UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-3651
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Touchstone Strategic Trust
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(Exact name of registrant as specified in charter)
303 Broadway, Cincinnati, Ohio 45202
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(Address of principal executive offices) (Zip code)
Jill T. McGruder, 303 Broadway, Cincinnati, Ohio 45202
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(Name and address of agent for service)
Registrant's telephone number, including area code: (513) 878-4066
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Date of fiscal year end: 3/31/07
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Date of reporting period: 9/30/07
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Form N-CSR is to be used by management investment companies to file
reports with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection and policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
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SEPTEMBER 30, 2007
(UNAUDITED)
Semi-Annual Report
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TOUCHSTONE STRATEGIC TRUST
Touchstone Diversified Small Cap Growth Fund
Touchstone Growth Opportunities Fund
Touchstone Large Cap Core Equity Fund
Touchstone Large Cap Growth Fund
Touchstone Large Cap Value Fund
Touchstone Micro Cap Growth Fund
Touchstone Mid Cap Growth Fund
Touchstone Small Cap Growth Fund
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[LOGO] TOUCHSTONE (R)
INVESTMENTS
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Table of Contents
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Page
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Tabular Presentation of Portfolios of Investments 3-4
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Statements of Assets and Liabilities 5-8
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Statements of Operations 9-10
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Statements of Changes in Net Assets 11-14
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Financial Highlights 15-30
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Notes to Financial Statements 31-45
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Portfolios of Investments:
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Diversified Small Cap Growth Fund 46-47
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Growth Opportunities Fund 48
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Large Cap Core Equity Fund 49
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Large Cap Growth Fund 50
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Large Cap Value Fund 51
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Micro Cap Growth Fund 52-53
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Mid Cap Growth Fund 54-55
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Small Cap Growth Fund 56-58
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Other Items 59-61
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2
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Tabular Presentation of Portfolios of Investments (Unaudited)
September 30, 2007
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The illustrations below provide each Fund's sector allocation. We hope it will
be useful to shareholders as it summarizes key information about each Fund's
investments.
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DIVERSIFIED SMALL CAP GROWTH FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Health Care 25.9
Technology 21.3
Consumer Discretionary 19.5
Financial Services 10.8
Producer Durables 10.1
Energy 4.5
Materials & Processing 3.6
Autos & Transportation 2.7
Utilities 0.6
Investment Funds 19.4
Other Assets/Liabilities (net) (18.4)
-------
100.0
-------
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LARGE CAP CORE EQUITY FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Financial Services 17.5
Technology 17.3
Energy 15.9
Producer Durables 15.4
Consumer Discretionary 11.3
Health Care 10.8
Utilities 4.0
Materials & Processing 3.4
Consumer Staples 3.2
Investment Funds 1.3
Other Assets/Liabilities (net) (0.1)
-------
100.0
-------
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LARGE CAP VALUE FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Financial Services 38.8
Technology 14.5
Producer Durables 12.6
Energy 8.3
Utilities 6.2
Health Care 4.7
Materials & Processing 2.8
Consumer Staples 2.5
Exchange Traded Funds 2.0
Autos & Transportation 0.7
Investment Funds 23.6
Other Assets/Liabilities (net) (16.7)
-------
100.0
-------
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GROWTH OPPORTUNITIES FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Health Care 30.7
Consumer Discretionary 15.4
Energy 12.1
Technology 11.2
Materials & Processing 9.6
Producer Durables 8.3
Financial Services 7.9
Consumer Staples 1.8
Utilities 1.1
Investment Funds 12.9
Other Assets/Liabilities (net) (11.0)
-------
100.0
-------
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LARGE CAP GROWTH FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Producer Durables 14.9
Technology 14.6
Consumer Discretionary 14.1
Materials & Processing 13.2
Utilities 11.1
Health Care 8.3
Energy 7.7
Financial Services 7.4
Consumer Staples 4.2
Autos & Transportation 2.3
Investment Funds 10.9
Other Assets/Liabilities (net) (8.7)
-------
100.0
-------
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MICRO CAP GROWTH FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Technology 22.8
Producer Durables 18.7
Health Care 17.1
Consumer Discretionary 13.3
Financial Services 8.9
Materials & Processing 7.5
Autos & Transportation 5.8
Energy 4.6
Consumer Staples 0.6
Utilities 0.3
Investment Funds 19.5
Other Assets/Liabilities (net) (19.1)
-------
100.0
-------
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3
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Tabular Presentation of Portfolios of Investments (Continued)
September 30, 2007
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MID CAP GROWTH FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Technology 17.7
Health Care 17.7
Producer Durables 17.5
Consumer Discretionary 16.1
Financial Services 11.6
Energy 11.3
Materials & Processing 3.7
Consumer Staples 1.1
Utilities 1.0
Autos & Transportation 0.6
Investment Funds 11.5
Other Assets/Liabilities (net) (9.8)
-------
100.0
-------
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SMALL CAP GROWTH FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Health Care 22.8
Technology 20.0
Consumer Discretionary 16.8
Producer Durables 12.6
Financial Services 9.3
Energy 4.9
Materials & Processing 3.7
Exchange Traded Funds 2.6
Autos & Transportation 2.5
Utilities 0.8
Consumer Staples 0.4
Investment Funds 7.5
Other Assets/Liabilities (net) (3.9)
-------
100.0
-------
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4
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Statements of Assets and Liabilities
September 30, 2007 (Unaudited)
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DIVERSIFIED LARGE
SMALL CAP GROWTH CAP CORE LARGE CAP
GROWTH OPPORTUNITIES EQUITY GROWTH
FUND FUND FUND FUND
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ASSETS
Investment securities:
At cost $ 14,427,051 $ 48,974,927 $ 86,964,801 $ 851,075,288
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Affiliated securities at market value $ 238,221 $ 1,657,059 $ 1,386,860 $ 22,413,528
Non-affiliated securities at market value 16,129,521 57,031,598 104,888,024 1,115,513,826
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At market value - including $2,345,091, $4,962,188 and
$89,295,931 of securities loaned for the Diversified
Small Cap Growth Fund, Growth Opportunities Fund and
Large Cap Growth Fund, respectively 16,367,742 58,688,657 106,274,884 1,137,927,354
Cash 13,874 -- -- --
Dividends and interest receivable 1,987 25,942 142,797 528,727
Receivable for capital shares sold 67,573 180,524 39,456 2,955,865
Receivable for securities sold 272,626 555,916 -- --
Receivable for securities lending income 2,366 1,104 -- 46,327
Other assets 2,152 18,589 9,349 54,410
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TOTAL ASSETS 16,728,320 59,470,732 106,466,486 1,141,512,683
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LIABILITIES
Payable upon return of securities loaned 2,438,724 5,156,829 -- 91,658,870
Payable for capital shares redeemed -- 25,575 149,561 1,918,630
Payable for securities purchased 412,710 1,277,232 -- 39,605
Payable to Advisor 10,769 41,611 55,582 569,185
Payable to other affiliates 13,434 12,999 18,489 172,656
Payable to Trustees 1,814 2,235 2,686 2,357
Other accrued expenses and liabilities 22,870 84,632 46,248 564,973
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TOTAL LIABILITIES 2,900,321 6,601,113 272,566 94,926,276
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NET ASSETS $ 13,827,999 $ 52,869,619 $ 106,193,920 $ 1,046,586,407
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NET ASSETS CONSIST OF:
Paid-in capital $ 10,695,336 $ 88,152,625 $ 83,697,089 $ 825,024,042
Accumulated net investment income (loss) (54,957) (273,192) 665,516 (1,057,833)
Accumulated net realized gains (losses) from security
transactions 1,246,929 (44,723,544) 2,521,232 (64,231,868)
Net unrealized appreciation on investments 1,940,691 9,713,730 19,310,083 286,852,066
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NET ASSETS $ 13,827,999 $ 52,869,619 $ 106,193,920 $ 1,046,586,407
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PRICING OF CLASS A SHARES
Net assets attributable to Class A shares $ 6,925,671 $ 37,781,915 $ 102,224,491 $ 762,078,864
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Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 530,315 1,580,969 8,230,066 28,339,375
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Net asset value and redemption price per share $ 13.06 $ 23.90 $ 12.42 $ 26.89
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Maximum offering price per share $ 13.86 $ 25.36 $ 13.18 $ 28.53
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PRICING OF CLASS B SHARES
Net assets attributable to Class B shares $ -- $ 2,375,213 $ -- $ 31,914,018
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Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) -- 105,734 -- 1,217,574
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Net asset value, offering price and redemption price per
share* $ -- $ 22.46 $ -- $ 26.21
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5
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Statements of Assets and Liabilities (Continued)
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DIVERSIFIED LARGE
SMALL CAP GROWTH CAP CORE LARGE CAP
GROWTH OPPORTUNITIES EQUITY GROWTH
FUND FUND FUND FUND
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PRICING OF CLASS C SHARES
Net assets attributable to Class C shares $ 2,620 $ 12,712,491 $ 3,969,429 $ 224,317,350
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Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 201 559,908 322,706 8,538,983
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Net asset value, offering price and redemption price per
share* $ 13.04 $ 22.70 $ 12.30 $ 26.27
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PRICING OF CLASS Y SHARES
Net assets attributable to Class Y shares $ 6,899,708 $ -- $ -- $ 28,276,175
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Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 526,924 -- -- 1,045,291
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Net asset value, offering price and redemption price per
share $ 13.09 $ -- $ -- $ 27.05
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* Redemption price per share varies by length of time shares are held.
See accompanying notes to financial statements.
6
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Statements of Assets and Liabilities (Continued)
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LARGE CAP MICRO CAP MID CAP SMALL CAP
VALUE GROWTH GROWTH GROWTH
FUND FUND FUND FUND
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ASSETS
Investment securities:
At cost $ 68,595,866 $ 56,439,110 $ 1,106,461,628 $ 41,742,611
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Affiliated securities at market value $ 4,466,617 $ 456,206 $ 21,461,111 $ 2,877,052
Non-affiliated securities at market value 58,795,092 74,945,536 1,300,771,947 42,139,708
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At market value - including $7,971,872, $11,327,032,
$114,679,790 and $327,255 of securities loaned for the
Large Cap Value Fund, Micro Cap Growth Fund, Mid Cap
Growth Fund and Small Cap Growth Fund, respectively 63,261,709 75,401,742 1,322,233,058 45,016,760
Cash -- -- -- 15,912
Dividends and interest receivable 48,515 1,513 651,674 17,312
Receivable for capital shares sold 165,577 1,699 1,641,345 21,350
Receivable for securities sold 395,969 426,688 8,289,047 904,474
Receivable for securities lending income 1,833 3,687 18,616 9,300
Other assets 13,731 18,202 48,633 26,664
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TOTAL ASSETS 63,887,334 75,853,531 1,332,882,373 46,011,772
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LIABILITIES
Payable upon return of securities loaned 8,308,475 11,895,053 117,374,028 374,855
Payable for capital shares redeemed 389,177 292,575 1,681,023 119,324
Payable for securities purchased 896,882 183,628 7,367,785 1,999,877
Payable to Advisor 33,807 64,698 777,780 28,031
Payable to other affiliates 3,195 19,557 303,117 45,360
Payable to Trustees 2,353 4,602 6,515 2,285
Other accrued expenses and liabilities 30,196 69,111 717,742 109,092
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TOTAL LIABILITIES 9,664,085 12,529,224 128,227,990 2,678,824
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NET ASSETS $ 54,223,249 $ 63,324,307 $ 1,204,654,383 $ 43,332,948
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NET ASSETS CONSIST OF:
Paid-in capital $ 57,182,852 $ 46,777,504 $ 881,482,102 $ 51,742,842
Accumulated net investment income (loss) 188,373 (461,502) (5,628,323) (199,488)
Accumulated net realized gains (losses) from security
transactions 2,186,181 (1,954,327) 113,029,174 (11,484,555)
Net unrealized appreciation (depreciation) on investments (5,334,157) 18,962,632 215,771,430 3,274,149
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NET ASSETS $ 54,223,249 $ 63,324,307 $ 1,204,654,383 $ 43,332,948
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PRICING OF CLASS A SHARES
Net assets attributable to Class A shares $ 35,289,443 $ 39,775,187 $ 766,619,784 $ 19,104,826
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Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 3,431,507 2,967,405 29,146,855 1,083,545
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Net asset value and redemption price per share $ 10.28 $ 13.40 $ 26.30 $ 17.63
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Maximum offering price per share $ 10.91 $ 14.22 $ 27.90 $ 18.71
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PRICING OF CLASS B SHARES
Net assets attributable to Class B shares $ -- $ -- $ 76,078,882 $ 4,037,684
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Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) -- -- 3,303,116 236,291
====================================================================================================================================
Net asset value, offering price and redemption price per
share* $ -- $ -- $ 23.03 $ 17.09
====================================================================================================================================
7
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Statements of Assets and Liabilities (Continued)
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LARGE CAP MICRO CAP MID CAP SMALL CAP
VALUE GROWTH GROWTH GROWTH
FUND FUND FUND FUND
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PRICING OF CLASS C SHARES
Net assets attributable to Class C shares $ 18,933,806 $ 23,029,361 $ 361,955,717 $ 6,723,759
====================================================================================================================================
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 1,858,412 1,760,442 15,698,372 393,200
====================================================================================================================================
Net asset value, offering price and redemption price per
share* $ 10.19 $ 13.08 $ 23.06 $ 17.10
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PRICING OF CLASS Y SHARES
Net assets attributable to Class Y shares $ -- $ 519,759 $ -- $ 13,466,679
====================================================================================================================================
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) -- 38,069 -- 753,821
====================================================================================================================================
Net asset value, offering price and redemption price per
share $ -- $ 13.65 $ -- $ 17.86
====================================================================================================================================
* Redemption price per share varies by length of time shares are held.
See accompanying notes to financial statements.
8
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Statements of Operations
For the Six Months Ended September 30, 2007 (Unaudited)
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DIVERSIFIED LARGE
SMALL CAP GROWTH CAP CORE LARGE CAP
GROWTH OPPORTUNITIES EQUITY GROWTH
FUND FUND FUND FUND
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INVESTMENT INCOME
Dividends from affiliated securities $ 3,582 $ 16,977 $ 35,706 $ 238,812
Dividends from non-affiliated securities(A) 16,483 160,137 1,007,102 5,206,702
Interest -- 13 10,301 455
Income from securities loaned 9,106 5,777 216 188,889
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TOTAL INVESTMENT INCOME 29,171 182,904 1,053,325 5,634,858
====================================================================================================================================
EXPENSES
Investment advisory fees 69,443 258,019 337,341 3,348,894
Distribution expenses, Class A 8,206 46,321 124,983 854,026
Distribution expenses, Class B -- 11,735 -- 143,306
Distribution expenses, Class C 4 61,837 20,533 992,024
Administration fees 13,227 51,771 104,094 942,625
Transfer Agent fees, Class A 6,891 43,665 23,991 343,560
Transfer Agent fees, Class B -- 1,435 -- 23,870
Transfer Agent fees, Class C 2 18,407 4,938 121,235
Transfer Agent fees, Class Y 6,880 -- -- 13,017
Postage and supplies 4,464 41,606 13,197 187,215
Reports to shareholders 2,397 18,823 5,219 126,470
Custodian fees 1,462 13,125 8,384 94,461
Registration fees, Class A 645 6,373 6,229 29,587
Registration fees, Class B -- 3,916 -- 6,076
Registration fees, Class C 25 5,385 3,947 10,384
Registration fees, Class Y 749 -- -- 6,851
Professional fees 9,549 9,309 10,496 34,340
Trustees' fees and expenses 3,220 5,014 5,174 5,169
Compliance fees and expenses 88 304 648 2,507
Other expenses 1,049 2,025 1,192 12,846
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TOTAL EXPENSES 128,301 599,070 670,366 7,298,463
Fees waived by the Administrator (13,227) (51,771) (57,810) (605,772)
Fees waived and/or expenses reimbursed by the Advisor (30,946) (91,203) -- --
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NET EXPENSES 84,128 456,096 612,556 6,692,691
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NET INVESTMENT INCOME (LOSS) (54,957) (273,192) 440,769 (1,057,833)
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REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 908,120 3,221,651 1,601,036 41,205,419
Net change in unrealized appreciation/
depreciation on investments 629,069 4,460,182 7,085,870 149,637,692
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NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 1,537,189 7,681,833 8,686,906 190,843,111
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NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,482,232 $ 7,408,641 $ 9,127,675 $ 189,785,278
====================================================================================================================================
(A) Net of foreign tax withholding of: $ -- $ 1,057 $ -- $ 22,757
See accompanying notes to financial statements.
9
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Statements of Operations (Continued)
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LARGE CAP MICRO CAP MID CAP SMALL CAP
VALUE GROWTH GROWTH GROWTH
FUND FUND FUND FUND
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INVESTMENT INCOME
Dividends from affiliated securities $ 162,981 $ 21,033 $ 724,472 $ 37,344
Dividends from non-affiliated securities(A) 440,047 246,724 3,873,052 118,314
Interest 6 124 43,117 1,005
Income from securities loaned 6,821 43,481 96,557 93,654
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TOTAL INVESTMENT INCOME 609,855 311,362 4,737,198 250,317
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EXPENSES
Investment advisory fees 201,874 435,524 4,797,013 318,035
Distribution expenses, Class A 43,719 54,936 950,532 30,474
Distribution expenses, Class B -- -- 384,839 22,327
Distribution expenses, Class C 94,289 125,894 1,809,292 38,792
Administration fees 53,834 69,684 1,199,264 50,886
Transfer Agent fees, Class A 9,016 43,268 368,984 55,833
Transfer Agent fees, Class B -- -- 62,756 8,837
Transfer Agent fees, Class C 9,604 25,606 256,949 25,212
Transfer Agent fees, Class Y -- 479 -- 7,212
Postage and supplies 5,938 31,006 277,576 50,565
Reports to shareholders 4,133 13,402 106,774 41,463
Custodian fees 2,714 13,070 67,434 26,083
Registration fees, Class A 7,888 6,534 20,245 5,882
Registration fees, Class B -- -- 7,235 5,208
Registration fees, Class C 7,368 5,514 12,547 5,846
Registration fees, Class Y -- 3,437 -- 14,693
Professional fees 8,122 9,328 27,462 10,065
Trustees' fees and expenses 4,803 5,191 7,407 5,054
Compliance fees and expenses 372 224 1,958 752
Other expenses 976 2,537 15,400 4,591
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TOTAL EXPENSES 454,650 845,634 10,373,667 727,810
Fees waived by the Administrator (21,113) (69,684) (8,146) (50,886)
Fees waived and/or expenses reimbursed by the Advisor -- (2,215) -- (224,373)
Fees reduced by Custodian -- (871) -- (2,746)
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NET EXPENSES 433,537 772,864 10,365,521 449,805
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NET INVESTMENT INCOME (LOSS) 176,318 (461,502) (5,628,323) (199,488)
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REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gains from security transactions 1,253,932 4,790,634 93,510,239 9,745,940
Net change in unrealized appreciation/
depreciation on investments (7,083,445) (2,192,410) 9,865,787 (6,052,832)
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NET REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS (5,829,513) 2,598,224 103,376,026 3,693,108
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NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ (5,653,195) $ 2,136,722 $ 97,747,703 $ 3,493,620
====================================================================================================================================
(A) Net of foreign tax withholding of: $ 16,213 $ -- $ 17,205 $ --
See accompanying notes to financial statements.
