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
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Date of reporting period: 9/30/09
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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.
SEPTEMBER 30, 2009
(UNAUDITED)
SEMI-ANNUAL REPORT
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 Mid Cap Growth Fund
[LOGO] TOUCHSTONE INVESTMENTS(R)
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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 4-7
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Statements of Operations 8-9
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Statements of Changes in Net Assets 10-12
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Financial Highlights 13-24
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Notes to Financial Statements 25-39
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Portfolios of Investments:
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Diversified Small Cap Growth Fund 40-41
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Growth Opportunities Fund 42-43
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Large Cap Core Equity Fund 44-45
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Large Cap Growth Fund 46
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Large Cap Value Fund 47
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Mid Cap Growth Fund 48-49
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Other Items 50-52
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Privacy Protection Policy 53
2
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Tabular Presentation of Portfolios of Investments (Unaudited)
September 30, 2009
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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)
Information Technology 28.3
Health Care 24.2
Consumer Discretionary 15.9
Industrials 13.2
Financials 6.4
Energy 5.3
Consumer Staples 2.9
Telecommunication Services 1.7
Materials 1.5
Investment Funds 29.1
Other Assets/Liabilities (Net) (28.5)
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TOTAL 100.0
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LARGE CAP CORE EQUITY FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Information Technology 21.1
Financials 14.3
Energy 12.7
Health Care 12.0
Industrials 10.9
Consumer Discretionary 10.6
Consumer Staples 9.8
Materials 2.4
Utilities 2.3
Telecommunication Services 2.2
Investment Funds 16.0
Other Assets/Liabilities (Net) (14.3)
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TOTAL 100.0
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LARGE CAP VALUE FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Financials 32.6
Energy 19.2
Consumer Discretionary 16.0
Utilities 10.3
Information Technology 9.3
Industrials 4.7
Telecommunication Services 3.9
Consumer Staples 1.0
Investment Funds 24.2
Other Assets/Liabilities (Net) (21.2)
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TOTAL 100.0
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GROWTH OPPORTUNITIES FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Information Technology 34.3
Health Care 20.1
Energy 11.5
Consumer Staples 9.5
Industrials 7.9
Consumer Discretionary 6.4
Materials 5.8
Financials 4.4
Investment Funds 21.9
Other Assets/Liabilities (Net) (21.8)
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TOTAL 100.0
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LARGE CAP GROWTH FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Information Technology 21.5
Consumer Discretionary 17.5
Health Care 15.3
Materials 13.9
Energy 11.8
Industrials 11.0
Financials 5.6
Consumer Staples 1.9
Investment Funds 23.4
Other Assets/Liabilities (Net) (21.9)
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TOTAL 100.0
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MID CAP GROWTH FUND
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SECTOR ALLOCATION (% OF NET ASSETS)
Industrials 16.2
Information Technology 15.6
Financials 14.2
Health Care 13.6
Consumer Discretionary 13.3
Energy 10.6
Materials 7.0
Consumer Staples 3.9
Utilities 3.1
Telecommunication Services 1.1
Investment Funds 25.3
Other Assets/Liabilities (Net) (23.9)
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TOTAL 100.0
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3
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Statements of Assets and Liabilities
September 30, 2009 (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 $ 34,123,603 $ 38,872,710 $ 54,992,660 $ 912,360,774
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Affiliated securities, at market value $ 178,855 $ 529,203 $ 898,810 $ 9,545,025
Non-affiliated securities, at market value 36,493,595 41,220,276 54,431,704 1,068,159,464
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At market value - including $7,982,294, $6,801,540,
$6,698,084, and $193,661,903 of securities loaned
for the Diversified Small Cap Growth Fund, Growth
Opportunities Fund, Large Cap Core Equity Fund, and
Large Cap Growth Fund, respectively. $ 36,672,450 $ 41,749,479 $ 55,330,514 $ 1,077,704,489
Dividends and interest receivable 6,679 17,476 78,130 472,836
Receivable for capital shares sold 1,001 3,635 871 476,292
Receivable for securities sold 105,520 -- -- 7,030,484
Receivable for securities lending income 2,877 905 697 44,407
Other assets 15,416 39,577 8,996 42,987
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TOTAL ASSETS 36,803,943 41,811,072 55,419,208 1,085,771,495
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LIABILITIES
Payable upon return of securities loaned 8,126,360 6,976,850 6,860,079 197,352,955
Payable for capital shares redeemed 26,240 70,093 48,602 2,350,827
Payable for securities purchased 11,386 344,982 -- --
Payable to Advisor 22,105 20,044 29,852 492,366
Payable to other affiliates 27,081 26,133 21,592 617,400
Payable to Trustees 4,118 4,117 4,117 4,372
Other accrued expenses and liabilities 44,917 81,041 46,428 555,457
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TOTAL LIABILITIES 8,262,207 7,523,260 7,010,670 201,373,377
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NET ASSETS $ 28,541,736 $ 34,287,812 $ 48,408,538 $ 884,398,118
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NET ASSETS CONSIST OF:
Paid-in capital $ 49,213,703 $ 79,661,853 $ 60,669,136 $ 1,107,078,485
Accumulated net investment income (loss) (111,119) (59,962) 566,116 1,387,289
Accumulated net realized losses from security
transactions $ 23,109,695) (48,190,848) (13,164,568) (389,411,371)
Net unrealized appreciation on investments 2,548,847 2,876,769 337,854 165,343,715
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NET ASSETS $ 28,541,736 $ 34,287,812 $ 48,408,538 $ 884,398,118
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PRICING OF CLASS A SHARES
Net assets attributable to Class A shares $ 11,391,861 $ 21,774,235 $ 46,445,527 $ 408,117,829
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Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 1,370,236 1,172,725 5,899,090 21,529,158
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Net asset value and redemption price per share $ 8.31 $ 18.57 $ 7.87 $ 18.96
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Maximum offering price per share $ 8.82 $ 19.70 $ 8.35 $ 20.12
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PRICING OF CLASS B SHARES
Net assets attributable to Class B shares $ -- $ -- $ -- $ 16,088,555
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Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) -- -- -- 882,152
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Net asset value, offering price and redemption price per
share* $ -- $ -- $ -- $ 18.24
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4
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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 $ 2,659,523 $ 7,605,050 $ 1,963,011 $ 154,079,642
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Shares of beneficial interest outstanding (unlimited number
of shares authorized, no par value) 324,827 437,139 252,273 8,431,212
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Net asset value, offering price and redemption price per share* $ 8.19 $ 17.40 $ 7.78 $ 18.27
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PRICING OF CLASS Y SHARES
Net assets attributable to Class Y shares $ 14,490,352 $ 3,236 $ -- $ 306,112,092
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Shares of beneficial interest outstanding (unlimited number
of shares authorized, no par value) 1,731,119 174 -- 16,006,701
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Net asset value, offering price and redemption price per share $ 8.37 $ 18.60 $ -- $ 19.12
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PRICING OF INSTITUTIONAL CLASS SHARES
Net assets attributable to Institutional Class shares $ -- $ 4,905,291 $ -- $ --
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Shares of beneficial interest outstanding (unlimited number
of shares authorized, no par value) -- 263,406 -- --
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Net asset value, offering price and redemption price per share $ -- $ 18.62 $ -- $ --
===================================================================================================================================
* Redemption price per share varies by length of time shares are held.
See accompanying notes to financial statements.
5
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Statements of Assets and Liabilities (Continued)
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LARGE CAP MID CAP
VALUE GROWTH
FUND FUND
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ASSETS
Investment securities:
At cost $ 22,573,147 $ 947,633,618
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Affiliated securities, at market value $ 655,763 $ 19,306,219
Non-affiliated securities, at market value 23,109,914 1,003,213,447
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At market value - including $3,943,603 and $184,379,053 of securities loaned
for the Large Cap Value Fund and Mid Cap Growth Fund, respectively. $ 23,765,677 $ 1,022,519,666
Dividends and interest receivable 6,150 908,912
Receivable for capital shares sold 304,379 926,659
Receivable for securities sold 536,218 --
Receivable for securities lending income 303 15,961
Other assets 22,142 92,683
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TOTAL ASSETS 24,634,869 1,024,463,881
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LIABILITIES
Payable upon return of securities loaned 4,089,701 189,307,783
Payable for capital shares redeemed 41,337 1,492,141
Payable for securities purchased 822,197 6,114,394
Payable to Advisor 7,276 532,021
Payable to other affiliates 12,301 723,151
Payable to Trustees 4,372 3,956
Other accrued expenses and liabilities 47,564 930,178
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TOTAL LIABILITIES 5,024,748 199,103,624
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NET ASSETS $ 19,610,121 $ 825,360,257
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NET ASSETS CONSIST OF:
Paid-in capital $ 54,765,910 $ 914,908,094
Accumulated net investment loss (60,357) (1,017,318)
Accumulated net realized losses from security transactions (36,287,962) (163,416,567)
Net unrealized appreciation on investments 1,192,530 74,886,048
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NET ASSETS $ 19,610,121 $ 825,360,257
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PRICING OF CLASS A SHARES
Net assets attributable to Class A shares $ 15,914,023 $ 569,006,818
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Shares of beneficial interest outstanding (unlimited number
of shares authorized, no par value) 4,554,720 31,296,092
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Net asset value and redemption price per share $ 3.49 $ 18.18
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Maximum offering price per share $ 3.70 $ 19.29
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PRICING OF CLASS B SHARES
Net assets attributable to Class B shares $ -- $ 35,928,650
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Shares of beneficial interest outstanding (unlimited number
of shares authorized, no par value) -- 2,339,977
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Net asset value, offering price and redemption price per share* $ -- $ 15.35
==================================================================================================================
6
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Statements of Assets and Liabilities (Continued)
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LARGE CAP MID CAP
VALUE GROWTH
FUND FUND
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PRICING OF CLASS C SHARES
Net assets attributable to Class C shares $ 3,696,098 $ 211,436,396
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Shares of beneficial interest outstanding (unlimited number
of shares authorized, no par value) 1,071,036 13,757,003
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Net asset value, offering price and redemption price per share* $ 3.45 $ 15.37
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PRICING OF CLASS Y SHARES
Net assets attributable to Class Y shares $ -- $ 8,988,393
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Shares of beneficial interest outstanding (unlimited number
of shares authorized, no par value) -- 493,099
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Net asset value, offering price and redemption price per share $ -- $ 18.23
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* Redemption price per share varies by length of time shares are held.
See accompanying notes to financial statements.
7
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Statement of Operations
For the Six Months Ended September 30, 2009 (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 $ 2,643 $ 3,727 $ 4,309 $ 75,335
Dividends from non-affiliated securities (A) 44,300 132,668 609,667 4,287,892
Interest -- -- -- 2
Income from securities loaned 15,530 8,834 10,205 280,422
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TOTAL INVESTMENT INCOME 62,473 145,229 624,181 4,643,651
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EXPENSES
Investment advisory fees 134,985 124,085 177,621 2,935,553
Distribution expenses, Class A 13,104 25,041 65,832 513,860
Distribution expenses, Class B -- -- -- 76,311
Distribution expenses, Class C 12,558 34,306 9,933 743,334
Administration fees 25,712 29,901 54,653 824,412
Transfer Agent fees, Class A 31,668 37,310 21,474 345,706
Transfer Agent fees, Class B -- -- -- 23,716
Transfer Agent fees, Class C 8,049 12,360 3,909 139,617
Transfer Agent fees, Class Y 2,847 4 -- 97,189
Transfer Agent fees, Institutional Class -- 4 -- --
Postage and supplies 10,243 19,333 7,290 130,199
Reports to shareholders 7,380 9,843 4,770 99,531
Registration fees, Class A 5,881 11,225 5,108 15,138
Registration fees, Class B -- -- -- 3,448
Registration fees, Class C 5,701 2,687 1,431 7,599
Registration fees, Class Y 7,813 8,119 -- 4,403
Registration fees, Institutional Class -- 7,033 -- --
Professional fees 10,205 10,510 11,074 28,789
Custodian fees 2,246 3,451 3,309 15,606
Trustees' fees and expenses 3,999 3,998 3,998 4,254
Compliance fees and expenses 515 537 902 3,243
Other expenses 1,905 1,279 884 16,746
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TOTAL EXPENSES 284,811 341,026 372,188 6,028,654
Fees waived by the Administrator (25,712) (29,901) (50,694) (586,214)
Fees waived and/or expenses reimbursed by the Advisor (85,507) (105,934) -- --
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NET EXPENSES 173,592 205,191 321,494 5,442,440
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NET INVESTMENT INCOME (LOSS) (111,119) (59,962) 302,687 (798,789)
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REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized losses from security transactions (1,082,608) (264,596) (3,720,537) (20,560,723)
Net change in unrealized appreciation/
depreciation on investments 8,211,408 7,732,912 17,878,013 226,856,059
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NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 7,128,800 7,468,316 14,157,476 206,295,336
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NET INCREASE IN NET ASSETS FROM OPERATIONS $ 7,017,681 $ 7,408,354 $ 14,460,163 $ 205,496,547
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(A) Net of foreign tax withholding of: $ -- $ 529 $ 8,689 $ 168,808
See accompanying notes to financial statements.
8
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Statement of Operations (Continued)
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LARGE CAP MID CAP
VALUE GROWTH
FUND FUND
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INVESTMENT INCOME
Dividends from affiliated securities $ 1,779 $ 99,886
Dividends from non-affiliated securities (A) 31,426 4,782,067
Income from securities loaned 3,233 273,994
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TOTAL INVESTMENT INCOME 36,438 5,155,947
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EXPENSES
Investment advisory fees 47,786 2,849,016
Distribution expenses, Class A 12,451 610,184
Distribution expenses, Class B -- 168,046
Distribution expenses, Class C 13,910 941,081
Transfer Agent fees, Class A 10,410 432,108
Transfer Agent fees, Class B -- 50,534
Transfer Agent fees, Class C 10,015 223,734
Transfer Agent fees, Class Y -- 4
Administration fees 12,743 712,261
Postage and supplies 10,758 272,542
Reports to shareholders 5,411 123,561
Professional fees 10,064 38,067
Custodian fees 1,781 27,289
Registration fees, Class A 3,182 2,668
Registration fees, Class B -- 1,188
Registration fees, Class C 3,146 409
Registration fees, Class Y -- 5,131
Trustees' fees and expenses 4,254 4,014
Compliance fees and expenses 877 2,270
Other expenses 897 17,101
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TOTAL EXPENSES 147,685 6,481,208
Fees waived by the Administrator (12,743) (307,943)
Fees waived and/or expenses reimbursed by the Advisor (38,147) --
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NET EXPENSES 96,795 6,173,265
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NET INVESTMENT LOSS (60,357) (1,017,318)
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REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains (losses) from security transactions (450,177) 3,083,868
Net change in unrealized appreciation/depreciation on investments 8,025,556 233,242,469
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NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 7,575,379 236,326,337
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NET INCREASE IN NET ASSETS FROM OPERATIONS $ 7,515,022 $ 235,309,019
=========================================================================================================
(A) Net of foreign tax withholding of: $ -- $ 862
See accompanying notes to financial statements.
