UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
Touchstone Funds Group Trust
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<page>
TOUCHSTONE INVESTMENTS
303 BROADWAY, SUITE 1100
CINCINNATI, OH 45202
Dear Valued Shareholder:
The proxy statement that accompanies this letter describes a proposal to
elect additional members to the Board of Trustees for the Touchstone Funds
Group Trust (the "Trust"), which previously operated under the name
"Constellation Funds" and the Constellation Institutional Portfolios ("CIP").
Enclosed is a Notice, Proxy Statement and proxy card for a Special Meeting of
Shareholders (the "Special Meeting") of the funds (each, a "Fund" and
collectively, the "Funds"), The Special Meeting is scheduled for February 5,
2007. If you are a shareholder of record of a Fund as of the close of
business on December 7, 2006, you are entitled to vote at the Special Meeting,
and any adjournment of the Special Meeting, to elect additional members to the
Board of Trustees (the "Board") for the Trusts.
The Board has considered and nominated four additional Trustees (the "Board
Nominees") for election to the Board of the Trusts. Based on information it
received, the Board has determined it to be in the best interests of
shareholders to approve the Board Nominees to serve as trustees. The Board also
recommended that the Proposal be submitted to shareholders for approval.
Your vote is important to us. Please take a few minutes to review this proxy
statement and vote your shares today. We have enclosed one or more proxy
cards that we ask you to complete, sign, date and return as soon as possible,
unless you plan to attend the Special Meeting.
Thank you for your attention and consideration of this important proposal
and for your investment in the Funds. If you need additional information,
please call shareholder services at 1-800-543-0407.
Sincerely,
Jill T. McGruder
President
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY CARD IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE,
ALONG WITH INSTRUCTIONS ON HOW TO VOTE OVER THE INTERNET OR BY TELEPHONE SHOULD
YOU PREFER TO VOTE BY ONE OF THOSE METHODS.
<page>
<table>
<s> <c>
Touchstone Value Opportunities Fund Touchstone Family Heritage Fund
Touchstone Diversified Small Cap Value Fund Touchstone Pitcairn Taxable Bond Fund
Touchstone Clover Core Fixed Income Fund Touchstone Tax-Exempt Bond Fund
Touchstone Ultra Short Duration Fixed Income Fund Touchstone Sands Capital Select Growth Fund
Touchstone Short Duration Fixed Income Fund Touchstone Small Cap Value Opportunities Fund
Touchstone Large Cap Quality Stock Fund Touchstone Mid Cap Fund
Touchstone Diversified Value Fund Touchstone Healthcare & Biotechnology Fund
Touchstone Pitcairn Select Value Fund Touchstone International Equity Fund
Touchstone Diversified Growth Fund Touchstone Strategic Value and High Income Fund
Touchstone Small Cap Fund
</table>
EACH, A SERIES OF
TOUCHSTONE FUNDS GROUP TRUST
303 BROADWAY, SUITE 1100
CINCINNATI, OH 45202
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 5, 2007.
NOTICE IS HEREBY GIVEN THAT a Special Meeting of Shareholders (the "Special
Meeting") of the above-referenced funds (each, a "Fund" and collectively,
the "Funds"), each of which is a series of the Touchstone Funds Group Trust
(the "Trust"), will be held at the offices of Touchstone Advisors, Inc.
("Touchstone"), 303 Broadway, Cincinnati, OH 45202, on February 5, 2007 at
10:00 a.m. Eastern time.
At the Special Meeting, shareholders will be asked to:
Elect 4 additional Trustees to the Board of the Touchstone Funds Group Trust.
All shareholders are invited to attend the Special Meeting. However, if you are
unable to attend the Special Meeting, you are requested to mark, sign and date
the enclosed Proxy Card and return it promptly in the enclosed, postage-paid
envelope so that the Special Meeting may be held and a maximum number of shares
may be voted. In addition, you can vote easily and quickly by Internet, by
telephone or in person. Your vote is important no matter how many shares you
own. You may change your vote even though a proxy has already been returned by
written notice to the Trust, by submitting a subsequent proxy using the mail, by
Internet, by telephone or by voting in person at the Special Meeting.
Shareholders of record at the close of business on December 7, 2006 are entitled
to notice of and to vote at the Special Meeting or any adjournment thereof.
By Order of the Board of Trustees
----------------------------
Jay S. Fitton
Secretary
____________, 2006
<page>
- -------------------------------------------------------------------------------
TOUCHSTONE FUNDS GROUP TRUST
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CONSTELLATION INSTITUTIONAL PORTFOLIOS
- -------------------------------------------------------------------------------
303 Broadway, Suite 1100
Cincinnati, OH 45202
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON February 5, 2007
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Trustees (the "Board") of the Touchstone Funds Group Trust and
the Constellation Institutional Portfolios (each a "Trust" and collectively the
"Trusts") for use at a Special Meeting of Shareholders of the above-referenced
funds (each, a "Fund" and collectively, the "Funds"), each of which is a series
of the Trusts, to be held on February 5, 2007 at 10:00 a.m., Eastern time at the
offices of Touchstone Advisors, Inc. ("Touchstone"), 303 Broadway, Suite 1100,
Cincinnati, OH 45202, and at any adjourned session thereof (such Special Meeting
and any adjournment thereof are hereinafter referred to as the "Special
Meeting"). This Proxy Statement is being mailed to shareholders on or about
December 28, 2006. Shareholders of record of the Funds as of the close of
business on December 7, 2006 (the "Record Date") are entitled to vote at the
Special Meeting and will be asked to consider and act on the following proposal:
<table>
<s> <c> <c>
- ----------------------------------------------------------------------- ----------------------------------------------
Description of the Proposal: Fund(s) Solicited:
- ----------------------------------------------------------------------- ----------------------------------------------
- ----------------------------------------------------------------------- ----------------------------------------------
Elect 4 additional Trustees for the Board of the Trusts All Funds
- ----------------------------------------------------------------------- ----------------------------------------------
- -------------------------------------------------------------------------------
PROPOSAL: ELECTION OF BOARD OF TRUSTEES
- -------------------------------------------------------------------------------
</table>
It is proposed that the persons listed below (each, a "Board Nominee" and
collectively, the "Board Nominees") be elected at the Special Meeting to serve
as Trustees of the Trusts. None of the Board Nominees currently serves on the
Board of the Trusts; however, each of the Board Nominees serves on each of the
boards of trustees in the Touchstone mutual fund complex, with the exception of
the Touchstone Funds Group Trust (formerly known as "The Constellation Funds
Group Trust") and Constellation Institutional Portfolios ("CIP"). In addition to
the Touchstone Funds Group Trust and CIP, the Touchtone fund complex consists of
Touchstone Strategic Trust, Touchstone Tax-Free Trust, Touchstone Investment
Trust and Touchstone Variable Series Trust (collectively, the "Touchstone Fund
Complex").