10
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Statements of Changes in Net Assets
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DIVERSIFIED GROWTH
SMALL CAP OPPORTUNITIES
GROWTH FUND FUND
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SIX MONTHS SIX MONTHS
ENDED PERIOD ENDED YEAR
SEPT. 30, ENDED SEPT. 30, ENDED
2007 MARCH 31, 2007 MARCH 31,
(UNAUDITED)(A) 2007(B) (UNAUDITED) 2007
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FROM OPERATIONS
Net investment loss $ (54,957) $ (63,303) $ (273,192) $ (992,944)
Net realized gains from security transactions 908,120 402,112 3,221,651 6,243,275
Net change in unrealized appreciation/depreciation on
investments 629,069 1,311,622 4,460,182 (12,350,574)
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NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS 1,482,232 1,650,431 7,408,641 (7,100,243)
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FROM CAPITAL SHARE TRANSACTIONS
CLASS A
Proceeds from shares sold 567,265 5,026,414 3,473,543 9,737,523
Payments for shares redeemed (213,443) (1,400) (6,680,998) (66,577,364)
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NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS A SHARE
TRANSACTIONS 353,822 5,025,014 (3,207,455) (56,839,841)
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CLASS B
Proceeds from shares sold -- -- 47,851 178,893
Payments for shares redeemed -- -- (305,105) (928,261)
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NET DECREASE IN NET ASSETS FROM CLASS B SHARE TRANSACTIONS -- -- (257,254) (749,368)
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS C
Proceeds from shares sold 2,500 -- 536,000 1,159,910
Payments for shares redeemed -- -- (1,578,658) (10,148,048)
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NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS C SHARE
TRANSACTIONS 2,500 -- (1,042,658) (8,988,138)
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CLASS Y
Proceeds from shares sold 15,000 5,299,000 -- --
Payments for shares redeemed -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM CLASS Y SHARE TRANSACTIONS 15,000 5,299,000 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,853,554 11,974,445 2,901,274 (73,677,590)
NET ASSETS
Beginning of period 11,974,445 -- 49,968,345 123,645,935
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End of period $ 13,827,999 $ 11,974,445 $ 52,869,619 $ 49,968,345
====================================================================================================================================
ACCUMULATED NET INVESTMENT LOSS $ (54,957) $ -- $ (273,192) $ --
====================================================================================================================================
(A) Class C represents the period from commencement of operations (August 1,
2007) through September 30, 2007.
(B) Represents the period from commencement of operations (September 6, 2006)
through March 31, 2007.
See accompanying notes to financial statements.
11
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Statements of Changes in Net Assets (Continued)
- --------------------------------------------------------------------------------
LARGE CAP CORE LARGE CAP
EQUITY FUND GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPT. 30, ENDED SEPT. 30, ENDED
2007 MARCH 31, 2007 MARCH 31,
(UNAUDITED) 2007 (UNAUDITED) 2007
- -----------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) $ 440,769 $ 664,515 $ (1,057,833) $ (3,283,598)
Net realized gains (losses) from security transactions 1,601,036 3,935,114 41,205,419 (76,218,132)
Net change in unrealized appreciation/depreciation on
investments 7,085,870 5,433,488 149,637,692 5,246,299
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS 9,127,675 10,033,117 189,785,278 (74,255,431)
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Class A -- (612,288) -- --
From net investment income, Class B -- (6,537) -- --
From net investment income, Class C -- (5,077) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS -- (623,902) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS
CLASS A
Proceeds from shares sold 1,862,249 4,816,716 88,060,397 358,732,151
Reinvested distributions -- 604,929 -- --
Proceeds from shares issued in connection with acquisition -- 59,728,074 -- --
Payments for shares redeemed (3,592,737) (4,788,529) (119,901,534) (483,563,307)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS A SHARE
TRANSACTIONS (1,730,488) 60,361,190 (31,841,137) (124,831,156)
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B
Proceeds from shares sold -- 104,544 1,230,384 6,607,084
Reinvested distributions -- 5,697 -- --
Payments for shares redeemed -- (1,780,230) (1,794,548) (5,912,510)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS B SHARE
TRANSACTIONS -- (1,669,989) (564,164) 694,574
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS C
Proceeds from shares sold 197,538 2,011,754 21,508,424 76,446,276
Reinvested distributions -- 4,228 -- --
Proceeds from shares issued in connection with acquisition -- 1,712,923 -- --
Payments for shares redeemed (806,327) (1,228,598) (27,903,248) (62,773,183)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS C SHARE
TRANSACTIONS (608,789) 2,500,307 (6,394,824) 13,673,093
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS Y
Proceeds from shares sold -- -- 7,008,712 45,211,834
Payments for shares redeemed -- -- (24,963,703) (68,302,970)
- -----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM CLASS Y SHARE TRANSACTIONS -- -- (17,954,991) (23,091,136)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 6,788,398 70,600,723 133,030,162 (207,810,056)
NET ASSETS
Beginning of period 99,405,522 28,804,799 913,556,245 1,121,366,301
- -----------------------------------------------------------------------------------------------------------------------------------
End of period $ 106,193,920 $ 99,405,522 $ 1,046,586,407 $ 913,556,245
====================================================================================================================================
ACCUMULATED NET INVESTMENT INCOME (LOSS) $ 665,516 $ 224,747 $ (1,057,833) $ --
====================================================================================================================================
See accompanying notes to financial statements.
12
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (Continued)
- --------------------------------------------------------------------------------
LARGE CAP MICRO CAP
VALUE FUND GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPT. 30, ENDED SEPT. 30, ENDED
2007 MARCH 31, 2007 MARCH 31,
(UNAUDITED) 2007 (UNAUDITED) 2007
- -----------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) $ 176,318 $ 93,385 $ (461,502) $ (1,310,460)
Net realized gains (losses) from security transactions 1,253,932 1,554,882 4,790,634 (3,907,984)
Net change in unrealized appreciation/depreciation on
investments (7,083,445) 1,614,303 (2,192,410) 138,263
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS (5,653,195) 3,262,570 2,136,722 (5,080,181)
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Class A -- (81,628) -- --
From net investment income, Class C -- (10,363) -- --
From net realized gains on security transactions, Class A -- (476,738) -- --
From net realized gains on security transactions, Class C -- (203,372) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS -- (772,101) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS
CLASS A
Proceeds from shares sold 12,099,415 16,829,887 1,531,217 10,143,744
Reinvested distributions (3) 473,417 -- --
Payments for shares redeemed (2,740,817) (1,249,158) (8,700,988) (23,441,837)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS A SHARE
TRANSACTIONS 9,358,595 16,054,146 (7,169,771) (13,298,093)
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS C
Proceeds from shares sold 7,225,790 14,128,900 1,358,512 6,573,633
Reinvested distributions -- 175,377 -- --
Payments for shares redeemed (1,536,562) (265,138) (5,111,448) (11,867,742)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS C SHARE
TRANSACTIONS 5,689,228 14,039,139 (3,752,936) (5,294,109)
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS Y
Proceeds from shares sold -- -- 258,615 369,176
Payments for shares redeemed -- -- (186,713) (559,072)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS Y SHARE
TRANSACTIONS -- -- 71,902 (189,896)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 9,394,628 32,583,754 (8,714,083) (23,862,279)
NET ASSETS
Beginning of period 44,828,621 12,244,867 72,038,390 95,900,669
- -----------------------------------------------------------------------------------------------------------------------------------
End of period $ 54,223,249 $ 44,828,621 $ 63,324,307 $ 72,038,390
====================================================================================================================================
ACCUMULATED NET INVESTMENT INCOME (LOSS) $ 188,373 $ 12,055 $ (461,502) $ --
====================================================================================================================================
See accompanying notes to financial statements.
13
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (Continued)
- --------------------------------------------------------------------------------
MID CAP SMALL CAP
GROWTH FUND GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPT. 30, ENDED SEPT. 30, ENDED
2007 MARCH 31, 2007 MARCH 31,
(UNAUDITED) 2007 (UNAUDITED) 2007
- -----------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment loss $ (5,628,323) $ (10,024,153) $ (199,488) $ (1,945,258)
Net realized gains (losses) from security transactions 93,510,239 86,707,430 9,745,940 (16,494,317)
Net change in unrealized appreciation/depreciation on
investments 9,865,787 12,538,286 (6,052,832) (69,830,999)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS 97,747,703 89,221,563 3,493,620 (88,270,574)
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net realized gains on security transactions, Class A -- (51,726,255) -- --
From net realized gains on security transactions, Class B -- (6,541,309) -- --
From net realized gains on security transactions, Class C -- (28,926,766) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS -- (87,194,330) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS
CLASS A
Proceeds from shares sold 102,634,533 227,924,543 2,420,182 11,676,005
Reinvested distributions 6 43,071,390 -- --
Payments for shares redeemed (112,521,460) (202,778,708) (17,811,219) (22,640,484)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS A SHARE
TRANSACTIONS (9,886,921) 68,217,225 (15,391,037) (10,964,479)
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B
Proceeds from shares sold 1,906,894 6,454,411 115,785 215,598
Reinvested distributions -- 4,916,368 -- --
Payments for shares redeemed (6,936,953) (15,047,214) (1,225,610) (4,066,713)
- -----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM CLASS B SHARE TRANSACTIONS (5,030,059) (3,676,435) (1,109,825) (3,851,115)
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS C
Proceeds from shares sold 20,096,645 65,445,122 47,070 1,489,190
Reinvested distributions -- 18,600,380 -- --
Payments for shares redeemed (32,871,075) (62,935,807) (2,531,310) (11,121,847)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS C SHARE
TRANSACTIONS (12,774,430) 21,109,695 (2,484,240) (9,632,657)
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS Y
Proceeds from shares sold -- -- 1,068,050 102,309,420
Payments for shares redeemed -- -- (4,515,979) (357,160,120)
- -----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM CLASS Y SHARE TRANSACTIONS -- -- (3,447,929) (254,850,700)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 70,056,293 87,677,718 (18,939,411) (367,569,525)
NET ASSETS
Beginning of period 1,134,598,090 1,046,920,372 62,272,359 429,841,884
- -----------------------------------------------------------------------------------------------------------------------------------
End of period $ 1,204,654,383 $ 1,134,598,090 $ 43,332,948 $ 62,272,359
====================================================================================================================================
ACCUMULATED NET INVESTMENT LOSS $ (5,628,323) $ -- $ (199,488) $ --
====================================================================================================================================
See accompanying notes to financial statements.
14
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
DIVERSIFIED SMALL CAP GROWTH FUND--CLASS A
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD
SEPT. 30, ENDED
2007 MARCH 31,
(UNAUDITED) 2007(A)
- ------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 11.64 $ 10.00
- ------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.06) (0.07)
Net realized and unrealized gains on investments 1.48 1.71
- ------------------------------------------------------------------------------------------
Total from investment operations 1.42 1.64
- ------------------------------------------------------------------------------------------
Net asset value at end of period $ 13.06 $ 11.64
==========================================================================================
Total return(B) 12.20%(C) 16.40%(C)
==========================================================================================
Net assets at end of period (000's) $ 6,926 $ 5,846
==========================================================================================
Ratio of net expenses to average net assets 1.40%(D) 1.40%(D)
Ratio of net investment loss to average net assets (0.96%)(D) (1.15%)(D)
Portfolio turnover rate 80%(D) 86%(D)
(A) Represents the period from commencement of operations (September 6, 2006)
through March 31, 2007.
(B) Total returns shown exclude the effect of applicable sales loads.
(C) Not annualized.
(D) Annualized.
DIVERSIFIED SMALL CAP GROWTH FUND--CLASS C
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
- --------------------------------------------------------------------------------
PERIOD
ENDED
SEPT. 30,
2007
(UNAUDITED)(A)
- --------------------------------------------------------------------------------
Net asset value at beginning of period $ 12.44
- --------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.04)
Net realized and unrealized gains on investments 0.64
- --------------------------------------------------------------------------------
Total from investment operations 0.60
- --------------------------------------------------------------------------------
Net asset value at end of period $ 13.04
================================================================================
Total return(B) 4.82%(C)
================================================================================
Net assets at end of period (000's) $ 2
================================================================================
Ratio of net expenses to average net assets 2.11%(D)
Ratio of net investment loss to average net assets (1.65%)(D)
Portfolio turnover rate 80%(D)
(A) Represents the period from commencement of operations (August 1, 2007)
through September 30, 2007.
(B) Total return shown excludes the effect of applicable sales loads.
(C) Not annualized.
(D) Annualized.
See accompanying notes to financial statements.
15
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
DIVERSIFIED SMALL CAP GROWTH FUND--CLASS Y
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD
SEPT. 30, ENDED
2007 MARCH 31,
(UNAUDITED) 2007(A)
- ------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 11.66 $ 10.00
- ------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.05) (0.05)
Net realized and unrealized gains on investments 1.48 1.71
- ------------------------------------------------------------------------------------------
Total from investment operations 1.43 1.66
- ------------------------------------------------------------------------------------------
Net asset value at end of period $ 13.09 $ 11.66
==========================================================================================
Total return 12.26%(B) 16.60%(B)
==========================================================================================
Net assets at end of period (000's) $ 6,900 $ 6,128
==========================================================================================
Ratio of net expenses to average net assets 1.15%(C) 1.15%(C)
Ratio of net investment loss to average net assets (0.71%)(C) (0.90%)(C)
Portfolio turnover rate 80%(C) 86%(C)
(A) Represents the period from commencement of operations (September 6, 2006)
through March 31, 2007.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
16
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
GROWTH OPPORTUNITIES FUND--CLASS A
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPT. 30, YEAR ENDED MARCH 31,
2007 ---------------------------------------------------------------
(UNAUDITED) 2007 2006 2005 2004 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 20.75 $ 21.57 $ 17.92 $ 18.06 $ 12.70 $ 18.18
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.10) (0.35) (0.21) (0.24) (0.21) (0.19)
Net realized and unrealized gains
(losses) on investments 3.25 (0.47) 3.86 0.10 5.57 (5.29)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.15 (0.82) 3.65 (0.14) 5.36 (5.48)
====================================================================================================================================
Net asset value at end of period $ 23.90 $ 20.75 $ 21.57 $ 17.92 $ 18.06 $ 12.70
====================================================================================================================================
Total return(A) 15.18%(B) (3.80)% 20.37% (0.78)% 42.20% (30.14)%
====================================================================================================================================
Net assets at end of period (000's) $ 37,782 $ 35,723 $ 98,004 $ 81,313 $117,605 $ 84,472
====================================================================================================================================
Ratio of net expenses to average net assets 1.55%(C) 1.79% 1.64% 1.68% 1.60% 1.83%
Ratio of net investment loss to average net assets (0.85)%(C) (1.12)% (1.09)% (1.14)% (1.23)% (1.40)%
Portfolio turnover rate 78%(C) 161% 80% 35% 47% 39%
Amount of debt outstanding at
end of period (000's) n/a n/a n/a n/a n/a $ --
Average daily amount of debt outstanding
during the period (000's) n/a n/a n/a n/a n/a $ 242(D)
Average daily number of capital shares
outstanding during the period (000's) n/a n/a n/a n/a n/a 8,916(D)
Average amount of debt per share
during the period n/a n/a n/a n/a n/a $ 0.03(D)
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
(D) Based on fund level shares outstanding. See accompanying notes to
financial statements.
See accompanying notes to financial statements.
17
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
GROWTH OPPORTUNITIES FUND--CLASS B
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPT. 30, YEAR ENDED MARCH 31,
2007 --------------------------------------------------------------
(UNAUDITED) 2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 19.38 $ 20.39 $ 16.97 $ 17.31 $ 12.13 $ 17.78
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.17) (0.51) (0.46) (0.43) (0.38) (0.36)
Net realized and unrealized gains
(losses) on investments 3.25 (0.50) 3.88 0.09 5.56 (5.29)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.08 (1.01) 3.42 (0.34) 5.18 (5.65)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 22.46 $ 19.38 $ 20.39 $ 16.97 $ 17.31 $ 12.13
===================================================================================================================================
Total return(A) 15.89%(B) (4.95)% 20.15% (1.96)% 42.70% (31.78)%
===================================================================================================================================
Net assets at end of period (000's) $ 2,375 $ 2,288 $ 3,230 $ 3,064 $ 3,608 $ 2,463
===================================================================================================================================
Ratio of net expenses to average net assets 2.30%(C) 2.97% 2.97% 2.95% 2.84% 3.16%
Ratio of net investment loss to average net assets (1.56)%(C) (2.24)% (2.39)% (2.38)% (2.45)% (2.71)%
Portfolio turnover rate 78%(C) 161% 80% 35% 47% 39%
Amount of debt outstanding at end of period (000's) n/a n/a n/a n/a n/a $ --
Average daily amount of debt outstanding
during the period (000's) n/a n/a n/a n/a n/a $ 242(D)
Average daily number of capital shares outstanding
during the period (000's) n/a n/a n/a n/a n/a 8,916(D)
Average amount of debt per share during the period n/a n/a n/a n/a n/a $ 0.03(D)
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
(D) Based on fund level shares outstanding.
See accompanying notes to financial statements.
18
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
GROWTH OPPORTUNITIES FUND--CLASS C
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPT. 30, YEAR ENDED MARCH 31,
2007 ------------------------------------------------------------------
(UNAUDITED) 2007 2006 2005 2004 2003
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 19.63 $ 20.60 $ 17.11 $ 17.39 $ 12.17 $ 17.78
- ------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.17) (0.54) (0.40) (0.40) (0.37) (0.36)
Net realized and unrealized gains
(losses) on investments 3.24 (0.43) 3.89 0.12 5.59 (5.25)
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.07 (0.97) 3.49 (0.28) 5.22 (5.61)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 22.70 $ 19.63 $ 20.60 $ 17.11 $ 17.39 $ 12.17
==============================================================================================================================
Total return(A) 15.64%(B) (4.71)% 20.40% (1.61)% 42.89% (31.55)%
==============================================================================================================================
Net assets at end of period (000's) $ 12,713 $ 11,957 $ 22,412 $ 21,789 $ 28,470 $ 21,727
==============================================================================================================================
Ratio of net expenses to average
net assets 2.30%(C) 2.71% 2.57% 2.61% 2.60% 2.87%
Ratio of net investment loss to
average net assets (1.56)%(C) (2.00)% (2.01)% (2.04)% (2.21)% (2.42)%
Portfolio turnover rate 78%(C) 161% 80% 35% 47% 39%
Amount of debt outstanding at
end of period (000's) n/a n/a n/a n/a n/a $ --
Average daily amount of debt outstanding
during the period (000's) n/a n/a n/a n/a n/a $ 242(D)
Average daily number of capital shares
outstanding during the period (000's) n/a n/a n/a n/a n/a 8,916(D)
Average amount of debt per share
during the period n/a n/a n/a n/a n/a $ 0.03(D)
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
(D) Based on fund level shares outstanding.
See accompanying notes to financial statements.
19
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
LARGE CAP CORE EQUITY FUND--CLASS A
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPT. 30, YEAR ENDED MARCH 31,
2007 --------------------------------------------------------------
(UNAUDITED) 2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 11.36 $ 10.49 $ 9.48 $ 9.10 $ 6.71 $ 9.19
- --------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.05 0.11 0.06 0.11 0.07 0.06
Net realized and unrealized gains
(losses) on investments 1.01 0.91 0.96 0.38 2.37 (2.46)
- --------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.06 1.02 1.02 0.49 2.44 (2.40)
- --------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income -- (0.15) (0.01) (0.11) (0.05) (0.08)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 12.42 $ 11.36 $ 10.49 $ 9.48 $ 9.10 $ 6.71
==========================================================================================================================
Total return(A) 9.33%(B) 9.83% 10.74% 5.32% 36.41% (26.19)%
==========================================================================================================================
Net assets at end of period (000's) $ 102,225 $ 95,175 $ 25,693 $ 9,328 $ 8,783 $ 6,109
==========================================================================================================================
Ratio of net expenses to average
net assets 1.15%(C) 1.15% 1.00% 1.00% 0.97%(D) 1.00%
Ratio of net investment income to
average net assets 0.88%(C) 0.97% 1.03% 1.18% 0.85%(D) 0.90%
Portfolio turnover rate 10%(C) 54% 6% 7% 10% 29%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
(D) Absent voluntary expense reimbursements, the ratio of net expenses to
average net assets would have been 1.00% and the ratio of net investment
income to average net assets would have been 0.82%.
See accompanying notes to financial statements.
20
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
LARGE CAP CORE EQUITY FUND--CLASS C
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPT. 30, YEAR ENDED MARCH 31,
2007 --------------------------------------------------------------
(UNAUDITED) 2007 2006 2005 2004 2003
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 11.29 $ 10.39 $ 9.46 $ 9.08 $ 6.72 $ 9.13
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 0.00(A) (0.02) 0.03 0.04 0.01 0.01
Net realized and unrealized gains
(losses) on investments 1.01 0.96 0.91 0.37 2.37 (2.41)
- ----------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.01 0.94 0.94 0.41 2.38 (2.40)
- ----------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income -- (0.04) (0.01) (0.03) (0.02) (0.01)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 12.30 $ 11.29 $ 10.39 $ 9.46 $ 9.08 $ 6.72
============================================================================================================================
Total return(B) 8.95%(C) 9.09% 9.91% 4.52% 35.38% (26.32)%
============================================================================================================================
Net assets at end of period (000's) $ 3,969 $ 4,231 $ 1,399 $ 1,675 $ 2,260 $ 920
============================================================================================================================
Ratio of net expenses to average net assets 1.89%(D) 1.90% 1.75% 1.75% 1.72%(E) 1.74%
Ratio of net investment income (loss)
to average net assets 0.13%(D) (0.26)% 0.26% 0.41% 0.13%(E) 0.18%
Portfolio turnover rate 10%(D) 54% 6% 7% 10% 29%
(A) Amount rounds to less than $0.01 per share.
