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 811-08416
Touchstone Variable Series Trust
(Exact name of registrant as specified in charter)
303 Broadway, Suite 1100
Cincinnati, Ohio 45202-4203
(Address of principal executive offices) (Zip code)
Jill T. McGruder
303 Broadway, Suite 1100
Cincinnati, Ohio 45202-4203
(Name and address of agent for service)
Registrant's telephone number, including area code: 800-638-8194
Date of fiscal year end: December 31
Date of reporting period: June 30, 2018
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. § 3507.
Item 1. Reports to Stockholders.
The Report to Shareholders is attached herewith.
June 30, 2018
(Unaudited)
Semi-Annual Report
Touchstone Variable Series Trust
Touchstone Active Bond Fund
Touchstone Balanced Fund
Touchstone Bond Fund
Touchstone Common Stock Fund
Touchstone Focused Fund
Touchstone Large Cap Core Equity Fund
Touchstone Small Company Fund
Touchstone Aggressive ETF Fund
Touchstone Conservative ETF Fund
Touchstone Moderate ETF Fund
Table of Contents
This report identifies the Funds' investments on June 30, 2018. These holdings are subject to change. Not all investments in each Fund performed the same, nor is there any guarantee that these investments will perform as well in the future. Market forecasts provided in this report may not occur.
2 |
Tabular Presentation of Portfolios of Investments (Unaudited)
June 30, 2018
The illustrations below provide each Fund’s credit quality and/or sector allocation. We hope it will be useful to shareholders as it summarizes key information about each Fund’s investments.
Touchstone Active Bond Fund | ||||
Credit Quality* | (% of Investment Securities) | |||
AAA/Aaa | 45.3 | % | ||
AA/Aa | 5.0 | |||
A/A | 11.9 | |||
BBB/Baa | 25.6 | |||
BB/Ba | 1.1 | |||
CCC | 0.5 | |||
Not Rated | 7.7 | |||
Cash Equivalents | 2.9 | |||
Total | 100.0 | % | ||
Touchstone Balanced Fund | ||||
Credit Quality* | (% of Fixed Income Securities) | |||
AAA/Aaa | 60.7 | % | ||
AA/Aa | 4.9 | |||
A/A | 11.2 | |||
BBB/Baa | 22.7 | |||
BB/Ba | 0.5 | |||
100.0 | % | |||
Sector Allocation** | (% of Net Assets) | |||
Common Stocks | ||||
Information Technology | 18.5 | % | ||
Consumer Discretionary | 13.1 | |||
Financials | 10.4 | |||
Health Care | 7.5 | |||
Industrials | 5.8 | |||
Energy | 3.4 | |||
Real Estate | 3.1 | |||
Consumer Staples | 2.5 | |||
Telecommunication Services | 1.2 | |||
Materials | 1.1 | |||
Corporate Bonds | 12.0 | |||
U.S. Treasury Obligations | 10.4 | |||
U.S. Government Mortgage-Backed Obligations | 7.8 | |||
Exchange-Traded Fund | 1.7 | |||
Sovereign Bonds | 0.2 | |||
Preferred Stock | 0.1 | |||
Short-Term Investment Fund | 1.2 | |||
Other Assets/Liabilities (Net) | 0.0 | |||
Total | 100.0 | % | ||
* | Credit quality ratings are from Standard & Poor's (“S&P”) and Moody's Investors Service (“Moody's”). If agency ratings differ, the higher rating will be used. Where no rating has been assigned, it may be for reasons unrelated to the creditworthiness of the issuer. |
** | Sector Classifications are based upon the Global Industry Classification Standard (GICS®). |
3 |
Tabular Presentation of Portfolios of Investments (Unaudited) (Continued)
Touchstone Bond Fund | ||||
Credit Quality* | (% of Investment Securities) | |||
AAA/Aaa | 47.6 | % | ||
AA/Aa | 4.2 | |||
A/A | 12.0 | |||
BBB/Baa | 24.5 | |||
BB/Ba | 0.9 | |||
Not Rated | 8.3 | |||
Cash Equivalents | 2.5 | |||
Total | 100.0 | % | ||
Touchstone Common Stock Fund | ||||
Sector Allocation** | (% of Net Assets) | |||
Information Technology | 27.1 | % | ||
Consumer Discretionary | 19.9 | |||
Financials | 16.4 | |||
Health Care | 12.5 | |||
Industrials | 8.3 | |||
Energy | 5.1 | |||
Real Estate | 4.9 | |||
Consumer Staples | 3.9 | |||
Telecommunication Services | 1.8 | |||
Short-Term Investment Fund | 0.4 | |||
Other Assets/Liabilities (Net) | (0.3 | ) | ||
Total | 100.0 | % | ||
Touchstone Focused Fund | ||||
Sector Allocation** | (% of Net Assets) | |||
Information Technology | 26.1 | % | ||
Consumer Discretionary | 18.8 | |||
Financials | 16.4 | |||
Health Care | 15.5 | |||
Industrials | 7.8 | |||
Energy | 5.1 | |||
Real Estate | 4.8 | |||
Consumer Staples | 3.8 | |||
Telecommunication Services | 1.9 | |||
Short-Term Investment Fund | 0.0 | |||
Other Assets/Liabilities (Net) | (0.2 | ) | ||
Total | 100.0 | % | ||
Touchstone Large Cap Core Equity Fund | ||||