You are being asked to approve the election of the Board Nominees as Trustees of
the Trusts to satisfy certain requirements of Section 16 of the Investment
Company Act of 1940, as amended (the "1940 Act"). Section 16(a) of the 1940 Act
generally requires the trustees of an investment company be elected by
shareholder vote. Section 16(a) provides however, that trustees may be appointed
without the election by shareholders, if, immediately after such appointment, at
least two-thirds of the trustees then holding office have been elected by
shareholders. Currently, all four Trustees have been elected by shareholders. If
the four Board Nominees were appointed to the Board, immediately following such
appointment, only four of eight, or one-half, of the Board could be elected by
shareholder vote, thus failing to meet the two-thirds requirement. Accordingly,
the Board has determined that it would be in the best interests of the Trusts to
call a special meeting at this time and recommend the election by shareholders
of each Board Nominee.
<page>
The Board Nominees are Richard L. Brenan, H. Jerome Lerner, John P. Zanotti and
John F. Barrett. Mr. Barrett would be considered an "interested person" of the
Trust, as that term is defined in the 1940 Act, because he also serves as
President and Chairman of The Western and Southern Life Insurance Company and
Western-Southern Life Assurance Company, parent companies of Touchstone
Advisors, Inc. and Touchstone Securities, Inc., the investment adviser and
distributor, respectively, of the Funds. With the exception of Mr. Barrett, each
of the other Board Nominees will be considered an "Independent Trustee" of the
Trusts. Together, the Board Nominees and the current Trustees will comprise the
entire Board of the Trusts. Because the Trusts do not hold regular annual
shareholder meetings, the entire Board will serve until their successors have
been duly elected or appointed, as applicable, or until their earlier
resignation or removal. The names and ages of the Board Nominees, their
principal occupations during the past five years and certain of their other
affiliations are provided below. Each of the Board Nominees has agreed to serve
if elected at the Special Meeting.
It is the intention of the persons designated as proxies, unless otherwise
directed therein, to vote at the Special Meeting for the election of the Board
Nominees named above. If any Board Nominee is unable or unavailable to serve,
the persons named as proxies will vote for such other person(s) as the Board may
recommend.
The Board has overall responsibility to manage and control the business affairs
of the Trusts, including the complete and exclusive authority to oversee and to
establish policies regarding the management, conduct and operation of the
Trusts' business. The Trustees serve on the Board for terms of indefinite
duration. A Trustee's position in that capacity will terminate if he or she is
removed, resigns or is subject to various disabling events such as death or
incapacity. In the event of any vacancy in the position of a Trustee, the
remaining Trustees may appoint an individual to serve as a Trustee, subject to
the provisions of the 1940 Act. A Trustee may be removed by the vote or written
consent of shareholders holding not less than two-thirds of the Trust's
outstanding shares.
The Board held _ regular meetings, and _ special meetings, during the Trusts'
most recent fiscal year. None of the Board Nominees was in office during the
Trust's most recent fiscal year.
INFORMATION ABOUT THE BOARD NOMINEES. Listed below, for each Board Nominee, are
their names and ages, as well as their proposed positions with the Trusts, their
principal occupations during the past five years, the number of portfolios in
the Touchstone Fund Complex that, if elected, they will oversee and any other
directorships held by the Board Nominees. The business address of each Board
Nominee is Touchstone Advisors, Inc., 303 Broadway, Suite 1100, Cincinnati, OH,
45202.
<page>
<table>
<s> <c> <c> <c> <c> <c>
BOARD NOMINEES FOR INDEPENDENT TRUSTEES:
- --------------------- ------------ --------------- -------------------------------- ---------------- -----------------------
NAME AND AGE POSITION LENGTH OF PRINCIPAL OCCUPATION(S) DURING NUMBER OF OTHER DIRECTORSHIPS
FUNDS IN FUND
COMPLEX
TIME SERVED PAST 5 YEARS OVERSEEN*
- --------------------- ------------ --------------- -------------------------------- ---------------- -----------------------
- --------------------- ------------ --------------- -------------------------------- ---------------- -----------------------
Richard L. Brenan Nominee Not Applicable Retired Managing Partner of 54 Director of Wing
Age: 62 KPMG LLP (a certified public Eyecare Companies;
accounting firm); Director of Trustee of Touchstone
The National Underwriter Strategic Trust,
Company (a publisher of Touchstone Tax-Free
insurance and finance services Trust, Touchstone
products) until 2003. Investment Trust and
Touchstone Variable
Series Trust.
- --------------------- ------------ --------------- -------------------------------- ---------------- -----------------------
- --------------------- ------------ --------------- -------------------------------- ---------------- -----------------------
H. Jerome Lerner Nominee Not Applicable Principal of HJL Enterprises 54 Trustee of Touchstone
Age: 68 (a privately held investment Strategic Trust,
company). Touchstone Tax-Free
Trust, Touchstone
Investment Trust and
Touchstone Variable
Series Trust.
- --------------------- ------------ --------------- -------------------------------- ---------------- -----------------------
- --------------------- ------------ --------------- -------------------------------- ---------------- -----------------------
John P. Zanotti Nominee Not Applicable CEO, Chairman and Director of 54 Director of QMed
Age: 58 Avaton, Inc. (a wireless (a health care
entertainment company); management company);
President of Cincinnati Trustee of Touchstone
Biomedical (a life science and Strategic Trust,
economic development company); Touchstone Tax-Free
CEO, Chairman and Director of Trust, Touchstone
Astrum Digital Information (an Investment Trust and
information monitoring Touchstone Variable
company) from 2000 until 2001. Series Trust.
- --------------------- ------------ --------------- -------------------------------- ---------------- -----------------------
Board Nominee for Interested Trustee 1:
-
- --------------------- ------------ --------------- -------------------------------- ---------------- -----------------------
Name and Age Position Length of Principal Occupation(s) During Number of Other Directorships
Funds in Fund
Complex
Time Served Past 5 Years Overseen*
- --------------------- ------------ --------------- -------------------------------- ---------------- -----------------------
- --------------------- ------------ --------------- -------------------------------- ---------------- -----------------------
John F. Barrett Nominee Not Applicable Chairman of the Board, 54 Director of The
Age: 57 President and Chief Executive Andersons Inc. (an
Officer of The Western and agribusiness and
Southern Life Insurance retailing company),
Company, Western- Southern Convergys Corporation
Life Assurance Company and (a provider of
Western & Southern Financial business support
Group, Inc.; Director and systems and customer
Chairman of Columbus Life care operations) and
Insurance Company; Fort Fifth Third Bancorp;
Washington Investment Trustee of Touchstone
Advisors, Inc., Integrity Life Strategic Trust,
Insurance Company and National Touchstone Tax-Free
Integrity Life Insurance Trust, Touchstone
Company; Director of Eagle Investment Trust and
Realty Group, Inc., Eagle Touchstone Variable
Realty Investments, Inc.; Series Trust.
Integrated Fund Services, Inc.
and IFS Holdings, Inc.;
Director, Chairman and CEO of
WestAd, Inc.; President and
Trustee of Western & Southern
Financial Fund, Inc.
- --------------------- ------------ --------------- -------------------------------- ---------------- -----------------------
1 Mr. Barrett, as President and Chairman of The Western and Southern Life Insurance Company and Western-Southern
Life Assurance Company, parent companies of Touchstone Advisors, Inc. and Touchstone Securities, Inc., the
investment adviser and distributor of the Funds, and an officer of other affiliates of the investment adviser
and distributor, is an "interested person" of the Trust within the meaning of Section 2(a)(19) of the 1940 Act.