(B) Total returns shown exclude the effect of applicable sales loads.
(C) Not annualized.
(D) Annualized.
(E) Absent voluntary expense reimbursements, the ratio of net expenses to
average net assets would have been 1.75% and the ratio of net investment
income to average net assets would have been 0.10%.
See accompanying notes to financial statements.
21
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
LARGE CAP GROWTH FUND--CLASS A
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS THREE
ENDED MONTHS YEAR ENDED
SEPT. 30, YEAR ENDED MARCH 31, ENDED DECEMBER 31,
2007 ----------------------------------- MARCH 31, ----------------------
(UNAUDITED) 2007 2006 2005 2004(A) 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning
of period $ 22.06 $ 23.26 $ 19.84 $ 17.31 $ 16.53 $ 12.19 $ 16.63
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment loss (0.01) (0.04) (0.02) (0.02) (0.03) (0.07) (0.12)
Net realized and unrealized
gains (losses) on
investments 4.84 (1.16) 3.44 2.55 0.81 4.41 (4.32)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 4.83 (1.20) 3.42 2.53 0.78 4.34 (4.44)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 26.89 $ 22.06 $ 23.26 $ 19.84 $ 17.31 $ 16.53 $ 12.19
=================================================================================================================================
Total return(B) 21.89%(C) (5.16)% 17.24% 14.62% 4.72%(C) 35.60% (26.70)%
=================================================================================================================================
Net assets at end of
period (000's) $ 762,079 $ 656,582 $ 838,120 $ 274,121 $ 69,860 $ 62,187 $ 13,831
=================================================================================================================================
Ratio of net expenses to
average net assets 1.25%(D) 1.16% 1.17% 1.26% 1.30%(D) 1.39% 1.49%
Ratio of net investment loss to
average net assets (0.05)%(D) (0.16)% (0.13)% (0.23)% (0.78)%(D) (0.93)% (0.82)%
Portfolio turnover 59%(D) 115% 104% 127% 60%(D) 60% 115%
(A) Effective after the close of business on December 31, 2003, the Fund
changed its fiscal year end to March 31.
(B) Total returns shown exclude the effect of applicable sales loads.
(C) Not annualized.
(D) Annualized.
LARGE CAP GROWTH FUND--CLASS B
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS THREE
ENDED MONTHS PERIOD
SEPT. 30, YEAR ENDED MARCH 31, ENDED ENDED
2007 -------------------------------------- MARCH 31, DECEMBER 31,
(UNAUDITED) 2007 2006 2005 2004(A) 2003(B)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 21.46 $ 22.83 $ 19.60 $ 17.24 $ 16.50 $ 15.45
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.09) (0.21) (0.15) (0.12) (0.03) (0.06)
Net realized and unrealized gains
(losses) on investments 4.84 (1.16) 3.38 2.48 0.77 1.11
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 4.75 (1.37) 3.23 2.36 0.74 1.05
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 26.21 $ 21.46 $ 22.83 $ 19.60 $ 17.24 $ 16.50
==================================================================================================================================
Total return(C) 22.13%(D) (6.00)% 16.48% 13.69% 4.48%(D) 6.80%(D)
==================================================================================================================================
Net assets at end of period (000's) $ 31,914 $ 26,669 $ 27,781 $ 10,579 $ 1,897 $ 1,003
==================================================================================================================================
Ratio of net expenses to average
net assets 1.99%(E) 2.02% 2.08% 2.25% 2.25%(E) 2.22%(E)
Ratio of net investment loss to
average net assets (0.76)%(E) (0.98)% (1.02)% (1.23)% (1.71)%(E) (1.80)%(E)
Portfolio turnover rate 59%(E) 115% 104% 127% 60%(E) 60%(E)
(A) Effective after the close of business on December 31, 2003, the Fund
changed its fiscal year end to March 31.
(B) Represents the period from commencement of operations (October 4, 2003)
through December 31, 2003.
(C) Total returns shown exclude the effect of applicable sales loads.
(D) Not annualized.
(E) Annualized.
See accompanying notes to financial statements.
22
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
LARGE CAP GROWTH FUND--CLASS C
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS THREE
ENDED MONTHS PERIOD
SEPT. 30, YEAR ENDED MARCH 31, ENDED ENDED
2007 -------------------------------------- MARCH 31, DECEMBER 31,
(UNAUDITED) 2007 2006 2005 2004(A) 2003(B)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 21.52 $ 22.88 $ 19.62 $ 17.24 $ 16.50 $ 15.45
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.09) (0.20) (0.11) (0.08) (0.04) (0.05)
Net realized and unrealized gains
(losses) on investments 4.84 (1.16) 3.37 2.46 0.78 1.10
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 4.75 (1.36) 3.26 2.38 0.74 1.05
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 26.27 $ 21.52 $ 22.88 $ 19.62 $ 17.24 $ 16.50
==================================================================================================================================
Total return(C) 22.07%(D) (5.94)% 16.62% 13.81% 4.48%(D) 6.80%(D)
==================================================================================================================================
Net assets at end of period (000's) $ 224,317 $ 190,261 $ 188,810 $ 48,446 $ 4,310 $ 2,465
==================================================================================================================================
Ratio of net expenses to average
net assets 2.00%(E) 1.95% 1.98% 2.03% 2.25%(E) 2.21%(E)
Ratio of net investment loss to
average net assets (0.77)%(E) (0.92)% (0.93)% (0.97)% (1.70)%(E) (1.78)%(E)
Portfolio turnover rate 59%(E) 115% 104% 127% 60%(E) 60%(E)
(A) Effective after the close of business on December 31, 2003, the Fund
changed its fiscal year end to March 31.
(B) Represents the period from commencement of operations (October 4, 2003)
through December 31, 2003.
(C) Total returns shown exclude the effect of applicable sales loads.
(D) Not annualized.
(E) Annualized.
LARGE CAP GROWTH FUND--CLASS Y
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED PERIOD
SEPT. 30, MARCH 31, ENDED
2007 ------------------------ MARCH 31,
(UNAUDITED) 2007 2006 2005(A)
- ------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 22.19 $ 23.33 $ 19.86 $ 18.34
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.01 0.06 0.03 0.01
Net realized and unrealized gains (losses) on investments 4.85 (1.20) 3.44 1.51
- ------------------------------------------------------------------------------------------------------------------
Total from investment operations 4.86 (1.14) 3.47 1.52
- ------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 27.05 $ 22.19 $ 23.33 $ 19.86
==================================================================================================================
Total return 21.90%(B) (4.89)% 17.47% 8.29%(B)
==================================================================================================================
Net assets at end of period (000's) $ 28,276 $ 40,044 $ 66,655 $ 43,279
==================================================================================================================
Ratio of net expenses to average net assets 1.00%(C) 0.90% 0.93% 1.01%(C)
Ratio of net investment income to average net assets 0.03%(C) 0.13% 0.12% 0.21%(C)
Portfolio turnover rate 59%(C) 115% 104% 127%(C)
(A) Represents the period from commencement of operations (November 10, 2004)
through March 31, 2005.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
23
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
LARGE CAP VALUE FUND--CLASS A
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR PERIOD
SEPT. 30, ENDED ENDED
2007 MARCH 31, MARCH 31,
(UNAUDITED) 2007 2006(A)
- ------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 11.15 $ 10.19 $ 10.00
- ------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.04 0.04 0.01
Net realized and unrealized gains (losses) on investments (0.91) 1.19 0.18
- ------------------------------------------------------------------------------------------------------------
Total from investment operations (0.87) 1.23 0.19
- ------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income -- (0.04) --
Distributions from net realized gains -- (0.23) --
- ------------------------------------------------------------------------------------------------------------
Total distributions -- (0.27) --
- ------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 10.28 $ 11.15 $ 10.19
============================================================================================================
Total return(B) (7.80)%(C) 12.12% 1.90%(C)
============================================================================================================
Net assets at end of period (000's) $ 35,289 $ 29,609 $ 11,684
============================================================================================================
Ratio of net expenses to average net assets 1.35%(D) 1.35% 1.30%(D)
Ratio of net investment income to average net assets 0.92%(D) 0.55% 1.34%(D)
Portfolio turnover rate 58%(D) 57% 68%(D)
(A) Represents the period from commencement of operations (March 6, 2006)
through March 31, 2006.
(B) Total returns shown exclude the effect of applicable sales loads.
(C) Not annualized.
(D) Annualized.
See accompanying notes to financial statements.
24
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
LARGE CAP VALUE FUND--CLASS C
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR PERIOD
SEPT. 30, ENDED ENDED
2007 MARCH 31, MARCH 31,
(UNAUDITED) 2007 2006(A)
- ---------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 11.09 $ 10.18 $ 10.00
- ---------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 0.01 (0.01) 0.00 (B)
Net realized and unrealized gains (losses) on investments (0.91) 1.17 0.18
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (0.90) 1.16 0.18
- ---------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income -- (0.01) --
Distributions from net realized gains -- (0.24) --
- ---------------------------------------------------------------------------------------------------------
Total distributions -- (0.25) --
- ---------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 10.19 $ 11.09 $ 10.18
=========================================================================================================
Total return(C) (8.12)%(D) 11.37% 1.80%(D)
=========================================================================================================
Net assets at end of period (000's) $ 18,934 $ 15,220 $ 561
=========================================================================================================
Ratio of net expenses to average net assets 2.10%(E) 2.10% 1.89%(E)
Ratio of net investment income (loss) to average net assets 0.17%(E) (0.27)% 0.25%(E)
Portfolio turnover rate 58%(E) 57% 68%(E)
(A) Represents the period from commencement of operations (March 6, 2006)
through March 31, 2006.
(B) Amount rounds to less than $0.01 per share.
(C) Total returns shown exclude the effect of applicable sales loads.
(D) Not annualized.
(E) Annualized.
See accompanying notes to financial statements.
25
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
MICRO CAP GROWTH FUND--CLASS A
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD
SEPT. 30, YEAR ENDED MARCH 31, ENDED
2007 -------------------------- MARCH 31,
(UNAUDITED) 2007 2006 2005(A)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 12.98 $ 13.50 $ 11.07 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.08) (0.20) (0.10) (0.06)
Net realized and unrealized gains (losses) on investments 0.50 (0.32) 2.53 1.13
- ------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.42 (0.52) 2.43 1.07
- ------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 13.40 $ 12.98 $ 13.50 $ 11.07
========================================================================================================================
Total return(B) 3.24%(C) (3.85)% 21.95% 10.70%(C)
========================================================================================================================
Net assets at end of period (000's) $ 39,775 $ 45,536 $ 61,915 $ 32,378
========================================================================================================================
Ratio of net expenses to average net assets 1.95%(D) 1.95% 1.95% 1.95%(D)
Ratio of net investment loss to average net assets (1.06)%(D) (1.32)% (1.08)% (1.27)%(D)
Portfolio turnover rate 102%(D) 91% 90% 101%(D)
(A) Represents the period from commencement of operations (June 22, 2004)
through March 31, 2005.
(B) Total returns shown exclude the effect of applicable sales loads.
(C) Not Annualized.
(D) Annualized.
MICRO CAP GROWTH FUND--CLASS C
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD
SEPT. 30, YEAR ENDED MARCH 31, ENDED
2007 -------------------------- MARCH 31,
(UNAUDITED) 2007 2006 2005(A)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 12.72 $ 13.33 $ 11.01 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.13) (0.30) (0.17) (0.08)
Net realized and unrealized gains (losses) on investments 0.49 (0.31) 2.49 1.09
- ------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.36 (0.61) 2.32 1.01
- ------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 13.08 $ 12.72 $ 13.33 $ 11.01
========================================================================================================================
Total return(B) 2.83%(C) (4.58)% 21.07% 10.10%(C)
========================================================================================================================
Net assets at end of period (000's) $ 23,029 $ 26,062 $ 33,310 $ 16,224
========================================================================================================================
Ratio of net expenses to average net assets 2.70%(D) 2.70% 2.70% 2.70%(D)
Ratio of net investment loss to average net assets (1.81)%(D) (2.07)% (1.84)% (2.07)%(D)
Portfolio turnover rate 102%(D) 91% 90% 101%(D)
(A) Represents the period from commencement of operations (June 22, 2004)
through March 31, 2005.
(B) Total returns shown exclude the effect of applicable sales loads.
(C) Not Annualized.
(D) Annualized.
See accompanying notes to financial statements.
26
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
MICRO CAP GROWTH FUND--CLASS Y
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD
SEPT. 30, YEAR ENDED MARCH 31, ENDED
2007 -------------------------- MARCH 31,
(UNAUDITED) 2007 2006 2005(A)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 13.21 $ 13.70 $ 11.16 $ 9.89
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.06) (0.21) (0.03) (0.13)
Net realized and unrealized gains (losses) on investments 0.50 (0.28) 2.57 1.40
- ------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.44 (0.49) 2.54 1.27
- ------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 13.65 $ 13.21 $ 13.70 $ 11.16
========================================================================================================================
Total return 3.33%(B) (3.58)% 22.76% 12.84%(B)
========================================================================================================================
Net assets at end of period (000's) $ 520 $ 440 $ 676 $ --(C)
========================================================================================================================
Ratio of net expenses to average net assets 1.70%(D) 1.70% 1.55% 1.55%(D)
Ratio of net investment loss to average net assets (0.77)%(D) (1.05)% (0.77)% (2.34)%(D)
Portfolio turnover rate 102%(D) 91% 90% 101%(D)
(A) Represents the period from commencement of operations (October 4, 2004)
through March 31, 2005.
(B) Not Annualized.
(C) Amount rounds to less than $1,000.
(D) Annualized.
MID CAP GROWTH FUND--CLASS A
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPT. 30, YEAR ENDED MARCH 31,
2007 ---------------------------------------------------------------------
(UNAUDITED) 2007 2006 2005 2004 2003
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning
of period $ 24.17 $ 24.02 $ 21.42 $ 21.73 $ 13.89 $ 19.52
- ------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment loss (0.08) (0.14) (0.12) (0.16) (0.13) (0.14)
Net realized and unrealized gains
(losses) on investments 2.21 2.20 4.70 1.03 7.97 (5.29)
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.13 2.06 4.58 0.87 7.84 (5.43)
- ------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (1.91) (1.98) (1.18) -- (0.20)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 26.30 $ 24.17 $ 24.02 $ 21.42 $ 21.73 $ 13.89
==============================================================================================================================
Total return(A) 8.81%(B) 8.84% 22.21% 4.13% 56.44% (27.90)%
==============================================================================================================================
Net assets at end of period (000's) $ 766,620 $ 713,666 $ 639,501 $ 574,855 $ 458,524 $ 153,247
==============================================================================================================================
Ratio of net expenses to average
net assets 1.44%(C) 1.50% 1.50% 1.50% 1.49%(D) 1.50%
Ratio of net investment loss to
average net assets (0.65)%(C) (0.66)% (0.57)% (0.84)% (0.93)%(D) (1.07)%
Portfolio turnover 64%(C) 58% 69% 85% 79% 62%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
(D) Absent voluntary expense reimbursements, the ratio of net expenses to
average net assets would have been 1.50% and the ratio of net investment
loss to average net assets would have been (0.94)%.
See accompanying notes to financial statements.
27
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
MID CAP GROWTH FUND--CLASS B
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPT. 30, YEAR ENDED MARCH 31,
2007 ---------------------------------------------------------------------
(UNAUDITED) 2007 2006 2005 2004 2003
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning
of period $ 21.25 $ 21.49 $ 19.50 $ 20.03 $ 12.53 $ 18.25
- ------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment loss (0.17) (0.30) (0.26) (0.29) (0.25) (0.14)
Net realized and unrealized gains
(losses) on investments 1.95 1.97 4.23 0.94 7.75 (5.38)
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.78 1.67 3.97 0.65 7.50 (5.52)
- ------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (1.91) (1.98) (1.18) -- (0.20)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 23.03 $ 21.25 $ 21.49 $ 19.50 $ 20.03 $ 12.53
==============================================================================================================================
Total return(A) 8.38%(B) 8.04% 21.24% 3.37% 59.86% (30.34)%
==============================================================================================================================
Net assets at end of period (000's) $ 76,079 $ 74,935 $ 79,552 $ 71,879 $ 64,918 $ 26,226
==============================================================================================================================
Ratio of net expenses to average
net assets 2.25%(C) 2.25% 2.25% 2.25% 2.24%(D) 2.25%
Ratio of net investment loss to
average net assets (1.46)%(C) (1.42)% (1.32)% (1.60)% (1.68)%(D) (1.77)%
Portfolio turnover rate 64%(C) 58% 69% 85% 79% 62%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
(D) Absent voluntary epxense reimbursements, the ratio of net expenses to
average net assets would have been 2.25% and the ratio of net investment
loss to average net assets would have been (1.69)%.
MID CAP GROWTH FUND--CLASS C
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPT. 30, YEAR ENDED MARCH 31,
2007 ---------------------------------------------------------------------
(UNAUDITED) 2007 2006 2005 2004 2003
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning
of period $ 21.27 $ 21.51 $ 19.51 $ 20.04 $ 12.55 $ 18.26
- ------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment loss (0.17) (0.28) (0.25) (0.30) (0.23) (0.13)
Net realized and unrealized gains
(losses) on investments 1.96 1.95 4.23 0.95 7.72 (5.38)
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.79 1.67 3.98 0.65 7.49 (5.51)
- ------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (1.91) (1.98) (1.18) -- (0.20)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 23.06 $ 21.27 $ 21.51 $ 19.51 $ 20.04 $ 12.55
==============================================================================================================================
Total return(A) 8.42%(B) 8.04% 21.28% 3.36% 59.68% (30.27)%
==============================================================================================================================
Net assets at end of period (000's) $ 361,955 $ 345,997 $ 327,867 $ 284,966 $ 252,021 $ 97,743
==============================================================================================================================
Ratio of net expenses to average
net assets 2.23%(C) 2.25% 2.25% 2.25% 2.24%(D) 2.25%
Ratio of net investment loss to
average net assets (1.44)%(C) (1.41)% (1.32)% (1.60)% (1.68)%(D) (1.77)%
Portfolio turnover 64%(C) 58% 69% 85% 79% 62%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
(D) Absent voluntary expense reimbursements, the ratio of net expenses to
average net assets would have been 2.25% and the ratio of net investment
loss to average net assets would have been (1.69)%.
See accompanying notes to financial statements.
28
Financial Highlights (Continued)
SMALL CAP GROWTH FUND--CLASS A
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD
SEPT. 30, YEAR ENDED MARCH 31, ENDED
2007 ---------------------------------------------------- MARCH 31,
(UNAUDITED) 2007 2006 2005 2004 2003(A)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 16.62 $ 18.37 $ 15.25 $ 16.05 $ 9.78 $ 10.00
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment loss (0.07) (0.20) (0.18) (0.25) (0.14) (0.06)
Net realized and unrealized gains
(losses) on investments 1.08 (1.55) 3.30 (0.14) 6.78 (0.16)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.01 (1.75) 3.12 (0.39) 6.64 (0.22)
- -------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- -- -- (0.41) (0.37) --
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 17.63 $ 16.62 $ 18.37 $ 15.25 $ 16.05 $ 9.78
===============================================================================================================================
Total return(B) 6.08%(C) (9.53)% 20.46% (2.43)% 68.02% (2.20)%(C)
===============================================================================================================================
Net assets at end of period (000's) $ 19,105 $ 32,662 $ 48,697 $ 37,675 $ 53,064 $ 15,230
===============================================================================================================================
Ratio of net expenses to average
net assets 1.70%(D) 1.90% 1.95% 1.95% 1.89%(E) 1.95%(D)
Ratio of net investment loss to
average net assets (0.75)%(D) (1.00)% (1.18)% (1.40)% (1.34)%(E) (1.61)%(D)
Portfolio turnover 249%(D) 243% 109% 114% 133% 128%(D)
(A) Represents the period from commencement of operations (October 21, 2002)
through March 31, 2003.