Sector Allocation** | (% of Net Assets) | |||
Financials | 24.1 | % | ||
Consumer Discretionary | 23.4 | |||
Information Technology | 18.9 | |||
Industrials | 13.4 | |||
Materials | 5.8 | |||
Health Care | 4.8 | |||
Consumer Staples | 4.6 | |||
Energy | 2.4 | |||
Telecommunication Services | 1.5 | |||
Short-Term Investment Fund | 0.7 | |||
Other Assets/Liabilities (Net) | 0.4 | |||
Total | 100.0 | % | ||
* | Credit quality ratings are from Standard & Poor's (“S&P”) and Moody's Investors Service (“Moody's”). If agency ratings differ, the higher rating will be used. Where no rating has been assigned, it may be for reasons unrelated to the creditworthiness of the issuer. |
** | Sector Classifications are based upon the Global Industry Classification Standard (GICS®). |
4 |
Tabular Presentation of Portfolios of Investments (Unaudited) (Continued)
Touchstone Small Company Fund | ||||
Sector Allocation* | (% of Net Assets) | |||
Information Technology | 25.4 | % | ||
Industrials | 19.6 | |||
Health Care | 19.6 | |||
Consumer Discretionary | 12.5 | |||
Financials | 10.8 | |||
Real Estate | 3.2 | |||
Energy | 1.5 | |||
Consumer Staples | 1.4 | |||
Telecommunication Services | 1.4 | |||
Materials | 1.4 | |||
Short-Term Investment Fund | 3.7 | |||
Other Assets/Liabilities (Net) | (0.5 | ) | ||
Total | 100.0 | % | ||
Touchstone Aggressive ETF Fund | ||||
Sector Allocation | (% of Net Assets) | |||
Exchange-Traded Funds | ||||
Equity Funds | 81.2 | % | ||
Fixed Income Funds | 17.4 | |||
Short-Term Investment Funds | 8.7 | |||
Other Assets/Liabilities (Net) | (7.3 | ) | ||
Total | 100.0 | % | ||
Touchstone Conservative ETF Fund | ||||
Sector Allocation | (% of Net Assets) | |||
Exchange-Traded Funds | ||||
Fixed Income Funds | 56.5 | % | ||
Equity Funds | 38.9 | |||
Short-Term Investment Funds | 10.5 | |||
Other Assets/Liabilities (Net) | (5.9 | ) | ||
Total | 100.0 | % | ||
Touchstone Moderate ETF Fund | ||||
Sector Allocation | (% of Net Assets) | |||
Exchange-Traded Funds | ||||
Equity Funds | 60.6 | % | ||
Fixed Income Funds | 37.6 | |||
Short-Term Investment Funds | 5.7 | |||
Other Assets/Liabilities (Net) | (3.9 | ) | ||
Total | 100.0 | % | ||
* Sector Classifications are based upon the Global Industry Classification Standard (GICS®).
5 |
Touchstone Active Bond Fund – June 30, 2018 (Unaudited)
Principal | Market | |||||||
Amount | Value | |||||||
Corporate Bonds — 38.1% | ||||||||
Financials — 11.2% | ||||||||
$ | 218,000 | American Express Co., 3.000%, 10/30/24 | $ | 208,005 | ||||
144,000 | Bank of America Corp., 3.705%, 4/24/28 | 138,878 | ||||||
245,000 | Bank of America Corp. MTN, 4.000%, 1/22/25 | 241,852 | ||||||
212,000 | Bank of Montreal (Canada), 3.803%, 12/15/32 | 196,378 | ||||||
212,000 | Bank of New York Mellon Corp. (The) MTN, 2.950%, 1/29/23 | 207,198 | ||||||
230,000 | Bank of Nova Scotia (The), (Canada), (3M LIBOR +0.620%), 2.946%, 9/19/22(A) | 230,566 | ||||||
200,000 | Barclays PLC (United Kingdom), 3.250%, 1/12/21 | 197,135 | ||||||
210,000 | BB&T Corp. MTN, 2.850%, 10/26/24 | 199,256 | ||||||
164,000 | Chubb INA Holdings, Inc., 4.350%, 11/3/45 | 167,845 | ||||||
125,000 | Citigroup, Inc., 3.300%, 4/27/25 | 119,844 | ||||||
320,000 | Citigroup, Inc., (3M LIBOR +1.430%), 3.730%, 9/1/23(A) | 326,582 | ||||||
84,000 | Citigroup, Inc., 4.750%, 5/18/46 | 79,878 | ||||||
175,000 | Fifth Third Bancorp, 2.875%, 7/27/20 | 174,015 | ||||||
200,000 | GE Capital International Funding Co. Unlimited Co. (Ireland), 4.418%, 11/15/35 | 193,756 | ||||||
223,000 | General Motors Financial Co., Inc., 3.200%, 7/13/20 | 221,948 | ||||||
280,000 | Goldman Sachs Group, Inc. (The), (3M LIBOR +1.000%), 3.359%, 7/24/23(A) | 281,023 | ||||||
110,000 | Goldman Sachs Group, Inc. (The), 3.691%, 6/5/28 | 104,278 | ||||||
115,000 | Goldman Sachs Group, Inc. (The), 5.250%, 7/27/21 | 120,857 | ||||||
200,000 | HSBC Holdings PLC (United Kingdom), 3.900%, 5/25/26 | 195,566 | ||||||
300,000 | Huntington Bancshares, Inc./OH, 4.000%, 5/15/25 | 300,880 | ||||||
250,000 | Huntington National Bank (The), 2.200%, 11/6/18 | 249,664 | ||||||
155,000 | JPMorgan Chase & Co., (3M LIBOR +0.730%), 3.092%, 4/23/24(A) | 154,198 | ||||||
145,000 | JPMorgan Chase & Co., 3.250%, 9/23/22 | 143,656 | ||||||
205,000 | JPMorgan Chase & Co., 3.509%, 1/23/29 | 194,228 | ||||||
216,000 | Lloyds Banking Group PLC (United Kingdom), 3.574%, 11/7/28 | 199,288 | ||||||
