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 811-21113
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Touchstone Institutional Funds Trust
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(Exact name of registrant as specified in charter)
303 Broadway, Suite 1100
Cincinnati, OH 45202
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(Address of principal executive offices) (Zip code)
Jill McGruder
Touchstone Advisors, Inc.
303 Broadway, Suite 1100
Cincinnati, OH 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: 12/31
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Date of reporting period: 06/30/08
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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.
Semi-Annual Report JUNE 30, 2008
(UNAUDITED)
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TOUCHSTONE INSTITUTIONAL FUNDS TRUST
Touchstone JSAM Institutional Large Cap Value Fund
Touchstone JSAM Institutional Value Fund
Touchstone Mazama Institutional Growth Fund
Touchstone Sands Capital Institutional Growth Fund
[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
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Statements of Assets and Liabilities 4
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Statements of Operations 5
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Statements of Changes in Net Assets 6-7
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Financial Highlights 8-11
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Notes to Financial Statements 12-18
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Portfolios of Investments:
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JSAM Institutional Large Cap Value Fund 19
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JSAM Institutional Value Fund 20
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Mazama Institutional Growth Fund 21-22
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Sands Capital Institutional Growth Fund 23
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Other Items 24-25
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2
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Tabular Presentation of Portfolios of Investments (Unaudited)
June 30, 2008
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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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JSAM INSTITUTIONAL LARGE CAP VALUE FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Financial Services 34.8
Producer Durables 24.3
Energy 10.6
Technology 9.6
Utilities 9.4
Health Care 4.4
Materials & Processing 1.9
Consumer Discretionary 1.8
Autos & Transportation 1.1
Investment Funds 30.0
Other Assets/Liabilities (Net) (27.9)
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TOTAL 100.0
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MAZAMA INSTITUTIONAL GROWTH FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Consumer Discretionary 15.1
Technology 13.0
Health Care 11.0
Energy 10.9
Financial Services 9.6
Producer Durables 6.9
Materials & Processing 5.5
Utilities 3.3
Autos & Transportation 1.5
Consumer Staples 0.9
Other 0.3
Investment Funds 22.1
Other Assets/Liabilities (Net) (0.1)
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TOTAL 100.0
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JSAM INSTITUTIONAL VALUE FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Financial Services 39.7
Producer Durables 26.7
Energy 9.1
Consumer Discretionary 8.8
Technology 5.0
Materials & Processing 3.0
Autos & Transportation 2.2
Other 2.2
Health Care 1.7
Consumer Staples 1.6
Investment Funds 34.8
Other Assets/Liabilities (Net) (34.8)
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TOTAL 100.0
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SANDS CAPITAL INSTITUTIONAL GROWTH FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Health Care 22.6
Consumer Discretionary 21.7
Technology 17.9
Energy 17.7
Financial Services 12.9
Utilities 3.8
Autos & Transportation 2.1
Investment Funds 22.9
Other Assets/Liabilities (Net) (21.6)
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TOTAL 100.0
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3
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Statements of Assets and Liabilities
June 30, 2008 (Unaudited)
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JSAM
INSTITUTIONAL JSAM MAZAMA SANDS CAPITAL
LARGE CAP INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
VALUE VALUE GROWTH GROWTH
FUND FUND FUND FUND
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ASSETS
Investment securities:
At cost $ 21,434,332 $ 47,949,984 $ 25,705,937 $ 1,579,313,495
===================================================================================================================================
Affiliated securities, at market value $ 525,720 $ 768,895 $ 130,437 $ 13,443,354
Non-affiliated securities, at market value 13,247,360 29,568,119 23,642,223 1,633,658,854
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At market value - including $2,575,481, $6,701,258,
$4,855,612, and $287,909,607 of securities loaned
for the JSAM Institutional Large Cap Value Fund,
JSAM Institutional Value Fund, Mazama Institutional
Growth Fund, and Sands Capital Institutional Growth
Fund, respectively. $ 13,773,080 $ 30,337,014 $ 23,772,660 $ 1,647,102,208
Cash -- -- 4,251 --
Dividends and interest receivable 4,580 6,756 5,739 232,615
Receivable for capital shares sold -- -- 25,931 1,150,736
Receivable for securities sold 141,117 78,908 310,564 4,852,444
Receivable for securities lending income 5,468 16,639 16,134 103,694
Other assets -- -- -- 57,899
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TOTAL ASSETS 13,924,245 30,439,317 24,135,279 1,653,499,596
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LIABILITIES
Dividends payable 3,755 515 25,931 --
Payable upon return of securities loaned 2,703,450 7,050,731 5,112,118 297,223,167
Payable for capital shares redeemed 31,255 88,480 -- 862,744
Payable for securities purchased 406,991 780,545 354,494 --
Payable to Advisor 6,804 16,972 15,488 898,186
Other accrued expenses and liabilities 3,701 756 -- --
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TOTAL LIABILITIES 3,155,956 7,937,999 5,508,031 298,984,097
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NET ASSETS $ 10,768,289 $ 22,501,318 $ 18,627,248 $ 1,354,515,499
===================================================================================================================================
NET ASSETS CONSIST OF:
Paid-in capital $ 21,119,075 $ 47,560,535 $ 19,393,891 $ 1,285,700,617
Accumulated net investment income (loss) 8,707 4,674 673 (3,158,335)
Accumulated net realized gains (losses) on investments (2,698,241) (7,450,921) 1,165,961 4,184,504
Net unrealized appreciation (depreciation) on investments (7,661,252) (17,612,970) (1,933,277) 67,788,713
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NET ASSETS $ 10,768,289 $ 22,501,318 $ 18,627,248 $ 1,354,515,499
===================================================================================================================================
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) 2,156,938 4,194,464 1,878,732 115,532,482
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Net asset value, offering price and redemption price per
share $ 4.99 $ 5.36 $ 9.91 $ 11.72
===================================================================================================================================
See accompanying notes to financial statements.