(B) Total returns shown exclude the effect of applicable sales loads.
(C) Not annualized.
(D) Annualized.
(E) Absent voluntary expense reimbursements, the ratio of net expenses to
average net assets would have been 1.95% and ratio of net investment loss
to average net assets would have been (1.40)%.
SMALL CAP GROWTH FUND--CLASS B
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD
SEPT. 30, YEAR ENDED MARCH 31, ENDED
2007 ---------------------------------------------------- MARCH 31,
(UNAUDITED) 2007 2006 2005 2004 2003(A)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 16.13 $ 17.99 $ 14.99 $ 15.90 $ 9.75 $ 10.00
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment loss (0.13) (0.41) (0.31) (0.29) (0.21) (0.06)
Net realized and unrealized gains
(losses) on investments 1.09 (1.45) 3.31 (0.21) 6.73 (0.19)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.96 (1.86) 3.00 (0.50) 6.52 (0.25)
- -------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- -- -- (0.41) (0.37) --
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 17.09 $ 16.13 $ 17.99 $ 14.99 $ 15.90 $ 9.75
===============================================================================================================================
Total return(B) 5.95%(C) (10.34)% 20.01% (3.15)% 66.99% (2.50)%(C)
===============================================================================================================================
Net assets at end of period (000's) $ 4,037 $ 4,876 $ 9,858 $ 8,908 $ 7,831 $ 1,399
===============================================================================================================================
Ratio of net expenses to average
net assets 2.45%(D) 2.66% 2.70% 2.70% 2.63%(E) 2.69%(D)
Ratio of net investment loss to
average net assets (1.42)%(D) (1.75)% (1.92)% (2.13)% (2.09)%(E) (2.38)%(D)
Portfolio turnover 249%(D) 243% 109% 114% 133% 128%(D)
(A) Represents the period from commencement of operations (October 21, 2002)
through March 31, 2003.
(B) Total returns shown exclude the effect of applicable sales loads.
(C) Not annualized.
(D) Annualized.
(E) Absent voluntary expense reimbursements, the ratio of net expenses to
average net assets would have been 2.70% and the ratio of net investment
loss to average neet assets would have been (2.16)%.
See accompanying notes to financial statements.
29
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
SMALL CAP GROWTH FUND--CLASS C
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD
SEPT. 30, YEAR ENDED MARCH 31, ENDED
2007 ---------------------------------------------------- MARCH 31,
(UNAUDITED) 2007 2006 2005 2004 2003(A)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 16.15 $ 18.01 $ 15.00 $ 15.91 $ 9.74 $ 10.00
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment loss (0.13) (0.47) (0.32) (0.29) (0.21) (0.07)
Net realized and unrealized gains
(losses) on investments 1.08 (1.39) 3.33 (0.21) 6.75 (0.19)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.95 (1.86) 3.01 (0.50) 6.54 (0.26)
- -------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- -- -- (0.41) (0.37) --
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 17.10 $ 16.15 $ 18.01 $ 15.00 $ 15.91 $ 9.74
===============================================================================================================================
Total return(B) 5.88%(C) (10.33)% 20.07% (3.15)% 67.26% (2.60)%(C)
===============================================================================================================================
Net assets at end of period (000's) $ 6,724 $ 8,728 $ 20,964 $ 18,776 $ 14,596 $ 3,029
===============================================================================================================================
Ratio of net expenses to average
net assets 2.45%(D) 2.67% 2.70% 2.70% 2.63%(E) 2.69%(D)
Ratio of net investment loss to
average net assets (1.42)%(D) (1.77)% (1.92)% (2.12)% (2.09)%(E) (2.39)%(D)
Portfolio turnover 249%(D) 243% 109% 114% 133% 128%(D)
(A) Represents the period from commencement of operations (October 21, 2002)
through March 31, 2003.
(B) Total returns shown exclude the effect of applicable sales loads.
(C) Not annualized.
(D) Annualized.
(E) Absent voluntary expense reimbursements, the ratio of net expenses to
average net assets would have been 2.70% and the ratio of net investment
loss to average net assets would have been (2.16)%.
SMALL CAP GROWTH FUND--CLASS Y
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD
SEPT. 30, YEAR ENDED MARCH 31, ENDED
2007 -------------------------- MARCH 31,
(UNAUDITED) 2007 2006 2005(A)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 16.82 $ 18.49 $ 15.31 $ 15.37
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.02) (1.24) (0.07) (0.05)
Net realized and unrealized gains (losses) on investments 1.06 (0.43) 3.25 0.40
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.04 (1.67) 3.18 0.35
- ---------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- -- -- (0.41)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 17.86 $ 16.82 $ 18.49 $ 15.31
===========================================================================================================================
Total return 6.18%(B) (9.03)% 20.77% 2.29%(B)
===========================================================================================================================
Net assets at end of period (000's) $ 13,467 $ 16,006 $ 350,323 $ 82,846
===========================================================================================================================
Ratio of net expenses to average net assets 1.30%(C) 1.55% 1.55% 1.55%(C)
Ratio of net investment loss to average net assets (0.31)%(C) (0.82)% (0.77)% (0.95)%(C)
Portfolio turnover 249%(C) 243% 109% 114%(C)
(A) Represents the period from commencement of operations (May 5, 2004)
through March 31, 2005.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
30
- --------------------------------------------------------------------------------
Notes to Financial Statements
September 30, 2007 (Unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION
The Diversified Small Cap Growth Fund, Growth Opportunities Fund, Large Cap Core
Equity Fund, Large Cap Growth Fund, Large Cap Value Fund, Micro Cap Growth Fund,
Mid Cap Growth Fund, and Small Cap Growth Fund (individually, a Fund, and
collectively, the Funds) are each a series of Touchstone Strategic Trust (the
Trust). The Trust is registered under the Investment Company Act of 1940, as
amended (the Act), as an open-end management investment company. The Trust was
established as a Massachusetts business trust under a Declaration of Trust dated
November 18, 1982. The Declaration of Trust, as amended, permits the Trustees to
issue an unlimited number of shares of each Fund.
Prior to October 4, 2003, the Large Cap Growth Fund was a series of the
Navellier Funds. Effective October 4, 2003, the Navellier Performance Large Cap
Growth Portfolio and the Navellier Millennium Large Cap Growth Portfolio were
merged into the Large Cap Growth Fund. The accounting and performance history of
the Navellier Performance Large Cap Growth Portfolio was carried forward. The
Large Cap Growth Fund was the legal and tax survivor. Effective January 1, 2004,
the Fund changed its fiscal year end from December 31 to March 31.
The Funds are registered to offer different classes of shares: Class A shares,
Class B shares, Class C shares, and Class Y shares. The assets of each Fund are
segregated, and a shareholder's interest is limited to the Fund in which shares
are held. The Funds' prospectus provides a description of each Fund's investment
objectives, policies, and strategies along with information on the classes of
shares currently being offered.
The Large Cap Core Equity Fund and Large Cap Value Fund offer two classes of
shares: Class A shares (currently sold subject to a maximum front-end sales load
of 5.75% and a maximum distribution fee of up to 0.25)%, and Class C shares
(sold subject to a 1.00% contingent deferred sales load for a one-year period
and a maximum distribution fee of up to 1.00% of average daily net assets). The
Diversified Small Cap Growth Fund, Growth Opportunities Fund, Micro Cap Growth
Fund and Mid Cap Growth Fund offer three classes of shares: Class A shares
(described above), Class B shares, except Diversified Small Cap Growth Fund and
Micro Cap Growth Fund, (sold subject to a maximum contingent deferred sales load
of 5.00% for a one-year period and incrementally reduced over time and a maximum
distribution fee of up to 1.00% of average daily net assets), Class C shares
(described above), and Class Y shares (sold without a distribution fee or sales
charge, but offered only through selected dealers and subject to a higher
minimum initial investment) of Diversified Small Cap Growth Fund and Micro Cap
Growth Fund. The Large Cap Growth Fund and Small Cap Growth Fund offer four
classes of shares: Class A shares, Class B shares, Class C shares, and Class Y
shares (all described above). Each Class A, Class B, Class C and Class Y share
of a Fund represents identical interests in the investment portfolio of such
Fund and has the same rights, except that (i) Class B and Class C shares bear
the expenses of higher distribution fees, which is expected to cause Class B and
Class C shares to have a higher expense ratio and to pay lower dividends than
Class A and Class Y shares; (ii) certain other class specific expenses will be
borne solely by the class to which such expenses are attributable; and (iii)
each class has exclusive voting rights with respect to matters relating to its
own distribution arrangements.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the Funds' significant accounting policies:
SECURITY VALUATION -- The Funds' portfolio securities are valued as of the close
of the regular session of trading on the New York Stock Exchange (currently 4:00
p.m., Eastern time). Portfolio securities traded on stock exchanges are valued
at the last sale price and portfolio securities quoted by NASDAQ are valued at
the NASDAQ Official Closing Price (NOCP). Securities not traded on a particular
day, or for which the last sale price is not readily available, are valued at
their last broker-quoted bid prices as obtained from one or more of the major
market makers for such securities by an independent pricing service. Securities
for which market quotations or the NOCP are not readily available are valued
based on fair value as determined by or under the direction of the Board of
Trustees. Money market instruments and other debt securities with a remaining
maturity of less than 60 days are valued at amortized cost, which approximates
market. Shares of open-end mutual funds in which the Funds invest are valued at
their respective net asset values as reported by the underlying funds.
31
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement on Financial Accounting Standards (SFAS) No. 157, "Fair Value
Measurements." This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and requires
additional disclosures about fair value measurements. SFAS No. 157 applies to
fair value measurements already required or permitted by existing standards.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007 and interim periods within those fiscal years.
The changes to current generally accepted accounting principles from the
application of this Statement relate to the definition of fair value, the
methods used to measure fair value, and the expanded disclosures about fair
value measurements. As of September 30, 2007, the Trust does not believe the
adoption of SFAS No. 157 will impact the amounts reported in the financial
statements, however, additional disclosures may be required about the inputs
used to develop the measurements and the effect of certain of the measurements
reported on the statement of changes in net assets for a fiscal period.
PORTFOLIO SECURITIES LOANED -- Each Fund may lend its portfolio securities.
Lending portfolio securities exposes a Fund to the risk that the borrower may
fail to return the loaned securities or may not be able to provide additional
collateral or that the Fund may experience delays in recovery of the loaned
securities or loss of rights in the collateral if the borrower fails
financially. To minimize these risks, the borrower must agree to maintain
collateral marked to market daily, in the form of cash and/or liquid securities,
with the Fund's custodian in an amount at least equal to the market value of the
loaned securities.
As of September 30, 2007, the following Funds loaned common stocks and received
collateral as follows:
MARKET VALUE VALUE OF
OF COMMON COLLATERAL
STOCKS LOANED RECEIVED
- --------------------------------------------------------------------------------
Diversified Small Cap Growth Fund $ 2,345,091 $ 2,438,724
Growth Opportunities Fund $ 4,962,188 $ 5,156,829
Large Cap Growth Fund $ 89,295,931 $ 91,658,870
Large Cap Value Fund $ 7,971,872 $ 8,308,475
Micro Cap Growth Fund $ 11,327,032 $ 11,895,053
Mid Cap Growth Fund $ 114,679,790 $ 117,374,028
Small Cap Growth Fund $ 327,255 $ 374,855
All collateral received as cash and securities is received, held and
administered by the Funds' custodian for the benefit of the Funds in the
applicable custody account or other account established for the purpose of
holding collateral.
Funds participating in securities lending receive compensation in the form of
fees, or retain a portion of interest or dividends on the investment of any cash
received as collateral. The Funds also continue to receive interest or dividends
on the securities loaned. The loans are secured by collateral valued at least
equal, at all times, to the fair value of the securities loaned plus accrued
interest. Unrealized gain or loss on the fair value of the securities loaned
that may occur during the term of the loan are recognized by the Funds. The
Funds have the right under the lending agreement to recover the securities from
the borrower on demand.
32
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
SHARE VALUATION -- The net asset value per share of each class of shares of each
Fund is calculated daily by dividing the total value of a Fund's assets
attributable to that class, less liabilities attributable to that class, by the
number of outstanding shares of that class.
The maximum offering price per share of Class A shares of the Funds is equal to
the net asset value per share plus a sales load equal to 6.10% of the net asset
value (or 5.75% of the offering price). The maximum offering price per share of
Class B, Class C and Class Y shares of the Funds is equal to the net asset value
per share.
The redemption price per share of each class of shares of the Funds is equal to
the net asset value per share. However, Class B and Class C shares of the Funds
are subject to a contingent deferred sales load of 5.00% and 1.00%,
respectively, of the original purchase price if redeemed within a one-year
period from the date of purchase. The contingent deferred sales load for Class B
shares will be incrementally reduced over time. After the 6th year, there is no
contingent deferred sales load for Class B shares.
INVESTMENT INCOME -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on securities purchased
are recorded on an accrual basis.
DISTRIBUTIONS TO SHAREHOLDERS -- Dividends arising from net investment income,
if any, are declared and paid to shareholders annually for each Fund. With
respect to each Fund, net realized short-term capital gains, if any, may be
distributed throughout the year and net realized long-term capital gains, if
any, are distributed at least once each year. Income dividends and capital gain
distributions are determined in accordance with income tax regulations.
ALLOCATIONS -- Investment income earned, realized capital gains and losses, and
unrealized appreciation and depreciation for the Funds are allocated daily to
each class of shares based upon its proportionate share of total net assets of
the Fund. Class specific expenses are charged directly to the class incurring
the expense. Common expenses, which are not attributable to a specific class,
are allocated daily to each class of shares based upon its proportionate share
of total net assets of the Fund. Expenses not directly billed to a Fund are
allocated proportionally among all Funds daily in relation to net assets of each
Fund or another reasonable measure.
SECURITY TRANSACTIONS -- Security transactions are accounted for on the trade
date. Securities sold are determined on a specific identification basis.
ESTIMATES -- The preparation of financial statements in conformity with U.S.
GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of income and expenses during the reporting period. Actual results could differ
from those estimates.
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 taxable net income, the Fund (but
not the shareholders) will be relieved of federal income tax on the income
distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare and pay as
dividends in each calendar year at least 98% of its net investment income
(earned during the calendar year) and 98% of its net realized capital gains
(earned during the twelve months ending October 31) plus undistributed amounts
from prior years.
33
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
The tax character of distributions paid for the periods ended March 31, 2007 and
2006 was as follows:
DIVERSIFIED GROWTH LARGE CAP
SMALL CAP GROWTH OPPORTUNITIES CORE EQUITY
FUND FUND FUND
- ---------------------------------------------------------------------------------------------
PERIOD YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2007(A) 2007 2006 2007 2006
- ---------------------------------------------------------------------------------------------
From ordinary income $ -- $ -- $ -- $ 623,902 $ 20,159
- ---------------------------------------------------------------------------------------------
LARGE CAP
GROWTH LARGE CAP VALUE MICRO CAP GROWTH
FUND FUND FUND
- ------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR PERIOD YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2007 2006 2007 2006(B) 2007 2006
- ------------------------------------------------------------------------------------------------------
From ordinary income $ -- $ -- $ 772,101 $ -- $ -- $ --
- ------------------------------------------------------------------------------------------------------
(A) Represents the period from commencement of operations (September 6, 2006)
through March 31, 2007.
(B) Represents the period from commencement of operations (March 6, 2006)
through March 31, 2006.
MID CAP GROWTH SMALL CAP GROWTH
FUND FUND
- ----------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2007 2006 2007 2006
- ----------------------------------------------------------------------------------------
From ordinary income $ 12,124,355 $ 15,608,776 $ -- $ --
From long-term capital gains 75,069,975 67,044,251 -- --
- ----------------------------------------------------------------------------------------
$ 87,194,330 $ 82,653,027 $ -- $ --
- ----------------------------------------------------------------------------------------
The following information is computed on a tax basis for each item as of March
31, 2007:
DIVERSIFIED
SMALL CAP GROWTH LARGE CAP LARGE CAP
GROWTH OPPORTUNITIES CORE EQUITY GROWTH
FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------
Tax cost of portfolio investments $ 11,002,297 $ 51,576,684 $ 87,524,886 $ 842,613,158
- ----------------------------------------------------------------------------------------------------
Gross unrealized appreciation 1,568,161 5,802,894 13,153,397 145,641,489
Gross unrealized depreciation (285,558) (646,036) (1,364,731) (8,828,972)
- ----------------------------------------------------------------------------------------------------
Net unrealized appreciation 1,282,603 5,156,858 11,788,666 136,812,517
Undistributed long-term capital gains -- -- 1,355,743 --
Capital loss carryforward -- (47,848,505) -- (105,035,430)
Undistributed ordinary income 367,828 -- 224,747 --
- ----------------------------------------------------------------------------------------------------
Accumulated earnings (deficit) $ 1,650,431 $ (42,691,647) $ 13,369,156 $ 31,777,087
====================================================================================================
34
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
LARGE CAP MICRO CAP MID CAP SMALL CAP
VALUE GROWTH GROWTH GROWTH
FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------
Tax cost of portfolio investments $ 46,615,633 $ 70,379,516 $ 1,078,539,100 $ 70,059,250
- ------------------------------------------------------------------------------------------------------------
Gross unrealized appreciation 3,111,554 22,900,634 222,380,711 11,030,845
Gross unrealized depreciation (1,470,659) (1,776,617) (19,229,578) (1,927,371)
- ------------------------------------------------------------------------------------------------------------
Net unrealized appreciation 1,640,895 21,124,017 203,151,133 9,103,474
Capital loss carryforward -- (6,713,936) -- (21,006,988)
Undistributed ordinary income 962,205 -- 7,168,602 --
Undistributed long-term capital gains 90,492 -- 15,104,843 --
- ------------------------------------------------------------------------------------------------------------
Accumulated earnings (deficit) $ 2,693,592 $ 14,410,081 $ 225,424,578 $ (11,903,514)
============================================================================================================
The difference between the tax cost of portfolio investments and the financial
statement cost is primarily due to wash sales.
As of March 31, 2007, the Funds had the following capital loss carryforwards for
federal income tax purposes.
EXPIRES
FUND AMOUNT MARCH 31,
- --------------------------------------------------------------------------------
Growth Opportunities Fund $ 6,800,899 2010
21,975,058 2011
17,098,132 2012
1,974,416 2013
------------
$ 47,848,505
============
Large Cap Growth Fund* $ 12,837,110 2009
2,396,670 2010
7,655,647 2011
3,322,314 2012
1,798,659 2013
77,025,030 2015
------------
$105,035,430
============
Micro Cap Growth Fund $ 1,123,992 2013
1,673,731 2014
3,916,213 2015
------------
$ 6,713,936
============
Small Cap Growth Fund $ 1,422,586 2013
19,584,402 2015
------------
$ 21,006,988
============
- --------------------------------------------------------------------------------
* A portion of these capital loss carryforwards may be limited under 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.
During the year ended March 31, 2007, the funds utilized capital loss
carryforwards as follows:
AMOUNT
- --------------------------------------------------------------------------------
Growth Opportunities Fund $ 6,337,679
Large Cap Core Equity Fund $ 2,824,084
- --------------------------------------------------------------------------------
35
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
Certain reclassifications, the result of permanent differences between financial
statement and income tax reporting requirements have been made to the components
of capital. These reclassifications have no impact on the net assets or net
asset value per share of the Funds and are designed to present the Funds'
capital accounts on a tax basis. The following reclassifications of net
investment loss have been made to the following Funds for the year ended March
31, 2007:
ACCUMULATED ACCUMULATED
PAID-IN NET INVESTMENT NET REALIZED
CAPITAL INCOME (LOSS) GAINS (LOSSES)
- --------------------------------------------------------------------------------
Diversified Small Cap Growth Fund $ -- $ 63,303 $ (63,303)
Growth Opportunities Fund (992,944) 992,944 --
Large Cap Growth Fund (3,283,598) 3,283,598 --
Micro Cap Growth Fund (1,310,460) 1,310,460 --
Mid Cap Growth Fund -- 10,024,153 (10,024,153)
Small Cap Growth Fund (1,945,258) 1,945,258 --
- --------------------------------------------------------------------------------
For the six months ended September 30, 2007, the Trust had the following federal
tax cost resulting in net unrealized appreciation (depreciation) as follows:
- --------------------------------------------------------------------------------------------------
GROSS GROSS NET UNREALIZED
FEDERAL UNREALIZED UNREALIZED APPRECIATION
TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
- --------------------------------------------------------------------------------------------------
Diversified Small Cap Growth Fund $ 14,456,070 $ 2,377,255 $ (465,583) $ 1,911,672
Growth Opportunities Fund $ 49,071,617 $ 11,015,033 $ (1,397,993) $ 9,617,040
Large Cap Core Equity Fund $ 87,400,348 $ 20,332,324 $ (1,457,788) $ 18,874,536
Large Cap Growth Fund $ 851,477,145 $ 295,179,686 $ (8,729,477) $ 286,450,209
Large Cap Value Fund $ 68,704,259 $ 3,040,768 $ (8,483,318) $ (5,442,550)
Micro Cap Growth Fund $ 56,470,135 $ 20,288,832 $ (1,357,225) $ 18,931,607
Mid Cap Growth Fund $1,109,216,138 $ 250,900,661 $ (37,883,741) $ 213,016,920
Small Cap Growth Fund $ 41,966,119 $ 4,224,257 $ (1,173,616) $ 3,050,641
- --------------------------------------------------------------------------------------------------
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Funds' tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is
required for fiscal years beginning after December 15, 2006 and is to be applied
to all open tax years as of the effective date. Management has determined that
the Funds do not have any uncertain tax positions as of September 30, 2007.
