comply in all material respects with the applicable federal securities laws and
SEC rules. In addition, each Covered Officer having direct or supervisory
authority regarding these SEC filings or the Trusts' other public communications
should, to the extent appropriate within his area of responsibility, consult
with other Trust officers and employees and take other appropriate steps
regarding these disclosures with the goal of making full, fair, accurate, timely
and understandable disclosure.
Each Covered Officer must:
o familiarize himself with the disclosure requirements applicable to
the Trusts as well as the business and financial operations of the
Trusts; and
o not knowingly misrepresent, or cause others to misrepresent,
facts about the Trusts to others, whether within or outside
the Trusts, including to the Trusts' internal auditors,
independent directors, independent auditors, and to
governmental regulators and self-regulatory organizations.
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V. COMPLIANCE
It is the Trusts' policy to comply with all applicable laws and
governmental rules and regulations. It is the personal responsibility of each
Covered Officer to adhere to the standards and restrictions imposed by those
laws, rules and regulations, including those relating to affiliated
transactions, accounting and auditing matters.
VI. REPORTING AND ACCOUNTABILITY
Each Covered Officer must:
o upon receipt of the Code, sign and submit to the Compliance
Officer an acknowledgement stating that he has received, read,
and understands the Code.
o annually thereafter submit a form to the Compliance Officer
confirming that he has received, read and understands the Code
and has complied with the requirements of the Code.
o not retaliate against any employee or Covered Officer for reports of
potential violations that are made in good faith.
o notify the Compliance Officer promptly if he becomes aware of
any existing or potential violation of this Code. Failure to
do so is itself a violation of this Code.
Except as described otherwise below, the Compliance Officer is
responsible for applying this Code to specific situations in which questions are
presented to it and has the authority to interpret this Code in any particular
situation. The Compliance Officer shall take all action he considers appropriate
to investigate any actual or potential violations reported to him.
The Compliance Officer is authorized to consult, as appropriate, with
the Audit Committee (the "Committee"), the Independent Trustees, the Board of
Trustees, counsel to the Trusts and counsel to the Independent Trustees, and is
encouraged to do so.
The Committee is responsible for granting waivers and determining
sanctions, as appropriate. In addition, approvals, interpretations, or waivers
sought by the Principal Executive Officer will be considered by the Committee.
The Trusts will follow these procedures in investigating and enforcing
this Code, and in reporting on the Code:
o the Compliance Officer will take all appropriate action to
investigate any violations reported to him;
o violations and potential violations will be reported to the Committee
after such investigation;
o if the Committee determines that a violation has occurred, it will
inform the Board of Trustees who will take all appropriate
disciplinary or preventive action;
o appropriate disciplinary or preventive action may include a
letter of censure, suspension, dismissal or, in the event of
criminal or other serious violations of law, notification of
the SEC or other appropriate law enforcement authorities;
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o the Board will be responsible for granting waivers, as appropriate;
and
o any changes to or waivers of this Code will, to the extent required,
be disclosed on Form N-CSR as provided by SEC rules.
VII. OTHER POLICIES AND PROCEDURES
The Trusts' codes of ethics under Rule 17j-1 of the Investment Company
Act are separate requirements applying to Covered Officers and others, and are
not part of this Code.
VIII. AMENDMENTS
This Code may not be amended except in written form, which is
specifically approved by a majority vote of the investment company's board of
trustees, including a majority of Independent Trustees.
IX. CONFIDENTIALITY
All reports and records prepared or maintained pursuant to this Code
shall be considered confidential and shall be maintained and protected
accordingly. Except as otherwise required by law or this Code, such matters
shall not be disclosed to anyone other than the members of Board of Trustees and
their counsel.
X. INTERNAL USE
The Code is intended solely for the internal use by the Trusts and does
not constitute an admission, by or on behalf of the Trusts, as to any fact,
circumstance, or legal conclusion.
Date: May 19, 2003
EXHIBIT A
Persons Covered by this Code of Ethics
Michael S. Spangler - President Touchstone Investment Trust
Touchstone Strategic Trust
Touchstone Tax-Free Trust
Touchstone Variable Series Trust
Terrie A. Wiedenheft - Controller Touchstone Investment Trust
& Treasurer Touchstone Strategic Trust
Touchstone Tax-Free Trust
Touchstone Variable Series Trust