233,000 | Morgan Stanley, 3.737%, 4/24/24 | 231,602 | ||||||
170,000 | Morgan Stanley, 3.950%, 4/23/27 | 162,060 | ||||||
148,000 | New York Life Global Funding, 144a, 3.000%, 1/10/28 | 138,825 | ||||||
155,000 | Northwestern Mutual Life Insurance Co. (The), 144a, 3.850%, 9/30/47 | 141,932 | ||||||
160,000 | PNC Bank NA, 2.700%, 11/1/22 | 153,805 | ||||||
174,000 | Prudential Financial, Inc., 5.625%, 6/15/43 | 179,438 | ||||||
224,000 | Royal Bank of Canada (Canada) MTN, 3.200%, 4/30/21 | 223,903 | ||||||
215,000 | SunTrust Banks, Inc., 4.000%, 5/1/25 | 216,025 | ||||||
6,294,364 | ||||||||
Energy — 4.7% | ||||||||
120,000 | Boardwalk Pipelines LP, 4.450%, 7/15/27 | 116,522 | ||||||
184,000 | Cenovus Energy, Inc. (Canada), 4.250%, 4/15/27 | 177,228 | ||||||
162,000 | Columbia Pipeline Group, Inc., 4.500%, 6/1/25 | 161,628 | ||||||
152,000 | Concho Resources, Inc., 3.750%, 10/1/27 | 146,216 | ||||||
216,000 | Enbridge, Inc. (Canada), (3M LIBOR +0.700%), 3.041%, 6/15/20(A) | 216,845 | ||||||
130,000 | Energy Transfer Partners LP, 4.950%, 6/15/28 | 129,596 | ||||||
141,000 | EOG Resources, Inc., 3.900%, 4/1/35 | 136,795 | ||||||
230,000 | Kinder Morgan Energy Partners LP, 3.500%, 9/1/23 | 223,484 | ||||||
198,000 | Midcontinent Express Pipeline LLC, 144a, 6.700%, 9/15/19 | 203,841 | ||||||
116,000 | NGPL PipeCo LLC, 144a, 7.768%, 12/15/37 | 136,300 | ||||||
135,000 | Petroleos Mexicanos (Mexico), 4.500%, 1/23/26 | 126,657 | ||||||
76,000 | Petroleos Mexicanos (Mexico), 144a, 5.350%, 2/12/28 | 71,957 | ||||||
190,000 | Sabine Pass Liquefaction LLC, 5.000%, 3/15/27 | 193,076 | ||||||
210,000 | Shell International Finance BV (Netherlands), 1.875%, 5/10/21 | 203,591 | ||||||
2,338 | Transocean Phoenix 2 Ltd. (Cayman Islands), 144a, 7.750%, 10/15/24 | 2,504 | ||||||
166,000 | Valero Energy Corp., 4.350%, 6/1/28 | 165,265 | ||||||
267,000 | Williams Cos., Inc. (The), 3.700%, 1/15/23 | 258,322 | ||||||
2,669,827 | ||||||||
Consumer Discretionary — 3.9% | ||||||||
146,000 | Anheuser-Busch InBev Finance, Inc., 4.900%, 2/1/46 | 150,143 | ||||||
210,000 | Aptiv PLC (Jersey), 3.150%, 11/19/20 | 208,476 | ||||||
230,000 | AutoNation, Inc., 5.500%, 2/1/20 | 236,837 | ||||||
340,000 | BMW US Capital LLC, 144a, 3.100%, 4/12/21 | 337,878 | ||||||
190,000 | Comcast Corp., 2.850%, 1/15/23 | 183,715 | ||||||
224,000 | Dollar Tree, Inc., (3M LIBOR +0.700%), 3.055%, 4/17/20(A) | 224,458 | ||||||
80,000 | Ford Motor Co., 4.750%, 1/15/43 | 69,145 | ||||||
224,000 | Ford Motor Credit Co. LLC, 4.140%, 2/15/23 | 223,925 | ||||||
146,000 | General Motors Financial Co., Inc., 4.350%, 4/9/25 | 143,906 |
6 |
Touchstone Active Bond Fund (Unaudited) (Continued)
Principal | Market | |||||||
Amount | Value | |||||||
Corporate Bonds — 38.1% (Continued) | ||||||||
Consumer Discretionary — (Continued) | ||||||||
$ | 150,000 | Home Depot, Inc. (The), 5.950%, 4/1/41 | $ | 185,226 | ||||
224,000 | Toyota Motor Credit Corp. MTN, 2.950%, 4/13/21 | 222,846 | ||||||
2,186,555 | ||||||||
Health Care — 3.8% | ||||||||
102,000 | Abbott Laboratories, 3.750%, 11/30/26 | 100,258 | ||||||
174,000 | AbbVie, Inc., 4.450%, 5/14/46 | 166,388 | ||||||
90,000 | Allergan Funding SCS (Luxembourg), 3.800%, 3/15/25 | 87,394 | ||||||
205,000 | Allergan Sales LLC, 144a, 5.000%, 12/15/21 | 212,103 | ||||||
185,000 | Catholic Health Initiatives, 4.200%, 8/1/23 | 186,502 | ||||||
142,000 | Celgene Corp., 5.000%, 8/15/45 | 139,045 | ||||||
200,000 | CVS Health Corp., 4.300%, 3/25/28 | 197,282 | ||||||
130,000 | CVS Health Corp., 5.125%, 7/20/45 | 131,726 | ||||||
160,000 | Express Scripts Holding Co., 3.300%, 2/25/21 | 159,413 | ||||||
204,000 | Shire Acquisitions Investments Ireland DAC (Ireland), 2.400%, 9/23/21 | 195,302 | ||||||
138,000 | Thermo Fisher Scientific, Inc., 3.600%, 8/15/21 | 138,753 | ||||||
228,000 | UnitedHealth Group, Inc., 2.375%, 10/15/22 | 219,223 | ||||||
140,000 | Zimmer Biomet Holdings, Inc., 3.150%, 4/1/22 | 137,438 | ||||||
60,000 | Zimmer Biomet Holdings, Inc., 3.375%, 11/30/21 | 59,522 | ||||||
2,130,349 | ||||||||
Telecommunication Services — 2.8% | ||||||||
105,000 | AT&T, Inc., 3.950%, 1/15/25 | 102,693 | ||||||
40,000 | AT&T, Inc., 4.350%, 6/15/45 | 33,885 | ||||||
125,000 | AT&T, Inc., 4.500%, 5/15/35 | 115,618 | ||||||
226,000 | Booking Holdings, Inc., 3.600%, 6/1/26 | 219,922 | ||||||
124,000 | Charter Communications Operating LLC / Charter Communications Operating Capital, 6.484%, 10/23/45 | 130,700 | ||||||