36
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments and U.S. Government
securities) were as follows for the six months ended September 30, 2007:
DIVERSIFIED
SMALL CAP GROWTH LARGE CAP LARGE CAP
GROWTH OPPORTUNITIES CORE EQUITY GROWTH
FUND FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------
Purchases of investment securities $ 5,478,693 $ 19,978,854 $ 5,204,799 $ 277,213,054
Proceeds from sales and maturities $ 5,243,602 $ 25,694,027 $ 7,397,968 $ 352,534,483
- --------------------------------------------------------------------------------------------------------------
LARGE CAP MICRO CAP MID CAP SMALL CAP
VALUE GROWTH GROWTH GROWTH
FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------
Purchases of investment securities $ 30,270,473 $ 34,729,425 $375,179,407 $ 60,948,275
Proceeds from sales and maturities $ 13,580,957 $ 46,259,504 $407,352,487 $ 84,125,300
- ----------------------------------------------------------------------------------------------
4. TRANSACTIONS WITH AFFILIATES
MANAGEMENT AGREEMENTS
Touchstone Advisors, Inc. (the Advisor) provides general investment supervisory
services for the Funds, under the terms of an Advisory Agreement. Under the
Advisory Agreement, the Funds pay the Advisor a fee, which is computed and
accrued daily and paid monthly, at an annual rate based on average daily net
assets as follows:
Diversified Small Cap Growth Fund 1.05%
- -----------------------------------------------------------------------------------
Growth Opportunities Fund 1.00% on the first $50 million
0.90% on the next $50 million
0.80% on the next $900 million
0.75% of such assets in excess of $1 billion
- -----------------------------------------------------------------------------------
Large Cap Core Equity Fund 0.65% on the first $100 million
0.60% on the next $100 million
0.55% on the next $100 million
0.50% of such assets in excess of $300 million
- -----------------------------------------------------------------------------------
Large Cap Growth Fund 0.75% on the first $200 million
0.70% on the next $800 million
0.65% of such assets in excess of $1 billion
- -----------------------------------------------------------------------------------
Large Cap Value Fund 0.75%
- -----------------------------------------------------------------------------------
Micro Cap Growth Fund 1.25%
- -----------------------------------------------------------------------------------
Mid Cap Growth Fund 0.80%
- -----------------------------------------------------------------------------------
Small Cap Growth Fund 1.25%
- -----------------------------------------------------------------------------------
The Advisor has retained various Sub-Advisors to manage the investments of the
Funds under the terms of a Sub-Advisory Agreement. The Advisor (not the Funds)
pays the Sub-Advisors a fee for these services.
Fort Washington Investment Advisors, Inc. (Fort Washington), an affiliate of the
Advisor, has been retained by the Advisor to manage the investments of the
Diversified Small Cap Growth Fund and Small Cap Growth Fund.
37
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
Westfield Capital Management Company, LLC (Westfield) has been retained by the
Advisor to manage the investments of the Growth Opportunities Fund and a portion
of the investments of the Mid Cap Growth Fund.
Todd Investment Advisors, Inc. (Todd), an affiliate of the Advisor, has been
retained by the Advisor to manage the investments of the Large Cap Core Equity
Fund.
Navellier & Associates, Inc. (Navellier) has been retained by the Advisor to
manage the investments of the Large Cap Growth Fund.
JS Asset Management, LLC (JSAM) has been retained by the Advisor to manage the
investments of the Large Cap Value Fund.
Bjurman, Barry & Associates (Bjurman) has been retained by the Advisor to manage
the investments of the Micro Cap Growth Fund.
TCW Investment Management Company (TCW) has been retained by the Advisor to
manage a portion of the investments of the Mid Cap Growth Fund.
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
The Advisor entered into an Administration and Accounting Services Agreement
with the Trust, whereby the Advisor is responsible for supplying executive and
regulatory compliance services, supervises the preparation of tax returns, and
coordinates the preparation of reports to shareholders and reports to, and
filings with, the Securities and Exchange Commission and state securities
authorities, materials for meetings of the Board of Trustees, calculating the
daily net asset value per share and maintaining the financial books and record
of each Fund. For its services, the Advisor receives an annual fee of 0.20% of
the aggregate average daily net assets of the Trust, Touchstone Funds Group
Trust, Touchstone Tax-Free Trust, and Touchstone Investment Trust (excluding
Institutional Money Market Fund) up to and including $6 billion; 0.16% of the
next $4 billion of aggregate average daily net assets; and 0.12% of the
aggregate average daily net assets of all such assets in excess of $10 billion.
The fee is allocated among the Funds on the basis of relative daily net assets.
The Advisor has engaged JPMorgan Chase Bank, N.A. (JPMorgan) as the
Sub-Administrator to the Trust. JPMorgan provides administrative and accounting
services to the Trust and is compensated directly by the Advisor, not the Trust.
EXPENSE LIMITATION AGREEMENT
The Trust and the Advisor have entered into an Expense Limitation Agreement to
contractually limit operating expenses of the Diversified Small Cap Growth Fund,
Growth Opportunities Fund, Large Cap Core Equity Fund, Large Cap Growth Fund,
Large Cap Value Fund, Micro Cap Growth Fund, Mid Cap Growth Fund, and Small Cap
Growth Fund. The maximum operating expense limit in any year with respect to the
Funds is based on a percentage of the average daily net assets of the Funds. The
Advisor has agreed to waive advisory fees and reimburse expenses in order to
maintain expense limitations for the Funds as follows through January 1, 2008:
CLASS A CLASS B CLASS C CLASS Y
- --------------------------------------------------------------------------------
Diversified Small Cap Growth Fund 1.40% -- 2.15% 1.15%
Growth Opportunities Fund 1.55% 2.30% 2.30% --
Large Cap Core Equity Fund 1.15% -- 1.90% --
Large Cap Growth Fund 1.25% 2.00% 2.00% 1.00%
Large Cap Value Fund 1.35% -- 2.10% --
Micro Cap Growth Fund 1.95% -- 2.70% 1.70%
Mid Cap Growth Fund 1.50% 2.25% 2.25% --
Small Cap Growth Fund 1.70% 2.45% 2.45% 1.30%
- --------------------------------------------------------------------------------
38
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
For the six months ended September 30, 2007, the Advisor waived investment
advisory fees, administration fees, and/or reimbursed expenses as follows:
INVESTMENT OTHER OPERATING
ADVISORY ADMINISTRATION EXPENSES
FEES WAIVED FEES WAIVED REIMBURSED
- -------------------------------------------------------------------------------------
Diversified Small Cap Growth Fund $ 22,736 $ 13,227 $ 8,210
Growth Opportunities Fund $ -- $ 51,771 $ 91,203
Large Cap Core Equity Fund $ -- $ 57,810 $ --
Large Cap Growth Fund $ -- $ 605,772 $ --
Large Cap Value Fund $ -- $ 21,113 $ --
Micro Cap Growth Fund $ -- $ 69,684 $ 2,215
Mid Cap Growth Fund $ -- $ 8,146 $ --
Small Cap Growth Fund $ 132,780 $ 50,886 $ 91,593
- -------------------------------------------------------------------------------------
TRANSFER AGENT AGREEMENT
Under the terms of the Transfer Agent Agreement between the Trust and JPMorgan,
JPMorgan maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of each Fund's shares, acts as dividend and distribution disbursing
agent and performs other shareholder service functions. For these services,
JPMorgan receives a monthly fee per shareholder account from each Fund. In
addition, each Fund pays JPMorgan out-of-pocket expenses including, but not
limited to, postage and supplies.
For the six months ended September 30, 2007, the following Funds reimbursed the
Advisor for amounts paid to third parties that provide sub-transfer agency and
other administrative services to the Funds. These amounts are included in
transfer agent fees on the Statements of Operations:
AMOUNT
- --------------------------------------------------------------------------------
Diversified Small Cap Growth Fund $ 3
Growth Opportunities Fund $ 3,257
Large Cap Core Equity Fund $ 626
Large Cap Growth Fund $234,506
Large Cap Value Fund $ 1,867
Micro Cap Growth Fund $ 19,520
Mid Cap Growth Fund $175,631
Small Cap Growth Fund $ 10,595
UNDERWRITING AGREEMENT
Touchstone Securities, Inc. (the Underwriter) is the Funds' principal
underwriter and, as such, acts as the exclusive agent for distribution of the
Funds' shares. Under the terms of the Underwriting Agreement between the Trust
and Underwriter, the Underwriter earned the following from underwriting and
broker commissions on the sale of shares of the following Funds for the six
months ended September 30, 2007:
Diversified Small Cap Growth Fund $ 809
Growth Opportunities Fund $ 3,416
Large Cap Core Equity Fund $ 1,793
Large Cap Growth Fund $36,123
Large Cap Value Fund $12,981
Micro Cap Growth Fund $ 2,550
Mid Cap Growth Fund $58,023
Small Cap Growth Fund $ 1,697
39
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
In addition, the Underwriter collected the following contingent deferred sales
charges on the redemption of Class B and Class C shares of the following Funds
during the six months ended September 30, 2007:
Growth Opportunities Fund $ 2,817
Large Cap Core Equity Fund $ 26
Large Cap Growth Fund $39,599
Large Cap Value Fund $ 2,156
Micro Cap Growth Fund $ 517
Mid Cap Growth Fund $66,112
Small Cap Growth Fund $14,981
PLANS OF DISTRIBUTION
The Trust has a Plan of Distribution (Class A Plan) under which Class A shares
of each Fund may directly incur or reimburse the Advisor or the Underwriter for
expenses related to the distribution and promotion of shares. The annual
limitation for payment of such expenses under the Class A Plan is 0.25% of
average daily net assets attributable to such shares.
The Trust also has a Plan of Distribution (Class B and Class C Plan) under which
Class B and Class C shares of each Fund may directly incur or reimburse the
Advisor or the Underwriter for expenses related to the distribution and
promotion of shares. The annual limitation for payment of such expenses under
the Class B and Class C Plan is 1.00% of average daily net assets attributable
to Class B and Class C shares.
COMPLIANCE SERVICES AGREEMENT
Under the terms of the Compliance Services Agreement between the Trust and
JPMorgan, JPMorgan provides certain compliance services to the Trust for a fee,
including developing and assisting in implementing a compliance program for
JPMorgan on behalf of the Funds and providing administrative support services to
the Funds' Compliance Program and Chief Compliance Officer.
AFFILIATED INVESTMENTS
Each Fund may invest in the Touchstone Institutional Money Market Fund, subject
to compliance with the several conditions set forth in an order received by the
Trust from the Securities and Exchange Commission. To the extent that the other
Touchstone Funds are invested in the Touchstone Institutional Money Market Fund,
the Advisor and Administrator will be paid additional fees from the Touchstone
Institutional Money Market Fund that will not be waived or reimbursed.
A summary of each Fund's investment in the Touchstone Institutional Money Market
Fund, if any, for the six months ended September 30, 2007, is noted below:
SHARE ACTIVITY
----------------------------------------------------------
BALANCE BALANCE VALUE
3/31/07 PURCHASES SALES 09/30/07 DIVIDENDS 09/30/07
- ----------------------------------------------------------------------------------------------------------------------------
Diversified Small Cap Growth Fund 366,382 1,974,988 (2,103,149) 238,221 $ 3,582 $ 238,221
- ----------------------------------------------------------------------------------------------------------------------------
Growth Opportunities Fund -- 12,815,571 (11,158,512) 1,657,059 $ 16,977 $ 1,657,059
- ----------------------------------------------------------------------------------------------------------------------------
Large Cap Core Equity Fund 919,264 5,700,149 (5,232,553) 1,386,860 $ 35,706 $ 1,386,860
- ----------------------------------------------------------------------------------------------------------------------------
Large Cap Growth Fund 6,377,780 189,716,619 (173,680,871) 22,413,528 $ 238,812 $ 22,413,528
- ----------------------------------------------------------------------------------------------------------------------------
Large Cap Value Fund 5,195,264 26,976,306 (27,704,953) 4,466,617 $ 162,981 $ 4,466,617
- ----------------------------------------------------------------------------------------------------------------------------
Micro Cap Growth Fund 329,258 17,002,012 (16,875,064) 456,206 $ 21,033 $ 456,206
- ----------------------------------------------------------------------------------------------------------------------------
Mid Cap Growth Fund 25,143,633 295,990,635 (299,673,157) 21,461,111 $ 724,472 $ 21,461,111
- ----------------------------------------------------------------------------------------------------------------------------
Small Cap Growth Fund 1,217,649 33,734,309 (32,074,906) 2,877,052 $ 37,344 $ 2,877,052
- ----------------------------------------------------------------------------------------------------------------------------
As of September 30, 2007, 95% of the Diversified Small Cap Growth Fund was owned
by The Western and Southern Life Insurance Company (Western-Southern) and 61% of
the Large Cap Core Equity Fund was owned by Western-Southern and subsidiaries.
40
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
5. CAPITAL SHARE TRANSACTIONS
Proceeds and payments on capital shares as shown in the Statements of Changes in
Net Assets are the result of the following capital share transactions for the
periods shown:
DIVERSIFIED SMALL CAP GROWTH
GROWTH FUND OPPORTUNITIES FUND
- ----------------------------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED PERIOD ENDED YEAR
SEPT. 30, ENDED SEPT. 30, ENDED
2007 MARCH 31, 2007 MARCH 31,
(UNAUDITED)(A) 2007(B) (UNAUDITED) 2007
- ----------------------------------------------------------------------------------------------------------------------
CLASS A
Shares sold 44,868 502,422 153,676 479,372
Shares redeemed (16,849) (126) (294,602) (3,300,859)
- ----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding 28,019 502,296 (140,926) (2,821,487)
Shares outstanding, beginning of period 502,296 -- 1,721,895 4,543,382
- ----------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period 530,315 502,296 1,580,969 1,721,895
======================================================================================================================
CLASS B
Shares sold -- -- 2,214 9,619
Shares redeemed -- -- (14,539) (49,965)
- ----------------------------------------------------------------------------------------------------------------------
Net decrease in shares outstanding -- -- (12,325) (40,346)
Shares outstanding, beginning of period -- -- 118,059 158,405
- ----------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period -- -- 105,734 118,059
======================================================================================================================
CLASS C
Shares sold 201 -- 24,973 60,809
Shares redeemed -- -- (74,314) (539,695)
- ----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding 201 -- (49,341) (478,886)
Shares outstanding, beginning of period -- -- 609,249 1,088,135
- ----------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period 201 -- 559,908 609,249
======================================================================================================================
CLASS Y
Shares sold 1,168 525,756 -- --
Shares redeemed -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Net increase in shares outstanding 1,168 525,756 -- --
Shares outstanding, beginning of period 525,756 -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period 526,924 525,756 -- --
======================================================================================================================
(A) Class C represents the period from commencement of operations (August 1,
2007) through September 30, 2007.
(B) Represents the period from commencement of operations (September 6, 2006)
through March 31, 2007.
41
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
LARGE CAP LARGE CAP
CORE EQUITY FUND GROWTH FUND
- ------------------------------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPT. 30, ENDED SEPT. 30, ENDED
2007 MARCH 31, 2007 MARCH 31,
(UNAUDITED) 2007 (UNAUDITED) 2007
- ------------------------------------------------------------------------------------------------------------------------
CLASS A
Shares sold 155,430 432,754 3,641,012 16,290,197
Shares reinvested -- 55,289 -- --
Shares issued in connection with acquisition -- 7,087,773 -- --
Shares redeemed (301,406) (1,649,000) (5,066,868) (22,561,064)
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding (145,976) 5,926,816 (1,425,856) (6,270,867)
Shares outstanding, beginning of period 8,376,042 2,449,226 29,765,231 36,036,098
- ------------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period 8,230,066 8,376,042 28,339,375 29,765,231
========================================================================================================================
CLASS B
Shares sold -- 10,252 52,174 309,413
Shares reinvested -- 563 -- --
Shares redeemed -- (176,272) (77,231) (283,496)
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding -- (165,457) (25,057) 25,917
Shares outstanding, beginning of period -- 165,457 1,242,631 1,216,714
- ------------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period -- -- 1,217,574 1,242,631
========================================================================================================================
CLASS C
Shares sold 16,604 182,151 910,106 3,574,684
Shares reinvested -- 416 -- --
Shares issued in connection with acquisition -- 167,611 -- --
Shares redeemed (68,493) (110,206) (1,211,639) (2,986,377)
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding (51,889) 239,972 (301,533) 588,307
Shares outstanding, beginning of period 374,595 134,623 8,840,516
8,252,209
- ------------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period 322,706 374,595 8,538,983 8,840,516
========================================================================================================================
CLASS Y
Shares sold -- -- 281,959 2,101,975
Shares redeemed -- -- (1,041,534) (3,154,025)
- ------------------------------------------------------------------------------------------------------------------------
Net decrease in shares outstanding -- -- (759,575) (1,052,050)
Shares outstanding, beginning of period -- -- 1,804,866 2,856,916
- ------------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period -- -- 1,045,291 1,804,866
========================================================================================================================
42
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
LARGE CAP MICRO CAP
VALUE FUND GROWTH FUND
- -------------------------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPT. 30, ENDED SEPT. 30, ENDED
2007 MARCH 31, 2007 MARCH 31,
(UNAUDITED) 2007 (UNAUDITED) 2007
- -------------------------------------------------------------------------------------------------------------------
CLASS A
Shares sold 1,026,764 1,583,308 114,111 823,588
Shares reinvested -- 42,850 -- --
Shares redeemed (250,755) (117,367) (654,512) (1,901,288)
- -------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding 776,009 1,508,791 (540,401) (1,077,700)
Shares outstanding, beginning of period 2,655,498 1,146,707 3,507,806 4,585,506
- -------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period 3,431,507 2,655,498 2,967,405 3,507,806
===================================================================================================================
CLASS C
Shares sold 629,704 1,325,815 103,325 531,759
Shares reinvested -- 15,984 -- --
Shares redeemed (143,826) (24,336) (391,664) (981,321)
- -------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding 485,878 1,317,463 (288,339) (449,562)
Shares outstanding, beginning of period 1,372,534 55,071 2,048,781 2,498,343
- -------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period 1,858,412 1,372,534 1,760,442 2,048,781
===================================================================================================================
CLASS Y
Shares sold -- -- 18,842 28,393
Shares redeemed -- -- (14,074) (44,455)
- -------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding -- -- 4,768 (16,062)
Shares outstanding, beginning of period -- -- 33,301 49,363
- -------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period -- -- 38,069 33,301
===================================================================================================================
43
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
MID CAP SMALL CAP
GROWTH FUND GROWTH FUND
- ------------------------------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPT. 30, ENDED SEPT. 30, ENDED
2007 MARCH 31, 2007 MARCH 31,
(UNAUDITED) 2007 (UNAUDITED) 2007
- ------------------------------------------------------------------------------------------------------------------------
CLASS A
Shares sold 4,000,028 9,611,016 140,199 711,231
Shares reinvested -- 1,843,809 -- --
Shares redeemed (4,384,667) (8,547,512) (1,021,906) (1,397,081)
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding (384,639) 2,907,313 (881,707) (685,850)
Shares outstanding, beginning of period 29,531,494 26,624,181 1,965,252 2,651,102
- ------------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period 29,146,855 29,531,494 1,083,545 1,965,252
========================================================================================================================
CLASS B
Shares sold 85,005 306,484 6,902 13,364
Shares reinvested -- 238,775 -- --
Shares redeemed (308,590) (719,695) (72,840) (258,948)
- ------------------------------------------------------------------------------------------------------------------------
Net decrease in shares outstanding (223,585) (174,436) (65,938) (245,584)
Shares outstanding, beginning of period 3,526,701 3,701,137 302,229 547,813
- ------------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period 3,303,116 3,526,701 236,291 302,229
========================================================================================================================
CLASS C
Shares sold 892,778 3,112,087 2,824 91,054
Shares reinvested -- 902,493 -- --
Shares redeemed (1,461,870) (2,986,165) (150,164) (714,717)
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding (569,092) 1,028,415 (147,340) (623,663)
Shares outstanding, beginning of period 16,267,464 15,239,049 540,540 1,164,203
- ------------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period 15,698,372 16,267,464 393,200
540,540
========================================================================================================================
CLASS Y
Shares sold -- -- 60,759 6,170,382
Shares redeemed -- -- (258,669) (24,169,432)
- ------------------------------------------------------------------------------------------------------------------------
Net decrease in shares outstanding -- -- (197,910) (17,999,050)
Shares outstanding, beginning of period -- -- 951,731 18,950,781
- ------------------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period -- -- 753,821 951,731
========================================================================================================================
6. CUSTODY OFFSET ARRANGEMENT
For financial reporting purposes for the six months ended September 30, 2007,
custodian fees reduced by the Custodian were $871 and $2,746 for the Micro Cap
Growth Fund and Small Cap Growth Fund, respectively. There was no effect on net
investment income.