9
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Statement 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 YEAR ENDED YEAR
SEPT. 30, ENDED SEPT. 30, ENDED
2009 MARCH 31, 2009 MARCH 31,
(UNAUDITED) 2009 (UNAUDITED) 2009(A)(B)
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FROM OPERATIONS
Net investment loss $ (111,119) $ (63,651) $ (59,962) $ (323,856)
Net realized losses from security transactions (1,082,608) (9,624,130) 264,596 (6,773,831)
Net change in unrealized appreciation/depreciation on investments 8,211,408 (1,538,607) 7,732,912 (7,150,096)
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NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS 7,017,681 (11,226,388) 7,408,354 (14,247,783)
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FROM CAPITAL SHARE TRANSACTIONS
CLASS A
Proceeds from shares sold 1,110,062 2,325,565 1,121,361 10,983,044
Payments for shares redeemed (1,671,684) (10,439,076) (2,386,668) (9,002,735)
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NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS A SHARE TRANSACTIONS (561,622) (8,113,511) (1,265,307) 1,980,309
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CLASS B
Proceeds from shares sold -- -- -- 179,046
Payments for shares redeemed -- -- -- (1,769,228)
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NET DECREASE IN NET ASSETS FROM CLASS B SHARE TRANSACTIONS -- -- -- (1,590,182)
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CLASS C
Proceeds from shares sold 27,945 454,913 308,817 1,562,451
Payments for shares redeemed (324,890) (1,205,593) (672,966) (2,906,983)
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NET DECREASE IN NET ASSETS FROM CLASS C SHARE TRANSACTIONS (296,945) (750,680) (364,149) (1,344,532)
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CLASS Y
Proceeds from shares sold 3,565,220 2,368,883 -- 2,500
Payments for shares redeemed (1,311,524) (3,840,927) -- --
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NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS Y SHARE TRANSACTIONS 2,253,696 (1,472,044) -- 2,500
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INSTITUTIONAL CLASS
Proceeds from shares sold -- -- 5,168,100 2,500
Payments for shares redeemed -- -- (900,000) --
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NET INCREASE IN NET ASSETS FROM INSTITUTIONAL CLASS SHARE TRANSACTIONS -- -- 4,268,100 2,500
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 8,412,810 (21,562,623) 10,046,998 (15,197,188)
NET ASSETS
Beginning of period 20,128,926 41,691,549 24,240,814 39,438,002
- ----------------------------------------------------------------------------------------------------------------------------------
End of period $ 28,541,736 $ 20,128,926 $ 34,287,812 $ 24,240,814
==================================================================================================================================
ACCUMULATED NET INVESTMENT LOSS $ (111,119) $ -- $ (59,962) $ --
==================================================================================================================================
(A) Class B represents the period from April 1, 2008 through February 1, 2009.
(B) Class Y and Institutional Class represent the period from commencement of
operations (February 2, 2009) through March 31, 2009.
See accompanying notes to financial statements.
10
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Statement of Changes in Net Assets (Continued)
- --------------------------------------------------------------------------------
LARGE CAP CORE LARGE CAP
EQUITY FUND GROWTH FUND
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SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPT. 30, ENDED SEPT. 30, ENDED
2009 MARCH 31, 2009 MARCH 31,
(UNAUDITED) 2009 (UNAUDITED) 2009
- -----------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) $ 302,687 $ 899,578 $ (798,789) $ 3,314,652
Net realized losses from security transactions (3,720,537) (9,214,214) (20,560,723) (341,832,277)
Net change in unrealized appreciation/depreciation on
investments 17,878,013 (18,011,816) 226,856,059 (210,014,994)
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NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS 14,460,163 (26,326,452) 205,496,547 (548,532,619)
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DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Class A -- (826,694) -- (384,725)
From net investment income, Class C -- (23,762) -- --
From net investment income, Class Y -- -- -- (743,849)
From net realized gains, Class A -- (4,234,966) -- --
From net realized gains, Class C -- (191,660) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS -- (5,277,082) -- (1,128,574)
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FROM CAPITAL SHARE TRANSACTIONS
CLASS A
Proceeds from shares sold 1,550,538 11,416,914 32,534,868 275,238,115
Reinvested distributions -- 4,958,772 -- 249,999
Payments for shares redeemed (14,109,300) (25,433,557) (146,491,277) (255,367,571)
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NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS A SHARE
TRANSACTIONS (12,558,762) (9,057,871) (113,956,409) 20,120,543
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B
Proceeds from shares sold -- -- 3,443 2,200,560
Payments for shares redeemed -- -- (1,873,927) (6,221,431)
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NET DECREASE IN NET ASSETS FROM CLASS B SHARE TRANSACTIONS -- -- (1,870,484) (4,020,871)
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS C
Proceeds from shares sold 82,733 2,075,124 6,798,043 58,876,139
Reinvested distributions -- 148,421 -- --
Payments for shares redeemed (506,838) (2,154,892) (27,050,413) (53,064,767)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS C SHARE
TRANSACTIONS (424,105) 68,653 (20,252,370) 5,811,372
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS Y
Proceeds from shares sold -- -- 66,869,500 339,657,227
Reinvested distributions -- -- -- 715,680
Payments for shares redeemed -- -- (28,893,008) (53,196,540)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM CLASS Y SHARE TRANSACTIONS -- -- 37,976,492 287,176,367
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,477,296 (40,592,752) 107,393,776 (240,573,782)
NET ASSETS
Beginning of period 46,931,242 87,523,994 777,004,342 1,017,578,124
- -----------------------------------------------------------------------------------------------------------------------------------
End of period $ 48,408,538 $ 46,931,242 $ 884,398,118 $ 777,004,342
===================================================================================================================================
ACCUMULATED NET INVESTMENT INCOME $ 566,116 $ 263,429 $ 1,387,289 $ 2,186,078
===================================================================================================================================
See accompanying notes to financial statements.
11
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Statement of Changes in Net Assets (Continued)
- --------------------------------------------------------------------------------
LARGE CAP MID CAP
VALUE FUND GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPT. 30, ENDED SEPT. 30, ENDED
2009 MARCH 31, 2009 MARCH 31,
(UNAUDITED) 2009 (UNAUDITED) 2009(A)
- -----------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) $ (60,357) $ 193,299 $ (1,017,318) $ (2,859,559)
Net realized gains (losses) from security transactions (450,177) (29,398,630) 3,083,868 (154,319,675)
Net change in unrealized appreciation/depreciation on
investments 8,025,556 8,616,169 233,242,469 (231,737,939)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS 7,515,022 (20,589,162) 235,309,019 (388,917,173)
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Class A -- (215,080) -- --
From net investment income, Class C -- (65,250) -- --
From net realized gains, Class A -- -- -- (7,418,546)
From net realized gains, Class B -- -- -- (709,563)
From net realized gains, Class C -- -- -- (3,686,097)
- -----------------------------------------------------------------------------------------------------------------------------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS -- (280,330) -- (11,814,206)
- -----------------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS
CLASS A
Proceeds from shares sold 7,757,091 4,874,733 73,431,256 198,229,454
Reinvested distributions -- 207,375 -- 6,477,072
Payments for shares redeemed (3,012,153) (8,689,205) (63,906,967) (194,004,433)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS A SHARE
TRANSACTIONS 4,744,938 (3,607,097) 9,524,289 10,702,093
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B
Proceeds from shares sold -- -- 5,674 2,085,030
Reinvested distributions -- -- -- 554,988
Payments for shares redeemed -- -- (4,664,745) (12,750,178)
- -----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM CLASS B SHARE TRANSACTIONS -- -- (4,659,071) (10,110,160)
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS C
Proceeds from shares sold 652,996 760,133 8,041,486 29,438,796
Reinvested distributions -- 58,850 -- 2,383,946
Payments for shares redeemed (388,234) (2,505,493) (17,173,503) (59,914,155)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CLASS C SHARE
TRANSACTIONS 264,762 (1,686,510) (9,132,017) (28,091,413)
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS Y
Proceeds from shares sold -- -- 8,256,000 2,500
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM CLASS Y SHARE TRANSACTIONS -- -- 8,256,000 2,500
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 12,524,722 (26,163,099) 239,298,220 (428,228,359)
NET ASSETS
Beginning of period 7,085,399 33,248,498 586,062,037 1,014,290,396
- -----------------------------------------------------------------------------------------------------------------------------------
End of period $ 19,610,121 $ 7,085,399 $ 825,360,257 $ 586,062,037
===================================================================================================================================
ACCUMULATED NET INVESTMENT LOSS $ (60,357) $ -- $ (1,017,318) $ --
===================================================================================================================================
(A) Class Y represents the period from commencement of operations (February 2,
2009) through March 31, 2009.
See accompanying notes to financial statements.
12
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
DIVERSIFIED SMALL CAP GROWTH FUND--CLASS A
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED PERIOD
SEPT. 30, MARCH 31, ENDED
2009 ------------------------ MARCH 31,
(UNAUDITED) 2009 2008 2007(A)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 6.27 $ 9.80 $ 11.64 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (0.04) (0.02) 0.50 (0.07)
Net realized and unrealized gains (losses) on investments 2.08 (3.51) (1.15) 1.71
- ------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.04 (3.53) (0.65) 1.64
- ------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- -- (1.19) --
- ------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 8.31 $ 6.27 $ 9.80 $ 11.64
========================================================================================================================
Total return(B) 32.54%(C) (36.02%) (7.28%) 16.40%(C)
========================================================================================================================
Net assets at end of period (000's) $ 11,392 $ 9,054 $ 22,955 $ 5,846
========================================================================================================================
Ratio of net expenses to average net assets 1.40%(D) 1.40% 1.40% 1.40%(D)
Ratio of net investment income (loss) to average net assets (0.92%)(D) (0.22%) 0.33% (1.15%)(D)
Portfolio turnover rate 83%(D) 113% 99% 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 EACH PERIOD
- --------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR PERIOD
SEPT. 30, ENDED ENDED
2009 MARCH 31, MARCH 31,
(UNAUDITED) 2009 2008(A)
- --------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 6.20 $ 9.75 $ 12.44
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.06) (0.08) (0.22)
Net realized and unrealized gains (losses) on investments 2.05 (3.47) (1.28)
- --------------------------------------------------------------------------------------------------------
Total from investment operations 1.99 (3.55) (1.50)
- --------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- -- (1.19)
- --------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 8.19 $ 6.20 $ 9.75
========================================================================================================
Total return(B) 32.10%(C) (36.41%) (13.66%)(C)
========================================================================================================
Net assets at end of period (000's) $ 2,660 $ 2,267 $ 4,228
========================================================================================================
Ratio of net expenses to average net assets 2.15%(D) 2.15% 0.84%(D)
Ratio of net investment loss to average net assets (1.66%)(D) (0.98%) (17.70%)(D)
Portfolio turnover rate 83%(D) 113% 99%
(A) Represents the period from commencement of operations (August 1, 2007)
through March 31, 2008.
(B) Total returns shown exclude the effect of applicable sales loads.
(C) Not annualized.
(D) Annualized.
See accompanying notes to financial statements.
13
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
DIVERSIFIED SMALL 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
2009 ------------------------ MARCH 31,
(UNAUDITED) 2009 2008 2007(A)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 6.30 $ 9.84 $ 11.66 $ 10.00
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (0.02) 0.00(B) 0.04 (0.05)
Net realized and unrealized gains (losses) on investments 2.09 (3.54) (0.67) 1.71
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.07 (3.54) (0.63) 1.66
- ---------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- -- (1.19) --
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 8.37 $ 6.30 $ 9.84 $ 11.66
===========================================================================================================================
Total return 32.86%(C) (35.98%) (7.09%) 16.60%(C)
===========================================================================================================================
Net assets at end of period (000's) $ 14,490 $ 8,808 $ 14,509 $ 6,128
===========================================================================================================================
Ratio of net expenses to average net assets 1.15%(D) 1.15% 1.15% 1.15%(D)
Ratio of net investment income (loss) to average net assets (0.66%)(D) 0.02% (0.52%) (0.90%)(D)
Portfolio turnover rate 83%(D) 113% 99% 86%(D)
(A) Represents the period from commencement of operations (September 6, 2006)
through March 31, 2007.
(B) Amount rounds to less than $0.01 per share.
(C) Not annualized. (D) Annualized.