118,000 | Comcast Corp., 4.000%, 3/1/48 | 103,960 | ||||||
170,000 | Qwest Corp., 6.750%, 12/1/21 | 180,897 | ||||||
212,000 | Telecom Italia SpA/Milano (Italy), 144a, 5.303%, 5/30/24 | 209,085 | ||||||
331,000 | Verizon Communications, Inc., 5.012%, 4/15/49 | 322,345 | ||||||
153,000 | Warner Media LLC, 3.800%, 2/15/27 | 144,489 | ||||||
1,563,594 | ||||||||
Consumer Staples — 2.7% | ||||||||
226,000 | Cargill, Inc., 144a, 3.050%, 4/19/21 | 224,777 | ||||||
102,000 | General Mills, Inc., 3.200%, 4/16/21 | 101,471 | ||||||
200,000 | Grupo Bimbo SAB de CV (Mexico), 144a, 4.500%, 1/25/22 | 204,117 | ||||||
292,000 | Imperial Brands Finance PLC (United Kingdom), 144a, 4.250%, 7/21/25 | 290,665 | ||||||
130,000 | Kraft Heinz Foods Co., 6.875%, 1/26/39 | 153,278 | ||||||
165,000 | Mondelez International, Inc., 4.125%, 5/7/28 | 163,590 | ||||||
208,000 | Moody's Corp., 2.750%, 12/15/21 | 203,150 | ||||||
192,000 | Reynolds American, Inc., 4.450%, 6/12/25 | 193,229 | ||||||
1,534,277 | ||||||||
Information Technology — 2.6% | ||||||||
198,000 | Activision Blizzard, Inc., 144a, 6.125%, 9/15/23 | 205,151 | ||||||
235,000 | Apple, Inc., 2.750%, 1/13/25 | 224,916 | ||||||
148,000 | Apple, Inc., 4.650%, 2/23/46 | 159,440 | ||||||
113,000 | Dell International LLC / EMC Corp., 144a, 6.020%, 6/15/26 | 118,694 | ||||||
175,000 | Hewlett Packard Enterprise Co., 144a, 2.100%, 10/4/19 | 172,797 | ||||||
85,000 | Microsoft Corp., 3.500%, 2/12/35 | 82,365 | ||||||
170,000 | Oracle Corp., 2.650%, 7/15/26 | 156,780 | ||||||
200,000 | QUALCOMM, Inc., 3.450%, 5/20/25 | 192,467 | ||||||
134,000 | Visa, Inc., 4.150%, 12/14/35 | 138,848 | ||||||
1,451,458 | ||||||||
Real Estate — 2.5% | ||||||||
208,000 | Boston Properties LP REIT, 3.200%, 1/15/25 | 197,973 | ||||||
185,000 | Crown Castle International Corp. REIT, 3.650%, 9/1/27 | 172,079 | ||||||
152,000 | Digital Realty Trust LP REIT, 2.750%, 2/1/23 | 144,780 | ||||||
61,000 | Mid-America Apartments LP, REIT, 3.750%, 6/15/24 | 60,159 | ||||||
248,000 | Sabra Health Care LP. REIT, 5.125%, 8/15/26 | 236,970 | ||||||
205,000 | SL Green Operating Partnership LP REIT, 3.250%, 10/15/22 | 199,212 | ||||||
204,000 | VEREIT Operating Partnership LP REIT, 4.600%, 2/6/24 | 204,076 | ||||||
184,000 | Welltower, Inc. REIT, 4.250%, 4/1/26 | 182,058 | ||||||
1,397,307 | ||||||||
Industrials — 1.9% | ||||||||
265,000 | Burlington Northern Santa Fe LLC, 5.750%, 5/1/40 | 313,996 | ||||||
200,000 | CRH America Finance, Inc., 144a, 4.500%, 4/4/48 | 187,615 | ||||||
202,000 | Eagle Materials, Inc., 4.500%, 8/1/26 | 202,938 | ||||||
175,000 | FedEx Corp., 5.100%, 1/15/44 | 183,472 | ||||||
2,294 | United Airlines 2014-2 Class B Pass Through Trust, 4.625%, 9/3/22 | 2,298 | ||||||
150,000 | Vulcan Materials Co., 4.500%, 4/1/25 | 150,741 | ||||||
1,041,060 |
7 |
Touchstone Active Bond Fund (Unaudited) (Continued)
Principal | Market | |||||||
Amount | Value | |||||||
Corporate Bonds — 38.1% (Continued) | ||||||||
Utilities — 1.4% | ||||||||
$ | 206,000 | Dominion Energy, Inc., 2.000%, 8/15/21 | $ | 196,421 | ||||
184,000 | Fortis, Inc., (Canada), 3.055%, 10/4/26 | 167,643 | ||||||
18,000 | GenOn Energy, Inc., 10/15/18(B) | 16,380 | ||||||
128,000 | NextEra Energy Capital Holdings, Inc., 2.800%, 1/15/23 | 123,736 | ||||||
150,000 | Oncor Electric Delivery Co. LLC, 3.800%, 9/30/47 | 143,327 | ||||||
124,000 | PacifiCorp., 5.750%, 4/1/37 | 149,068 | ||||||
796,575 | ||||||||
Materials — 0.6% | ||||||||
32,000 | Newcrest Finance Pty Ltd. (Australia), 144a, 4.200%, 10/1/22 | 32,036 | ||||||
60,000 | Newcrest Finance Pty Ltd. (Australia), 144a, 4.450%, 11/15/21 | 60,772 | ||||||
238,000 | Suzano Austria GmbH (Austria), 144a, 5.750%, 7/14/26 | 240,761 | ||||||
333,569 | ||||||||
Total Corporate Bonds | $ | 21,398,935 | ||||||
U.S. Treasury Obligations — 29.9% | ||||||||
64,000 | U.S. Treasury Bond, 3.000%, 5/15/45 | 64,248 | ||||||
2,110,000 | U.S. Treasury Bond, 3.000%, 2/15/48 | 2,117,088 | ||||||
610,000 | U.S. Treasury Bond, 3.125%, 5/15/48 | 626,942 | ||||||
46,000 | U.S. Treasury Note, 1.125%, 2/28/21 | 44,259 | ||||||
985,000 | U.S. Treasury Note, 1.875%, 9/30/22 | 952,256 | ||||||
71,000 | U.S. Treasury Note, 2.000%, 1/31/20 | 70,465 | ||||||
5,699,000 | U.S. Treasury Note, 2.000%, 12/31/21 | 5,572,553 | ||||||
1,205,000 | U.S. Treasury Note, 2.500%, 5/31/20 | 1,204,435 | ||||||