* The number of funds is based on each of the Touchstone mutual fund complex that a Board Nominee currently oversees,
in addition to each of the Funds and the separate series of CIP that the Nominee would oversee if elected.
</table>
<page>
<table>
<s> <c> <c> <c> <c> <c>
CURRENT INDEPENDENT TRUSTEES:
- --------------------- ------------ --------------- ------------------------------ ---------------- -------------------------
Name and Age Position Length of Principal Occupation(s) Number of Other Directorships
Time Served During Past 5 Years Funds in Fund
Complex
Overseen
- --------------------- ------------ --------------- ------------------------------ ---------------- -------------------------
- --------------------- ------------ --------------- ------------------------------ ---------------- -------------------------
Phillip R. Cox Trustee Trustee since President and Chief 54 Director of the Federal
Age: 59 2006 Executive Officer of Cox Reserve Bank of
Financial Corp. (a financial Cleveland and Cinergy
services company). Corporation (a utility
company); Chairman
of The Cincinnati Bell
Telephone Company LLC;
Director of the Timken
Company a manufacturer
of bearings, alloy steels and
related products and services);
Director of of Diebold,
Incorporated (a provider
of integrated self-service
delivery and security
systems); Trustee of
Touchstone Funds Group
Trust, Constellation
Institutional Portfolios,
Touchstone Strategic Trust,
Touchstone Tax-Free Trust,
Touchstone Investment Turst and
Touchstone Variable Series Trust.
- --------------------- ------------ --------------- ------------------------------ ---------------- -------------------------
- --------------------- ------------ --------------- ------------------------------ ---------------- -------------------------
Donald C. Siekmann Trustee Trustee since Executive for Duro Bag 54 Trustee of Jewish
Age: 68 2006 Manufacturing Co. (a bag Hospital; Greater
manufacturer); President of Cincinnati Arts &
Shor Foundation for Epilepsy Education Center and
Research (a charitable Cincinnati Arts
foundation); Trustee of Association; Trustee of
Riverfront Funds (mutual Touchstone Funds Group
funds) from 1999-2004. Trust, Constellation
Institutional Portfolios,
Touchstone Strategic
Trust, Touchstone
Tax-Free Trust,
Touchstone Investment
Trust and Touchstone
Variable Series Trust.
- --------------------- ------------ --------------- ------------------------------ ---------------- -------------------------
- --------------------- ------------ --------------- ------------------------------ ---------------- -------------------------
Robert E. Stautberg Trustee Trustee since Retired Partner of KPMG LLP 54 Trustee of Tri-Health
Age: 72 2006 (a certified public Physician Enterprise
accounting firm); Vice Corporation; Trustee of
President of St. Xavier High Touchstone Funds Group
School. Trust, Constellation
Institutional Portfolios,
Touchstone Strategic
Trust, Touchstone
Tax-Free Trust,
Touchstone Investment
Trust and Touchstone
Variable Series Trust.
- --------------------- ------------ --------------- ------------------------------ ---------------- -------------------------
</table>
<page>
CURRENT INTERESTED TRUSTEE:
<table>
<s> <c> <c> <c> <c> <c>
- --------------------- ------------ --------------- ------------------------------ ---------------- -------------------------
Name and Age Position Length of Principal Occupation(s) Number of Other Directorships
Time Served During Past 5 Years Funds in Fund
Complex
Overseen
- --------------------- ------------ --------------- ------------------------------ ---------------- -------------------------
- --------------------- ------------ --------------- ------------------------------ ---------------- -------------------------
Jill T. McGruder* Trustee Trustee since Senior Vice President of The 54 Director of LaRosa's (a
Age: 51 and 2006 Western and Southern Life restaurant chain);
President Insurance Company; President Trustee of Touchstone
and a director of IFS Funds Group Trust,
Financial Services, Inc. (a Constellation
holding company); a director Institutional
and Capital Analysts Portfolios, Touchstone
Incorporated (an investment Strategic Trust,
advisor and broker-dealer), Touchstone Tax-Free
Integrated Fund Services, Trust, Touchstone
Inc. (the Trust's Investment Trust and
sub-administrator), IFS Fund Touchstone Variable
Distributors, Inc. (a Series Trust.
broker-dealer), Touchstone
Advisors, Inc. (the Trust's
investment advisor) and
Touchstone Securities, Inc.
(the Trust's distributor);
President and a director of
IFS Agency Services Inc. (an
insurance agency), W&S
Financial Group
Distributors, Inc. (an
annuity distributor) and IFS
Systems, Inc.; Senior Vice
President and a director of
Fort Washington Brokerage
Services, Inc. (a
broker-dealer); President
and Chief Executive Officer
of Integrity Life Insurance
Company and National
Integrity Life Insurance
Company; President of
Touchstone Tax-Free Trust,
Touchstone Investment Trust,
Touchstone Variable Series
Trust, Touchstone Strategic
Trust and Constellation
Institutional Portfolios;
President of Touchstone
Advisors, Inc. and
Touchstone Securities, Inc.
until 2004.
- --------------------- ------------ --------------- ------------------------------ ---------------- -------------------------
*Ms. McGruder, as a director of Touchstone Advisors, Inc., the Trust's investment advisor, and Touchstone
Securities, Inc., the Trust's distributor and an officer of affiliates of the Advisor and Distributor, is an
"interested person" of the Trust within the meaning of Section 2(a)(19) of the 1940 Act.
<page>
Principal Officers:
- ----------------- ---------------- --------------- -------------------------------- ---------------- -----------------------
Name and Age Position Length of Principal Occupation(s) During Number of Other Directorships
Funds in Fund
Complex
Time Served Past 5 Years Overseen
- ----------------- ---------------- --------------- -------------------------------- ---------------- -----------------------
- ----------------- ---------------- --------------- -------------------------------- ---------------- -----------------------
Jill T. McGruder Trustee and President See biography above. 54 See biography above.
Age: 51 President since 2006
- ----------------- ---------------- --------------- -------------------------------- ---------------- -----------------------
- ----------------- ---------------- --------------- -------------------------------- ---------------- -----------------------
Brian E. Hirsch Vice President Vice Vice President-Compliance of 54 None.
Age: 50 and Chief President IFS Financial Services Inc.;
Compliance since 2006 Director of Compliance of Fort
Officer Washington Brokerage Services,
Inc.; Chief Compliance Officer
of Puglisi & Co. from 2001
until 2002; Vice President -
Compliance of Palisade Capital
Management LLC (an investment
advisor) from 1997 until 2000.
- ----------------- ---------------- --------------- -------------------------------- ---------------- -----------------------
- ----------------- ---------------- --------------- -------------------------------- ---------------- -----------------------
James H. Grifo Vice President Vice President of Touchstone 54 None.
Age: 55 President Securities, Inc. and
since 2006 Touchstone Advisors, Inc.;
Managing Director of Deutsche
Asset Management until 2001.
- ----------------- ---------------- --------------- -------------------------------- ---------------- -----------------------
- ----------------- ---------------- --------------- -------------------------------- ---------------- -----------------------
William A. Dent Vice President Vice Senior Vice President of 54 None.