4
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Statements of Operations
For the Six Months Ended June 30, 2008 (Unaudited)
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JSAM
INSTITUTIONAL JSAM MAZAMA SANDS CAPITAL
LARGE CAP INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
VALUE VALUE GROWTH GROWTH
FUND FUND FUND (B) FUND
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INVESTMENT INCOME
Dividends from affiliated securities $ 4,721 $ 7,851 $ 11,160 $ 285,918
Dividends from non-affiliated securities (A) 139,461 256,435 33,157 1,339,416
Interest 25 153 287 150
Income from securities loaned 20,212 77,151 41,588 234,199
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TOTAL INVESTMENT INCOME 164,419 341,590 86,192 1,859,683
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EXPENSES
Unified management fee 46,617 100,890 55,500 4,974,900
Registration fees -- -- -- 23,177
Miscellaneous expenses -- -- -- 19,941
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TOTAL EXPENSES 46,617 100,890 55,500 5,018,018
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NET INVESTMENT INCOME (LOSS) 117,802 240,700 30,692 (3,158,335)
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REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains (losses) from security transactions (649,297) 512,242 1,165,961 (16,894,767)
Net change in unrealized appreciation/depreciation on
investments (3,647,715) (8,830,972) (1,933,277) (137,422,275)
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NET REALIZED AND UNREALIZED LOSSES ON INVESTMENTS (4,297,012) (8,318,730) (767,316) (154,317,042)
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NET DECREASE IN NET ASSETS FROM OPERATIONS $ (4,179,210) $ (8,078,030) $ (736,624) $ (157,475,377)
===================================================================================================================================
(A) Net of foreign tax withholding of: $ -- $ 934 $ -- $ --
(B) Represents the period from commencement of operations (January 30, 2008) through June 30, 2008.
See accompanying notes to financial statements.
5
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Statements of Changes in Net Assets
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JSAM INSTITUTIONAL JSAM
LARGE CAP VALUE INSTITUTIONAL VALUE
FUND FUND
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SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
JUNE 30, ENDED JUNE 30, ENDED
2008 DECEMBER 31, 2008 DECEMBER 31,
(UNAUDITED) 2007 (UNAUDITED) 2007
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FROM OPERATIONS
Net investment income $ 117,802 $ 266,603 $ 240,700 $ 481,795
Net realized gains (losses) from security transactions (649,297) (341,595) 512,242 (7,881,253)
Net change in unrealized appreciation/depreciation on
investments (3,647,715) (5,590,818) (8,830,972) (9,005,472)
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NET DECREASE IN NET ASSETS FROM OPERATIONS (4,179,210) (5,665,810) (8,078,030) (16,404,930)
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DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (109,095) (266,877) (236,009) (481,793)
From net realized gains -- (2,017,287) -- (275,244)
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DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (109,095) (2,284,164) (236,009) (757,037)
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FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 3,484,749 5,735,919 6,690,786 43,367,825
Reinvested distributions 102,512 2,181,378 235,323 509,170
Payments for shares redeemed (4,443,104) (5,901,020) (715,445) (12,312,776)
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NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE
TRANSACTIONS (855,843) 2,016,277 6,210,664 31,564,219
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TOTAL INCREASE (DECREASE) IN NET ASSETS (5,144,148) (5,933,697) (2,103,375) 14,402,252
NET ASSETS
Beginning of period 15,912,437 21,846,134 24,604,693 10,202,441
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End of period $ 10,768,289 $ 15,912,437 $ 22,501,318 $ 24,604,693
===================================================================================================================================
ACCUMULATED NET INVESTMENT INCOME (LOSS) $ 8,707 $ -- $ 4,674 $ (17)
===================================================================================================================================
See accompanying notes to financial statements.
6
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Statements of Changes in Net Assets (Continued)
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MAZAMA SANDS CAPITAL
INSTITUTIONAL INSTITUTIONAL
GROWTH GROWTH
FUND FUND
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PERIOD SIX MONTHS
ENDED ENDED YEAR
JUNE 30, JUNE 30, ENDED
2008 (A) 2008 DECEMBER 31,
(UNAUDITED) (UNAUDITED) 2007
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FROM OPERATIONS
Net investment income (loss) $ 30,692 $ (3,158,335) $ (4,167,635)
Net realized gains (losses) from security transactions 1,165,961 (16,894,767) 63,629,430
Net change in unrealized appreciation/depreciation on investments (1,933,277) (137,422,275) 163,397,854
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NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS (736,624) (157,475,377) 222,859,649
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DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (30,019) -- --
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DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (30,019) -- --
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FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 19,390,001 324,549,891 420,293,245
Reinvested distributions 4,087 -- --
Payments for shares redeemed (197) (188,052,855) (502,110,289)
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NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 19,393,891 136,497,036 (81,817,044)
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TOTAL INCREASE (DECREASE) IN NET ASSETS 18,627,248 (20,978,341) 141,042,605
NET ASSETS
Beginning of period -- 1,375,493,840 1,234,451,235
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End of period $ 18,627,248 $ 1,354,515,499 $ 1,375,493,840
=========================================================================================================================
ACCUMULATED NET INVESTMENT INCOME (LOSS) $ 673 $ (3,158,335) $ --
=========================================================================================================================
(A) Represents the period from commencement of operations (January 30, 2008)
through June 30, 2008.
See accompanying notes to financial statements.
7
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Financial Highlights
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JSAM INSTITUTIONAL LARGE CAP VALUE FUND
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
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SIX MONTHS
ENDED YEAR ENDED PERIOD
JUNE 30, DECEMBER 31, ENDED
2008 ------------------------------- DECEMBER 31,
(UNAUDITED) 2007 2006 2005(A)
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Net asset value at beginning of period $ 6.92 $ 10.95 $ 9.97 $ 10.00
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Income (loss) from investment operations:
Net investment income 0.06 0.13 0.12 0.05
Net realized and unrealized gains (losses) on
investments (1.94) (3.00) 1.59 0.09
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Total from investment operations (1.88) (2.87) 1.71 0.14
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Less distributions:
Dividends from net investment income (0.05) (0.13) (0.12) (0.05)
Distributions from net realized gains -- (1.03) (0.61) (0.12)
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Total distributions (0.05) (1.16) (0.73) (0.17)
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Net asset value at end of period $ 4.99 $ 6.92 $ 10.95 $ 9.97
====================================================================================================================================
Total return (27.20%)(B) (26.37%) 17.32% 1.43%(B)
====================================================================================================================================
Net assets at end of period (000's) $ 10,768 $ 15,912 $ 21,846 $ 14,673
====================================================================================================================================
Ratio of net expenses to average net assets 0.70%(C) 0.77% 0.75% 0.71%(C)
Ratio of net investment income to average net assets 1.77%(C) 1.22% 1.18% 1.24%(C)
Portfolio turnover rate 72%(C) 72% 82% 45%(B)
(A) Represents the period from commencement of operations (June 20, 2005)
through December 31, 2005.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
8
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Financial Highlights (Continued)
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JSAM INSTITUTIONAL VALUE FUND
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
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SIX MONTHS