44
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
7. COMMITMENTS AND CONTINGENCIES
The Funds indemnify the Trust's Officers and Trustees for certain liabilities
that might arise from their performance of their duties to the Funds.
Additionally, in the normal course of business, the Funds enter into contracts
that contain a variety of representations and warranties and which provide
general indemnifications. The Funds' maximum exposure under these arrangements
is unknown, as this would involve future claims that may be made against the
Funds that have not yet occurred. However, based on experience, the Funds expect
the risk of loss to be remote.
8. FUND MERGERS
During a meeting held August 15, 2007 of the Board of Trustees of the Trust, the
Trustees recommended an Agreement and Plan of Reorganization between the
Touchstone Strategic Trust Small Cap Growth Fund and Touchstone Strategic Trust
Diversified Small Cap Growth Fund whereby the Small Cap Growth Fund would
transfer to the Diversified Small Cap Growth Fund all of its assets, subject to
all of its liabilities, in exchange for shares of the Diversified Small Cap
Growth Fund contingent upon shareholder approval.
45
- --------------------------------------------------------------------------------
Portfolio of Investments
Diversified Small Cap Growth Fund - September 30, 2007 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 99.0% SHARES VALUE
- --------------------------------------------------------------------------------
HEALTH CARE -- 25.9%
Alexion Pharmaceuticals, Inc.* 5,905 $ 384,710
ArthroCare Corp.* 5,110 285,598
Biomarin Pharmaceutical, Inc.* 12,575 313,118
ev3, Inc.*+ 14,225 233,575
Genomic Health, Inc.*+ 13,461 258,317
Gen-Probe, Inc.* 3,375 224,708
Hologic, Inc.*+ 6,000 365,999
Intuitive Surgical, Inc.* 485 111,550
LifeCell Corp.* 3,510 131,871
OSI Pharmaceuticals, Inc.* 5,765 195,952
Pharmion Corp.* 7,445 343,512
Progenics Pharmaceuticals, Inc.*+ 9,005 199,101
Radiation Therapy Services, Inc.* 8,553 178,073
The Spectranetics Corp.* 11,035 148,752
Ventana Medical Systems, Inc.* 2,435 209,191
- --------------------------------------------------------------------------------
3,584,027
- --------------------------------------------------------------------------------
TECHNOLOGY -- 21.3%
ACI Worldwide, Inc.* 1,780 39,783
Anixter International, Inc.* 2,305 190,047
Avnet, Inc.* 3,890 155,055
COMSYS IT Partners, Inc.* 8,822 148,298
Digital River, Inc.* 2,810 125,748
DivX, Inc.*+ 10,245 152,343
Emulex Corp.* 7,676 147,149
F5 Networks, Inc.* 3,353 124,698
ION Geophysical Corp.* 16,738 231,487
j2 Global Communications, Inc.* 4,645 152,031
Micros Systems, Inc.* 3,101 201,782
Microsemi Corp.* 6,595 183,869
NETGEAR, Inc.* 6,405 194,840
Nuance Communications, Inc.*+ 12,465 240,699
Parametric Technology Corp.* 8,094 140,997
RF Micro Devices, Inc.* 13,785 92,773
Secure Computing Corp.* 18,340 178,448
Skyworks Solutions, Inc.* 8,130 73,495
Tessera Technologies, Inc.* 4,650 174,375
- --------------------------------------------------------------------------------
2,947,917
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 19.5%
Adminstaff, Inc. 5,510 200,013
BJ'S Restaurants, Inc.* 7,330 154,297
Bright Horizons Family Solutions, Inc.* 4,084 174,959
Chipotle Mexican Grill, Inc.* 1,803 212,988
Consolidated Graphics, Inc.* 3,287 206,391
DSW, Inc.*+ 5,902 148,553
Life Time Fitness* 3,586 219,965
McCormick & Schmick's
Seafood Restaurants, Inc.* 6,294 118,516
Nutri/System, Inc.*+ 5,252 246,267
PetMed Express, Inc.* 12,410 173,864
Phillips-Van Heusen Corp. 3,053 160,221
Sonic Corp.* 7,673 179,548
Steiner Leisure Ltd.* 3,886 168,652
ValueClick, Inc.* 6,763 151,897
Watson Wyatt Worldwide, Inc. 4,113 184,838
- --------------------------------------------------------------------------------
2,700,969
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 10.8%
Affiliated Managers Group, Inc.*+ 1,245 158,750
Boston Private Financial Holdings, Inc. + 4,710 131,126
East West Bancorp, Inc. 3,985 143,301
Euronet Worldwide, Inc.* 6,490 193,207
Jefferies Group, Inc. 4,550 126,627
LaSalle Hotel Properties 3,540 148,963
Morningstar, Inc.* 4,326 265,616
Portfolio Recovery Associates, Inc. + 3,268 173,433
Wright Express Corp.* 4,020 146,690
- --------------------------------------------------------------------------------
1,487,713
- --------------------------------------------------------------------------------
PRODUCER DURABLES -- 10.1%
Arris Group, Inc.* 8,595 106,148
Bucyrus International, Inc. 2,460 179,408
Ducommun, Inc.* 5,695 183,949
EnPro Industries, Inc.* 3,645 147,987
General Cable Corp.* 2,370 159,074
Regal-Beloit Corp. 2,463 117,953
Sonic Solutions* 7,032 73,625
Triumph Group, Inc. 1,235 100,912
Ultra Clean Holdings, Inc.* 13,481 198,170
Woodward Governor Co. 2,014 125,674
- --------------------------------------------------------------------------------
1,392,900
- --------------------------------------------------------------------------------
ENERGY -- 4.5%
Cabot Oil & Gas Corp. 3,251 114,305
Helix Energy Solutions Group, Inc.* 3,370 143,090
Helmerich & Payne, Inc. 3,148 103,349
Superior Well Services, Inc.* 4,815 109,445
W-H Energy Services, Inc.* 2,055 151,556
- --------------------------------------------------------------------------------
621,745
- --------------------------------------------------------------------------------
MATERIALS AND PROCESSING -- 3.6%
NCI Building Systems, Inc.* 2,075 89,661
RTI International Metals, Inc.* 1,455 115,323
Terra Industries, Inc.* 4,305 134,574
The Andersons, Inc. + 3,365 161,588
- --------------------------------------------------------------------------------
501,146
- --------------------------------------------------------------------------------
AUTOS AND TRANSPORTATION -- 2.7%
AAR Corp.* 2,578 78,217
Hub Group, Inc.* 3,645 109,459
Wabtec Corp. 4,811 180,220
- --------------------------------------------------------------------------------
367,896
- --------------------------------------------------------------------------------
UTILITIES -- 0.6%
Pike Electric Corp.* 4,610 86,484
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS $ 13,690,797
- --------------------------------------------------------------------------------
46
- --------------------------------------------------------------------------------
Diversified Small Cap Growth Fund (Continued)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
INVESTMENT FUNDS -- 19.4%
BBH Securities Lending Fund ** 2,438,724 2,438,724
Touchstone Institutional
Money Market Fund^ 238,221 238,221
- --------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $ 2,676,945
- --------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 118.4%
(Cost $14,427,051) $ 16,367,742
LIABILITIES IN EXCESS OF OTHER
ASSETS -- (18.4)% (2,539,743)
- --------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 13,827,999
================================================================================
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
+ All or a portion of the security is on loan. The total value of securities
on loan as of September 30, 2007, was $2,345,091.
** Represents collateral for securities loaned.
See accompanying notes to financial statements.
47
- --------------------------------------------------------------------------------
Portfolio of Investments
Growth Opportunities Fund - September 30, 2007 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 98.1% SHARES VALUE
- --------------------------------------------------------------------------------
HEALTH CARE -- 30.7%
Adolor Corp.*+ 130,400 $ 445,968
Biogen Idec, Inc.* 26,600 1,764,378
Celgene Corp.* 21,900 1,561,689
CVS Corp. 38,300 1,517,829
DaVita, Inc.* 18,000 1,137,240
Dentsply International, Inc. 21,100 878,604
Elan Corp. PLC* 121,700 2,560,568
Gen-Probe, Inc.* 17,200 1,145,176
Gilead Sciences, Inc.* 20,300 829,661
OSI Pharmaceuticals, Inc.* 38,800 1,318,812
Palomar Medical Technologies, Inc.*+ 14,800 421,652
Santarus, Inc.*+ 71,800 190,270
Shire PLC - ADR 12,500 924,750
Vanda Pharmaceuticals, Inc.*+ 39,000 542,490
Wyeth 21,900 975,645
- --------------------------------------------------------------------------------
16,214,732
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 15.4%
Bare Escentuals, Inc.* 40,800 1,014,696
eBay, Inc.* 28,900 1,127,678
Geo Group, Inc.* 29,700 879,417
Google, Inc.* 1,600 907,632
MSC Industrial Direct Co., Inc. 12,500 632,375
Omnicom Group, Inc. 10,400 500,136
O'Reilly Automotive, Inc.* 20,300 678,223
Tiffany & Co. 18,700 978,945
VeriSign, Inc.*+ 42,200 1,423,828
- --------------------------------------------------------------------------------
8,142,930
- --------------------------------------------------------------------------------
ENERGY -- 12.1%
Grant Prideco, Inc.* 22,600 1,232,152
National-Oilwell Varco, Inc.* 9,400 1,358,300
Smith International, Inc. 14,100 1,006,740
Suncor Energy, Inc. 11,700 1,109,277
Weatherford International Ltd.* 25,000 1,679,500
- --------------------------------------------------------------------------------
6,385,969
- --------------------------------------------------------------------------------
TECHNOLOGY -- 11.2%
Amdocs Ltd.* 19,500 725,205
Autodesk, Inc.* 12,700 634,619
Cognos, Inc.* 22,600 938,578
Corning, Inc. 28,100 692,665
DRS Technologies, Inc. 13,300 733,096
Marvell Technology Group Ltd.* 31,200 510,744
Maxim Integrated Products, Inc. 17,600 516,560
Nuance Communications, Inc.*+ 60,900 1,175,979
- --------------------------------------------------------------------------------
5,927,446
- --------------------------------------------------------------------------------
MATERIALS AND PROCESSING -- 9.6%
Goldcorp, Inc. + 36,600 1,118,496
Hexcel Corp.* 39,000 885,690
Monsanto Co. 13,300 1,140,342
Praxair, Inc. 11,700 979,992
Textron, Inc. 15,600 970,476
- --------------------------------------------------------------------------------
5,094,996
- --------------------------------------------------------------------------------
PRODUCER DURABLES -- 8.3%
AMETEK, Inc. 21,050 909,781
General Electric Co. 26,600 1,101,240
IDEX Corp. 19,900 724,161
ITT Corp. 14,800 1,005,364
Polycom, Inc.* 24,200 650,012
- --------------------------------------------------------------------------------
4,390,558
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 7.9%
American Express Co. 17,850 1,059,755
Charles Schwab Corp. 39,800 859,680
CME Group, Inc. + 1,600 939,760
Signature Bank* 15,600 549,588
T. Rowe Price Group, Inc. 14,100 785,229
- --------------------------------------------------------------------------------
4,194,012
- --------------------------------------------------------------------------------
CONSUMER STAPLES -- 1.8%
Church & Dwight Co., Inc. 20,300 954,912
- --------------------------------------------------------------------------------
UTILITIES -- 1.1%
NeuStar Inc. - Class A* 16,600 569,214
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS $ 51,874,769
- --------------------------------------------------------------------------------
INVESTMENT FUNDS -- 12.9%
BBH Securities Lending Fund** 5,156,829 5,156,829
Touchstone Institutional
Money Market Fund^ 1,657,059 1,657,059
- --------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $ 6,813,888
- --------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 111.0%
(Cost $48,974,927) $ 58,688,657
LIABILITIES IN EXCESS OF OTHER
ASSETS -- (11.0)% (5,819,038)
- --------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 52,869,619
================================================================================
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
+ All or a portion of the security is on loan. The total value of securities
on loan as of September 30, 2007, was $4,962,188.
** Represents collateral for securities loaned.
ADR American Depository Receipt.
See accompanying notes to financial statements.
48
- --------------------------------------------------------------------------------
Portfolio of Investments
Large Cap Core Equity Fund - September 30, 2007 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 98.8% SHARES SHARES VALUE
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 17.5%
Aflac, Inc. 68,557 $ 3,910,491
Allstate Corp. 51,737 2,958,839
American Express Co. 55,478 3,293,729
Bank of America Corp. 58,836 2,957,686
Morgan Stanley 39,560 2,492,280
Wells Fargo 83,033 2,957,635
- --------------------------------------------------------------------------------
18,570,660
- --------------------------------------------------------------------------------
TECHNOLOGY -- 17.3%
Cisco Systems, Inc.* 128,523 4,255,396
Hewlett-Packard Co. 81,307 4,048,275
Microsoft Corp. 117,225 3,453,449
Oracle Corp.* 166,000 3,593,900
QUALCOMM, Inc. 72,334 3,056,835
- --------------------------------------------------------------------------------
18,407,855
- --------------------------------------------------------------------------------
ENERGY -- 15.9%
Chevron Corp. 43,353 4,056,974
ConocoPhillips 46,219 4,056,642
Exxon Mobil Corp. 43,868 4,060,422
Marathon Oil Corp. 82,634 4,711,790
- --------------------------------------------------------------------------------
16,885,828
- --------------------------------------------------------------------------------
PRODUCER DURABLES -- 15.4%
General Electric Co. 87,576 3,625,646
Honeywell International, Inc. 75,013 4,461,024
Illinois Tool Works, Inc. 72,521 4,325,152
United Technologies Corp. 48,904 3,935,794
- --------------------------------------------------------------------------------
16,347,616
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 11.3%
Best Buy Co., Inc. 61,989 2,852,734
Home Depot, Inc. 79,924 2,592,735
Kimberly-Clark Corp. 47,666 3,349,012
Target Corp. 50,394 3,203,547
- --------------------------------------------------------------------------------
11,998,028
- --------------------------------------------------------------------------------
HEALTH CARE -- 10.8%
Amgen* 47,923 2,711,004
Cardinal Health, Inc. 43,554 2,723,432
Johnson & Johnson 45,595 2,995,592
WellPoint, Inc.* 38,378 3,028,791
- --------------------------------------------------------------------------------
11,458,819
- --------------------------------------------------------------------------------
UTILITIES -- 4.0%
AT&T, Inc. 101,077 4,276,568
- --------------------------------------------------------------------------------
MATERIALS AND PROCESSING -- 3.4%
E.I. DuPont de Nemours 72,294 3,582,891
- --------------------------------------------------------------------------------
CONSUMER STAPLES -- 3.2%
Altria Group, Inc. 48,321 3,359,759
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS $ 104,888,024
- --------------------------------------------------------------------------------
INVESTMENT FUND -- 1.3%
Touchstone Institutional
Money Market Fund^ 1,386,860 $ 1,386,860
- --------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 100.1%
(Cost $86,964,801) $ 106,274,884
LIABILITIES IN EXCESS OF OTHER
ASSETS -- (0.1)% (80,964)
- --------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 106,193,920
================================================================================
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
See accompanying notes to financial statements.
49
- --------------------------------------------------------------------------------
Portfolio of Investments
Large Cap Growth Fund - September 30, 2007 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 97.8% SHARES VALUE
- --------------------------------------------------------------------------------
PRODUCER DURABLES -- 14.9%
Boeing 321,555 $ 33,760,059
Lockheed Martin Corp. 317,330 34,427,132
Raytheon Co. 311,530 19,881,845
Research In Motion Ltd.* 500,965 49,370,100
Rockwell Collins, Inc. 233,570 17,059,953
- --------------------------------------------------------------------------------
154,499,089
- --------------------------------------------------------------------------------
TECHNOLOGY -- 14.6%
Apple Computer, Inc.* 249,470 38,303,624
Cisco Systems, Inc.* 875,300 28,981,183
Garmin Ltd. + 338,810 40,453,913
NVIDIA Corp.* 630,945 22,865,447
Oracle Corp.* 1,049,210 22,715,397
- --------------------------------------------------------------------------------
153,319,564
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 14.1%
DIRECTV Group, Inc.* 922,680 22,402,670
EchoStar Communications - Class A* 533,410 24,968,922
Google, Inc.* 47,420 26,899,944
McDonald's Corp. 460,890 25,104,678
MGM MIRAGE*+ 279,265 24,977,462
NIKE, Inc. - Class B 399,550 23,437,603
- --------------------------------------------------------------------------------
147,791,279
- --------------------------------------------------------------------------------
MATERIALS AND PROCESSING -- 13.2%
Anglo American PLC - ADR + 811,183 27,134,071
Potash Corp. of Saskatchewan + 347,645 36,746,077
Praxair, Inc. 299,840 25,114,598
Precision Castparts Corp. 200,000 29,596,000
Southern Copper Corp. + 159,450 19,744,694
- --------------------------------------------------------------------------------
138,335,440
- --------------------------------------------------------------------------------
UTILITIES -- 11.1%
America Movil S.A. - ADR 591,805 37,875,521
AT&T, Inc. 456,295 19,305,841
Qwest Communications
International, Inc.*+ 1,746,870 16,001,329
Rogers Communications, Inc. 367,370 16,726,356
Vimpel-Communications 979,850 26,495,144
- --------------------------------------------------------------------------------
116,404,191
- --------------------------------------------------------------------------------
HEALTH CARE -- 8.3%
Baxter International, Inc. 410,800 23,119,824
Gilead Sciences, Inc.* 563,820 23,043,323
Laboratory Corp. of America Holdings* 247,960 19,397,911
Stryker Corp. 316,860 21,787,294
- --------------------------------------------------------------------------------
87,348,352
- --------------------------------------------------------------------------------
ENERGY -- 7.7%
National-Oilwell Varco, Inc.* 156,680 22,640,260
NRG Energy, Inc.* 525,000 22,202,250
Schlumberger Ltd. + 336,175 35,298,375
- --------------------------------------------------------------------------------
80,140,885
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 7.4%
Brookfield Asset Management, Inc. -
Class A 478,850 18,435,725
Fidelity National Information
Services, Inc. + 299,240 13,277,279
Goldman Sachs Group, Inc. 110,045 23,851,153
Loews 459,175 22,201,111
- --------------------------------------------------------------------------------
77,765,268
- --------------------------------------------------------------------------------
CONSUMER STAPLES -- 4.2%
Colgate-Palmolive Co. 271,160 19,339,131
PepsiCo, Inc. 335,605 24,586,423
- --------------------------------------------------------------------------------
43,925,554
- --------------------------------------------------------------------------------
AUTOS AND TRANSPORTATION -- 2.3%
CSX Corp. 569,280 24,325,334
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS $ 1,023,854,956
- --------------------------------------------------------------------------------
INVESTMENT FUNDS -- 10.9%
BBH Securities Lending Fund** 91,658,870 91,658,870
Touchstone Institutional
Money Market Fund^ 22,413,528 22,413,528
- --------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $ 114,072,398
- --------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 108.7%
(Cost $851,075,288) $ 1,137,927,354
LIABILITIES IN EXCESS OF OTHER
ASSETS -- (8.7)% (91,340,947)
- --------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 1,046,586,407
================================================================================
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
+ All or a portion of the security is on loan. The total value of securities
on loan as of September 30, 2007, was $89,295,931.