Age: 43 President Touchstone Advisors, Inc.;
since 2006 Marketing Director of
Promontory Interfinancial
Network from 2002-2003;
Senior Vice President of
McDonald Investments from
1998-2001.
- ----------------- ---------------- --------------- -------------------------------- ---------------- -----------------------
- ----------------- ---------------- --------------- -------------------------------- ---------------- -----------------------
Terrie A. Controller and Controller Senior Vice President, Chief 54 None.
Wiedenheft Treasurer and Treasurer Financial Officer and
Age: 44 since 2006 Treasurer of Integrated Fund
Services, Inc., IFS Fund
Distributors, Inc. and Fort
Washington Brokerage Services,
Inc.; Chief Financial Officer
of IFS Financial Services,
Inc., Touchstone Advisors,
Inc. and Touchstone
Securities, Inc.; Assistant
Treasurer of Fort Washington
Investment Advisors, Inc.
- ----------------- ---------------- --------------- -------------------------------- ---------------- -----------------------
- ----------------- ---------------- --------------- -------------------------------- ---------------- -----------------------
Jay S. Fitton Secretary Secretary Senior Counsel at Integrated 54 None.
Age: 36 since 2006 Investment Services, Inc.
- ----------------- ---------------- --------------- -------------------------------- ---------------- -----------------------
</table>
<page>
FUND SHARES OWNED BY BOARD NOMINEES. As of the date of this Proxy Statement,
none of the Board Nominees serves on the Board or is a beneficial owner of
shares of the Funds. Beneficial ownership is determined in accordance with Rule
16a-1(a)(2) under the Securities Exchange Act of 1934 (the "Exchange Act").
BOARD COMPENSATION. The aggregate compensation paid by the Trust and the
Touchstone Fund Complex to the Trustees and Board Nominees serving during the
fiscal year ended September 30, 2006, is set forth in the table below.
Interested Trustees and Trust officers receive no compensation from the Trust
for services to the Trust. Amounts reflected in the table reflect the period
from March 1, 2006 through September 30, 2006, the portion of the most recent
fiscal year during which each Trustee served in such capacity.
<table>
<s> <c> <c> <c> <c>
COMPENSATION TABLE:
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Name (Position) Aggregate Pension or Retirement Estimated Annual Total Compensation
from the Trust and
Compensation From Benefits Accrued as Benefits Upon the Touchstone Fund
the Trust Part of Fund Expenses Retirement Complex*
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Jill T. McGruder None None None $
(Trustee/President)
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Phillip R. Cox $ None None $
(Trustee)
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Donald C. Siekmann $ None None $
(Trustee)
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Robert E. Stautberg $ None None $
(Trustee)
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
John F. Barrett None None None $
(Trustee)
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Richard L. Brenan None None None $
(Trustee)
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
H. Jerome Lerner None None None $
(Trustee)
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
John P. Zanotti None None None $
(Trustee)
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
</table>
* Represents the aggregate total compensation paid, for the 2005 calendar year,
from the combined Constellation and Touchstone fund complex.
AUDIT COMMITTEE. The Board has a standing Audit Committee that is currently
composed of each of the Independent Trustees of the Trust. Robert E. Stautberg
currently serves as chairman of the Audit Committee and Donald C. Siekmann and
Phillip R. Cox currently serve as members of the Audit Committee. The Audit
Committee operates under a written charter approved by the Board. The Audit
Committee is responsible for the selection of the Trust's independent auditors,
including evaluating their independence and meeting with such auditors to
consider and review matters relating to the Trust's financial reports and
internal accounting. The Audit Committee meets periodically, as necessary, and
met 2 times during the Trust's most recently completed fiscal year.
<page>
NOMINATING COMMITTEE. The Nominating Committee is currently comprised of Donald
C. Siekmann, Chairman; Robert E. Stautberg and Phillip R. Cox, each of whom is
an Independent Trustee. The Nominating Committee recommends nominees for (i)
Independent Trustees for consideration by the incumbent Independent Trustees of
the Trust, and (ii) Interested Trustees for consideration by the full Board of
the Trust. During the Trust's fiscal year ended September 30, 2006, the
Nominating Committee met on August 15, 2006 to consider the subject of this
Proposal. The Nominating Committee, which at the time was composed of the
Trust's former trustees, also met on November 9, 2005 to consider a proposal
with respect to the election of the current Trustees. The Board has adopted a
formal charter for its Nominating Committee setting forth such Committee's
responsibilities.
The Nominating Committee will consider shareholder recommendations for
nomination to the Board only in the event that there is a vacancy on the Board.
Shareholders who wish to submit recommendations for nominations to the Board to
fill the vacancy must submit their recommendations in writing to Donald C.
Siekmann, Chairman of the Nominating Committee, c/o Touchstone, 303 Broadway,
Suite 1100 Cincinnati, OH 45202. Shareholders should include appropriate
information on the background and qualifications of any person recommended to
the Nominating Committee (e.g., a resume), as well as the candidate's contact
information and a written consent from the candidate to serve if nominated and
elected. Shareholder recommendations for nominations to the Board will be
accepted on an ongoing basis and such recommendations will be kept on file for
consideration in the event of a future vacancy on the Board.
The Nominating Committee generally identifies candidates for Board membership
through personal and business contacts of Trustees and shareholders. In
addition, the Nominating Committee may use a search firm to identify candidates
for Board, if deemed necessary and appropriate to use such a firm.
The Nominating Committee's process for evaluating a candidate generally includes
a review of the candidate's background and experience, a check of the
candidate's references and other due diligence and, when appropriate, interviews
with Nominating Committee members. In evaluating a candidate, the Nominating
Committee will also consider whether the candidate, if elected, would be an
Independent Trustee. The Nominating Committee has not established any specific
minimum requirements that candidates must meet in order to be recommended by the
Nominating Committee for nomination for election to the Board. Rather, the
Nominating Committee seeks candidates who, in its judgment, will serve the best
interests of the Trust's long-term shareholders and whose background will
complement the experience, skills and diversity of the other Trustees and add to
the overall effectiveness of the Board.
<page>
COMMUNICATIONS WITH THE BOARD. Shareholders wishing to submit written
communications to the Board should send their communications to Board of
Trustees, Touchstone Funds, 303 Broadway, Suite 1100, Cincinnati, OH 45202. Any
such communications received will be reviewed by the Board at its next regularly
scheduled meeting.
BOARD RECOMMENDATION ON THE PROPOSAL. In considering whether to nominate the
Board Nominees, the Nominating Committee considered a number of factors,
including but not limited to the fact that the Board Nominees currently serve on
the board of trustees for the Touchstone Fund Complex, with the exception of the
Trust and CIP, and have distinguished careers in accounting, finance, marketing
and other areas and have during their current tenure as trustees for the
Touchstone Fund Complex brought, and expect to continue to bring, a wide range
of expertise to the Board and the oversight of the Trust. The Nominating
Committee considered, among other factors, the benefits to the Board and the
Funds that would be derived as a result of nominating Board Nominees who are
familiar with the operations of Touchstone and are exposed to the wide variety
of issues that arise from overseeing the Funds on a day-to-day basis would bring
to the Board. The Board met on August 15, 2006 to consider the recommendation of
the Nominating Committee and voted unanimously to approve the nomination of the
Board Nominees to serve as Trustees, subject to approval by shareholders.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE "FOR" EACH OF THE
PROPOSED TRUSTEES SET FORTH IN THE PROPOSAL.