ENDED YEAR ENDED PERIOD
JUNE 30, DECEMBER 31, ENDED
2008 ------------------------------- DECEMBER 31,
(UNAUDITED) 2007 2006 2005(A)
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Net asset value at beginning of period $ 7.47 $ 10.65 $ 10.33 $ 10.00
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Income (loss) from investment operations:
Net investment income 0.06 0.17 0.02 0.02
Net realized and unrealized gains (losses) on
investments (2.11) (3.10) 1.45 0.45
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Total from investment operations (2.05) (2.93) 1.47 0.47
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Less distributions:
Dividends from net investment income (0.06) (0.17) (0.02) (0.02)
Distributions from net realized gains -- (0.08) (1.13) (0.12)
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Total distributions (0.06) (0.25) (1.15) (0.14)
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Net asset value at end of period $ 5.36 $ 7.47 $ 10.65 $ 10.33
====================================================================================================================================
Total return (27.52%)(B) (27.81%) 14.35% 4.69%(B)
====================================================================================================================================
Net assets at end of period (000's) $ 22,501 $ 24,605 $ 10,202 $ 7,714
====================================================================================================================================
Ratio of net expenses to average net assets 0.80%(C) 0.83% 0.90% 0.83%(C)
Ratio of net investment income to average net assets 1.91%(C) 1.94% 0.24% 0.34%(C)
Portfolio turnover rate 54%(C) 128% 88% 43%(B)
(A) Represents the period from commencement of operations (June 17, 2005)
through December 31, 2005.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
9
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Financial Highlights (Continued)
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MAZAMA INSTITUTIONAL GROWTH FUND
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
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PERIOD
ENDED
JUNE 30,
2008(A)
(UNAUDITED)
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Net asset value at beginning of period $ 10.00
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Income (loss) from investment operations:
Net investment income 0.02
Net realized and unrealized losses on investments (0.09)
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Total from investment operations (0.07)
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Less distributions:
Dividends from net investment income (0.02)
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Net asset value at end of period $ 9.91
================================================================================
Total return (0.73%)(B)
================================================================================
Net assets at end of period (000's) $ 18,627
================================================================================
Ratio of net expenses to average net assets 0.95%(C)
Ratio of net investment income to average net assets 0.52%(C)
Portfolio turnover rate 276%(C)
(A) Represents the period from commencement of operations (January 30, 2008)
through June 30, 2008.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
10
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Financial Highlights (Continued)
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SANDS CAPITAL INSTITUTIONAL GROWTH FUND
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED PERIOD
JUNE 30, DECEMBER 31, ENDED
2008 ------------------------------- DECEMBER 31,
(UNAUDITED) 2007 2006 2005(A)
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Net asset value at beginning of period $ 13.18 $ 11.10 $ 11.79 $ 10.00
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Income (loss) from investment operations:
Net investment loss (0.03) (0.04) (0.04) (0.02)
Net realized and unrealized gains (losses) on
investments (1.43) 2.12 (0.65) 1.81
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Total from investment operations (1.46) 2.08 (0.69) 1.79
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Net asset value at end of period $ 11.72 $ 13.18 $ 11.10 $ 11.79
====================================================================================================================================
Total return (11.08%)(B) 18.74% (5.85%) 17.90%(B)
====================================================================================================================================
Net assets at end of period (000's) $ 1,354,515 $ 1,375,494 $ 1,234,451 $ 615,503
====================================================================================================================================
Ratio of net expenses to average net assets 0.79%(C) 0.80% 0.80% 0.79%(C)
Ratio of net investment loss to average net assets (0.50%)(C) (0.31%) (0.44%) (0.45%)(C)
Portfolio turnover rate 29%(C) 36% 28% 16%(B)
(A) Represents the period from commencement of operations (January 21, 2005)
through December 31, 2005.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
11
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Notes to Financial Statements
June 30, 2008 (Unaudited)
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1. ORGANIZATION
The Touchstone Institutional Funds Trust (the Trust), formerly Constellation
Institutional Portfolios, a Delaware Business Trust, is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company with four active funds, all of which are non-diversified. The financial
statements included herein are those of the Touchstone JSAM Institutional Large
Cap Value Fund (formerly CIP JSAM Large Cap Value Portfolio), Touchstone JSAM
Institutional Value Fund (formerly CIP JSAM Value Portfolio), Touchstone Mazama
Institutional Growth Fund, and Touchstone Sands Capital Institutional Growth
Fund (formerly CIP Sands Capital Institutional Growth Portfolio), each a "Fund"
and collectively the "Funds". The Funds commenced operations on June 20, 2005,
June 17, 2005, January 30, 2008 and January 21, 2005, respectively.
The Funds are registered to offer one class of 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
class of shares currently being offered.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed by
the Funds:
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.
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 (GAAP) 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.
Various inputs are used in determining the value of the Funds investments. These
inputs are summarized in the three broad levels listed below:
o Level 1 - quoted prices in active markets for identical securities
o Level 2 - other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk,
etc.)
12
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Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
o Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. For
example, money market securities are valued using amortized cost, in accordance
with rules under the Investment Company Act of 1940. Generally, amortized cost
approximates the current fair value of a security, but since the value is not
obtained from a quoted price in an active market, such securities are reflected
as Level 2.
The following is a summary of the inputs used to value the Funds net assets as
of June 30, 2008:
LEVEL 2 - LEVEL 3 -
OTHER SIGNIFICANT SIGNIFICANT
LEVEL 1 - OBSERVABLE UNOBSERVABLE
INVESTMENTS IN SECURITIES: QUOTED PRICES INPUTS INPUTS
- ------------------------------------------------------------------------------------------------
JSAM Institutional Large Cap Value Fund $ 11,069,630 $ -- $ --
JSAM Institutional Value Fund 23,286,283 -- --
Mazama Institutional Growth Fund 18,660,542 -- --
Sands Capital Institutional Growth Fund 1,349,879,041 -- --
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 June 30, 2008, the following Funds loaned common stocks and received
collateral as follows:
MARKET VALUE VALUE OF
OF COMMON COLLATERAL
STOCKS LOANED RECEIVED
- --------------------------------------------------------------------------------
JSAM Institutional Large Cap Value Fund $ 2,575,481 $ 2,703,450
JSAM Institutional Value Fund $ 6,701,258 $ 7,050,731
Mazama Institutional Growth Fund $ 4,855,612 $ 5,112,118
Sands Capital Institutional Growth Fund $ 287,909,607 $ 297,223,167
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.
SHARE VALUATION - The net asset value per share is calculated each business day.
It is computed by dividing the assets of the Fund, less its liabilities, by the
number of outstanding shares of the Fund.
13
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions are
accounted for on the date the security is purchased or sold (trade date).
Dividend income is recognized on the ex-dividend date. Costs used in determining
realized gains and losses on the sales of investment securities are those of the
specific securities sold.
DIVIDENDS AND DISTRIBUTIONS - The Funds pay distributions of net income
quarterly. Any net realized capital gains on sales of securities are distributed
to shareholders at least annually.