** Represents collateral for securities loaned.
ADR American Depository Receipt.
See accompanying notes to financial statements.
50
- --------------------------------------------------------------------------------
Portfolio of Investments
Large Cap Value Fund - September 30, 2007 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 91.1% SHARES VALUE
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 38.8%
Citigroup, Inc. 55,700 $ 2,599,519
Countrywide Financial Corp. + 107,800 2,049,278
Fannie Mae 55,000 3,344,550
Freddie Mac 58,200 3,434,383
Genworth Financial, Inc. 87,900 2,701,167
JP Morgan Chase & Co. 22,600 1,035,532
Radian Group, Inc. + 46,900 1,091,832
W Holding Co., Inc. + 193,000 432,320
Wachovia Corp. 27,000 1,354,050
Washington Mutual, Inc. 84,800 2,994,288
- --------------------------------------------------------------------------------
21,036,919
- --------------------------------------------------------------------------------
TECHNOLOGY -- 14.5%
AU Optronics Corp. - ADR + 125,875 2,129,812
BearingPoint, Inc.* 392,000 1,587,600
Dell, Inc.* 56,400 1,556,640
Motorola, Inc. 79,600 1,474,988
Sanmina-SCI Corp.* 236,600 501,592
Tyco Electronics Ltd. 16,700 591,681
- --------------------------------------------------------------------------------
7,842,313
- --------------------------------------------------------------------------------
PRODUCER DURABLES -- 12.6%
Alcatel - ADR + 263,700 2,684,466
D.R. Horton, Inc. 82,600 1,058,106
Navistar International Corp.* 9,000 555,300
Nortel Networks Corp.* 18,150 308,187
Pulte Homes, Inc. 111,000 1,510,710
Tyco International Ltd. 15,900 705,006
- --------------------------------------------------------------------------------
6,821,775
- --------------------------------------------------------------------------------
ENERGY -- 8.3%
Peabody Energy Corp. 49,100 2,350,417
Reliant Energy, Inc.* 83,500 2,137,600
- --------------------------------------------------------------------------------
4,488,017
- --------------------------------------------------------------------------------
UTILITIES -- 6.2%
Mirant Corp.* 28,700 1,167,516
Sprint Nextel Corp. 116,700 2,217,300
- --------------------------------------------------------------------------------
3,384,816
- --------------------------------------------------------------------------------
HEALTH CARE -- 4.7%
Omnicare, Inc. 19,300 639,409
Sanofi-Aventis - ADR 45,600 1,934,352
- --------------------------------------------------------------------------------
2,573,761
- --------------------------------------------------------------------------------
MATERIALS AND PROCESSING -- 2.8%
Abitibi-Consolidated, Inc. - ADR*+ 860,600 1,506,050
- --------------------------------------------------------------------------------
CONSUMER STAPLES -- 2.5%
Safeway, Inc. 9,500 314,545
Tyson Foods, Inc. 57,900 1,033,515
- --------------------------------------------------------------------------------
1,348,060
- --------------------------------------------------------------------------------
AUTOS AND TRANSPORTATION -- 0.7%
Ford Motor Co.*+ 46,300 393,087
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS $ 49,394,798
- --------------------------------------------------------------------------------
EXCHANGE TRADED FUND -- 2.0%
iShares Russell 1000
Value Index Fund 12,700 $ 1,091,819
- --------------------------------------------------------------------------------
INVESTMENT FUNDS -- 23.6%
BBH Securities Lending Fund** 8,308,475 8,308,475
Touchstone Institutional
Money Market Fund^ 4,466,617 4,466,617
- --------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $ 12,775,092
- --------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 116.7%
(Cost $68,595,866) $ 63,261,709
LIABILITIES IN EXCESS OF OTHER
ASSETS -- (16.7)% (9,038,460)
- --------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 54,223,249
================================================================================
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
+ All or a portion of the security is on loan. The total value of securities
on loan as of September 30, 2007, was $7,971,872.
** Represents collateral for securities loaned.
ADR American Depository Receipt.
See accompanying notes to financial statements.
51
- --------------------------------------------------------------------------------
Portfolio of Investments
Micro Cap Growth Fund - September 30, 2007 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 99.6% SHARES VALUE
- --------------------------------------------------------------------------------
TECHNOLOGY -- 22.8%
Actuate Corp.* 159,600 $ 1,029,420
BSQUARE Corp.* 159,850 959,100
Catalyst Semiconductor, Inc.* 58,700 406,791
Chordiant Software, Inc.* 67,900 941,094
Comtech Group, Inc.* 76,700 1,396,707
Concur Technologies, Inc.* 54,900 1,730,448
Ebix, Inc.* 5,600 278,040
iGate Capital Corp.* 86,300 739,591
Integrated Silicon Solution, Inc.* 71,800 452,340
Iomega Corp.* 147,700 773,948
LivePerson, Inc.* 53,300 328,328
Logility, Inc.* 5,000 58,150
Network Equipment
Technologies, Inc.* 100,900 1,463,050
Pericom Semiconductor Corp.* 57,300 671,556
Silicom Ltd.*+ 78,800 1,814,763
Vicon Industries, Inc.* 37,600 439,168
Video Display Corp.*+ 47,350 378,800
Vocus, Inc.* 19,500 570,180
- --------------------------------------------------------------------------------
14,431,474
- --------------------------------------------------------------------------------
PRODUCER DURABLES -- 18.7%
Astronics Corp.* 38,500 1,677,445
Avalon Holdings Corp. - Class A* 37,200 262,260
Ducommun, Inc.* 23,700 765,510
Globecomm Systems, Inc.* 58,984 782,128
Graham Corp. 10,100 415,211
Hardinge, Inc. 42,000 1,462,860
Hawk Corp. - Class A* 44,900 622,763
Kadant, Inc.* 30,400 851,200
Key Technology, Inc.* 36,400 1,095,640
KMG Chemicals, Inc. + 46,800 1,225,224
K-Tron International, Inc.* 19,800 1,881,000
MagneTek, Inc.* 93,900 450,720
Team, Inc.* 9,600 262,848
Wireless Telecom Group, Inc.* 34,800 80,040
- --------------------------------------------------------------------------------
11,834,849
- --------------------------------------------------------------------------------
HEALTH CARE -- 17.1%
Accelrys, Inc.* 59,200 405,520
Air Methods Corp.* 37,700 1,741,740
Almost Family, Inc.* 58,700 1,061,883
Avigen, Inc.* 49,100 265,140
BioScrip, Inc.* 72,500 465,450
Cynosure, Inc. - Class A* 25,600 944,640
Escalon Medical Corp.* 78,900 451,308
HealthStream, Inc.* 4,600 13,570
HMS Holdings Corp.* 95,000 2,337,950
iCAD, Inc.* 95,600 287,756
Mesa Laboratories, Inc. 24,900 516,675
Shamir Optical Industry Ltd. 26,600 319,466
Span-America Medical Systems, Inc. 38,600 725,680
Synovis Life Technologies, Inc.* 50,200 1,082,814
Tutogen Medical, Inc.* 19,100 219,650
- --------------------------------------------------------------------------------
10,839,242
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 13.3%
American Medical Alert Corp.* 80,100 724,104
Aristotle Corp.* 24,841 303,557
DG Fastchannel, Inc.* 32,300 761,634
Famous Dave's of America, Inc.* 25,900 421,134
Learning Tree International, Inc.* 53,500 950,160
Libbey, Inc. + 18,300 320,616
McCormick & Schmick's
Seafood Restaurants, Inc.* 21,100 397,313
PC Connection, Inc.*+ 29,100 363,750
Perficient, Inc.*+ 75,300 1,646,811
Premier Exhibitions, Inc.*+ 26,100 393,588
SmartPros Ltd.* 5,200 30,732
Smith & Wesson Holding Corp.*+ 86,350 1,648,422
Standard Parking Corp.* 11,400 453,606
- --------------------------------------------------------------------------------
8,415,427
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 8.9%
American Physicians Capital, Inc. 37,500 1,461,000
CyberSource Corp.*+ 109,300 1,277,717
Life Partners Holding, Inc. + 22,188 746,609
TheStreet.com, Inc. + 177,500 2,149,525
- --------------------------------------------------------------------------------
5,634,851
- --------------------------------------------------------------------------------
MATERIALS AND PROCESSING -- 7.5%
Chase Corp. 8,100 150,660
Furmanite Corp.* 82,100 747,110
KSW, Inc.* 24,400 171,532
L. B. Foster Co.* 39,900 1,734,054
Landec Corp.* 5,200 80,392
Michael Baker Corp.* 5,300 259,753
Multi-Color Corp. 42,150 961,863
Penford Corp. 16,900 637,130
- --------------------------------------------------------------------------------
4,742,494
- --------------------------------------------------------------------------------
AUTOS AND TRANSPORTATION -- 5.8%
Amerigon, Inc.* 114,000 1,973,340
Dorman Products, Inc.* 3,500 49,420
Midwest Air Group, Inc.*+ 29,400 483,630
Spartan Motors, Inc. + 69,749 1,173,876
- --------------------------------------------------------------------------------
3,680,266
- --------------------------------------------------------------------------------
ENERGY -- 4.6%
Bolt Technology Corp.*+ 19,800 646,668
Clayton Williams Energy, Inc.* 20,200 666,600
Dawson Geophysical Co.* 5,500 426,305
ICO, Inc.* 13,800 194,304
Matrix Service Co.* 30,600 641,070
Union Drilling, Inc.* 23,000 335,340
- --------------------------------------------------------------------------------
2,910,287
- --------------------------------------------------------------------------------
52
- --------------------------------------------------------------------------------
Micro Cap Growth Fund (Continued)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 99.6% (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
CONSUMER STAPLES -- 0.6%
Omega Protein Corp.* 43,300 $ 391,865
- --------------------------------------------------------------------------------
UTILITIES -- 0.3%
Shenandoah Telecommunications Co.* 7,800 169,728
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS $ 63,050,483
- --------------------------------------------------------------------------------
INVESTMENT FUNDS -- 19.5%
BBH Securities Lending Fund** 11,895,053 11,895,053
Touchstone Institutional
Money Market Fund^ 456,206 456,206
- --------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $ 12,351,259
- --------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 119.1%
(Cost $56,439,110) $ 75,401,742
LIABILITIES IN EXCESS OF OTHER
ASSETS -- (19.1)% (12,077,435)
- --------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 63,324,307
================================================================================
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
+ All or a portion of the security is on loan. The total value of securities
on loan as of September 30, 2007, was $11,327,032.
** Represents collateral for securities loaned.
See accompanying notes to financial statements.
53
- --------------------------------------------------------------------------------
Portfolio of Investments
Mid Cap Growth Fund - September 30, 2007 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 98.3% SHARES VALUE
- --------------------------------------------------------------------------------
TECHNOLOGY -- 17.7%
ADC Telecommunications, Inc.* 536,200 $ 10,514,882
Amdocs Ltd.* 301,000 11,194,190
Analog Devices, Inc. 360,000 13,017,600
Autodesk, Inc.* 225,900 11,288,223
Brocade Communications
Systems, Inc.* 1,352,400 11,576,544
Cognizant Technology
Solutions Corp.* 124,100 9,899,457
Cognos, Inc.* 353,000 14,660,090
DRS Technologies, Inc. 94,100 5,186,792
International Rectifier Corp.* 191,800 6,327,482
LSI Logic Corp.* 1,390,200 10,315,284
Marvell Technology Group Ltd.* 967,100 15,831,427
Maxim Integrated Products, Inc. 792,750 23,267,212
Micron Technology, Inc.* 879,000 9,756,900
Red Hat, Inc.* 436,500 8,673,255
Satyam Computer
Services Ltd. - ADR + 226,800 5,871,852
Sun Microsystems* 2,311,000 12,964,710
TIBCO Software, Inc.* 1,087,000 8,032,930
Varian, Inc.* 134,880 8,579,717
Vishay Intertechnology, Inc.*+ 701,170 9,136,245
Zebra Technologies Corp.* 178,015 6,495,767
- --------------------------------------------------------------------------------
212,590,559
- --------------------------------------------------------------------------------
HEALTH CARE -- 17.7%
Beckman Coulter, Inc. 93,400 6,889,184
Celgene Corp.* 256,800 18,312,408
DaVita, Inc.* 303,800 19,194,084
Dentsply International, Inc. 453,600 18,887,904
Edwards Lifesciences Corp.* 237,950 11,733,315
Elan Corp. PLC - ADR*+ 1,410,100 29,668,503
HEALTHSOUTH Corp.*+ 343,260 6,010,483
Hillenbrand Industries, Inc. 150,000 8,253,000
Hospira, Inc.* 149,740 6,206,723
IDEXX Laboratories, Inc.* 93,300 10,224,747
Invitrogen Corp.* 166,900 13,640,737
Manor Care, Inc. + 194,700 12,538,680
ResMed, Inc.* 291,000 12,475,170
Shire Pharmaceuticals
Group PLC - ADR 318,800 23,584,824
Thermo Fisher Scientific, Inc.*+ 247,350 14,277,042
- --------------------------------------------------------------------------------
211,896,804
- --------------------------------------------------------------------------------
PRODUCER DURABLES -- 17.5%
Alliant Techsystems, Inc.*+ 92,950 10,159,435
AMETEK, Inc. 332,350 14,364,167
ASML Holding N.V. + 277,010 9,102,549
Comverse Technology, Inc.* 376,600 7,475,510
Diebold, Inc. 230,710 10,478,848
Dover Corp. 181,190 9,231,631
Empresa Brasileira De
Aeronautica S.A 256,750 11,276,460
IDEX Corp. 299,600 10,902,444
ITT Industries, Inc. 209,700 14,244,921
Joy Global, Inc. 232,000 11,799,520
KLA-Tencor Corp. 155,500 8,673,790
Mettler-Toledo International, Inc.* 145,500 14,841,000
Pentair, Inc. 201,800 6,695,724
SPX Corp. 122,240 11,314,534
Tektronix, Inc. 264,677 7,342,140
Teleflex, Inc. 120,787 9,411,723
Teradyne, Inc.* 655,850 9,050,730
Thomas & Betts Corp.* 218,200 12,795,248
Verigy Ltd.* 316,151 7,812,091
Waters Corp.* 214,000 14,320,880
- --------------------------------------------------------------------------------
211,293,345
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 16.1%
Cheesecake Factory, Inc.* 424,200 9,955,974
Coldwater Creek, Inc.* 1,029,940 11,185,148
Corrections Corp. of America* 421,800 11,038,506
DeVry, Inc. 338,100 12,513,081
Dick's Sporting Goods, Inc.* 145,500 9,770,325
GameStop Corp.* 350,800 19,767,581
Gap, Inc. 490,900 9,052,196
Gaylord Entertainment Co.*+ 214,000 11,389,080
International Flavors &
Fragrances, Inc. 208,800 11,037,168
Jones Apparel Group, Inc. 315,680 6,670,318
Macy's, Inc. 258,374 8,350,648
MSC Industrial Direct Co., Inc. 291,000 14,721,690
O'Reilly Automotive, Inc.* 278,200 9,294,662
Regis Corp. 275,529 8,792,130
Snap-On, Inc. 11,800 584,572
Tiffany & Co. 308,100 16,129,035
VeriSign, Inc.*+ 312,400 10,540,376
VistaPrint Ltd.*+ 363,700 13,591,469
- --------------------------------------------------------------------------------
194,383,959
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 11.6%
Assurant, Inc. 91,380 4,888,830
Commerce Bancorp, Inc. + 179,530 6,962,173
E*TRADE Financial Corp.*+ 757,100 9,887,726
Federated Investors, Inc. - Class B 283,600 11,258,920
Fidelity National Information
Services, Inc. 196,900 8,736,453
Hudson City Bancorp, Inc. 831,300 12,785,394
IntercontinentalExchange, Inc.* 64,200 9,751,980
Knight Capital Group, Inc.* 626,000 7,486,960
Marshall & Ilsley Corp. 229,900 10,062,723
Moody's Corp. 173,200 8,729,280
New York Community Bancorp, Inc. + 562,107 10,708,138
People's United Financial, Inc. 829,615 14,335,748
T. Rowe Price Group, Inc. 235,400 13,109,426
Willis Group Holdings Ltd. 270,489 11,073,820
- --------------------------------------------------------------------------------
139,777,571
- --------------------------------------------------------------------------------
54
- --------------------------------------------------------------------------------
Mid Cap Growth Fund (Continued)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 98.3% (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
ENERGY -- 11.3%
Cameron International Corp.* 96,700 $ 8,924,443
Chesapeake Energy Corp. + 374,400 13,201,344
CONSOL Energy, Inc. 603,800 28,137,080
Grant Prideco, Inc.* 295,300 16,099,756
Hess Corp. 199,000 13,239,470
Murphy Oil Corp. 213,520 14,922,913
Range Resources Corp. 256,800 10,441,488
Smith International, Inc. 280,300 20,013,420
Weatherford International Ltd.* 174,200 11,702,756
- --------------------------------------------------------------------------------
136,682,670
- --------------------------------------------------------------------------------
MATERIALS AND PROCESSING -- 3.7%
Allegheny Technologies, Inc. 100,500 11,049,975
Cytec Industries, Inc. 163,915 11,210,147
Hexcel Corp.* 267,195 6,067,998
Textron, Inc. 256,800 15,975,528
- --------------------------------------------------------------------------------
44,303,648
- --------------------------------------------------------------------------------
CONSUMER STAPLES -- 1.1%
Whole Foods Market, Inc. + 259,200 12,690,432
- --------------------------------------------------------------------------------
UTILITIES -- 1.0%
Neustar, Inc. - Class A*+ 350,900 12,032,361
- --------------------------------------------------------------------------------
AUTOS AND TRANSPORTATION -- 0.6%
Kirby Corp.* 175,500 7,746,570
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS $ 1,183,397,919
- --------------------------------------------------------------------------------
INVESTMENT FUNDS -- 11.5%
BBH Securities Lending Fund** 117,374,028 117,374,028
Touchstone Institutional
Money Market Fund^ 21,461,111 21,461,111
- --------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $ 138,835,139
- --------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 109.8%
(Cost $1,106,461,628) $ 1,322,233,058
LIABILITIES IN EXCESS OF OTHER
ASSETS -- (9.8)% (117,578,675)
- --------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 1,204,654,383
================================================================================
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
+ All or a portion of the security is on loan. The total value of securities
on loan as of September 30, 2007, was $114,679,790.
** Represents collateral for securities loaned.
ADR American Depository Receipt.
See accompanying notes to financial statements.