- --------------------------------------------------------------------------------
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
On May 17, 2006, the independent registered public accounting firm, Ernst &
Young LLP ("E&Y") was selected as the independent auditors for the Trust for its
current fiscal year. The former audit firm, KPMG LLP, resigned as of May 17,
2006 upon the Audit Committee's decision to retain E&Y as the Trust's auditor.
KPMG LLP's report on the financial statements for the fiscal year ended
September 2005 and the fiscal period from October 1, 2005 through May 17, 2006
did not contain any adverse opinion or a disclaimer of opinion, and was not
qualified or modified as to uncertainty, audit scope, or accounting principles.
During the fiscal year ended September 2005 and the fiscal period from October
1, 2005 through May 17, 2006, there were no disagreements with KPMG LLP on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure. KPMG LLP has informed the Trust that it has no
material direct or indirect financial interest in the Trust. Representatives of
KPMG LLP are not expected to be present at the Special Meeting but have been
given the opportunity to make a statement if they so desire and will be
available should any matter arise requiring their presence.
The Audit Committee must approve all audit and non-audit services provided by
E&Y relating to the operations or financial reporting of the Trust. The Audit
Committee reviews any audit or non-audit services to be provided by E&Y to
determine whether they are appropriate and permissible under applicable law.
The Audit Committee has adopted policies and procedures to provide a framework
for the Audit Committee's consideration of non-audit services by E&Y. These
policies and procedures require that any non-audit service to be provided by E&Y
to the Trust, Touchstone or any entity controlling, controlled by or under
common control with Touchstone that relate directly to the operations and
financial reporting of the Trust is subject to pre-approval by the Audit
Committee or the Chairperson of the Audit Committee before such service is
provided.
<page>
Representatives of E&Y are not expected to be present at the Special Meeting,
but will have the opportunity to make a statement if they wish, and will be
available should any matter arise requiring their presence.
AUDIT FEES. The aggregate fees billed by KPMG LLP, the principal accountant
prior to May 17, 2006, in connection with the annual audit of the Trust's
financial statements and for services normally provided by the independent
auditors in connection with statutory and regulatory filings or engagements for
the fiscal year ended September 30, 2005 and the fiscal period from October 1,
2005 through May 17, 2006 for the Trust were $367,500 and $[ ], respectively.
The audit fees billed by E&Y, the current principal accountant, for its services
provided to the Trust for the fiscal year ended September 30, 2006 were $[ ].
AUDIT-RELATED FEES. There were no fees billed by KPMG LLP, the principal
accountant prior to May 17, 2006 for assurance and other services reasonably
related to the performance of the audit of the Trust's financial statements and
not reported above under "Audit Fees" for the fiscal year ended September 30,
2005 and the fiscal period from October 1, 2005 through May 17, 2006. Similarly,
no audit-related fees were billed by E&Y, the current principal accountant for
the fiscal year ended September 30, 2006.[PLEASE CONFIRM] The aggregate fees
billed by KPMG LLP for assurance and other services relating to the performance
of the audit of the financial statements of Constellation Investment Management
Company, L.P., the former investment adviser to the Trust ("CIMCO"), and other
service providers under common control with CIMCO that relate directly to the
operations or financial reporting of the Trust for the fiscal years ended
September 30, 2005 was $3,500. These audit-related services relate to the use of
name consents. None of these services were approved by the Audit Committee
pursuant to the de minimis exception from the pre-approval requirement under
Regulation S-X.
TAX FEES. The aggregate fees billed by KPMG LLP, the principal accountant prior
to May 17, 2006 for tax compliance, tax advice and tax planning (together,
"Tax-Related Services") provided to the Trust for the fiscal year ended
September 30, 2005 and the fiscal period from October 1, 2005 through May 17,
2006 were $48,000 and $[ ], respectively. The fees billed by E&Y for its
Tax-Related Services provided to the Trust for the fiscal year ended September
30, 2006 is $[ ]. None of these Tax-Related Services were approved by the Audit
Committee pursuant to the de minimis exception from the pre-approval requirement
under Regulation S-X. These Tax-Related Services included review of income tax
returns and annual excise distribution calculations. There were no fees billed
by KPMG LLP for Tax-Related Services provided to CIMCO and other service
providers under common control with CIMCO that relate directly to the operations
or financial reporting of the Trust for the Trust's last two completed fiscal
years ended September 30, 2005 and 2006.
<page>
ALL OTHER FEES. There were no fees billed by KPMG LLP, the principal accountant
prior to May 17, 2006 for products and services provided to the Trust other than
the services reported in the above paragraphs for the Trust's fiscal year ended
September 30, 2005 and the fiscal period from October 1, 2005 through May 17,
2006. Similarly, no fees were billed by E&Y for products and services other than
the services reported in the above paragraphs provided to the Trust for the
fiscal year ended September 30, 2006. There were no fees billed for any products
and services other than those set forth above provided by KPMG LLP to CIMCO or
Touchstone and any entity controlling, controlled by, or under common control
with CIMCO or Touchstone that relate directly to the operations or financial
reporting of the Trust for the Trust's fiscal year ended September 30, 2005 and
the fiscal period from October 1, 2005 through May 17, 2006. No fees were billed
by E&Y with respect to non-audit fees for services rendered to Touchstone and
any entity controlling, controlled by, or under common control with Touchstone
for the fiscal year ended September 30, 2006.
AGGREGATE NON-AUDIT FEES TO THE TRUST. There were no non-audit fees billed by
KPMG LLP, the principal accountant prior to May 17, 2006 for services rendered
to the Trust, CIMCO, Touchstone and other service providers under common control
with CIMCO or Touchstone, for the Trust's fiscal year ended September 30, 2005
and the fiscal period from October 1, 2005 through May 17, 2006. In connection
with its selection of the principal accountant, the Audit Committee has
considered KPMG LLP's provision of non-audit services to CIMCO and Touchstone
and other services provided to any entity controlling, controlled by, or under
common control with CIMCO or Touchstone that were not required to be
pre-approved pursuant to Regulation S-X. Similarly, the Audit Committee has
considered E&Y's provision of non-audit services to Touchstone and other
services provided to any entity controlling, controlled by, or under common
control with Touchstone. The Audit Committee has determined that the provisions
of these services are compatible with maintaining the KPMG LLP's and E&Y's
independence.
- -------------------------------------------------------------------------------
OTHER INFORMATION
- -------------------------------------------------------------------------------
GENERAL. As used in this proxy statement, the Trust's Board of Trustees is
referred to as the "Board," and the term "Trustee" includes each trustee of the
Trust. A Trustee that is an interested person of the Trust is referred to in
this proxy statement as an "Interested Trustee." A Trustee may be an interested
person of the Trust because he or she is affiliated with one or more of the
Trust's investment advisers. Trustees that are not interested persons of the
Trust are referred to in this proxy statement as "Independent Trustees."
