September 1, 2010
Mr. John Ganley
Division of Investment Management
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Re: Touchstone Strategic Trust
File Nos. 811-03651 and 333-168093
Dear Mr. Ganley:
This will confirm our telephone conversation on Wednesday August 11, 2010
regarding the N-14 filing made by the Touchstone Strategic Trust ("Registrant")
on July 14, 2010. Your comments and the Registrant's responses are set forth
below:
PROSPECTUS/PROXY STATEMENT
Comment
For the following question under the Q&A section, you asked that we emphasize
the differences in the Funds and explain the risks of those differences in plain
English.
WHAT ARE THE DIFFERENCES BETWEEN THE INVESTMENT OBJECTIVES AND INVESTMENT
STRATEGIES OF THE CORE EQUITY FUND AND THE GROWTH OPPORTUNITIES FUND?
Response
The requested change has been made.
Comment
For the following question under the Q&A section, you asked that we emphasize
the difference in all of the expenses of each Fund. You asked specfically that
we emphasize that the management fee for the Growth Opportunities Fund is larger
than that of the Large Cap Core Equity Fund. You also asked that we change the
table under this question to reflect all of the expenses of the Funds.
WHAT IS THE DIFFERENCE IN THE EXPENSES BETWEEN THE CORE EQUITY FUND AND THE
GROWTH OPPORTUNITIES FUND?
Response
The requested change has been made.
Comment
You asked that we change the following question in the Q&A section to include
all tax consequences of the Reorganization. You also asked that we provide
information in the answer
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that explains the tax consequences of securities being sold in conjunction with
the Reorganization.
WILL THE REORGANIZATION CREATE A TAXABLE EVENT FOR ME?
Response
After consideration, we have determined that securities will not be sold in
connection with the Reorganization and will only be sold in the ordinary course
of business. Accordingly, the language has been modified.
Comment
You asked that we add a question in the Q&A section that discusses the
sub-advisor and portfolio manager changes.
Response
The requested change has been made.
Comment
You asked that we deliver a statutory prospectus of the Growth Opportunities
Fund along with the prospectus/proxy statement when it is mailed.
Response
The requested change has been made.
Comment
Under the section titled "How will the Reorganization affect me?" you asked that
we emphasize that the mangement fee and other expenses of the Growth
Opportunities Fund are larger than those of the Large Cap Core Equity Fund. You
also asked that we emphasize the sub-advisor and portfolio manager change.
Response
The requested change has been made.
Comment
Under the section titled "How do the Funds' investment goals and principal
investment strategies compare?" you asked that we note the differences in the
size of the market capitalizations of the securities each fund can invest in.
Response
The requested change has been made.
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Comment
Under the section titled "How do the Funds' fees and expenses compare?" you
asked that we note that the management fee of the Growth Opportunities Fund is
higher than that of the Large Cap Core Equity Fund.
Response
The requested change has been made.
Comment
In regards to the fee tables, you asked that all footnotes be combined in the
same area.
Response
The requested change has been made.
Comment
In regards to the fee tables, for the deferred sales charge for Class A shares
of each Fund, you asked that we remove "None" from the table and put "1.00%."
This is in reference to the footnote that states that purchases of $1 million or
more do not pay a front-end sales charge, but may pay a contingent deferred
sales charge of 1.00% if shares are redeemed within 1 year of their purchase and
compensation was paid to an unaffiliated broker-dealer.
Response
We believe that putting 1.00% in the table will be confusing to shareholders
considering the unique circumstances of when a 1.00% fee is actually charged.
Since the 1.00% is not charged to all shareholders, we believe None or 0.00% is
a more appropriate disclosure in the fee table. The footnote is very clear in
explaining what circumstances the 1.00% is charged.
Comment
In regards to the portfolio turnover section, you asked that we provide an
explanation as to why there is a large difference in the portfolio turnovers of
each fund if, historically, the two funds have always had large differences in
their turnovers.
Response
We reviewed the historical portfolio turnovers of the Funds and have determined
that the large difference between the turnovers of the Funds for fiscal year
2010 was a unique situation. Thus, no explanation is needed in the document.
Comment
In regards to the section titled "Reasons for the Reorganization" you asked that
we add the difference in management fees of the two funds as a consideration of
the Trustees when approving the merger.
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Response
The requested change has been made.
ACCOUNTING COMMENTS
Comment
You referenced the language that stated that securities may be sold prior to the
Reorganization and that there may be tax consequences due to the sale. You asked
that we reflect in the pro forma schedule of investments those securities that
may be sold.
Response
After consideration, we have determined that securities will not be sold in
connection with the Reorganization and will only be sold in the ordinary course
of business. Accordingly, no changes will be made to the pro forma schedule of
investments.
Comment
For the pro forma capitalization table in the prospectus/proxy statement, you
asked that we reformat the table so that it is set up horizontally instead of
vertically so that it is easier to read. You asked that we add an "Adjustments"
column to the table to show the adjustments in the numbers. You also asked that
we add a column in the table that reflects the federal and state registration
fees that the Growth Opportunities Fund will pay in connection with the merger.
Response
The requested change has been made. After our analysis, we determined that the
additonal federal and state registration fees are a small and immaterial amount
so it is not included in the table.
Comment
In reference to the pro forma statement of assets and liabilities, you asked
that we double check the outstanding shares numbers for the pro forma Growth
Opportunities Fund and make sure they are correct.
Response
The requested change has been made.
Comment
In reference to the pro forma schedule of investments, you asked that we add the
word "respectively" to the end of the + footnote at the bottom of the schedule.
Response
The requested change has been made.
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In connection with this filing, the Trust acknowledges that: (1) the Trust is
responsible for the adequacy and accuracy of the disclosure in the filing; (2)
staff comments or changes to disclosure in connection with this filing, reviewed
by the staff do not foreclose the Commission from taking any action with respect
to the filing; and (3) the Trust may not assert staff comments as a defense in
any proceeding initiated by the Commission or any person under the federal
securities laws of the United States.
Please contact the undersigned at 513-878-4066 if you have any questions or need
any additional information.
Very truly yours,
/s/ Jay S. Fitton
Jay S. Fitton
Secretary
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