2,440,000 | U.S. Treasury Note, 2.500%, 3/31/23 | 2,415,600 | ||||||
3,705,000 | U.S. Treasury Note, 2.875%, 5/15/28 | 3,712,381 | ||||||
Total U.S. Treasury Obligations | $ | 16,780,227 | ||||||
U.S. Government Mortgage-Backed Obligations — 10.6% | ||||||||
21,544 | FHLMC, Pool #A56988, 5.500%, 2/1/37 | 23,299 | ||||||
125,339 | FHLMC, Pool #A95946, 4.000%, 1/1/41 | 128,852 | ||||||
95,957 | FHLMC, Pool #A96485, 4.500%, 1/1/41 | 100,921 | ||||||
28,586 | FHLMC, Pool #G03217, 5.500%, 9/1/37 | 30,829 | ||||||
16,329 | FHLMC, Pool #G03781, 6.000%, 1/1/38 | 17,930 | ||||||
68,957 | FHLMC, Pool #J27931, 3.500%, 4/1/29 | 69,906 | ||||||
312,779 | FHLMC, Pool #Q51274, 4.000%, 10/1/47 | 319,101 | ||||||
7,409 | FNMA, Pool #561741, 7.500%, 1/1/31 | 8,291 | ||||||
9,983 | FNMA, Pool #889734, 5.500%, 6/1/37 | 10,812 | ||||||
14,816 | FNMA, Pool #984256, 5.000%, 6/1/23 | 15,218 | ||||||
12,069 | FNMA, Pool #995472, 5.000%, 11/1/23 | 12,494 | ||||||
70,222 | FNMA, Pool #AB1149, 5.000%, 6/1/40 | 75,275 | ||||||
65,497 | FNMA, Pool #AB1800, 4.000%, 11/1/40 | 67,357 | ||||||
108,141 | FNMA, Pool #AD3795, 4.500%, 4/1/40 | 113,780 | ||||||
158,199 | FNMA, Pool #AD9150, 5.000%, 8/1/40 | 169,708 | ||||||
215,426 | FNMA, Pool #AE0548, 4.500%, 11/1/40 | 226,626 | ||||||
175,141 | FNMA, Pool #AE4429, 4.000%, 10/1/40 | 179,883 | ||||||
13,672 | FNMA, Pool #AH2666, 4.000%, 1/1/26 | 14,040 | ||||||
25,188 | FNMA, Pool #AH3493, 4.000%, 2/1/26 | 25,877 | ||||||
298,924 | FNMA, Pool #AJ5457, 4.000%, 11/1/41 | 307,021 | ||||||
280,320 | FNMA, Pool #AL0054, 4.500%, 2/1/41 | 294,934 | ||||||
48,736 | FNMA, Pool #AL2663, 4.000%, 1/1/26 | 50,036 | ||||||
249,828 | FNMA, Pool #AS7813, 4.000%, 8/1/46 | 254,893 | ||||||
359,459 | FNMA, Pool #AS8552, 3.000%, 12/1/36 | 354,767 | ||||||
648,983 | FNMA, Pool #AS8855, 3.500%, 2/1/37 | 655,446 | ||||||
662,037 | FNMA, Pool #BH6180, 4.000%, 7/1/47 | 675,730 | ||||||
312,500 | FNMA, Pool #MA1175, 3.000%, 9/1/42 | 305,680 | ||||||
194,244 | FNMA, Pool #MA1543, 3.500%, 8/1/33 | 197,146 | ||||||
174,783 | FNMA, Pool #MA2177, 4.000%, 2/1/35 | 180,847 | ||||||
246,899 | GNMA, Pool #4853, 4.000%, 11/20/40 | 255,319 | ||||||
165,023 | GNMA, Pool #4883, 4.500%, 12/20/40 | 173,531 | ||||||
71,255 | GNMA, Pool #736696, 4.500%, 5/15/40 | 75,012 | ||||||
331,437 | GNMA, Pool #AD1745, 3.000%, 2/20/43 | 325,202 | ||||||
247,963 | GNMA, Pool #MA1157, 3.500%, 7/20/43 | 250,916 | ||||||
Total U.S. Government Mortgage-Backed Obligations | $ | 5,966,679 |
Shares | ||||||||
Exchange-Traded Fund — 4.8% | ||||||||
25,384 | iShares JP Morgan USD Emerging Markets Bond ETF | $ | 2,710,250 |
Principal | ||||||||
Amount | ||||||||
Asset-Backed Securities — 4.4% | ||||||||
$ | 200,000 | Ascentium Equipment Receivables 2016-1 Trust, Ser 2016-1A, Class B, 144a, 2.850%, 7/10/20 | $ | 199,923 | ||||
253,641 | CWHEQ Home Equity Loan Trust, Ser 2007-S1, Class A5, 6.018%, 11/25/36(A)(C) | 252,268 | ||||||
300,385 | Elara HGV Timeshare Issuer LLC, Ser 2017-A, Class A, 144a, 2.690%, 3/25/30 | 294,296 | ||||||
248,125 | Jimmy Johns Funding LLC, Ser 2017-1A, Class A2II, 144a, 4.846%, 7/30/47 | 248,832 | ||||||
155,000 | SBA Tower Trust, 144a, 2.898%, 10/15/44 | 154,018 | ||||||
141,895 | Sonic Capital LLC, Ser 2016-1A, Class A2, 144a, 4.472%, 5/20/46 | 141,858 | ||||||
112,345 | SpringCastle America Funding LLC, Ser 2016-AA, Class A, 144a, 3.050%, 4/25/29 | 111,930 | ||||||
325,000 | Towd Point Mortgage Trust, Ser 2015-3, Class A2, 144a, 4.000%, 3/25/54(A)(C) | 329,619 | ||||||
380,000 | Voya CLO Ltd. (Cayman Islands), Ser 2017-4A, Class A1, 144a, (3M LIBOR +1.130%), 3.478%, 10/15/30(A) | 379,219 |
8 |
Touchstone Active Bond Fund (Unaudited) (Continued)
Principal | Market | |||||||
Amount | Value | |||||||
Asset-Backed Securities — 4.4% (Continued) | ||||||||
$ | 398,000 | Wendys Funding LLC, Ser 2018-1A, Class A2I, 144a, 3.573%, 3/15/48 | $ | 387,063 | ||||
Total Asset-Backed Securities | $ | 2,499,026 | ||||||
Non-Agency Collateralized Mortgage Obligations — 2.9% | ||||||||
7,329 | Deutsche ALT-A Securities, Inc. Alternate Loan Trust, Ser 2003-2XS, Class A6, 5.470%, 9/25/33(D) | 7,406 | ||||||
446,103 | EverBank Mortgage Loan Trust, Ser 2013-1, Class B1, 144a, 3.486%, 3/25/43(A)(C) | 440,218 | ||||||
150,204 | PMT Loan Trust, Ser 2013-J1, Class A11, 144a, 3.500%, 9/25/43(A)(C) | 147,529 | ||||||
104,421 | Residential Asset Securitization Trust, Ser 2006-A1, Class 1A3, 6.000%, 4/25/36 | 80,656 | ||||||
