Pepper Hamilton LLP
-------- Attorneys at Law
3000 Two Logan Square
Eighteenth and Arch Streets
Philadelphia, PA 19103-2799
215.981.4000
Fax 215.981.4750
[DATE], 2010
Touchstone Growth Opportunities Fund Touchstone Large Cap Core Equity Fund
Touchstone Strategic Trust Touchstone Strategic Trust
303 Broadway 303 Broadway
Suite 1100 Suite 1100
Cincinnati, Ohio 45202 Cincinnati, Ohio 45202
Ladies and Gentlemen:
You have requested our opinion regarding certain U.S. federal income tax
consequences to (i) Touchstone Large Cap Core Equity Fund (the "Acquired Fund"),
a separate series of the Touchstone Strategic Trust, a Massachusetts business
trust ("TST"), (ii) the holders (the "Acquired Fund Shareholders") of voting
shares of common stock of the Acquired Fund ("Acquired Fund Shares"), and (iii)
Touchstone Growth Opportunities Fund (the "Acquiring Fund," and together with
the Acquired Fund, the "Funds"), a separate series of TST, in connection with
the transfer of all of the assets of the Acquired Fund to the Acquiring Fund in
exchange solely for voting shares of common stock of the Acquiring Fund
("Acquiring Fund Shares") and the assumption of certain of the liabilities of
the Acquired Fund by the Acquiring Fund, followed by the distribution of such
Acquiring Fund Shares received by the Acquired Fund in complete liquidation and
termination of the Acquired Fund (these transactions together, the
"Reorganization"), all pursuant to the Agreement and Plan of Reorganization (the
"Agreement") dated as of [DATE] executed by TST on behalf of the Acquired Fund
and of the Acquiring Fund.
For the purpose of rendering this opinion, we have examined and are relying,
with your permission (without any independent investigation or review thereof
other than such investigation and review as we have deemed necessary to comply
with our professional obligations under IRS Circular 230 or otherwise), upon the
truth and accuracy, at all relevant times, of the statements, covenants,
representations and warranties contained in the following documents (the
"Documents"):
1. The Agreement;
2. The registration statement of TST on Form N-14 to which this opinion is an
exhibit, filed with the Securities and Exchange Commission with respect to the
Shares to be issued in connection with the Reorganization (the "Registration
Statement"), and the proxy statement/prospectus included in the Registration
Statement (the "Proxy/Prospectus");
3. The representations made to us by the Funds in their letters to us dated the
date hereof; and
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Pepper Hamilton LLP
-------- Attorneys at Law
Page 2
[DATE]
4. Such other instruments and documents as we have deemed necessary or
appropriate for purposes of rendering this opinion.
For purposes of this opinion, we have assumed, with your permission and without
independent investigation (other than such investigation as we have deemed
necessary to comply with our professional obligations under IRS Circular 230 or
otherwise), (i) that the Reorganization will be consummated in the manner
contemplated by the Proxy/Prospectus and in accordance with the provisions of
the Agreement without the waiver of any conditions to any party's obligation to
effect the Reorganization, (ii) that original documents (including signatures)
are authentic, (iii) that documents submitted to us as copies conform to the
original documents, (iv) that there has been (or will be by the date of the
Reorganization) due execution and delivery of all documents where due execution
and delivery are prerequisites to the effectiveness of those documents, (v) the
accuracy of statements and representations contained in the Documents, (vi) that
covenants and warranties set forth in the Documents will be complied with and
(vii) that the Reorganization will be effective under applicable law.
Furthermore, we have assumed, with your permission and without independent
investigation (other than such investigation as we have deemed necessary to
comply with our professional obligations under IRS Circular 230 or otherwise),
that, as to all matters in which a person or entity making a representation has
represented that such person or entity or a related party is not a party to,
does not have, or is not aware of, any plan, intention, understanding or
agreement to take action, there is in fact no plan, intention, understanding or
agreement and such action will not be taken, and we have further assumed that
any statement made "to the knowledge of" or otherwise similarly qualified is
correct without such qualification.