Each Trust is organized as a Delaware statutory trust and, as such, is not
required to hold annual meetings of shareholders. The Board has called the
Special Meeting in order to permit the shareholders to consider and vote on the
Proposal. If you wish to participate in the Special Meeting you may submit the
proxy card included with this proxy statement or attend in person. Your vote is
important no matter how many shares you own. You can vote easily and quickly by
mail, by Internet, by telephone or in person. At any time before the Special
Meeting, you may change your vote, even though a proxy has already been
returned, by written notice to the Trust c/o Touchstone, 303 Broadway, Suite
1100 Cincinnati, OH 45202 or by submitting a subsequent proxy, by mail, by
Internet, by telephone or by voting in person at the Special Meeting. Should
shareholders require additional information regarding any of the proposals
contained in the Proxy Statement, or replacement proxy cards, they may contact
the Trust at 1-800-543-0407.
<page> .
In addition to the solicitation of proxies by mail, the Board and officers of
the Trust, as well as employees of __________, a proxy soliciting firm engaged
by the Trusts, may solicit proxies in person or by telephone. Persons holding
shares as nominees will, upon request, be reimbursed for their reasonable
expenses incurred in sending soliciting materials to their principals. The
expenses of the Special Meeting will be borne proportionately by each Fund of
the Trust based on the assets of each Fund. The costs of the Special Meeting and
the preparation and mailing of this Proxy Statement, as well as the costs
associated with the solicitation of proxies, which is anticipated to be
$100,000.00.
Shares represented by duly executed proxies will be voted in accordance with the
instructions given. All proxy cards solicited that are properly executed and
received in time to be voted at the Special Meeting will be voted at the Special
Meeting or any adjournment thereof according to the instructions on the proxy
card. If no specification is made on a proxy card, it will be voted FOR the
matters specified on the proxy card.
QUORUM AND ADJOURNMENTS. Each whole share is entitled to one vote, and each
fractional share is entitled to a proportionate fractional vote on each matter
as to which such shares are to be voted at the Special Meeting. The holders of
40% of the Fund's shares entitled to vote constitutes a quorum. For purposes of
determining the presence of a quorum, abstentions or "broker non-votes" (as
defined below) will be counted as present and, therefore, will count towards a
quorum.
If a quorum is not present at the Special Meeting, or if a quorum is present at
the Special Meeting but sufficient votes to approve the Proposal are not
received, or if other matters arise requiring Shareholder attention, the persons
named as proxy agents may propose one or more adjournments of the Special
Meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of those shares present at the
Special Meeting or represented by proxy. The persons named as proxies will vote
those proxies that they are entitled to vote FOR the Proposal in favor of such
an adjournment with respect to the Proposal, and will vote those proxies
required to be voted AGAINST the Proposal, against such an adjournment for the
Proposal.
VOTE REQUIRED TO APPROVE PROPOSAL. With respect to the Proposal, provided that a
quorum is present, the affirmative vote of a plurality of the shares entitled to
vote among all Funds is required to elect the Trustees.
If your shares are held of record by a broker-dealer and you wish to vote in
person at the Special Meeting, you should obtain a legal proxy from your broker
of record and present it to the Inspector of Elections at the Special Meeting.
Abstentions and broker non-votes will have no effect with respect to the
Proposal or any adjournment with respect to the Proposal, which is the election
of Trustees and which requires approval by a plurality.
As used above, "broker non-votes" relate to shares that are held of record by a
broker-dealer for a beneficial owner who has not given instructions to such
broker-dealer. Pursuant to certain rules promulgated by the New York Stock
Exchange, Inc. that govern the voting by such broker-dealers, a broker-dealer
holding shares of record for a beneficial owner may not exercise discretionary
voting power with respect to certain non-routine matters (including the approval
of new investment management agreements), although such broker may be authorized
to vote such shares on routine matters for which it has discretionary authority
or has received instructions from the beneficial owner. It is anticipated that
such broker-dealers will have discretionary authority to vote on the Proposal.
The absence of such instructions will result in a "broker non-vote" for that
Proposal.
<page>
INVESTMENT ADVISER. Touchstone Advisors, Inc. ("Touchstone"), 303 Broadway,
Suite 1100, Cincinnati, OH 45202, serves as the investment adviser to the Funds.
ADMINISTRATOR. Touchstone also serves as each Fund's administrator pursuant to
an administrative agreement between the Trust, on the Funds' behalf, and
Touchstone. Integrated Fund Services, Inc. currently serves as
Sub-Administrator. Its address is the same as that of Touchstone.
DISTRIBUTOR. Touchstone Securities, Inc. ("Touchstone Securities"), 303
Broadway, Cincinnati, Ohio 45202, is the principal underwriter of the Funds and,
as such, the exclusive agent for distribution of shares of the Funds under the
terms of a Distribution Agreement. Touchstone Securities is an affiliate of the
Advisor by reason of common ownership. Touchstone Securities is obligated to
sell the shares on a best efforts basis only against purchase orders for the
shares. Shares of each Fund are offered to the public on a continuous basis.
Touchstone Securities receives no compensation under the Distribution Agreement.
RECORD OWNERSHIP AND BENEFICIAL OWNERSHIP INFORMATION. The chart below
depicts the number of outstanding shares for each Fund as of the Record Date:
<table>
<s> <c>
- ----------------------------------------------------------------------------------- --------------------------------
Name of Fund Number of Outstanding Shares
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Small Cap Value Opportunities Fund
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Mid Cap Fund - Class Y
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Mid Cap Fund - Class Z
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Healthcare & Biotechnology Fund
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Value Opportunities Fund
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Diversified Small Cap Value Fund
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Clover Core Fixed Income Fund
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Ultra Short Duration Fixed Income Fund
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Short Duration Fixed Income Fund
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Large Cap Quality Stock Fund
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Diversified Value Fund
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Diversified Growth Fund
- ----------------------------------------------------------------------------------- --------------------------------
<page>
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Pitcairn Select Value Fund
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Small Cap Fund
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Family Heritage(R) Fund
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Pitcairn Taxable Bond Fund
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Tax-Exempt Bond Fund
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Sands Capital Select Growth Fund - Class Y
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Sands Capital Select Growth Fund - Class Z
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone International Equity Fund
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
Touchstone Strategic Value & High Income Fund
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
CIP Sands Capital Institutional Growth Portfolio
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
CIP JSAM Large Cap Value Portfolio
- ----------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------- --------------------------------
CIP JSAM Value Portfolio
- ----------------------------------------------------------------------------------- --------------------------------
- -------------------------------------------------------------------------------------------------------------------
</table>
<page>
As of the Record Date, the following persons were the only persons who were
record owners or, to the knowledge of the Trusts, were beneficial owners of 5%
or more of the shares of the Fund, as indicated below by the number of shares
beneficially owned and the percentage of the Fund represented by such beneficial
ownership.