GROWTH OPPORTUNITIES FUND--CLASS A
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- -----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPT. 30, YEAR ENDED MARCH 31,
2009 --------------------------------------------------------------------
(UNAUDITED) 2009 2008 2007 2006 2005
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 14.41 $ 21.68 $ 20.75 $ 21.57 $ 17.92 $ 18.06
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.02) (0.15) (0.24) (0.35) (0.21) (0.24)
Net realized and unrealized gains
(losses) on investments 4.18 (7.12) 1.17 (0.47) 3.86 0.10
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 4.16 (7.27) 0.93 (0.82) 3.65 (0.14)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 18.57 $ 14.41 $ 21.68 $ 20.75 $ 21.57 $ 17.92
===================================================================================================================================
Total return(A) 28.87%(B) (33.53%) 4.48% (3.80%) 20.37% (0.78%)
===================================================================================================================================
Net assets at end of period (000's) $ 21,774 $ 17,973 $ 26,349 $ 35,723 $ 98,004 $ 81,313
===================================================================================================================================
Ratio of net expenses to average net assets 1.24%(C) 1.51% 1.55% 1.79% 1.64% 1.68%
Ratio of net investment loss to average net
assets (0.27%)(C) (0.70%) (0.89%) (1.12%) (1.09%) (1.14%)
Portfolio turnover rate 114%(C) 60% 82% 161% 80% 35%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
14
- --------------------------------------------------------------------------------
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,
2009 --------------------------------------------------------------------
(UNAUDITED) 2009 2008 2007 2006 2005
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 13.55 $ 20.42 $ 19.63 $ 20.60 $ 17.11 $ 17.39
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.08) (0.29) (0.35) (0.54) (0.40) (0.40)
Net realized and unrealized gains
(losses) on investments 3.93 (6.58) 1.14 (0.43) 3.89 0.12
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.85 (6.87) 0.79 (0.97) 3.49 (0.28)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 17.40 $ 13.55 $ 20.42 $ 19.63 $ 20.60 $ 17.11
===================================================================================================================================
Total return(A) 28.41%(B) (33.64%) 4.02% (4.71%) 20.40% (1.61%)
===================================================================================================================================
Net assets at end of period (000's) $ 7,605 $ 6,262 $ 11,115 $ 11,957 $ 22,412 $ 21,789
===================================================================================================================================
Ratio of net expenses to average net assets 1.99%(C) 2.27% 2.30% 2.71% 2.57% 2.61%
Ratio of net investment loss to average net
assets (1.02%)(C) (1.46%) (1.60%) (2.00%) (2.01%) (2.04%)
Portfolio turnover rate 114%(C) 60% 82% 161% 80% 35%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
GROWTH OPPORTUNITIES FUND--CLASS Y
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD
SEPT. 30, ENDED
2009 MARCH 31,
(UNAUDITED) 2009(A)
- --------------------------------------------------------------------------------
Net asset value at beginning of period $ 14.41 $ 14.37
- --------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.00)(B) (0.00)(B)
Net realized and unrealized gains on investments 4.19 0.04
- --------------------------------------------------------------------------------
Total from investment operations 4.19 0.04
- --------------------------------------------------------------------------------
Net asset value at end of period $ 18.60 $ 14.41
================================================================================
Total return 29.08%(C) 0.28%(C)
================================================================================
Net assets at end of period (000's) $ 3 $ 3
================================================================================
Ratio of net expenses to average net assets 0.99%(D) 0.97%(D)
Ratio of net investment income (loss) to average net
assets (0.03%)(D) 0.21%(D)
Portfolio turnover rate 114%(D) 60%
(A) Represents the period from commencement of operations (February 2, 2009)
through March 31, 2009.
(B) Amount rounds to less than $0.01.
(C) Not annualized.
(D) Annualized.
See accompanying notes to financial statements.
15
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
GROWTH OPPORTUNITIES FUND--INSTITUTIONAL CLASS
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD
SEPT. 30, ENDED
2009 MARCH 31,
(UNAUDITED) 2009(A)
- --------------------------------------------------------------------------------
Net asset value at beginning of period $ 14.42 $ 14.37
- --------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 0.01 (0.00)(B)
Net realized and unrealized gains on
investments 4.19 0.05
- --------------------------------------------------------------------------------
Total from investment operations 4.20 0.05
- --------------------------------------------------------------------------------
Net asset value at end of period $ 18.62 $ 14.42
================================================================================
Total return 29.13%(C) 0.35%(C)
================================================================================
Net assets at end of period (000's) $ 4,906 $ 3
================================================================================
Ratio of net expenses to average net assets 0.84%(D) 0.82%(D)
Ratio of net investment income to average net
assets 0.13%(D) 0.36%(D)
Portfolio turnover rate 114%(D) 60%
(A) Represents the period from commencement of operations (February 2, 2009)
through March 31, 2009.
(B) Amount rounds to less than $0.01.
(C) Not annualized.
(D) Annualized.
See accompanying notes to financial statements.
16
- --------------------------------------------------------------------------------
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,
2009 ---------------------------------------------------------------------
(UNAUDITED) 2009 2008 2007 2006 2005
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 6.00 $ 10.36 $ 11.36 $ 10.49 $ 9.48 $ 9.10
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.06 0.12 0.10 0.11 0.06 0.11
Net realized and unrealized gains
(losses) on investments 1.81 (3.77) (0.62) 0.91 0.96 0.38
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.87 (3.65) (0.52) 1.02 1.02 0.49
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income -- (0.11) (0.10) (0.15) (0.01) (0.11)
Distributions from net realized gains -- (0.60) (0.38) -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions -- (0.71) (0.48) (0.15) (0.01) (0.11)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 7.87 $ 6.00 $ 10.36 $ 11.36 $ 10.49 $ 9.48
===================================================================================================================================
Total return(A) 31.17%(B) (35.73%) (5.03%) 9.83% 10.74% 5.32%
===================================================================================================================================
Net assets at end of period (000's) $ 46,446 $ 45,073 $ 84,611 $ 95,175 $ 25,693 $ 9,328
===================================================================================================================================
Ratio of net expenses to average net assets 1.15%(C) 1.15% 1.15% 1.15% 1.00% 1.00%
Ratio of net investment income to average net
assets 1.13%(C) 1.38% 0.89% 0.97% 1.03% 1.18%
Portfolio turnover rate 28%(C) 51% 52% 54% 6% 7%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
17
- --------------------------------------------------------------------------------
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,
2009 ---------------------------------------------------------------
(UNAUDITED) 2009 2008 2007 2006 2005
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 5.95 $ 10.29 $ 11.29 $ 10.39 $ 9.46 $ 9.08
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 0.01 0.04 0.01 (0.02) 0.03 0.04
Net realized and unrealized gains
(losses) on investments 1.82 (3.72) (0.61) 0.96 0.91 0.37
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.83 (3.68) (0.60) 0.94 0.94 0.41
- ---------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income -- (0.06) (0.02) (0.04) (0.01) (0.03)
Distributions from net realized gains -- (0.60) (0.38) -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions -- (0.66) (0.40) (0.04) (0.01) (0.03)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 7.78 $ 5.95 $ 10.29 $ 11.29 $ 10.39 $ 9.46
===========================================================================================================================
Total return(A) 30.76%(B) (36.23%) (5.72%) 9.09% 9.91% 4.52%
===========================================================================================================================
Net assets at end of period (000's) $ 1,963 $ 1,858 $ 2,913 $ 4,231 $ 1,399 $ 1,675
===========================================================================================================================
Ratio of net expenses to average net assets 1.90%(C) 1.90% 1.90% 1.90% 1.75% 1.75%
Ratio of net investment income (loss)
to average net assets 0.38%(C) 0.70% 0.13% (0.26%) 0.26% 0.41%
Portfolio turnover rate 28%(C) 51% 52% 54% 6% 7%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
18
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
LARGE CAP GROWTH FUND--CLASS A
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- -----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPT. 30, YEAR ENDED MARCH 31,
2009 ---------------------------------------------------------------------
(UNAUDITED) 2009 2008 2007 2006 2005
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 14.73 $ 24.45 $ 22.06 $ 23.26 $ 19.84 $ 17.31
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 0.01 0.09 0.02 (0.04) (0.02) (0.02)
Net realized and unrealized gains
(losses) on investments 4.22 (9.80) 2.37 (1.16) 3.44 2.55
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 4.23 (9.71) 2.39 (1.20) 3.42 2.53
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income -- (0.01) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 18.96 $ 14.73 $ 24.45 $ 22.06 $ 23.26 $ 19.84
===================================================================================================================================
Total return(A) 28.72%(B) (39.71%) 10.83% (5.16%) 17.24% 14.62%
===================================================================================================================================
Net assets at end of period (000's) $ 408,118 $ 418,808 $ 9,488 $ 656,582 $ 838,120 $ 274,121
===================================================================================================================================
Ratio of net expenses to average net assets 1.25%(C) 1.25% 1.25% 1.16% 1.17% 1.26%
Ratio of net investment income (loss)
to average net assets (0.13%)(C) 0.41% 0.06% (0.16%) (0.13%) (0.23%)
Portfolio turnover 79%(C) 126% 72% 115% 104% 127%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
LARGE CAP GROWTH FUND--CLASS B
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- -----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPT. 30, YEAR ENDED MARCH 31,
2009 --------------------------------------------------------------------
(UNAUDITED) 2009 2008 2007 2006 2005
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 14.22 $ 23.68 $ 21.46 $ 22.83 $ 19.60 $ 17.24
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.09) (0.08) (0.15) (0.21) (0.15) (0.12)
Net realized and unrealized gains
(losses) on investments 4.11 (9.38) 2.37 (1.16) 3.38 2.48
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 4.02 (9.46) 2.22 (1.37) 3.23 2.36
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 18.24 $ 14.22 $ 23.68 $ 21.46 $ 22.83 $ 19.60
===================================================================================================================================
Total return(A) 28.27%(B) (39.95%) 10.34% (6.00%) 16.48% 13.69%
===================================================================================================================================
Net assets at end of period (000's) $ 16,088 $ 14,186 $ 29,829 $ 26,669 $ 27,781 $ 10,579
===================================================================================================================================
Ratio of net expenses to average net assets 2.00%(C) 2.00% 2.00% 2.02% 2.08% 2.25%
Ratio of net investment loss to average net
assets (0.86%)(C) (0.35%) (0.65%) (0.98%) (1.02%) (1.23%)
Portfolio turnover rate 79%(C) 126% 72% 115% 104% 127%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
19
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
LARGE CAP GROWTH FUND--CLASS C
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- -----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPT. 30, YEAR ENDED MARCH 31,
2009 -------------------------------------------------------------------
(UNAUDITED) 2009 2008 2007 2006 2005
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 14.25 $ 23.74 $ 21.52 $ 22.88 $ 19.62 $ 17.24
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.09) (0.07) (0.14) (0.20) (0.11) (0.08)
Net realized and unrealized gains
(losses) on investments 4.11 (9.42) 2.36 (1.16) 3.37 2.46
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 4.02 (9.49) 2.22 (1.36) 3.26 2.38
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 18.27 $ 14.25 $ 23.74 $ 21.52 $ 22.88 $ 19.62
===================================================================================================================================
Total return(A) 28.21%(B) (39.97%) 10.32% (5.94%) 16.62% 13.81%
===================================================================================================================================
Net assets at end of period (000's) $ 154,080 $ 137,641 $ 236,582 $ 190,261 $ 188,810 $ 48,446
===================================================================================================================================
Ratio of net expenses to average net assets 2.00%(C) 2.00% 2.00% 1.95% 1.98% 2.03%
Ratio of net investment loss to average net
assets (0.86%)(C) (0.33%) (0.66%) (0.92%) (0.93%) (0.97%)
Portfolio turnover rate 79%(C) 126% 72% 115% 104% 127%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
LARGE 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
2009 --------------------------------------------------- MARCH 31,
(UNAUDITED) 2009 2008 2007 2006 2005(A)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 14.84 $ 24.64 $ 22.19 $ 23.33 $ 19.86 $ 18.34
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.00(B) 0.10 0.05 0.06 0.03 0.01
Net realized and unrealized gains
(losses) on investments 4.28 (9.85) 2.40 (1.20) 3.44 1.51
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 4.28 (9.75) 2.45 (1.14) 3.47 1.52
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income -- (0.05) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 19.12 $ 14.84 $ 24.64 $ 22.19 $ 23.33 $ 19.86
===================================================================================================================================
Total return 28.84%(C) (39.58%) 11.04% (4.89%) 17.47% 8.29%(C)
===================================================================================================================================
Net assets at end of period (000's) $ 306,112 $ 206,369 $ 31,679 $ 40,044 $ 66,655 $ 43,279
===================================================================================================================================
Ratio of net expenses to average net assets 0.99%(D) 0.97% 1.00% 0.90% 0.93% 1.01%(D)
Ratio of net investment income to average net
assets 0.14%(D) 0.95% 0.21% 0.13% 0.12% 0.21%(D)
Portfolio turnover 79%(D) 126% 72% 115% 104% 127%
(A) Represents the period from commencement of operations (November 10, 2004)
through March 31, 2005.
(B) Amount rounds to less than $0.01.
(C) Not annualized.
(D) Annualized.
See accompanying notes to financial statements.
20
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
LARGE CAP VALUE FUND--CLASS A
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- -----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD
SEPT. 30, YEAR ENDED MARCH 31, ENDED
2009 -------------------------------------- MARCH 31,
(UNAUDITED) 2009 2008 2007 2006(A)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 1.81 $ 6.41 $ 11.15 $ 10.19 $ 10.00
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (0.01) 0.06 0.10 0.04 0.01
Net realized and unrealized gains
(losses) on investments 1.69 (4.58) (4.15) 1.19 0.18
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.68 (4.52) (4.05) 1.23 0.19
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income -- (0.08) (0.09) (0.04) --
Distributions from net realized gains -- -- (0.60) (0.23) --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions -- (0.08) (0.69) (0.27) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 3.49 $ 1.81 $ 6.41 $ 11.15 $ 10.19
===================================================================================================================================
Total return(B) 92.82%(C) (70.60%) (37.31%) 12.12% 1.90%(C)
===================================================================================================================================
Net assets at end of period (000's) $ 15,914 $ 5,321 $ 23,609 $ 29,609 $ 11,684
===================================================================================================================================
Ratio of net expenses to average net assets 1.35%(D) 1.35% 1.35% 1.35% 1.30%(D)
Ratio of net investment income (loss) to average net
assets (0.78%)(D) 1.30% 1.06% 0.55% 1.34%(D)
Portfolio turnover rate 128%(D) 100% 75% 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.
21
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
LARGE CAP VALUE FUND--CLASS C
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- -------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD
SEPT. 30, YEAR ENDED MARCH 31, ENDED
2009 ----------------------------------------- MARCH 31,
(UNAUDITED) 2009 2008 2007 2006(A)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 1.79 $ 6.38 $ 11.09 $ 10.18 $ 10.00
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (0.02) 0.03 0.03 (0.01) 0.00(B)
Net realized and unrealized gains (losses)
on investments 1.68 (4.56) (4.14) 1.17 0.18
- -------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.66 (4.53) (4.11) 1.16 0.18
- -------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income -- (0.06) (0.00)(B) (0.01) --
Distributions from net realized gains -- -- (0.60) (0.24) --
- -------------------------------------------------------------------------------------------------------------------------
Total distributions -- (0.06) (0.60) (0.25) --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 3.45 $ 1.79 $ 6.38 $ 11.09 $ 10.18
=========================================================================================================================
Total return(C) 92.74%(D) (71.00%) (37.89%) 11.37% 1.80%(D)
=========================================================================================================================
Net assets at end of period (000's) $ 3,696 $ 1,764 $ 9,639 $ 15,220 $ 561
=========================================================================================================================
Ratio of net expenses to average net assets 2.10%(E) 2.10% 2.10% 2.10% 1.89%(E)
Ratio of net investment income (loss) to
average net assets (1.53%)(E) 0.55% 0.30% (0.27%) 0.25%(E)
Portfolio turnover rate 128%(E) 100% 75% 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.