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 reported period. Actual results could differ from
those estimates.
EXPENSES - The Funds pay a unified management fee to Touchstone Advisors, Inc.
(the Advisor) for providing or procuring advisory, administration and other
services. The Advisor is responsible for compensating any third party engaged to
provide services under its supervision and is also responsible for payment of
the fees of the independent Trustees, custodian, independent auditor, legal
counsel (excluding costs in connection with certain litigation or administrative
actions), and the transfer and dividend disbursing agent. The Funds will pay all
state registration fees and charges incurred related to printing and mailing to
existing shareholders prospectuses, statement of additional information, proxy
solicitation material, shareholder reports and EDGAR filings.
3. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments and U.S. Government
securities) were as follows for the six months ended June 30, 2008:
JSAM JSAM MAZAMA SANDS CAPITAL
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
LARGE CAP VALUE VALUE GROWTH GROWTH
FUND FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------
Cost of Purchases $ 5,324,378 $ 15,707,959 $ 33,008,874 $320,468,111
Proceeds from Sales $ 4,584,778 $ 6,459,771 $ 13,711,453 $183,932,351
- ---------------------------------------------------------------------------------------------------------
4. TRANSACTIONS WITH AFFILIATES
Certain officers of the Trust are also officers of the Advisor, the Underwriter
(Touchstone Securities, Inc.) and/or JPMorgan Chase Bank, N.A. ("JPMorgan" and
the Sub-Administrator and Transfer Agent to the Funds). The Advisor and
Underwriter are each wholly-owned indirect subsidiaries of The Western and
Southern Life Insurance Company (Western-Southern).
As of June 30, 2008, 61% and 54% of the JSAM Institutional Value Fund and the
Mazama Institutional Growth Fund was owned by Western-Southern and subsidiaries,
respectively.
Pursuant to an exemptive order issued by the Securities and Exchange Commission,
the Funds and the Investment Manager are permitted to operate in a
"Manager-of-Managers" structure.
14
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
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 June 30, 2008, is noted below:
SHARE ACTIVITY
---------------------------------------------------
BALANCE BALANCE VALUE
12/31/07 PURCHASES SALES 06/30/08 DIVIDENDS 06/30/08
- ----------------------------------------------------------------------------------------------------------------------------
JSAM Institutional Large Cap Value Fund -- 3,911,880 (3,386,160) 525,720 $ 4,721 $ 525,720
JSAM Institutional Value Fund -- 6,114,150 (5,345,255) 768,895 $ 7,851 $ 768,895
Mazama Institutional Growth Fund -- 19,740,639 (19,610,202) 130,437 $ 11,160 $ 130,437
Sands Capital Institutional Growth Fund -- 197,373,624 (183,930,270) 13,443,354 $ 285,918 $ 13,443,354
- ----------------------------------------------------------------------------------------------------------------------------
5. MANAGEMENT AGREEMENT
The Trust and the Advisor are parties to a management agreement under which the
Advisor receives a fee, calculated daily and paid monthly, of 0.70%, 0.80%,
0.95% and 0.78% per annum of the average daily net assets of the JSAM
Institutional Large Cap Value Fund, JSAM Institutional Value Fund, Mazama
Institutional Growth Fund, and Sands Capital Institutional Growth Fund,
respectively. Under the management agreement, Touchstone continuously reviews,
supervises and administers the Funds' investment programs, subject to the
supervision of and policies established by the Board of Trustees. Under the
management agreement, Touchstone also provides administrative services to the
Trust and pays all operating expenses on the Trust's behalf, excluding BlueSky
state registration fees and charges incurred related to printing and mailing to
existing shareholders prospectuses, statement of additional information, proxy
solicitation material, shareholder reports and EDGAR filings.
JS Asset Management, LLC ("JSAM"), a SEC registered advisor, serves as the
sub-advisor to the JSAM Institutional Large Cap Value Fund and JSAM
Institutional Value Fund and makes investment decisions for the Funds and also
ensures compliance with the Funds' investment policies and guidelines.
Mazama Capital Management, Inc. ("Mazama"), a SEC registered advisor, serves as
the sub-advisor to the Mazama Institutional Growth Fund and makes investment
decisions for the Fund and also ensures compliance with the Fund's investment
policies and guidelines.
Sands Capital Management, LLC, a SEC registered advisor, serves as the
sub-advisor to the Sands Capital Institutional Growth Fund and makes investment
decisions for the Fund and also ensures compliance with the Fund's investment
policies and guidelines.
The Advisor, (not the Funds) pays the Sub-Advisors a fee for their services.
15
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
6. 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:
JSAM INSTITUTIONAL JSAM INSTITUTIONAL
LARGE CAP VALUE VALUE
FUND FUND
- -----------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
JUNE 30, ENDED JUNE 30, ENDED
2008 DECEMBER 31, 2008 DECEMBER 31,
(UNAUDITED) 2007 (UNAUDITED) 2007
- -----------------------------------------------------------------------------------------------------
Shares sold 574,143 633,028 971,050 3,805,280
Shares reinvested 19,174 308,470 39,623 64,513
Shares redeemed (737,164) (635,908) (110,763) (1,533,278)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding (143,847) 305,590 899,910 2,336,515
Shares outstanding, beginning of period 2,300,785 1,995,195 3,294,554 958,039
- -----------------------------------------------------------------------------------------------------
Shares outstanding, end of period 2,156,938 2,300,785 4,194,464 3,294,554
=====================================================================================================
MAZAMA SANDS CAPITAL
INSTITUTIONAL GROWTH INSTITUTIONAL GROWTH
FUND FUND
- ------------------------------------------------------------------------------------------------
PERIOD SIX MONTHS
ENDED ENDED YEAR
JUNE 30, JUNE 30, ENDED
2008 (A) 2008 DECEMBER 31,
(UNAUDITED) (UNAUDITED) 2007
- ------------------------------------------------------------------------------------------------
Shares sold 1,878,337 27,163,630 34,610,503
Shares reinvested 413 -- --
Shares redeemed (18) (16,028,444) (41,425,271)
- ------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding 1,878,732 11,135,186 (6,814,768)
Shares outstanding, beginning of period -- 104,397,296 111,212,064
- ------------------------------------------------------------------------------------------------
Shares outstanding, end of period 1,878,732 115,532,482 104,397,296
================================================================================================
(A) Represents the period from commencement of operations (January 30, 2008)
through June 30, 2008
7. FEDERAL INCOME TAXES
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 realized capital gains
(earned during the twelve months ending October 31) plus undistributed amounts
from prior years.