TOUCHSTONE HEALTHCARE & BIOTECHNOLOGY FUND
CHARLES SCHWAB & CO INC. ______%
4500 CHERRY CREEK DR S FL 3
DENVER, CO 80209 No. of shares:
NATIONAL FINANCIAL SERVICES CORP _____%
200 LIBERTY STREET
ONE WORLD FINANCIAL CENTER No. of shares:
NEW YOR, NY 10281-1003
NATIONAL INVESTOR SERVICES _____%
55 WATER STREET, 32ND FLOOR
NEW YORK, NY 10041-3299 No. of shares:
TOUCHSTONE SMALL CAP VALUE OPPORTUNITIES FUND
CHARLES SCHWAB & CO INC. _____%
4500 CHERRY CREEK DR S FL 3
DENVER, CO 80209 No. of shares:
NATIONAL FINANCIAL SERVICES CORP _____%
200 LIBERTY STREET
ONE WORLD FINANCIAL CENTER No. of shares:
NEW YORK, NY 10281-1003
TOUCHSTONE VALUE OPPORTUNITIES FUND
NATIONAL FINANCIAL SERVICES CORP _____%
200 LIBERTY STREET
ONE WORLD FINANCIAL CENTER No. of shares:
NEW YORK, NY 10281-1003
CHARLES SCHWAB & CO INC. _____%
4500 CHERRY CREEK DR S FL 3
DENVER, CO 80209 No. of shares:
BILL & MELINDA GATES FOUNDATION _____%
WILLIAM H GATES III TR U/A DTD 12/29/1994
2365 CARILLON PT. No. of shares:
KIRKLAND, WA 98033-7353
NATIONAL INVESTOR SERVICES _____%
55 WATER STREET, 32ND FLOOR
NEW YORK, NY 10041-3299 No. of shares
<page>
TOUCHSTONE SMALL CAP VALUE FUND
CHARLES SCHWAB & CO INC. _____%
4500 CHERRY CREEK DR S FL 3
DENVER, CO 80209 No. of shares:
SAXON & CO. _____%
OMNIOBUS
PO BOX 7780-1888
PHILADELPHIA, PA 19182-0001 No. of shares:
National Financial Services Corp _____%
200 Liberty St
One World Financial Center No. of shares:
New York, NY 10281-1003
UMB Bank NA _____%
Cadence Design Systems Inc.
401(k) Trust Plan
PO Box 419784 No. of shares:
Attn: 5500 Team
Kansas City, MO 64141-6784
TOUCHSTONE CLOVER CORE FIXED INCOME FUND
Charles Schwab & Co Inc. _____%
4500 Cherry Creek Dr S FL 3 No. of shares:
Denver, CO 80209
National Financial Services Corp _____%
200 Liberty St
One World Financial Center No. of shares:
New York, NY 10281-1003
TOUCHSTONE ULTRA SHORT DURATION FIXED INCOME FUND
Charles Schwab & Co _____%
101 Montgomery St.
San Francisco, CA 94104-4122 No. of shares:
National Financial Services Corp _____%
200 Liberty St
One World Financial Center No. of shares:
New York, NY 10281-1003
<page>
TOUCHSTONE SHORT DURATION FIXED INCOME FUND
Charles Schwab & Co _____%
101 Montgomery St.
San Francisco, CA 94104-4122 No. of shares:
TOUCHSTONE STRATEGIC VALUE AND HIGH INCOME FUND
Peter J. Moran Family Trust _____%
180 Country Ln
Phoenixville, PA 19460-1703 No. of shares:
National Financial Services Corp _____%
200 Liberty St
One World Financial Center No. of shares:
New York, NY 10281-1003
National Investor Services _____%
55 Water Street, 32nd Floor
New York, NY 10041-3299
TOUCHSTONE DIVERSIFIED VALUE FUND
Pitcairn Trust Company _____%
Cash/Cash Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
Pitcairn Trust Company _____%
Cash/Reinvest Capital Gains
One Pitcairn Place STE 3000
165 Township Line Rd No. of shares:
Jenkintown, PA 19046-3531
TOUCHSTONE PITCAIRN SELECT VALUE FUND
Pitcairn Trust Company _____%
Cash/Cash Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
Pitcairn Trust Company _____%
Cash/Reinvest Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
Pitcairn Trust Company _____%
Reinvest/Reinvest Capital Gains
One Pitcairn Place STE 3000
165 Township Line Rd No. of shares:
Jenkintown, PA 19046-3531
<page>
TOUCHSTONE DIVERSIFIED GROWTH FUND
Pitcairn Trust Company _____%
Cash/Cash Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
Pitcairn Trust Company _____%
Cash/Reinvest Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
Pitcairn Trust Company _____%
Reinvest/Reinvest Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line RD
Jenkintown, PA 19046-3531
TOUCHSTONE SMALL CAP FUND
Pitcairn Trust Company _____%
Cash/Cash Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
Pitcairn Trust Company _____%
Cash/Reinvest Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
Pitcairn Trust Company _____%
Reinvest/Reinvest Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
TOUCHSTONE FAMILY HERITAGE(R) FUND
Pitcairn Trust Company _____%
Cash/Cash Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
Pitcairn Trust Company _____%
Cash/Reinvest Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
Pitcairn Trust Company _____%
Reinvest/Reinvest Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
TOUCHSTONE PITCAIRN TAXABLE BOND FUND
Pitcairn Trust Company _____%
Cash/Cash Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
Pitcairn Trust Company _____%
Cash/Reinvest Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
Pitcairn Trust Company _____%
Reinvest/Reinvest Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
SEI Private Trust Co. _____%
C/O M&T Bank ID 337
Attn: Mutual Fund Administrator No. of shares:
One Freedom Valley Drive
Oaks, PA 19456
<page>
TOUCHSTONE TAX EXEMPT BOND FUND
Pitcairn Trust Company _____%
Cash/Cash Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
Pitcairn Trust Company _____%
Cash/Reinvest Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
TOUCHSTONE SANDS CAPITAL SELECT GROWTH FUND class Y
Charles Schwab & Co. Inc. _____%
4500 Cherry Creek Dr. S FL 3 No. of shares:
Denver, CO 80209
National Financial Services Corp _____%
200 Liberty Street
One World Financial Center No. of shares:
New York, NY 10281-1003
Saxon and Co _____%
PO Box 7780-1888
Philadelphia, PA 19182-0001 No. of shares:
TOUCHSTONE SANDS CAPITAL SELECT GROWTH FUND CLASS Z
Charles Schwab & Co. Inc. _____%
101 Montgomery St.
San Francisco, CA 94104-4122 No. of shares:
Citigroup Global Markets Inc. _____%
333 West 34th St 3rd Fl
New York, NY 10001-2402 No. of shares:
Pitcairn Trust Company _____%
Cash/Cash Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
Prudential Investment Mgt/ Svc. Cust. _____%
Attn: Pruchoice Unit
Gateway Center 3 No. of shares:
100 Mulberry St FL 11
Newark, NJ 07102
Pitcairn Trust Company _____%
Cash/Reinvest Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
TOUCHSTONE INTERNATIONAL EQUITY FUND
Pitcairn Trust Company _____%
Cash/Cash Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
Pitcairn Trust Company _____%
Cash/Reinvest Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
Pitcairn Trust Company _____%
Reinvest/Reinvest Capital Gains
One Pitcairn Place STE 3000 No. of shares:
165 Township Line Rd
Jenkintown, PA 19046-3531
<page>
TOUCHSTONE MID CAP FUND Class Y
Thomas Joseph Dibella _____%
& Lucille Marie Dibella
1 Jeff Lane No. of shares:
Canton, CT 06019-2617
Edward William Gold _____%
& Eathan Kronman Gold
7 Hillchase Ct No. of shares:
Pikesville, MD 21208-6306
Kenneth W Gainey & Christine M Gainey _____%
160 Farmcliff Dr
Gastonbury, CT 06033-4183 No. of shares:
Ronald A Clarke & Martha R Clarke _____%
477 Simsbury Rd
Bloomfield, CT 06002-2246 No. of shares:
Peter James Moran III & Joan Larson Moran _____%
180 Country Lane
Pheonixville, PA 19460-1703 No. of shares:
SEI Private Trust Compnay _____%
SEP IRA A/C Steven L Gold
43 Druce St. No. of shares:
Brookline, MA 02445-5831
TOUCHSTONE MID CAP FUND CLASS Z
To the best of the Fund's knowledge, as of the Record Date, no Trustee or
officer of the Trust owned beneficially more than 1% of a Fund's outstanding
shares.