277,126 | Sequoia Mortgage Trust, Ser 2013-1, Class B1, 3.634%, 2/25/43(A)(C) | 275,398 | ||||||
251,710 | Sequoia Mortgage Trust, Ser 2013-10, Class B2, 144a, 3.562%, 8/25/43(A)(C) | 248,139 | ||||||
351,176 | Sequoia Mortgage Trust, Ser 2013-5, Class B1, 144a, 3.515%, 5/25/43(A)(C) | 349,117 | ||||||
71,993 | Structured Asset Securities Corp. Trust, Ser 2005-17, Class 5A1, 5.500%, 10/25/35 | 58,131 | ||||||
50,742 | Washington Mutual Alternative Mortgage Pass-Through Certificates, Ser 2005-9, Class 2A4, 5.500%, 11/25/35†† | 47,066 | ||||||
Total Non-Agency Collateralized Mortgage Obligations | $ | 1,653,660 | ||||||
Agency Collateralized Mortgage Obligations — 1.9% | ||||||||
103,355 | FNMA REMIC, Ser 2015-51, Class KC, 3.000%, 6/25/45 | 101,261 | ||||||
228,000 | FNMA REMIC, Ser 2016-102, Class AY, 3.000%, 1/25/37 | 215,874 | ||||||
160,000 | FNMA REMIC, Ser 2017-83, Class DL, 3.000%, 10/25/37 | 151,559 | ||||||
615,754 | FNMA REMIC, Ser 2017-90, Class KA, 3.000%, 11/25/47 | 606,619 | ||||||
Total Agency Collateralized Mortgage Obligations | $ | 1,075,313 | ||||||
Sovereign Bonds — 1.7% | ||||||||
200,000 | Mexico Government International Bond, 4.350%, 1/15/47 | 178,700 | ||||||
198,000 | Portugal Government International Bond, 144a, 5.125%, 10/15/24 | 204,941 | ||||||
220,000 | Province of Alberta Canada, 2.200%, 7/26/22 | 212,434 | ||||||
208,000 | Province of Ontario Canada, 1.875%, 5/21/20 | 204,365 | ||||||
146,000 | Uruguay Government International Bond, 4.975%, 4/20/55 | 141,620 | ||||||
Total Sovereign Bonds | $ | 942,060 | ||||||
Commercial Mortgage-Backed Securities — 1.3% | ||||||||
360,000 | DBUBS Mortgage Trust, Ser 2017-BRBK, Class B, 144a, 3.648%, 10/10/34(A)(C) | 355,769 | ||||||
375,000 | GS Mortgage Securities Corp. II, Ser 2017-SLP, Class B, 144a, 3.772%, 10/10/32 | 374,151 | ||||||
Total Commercial Mortgage-Backed Securities | $ | 729,920 | ||||||
Municipal Bond — 0.6% | ||||||||
New York — 0.6% | ||||||||
320,000 | NY Housing Development Corp., Ref 8 Spruce Street Class B, 3.864%, 2/15/48 | $ | 319,722 |
Shares | ||||||||
Preferred Stock — 0.4% | ||||||||
Utilities — 0.4% | ||||||||
7,919 | Integrys Holding, Inc., 6.000%, 8/1/73 | $ | 207,874 | |||||
Short-Term Investment Fund — 2.8% | ||||||||
1,572,593 | Dreyfus Government Cash Management, Institutional Shares, 1.81%∞Ω | $ | 1,572,593 | |||||
Total Investment Securities —99.4% | ||||||||
(Cost $56,579,176) | $ | 55,856,259 | ||||||
Other Assets in | ||||||||
Excess of Liabilities — 0.6% | 329,793 | |||||||
Net Assets — 100.0% | $ | 56,186,052 |
(A) | Variable rate security - Rate reflected is the rate in effect as of June 30, 2018. |
(B) | The issuer is in default of certain debt covenants. Income is not being accrued. The total value of such securities as of June 30, 2018 was 16,380 or 0.03% of net assets. |
(C) | Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description. |
(D) | Step Bond - A bond that pays an initial interest rate for the first period and then a higher interest rate for the following |
9 |
Touchstone Active Bond Fund (Unaudited) (Continued)
periods until maturity. The interest rate shown reflects the rate in effect as of June 30, 2018.
†† | The issuers and/or sponsors of certain mortgage-backed securities may no longer exist; however, the securities held by the Fund are separate legal entities organized as trusts and publicly traded. The Fund receives principal and interest payments directly from these trusts. |
∞ | Open-End Fund. |
Ω | Represents the 7-day SEC yield as of June 30, 2018. |
Portfolio Abbreviations:
CLO - Collateralized Loan Obligation
DAC - Designated Activity Company
ETF - Exchange-Traded Fund
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
LIBOR - London Interbank Offered Rate
LLC - Limited Liability Company
LP - Limited Partnership
MTN -Medium Term Note
PLC - Public Limited Company
REIT - Real Estate Investment Trust
REMIC - Real Estate Mortgage Investment Conduit
USD - United States Dollar
144a - This is a restricted security that was sold in a transaction qualifying for the exemption under Rule 144a of the Securities Act of 1933. This security may be sold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2018, these securities were valued at $7,558,432 or 13.5% of net assets. These securities were deemed liquid pursuant to procedures approved by the Board of Trustees.