16
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
The tax character of distributions paid for the years ended December 31, 2007
and 2006 was as follows:
JSAM
INSTITUTIONAL JSAM SANDS CAPITAL
LARGE CAP INSTITUTIONAL INSTITUTIONAL
VALUE VALUE GROWTH
FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------
2007 2006 2007 2006 2007 2006
- ----------------------------------------------------------------------------------------------------------
From ordinary income $1,448,818 $1,255,961 $ 731,010 $ 861,982 $ -- $ --
From long-term capital gains 835,346 165,957 26,027 97,574 -- --
- ----------------------------------------------------------------------------------------------------------
$2,284,164 $1,421,918 $ 757,037 $ 959,556 $ -- $ --
- ----------------------------------------------------------------------------------------------------------
The following information is computed on a tax basis for each item as of
December 31, 2007:
JSAM
INSTITUTIONAL JSAM SANDS CAPITAL
LARGE CAP INSTITUTIONAL INSTITUTIONAL
VALUE VALUE GROWTH
FUND FUND FUND
- --------------------------------------------------------------------------------------------------
Tax cost of portfolio investments $ 20,187,389 $ 33,183,474 $ 1,186,469,322
==================================================================================================
Gross unrealized appreciation 1,180,407 716,791 318,337,545
Gross unrealized depreciation (5,416,866) (9,564,220) (117,346,200)
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) (4,236,459) (8,847,429) 200,991,345
Post-October losses (1,826,022) (4,021,846) --
Capital loss carryforward -- (3,875,886) --
Undistributed ordinary income -- 173 --
Undistributed long-term capital gains -- -- 25,298,914
Other temporary differences -- (190) --
==================================================================================================
Accumulated earnings (deficit) $ (6,062,481) $ (16,745,178) $ 226,290,259
==================================================================================================
The difference between the tax cost of portfolio investments and the financial
statement cost is primarily due to wash sales.
As of December 31, 2007, the Funds had the following capital loss carryforwards
for federal income tax purposes.
EXPIRES
FUND AMOUNT DECEMBER 31,
- --------------------------------------------------------------------------------
JSAM Institutional Value Fund $3,875,886 2015
- --------------------------------------------------------------------------------
The capital loss carryforwards may be utilized in future years to offset net
realized capital gain, if any, prior to distributing such gains to shareholders.
During the year ended December 31, 2007, the Funds utilized capital loss
carryforwards as follows:
AMOUNT
- --------------------------------------------------------------------------------
Sands Capital Institutional Growth Fund $ 38,746,046
- --------------------------------------------------------------------------------
Certain reclassifications, the result of permanent differences between financial
statement and income tax reporting requirements have been made to the components
of net assets. 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 income (loss) have been made to the following Funds for the year
ended December 31, 2007:
17
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
UNDISTRIBUTED ACCUMULATED
PAID-IN NET INVESTMENT NET REALIZED
CAPITAL INCOME (LOSS) LOSSES
- --------------------------------------------------------------------------------------
JSAM Institutional Large Cap Value Fund $ (6) $ 98 $ (92)
JSAM Institutional Value Fund 19 (19) --
Sands Capital Institutional Growth Fund (4,167,635) 4,167,635 --
- --------------------------------------------------------------------------------------
For the six months ended June 30, 2008, the Trust had the following federal tax
cost resulting in net unrealized appreciation (depreciation) as follows:
NET
GROSS GROSS UNREALIZED
FEDERAL UNREALIZED UNREALIZED APPRECIATION
TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
- -------------------------------------------------------------------------------------------------------------
JSAM Institutional Large Cap Value Fund $ 21,657,254 $ 640,224 $ (8,524,398) $ (7,884,174)
JSAM Institutional Value Fund $ 48,015,415 $ 537,092 $ (18,215,493) $ (17,678,401)
Mazama Institutional Growth Fund $ 25,705,937 $ 723,471 $ (2,656,748) $ (1,933,277)
Sands Capital Institutional Growth Fund $1,583,533,138 $ 239,229,738 $ (175,660,668) $ 63,569,070
- -------------------------------------------------------------------------------------------------------------
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 a more-likely-than-not threshold would be recorded
as a tax benefit 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. The Funds have analyzed their tax positions
taken on Federal income tax returns for all open tax years (tax years ended
December 31, 2004 through 2007) for purposes of implementing FIN 48 and have
concluded that no provision for income tax is required in their financial
statements.
8. 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.
9. CONCENTRATIONS/RISKS
Each Fund may invest a high percentage of its assets in specific sectors of the
market in order to achieve a potentially greater investment return. As a result,
the Funds may be more susceptible to economic, political, and regulatory
developments in a particular sector of the market, positive or negative, and may
experience increased volatility on the Funds' net asset value and magnified
effect on the total return.
18
- --------------------------------------------------------------------------------
Portfolio of Investments
JSAM Institutional Large Cap Value Fund - June 30, 2008 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
PREFERRED STOCK -- 0.4% SHARES VALUE
- -------------------------------------------------------------------------------
AUTOS & TRANSPORTATION -- 0.4%
General Motors Corp. 2,900 $ 39,730
- -------------------------------------------------------------------------------
COMMON STOCKS -- 97.5%
FINANCIAL SERVICES -- 34.8%
American International Group, Inc. + 7,800 206,388
Citigroup, Inc. 26,250 439,950
Fannie Mae 29,850 582,374
Freddie Mac 37,950 622,380
Genworth Financial, Inc. - Class A 31,960 569,208
KeyCorp 3,700 40,626
Lehman Brothers Holdings, Inc. 1,800 35,658
National City Corp. + 83,000 395,910
Wachovia Corp. + 28,700 445,711
Washington Mutual, Inc. + 84,400 416,092
- -------------------------------------------------------------------------------
3,754,297
- -------------------------------------------------------------------------------
PRODUCER DURABLES -- 24.3%
Alcatel-Lucent - ADR* + 93,500 564,740
Centex Corp. 31,400 419,818
D R Horton, Inc. 48,600 527,310
Navistar International Corp.* 6,400 421,248
Nortel Networks Corp.* 19,910 163,660
Pulte Homes, Inc. + 54,100 520,983
- -------------------------------------------------------------------------------
2,617,759
- -------------------------------------------------------------------------------
ENERGY -- 10.6%
Peabody Energy Corp. 6,500 572,325
Reliant Energy, Inc.* 27,000 574,290
- -------------------------------------------------------------------------------
1,146,615
- -------------------------------------------------------------------------------
TECHNOLOGY -- 9.6%
AU Optronics Corp. - ADR* + 10,373 164,308
BearingPoint, Inc.* + 178,800 144,828
Dell, Inc.* 22,100 483,548
Motorola, Inc. 32,500 238,550
- -------------------------------------------------------------------------------
1,031,234
- -------------------------------------------------------------------------------
UTILITIES -- 9.4%
Mirant Corp.* 11,400 446,310
Sprint Nextel Corp. 59,500 565,250
- -------------------------------------------------------------------------------
1,011,560
- -------------------------------------------------------------------------------
HEALTH CARE -- 4.4%
Omnicare, Inc. 6,800 178,296
Sanofi-Aventis - ADR 9,000 299,070
- -------------------------------------------------------------------------------
477,366
- -------------------------------------------------------------------------------
MATERIALS & PROCESSING -- 1.9%
Abitibibowater, Inc.* + 21,743 202,862
- -------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 1.8%
J.C. Penney Co., Inc. 5,300 192,337
- -------------------------------------------------------------------------------
AUTOS & TRANSPORTATION -- 0.7%
General Motors Corp. + 6,100 70,150
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS $ 10,504,180
- -------------------------------------------------------------------------------
INVESTMENT FUNDS -- 30.0%
BBH Securities Lending Fund ** 2,703,450 2,703,450
Touchstone Institutional
Money Market Fund^ 525,720 525,720
- -------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $ 3,229,170
- -------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 127.9%
(Cost $21,434,332) $ 13,773,080
- -------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS -- (27.9%) (3,004,791)
- -------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 10,768,289
===============================================================================
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
See Note 4.