22
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
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,
2009 ---------------------------------------------------------------------
(UNAUDITED) 2009 2008 2007 2006 2005
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 12.95 $ 21.16 $ 24.17 $ 24.02 $ 21.42 $ 21.73
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.00)(A) (0.01) (0.12) (0.14) (0.12) (0.16)
Net realized and unrealized gains
(losses) on investments 5.23 (7.96) 0.01 2.20 4.70 1.03
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 5.23 (7.97) (0.11) 2.06 4.58 0.87
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (0.24) (2.90) (1.91) (1.98) (1.18)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 18.18 $ 12.95 $ 21.16 $ 24.17 $ 24.02 $ 21.42
===================================================================================================================================
Total return(B) 40.39%(C) (37.67%) (1.53%) 8.84% 22.21% 4.13%
===================================================================================================================================
Net assets at end of period (000's) $ 569,007 $ 397,756 $ 649,891 $ 713,666 $ 639,501 $ 574,855
===================================================================================================================================
Ratio of net expenses to average net assets 1.50%(D) 1.50% 1.47% 1.50% 1.50% 1.50%
Ratio of net investment loss to average net
assets (0.05%)(D) (0.07%) (0.53%) (0.66%) (0.57%) (0.84%)
Portfolio turnover 67%(D) 71% 64% 58% 69% 85%
(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.
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,
2009 ---------------------------------------------------------------------
(UNAUDITED) 2009 2008 2007 2006 2005
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 10.98 $ 18.13 $ 21.25 $ 21.49 $ 19.50 $ 20.03
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.06) (0.15) (0.28) (0.30) (0.26) (0.29)
Net realized and unrealized gains
(losses) on investments 4.43 (6.76) 0.06 1.97 4.23 0.94
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 4.37 (6.91) (0.22) 1.67 3.97 0.65
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (0.24) (2.90) (1.91) (1.98) (1.18)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 15.35 $ 10.98 $ 18.13 $ 21.25 $ 21.49 $ 19.50
===================================================================================================================================
Total return(A) 39.80%(B) (38.12%) (2.29%) 8.04% 21.24% 3.37%
===================================================================================================================================
Net assets at end of period (000's) $ 35,929 $ 29,521 $ 61,977 $ 74,935 $ 79,552 $ 71,879
===================================================================================================================================
Ratio of net expenses to average net assets 2.25%(C) 2.25% 2.25% 2.25% 2.25% 2.25%
Ratio of net investment loss to average net
assets (0.81%)(C) (0.85%) (1.31%) (1.42%) (1.32%) (1.60%)
Portfolio turnover rate 67%(C) 71% 64% 58% 69% 85%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
23
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
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,
2009 ---------------------------------------------------------------------
(UNAUDITED) 2009 2008 2007 2006 2005
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 10.99 $ 18.15 $ 21.27 $ 21.51 $ 19.51 $ 20.04
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.06) (0.14) (0.27) (0.28) (0.25) (0.30)
Net realized and unrealized gains
(losses) on investments 4.44 (6.78) 0.05 1.95 4.23 0.95
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 4.38 (6.92) (0.22) 1.67 3.98 0.65
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (0.24) (2.90) (1.91) (1.98) (1.18)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $ 15.37 $ 10.99 $ 18.15 $ 21.27 $ 21.51 $ 19.51
===================================================================================================================================
Total return(A) 39.85%(B) (38.14%) (2.28%) 8.04% 21.28% 3.36%
===================================================================================================================================
Net assets at end of period (000's) $ 211,436 $ 158,782 $ 302,422 $ 345,997 $ 327,867 $ 284,966
===================================================================================================================================
Ratio of net expenses to average net assets 2.25%(C) 2.25% 2.24% 2.25% 2.25% 2.25%
Ratio of net investment loss to average net
assets (0.80%)(C) (0.84%) (1.30%) (1.41%) (1.32%) (1.60%)
Portfolio turnover 67%(C) 71% 64% 58% 69% 85%
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Not annualized.
(C) Annualized.
MID CAP GROWTH FUND--CLASS Y
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD
SEPT. 30, ENDED
2009 MARCH 31,
(UNAUDITED) 2009(A)
- --------------------------------------------------------------------------------
Net asset value at beginning of period $ 12.96 $ 13.20
- --------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.01 0.02
Net realized and unrealized gains (losses)
on investments 5.26 (0.26)
- --------------------------------------------------------------------------------
Total from investment operations 5.27 (0.24)
- --------------------------------------------------------------------------------
Net asset value at end of period $ 18.23 $ 12.96
================================================================================
Total return 40.56%(B) (1.82%)(B)
================================================================================
Net assets at end of period (000's) $ 8,988 $ 3
================================================================================
Ratio of net expenses to average net assets 1.23%(C) 1.25%(C)
Ratio of net investment income to average net
assets 0.32%(C) 1.11%(C)
Portfolio turnover 67%(C) 71%
(A) Represents the period from commencement of operations (February 2, 2009)
through March 31, 2009.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
24
- --------------------------------------------------------------------------------
Notes to Financial Statements
September 30, 2009 (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, and Mid 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.
The Funds are registered to offer certain of the following classes of shares:
Class A shares, Class B shares, Class C shares, Class Y shares, and
Institutional Class 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 as outlined below:
CLASS A(1) CLASS B(2) CLASS C(3) CLASS Y(4) INSTITUTIONAL CLASS(5)
- ---------------------------------------------------------------------------------------------------------------
Diversified Small Cap Growth Fund X X X
Growth Opportunities Fund X X X X
Large Cap Core Equity Fund X X
Large Cap Growth Fund X X X X X
Large Cap Value Fund X X
Mid Cap Growth Fund X X X X X
(1) Currently sold subject to a maximum front-end sales load of 5.75% and a
maximum distribution fee of up to 0.25% of average daily net assets
(2) 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; closed to new
investors effective February 1, 2009.
(3) 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
(4) Sold without a distribution fee or sales charge, but offered only through
selected dealers
(5) Sold without a distribution fee or sales charge, and subject to a higher
minimum initial investment
Each Class A, Class B, Class C, Class Y, and Institutional Class 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, Class Y,
and Institutional Class 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. Effective after the close of business on October
6, 2009, the Large Cap Value Fund was closed to new investors.
25
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
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 value. 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.
The Funds have adopted FASB ASC 820 "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. Fair Value Measurements applies to fair value
measurements already required or permitted by existing standards. 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.)
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 aggregate value by input level, as of September 30, 2009, for each Fund's
investments, as well as a reconciliation of assets for which significant
unobservable inputs (Level 3) were used in determining value, is included in
each Fund's Portfolio of Investments, which also includes a breakdown of the
Fund's investments by geographic/industry concentration.
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.
26
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
As of September 30, 2009, 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 $ 7,982,294 $ 8,126,360
Growth Opportunities Fund $ 6,801,540 $ 6,976,850
Large Cap Core Equity Fund $ 6,698,084 $ 6,860,079
Large Cap Growth Fund $193,661,903 $197,352,955
Large Cap Value Fund $ 3,943,603 $ 4,089,701
Mid Cap Growth Fund $184,379,053 $189,307,783
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 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, Class Y, and Institutional Class 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 accreted or amortized into income using the effective yield method.
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.
27
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
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.
3. FEDERAL TAX INFORMATION
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.
The tax character of distributions paid for the years ended March 31, 2009 and
2008 was as follows:
DIVERSIFIED GROWTH LARGE CAP
SMALL CAP GROWTH OPPORTUNITIES CORE EQUITY
FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2009 2008 2009 2008 2009 2008
- ------------------------------------------------------------------------------------------------------------------------------------
From ordinary income $ -- $ 1,091,263 $ -- $ -- $ 850,456 $ 953,047
From long-term capital gains -- 250,461 -- -- 4,426,626 3,110,976
From tax return of capital -- 44,031 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
$ -- $ 1,385,755 $ -- $ -- $ 5,277,082 $ 4,064,023
- ------------------------------------------------------------------------------------------------------------------------------------
LARGE CAP
GROWTH LARGE CAP VALUE MID CAP GROWTH
FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2009 2008 2009 2008 2009 2008
- ------------------------------------------------------------------------------------------------------------------------------------
From ordinary income $ 1,128,574 $ -- $ 280,330 $ 2,249,958 $ -- $ 10,614,691
From long-term capital gains -- -- -- 661,846 11,814,206 126,598,336
From tax return of capital -- -- -- 105,998 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
$ 1,128,574 $ -- $ 280,330 $ 3,017,802 $ 11,814,206 $137,213,027
- ------------------------------------------------------------------------------------------------------------------------------------
28
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
The following information is computed on a tax basis for each item as of March
31, 2009:
DIVERSIFIED LARGE
SMALL CAP GROWTH CAP CORE
GROWTH OPPORTUNITIES EQUITY
FUND FUND FUND
- --------------------------------------------------------------------------------
Tax cost of portfolio investments $ 31,826,824 $ 36,212,179 $ 79,984,711
- --------------------------------------------------------------------------------
Gross unrealized appreciation 287,883 1,026,989 --
Gross unrealized depreciation (8,349,179) (6,216,575) (20,899,797)
- --------------------------------------------------------------------------------
Net unrealized depreciation (8,061,296) (5,189,586) (20,899,797)
Undistributed ordinary income -- -- 263,429
Capital loss carryforward (15,063,549) (44,094,123) (1,053,666)
Post October losses (4,564,803) (3,498,686) (5,030,727)
- --------------------------------------------------------------------------------
Accumulated deficit $(27,689,648) $(52,782,395) $(26,720,761)
================================================================================
LARGE CAP LARGE CAP MID CAP
GROWTH VALUE GROWTH
FUND FUND FUND
- ---------------------------------------------------------------------------------------
Tax cost of portfolio investments $ 1,025,938,378 $ 16,851,160 $ 926,918,458
- ---------------------------------------------------------------------------------------
Gross unrealized appreciation 42,083,743 -- 16,272,015
Gross unrealized depreciation (112,752,728) (8,132,839) (186,600,713)
- ---------------------------------------------------------------------------------------
Net unrealized depreciation (70,668,985) (8,132,839) (170,328,698)
Undistributed ordinary income 2,186,078 -- --
Capital loss carryforward (67,703,714) (22,453,637) (55,424,720)
Post October losses (291,990,293) (12,084,335) (99,103,438)
- ---------------------------------------------------------------------------------------
Accumulated deficit $ (428,176,914) $ (42,670,811) $ (324,856,856)
=======================================================================================
The difference between the tax cost of portfolio investments and the financial
statement cost is primarily due to wash sales.
As of March 31, 2009, the Funds had the following capital loss carryforwards for
federal income tax purposes.
EXPIRES
FUND AMOUNT MARCH 31,
- ----------------------------------------------------------
Diversified Small Cap Growth Fund $11,436,443 2015
3,627,106 2017
-----------
15,063,549
===========
Growth Opportunities Fund $21,887,780 2011
17,098,132 2012
1,976,702 2013
3,131,509 2017
-----------
44,094,123
===========
Large Cap Core Equity Fund $ 1,053,666 2017
===========
Large Cap Growth Fund $26,177,120 2015
41,526,594 2017
-----------
67,703,714
===========
Large Cap Value Fund $22,453,637 2017
===========
Mid Cap Growth Fund $55,424,720 2017
===========
29
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
The capital loss carryforwards and Post-October losses may be utilized in future
years to offset net realized capital gains, if any, prior to distributing such
gains to shareholders.
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 Fund's
capital accounts on a tax basis. The following reclassification of net
investment loss have been made to the following Funds for the year ended March
31, 2009:
ACCUMULATED ACCUMULATED
PAID-IN NET INVESTMENT NET REALIZED
CAPITAL INCOME GAINS
- --------------------------------------------------------------------------------
Diversified Small Cap Growth Fund $ (66,895) $ 63,533 $ 3,362
Growth Opportunities Fund (328,722) 323,694 5,028
Large Cap Value Fund (87,031) 87,031 --
Mid Cap Growth Fund (2,859,559) 2,859,559 --
For the six months ended September 30, 2009, 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)
- ------------------------------------------------------------------------------------------------
Diversified Small Cap Growth Fund $ 36,522,338 $ 3,816,908 $ (3,666,796) $ 150,112
Growth Opportunities Fund $ 39,206,153 $ 4,627,156 $ (2,083,830) $ 2,543,326
Large Cap Core Equity Fund $ 58,352,298 $ 2,560,046 $ (5,581,830) $ (3,021,784)
Large Cap Growth Fund $ 921,517,415 $ 176,544,751 $ (20,357,677) $ 156,187,074
Large Cap Value Fund $ 23,872,960 $ 3,389,313 $ (3,496,596) $ (107,283)
Mid Cap Growth Fund $ 959,605,895 $ 122,494,579 $ (59,580,808) $ 62,913,771
The Funds have analyzed their tax positions taken on Federal income tax returns
for all open tax years (tax years ended March 31, 2006 through 2009) and have
concluded that no provision for income tax is required in their financial
statements.
30
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
4. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments and U.S. Government
securities) were as follows for the six months ended September 30, 2009:
DIVERSIFIED
SMALL CAP GROWTH LARGE CAP LARGE CAP
GROWTH OPPORTUNITIES CORE EQUITY GROWTH
FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------
Purchases of investment securities $ 12,028,779 $ 19,693,906 $ 7,452,469 $319,271,997
- ------------------------------------------------------------------------------------------
Proceeds from sales and maturities $ 10,455,865 $ 16,583,864 $ 20,308,199 $417,114,339
- ------------------------------------------------------------------------------------------
LARGE CAP MID CAP
VALUE GROWTH
FUND FUND
- --------------------------------------------------------------------------------
Purchases of investment securities $ 12,530,007 $ 250,466,050
- --------------------------------------------------------------------------------
Proceeds from sales and maturities $ 8,027,235 $ 232,291,762
- --------------------------------------------------------------------------------
5. TRANSACTIONS WITH AFFILIATES
Certain officers of the Trust are also officers of the Advisor (Touchstone
Advisors, Inc.), the Underwriter (Touchstone Securities, Inc.), and/or JPMorgan
Chase Bank, N.A. (JPMorgan) 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).