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 | ||||||||||||
Assets: | ||||||||||||||||
Corporate Bonds | $ | — | $ | 21,398,935 | $ | — | $ | 21,398,935 | ||||||||
U.S. Treasury Obligations | — | 16,780,227 | — | 16,780,227 | ||||||||||||
U.S. Government Mortgage-Backed Obligations | — | 5,966,679 | — | 5,966,679 | ||||||||||||
Exchange-Traded Fund | 2,710,250 | — | — | 2,710,250 | ||||||||||||
Asset-Backed Securities | — | 2,499,026 | — | 2,499,026 | ||||||||||||
Non-Agency Collateralized Mortgage Obligations | — | 1,653,660 | — | 1,653,660 | ||||||||||||
Agency Collateralized Mortgage Obligations | — | 1,075,313 | — | 1,075,313 | ||||||||||||
Sovereign Bonds | — | 942,060 | — | 942,060 | ||||||||||||
Commercial Mortgage-Backed Securities | — | 729,920 | — | 729,920 | ||||||||||||
Municipal Bond | — | 319,722 | — | 319,722 | ||||||||||||
Preferred Stock | 207,874 | — | — | 207,874 | ||||||||||||
Short-Term Investment Fund | 1,572,593 | — | — | 1,572,593 | ||||||||||||
Total Assets | $ | 4,490,717 | $ | 51,365,542 | $ | — | $ | 55,856,259 |
See accompanying Notes to Financial Statements.
10 |
Touchstone Balanced Fund – June 30, 2018 (Unaudited)
Market | ||||||||
Shares | Value | |||||||
Common Stocks — 66.6% | ||||||||
Information Technology — 18.5% | ||||||||
5,567 | Microsoft Corp. | $ | 548,962 | |||||
2,869 | Apple, Inc. | 531,081 | ||||||
458 | Alphabet, Inc. - Class C* | 510,968 | ||||||
2,486 | Facebook, Inc. - Class A* | 483,080 | ||||||
2,731 | salesforce.com, Inc.* | 372,508 | ||||||
7,181 | Oracle Corp. | 316,395 | ||||||
4,292 | Avnet, Inc. | 184,084 | ||||||
1,250 | International Business Machines Corp. | 174,625 | ||||||
2,207 | Cisco Systems, Inc. | 94,967 | ||||||
3,216,670 | ||||||||
Consumer Discretionary — 13.1% | ||||||||
422 | Amazon.com, Inc.* | 717,316 | ||||||
6,749 | Twenty-First Century Fox, Inc. - Class A | 335,358 | ||||||
158 | Booking Holdings, Inc.* | 320,280 | ||||||
3,744 | Carnival Corp. | 214,569 | ||||||
6,110 | Comcast Corp. - Class A | 200,469 | ||||||
594 | Charter Communications, Inc. - Class A* | 174,167 | ||||||
4,257 | Yum China Holdings, Inc. (China) | 163,724 | ||||||
3,045 | Starbucks Corp. | 148,748 | ||||||
2,274,631 | ||||||||
Financials — 10.4% | ||||||||
5,011 | Berkshire Hathaway, Inc. - Class B* | 935,303 | ||||||
6,193 | Brookfield Asset Management, Inc. (Canada) - Class A | 251,064 | ||||||
1,128 | Goldman Sachs Group, Inc. (The) | 248,803 | ||||||
8,450 | Bank of America Corp. | 238,206 | ||||||
1,095 | Signature Bank/NewYork NY* | 140,029 | ||||||
1,813,405 | ||||||||
Health Care — 7.5% | ||||||||
4,311 | Novartis AG (Switzerland) ADR | 325,653 | ||||||
4,994 | Bristol-Myers Squibb Co. | 276,368 | ||||||
2,248 | Johnson & Johnson | 272,772 | ||||||
890 | Biogen, Inc.* | 258,314 | ||||||
1,976 | AmerisourceBergen Corp. | 168,494 | ||||||
1,301,601 | ||||||||
Industrials — 5.8% | ||||||||
2,069 | United Technologies Corp. | 258,687 | ||||||
1,543 | Union Pacific Corp. | 218,612 | ||||||
2,887 | Stericycle, Inc.* | 188,492 | ||||||
13,578 | General Electric Co. | 184,797 | ||||||
4,569 | Johnson Controls International PLC | 152,833 | ||||||
1,003,421 | ||||||||
Energy — 3.4% | ||||||||
3,317 | Schlumberger Ltd. | 222,339 | ||||||
2,491 | Exxon Mobil Corp. | 206,080 | ||||||
3,711 | Halliburton Co. | 167,218 | ||||||
595,637 | ||||||||
Real Estate — 3.1% | ||||||||
1,574 | Simon Property Group, Inc. REIT | 267,879 | ||||||
1,571 | Jones Lang LaSalle, Inc. REIT | 260,770 | ||||||
528,649 | ||||||||
Consumer Staples — 2.5% | ||||||||
3,839 | Unilever NV (United Kingdom) | 213,909 | ||||||
3,115 | Mondelez International, Inc. - Class A | 127,715 | ||||||
914 | JM Smucker Co. (The) | 98,237 | ||||||
439,861 | ||||||||
Telecommunication Services — 1.2% | ||||||||
6,447 | AT&T, Inc. | 207,013 | ||||||
Materials — 1.1% | ||||||||
3,554 | Nutrien Ltd. (Canada) | 193,267 | ||||||
Total Common Stocks | $ | 11,574,155 |
Principal | ||||||||
Amount | ||||||||
Corporate Bonds — 12.0% | ||||||||