+ All or a portion of the security is on loan. The total value of securities
on loan as of June 30, 2008, was $2,575,481.
** Represents collateral for securities loaned.
ADR American Depository Receipt.
See accompanying notes to financial statements.
19
- --------------------------------------------------------------------------------
Portfolio of Investments
JSAM Institutional Value Fund - June 30, 2008 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
PREFERRED STOCK -- 0.4% SHARES VALUE
- -------------------------------------------------------------------------------
AUTOS & TRANSPORTATION -- 0.4%
General Motors Corp. 6,300 $ 86,310
- -------------------------------------------------------------------------------
COMMON STOCKS -- 99.6%
FINANCIAL SERVICES -- 39.7%
American Equity Investment
Life Holding Co.* 78,300 638,145
American International Group, Inc. 11,600 306,936
BFC Financial Corp. - Class A* 133,400 100,050
Capital One Financial Corp. + 4,300 163,443
CIT Group, Inc. 21,200 144,372
Citigroup, Inc. 59,000 988,840
Conseco, Inc.* 23,900 237,088
Fannie Mae 65,600 1,279,856
Freddie Mac 78,500 1,287,400
Genworth Financial, Inc. - Class A 47,086 838,602
LandAmerica Financial Group, Inc. + 19,700 437,143
Lehman Brothers Holdings, Inc. 9,500 188,195
National City Corp. + 174,300 831,411
Wachovia Corp. + 44,500 691,085
Washington Mutual, Inc. + 163,400 805,562
- -------------------------------------------------------------------------------
8,938,128
- -------------------------------------------------------------------------------
PRODUCER DURABLES -- 26.7%
Alcatel-Lucent - ADR* + 131,100 791,844
Cavalier Homes, Inc.* 50,000 98,500
Centex Corp. 56,100 750,057
Champion Enterprises, Inc.* 14,000 81,900
D R Horton, Inc. + 109,300 1,185,905
Hovnanian Enterprises, Inc.* + 29,000 158,920
MasTec, Inc.* 5,600 59,696
Meritage Homes Corp.* + 45,800 694,786
Navistar International Corp.* 13,600 895,152
Pulte Homes, Inc. + 111,500 1,073,745
Ryland Group, Inc. + 10,000 218,100
- -------------------------------------------------------------------------------
6,008,605
- -------------------------------------------------------------------------------
ENERGY -- 9.1%
Foundation Coal Holdings, Inc. 4,000 354,320
Peabody Energy Corp. 8,400 739,620
Reliant Energy, Inc.* 45,200 961,404
- -------------------------------------------------------------------------------
2,055,344
- -------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 8.8%
Hudson Highland Group, Inc.* 87,600 917,172
J.C. Penney Co., Inc. 5,000 181,450
Libbey, Inc. 71,900 534,936
Office Depot, Inc.* 32,200 352,268
- -------------------------------------------------------------------------------
1,985,826
- -------------------------------------------------------------------------------
TECHNOLOGY -- 5.0%
Alliance Semiconductor Corp. 19,100 16,331
AU Optronics Corp. - ADR* + 22,558 357,319
BearingPoint, Inc.* + 478,900 387,908
Motorola, Inc. 25,000 183,500
Qimonda AG - ADR* + 76,200 181,356
- -------------------------------------------------------------------------------
1,126,414
- -------------------------------------------------------------------------------
MATERIALS & PROCESSING -- 3.0%
Abitibibowater, Inc.* + 72,085 672,553
- -------------------------------------------------------------------------------
OTHER -- 2.2%
iShares Russell 1000 Value Index 7,300 504,065
- -------------------------------------------------------------------------------
AUTOS & TRANSPORTATION -- 1.8%
ArvinMeritor, Inc. 11,500 143,520
Cooper Tire & Rubber Co. 13,700 107,408
General Motors Corp. + 13,200 151,800
- -------------------------------------------------------------------------------
402,728
- -------------------------------------------------------------------------------
HEALTH CARE -- 1.7%
Omnicare, Inc. + 14,500 380,190
- -------------------------------------------------------------------------------
CONSUMER STAPLES -- 1.6%
Pilgrim's Pride Corp. - Class B 27,500 357,225
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS $ 22,431,078
- -------------------------------------------------------------------------------
INVESTMENT FUNDS -- 34.8%
BBH Securities Lending Fund ** 7,050,731 7,050,731
Touchstone Institutional
Money Market Fund^ 768,895 768,895
- -------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $ 7,819,626
- -------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 134.8%
(Cost $47,949,984) $ 30,337,014
LIABILITIES IN EXCESS OF OTHER ASSETS -- (34.8%) (7,835,696)
- -------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 22,501,318
===============================================================================
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
See Note 4.
+ All or a portion of the security is on loan. The total value of securities
on loan as of June 30, 2008, was $6,701,258.
** Represents collateral for securities loaned.
ADR American Depository Receipt.
See accompanying notes to financial statements.