55
- --------------------------------------------------------------------------------
Portfolio of Investments
Small Cap Growth Fund - September 30, 2007 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 93.8% SHARES VALUE
- --------------------------------------------------------------------------------
HEALTH CARE -- 22.8%
Accelrys, Inc.* 11,600 $ 79,460
Alexion Pharmaceuticals, Inc.* 10,994 716,259
Almost Family, Inc.* 14,800 267,732
ArthroCare Corp.* 9,544 533,414
Avigen, Inc.* 52,900 285,660
BioMarin Pharmaceutical, Inc.* 23,101 575,215
Cynosure, Inc. - Class A* 4,000 147,600
Escalon Medical Corp.* 15,600 89,232
ev3, Inc.* 26,663 437,806
Genomic Health, Inc.* 25,122 482,091
Gen-Probe, Inc.* 6,154 409,733
HMS Holdings Corp.* 11,840 291,382
Hologic, Inc.* 11,241 685,701
Indevus Pharmaceuticals, Inc.* 40,200 277,782
Intuitive Surgical, Inc.* 833 191,590
Isis Pharmaceuticals, Inc.* 23,290 348,651
LifeCell Corp.* 6,364 239,095
Luminex Corp.* 18,700 281,996
Mesa Laboratories, Inc. 7,570 157,078
Micrus Endovascular Corp.* 11,710 213,942
Nighthawk Radiology Holdings, Inc.* 13,660 334,807
OSI Pharmaceuticals, Inc.* 10,827 368,010
Pharmion Corp.* 13,911 641,854
Progenics Pharmaceuticals, Inc.* 16,748 370,298
Radiation Therapy Services, Inc.* 15,939 331,850
Shamir Optical Industry, Ltd. 10,100 121,301
Sonic Innovations, Inc.* 10,200 93,534
Span-America Medical Systems, Inc. 8,200 154,160
Spectranetics Corp.* 22,355 301,345
Vascular Solutions, Inc.* 9,900 79,002
Ventana Medical Systems, Inc.* 4,548 390,719
- --------------------------------------------------------------------------------
9,898,299
- --------------------------------------------------------------------------------
TECHNOLOGY -- 20.0%
ACI Worldwide, Inc.* 3,172 70,894
Actuate Corp.* 25,260 162,927
Anixter International, Inc.* 4,294 354,040
Avnet, Inc.* 7,261 289,423
Bluephoenix Solutions Ltd.* 13,500 248,535
BSQUARE Corp.* 14,500 87,000
Chordiant Software, Inc.* 11,470 158,974
Cogent Communications Group, Inc.* 6,420 149,843
COMSYS IT Partners, Inc.* 16,514 277,600
Concur Technologies, Inc.* 6,020 189,750
Digital River, Inc.* 5,228 233,953
DivX, Inc.* 19,106 284,106
Ebix, Inc.* 2,500 124,125
Emulex Corp.* 14,515 278,253
F5 Networks, Inc.* 6,320 235,041
Harmonic, Inc.* 19,600 207,956
iGATE Capital Corp.* 16,010 137,206
Integrated Silicon Solution, Inc.* 11,500 72,450
Iomega Corp.* 32,210 168,780
ION Geophysical Corp.* 31,524 435,977
j2 Global Communications, Inc.* 8,676 283,965
LivePerson, Inc.* 17,400 107,184
Logility, Inc.* 7,099 82,561
Micros Systems, Inc.* 5,768 375,324
Microsemi Corp.* 12,292 342,701
NETGEAR, Inc.* 11,976 364,310
Network Equipment Technologies, Inc.* 9,400 136,300
Nuance Communications, Inc.* 23,197 447,935
Parametric Technology Corp.* 15,066 262,450
PMC-Sierra, Inc.* 22,320 187,265
RF Micro Devices, Inc.* 28,190 189,719
Riverbed Technology, Inc.* 4,080 164,791
Secure Computing Corp.* 34,322 333,953
Skyworks Solutions, Inc.* 16,575 149,838
Tessera Technologies, Inc.* 8,694 326,025
Trident Microsystems, Inc.* 11,290 179,398
Varian, Inc.* 4,560 290,062
Vicon Industries, Inc.* 8,700 101,616
Vocus, Inc.* 6,300 184,212
- --------------------------------------------------------------------------------
8,676,442
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 16.8%
Adminstaff, Inc. 10,314 374,398
American Medical Alert Corp.* 30,490 275,630
BJ's Restaurants, Inc.* 13,643 287,185
Bright Horizons Family Solutions* 7,590 325,156
Chipotle Mexican Grill, Inc. - Class A* 3,452 407,785
Consolidated Graphics, Inc.* 6,112 383,772
DG FastChannel, Inc.* 4,200 99,036
DSW, Inc. - Class A* 11,015 277,248
Famous Dave's of America, Inc.* 7,000 113,820
Gemstar-TV Guide International, Inc.* 48,800 339,648
Hartmarx Corp.* 10,100 49,490
Learning Tree International, Inc.* 11,320 201,043
Life Time Fitness, Inc.* 6,666 408,892
McCormick & Schmick's Seafood
Restaurants, Inc.* 17,937 337,754
NutriSystems, Inc.* 9,780 458,584
On Assignment, Inc.* 15,530 145,050
Perficient, Inc.* 7,040 153,965
PetMed Express, Inc.* 23,217 325,270
Phillips-Van Heusen Corp. 5,703 299,293
Smith & Wesson Holding Corp.*+ 14,150 270,124
Sonic Corp.* 14,333 335,392
Standard Parking Corp.* 4,140 164,731
Steiner Leisure, Ltd. - ADR* 7,248 314,563
Universal Security Instruments* 7,200 126,000
ValueClick, Inc.* 12,662 284,389
Waste Industries USA, Inc. 5,600 160,272
Watson Wyatt Worldwide, Inc. 7,715 346,712
- --------------------------------------------------------------------------------
7,265,202
- --------------------------------------------------------------------------------
56
- --------------------------------------------------------------------------------
Small Cap Growth Fund (Continued)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 93.8% (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
PRODUCER DURABLES -- 12.6%
Arris Group, Inc.* 16,963 $ 209,493
Astronics Corp.* 5,200 226,564
Avalon Holdings Corp. - Class A* 18,700 131,835
Bucyrus International, Inc. - Class A 4,601 335,551
Ducommun, Inc.* 16,042 518,158
EnPro Industries, Inc.* 6,777 275,146
Fuel-Tech N.V.*+ 3,600 79,524
General Cable Corp.* 4,407 295,798
Globecomm Systems, Inc.* 13,330 176,756
Graham Corp. 2,800 115,108
Hardinge, Inc. 5,740 199,924
Hawk Corp. - Class A* 6,900 95,703
Kadant, Inc.* 5,460 152,880
Key Technology, Inc.* 6,880 207,088
KMG Chemicals, Inc. 11,600 303,688
K-Tron International, Inc.* 1,820 172,900
Ladish Co., Inc.* 3,230 179,200
Regal-Beloit Corp. 4,535 217,181
SBA Communications Corp. - Class A* 5,380 189,806
Sonic Solutions* 14,095 147,575
Tat Technologies Ltd. 9,000 122,850
Team, Inc.* 6,400 175,232
Trio-Tech International* 6,400 69,696
Triumph Group, Inc. 2,300 187,933
Ultra Clean Holdings, Inc.* 24,842 365,177
Wireless Telecom Group, Inc.* 31,900 73,370
Woodward Governor Co. 3,758 234,499
- --------------------------------------------------------------------------------
5,458,635
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 9.3%
Affiliated Managers Group, Inc.* 2,325 296,461
American Physicians Capital, Inc. 6,590 256,746
Boston Private Financial Holdings, Inc. 8,740 243,322
CyberSource Corp.* 12,850 150,217
Deluxe Corp. 4,510 166,148
East West Bancorp, Inc. 7,400 266,104
Euronet Worldwide, Inc.* 12,129 361,080
James River Group, Inc. 2,523 81,745
Jefferies Group, Inc. 8,528 237,334
LaSalle Hotel Properties - REIT 6,585 277,097
Life Partners Holdings, Inc. + 3,625 121,981
Morningstar, Inc.* 8,053 494,455
Portfolio Recovery Associates, Inc. 6,069 322,082
Redwood Trust, Inc. 8,370 278,051
TheStreet.com, Inc. 15,900 192,549
Wright Express Corp.* 7,519 274,368
- --------------------------------------------------------------------------------
4,019,740
- --------------------------------------------------------------------------------
ENERGY -- 4.9%
Bolt Technology Corp.* 5,400 176,364
Cabot Oil & Gas Corp. 6,060 213,070
Carrizo Oil & Gas, Inc.* 6,780 304,151
Helix Energy Solutions, Inc.* 6,264 265,969
Helmerich & Payne, Inc. 5,907 193,927
InterOil Corp.* 7,440 235,104
Matrix Service Co.* 8,100 169,695
Superior Well Services, Inc.* 8,990 204,343
Union Drilling, Inc.* 5,600 81,648
W-H Energy Services, Inc.* 3,787 279,291
- --------------------------------------------------------------------------------
2,123,562
- --------------------------------------------------------------------------------
MATERIALS AND PROCESSING -- 3.7%
Andersons, Inc. 6,376 306,176
Chase Corp. 7,200 133,920
Furmanite Corp.* 14,300 130,130
L.B. Foster Co. - Class A* 3,900 169,494
Multi-Color Corp. 6,346 144,804
NCI Building Systems, Inc.* 3,759 162,426
RTI International Metals, Inc.* 2,728 216,221
Synalloy Corp. 3,700 78,070
Terra Industries, Inc.* 8,149 254,738
- --------------------------------------------------------------------------------
1,595,979
- --------------------------------------------------------------------------------
AUTOS AND TRANSPORTATION -- 2.5%
AAR Corp.* 9,744 295,633
Amerigon, Inc.* 14,370 248,745
Hub Group, Inc. - Class A* 6,574 197,417
Wabtec 9,057 339,275
- --------------------------------------------------------------------------------
1,081,070
- --------------------------------------------------------------------------------
UTILITIES -- 0.8%
Global Crossing Ltd.* 9,010 189,930
Pike Electric Corp.* 8,564 160,661
- --------------------------------------------------------------------------------
350,591
- --------------------------------------------------------------------------------
CONSUMER STAPLES -- 0.4%
NutraCea*+ 55,200 85,008
Omega Protein Corp.* 9,600 86,880
- --------------------------------------------------------------------------------
171,888
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS $ 40,641,408
- --------------------------------------------------------------------------------
57
- --------------------------------------------------------------------------------
Small Cap Growth Fund (Continued)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
EXCHANGE TRADED FUNDS -- 2.6%
iShares Russell 2000
Growth Index Fund 6,495 $ 556,492
iShares S&P Small Cap 600
Growth Index Fund 3,960 566,953
- --------------------------------------------------------------------------------
TOTAL EXCHANGE TRADED FUNDS $ 1,123,445
- --------------------------------------------------------------------------------
INVESTMENT FUNDS -- 7.5%
BBH Securities Lending Fund** 374,855 374,855
Touchstone Institutional
Money Market Fund^ 2,877,052 2,877,052
- --------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $ 3,251,907
- --------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 103.9%
(Cost $41,742,611) $ 45,016,760
LIABILITIES IN EXCESS OF OTHER
ASSETS -- (3.9)% (1,683,812)
- --------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 43,332,948
================================================================================
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
+ All or a portion of the security is on loan. The total value of securities
on loan as of September 30, 2007, was $327,255.
** Represents collateral for securities loaned.
ADR American Depository Receipt.
See accompanying notes to financial statements.
58
- --------------------------------------------------------------------------------
Other Items (Unaudited)
- --------------------------------------------------------------------------------
PROXY VOTING
The Sub-Advisors are responsible for exercising the voting rights associated
with the securities purchased and held by the Funds. A description of the
policies and procedures that the Sub-Advisors use in fulfilling this
responsibility and information regarding how those proxies were voted during the
twelve month period ended June 30 are available without charge upon request by
calling toll free 1.800.543.0407. These items are also available on the
Securities and Exchange Commission's (the Commission) Website at
http://www.sec.gov.
QUARTERLY PORTFOLIO DISCLOSURE
The Trust files a complete listing of portfolio holdings for each Fund as of the
end of the first and third quarters of each fiscal year on Form N-Q. The
complete listing (i) is available on the Commission's Website; (ii) may be
reviewed and copied at the Commission's Public Reference Room in Washington, DC;
and (iii) will be made available to shareholders upon request by calling
1.800.543.0407. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
SCHEDULE OF SHAREHOLDER EXPENSES
As a shareholder of the Funds, you incur two
types of costs: (1) transaction costs, including reinvested dividends or other
distributions; and (2) ongoing costs, including investment advisory fees;
distribution (12b-1) fees; and other Fund expenses. This example is intended to
help you understand your ongoing costs (in dollars) of investing in the Funds
and to compare these costs with the ongoing costs of investing in other mutual
funds.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 - 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During the Six
Months Ended September 30, 2007" to estimate the expenses you paid on your
account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Funds' actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Funds' actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Funds and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
59
- --------------------------------------------------------------------------------
Other Items (Continued)
- --------------------------------------------------------------------------------
SCHEDULE OF SHAREHOLDER EXPENSES (CONTINUED)
EXPENSES
NET EXPENSE BEGINNING ENDING PAID DURING
RATIO ACCOUNT ACCOUNT THE SIX MONTHS
ANNUALIZED VALUE VALUE ENDED
SEPTEMBER 30, APRIL 1, SEPTEMBER 30, SEPTEMBER 30,
2007 2007 2007 2007*
- ------------------------------------------------------------------------------------------------------
DIVERSIFIED SMALL CAP GROWTH FUND
Class A Actual 1.40% $ 1,000.00 $ 1,122.00 $ 7.43
Class A Hypothetical 1.40% $ 1,000.00 $ 1,018.07 $ 7.07
Class C Actual ** 2.11% $ 1,000.00 $ 1,048.20 $ 3.62
Class C Hypothetical ** 2.11% $ 1,000.00 $ 1,004.82 $ 3.54
Class Y Actual 1.15% $ 1,000.00 $ 1,122.60 $ 6.10
Class Y Hypothetical 1.15% $ 1,000.00 $ 1,019.32 $ 5.81
GROWTH OPPORTUNITIES FUND
Class A Actual 1.55% $ 1,000.00 $ 1,151.80 $ 8.35
Class A Hypothetical 1.55% $ 1,000.00 $ 1,017.30 $ 7.83
Class B Actual 2.30% $ 1,000.00 $ 1,158.90 $ 12.44
Class B Hypothetical 2.30% $ 1,000.00 $ 1,013.55 $ 11.60
Class C Actual 2.30% $ 1,000.00 $ 1,156.40 $ 12.42
Class C Hypothetical 2.30% $ 1,000.00 $ 1,013.55 $ 11.60
LARGE CAP CORE EQUITY FUND
Class A Actual 1.15% $ 1,000.00 $ 1,093.30 $ 6.02
Class A Hypothetical 1.15% $ 1,000.00 $ 1,019.32 $ 5.81
Class C Actual 1.89% $ 1,000.00 $ 1,089.50 $ 9.90
Class C Hypothetical 1.89% $ 1,000.00 $ 1,015.60 $ 9.55
LARGE CAP GROWTH FUND
Class A Actual 1.25% $ 1,000.00 $ 1,218.90 $ 6.94
Class A Hypothetical 1.25% $ 1,000.00 $ 1,018.81 $ 6.31
Class B Actual 1.99% $ 1,000.00 $ 1,221.30 $ 11.09
Class B Hypothetical 1.99% $ 1,000.00 $ 1,015.08 $ 10.06
Class C Actual 2.00% $ 1,000.00 $ 1,220.70 $ 11.11
Class C Hypothetical 2.00% $ 1,000.00 $ 1,015.06 $ 10.08
Class Y Actual 1.00% $ 1,000.00 $ 1,219.00 $ 5.55
Class Y Hypothetical 1.00% $ 1,000.00 $ 1,020.07 $ 5.05
LARGE CAP VALUE FUND
Class A Actual 1.35% $ 1,000.00 $ 922.00 $ 6.49
Class A Hypothetical 1.35% $ 1,000.00 $ 1,018.32 $ 6.81
Class C Actual 2.10% $ 1,000.00 $ 918.80 $ 10.08
Class C Hypothetical 2.10% $ 1,000.00 $ 1,014.56 $ 10.59
60
- --------------------------------------------------------------------------------
Other Items (Continued)
- --------------------------------------------------------------------------------
SCHEDULE OF SHAREHOLDER EXPENSES (CONTINUED)
EXPENSES
NET EXPENSE BEGINNING ENDING PAID DURING
RATIO ACCOUNT ACCOUNT THE SIX MONTHS
ANNUALIZED VALUE VALUE ENDED
SEPTEMBER 30, APRIL 1, SEPTEMBER 30, SEPTEMBER 30,
2007 2007 2007 2007*
- ------------------------------------------------------------------------------------------------------
MICRO CAP GROWTH FUND
Class A Actual 1.95% $ 1,000.00 $ 1,032.40 $ 9.94
Class A Hypothetical 1.95% $ 1,000.00 $ 1,015.29 $ 9.86
Class C Actual 2.70% $ 1,000.00 $ 1,028.30 $ 13.73
Class C Hypothetical 2.70% $ 1,000.00 $ 1,011.53 $ 13.62
Class Y Actual 1.70% $ 1,000.00 $ 1,033.30 $ 8.66
Class Y Hypothetical 1.70% $ 1,000.00 $ 1,016.55 $ 8.59
MID CAP GROWTH FUND
Class A Actual 1.44% $ 1,000.00 $ 1,088.10 $ 7.52
Class A Hypothetical 1.44% $ 1,000.00 $ 1,017.87 $ 7.27
Class B Actual 2.25% $ 1,000.00 $ 1,083.80 $ 11.73
Class B Hypothetical 2.25% $ 1,000.00 $ 1,013.81 $ 11.34
Class C Actual 2.23% $ 1,000.00 $ 1,084.20 $ 11.66
Class C Hypothetical 2.23% $ 1,000.00 $ 1,013.88 $ 11.26
SMALL CAP GROWTH FUND
Class A Actual 1.71% $ 1,000.00 $ 1,060.80 $ 8.81
Class A Hypothetical 1.71% $ 1,000.00 $ 1,016.52 $ 8.62
Class B Actual 2.45% $ 1,000.00 $ 1,059.50 $ 12.66
Class B Hypothetical 2.45% $ 1,000.00 $ 1,012.77 $ 12.38
Class C Actual 2.45% $ 1,000.00 $ 1,058.80 $ 12.66
Class C Hypothetical 2.45% $ 1,000.00 $ 1,012.77 $ 12.38
Class Y Actual 1.30% $ 1,000.00 $ 1,061.80 $ 6.73
Class Y Hypothetical 1.30% $ 1,000.00 $ 1,018.54 $ 6.59
* Expenses are equal to the Fund's annualized expense ratio, multiplied by
the average account value over the period, multiplied by [number of days
in most recent fiscal half-year/365 [or366]] (to reflect the one-half year
period).
** The example is based on an investment of $1,000 invested at the beginning
of the period (August 1, 2007) and held for the entire period through
September 30, 2007.
61
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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
JP Morgan
P.O. Box 5354
Cincinnati, Ohio 45201-5354
SHAREHOLDER SERVICE
800.543.0407
* A Member of Western & Southern Financial Group(R)
- --------------------------------------------------------------------------------
[LOGO] TOUCHSTONE(R)
INVESTMENTS
303 Broadway, Suite 1100
Cincinnati, OH 45202-4203
TSF-54-TST-SAR-0710
ITEM 2. CODE OF ETHICS.
Not required for Semiannual Reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not required for Semiannual Reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required for Semiannual Reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable
ITEM 6. SCHEDULE OF INVESTMENTS.
The Schedule of Investments in securities of unaffiliated issuers is included in
the Semiannual Report.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Governance Committee will consider shareholder recommendations for
nomination to the Board only in the event that there is a vacancy on the Board.
Shareholders who wish to submit recommendations for nominations to the Board to
fill the vacancy must submit their recommendations in writing to Phillip R. Cox,
Chairman of the Governance Committee, c/o Touchstone, 303 Broadway, Suite 1100,
Cincinnati, OH 45202. Shareholders should include appropriate information on the
background and qualifications of any person recommended to the Governance
Committee (e.g., a resume), as well as the candidate's contact information and a
written consent from the candidate to serve if nominated and elected.
Shareholder recommendations for nominations to the Board will be accepted on an
ongoing basis and such recommendations will be kept on file for consideration in
the event of a future vacancy on the Board.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based on an evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the 1940 Act) the registrant's
principal executive officer and principal financial officer have concluded that
the registrant's disclosure controls and procedures are effective as of a date
within 90 days of the filing date of this report.
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during
the registrant's second fiscal half-year that have materially affected, or are
reasonably likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 12. EXHIBITS.
(a)(2) Certifications required by Item 12(a)(2) of Form N-CSR are filed
herewith. (b) Certification required by Item 11(b) of Form N-CSR is filed
herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Touchstone Strategic Trust
--------------------------------------------------------------------
By (Signature and Title)
/s/ Jill T. McGruder
- --------------------------------------------------------------------------------
Jill T. McGruder
President
Date: December 3, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)
/s/ Jill T. McGruder
- --------------------------------------------------------------------------------
Jill T. McGruder
President
Date: December 3, 2007
/s/ Terrie A. Wiedenheft
- --------------------------------------------------------------------------------
Terrie A. Wiedenheft
Controller & Treasurer
Date: December 3, 2007