MANAGEMENT AGREEMENTS
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 0.83% on the first $500 million
0.80% on the next $500 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%
- --------------------------------------------------------------------------------
Mid Cap Growth Fund 0.80%
- --------------------------------------------------------------------------------
31
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
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., an affiliate of the Advisor, has been
retained by the Advisor to manage the investments of the Diversified Small Cap
Growth Fund.
Westfield Capital Management Company, LP 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/Veredus Asset Management, LLC has been retained by the Advisor to manage
the investments of the Large Cap Core Equity Fund.
Navellier & Associates, Inc. has been retained by the Advisor to manage the
investments of the Large Cap Growth Fund.
JS Asset Management, LLC has been retained by the Advisor to manage the
investments of the Large Cap Value Fund.
TCW Investment Management Company 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, supervising the preparation of tax returns,
coordinating the preparation of reports to shareholders and reports to, and
filings with, the Securities and Exchange Commission and state securities
authorities, preparing materials for meetings of the Board of Trustees,
calculating the daily net asset value per share and maintaining the financial
books and records 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 Investment Trust (excluding Institutional Money
Market Fund), and Touchstone Tax-Free Trust 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 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.
32
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
EXPENSE LIMITATION AGREEMENT
The Trust and the Advisor have entered into an Expense Limitation Agreement to
contractually limit operating expenses of the Funds. 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 July 31, 2010:
INSTITUTIONAL
CLASS A CLASS B CLASS C CLASS Y CLASS
- --------------------------------------------------------------------------------
Diversified Small Cap Growth
Fund 1.40% -- 2.15% 1.15% --
Growth Opportunities Fund 1.24% -- 1.99% 0.99% 0.84%
Large Cap Core Equity Fund 1.15% -- 1.90% -- --
Large Cap Growth Fund 1.25% 2.00% 2.00% 0.99% --
Large Cap Value Fund 1.35% -- 2.10% -- --
Mid Cap Growth Fund 1.50% 2.25% 2.25% 1.25% --
For the six months ended September 30, 2009, 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 $ 59,845 $ 25,712 $ 25,662
Growth Opportunities Fund $ 46,587 $ 29,901 $ 59,347
Large Cap Core Equity Fund $ -- $ 50,694 $ --
Large Cap Growth Fund $ -- $586,214 $ --
Large Cap Value Fund $ 11,786 $ 12,743 $ 26,361
Mid Cap Growth Fund $ -- $307,943 $ --
- --------------------------------------------------------------------------------
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, 2009, 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 $ 2,875
Growth Opportunities Fund $ 2,641
Large Cap Core Equity Fund $ 1,364
Large Cap Growth Fund $ 316,113
Large Cap Value Fund $ 1,625
Mid Cap Growth Fund $ 203,376
33
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
UNDERWRITING AGREEMENT
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, 2009:
AMOUNT
- --------------------------------------------------------------------------------
Diversified Small Cap Growth Fund $ 889
Growth Opportunities Fund $ 1,086
Large Cap Core Equity Fund $ 1,019
Large Cap Growth Fund $ 10,984
Large Cap Value Fund $ 6,380
Mid Cap Growth Fund $ 23,139
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, 2009:
AMOUNT
- --------------------------------------------------------------------------------
Diversified Small Cap Growth Fund $ 221
Growth Opportunities Fund $ 55
Large Cap Core Equity Fund $ 175
Large Cap Growth Fund $ 30,354
Large Cap Value Fund $ 276
Mid Cap Growth Fund $ 18,997
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 and
provides administrative support services to the Funds' Compliance Program and
Chief Compliance Officer. For these services, JPMorgan receives a quarterly fee
from each Fund.
34
- --------------------------------------------------------------------------------
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, for the six months ended September 30, 2009, is noted below:
SHARE ACTIVITY
-------------------------------------------------
BALANCE BALANCE VALUE
03/31/09 PURCHASES SALES 09/30/09 DIVIDENDS 09/30/09
- ---------------------------------------------------------------------------------------------------------------
Diversified Small Cap Growth Fund 641,572 5,735,167 6,197,884 178,855 $ 2,643 $ 178,855
- ---------------------------------------------------------------------------------------------------------------
Growth Opportunities Fund 433,965 12,789,951 12,694,713 529,203 $ 3,727 $ 529,203
- ---------------------------------------------------------------------------------------------------------------
Large Cap Core Equity Fund 597,038 17,270,399 16,968,627 898,810 $ 4,309 $ 898,810
- ---------------------------------------------------------------------------------------------------------------
Large Cap Growth Fund 14,569,372 245,053,248 250,077,595 9,545,025 $ 75,335 $ 9,545,025
- ---------------------------------------------------------------------------------------------------------------
Large Cap Value Fund 295,932 5,193,386 4,833,555 655,763 $ 1,779 $ 655,763
- ---------------------------------------------------------------------------------------------------------------
Mid Cap Growth Fund 32,053,889 134,744,678 147,492,348 19,306,219 $ 99,886 $19,306,219
- ---------------------------------------------------------------------------------------------------------------
As of September 30, 2009, 51% of the Large Cap Core Equity Fund was owned by
Western-Southern and subsidiaries.
35
- --------------------------------------------------------------------------------
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:
DIVERSIFIED SMALL CAP GROWTH
GROWTH FUND OPPORTUNITIES FUND
- -------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED
SEPT. 30, ENDED SEPT. 30, YEAR ENDED
2009 MARCH 31, 2009 MARCH 31,
(UNAUDITED) 2009 (UNAUDITED) 2009(A)(B)
- -------------------------------------------------------------------------------------------------
CLASS A
Shares sold 149,960 284,069 67,056 597,146
Shares redeemed (223,974) (1,183,072) (141,830) (564,842)
- -------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding (74,014) (899,003) (74,774) 32,304
Shares outstanding, beginning of period 1,444,250 2,343,253 1,247,499 1,215,195
- -------------------------------------------------------------------------------------------------
Shares outstanding, end of period 1,370,236 1,444,250 1,172,725 1,247,499
=================================================================================================
CLASS B
Shares sold -- -- -- 12,106
Shares redeemed -- -- -- (109,949)
- -------------------------------------------------------------------------------------------------
Net decrease in shares outstanding -- -- -- (97,843)
Shares outstanding, beginning of period -- -- -- 97,843
- -------------------------------------------------------------------------------------------------
Shares outstanding, end of period -- -- -- --
=================================================================================================
CLASS C
Shares sold 3,872 75,215 18,903 95,132
Shares redeemed (44,932) (142,717) (43,843) (177,424)
- -------------------------------------------------------------------------------------------------
Net decrease in shares outstanding (41,060) (67,502) (24,940) (82,292)
Shares outstanding, beginning of period 365,887 433,389 462,079 544,371
- -------------------------------------------------------------------------------------------------
Shares outstanding, end of period 324,827 365,887 437,139 462,079
=================================================================================================
CLASS Y
Shares sold 511,566 381,513 -- 174
Shares redeemed (177,840) (459,173) -- --
- -------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding 333,726 (77,660) -- 174
Shares outstanding, beginning of period 1,397,393 1,475,053 174 --
- -------------------------------------------------------------------------------------------------
Shares outstanding, end of period 1,731,119 1,397,393 174 174
=================================================================================================
INSTITUTIONAL CLASS
Shares sold -- -- 322,717 174
Shares redeemed -- -- (59,485) --
- -------------------------------------------------------------------------------------------------
Net increase in shares outstanding -- -- 263,232 174
Shares outstanding, beginning of period -- -- 174 --
- -------------------------------------------------------------------------------------------------
Shares outstanding, end of period -- -- 263,406 174
=================================================================================================
(A) Class B represents the period from April 1, 2008 through February 1, 2009.
(B) Class Y and Institutional Class represent the period from commencement of
operations (February 2, 2009) through March 31, 2009.
36
- --------------------------------------------------------------------------------
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
2009 MARCH 31, 2009 MARCH 31,
(UNAUDITED) 2009 (UNAUDITED) 2009
- -----------------------------------------------------------------------------------------------------
CLASS A
Shares sold 216,207 1,320,503 1,940,955 12,745,671
Shares reinvested -- 752,009 -- 15,664
Shares redeemed (1,834,893) (2,719,015) (8,845,379) (13,751,512)
- -----------------------------------------------------------------------------------------------------
Net decrease in shares outstanding (1,618,686) (646,503) (6,904,424) (990,177)
Shares outstanding, beginning of period 7,517,776 8,164,279 28,433,582 29,423,759
- -----------------------------------------------------------------------------------------------------
Shares outstanding, end of period 5,899,090 7,517,776 21,529,158 28,433,582
=====================================================================================================
CLASS B
Shares sold -- -- 221 100,102
Shares redeemed -- -- (115,518) (362,105)
- -----------------------------------------------------------------------------------------------------
Net decrease in shares outstanding -- -- (115,297) (262,003)
Shares outstanding, beginning of period -- -- 997,449 1,259,452
- -----------------------------------------------------------------------------------------------------
Shares outstanding, end of period -- -- 882,152 997,449
=====================================================================================================
CLASS C
Shares sold 11,550 294,725 418,506 2,714,036
Shares reinvested -- 22,799 -- --
Shares redeemed (71,628) (288,175) (1,645,220) (3,021,193)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding (60,078) 29,349 (1,226,714) (307,157)
Shares outstanding, beginning of period 312,351 283,002 9,657,926 9,965,083
- -----------------------------------------------------------------------------------------------------
Shares outstanding, end of period 252,273 312,351 8,431,212 9,657,926
=====================================================================================================
CLASS Y
Shares sold -- -- 3,771,135 15,826,281
Shares reinvested -- -- -- 44,535
Shares redeemed -- -- (1,671,894) (3,249,013)
- -----------------------------------------------------------------------------------------------------
Net increase in shares outstanding -- -- 2,099,241 12,621,803
Shares outstanding, beginning of period -- -- 13,907,460 1,285,657
- -----------------------------------------------------------------------------------------------------
Shares outstanding, end of period -- -- 16,006,701 13,907,460
=====================================================================================================
37
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
LARGE CAP MID CAP
VALUE FUND GROWTH FUND
- -----------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPT. 30, ENDED SEPT. 30, ENDED
2009 MARCH 31, 2009 MARCH 31,
(UNAUDITED) 2009 (UNAUDITED) 2009(A)
- -----------------------------------------------------------------------------------------------------
CLASS A
Shares sold 2,634,252 1,490,908 4,635,912 11,219,498
Shares reinvested -- 109,722 -- 494,434
Shares redeemed (1,022,241) (2,340,944) (4,047,100) (11,715,127)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding 1,612,011 (740,314) 588,812 (1,195)
Shares outstanding, beginning of period 2,942,709 3,683,023 30,707,280 30,708,475
- -----------------------------------------------------------------------------------------------------
Shares outstanding, end of period 4,554,720 2,942,709 31,296,092 30,707,280
=====================================================================================================
CLASS B
Shares sold -- -- 387 130,202
Shares reinvested -- -- -- 49,864
Shares redeemed -- -- (348,383) (910,093)
- -----------------------------------------------------------------------------------------------------
Net decrease in shares outstanding -- -- (347,996) (730,027)
Shares outstanding, beginning of period -- -- 2,687,973 3,418,000
- -----------------------------------------------------------------------------------------------------
Shares outstanding, end of period -- -- 2,339,977 2,687,973
=====================================================================================================
CLASS C
Shares sold 235,263 247,818 602,934 1,903,113
Shares reinvested -- 31,303 -- 213,999
Shares redeemed (147,759) (806,356) (1,290,054) (4,331,573)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding 87,504 (527,235) (687,120) (2,214,461)
Shares outstanding, beginning of period 983,532 1,510,767 14,444,123 16,658,584
- -----------------------------------------------------------------------------------------------------
Shares outstanding, end of period 1,071,036 983,532 13,757,003 14,444,123
=====================================================================================================
CLASS Y
Shares sold -- -- 492,910 189
- -----------------------------------------------------------------------------------------------------
Net increase in shares outstanding -- -- 492,910 189
Shares outstanding, beginning of period -- -- 189 --
- -----------------------------------------------------------------------------------------------------
Shares outstanding, end of period -- -- 493,099 189
=====================================================================================================
(A) Class Y represents the period from commencement of operations (February 2,
2009) through March 31, 2009.
7. CUSTODY OFFSET ARRANGEMENT
Some Funds may participate in the Custody Fee Offset Program offered by the
Custodian when they execute security trades where the Custodian is the broker.
If a Fund chooses to participate in the Custody Fee Offset Program, a rebate
amount will be applied to and credited against the fees payable by the Fund to
the Custodian. For financial reporting purposes for the six months ended
September 30, 2009, there were no fees reduced by the Custodian. Effective June
1, 2009, the Custody Fee Offset Program was terminated.
38
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
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. SUBSEQUENT EVENTS
During a meeting held November 19, 2009 of the Board of Trustees, the Trustees
unanimously approved the liquidation of the Large Cap Value Fund.