20
- --------------------------------------------------------------------------------
Portfolio of Investments
Mazama Institutional Growth Fund - June 30, 2008 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
PREFERRED STOCK -- 0.2% SHARES VALUE
- -------------------------------------------------------------------------------
FINANCIAL SERVICES -- 0.2%
East West Bancorp, Inc. 62 $ 43,710
- -------------------------------------------------------------------------------
COMMON STOCKS -- 77.8%
CONSUMER DISCRETIONARY -- 15.1%
Abercrombie & Fitch Co. - Class A 3,300 206,844
Activision, Inc.* 4,900 166,943
Apollo Group, Inc.* 2,000 88,520
Avon Products, Inc. 2,200 79,244
Best Buy Co., Inc. 2,600 102,960
China Digital TV Holding Co. Ltd.* 9,600 133,536
Chipotle Mexican Grill, Inc. - Class A* + 3,100 256,122
Coach, Inc.* 7,200 207,936
CROCS, Inc.* + 42,000 336,420
Electronic Arts, Inc.* 3,400 151,062
Focus Media Holding Ltd. - ADR* + 2,800 77,616
GameStop Corp. - Class A* 1,800 72,720
Guess?, Inc. 1,800 67,410
J. Crew Group, Inc.* + 7,000 231,070
NDS Group PLC - SPONS ADR* 2,600 153,920
Priceline.com, Inc.* + 500 57,730
Quiksilver, Inc.* 61,900 607,857
Starbucks Corp.* 17,600 277,024
Tiffany & Co. 3,300 134,475
Williams-Sonoma, Inc. + 3,600 71,424
Yum! Brands, Inc. 3,200 112,288
- -------------------------------------------------------------------------------
3,593,121
- -------------------------------------------------------------------------------
TECHNOLOGY -- 13.0%
Broadcom Corp. - Class A* 10,100 275,629
First Solar, Inc.* 550 150,051
Flextronics International Ltd.* 25,700 241,580
Immersion Corp.* 16,600 113,046
MEMC Electronic Materials, Inc.* 6,200 381,548
NVIDIA Corp.* 19,200 359,424
Red Hat, Inc.* + 26,300 544,147
Riverbed Technology, Inc.* 35,500 487,060
Skyworks Solutions, Inc.* + 22,800 225,036
SunPower Corp. - Class A* + 4,300 309,514
- -------------------------------------------------------------------------------
3,087,035
- -------------------------------------------------------------------------------
HEALTH CARE -- 11.0%
Affymetrix, Inc.* 20,400 209,916
ArthroCare Corp.* + 9,500 387,695
Cell Genesys, Inc.* + 48,600 126,360
Cephalon, Inc.* + 10,700 713,583
Cubist Pharmaceuticals, Inc.* 23,300 416,138
Express Scripts, Inc.* 600 37,632
Hologic, Inc.* + 10,400 226,720
Medarex, Inc.* 62,100 410,481
Quest Diagnostics, Inc. 1,900 92,093
- -------------------------------------------------------------------------------
2,620,618
- -------------------------------------------------------------------------------
ENERGY -- 10.9%
Atwood Oceanics, Inc.* 800 99,472
CONSOL Energy, Inc. 1,300 146,081
Evergreen Solar, Inc.* + 30,600 296,514
FMC Technologies, Inc.* 1,600 123,088
Helix Energy Solutions Group, Inc.* 5,700 237,348
National Oilwell Varco, Inc.* 1,900 168,568
Noble Corp. 8,100 526,176
Range Resources Corp. 3,300 216,282
Southwestern Energy Co.* 3,400 161,874
Superior Energy Services, Inc.* 4,400 242,616
Valero Energy Corp. 3,800 156,484
Weatherford International Ltd.* 4,200 208,278
- -------------------------------------------------------------------------------
2,582,781
- -------------------------------------------------------------------------------
FINANCIAL SERVICES -- 9.4%
American Express Co. + 7,200 271,224
Bank of Hawaii Corp. 1,000 47,800
BlackRock, Inc. 275 48,675
Blackstone Group L.P. (The) + 24,100 438,861
East West Bancorp, Inc. + 15,000 105,900
InterContinental Exchange, Inc.* 1,100 125,400
Invesco Ltd. 3,500 83,930
Janus Capital Group, Inc. 1,300 34,411
Mastercard, Inc. - Class A + 225 59,742
NASDAQ OMX Group, Inc.* 3,500 92,925
Northern Trust Corp. 1,800 123,426
Och-Ziff Capital Management
Group LLC + 11,200 212,912
SEI Investments Co. 3,000 70,560
T. Rowe Price Group, Inc. 1,100 62,117
UCBH Holdings, Inc. + 43,400 97,650
Visa, Inc. - Class A 2,425 197,177
Zions Bancorp. + 5,200 163,748
- -------------------------------------------------------------------------------
2,236,458
- -------------------------------------------------------------------------------
PRODUCER DURABLES -- 6.9%
Agilent Technologies, Inc.* 2,900 103,066
Applied Materials, Inc. 9,700 185,173
BE Aerospace, Inc.* 7,000 163,030
Fuel-Tech, Inc.* + 9,300 163,866
LAM Research Corp.* 1,700 61,455
Polycom, Inc.* 35,100 855,036
Rockwell Collins, Inc. 2,200 105,512
- -------------------------------------------------------------------------------
1,637,138
- -------------------------------------------------------------------------------
MATERIALS & PROCESSING -- 5.5%
Air Products & Chemicals, Inc. 375 37,073
International Paper Co. 3,800 88,540
Jacobs Engineering Group, Inc.* 700 56,490
McDermott International, Inc.* 7,400 457,986
Meruelo Maddux Properties, Inc.* 44,800 97,664
Precision Castparts Corp. 2,000 192,740
21
- --------------------------------------------------------------------------------
Mazama Institutional Growth Fund (Continued)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 77.8% (CONTINUED) SHARES VALUE
- -------------------------------------------------------------------------------
MATERIALS & PROCESSING -- 5.5% (CONTINUED)
RTI International Metals, Inc.* 3,500 $ 124,670
The Mosaic Co.* 800 115,760
Titanium Metals Corp. + 8,800 123,112
- -------------------------------------------------------------------------------
1,294,035
- -------------------------------------------------------------------------------
UTILITIES -- 3.3%
Cascal N.V.* 10,700 131,610
Clearwire Corp.* + 18,400 238,464
NII Holdings, Inc.* 8,700 413,163
- -------------------------------------------------------------------------------
783,237
- -------------------------------------------------------------------------------
AUTOS & TRANSPORTATION -- 1.5%
CH Robinson Worldwide, Inc. 1,200 65,808
Expeditors International of
Washington, Inc. 5,800 249,400
Paccar, Inc. 1,200 50,196
- -------------------------------------------------------------------------------
365,404
- -------------------------------------------------------------------------------
CONSUMER STAPLES -- 0.9%
Whole Foods Market, Inc. + 8,700 206,103
- -------------------------------------------------------------------------------
OTHER -- 0.3%
Foster Wheeler Ltd. 1,100 80,465
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS $ 18,486,395
- -------------------------------------------------------------------------------
INVESTMENT FUNDS -- 22.1%
BBH Securities Lending Fund ** 5,112,118 $ 5,112,118
Touchstone Institutional
Money Market Fund^ 130,437 130,437
- -------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $ 5,242,555
- -------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 100.1%
(Cost $25,705,937) $ 23,772,660
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.1%) (5,145,412)
- -------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 18,627,248
===============================================================================
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
See Note 4.