Subject to the foregoing and any other assumptions, limitations and
qualifications specified herein, it is our opinion that for U.S. federal income
tax purposes:
1. The transfer of all of the Acquired Fund assets in exchange solely for the
Acquiring Fund Shares and the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund followed by the distribution of the Acquiring
Fund Shares to the Acquired Fund Shareholders in dissolution and liquidation of
the Acquired Fund will constitute a "reorganization" within the meaning of
Section 368(a) the Internal Revenue Code of 1986, as amended (the "Code"), and
the Acquiring Fund and the Acquired Fund will each be a "party to a
reorganization" within the meaning of Section 368(b) of the Code.
2. No gain or loss will be recognized by the Acquiring Fund upon the receipt of
the assets of the Acquired Fund solely in exchange for the Acquiring Fund Shares
and the assumption by the Acquiring Fund of the liabilities of the Acquired
Fund.
3. No gain or loss will be recognized by the Acquired Fund upon the transfer of
the Acquired Fund assets to the Acquiring Fund in exchange for the Acquiring
Fund Shares and the assumption by the Acquiring Fund of the liabilities of the
Acquired Fund or upon the distribution (whether actual or constructive) of the
Acquiring Fund Shares to Acquired Fund Shareholders in exchange for their shares
of the Acquired Fund.
Pepper Hamilton LLP
-------- Attorneys at Law
Page 3
[DATE]
4. No gain or loss will be recognized by the Acquired Fund Shareholders upon the
exchange of their Acquired Fund shares for the Acquiring Fund Shares in
liquidation of the Acquired Fund.
5. The aggregate tax basis for the Acquiring Fund Shares received by each
Acquired Fund Shareholder pursuant to the Reorganization will be the same as the
aggregate tax basis of the Acquired Fund shares held by such Shareholder
immediately prior to the Closing, and the holding period of the Acquiring Fund
Shares received by each Acquired Fund Shareholder will include the period during
which the Acquired Fund shares exchanged therefore were held by such Shareholder
(provided the Acquired Fund shares were held as capital assets on the date of
the Closing).
6. The tax basis of the Acquired Fund assets acquired by the Acquiring Fund will
be the same as the tax basis of such assets to the Acquired Fund immediately
prior to the Closing, and the holding period of the assets of the Acquired Fund
in the hands of the Acquiring Fund will include the period during which those
assets were held by the Acquired Fund.
We express no opinion as to (1) the effect of the Reorganization on (A) the
Acquired Fund or the Acquiring Fund with respect to any asset as to which any
unrealized gain or loss is required to be recognized for U.S. federal income tax
purposes at the end of a taxable year (or on the termination or transfer
thereof) under a mark-to-market system of accounting and (B) any Acquired Fund
Shareholder or Acquiring Fund Shareholder that is required to recognize
unrealized gains and losses for U.S. federal income tax purposes under a
mark-to-market system of accounting, or (C) the Acquired Fund or the Acquiring
Fund with respect to any stock held in a passive foreign investment company as
defined in Section 1297(a) of the Code or (2) any other federal tax issues
(except those set forth above) and all state, local or foreign tax issues of any
kind.
This opinion is based upon the Code, regulations promulgated thereunder,
administrative pronouncements and judicial authority, all as in effect as of the
date hereof. It represents our best legal judgment as to the matters addressed
herein but is not binding on the Internal Revenue Service or the courts.
Accordingly, no assurance can be given that the Internal Revenue Service would
agree with the opinion expressed herein or, if contested, the opinion would be
sustained by a court. Furthermore, the authorities upon which we rely may be
changed at any time, potentially with retroactive effect. No assurances can be
given as to the effect of any such changes on the conclusions expressed in this
opinion. We undertake no responsibility to advise you of any new developments in
the application or interpretation of relevant federal tax laws. If any of the
facts or assumptions pertinent to the U.S. federal income tax treatment of the
Reorganization specified herein or any of the statements, covenants,
representations or warranties contained in the Documents are, or later become,
inaccurate, such inaccuracy may adversely affect the conclusions expressed in
this opinion. In addition, our opinion is limited to the tax matters
specifically covered hereby, and we have not been asked to address, nor have we
addressed, any other tax consequences of the Reorganization or any other
transactions.
Pepper Hamilton LLP
-------- Attorneys at Law
Page 4
[DATE]
This opinion is being provided solely for the benefit of the Funds. No other
person or party shall be entitled to rely on this opinion.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us in the section captioned
"Information About the Reorganization - Federal Income Tax Consequences"
therein. In giving this consent we do not hereby admit that we come within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
Pepper Hamilton LLP