SHAREHOLDERS SHARING THE SAME ADDRESS. If two or more shareholders share the
same address, only one copy of this proxy statement is being delivered to that
address, unless the Trust has received contrary instructions from one or more of
the shareholders at that shared address. Upon written or oral request, the Trust
will deliver promptly a separate copy of this proxy statement to a shareholder
at a shared address. Please note that each Shareholder will receive a separate
proxy card, regardless of whether he or she resides at a shared address. Please
call 1-800-543-0407 or forward a written request to the Trust c/o Touchstone,
303 Broadway, Suite 1100 Cincinnati, OH 45202 if you would like to (1) receive a
separate copy of this proxy statement; (2) receive your annual reports or proxy
statements separately in the future; or (3) request delivery of a single copy of
annual reports or proxy statements if you are currently receiving multiple
copies at a shared address.
OTHER BUSINESS. The Board does not intend to present any other business at the
Special Meeting. If any other matter may properly come before the Special
Meeting, or any adjournment thereof, the persons named in the accompanying proxy
card(s) intend to vote, act, or consent thereunder in accordance with their best
judgment at that time on such matters. No annual or other special meeting is
currently scheduled for the Trust. Mere submission of a shareholder proposal
does not guarantee the inclusion of the proposal in the proxy statement or
presentation of the proposal at the Special Meeting because inclusion and
presentation are subject to compliance with certain federal regulations.
<page>
SHAREHOLDER PROPOSALS. The Trust is not required to hold annual shareholder
meetings. Shareholders wishing to submit proposals for inclusion or presentation
in a proxy statement for a future meeting should send their written proposals to
the Secretary of the Trust c/o Touchstone, 303 Broadway, Suite 1100 Cincinnati,
OH 45202. Shareholder proposals must be received by the Trust within a
reasonable time before any such meeting in order for the proposals to be
considered.
COMMUNICATIONS WITH THE BOARD. Shareholders wishing to submit written
communications to the Board should send their communications to the Touchstone
Fund Group, c/o Touchstone, 303 Broadway, Suite 1100 Cincinnati, OH 45202. Any
such communications received will be reviewed by the Board at its next regularly
scheduled meeting.
ANNUAL REPORT TO SHAREHOLDERS. The Annual Report of the Trust for the fiscal
year ended September 30, 2005 is available on request. The Annual Report may be
obtained by written request to the Trust at the address listed above, or by
telephoning 1-800-543-0407.
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY CARD(S) IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE,
ALONG WITH INSTRUCTIONS ON HOW TO VOTE OVER THE INTERNET OR BY TELEPHONE
SHOULD YOU PREFER TO VOTE BY ONE OF THOSE METHODS.
FORM OF PROXY SOLICITED BY
BOARD OF TRUSTEES
To vote by Internet
1) Read the Proxy Statement and
have the Proxy card at hand.
2) Go to www.proxyweb.com.
-----------------
3) Follow the on-line instructions.
To vote by Telephone
1) Read the Proxy Statement and
have the Proxy card at hand.
2) Call 1-800-____ - ______
3) Follow the recorded instructions.
To vote by Mail
1) Read the Proxy Statement.
2) Check the appropriate box on
the reverse side.
3) Sign, date and return the
Proxy card in the envelope
provided.
IF YOU VOTE BY TELEPHONE OR INTERNET, PLEASE DO NOT RETURN YOUR PROXY CARD.
TOUCHSTONE FUNDS GROUP TRUST AND CONSTELLATION INSTITUTIONAL PORTFOLIOS
303 BROADWAY, SUITE 1100
CINCINNATI, OH 45202
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON February 5, 2007
999 999 999 999 99
FUND NAME PRINTS HERE
Notice is hereby given that a special meeting of shareholders (the "Special
Meeting") of Touchstone Funds Group Trust and Constellation Institutional
Portfolios (each a "Trust" and collectively the "Trusts") will be held at the
office of Touchstone Advisors, Inc., 303 Broadway, Suite 1100 Cincinnati, OH
45202, on February 5, 2007, at 10:00 a.m. (Eastern time).
The purpose of the Special Meeting is to consider the Proposal set forth on the
reverse side and to transact such other business as may be properly brought
before the Special Meeting or any adjournment(s) thereof. The specifics of this
Proposal, which is more fully described in the attached Proxy Statement, are
shown on the reverse side of the card.
The undersigned shareholder(s) of the referenced Touchstone Funds of the
Touchstone Trust hereby appoints Jay S. Fitton and Frank L. Newbauer, or any one
of them true and lawful attorneys with power of substitution of each, to vote
all shares which the undersigned is entitled to vote, at the Special Meeting of
Shareholders of the Funds to be held on February 5, 2007, at the offices of the
Trusts, 303 Broadway, Suite 1100 Cincinnati, OH 45202, at 10:00 a.m. local time,
and at any adjournment thereof as indicated on the reverse side. In its
discretion, the Trust is authorized to vote upon such other matters as may
properly come before the meeting.
RECEIPT OF THE NOTICE(S) OF THE SPECIAL MEETING AND THE ACCOMPANYING PROXY
STATEMENT(S), AS APPLICABLE, IS HEREBY ACKNOWLEDGED. THE SHARES REPRESENTED
HEREBY WILL BE VOTED AS INDICATED OR FOR THE PROPOSAL IF NO CHOICE IS INDICATED.
Date: __________________, 200_
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Signature Title
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Signature Title
Please date and sign exactly as the name or names appear on this card. When
signing as attorney, trustee, executor, administrator, custodian, guardian or
corporate officer, please give full title. If shares are held jointly, each
shareholder should sign.
Please refer to the Proxy Statement discussion for this Proposal. If you simply
sign the proxy without specifying a vote, your shares will be voted FOR the
Proposal in accordance with the recommendation of the Board of Trustees. As to
any other matter, said proxy holders shall vote in accordance with the views of
management.
The Board of Trustees recommends a vote FOR the Proposal.
<table>
PLEASE MARK BOX(ES) BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: X
FOR AGAINST WITHHOLD
<s> <c> <c> <c> <c>
Proposal To elect four additional Trustees for the Board of the Trust, as [ ] [ ] [ ]
follows:
Richard L. Brenan, H. Jerome Lerner, John P. Zanotti and John F.
Barrett
(Instruction: To withhold authority to vote for any individual
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Nominee(s), write the names of the Nominee(s) on the line below:)
</table>
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PLEASE SIGN, DATE, AND RETURN IN THE ENCLOSED ENVELOPE.