+ All or a portion of the security is on loan. The total value of securities
on loan as of June 30, 2008, was $4,855,612.
** Represents collateral for securities loaned.
ADR American Depository Receipt.
See accompanying notes to financial statements.
22
- --------------------------------------------------------------------------------
Portfolio of Investments
Sands Capital Institutional Growth Fund - June 30, 2008 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 98.7% SHARES VALUE
- -------------------------------------------------------------------------------
HEALTH CARE -- 22.6%
Abraxis BioScience, Inc.* + 115,675 $ 7,340,736
Allergan, Inc. 1,183,600 61,606,380
Cerner Corp.* + 361,500 16,332,570
Genentech, Inc.* 511,200 38,800,080
Genzyme Corp.* 925,700 66,668,914
Intuitive Surgical, Inc.* + 179,600 48,384,240
Stryker Corp. 492,800 30,987,264
Varian Medical Systems, Inc.* 713,800 37,010,530
- -------------------------------------------------------------------------------
307,130,714
- -------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 21.7%
Amazon.com, Inc.* + 1,081,100 79,277,063
Google, Inc. - Class A* 216,500 113,969,930
Iron Mountain, Inc.* 573,400 15,223,770
Las Vegas Sands Corp.* + 854,300 40,527,992
Starbucks Corp.* + 2,878,400 45,306,016
- -------------------------------------------------------------------------------
294,304,771
- -------------------------------------------------------------------------------
TECHNOLOGY -- 17.9%
Apple, Inc.* 495,100 82,899,544
Broadcom Corp. - Class A* + 2,116,200 57,751,098
EMC Corp.* 3,511,600 51,585,404
Salesforce.com, Inc.* + 731,100 49,882,953
- -------------------------------------------------------------------------------
242,118,999
- -------------------------------------------------------------------------------
ENERGY -- 17.7%
FMC Technologies, Inc.* 495,100 38,088,043
National Oilwell Varco, Inc.* 1,245,740 110,522,053
Schlumberger Ltd. 843,900 90,660,177
- -------------------------------------------------------------------------------
239,270,273
- -------------------------------------------------------------------------------
FINANCIAL SERVICES -- 12.9%
CME Group, Inc. - Class A + 101,300 38,817,147
InterContinental Exchange, Inc.* 376,500 42,921,000
Moody's Corp. + 1,061,500 36,558,060
Visa, Inc. - Class A 690,800 56,168,948
- -------------------------------------------------------------------------------
174,465,155
- -------------------------------------------------------------------------------
UTILITIES -- 3.8%
America Movil S.A. - ADR* 972,900 51,320,475
- -------------------------------------------------------------------------------
AUTOS & TRANSPORTATION -- 2.1%
Expeditors International of
Washington, Inc. 647,100 27,825,300
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS $ 1,336,435,687
- -------------------------------------------------------------------------------
INVESTMENT FUNDS -- 22.9%
BBH Securities Lending Fund ** 297,223,167 $ 297,223,167
Touchstone Institutional
Money Market Fund^ 13,443,354 13,443,354
- -------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $ 310,666,521
- -------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 121.6%
(Cost $1,579,313,495) $ 1,647,102,208
LIABILITIES IN EXCESS OF OTHER ASSETS -- (21.6%) (292,586,709)
- -------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 1,354,515,499
===============================================================================
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
See Note 4.
+ All or a portion of the security is on loan. The total value of securities
on loan as of June 30, 2008, was $287,909,607.
** Represents collateral for securities loaned.
ADR American Depository Receipt.
See accompanying notes to financial statements.
23
- --------------------------------------------------------------------------------
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.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period (January 1, 2008 through June 30, 2008).
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 June 30, 2008" to estimate the expenses you paid on your account
during this period.
24
- --------------------------------------------------------------------------------
Other Items (Continued)
- --------------------------------------------------------------------------------
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.
EXPENSES
NET EXPENSE BEGINNING ENDING PAID DURING
RATIO ACCOUNT ACCOUNT THE SIX MONTHS
ANNUALIZED VALUE VALUE ENDED
JUNE 30, JANUARY 1, JUNE 30, JUNE 30,
2008 2008 2008 2008*
- ------------------------------------------------------------------------------------------------------------------
JSAM INSTITUTIONAL LARGE CAP VALUE FUND
Actual 0.70% $1,000.00 $ 728.00 $ 3.01
Hypothetical 0.70% $1,000.00 $ 1,021.38 $ 3.53
JSAM INSTITUTIONAL VALUE FUND
Actual 0.80% $1,000.00 $ 724.80 $ 3.43
Hypothetical 0.80% $1,000.00 $ 1,020.88 $ 4.02
MAZAMA INSTITUTIONAL GROWTH FUND
Actual** 0.94% $1,000.00 $ 992.70 $ 3.92
Hypothetical** 0.94% $1,000.00 $ 1,016.96 $ 3.97
SANDS CAPITAL INSTITUTIONAL GROWTH FUND
Actual 0.79% $1,000.00 $ 889.20 $ 3.70
Hypothetical 0.79% $1,000.00 $ 1,020.95 $ 3.95
* 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 [or 366]] (to reflect the one-half
year period).
** The example is based on an investment of $1,000 invested at the beginning
of the period (January 30, 2008) and held for the entire period through
June 30, 2008.
25
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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
JPMorgan Chase Bank, N.A.
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-1105-TIFT-SAR-0806
ITEM 2. CODE OF ETHICS.
Not required in semi-annual report filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not required in semi-annual report filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required in semi-annual report filing.
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 John P.
Zanotti, 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)(1) Not applicable in semiannual filing.
(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 Institutional Funds Trust
By (Signature and Title) /s/ Jill McGruder
------------------------------------------------------
Jill McGruder, President
(principal executive officer)
Date August 25, 2008
---------------------------------------------------------------------------
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 McGruder
------------------------------------------------------
Jill McGruder, President
(principal executive officer)
Date August 25, 2008
---------------------------------------------------------------------------
By (Signature and Title) /s/ Terrie Wiedenheft
------------------------------------------------------
Terrie Wiedenheft, Controller and Treasurer
(principal financial officer)
Date August 27, 2008
---------------------------------------------------------------------------