39
- --------------------------------------------------------------------------------
Portfolio of Investments
Diversified Small Cap Growth Fund - September 30, 2009 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 99.4% SHARES VALUE
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY -- 28.3%
Ariba, Inc.* 25,685 $ 297,946
Avnet, Inc.* 6,616 171,818
CACI International, Inc. - Class A* 6,280 296,856
ComScore, Inc.* 15,109 272,113
Digital River, Inc.* 7,273 293,247
DivX, Inc.* 20,032 109,375
Euronet Worldwide, Inc.* 19,749 474,567
F5 Networks, Inc.* 7,043 279,114
j2 Global Communications, Inc.* + 11,766 270,736
ManTech International Corp.* 5,860 276,358
Micros Systems, Inc.* 5,783 174,589
Microsemi Corp.* + 24,862 392,570
Multi-Fineline Electronix, Inc.* 6,581 188,941
NetScout Systems, Inc.* 24,459 330,441
Novatel Wireless, Inc.* + 22,402 254,487
Nuance Communications, Inc.* + 12,527 187,404
Oplink Communications, Inc.* 3,769 54,726
Parametric Technology Corp.* 16,635 229,896
Polycom, Inc.* 13,975 373,831
Progress Software Corp.* 12,640 286,296
Skyworks Solutions, Inc.* + 42,332 560,475
Sybase, Inc.* 5,075 197,418
Taleo Corp.* 10,171 230,271
Tessera Technologies, Inc.* 11,154 311,085
United Online, Inc. 29,255 235,210
ValueClick, Inc.* 8,916 117,602
Virtusa Corp.* 16,161 153,368
VistaPrint Ltd.* + 8,820 447,614
Web.Com Group, Inc.* 44,451 315,158
Wright Express Corp.* 10,114 298,464
- --------------------------------------------------------------------------------
8,081,976
- --------------------------------------------------------------------------------
HEALTH CARE -- 24.2%
Acorda Therapeutics, Inc.* 21,890 509,599
Alexion Pharmaceuticals, Inc.* 10,763 479,384
Auxilium Pharmaceuticals, Inc.* + 13,350 456,704
Biomarin Pharmaceutical, Inc.* 26,151 472,810
CryoLife, Inc.* 16,240 129,433
eResearch Technology, Inc.* 30,050 210,350
Genomic Health, Inc.* + 24,493 535,417
HMS Holdings Corp.* + 7,130 272,580
NuVasive, Inc.* + 12,905 538,912
Onyx Pharmaceuticals, Inc.* 9,950 298,202
OSI Pharmaceuticals, Inc.* + 10,837 382,546
RTI Biologics, Inc.* 101,870 443,135
SonoSite, Inc.* 21,145 559,496
Spectranetics Corp. (The)* 79,445 509,242
TranS1, Inc.* 33,401 160,659
United Therapeutics Corp.* + 9,480 464,425
Wright Medical Group, Inc.* 27,495 491,061
- --------------------------------------------------------------------------------
6,913,955
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 15.9%
99 Cents Only Stores* + 25,723 345,974
Big Lots, Inc.* 13,233 331,090
BJ's Restaurants, Inc.* + 11,520 172,685
Capella Education Co.* + 6,927 466,463
Chipotle Mexican Grill, Inc. - Class A*+ 3,225 312,986
Coinstar, Inc.* 10,343 341,112
Deckers Outdoor Corp.* 4,176 354,334
Fuel Systems Solutions, Inc.* + 5,320 191,467
Iconix Brand Group, Inc.* 5,936 74,022
LKQ Corp.* 17,185 318,610
Morningstar, Inc.* + 6,710 325,838
Netflix, Inc.* + 8,203 378,732
Panera Bread Co. - Class A* + 5,275 290,125
PetMed Express, Inc. 18,768 353,777
Tractor Supply Co.* + 6,056 293,232
- --------------------------------------------------------------------------------
4,550,447
- --------------------------------------------------------------------------------
INDUSTRIALS -- 13.2%
Adminstaff, Inc. + 8,955 235,248
Ameron International Corp. 3,615 252,978
Ducommun, Inc. 10,899 206,100
DynCorp International Corp.* 14,428 259,704
EnPro Industries, Inc.* + 10,712 244,876
GrafTech International Ltd.* 11,360 166,992
Granite Construction, Inc. + 8,745 270,570
Kforce, Inc.* 22,915 275,438
LaBarge, Inc.* 16,588 186,615
MYR Group, Inc.* 12,355 260,567
Powell Industries, Inc.* 7,610 292,148
Sykes Enterprises, Inc.* 17,325 360,708
TBS International Ltd.* + 17,460 151,902
Valmont Industries, Inc. 2,035 173,341
Wabtec Corp. 2,038 76,486
Watson Wyatt Worldwide, Inc. - Class A 8,156 355,275
- --------------------------------------------------------------------------------
3,768,948
- --------------------------------------------------------------------------------
FINANCIALS -- 6.4%
Bank of Hawaii Corp. 2,245 93,257
Cash America International, Inc. 8,140 245,502
Duff & Phelps Corp. - Class A 15,095 289,220
Encore Capital Group, Inc.* 7,130 95,899
EZCORP, Inc. - Class A* 24,285 331,733
First Cash Financial Services, Inc.* 15,005 257,036
Portfolio Recovery Associates, Inc.* + 7,705 349,268
SWS Group, Inc. 11,385 163,944
- --------------------------------------------------------------------------------
1,825,859
- --------------------------------------------------------------------------------
40
- -------------------------------------------------------------------------------
Diversified Small Cap Growth Fund (Continued)
- -------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 99.4% (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
ENERGY -- 5.3%
Alpha Natural Resources, Inc.* 4,650 $ 163,215
Arena Resources, Inc.* 8,485 301,217
Atwood Oceanics, Inc.* 5,837 205,871
Comstock Resources, Inc.* 2,465 98,797
Lufkin Industries, Inc. 4,305 228,940
Natural Gas Services Group, Inc.* 12,922 227,686
T-3 Energy Services, Inc.* 14,105 277,869
- --------------------------------------------------------------------------------
1,503,595
- --------------------------------------------------------------------------------
CONSUMER STAPLES -- 2.9%
BJ's Wholesale Club, Inc.* 5,426 196,530
Chattem, Inc.* + 2,900 192,589
Flowers Foods, Inc. + 8,205 215,709
Lancaster Colony Corp. 4,132 211,848
- --------------------------------------------------------------------------------
816,676
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 1.7%
NTELOS Holdings Corp. 9,970 176,070
Syniverse Holdings, Inc.* 17,205 301,088
- --------------------------------------------------------------------------------
477,158
- --------------------------------------------------------------------------------
MATERIALS -- 1.5%
Greif, Inc. - Class A + 2,415 132,946
LSB Industries, Inc.* 9,794 152,493
Olin Corp. 8,210 143,182
- --------------------------------------------------------------------------------
428,621
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS $ 28,367,235
- --------------------------------------------------------------------------------
INVESTMENT FUNDS -- 29.1%
Invesco AIM Liquid Assets Portfolio ** 8,126,360 $ 8,126,360
Touchstone Institutional
Money Market Fund^ 178,855 178,855
- --------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $ 8,305,215
- --------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 128.5%
(Cost $34,123,603) $ 36,672,450
LIABILITIES IN EXCESS OF OTHER ASSETS -- (28.5%) (8,130,714)
- --------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 28,541,736
================================================================================
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
See Note 5.
+ All or a portion of the security is on loan. The total value of securities
on loan as of September 30, 2009, was $7,982,294.
** Represents collateral for securities loaned.
OTHER INFORMATION:
The inputs or methodology used for valuing securities may not be an indication
of the risk associated with investing in those securities. For more information
on valuation inputs, and their aggregation into the levels used in the table
below, please refer to the security valuation section in the accompanying notes
to financial statements.
VALUATION INPUTS AT REPORTING DATE:
DESCRIPTION LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
- --------------------------------------------------------------------------------
Common Stock $28,367,235 $ -- $ -- $28,367,235
Mutual Fund 8,305,215 -- -- 8,305,215
---------------------------------------------------
$36,672,450
See accompanying notes to financial statements.
41
- --------------------------------------------------------------------------------
Portfolio of Investments
Growth Opportunities Fund - September 30, 2009 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 99.9% SHARES VALUE
- -------------------------------------------------------------------------------
INFORMATION TECHNOLOGY -- 34.3%
Accenture PLC* 9,250 $ 344,748
Analog Devices, Inc. 20,850 575,043
BMC Software, Inc.* + 16,900 634,257
Check Point Software
Technologies Ltd.* 33,800 958,229
Cognizant Technology
Solutions Corp.* 18,430 712,504
Google, Inc. - Class A* 700 347,095
Hewlett-Packard Co. 18,200 859,222
International Business Machines Corp. 6,500 777,465
Maxim Integrated Products, Inc. 26,650 483,431
McAfee, Inc.* 9,700 424,763
Microsoft Corp. 40,600 1,051,133
NICE Systems Ltd. - SPONS ADR* 18,900 575,316
Nuance Communications, Inc.* + 50,700 758,472
Oracle Corp. 42,900 894,036
Polycom, Inc.* 20,200 540,350
QUALCOMM, Inc. 16,550 744,419
SkillSoft PLC - ADR* 57,800 554,880
VeriFone Holdings, Inc.* + 35,100 557,739
- -------------------------------------------------------------------------------
11,793,102
- -------------------------------------------------------------------------------
HEALTH CARE -- 20.1%
Adolor Corp.* 108,600 172,674
Celgene Corp.* 21,025 1,175,297
Elan Corp. PLC - SPONS ADR* + 79,300 563,823
Masimo Corp.* 20,800 544,960
OSI Pharmaceuticals, Inc.* + 21,500 758,950
Pfizer, Inc. + 50,000 827,499
Santarus, Inc.* 59,800 196,742
Shire PLC - ADR 15,600 815,724
Thermo Fisher Scientific, Inc.* 15,550 679,069
United Therapeutics Corp.* 10,300 504,597
Vertex Pharmaceuticals, Inc.* + 17,500 663,250
- -------------------------------------------------------------------------------
6,902,585
- -------------------------------------------------------------------------------
ENERGY -- 11.5%
CONSOL Energy, Inc. 16,850 760,104
Exterran Holdings, Inc.* + 13,600 322,864
National-Oilwell Varco, Inc.* + 22,100 953,173
Peabody Energy Corp. 16,600 617,852
Suncor Energy, Inc.* 18,550 641,088
Weatherford International Ltd.* 30,700 636,411
- -------------------------------------------------------------------------------
3,931,492
- -------------------------------------------------------------------------------
CONSUMER STAPLES -- 9.5%
Coca-Cola Co. (The) 14,900 800,130
Colgate-Palmolive Co. 9,100 694,148
CVS Caremark Corp. 27,300 975,702
PepsiCo, Inc. 8,100 475,146
Ralcorp Holdings, Inc.* 5,200 304,044
- -------------------------------------------------------------------------------
3,249,170
- -------------------------------------------------------------------------------
INDUSTRIALS -- 7.9%
AMETEK, Inc. 17,550 612,671
BE Aerospace, Inc.* 25,900 521,626
IDEX Corp. 16,600 463,970
ITT Corp. 12,300 641,445
MSC Industrial Direct Co., Inc.-Class A + 10,400 453,232
- -------------------------------------------------------------------------------
2,692,944
- -------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 6.4%
Bed Bath & Beyond, Inc.* + 13,600 510,544
Netflix, Inc.* + 9,100 420,147
Starbucks Corp.* + 32,500 671,125
Target Corp. + 12,350 576,498
- -------------------------------------------------------------------------------
2,178,314
- -------------------------------------------------------------------------------
MATERIALS -- 5.8%
Celanese Corp. 11,700 292,500
Mosaic Co. (The) 9,050 435,034
Praxair, Inc. 9,700 792,393
Yamana Gold, Inc. 42,200 451,962
- -------------------------------------------------------------------------------
1,971,889
- -------------------------------------------------------------------------------
FINANCIALS -- 4.4%
CME Group, Inc. - Class A 2,300 708,837
Waddell & Reed Financial, Inc. 28,650 815,093
- -------------------------------------------------------------------------------
1,523,930
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS $34,243,426
- -------------------------------------------------------------------------------
INVESTMENT FUNDS -- 21.9%
Invesco AIM Liquid Assets Portfolio ** 6 ,976,850 6,976,850
Touchstone Institutional
Money Market Fund^ 529,203 529,203
- -------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $ 7,506,053
- -------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 121.8%
(Cost $38,872,710) $41,749,479
LIABILITIES IN EXCESS OF OTHER ASSETS -- (21.8%) (7,461,667)
- -------------------------------------------------------------------------------
NET ASSETS -- 100.0% $34,287,812
===============================================================================
42
- --------------------------------------------------------------------------------
Growth Opportunities Fund (Continued)
- --------------------------------------------------------------------------------
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
See Note 5.
+ All or a portion of the security is on loan. The total value of securities
on loan as of September 30, 2009, was $6,801,540.
** Represents collateral for securities loaned.
ADR American Depository Receipt.
OTHER INFORMATION:
The inputs or methodology used for valuing securities may not be an indication
of the risk associated with investing in those securities. For more information
on valuation inputs, and their aggregation into the levels used in the table
below, please refer to the security valuation section in the accompanying notes
to financial statements.
VALUATION INPUTS AT REPORTING DATE:
DESCRIPTION LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
- --------------------------------------------------------------------------------
Common Stock $34,243,426 $ -- $ -- $34,243,426
Mutual Fund 7,506,053 -- -- 7,506,053
--------------------------------------------------
$41,749,479
See accompanying notes to financial statements.
43
- --------------------------------------------------------------------------------
Portfolio of Investments
Large Cap Core Equity Fund - September 30, 2009 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 98.3% SHARES VALUE
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY -- 21.1%
Amphenol Corp. - Class A 20,986 $ 790,752
Cisco Systems, Inc.* 60,478 1,423,653
Fiserv, Inc.* 10,340 498,388
Hewlett-Packard Co. 22,283 1,051,980
Intel Corp. 55,659 1,089,247
International Business Machines Corp. 8,190 979,606
Microsoft Corp. 60,381 1,563,265
Oracle Corp. 43,465 905,811
QUALCOMM, Inc. 27,739 1,247,700
Western Union Co.* 31,433 594,712
- --------------------------------------------------------------------------------
10,145,114
- --------------------------------------------------------------------------------
FINANCIALS -- 14.3%
AFLAC, Inc. 34,148 1,459,485
Allstate Corp. (The) 21,016 643,510
American Express Co. 26,268 890,485
BB&T Corp. + 19,320 526,277
Goldman Sachs Group + 7,505 1,383,547
Morgan Stanley 31,429 970,528
PNC Financial Services Group + 12,590 611,748
State Street Corp. 8,560 450,256
- --------------------------------------------------------------------------------
6,935,836
- --------------------------------------------------------------------------------
ENERGY -- 12.7%
Chesapeake Energy Corp. 35,090 996,556
Chevron Corp. 16,271 1,145,967
Ensco International, Inc. + 21,582 918,098
Marathon Oil Corp. 43,947 1,401,909
Transocean Ltd.* 9,788 837,168
XTO Energy, Inc. 20,492 846,729
- --------------------------------------------------------------------------------
6,146,427
- --------------------------------------------------------------------------------
HEALTH CARE -- 12.0%
Johnson & Johnson 13,607 828,530
Laboratory Corp. of America Holdings* + 16,113 1,058,624
McKesson Corp. 17,031 1,014,196
Novartis AG - ADR 23,042 1,160,856
Teva Pharmaceutical Industries Ltd. 13,750 695,200
WellPoint, Inc.* 22,267 1,054,565
- --------------------------------------------------------------------------------
5,811,971
- --------------------------------------------------------------------------------
INDUSTRIALS -- 10.9%
Danaher Corp. + 10,285 692,386
Emerson Electric Co. + 17,742 711,099
Honeywell International, Inc. 12,096 449,366
Illinois Tool Works, Inc. 22,119 944,702
Union Pacific Corp. 17,068 995,918
United Technologies Corp. 24,497 1,492,603
- --------------------------------------------------------------------------------
5,286,074
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 10.6%
Best Buy Co., Inc. + 25,819 968,729
Dollar Tree, Inc.* 14,230 692,716
Honda Motor Co., Ltd. - SPONS ADR 24,240 734,714
McDonald's Corp. 13,570 774,440
Ross Stores, Inc. 15,180 725,149
Target Corp. + 26,326 1,228,898
- --------------------------------------------------------------------------------
5,124,646
- --------------------------------------------------------------------------------
CONSUMER STAPLES -- 9.8%
Altria Group, Inc. 34,915 621,836
CVS Caremark Corp. 21,241 759,153
Kimberly-Clark Corp. 15,511 914,839
PepsiCo, Inc. 15,370 901,604
Philip Morris International, Inc. 32,058 1,562,507
- --------------------------------------------------------------------------------
4,759,939
- --------------------------------------------------------------------------------
MATERIALS -- 2.4%
Praxair, Inc. 14,202 1,160,161
- --------------------------------------------------------------------------------
UTILITIES -- 2.3%
Dominion Resources, Inc. 32,824 1,132,428
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 2.2%
AT&T, Inc. 39,579 1,069,029
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS $47,571,625
- --------------------------------------------------------------------------------
INVESTMENT FUNDS -- 16.0%
Invesco AIM Liquid Assets Portfolio ** 6,860,079 6,860,079
Touchstone Institutional
Money Market Fund^ 898,810 898,810
- --------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $ 7,758,889
- --------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 114.3%
(Cost $54,992,660) $55,330,514
LIABILITIES IN EXCESS OF OTHER ASSETS -- (14.3%) (6,921,976)
- --------------------------------------------------------------------------------
NET ASSETS -- 100.0% $48,408,538
================================================================================
44
- --------------------------------------------------------------------------------
Large Cap Core Equity Fund (Continued)
- --------------------------------------------------------------------------------
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
See Note 5.
+ All or a portion of the security is on loan. The total value of securities
on loan as of September 30, 2009, was $6,698,084.
** Represents collateral for securities loaned.
ADR American Depository Receipt.
OTHER INFORMATION:
The inputs or methodology used for valuing securities may not be an indication
of the risk associated with investing in those securities. For more information
on valuation inputs, and their aggregation into the levels used in the table
below, please refer to the security valuation section in the accompanying notes
to financial statements.
VALUATION INPUTS AT REPORTING DATE:
DESCRIPTION LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
- --------------------------------------------------------------------------------
Common Stock $ 47,571,625 $ -- $ -- $ 47,571,625
Mutual Fund 7,758,889 -- -- 7,758,889
--------------------------------------------------------------
$ 55,330,514
See accompanying notes to financial statements.
45
- --------------------------------------------------------------------------------
Portfolio of Investments
Large Cap Growth Fund - September 30, 2009 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 98.5% SHARES VALUE
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY -- 21.5%
Baidu, Inc. - SPONS ADR* + 53,710 $ 21,003,296
Broadcom Corp.* 920,000 28,234,801
Cognizant Technology
Solutions Corp.* 625,500 24,181,830
Infosys Technologies Ltd. - ADR + 510,900 24,773,541
International Business
Machines Corp. 223,140 26,689,775
Juniper Networks, Inc.* 1,030,000 27,830,600
Oracle Corp. 1,220,880 25,443,139
Taiwan Semiconductor
Manufacturing Co., Ltd. + 1,041,439 11,414,171
- --------------------------------------------------------------------------------
189,571,153
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 17.5%
Amazon.com, Inc.* + 365,750 34,146,420
Apollo Group, Inc. - Class A* 263,150 19,386,261
AutoZone, Inc.* + 110,070 16,094,435
DIRECTV Group, Inc.* + 649,395 17,910,314
Gap, Inc. (The) + 802,600 17,175,640
Kohl's Corp.* + 553,283 31,564,795
TJX Cos., Inc. (The) + 477,000 17,720,550
- --------------------------------------------------------------------------------
153,998,415
- --------------------------------------------------------------------------------
HEALTH CARE -- 15.3%
Amgen, Inc.* 450,314 27,122,412
Express Scripts, Inc.* 365,995 28,393,893
Medco Health Solutions, Inc.* 453,175 25,065,109
Quest Diagnostics, Inc. + 334,800 17,473,212
Schering-Plough Corp. 780,000 22,035,000
St. Jude Medical, Inc.* 394,000 15,369,940
- --------------------------------------------------------------------------------
135,459,566
- --------------------------------------------------------------------------------
MATERIALS -- 13.9%
BHP Billiton Ltd.* + 312,110 20,602,381
Companhia Siderurgica Nacional + 650,600 19,908,360
Goldcorp, Inc. + 616,000 24,867,920
Praxair, Inc. + 343,025 28,021,712
Southern Copper Corp. + 968,500 29,723,265
- --------------------------------------------------------------------------------
123,123,638
- --------------------------------------------------------------------------------
ENERGY -- 11.8%
Anadarko Petroleum Corp. + 391,180 24,538,721
Occidental Petroleum Corp. 344,345 26,996,648
Southwestern Energy Co.* 704,425 30,064,859
Talisman Energy, Inc. + 1,334,197 23,134,976
- --------------------------------------------------------------------------------
104,735,204
- --------------------------------------------------------------------------------
INDUSTRIALS -- 11.0%
C.H. Robinson Worldwide, Inc. + 390,000 22,522,500
First Solar, Inc.* + 148,040 22,629,394
Precision Castparts Corp. 291,000 29,644,170
Union Pacific Corp. + 390,883 22,808,023
- --------------------------------------------------------------------------------
97,604,087
- --------------------------------------------------------------------------------
FINANCIALS -- 5.6%
Northern Trust Corp. 420,000 24,427,200
TD Ameritrade Holding Corp.* 1,282,180 25,156,372
- --------------------------------------------------------------------------------
49,583,572
- --------------------------------------------------------------------------------
CONSUMER STAPLES -- 1.9%
Colgate-Palmolive Co. + 219,335 16,730,874
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS $870,806,509
- --------------------------------------------------------------------------------
INVESTMENT FUNDS -- 23.4%
Invesco AIM Liquid
Assets Portfolio ** 197,352,955 197,352,955
Touchstone Institutional
Money Market Fund^ 9,545,025 9,545,025
- --------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $206,897,980
- --------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 121.9%
(Cost $912,360,774) $ 1,077,704,489
LIABILITIES IN EXCESS OF OTHER ASSETS -- (21.9%) (193,306,371)
- --------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 884,398,118
================================================================================
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
See Note 5.
+ All or a portion of the security is on loan. The total value of securities
on loan as of September 30, 2009, was $193,661,903.
** Represents collateral for securities loaned.
ADR American Depository Receipt.
OTHER INFORMATION:
The inputs or methodology used for valuing securities may not be an indication
of the risk associated with investing in those securities. For more information
on valuation inputs, and their aggregation into the levels used in the table
below, please refer to the security valuation section in the accompanying notes
to financial statements.
VALUATION INPUTS AT REPORTING DATE:
DESCRIPTION LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
- --------------------------------------------------------------------------------
Common Stock $870,806,509 $ -- $ -- $ 870,806,509
Mutual Fund 206,897,980 -- -- 206,897,980
------------------------------------------------------------------
$ 1,077,704,489
See accompanying notes to financial statements.
46
- --------------------------------------------------------------------------------
Portfolio of Investments
Large Cap Value Fund - September 30, 2009 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
PREFERRED STOCK -- 0.3% SHARES VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 0.3%
General Motors Corp.* 18,600 $ 60,450
- --------------------------------------------------------------------------------
COMMON STOCKS -- 96.7%
FINANCIALS -- 32.6%
Bank of America Corp. 55,992 947,385
Capital One Financial Corp. 21,700 775,341
Citigroup, Inc.* 182,438 883,000
Genworth Financial, Inc. - Class A* 72,847 870,522
Hartford Financial Services Group, Inc. 33,500 887,750
Huntington Bancshares, Inc. + 114,800 540,708
Lincoln National Corp. 7,600 196,916
Marshall & Ilsley Corp. 97,100 783,597
Regions Financial Corp. 74,700 463,887
SunTrust Banks, Inc. 2,900 65,395
- --------------------------------------------------------------------------------
6,414,501
- --------------------------------------------------------------------------------
ENERGY -- 19.2%
Arch Coal, Inc. + 52,500 1,161,825
Chesapeake Energy Corp. + 41,500 1,178,600
Nabors Industries Ltd.* + 21,600 451,440
Peabody Energy Corp. 26,100 971,442
- --------------------------------------------------------------------------------
3,763,307
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 15.7%
D.R. Horton, Inc. + 30,000 342,300
J.C. Penney Co., Inc. 7,800 263,250
Magna International, Inc.* 13,000 552,760
Pulte Homes, Inc.* + 91,267 1,003,024
Ryland Group, Inc. (The) + 43,300 912,331
- --------------------------------------------------------------------------------
3,073,665
- --------------------------------------------------------------------------------
UTILITIES -- 10.3%
Allegheny Energy, Inc. 12,600 334,152
Mirant Corp.* 42,202 693,379
RRI Energy, Inc.* 137,700 983,178
- --------------------------------------------------------------------------------
2,010,709
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY -- 9.3%
Alcatel - Lucent - SPONS ADR* 176,600 792,934
Avnet, Inc.* 6,800 176,596
Dell, Inc.* 20,200 308,252
Motorola, Inc.* 64,100 550,619
- --------------------------------------------------------------------------------
1,828,401
- --------------------------------------------------------------------------------
INDUSTRIALS -- 4.7%
Navistar International Corp.* 24,500 916,790
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 3.9%
Sprint Nextel Corp.* 192,200 759,190
- --------------------------------------------------------------------------------
CONSUMER STAPLES -- 1.0%
Smithfield Foods, Inc.* 14,000 193,200
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS $ 18,959,763
- --------------------------------------------------------------------------------
INVESTMENT FUNDS -- 24.2%
Invesco AIM Liquid Assets Portfolio ** 4,089,701 $ 4,089,701
Touchstone Institutional
Money Market Fund^ 655,763 655,763
- --------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $ 4,745,464
- --------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 121.2%
(Cost $22,573,147) $ 23,765,677
LIABILITIES IN EXCESS OF OTHER ASSETS -- (21.2%) (4,155,556)
- --------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 19,610,121
================================================================================
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
See Note 5.
+ All or a portion of the security is on loan. The total value of securities
on loan as of September 30, 2009, was $3,943,603.
** Represents collateral for securities loaned.
ADR American Depository Receipt.
OTHER INFORMATION:
The inputs or methodology used for valuing securities may not be an indication
of the risk associated with investing in those securities. For more information
on valuation inputs, and their aggregation into the levels used in the table
below, please refer to the security valuation section in the accompanying notes
to financial statements.
VALUATION INPUTS AT REPORTING DATE:
DESCRIPTION LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
- --------------------------------------------------------------------------------
Common Stock $18,959,763 $ -- $ -- $ 18,959,763
Preferred Stock 60,450 -- -- 60,450
Mutual Fund 4,745,464 -- -- 4,745,464
---------------------------------------------------------------
$ 23,765,677
See accompanying notes to financial statements.
47
- --------------------------------------------------------------------------------
Portfolio of Investments
Mid Cap Growth Fund - September 30, 2009 (Unaudited)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 98.6% SHARES VALUE
- --------------------------------------------------------------------------------
INDUSTRIALS -- 16.2%
Alliant Techsystems, Inc.* 45,835 $ 3,568,255
AMETEK, Inc. 233,450 8,149,740
Corrections Corp. of America* 467,000 10,577,550
CSX Corp. 269,550 11,283,363
Dover Corp. 161,690 6,267,104
Hexcel Corp.* + 580,395 6,639,719
IDEX Corp. 321,000 8,971,950
ITT Corp. 194,000 10,117,100
Jacobs Engineering Group, Inc.* 83,302 3,827,727
Joy Global, Inc. 156,530 7,660,578
Kennametal, Inc. + 146,300 3,600,443
Kirby Corp.* 260,500 9,591,610
MSC Industrial Direct Co., Inc. -
Class A + 318,800 13,893,303
Precision Castparts Corp. 77,050 7,849,084
Rockwell Collins, Inc. + 136,845 6,951,726
SPX Corp. + 110,175 6,750,422
Tyco International Ltd. 219,200 7,558,016
- --------------------------------------------------------------------------------
133,257,690
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY -- 15.6%
Agilent Technologies, Inc.* + 239,700 6,670,851
Alcatel-Lucent - SPONS ADR* + 1,753,112 7,871,473
Analog Devices, Inc. + 234,000 6,453,720
Avago Technologies Ltd.* 213,025 3,636,337
Avnet, Inc.* 184,100 4,781,077
BMC Software, Inc.* + 184,400 6,920,532
Broadcom Corp.* + 254,800 7,819,812
Cognizant Technology
Solutions Corp.* 152,650 5,901,449
Global Payments, Inc. 151,150 7,058,705
Maxim Integrated Products, Inc. 361,045 6,549,356
Microchip Technology, Inc. + 184,550 4,890,575
Motorola, Inc.* 675,100 5,799,109
NICE Systems Ltd. - SPONS ADR* 395,100 12,026,843
ON Semiconductor Corp.* + 997,550 8,229,788
QLogic Corp.* 228,600 3,931,920
Quest Software, Inc.* 548,400 9,240,540
Red Hat, Inc.* + 282,800 7,816,592
Verigy Ltd.* 658,000 7,645,960
Xilinx, Inc. + 242,850 5,687,547
- --------------------------------------------------------------------------------
128,932,186
- --------------------------------------------------------------------------------
FINANCIALS -- 14.2%
Ameriprise Financial, Inc. 228,350 8,295,955
Annaly Capital Management, Inc. + 691,500 12,543,809
Arch Capital Group, Ltd.* + 116,700 7,881,918
Assurant, Inc. 157,980 5,064,839
Federated Investors, Inc. - Class B + 204,700 5,397,939
Fidelity National Financial, Inc. 628,050 9,470,993
First Horizon National Corp.* + 279,633 3,699,539
Hudson City Bancorp, Inc. 303,375 3,989,381
Invesco Ltd. 266,420 6,063,719
Janus Capital Group, Inc. 330,900 4,692,162
KeyCorp 831,400 5,404,100
Knight Capital Group, Inc. - Class A* 320,225 6,964,894
Lazard Ltd. 118,450 4,893,170
New York Community Bancorp, Inc. + 320,473 3,659,802
Northern Trust Corp. 30,500 1,773,880
PartnerRe Ltd. + 62,900 4,839,526
People's United Financial, Inc. + 323,269 5,030,066
SunTrust Banks, Inc. 23,300 525,415
Synovus Financial Corp. + 1,145,350 4,295,063
TCF Financial Corp. + 351,500 4,583,560
Willis Group Holdings Ltd. + 275,489 7,774,300
- --------------------------------------------------------------------------------
116,844,030
- --------------------------------------------------------------------------------
HEALTH CARE -- 13.6%
Beckman Coulter, Inc. + 52,200 3,598,668
Celgene Corp.* 193,032 10,790,489
Cerner Corp.* + 66,170 4,949,516
DaVita, Inc.* 188,550 10,679,472
Edwards Lifesciences Corp.* + 59,450 4,156,150
Elan Corp. PLC - SPONS ADR* + 942,900 6,704,019
Life Technologies Corp.* 276,100 12,852,455
Mettler-Toledo International, Inc.* 138,050 12,505,950
Shire PLC - ADR + 269,400 14,086,925
Thermo Fisher Scientific, Inc.* 130,795 5,711,818
United Therapeutics Corp.* 102,700 5,031,273
Varian Medical Systems, Inc.* + 182,641 7,694,665
Vertex Pharmaceuticals, Inc.* + 363,700 13,784,230
- --------------------------------------------------------------------------------
112,545,630
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 13.3%
Abercrombie & Fitch Co. + 176,400 5,800,032
Advance Auto Parts, Inc. + 215,532 8,466,097
American Eagle Outfitters, Inc. 335,400 5,654,844
Bed Bath & Beyond, Inc.* + 360,200 13,521,907
Burger King Holdings, Inc. 286,200 5,034,258
Coach, Inc. 229,585 7,557,938
DeVry, Inc. 90,100 4,984,332
Discovery Communications, Inc.* + 291,850 8,431,547
Lennar Corp. - Class A + 250,200 3,565,350
Macy's, Inc. 329,824 6,032,481
Marriott International, Inc.- Class A + 250,552 6,912,730
Snap-On, Inc. 101,880 3,541,349
Starbucks Corp.* + 416,700 8,604,855
TJX Cos., Inc. (The) 179,000 6,649,850
Toll Brothers, Inc.* 167,000 3,263,180
Urban Outfitters, Inc.* 201,400 6,076,238
WABCO Holdings, Inc.* 275,830 5,792,430
- --------------------------------------------------------------------------------
109,889,418
- --------------------------------------------------------------------------------
ENERGY -- 10.6%
Cameron International Corp.* + 163,100 6,168,442
CONSOL Energy, Inc. + 325,300 14,674,283
Denbury Resources, Inc.* 536,150 8,111,950
Massey Energy Co. 307,600 8,578,964
Murphy Oil Corp. + 98,120 5,648,768
48
- --------------------------------------------------------------------------------
Mid Cap Growth Fund (Continued)
- --------------------------------------------------------------------------------
MARKET
COMMON STOCKS -- 98.6% (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
ENERGY -- 10.6% (CONTINUED)
National-Oilwell Varco, Inc.* 320,080 $ 13,805,050
Peabody Energy Corp. 135,400 5,039,588
Petrohawk Energy Corp.* 262,400 6,352,704
Smith International, Inc. + 134,550 3,861,585
Weatherford International Ltd.* 730,200 15,137,046
- --------------------------------------------------------------------------------
87,378,380
- --------------------------------------------------------------------------------
MATERIALS -- 7.0%
Commercial Metals Co. 373,545 6,686,456
Crown Holdings, Inc.* 417,550 11,357,359
Cytec Industries, Inc. 167,225 5,429,796
Ecolab, Inc. 161,500 7,466,145
International Flavors &
Fragrances, Inc. 158,535 6,013,233
Owens-Illinois, Inc.* 235,700 8,697,330
Pactiv Corp.* 237,900 6,197,295
Yamana Gold, Inc. 574,400 6,151,824
- --------------------------------------------------------------------------------
57,999,438
- --------------------------------------------------------------------------------
CONSUMER STAPLES -- 3.9%
Avon Products, Inc. + 147,750 5,017,590
Bunge Ltd. + 76,900 4,814,709
HJ Heinz Co. 151,000 6,002,250
JM Smucker Co. (The) 111,650 5,918,567
Molson Coors Brewing Co. 102,000 4,965,360
Ralcorp Holdings, Inc.* 97,800 5,718,366
- --------------------------------------------------------------------------------
32,436,842
- --------------------------------------------------------------------------------
UTILITIES -- 3.1%
Consolidated Edison, Inc. + 144,870 5,930,978
EQT Corp. 151,327 6,446,530
Hawaiian Electric Industries, Inc. + 212,239 3,845,771
PG&E Corp. + 76,000 3,077,240
Wisconsin Energy Corp. 137,295 6,201,615
- --------------------------------------------------------------------------------
25,502,134
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 1.1%
NII Holdings, Inc.* 304,200 9,119,916
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS $813,905,664
- --------------------------------------------------------------------------------
INVESTMENT FUNDS -- 25.3%
Invesco AIM Liquid
Assets Portfolio ** 189,307,783 189,307,783
Touchstone Institutional
Money Market Fund^ 19,306,219 19,306,219
- --------------------------------------------------------------------------------
TOTAL INVESTMENT FUNDS $208,614,002
- --------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES -- 123.9%
(Cost $947,633,618) $ 1,022,519,666
LIABILITIES IN EXCESS OF OTHER ASSETS -- (23.9%) (197,159,409)
- --------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 825,360,257
================================================================================
* Non-income producing security.
^ Affiliated Fund, sub-advised by Fort Washington Investment Advisors, Inc.
See Note 5.
+ All or a portion of the security is on loan. The total value of securities
on loan as of September 30, 2009, was $184,379,053.
** Represents collateral for securities loaned.
ADR American Depository Receipt.
OTHER INFORMATION:
The inputs or methodology used for valuing securities may not be an indication
of the risk associated with investing in those securities. For more information
on valuation inputs, and their aggregation into the levels used in the table
below, please refer to the security valuation section in the accompanying notes
to financial statements.
VALUATION INPUTS AT REPORTING DATE:
DESCRIPTION LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
- --------------------------------------------------------------------------------
Common Stock $813,905,664 $ -- $ -- $ 813,905,664
Mutual Fund 208,614,002 -- -- 208,614,002
------------------------------------------------------------------
$1,022,519,666
See accompanying notes to financial statements.
49
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Other Items (Unaudited)
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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, 2009" 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.
50
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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,
2009 2009 2009 2009*
- ---------------------------------------------------------------------------------------------------
DIVERSIFIED SMALL CAP GROWTH FUND --
Class A Actual 1.40% $ 1,000.00 $ 1,325.40 $ 8.15
Class A Hypothetical 1.40% $ 1,000.00 $ 1,018.06 $ 7.07
Class C Actual 2.15% $ 1,000.00 $ 1,321.00 $ 12.49
Class C Hypothetical 2.15% $ 1,000.00 $ 1,014.30 $ 10.84
Class Y Actual 1.15% $ 1,000.00 $ 1,328.60 $ 6.71
Class Y Hypothetical 1.15% $ 1,000.00 $ 1,019.31 $ 5.82
GROWTH OPPORTUNITIES FUND
Class A Actual 1.24% $ 1,000.00 $ 1,288.70 $ 7.11
Class A Hypothetical 1.24% $ 1,000.00 $ 1,018.86 $ 6.27
Class C Actual 1.99% $ 1,000.00 $ 1,284.10 $ 11.38
Class C Hypothetical 1.99% $ 1,000.00 $ 1,015.10 $ 10.04
Class Y Actual 0.99% $ 1,000.00 $ 1,290.80 $ 5.70
Class Y Hypothetical 0.99% $ 1,000.00 $ 1,020.10 $ 5.02
Institutional Class Actual 0.84% $ 1,000.00 $ 1,291.30 $ 4.82
Institutional Class Hypothetical 0.84% $ 1,000.00 $ 1,020.86 $ 4.25
LARGE CAP CORE EQUITY FUND
Class A Actual 1.15% $ 1,000.00 $ 1,311.70 $ 6.66
Class A Hypothetical 1.15% $ 1,000.00 $ 1,019.31 $ 5.82
Class C Actual 1.90% $ 1,000.00 $ 1,307.60 $ 10.98
Class C Hypothetical 1.90% $ 1,000.00 $ 1,015.55 $ 9.59
LARGE CAP GROWTH FUND
Class A Actual 1.25% $ 1,000.00 $ 1,287.20 $ 7.17
Class A Hypothetical 1.25% $ 1,000.00 $ 1,018.80 $ 6.33
Class B Actual 2.00% $ 1,000.00 $ 1,282.70 $ 11.43
Class B Hypothetical 2.00% $ 1,000.00 $ 1,015.05 $ 10.09
Class C Actual 2.00% $ 1,000.00 $ 1,282.10 $ 11.43
Class C Hypothetical 2.00% $ 1,000.00 $ 1,015.05 $ 10.09
Class Y Actual 0.99% $ 1,000.00 $ 1,288.40 $ 5.67
Class Y Hypothetical 0.99% $ 1,000.00 $ 1,020.11 $ 5.01
51
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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,
2009 2009 2009 2009*
- ------------------------------------------------------------------------------------------
LARGE CAP VALUE FUND
Class A Actual 1.35% $ 1,000.00 $ 1,928.20 $ 9.89
Class A Hypothetical 1.35% $ 1,000.00 $ 1,018.32 $ 6.82
Class C Actual 2.10% $ 1,000.00 $ 1,927.40 $ 15.41
Class C Hypothetical 2.10% $ 1,000.00 $ 1,014.54 $ 10.61
MID CAP GROWTH FUND
Class A Actual 1.50% $ 1,000.00 $ 1,403.90 $ 9.03
Class A Hypothetical 1.50% $ 1,000.00 $ 1,017.56 $ 7.58
Class B Actual 2.25% $ 1,000.00 $ 1,398.00 $ 13.53
Class B Hypothetical 2.25% $ 1,000.00 $ 1,013.78 $ 11.36
Class C Actual 2.25% $ 1,000.00 $ 1,398.50 $ 13.51
Class C Hypothetical 2.25% $ 1,000.00 $ 1,013.80 $ 11.34
Class Y Actual 1.23% $ 1,000.00 $ 1,405.60 $ 7.42
Class Y Hypothetical 1.23% $ 1,000.00 $ 1,018.90 $ 6.23
* 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).
52
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PRIVACY PROTECTION POLICY
WE RESPECT YOUR PRIVACY
Thank you for your decision to invest with us. Touchstone and its affiliates
have always placed a high value on the trust and confidence our clients place in
us. We believe that confidence must be earned and validated through time. In
today's world, when technology allows the sharing of information at light
speeds, trust must be reinforced by our sincere pledge to take the steps
necessary to ensure that the information you share with us is treated with
respect and confidentiality.
OUR PLEDGE TO OUR CLIENTS
o We collect only the information we need to service your account and
administer our business.
o We are committed to keeping your information confidential and we place
strict limits and controls on the use and sharing of your information.
o We make every effort to ensure the accuracy of your information.
WE COLLECT THE FOLLOWING NONPUBLIC PERSONAL INFORMATION ABOUT YOU:
o Information we receive from you on or in applications or other forms,
correspondence, or conversations, including, but not limited to, your
name, address, phone number, social security number, assets, income and
date of birth; and
o Information about your transactions with us, our affiliates, or others,
including, but not limited to, your account number and balance, payment
history, parties to transactions, cost basis information, and other
financial information.
CATEGORIES OF INFORMATION WE DISCLOSE AND PARTIES TO WHOM WE DISCLOSE
We do not disclose any nonpublic personal information about our current or
former clients to nonaffiliated third parties, except as required or permitted
by law.
WE PLACE STRICT LIMITS AND CONTROLS ON THE USE AND SHARING OF YOUR INFORMATION
o We restrict access to nonpublic personal information about you to
authorized employees who need the information to administer your business.
o We maintain physical, electronic and procedural safeguards that comply
with federal standards to protect this information.
o We do not disclose any nonpublic personal information about our current or
former clients to anyone, except as required or permitted by law or as
described in this document.
o We will not sell your personal information to anyone.
WE MAY PROVIDE INFORMATION TO SERVICE YOUR ACCOUNT
Sometimes it is necessary to provide information about you to various companies
such as transfer agents, custodians, broker-dealers and marketing service firms
to facilitate the servicing of your account. These organizations have a
legitimate business need to see some of your personal information in order for
us to provide service to you. We may disclose to these various companies the
information that we collect as described above. We require that these companies,
including our own subsidiaries and affiliates, strictly maintain the
confidentiality of this information and abide by all applicable laws. Companies
within our corporate family that may receive this information are financial
service providers and insurance companies. We do not permit these associated
companies to sell the information for their own purposes, and we never sell our
customer information.
This policy is applicable to the following affiliated companies: Touchstone
Funds Group Trust, Touchstone Investment Trust, Touchstone Strategic Trust,
Touchstone Tax-Free Trust, Touchstone Variable Series Trust, Touchstone
Institutional Funds Trust, Touchstone Securities, Inc.,* Capital Analysts
Incorporated and W&S Brokerage Services, Inc.
* Touchstone Securities, Inc. serves as the underwriter to the Touchstone
Funds.
A Member of Western & Southern Financial Group(R)
THE PRIVACY PROTECTION POLICY IS NOT PART OF THE ANNUAL REPORT.
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53
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[LOGO] TOUCHSTONE INVESTMENTS(R)
303 Broadway, Suite 1100
Cincinnati, OH 45202-4203
- --------------------------------------------------------------------------------
[LOGO] EDELIVERY
Go paperless, sign up today at:
www.touchstoneinvestments.com/home
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
TSF-54-TS7-SAR-0910
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 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)(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 1, 2009
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 1, 2009
/s/ Terrie A. Wiedenheft
- --------------------------------------------------------------------------------
Terrie A. Wiedenheft
Controller & Treasurer
Date: December 1, 2009