Financials — 3.0% | ||||||||
$ | 24,000 | American Express Co., 3.000%, 10/30/24 | 22,900 | |||||
50,000 | Bank of America Corp. MTN, 4.000%, 1/22/25 | 49,358 | ||||||
24,000 | Bank of Montreal (Canada), 3.803%, 12/15/32 | 22,231 | ||||||
24,000 | Bank of New York Mellon Corp. (The) MTN, 2.950%, 1/29/23 | 23,456 | ||||||
22,000 | BB&T Corp. MTN, 2.850%, 10/26/24 | 20,874 | ||||||
12,000 | Chubb INA Holdings, Inc., 4.350%, 11/3/45 | 12,281 | ||||||
18,000 | Citigroup, Inc., 3.300%, 4/27/25 | 17,258 | ||||||
11,000 | Citigroup, Inc., 4.750%, 5/18/46 | 10,460 | ||||||
18,000 | Fifth Third Bancorp, 2.875%, 7/27/20 | 17,899 | ||||||
20,000 | Goldman Sachs Group, Inc. (The), (3M LIBOR +1.000%), 3.359%, 7/24/23(A) | 20,073 | ||||||
32,000 | Goldman Sachs Group, Inc. (The), 3.691%, 6/5/28 | 30,335 | ||||||
32,000 | Huntington Bancshares, Inc./OH, 4.000%, 5/15/25 | 32,094 | ||||||
10,000 | JPMorgan Chase & Co., (3M LIBOR +0.730%), 3.092%, 4/23/24(A) | 9,948 | ||||||
15,000 | JPMorgan Chase & Co., 3.250%, 9/23/22 | 14,861 | ||||||
25,000 | JPMorgan Chase & Co., 3.509%, 1/23/29 | 23,686 | ||||||
17,000 | Morgan Stanley, 3.737%, 4/24/24 | 16,898 | ||||||
25,000 | Morgan Stanley, 3.950%, 4/23/27 | 23,832 | ||||||
19,000 | New York Life Global Funding, 144a, 3.000%, 1/10/28 | 17,822 | ||||||
18,000 | Northwestern Mutual Life Insurance Co. (The), 144a, 3.850%, 9/30/47 | 16,482 |
11 |
Touchstone Balanced Fund (Unaudited) (Continued)
Principal | Market | |||||||
Amount | Value | |||||||
Corporate Bonds — 12.0% (Continued) | ||||||||
Financials — (Continued) | ||||||||
$ | 17,000 | Prudential Financial, Inc., 5.625%, 6/15/43 | $ | 17,531 | ||||
24,000 | Royal Bank of Canada (Canada) MTN, 3.200%, 4/30/21 | 23,990 | ||||||
20,000 | SunTrust Banks, Inc., 4.000%, 5/1/25 | 20,095 | ||||||
17,000 | Visa, Inc., 4.150%, 12/14/35 | 17,615 | ||||||
30,000 | Wells Fargo & Co., 4.125%, 8/15/23 | 30,162 | ||||||
512,141 | ||||||||
Energy — 1.6% | ||||||||
14,000 | Boardwalk Pipelines LP, 4.450%, 7/15/27 | 13,594 | ||||||
17,000 | Cenovus Energy, Inc. (Canada), 4.250%, 4/15/27 | 16,374 | ||||||
16,000 | Columbia Pipeline Group, Inc., 4.500%, 6/1/25 | 15,963 | ||||||
15,000 | Concho Resources, Inc., 3.750%, 10/1/27 | 14,429 | ||||||
24,000 | Enbridge, Inc. (Canada), (3M LIBOR +0.700%), 3.041%, 6/15/20(A) | 24,094 | ||||||
14,000 | Energy Transfer Partners LP, 4.950%, 6/15/28 | 13,957 | ||||||
14,000 | EOG Resources, Inc., 3.900%, 4/1/35 | 13,582 | ||||||
25,000 | Kinder Morgan Energy Partners LP, 3.500%, 9/1/23 | 24,292 | ||||||
23,000 | Midcontinent Express Pipeline LLC, 144a, 6.700%, 9/15/19 | 23,679 | ||||||
20,000 | NGPL PipeCo LLC, 144a, 7.768%, 12/15/37 | 23,500 | ||||||
17,000 | Petroleos Mexicanos (Mexico), 4.500%, 1/23/26 | 15,949 | ||||||
5,000 | Petroleos Mexicanos (Mexico), 144a, 5.350%, 2/12/28 | 4,734 | ||||||
20,000 | Sabine Pass Liquefaction LLC, 5.000%, 3/15/27 | 20,324 | ||||||
20,000 | Shell International Finance BV (Netherlands), 1.875%, 5/10/21 | 19,390 | ||||||
16,000 | Valero Energy Corp., 4.350%, 6/1/28 | 15,929 | ||||||
26,000 | Williams Cos., Inc. (The), 3.700%, 1/15/23 | 25,155 | ||||||
284,945 | ||||||||
Consumer Discretionary — 1.4% | ||||||||
20,000 | Anheuser-Busch InBev Finance, Inc., 4.900%, 2/1/46 | 20,568 | ||||||
22,000 | Aptiv PLC (Jersey), 3.150%, 11/19/20 | 21,840 | ||||||
20,000 | AutoNation, Inc., 5.500%, 2/1/20 | 20,595 | ||||||
36,000 | BMW US Capital LLC, 144a, 3.100%, 4/12/21 | 35,775 | ||||||
24,000 | Dollar Tree, Inc., (3M LIBOR +0.700%), 3.055%, 4/17/20(A) | 24,049 | ||||||
13,000 | Ford Motor Co., 4.750%, 1/15/43 | 11,236 | ||||||
24,000 | Ford Motor Credit Co. LLC, 4.140%, 2/15/23 | 23,992 | ||||||
32,000 | General Motors Financial Co., Inc., 3.950%, 4/13/24 | 31,315 | ||||||
9,000 | General Motors Financial Co., Inc., 4.350%, 4/9/25 | 8,871 | ||||||
20,000 | Home Depot, Inc. (The), 5.950%, 4/1/41 | 24,697 | ||||||
24,000 | Toyota Motor Credit Corp. MTN, 2.950%, 4/13/21 | 23,876 | ||||||
246,814 | ||||||||
Health Care — 1.3% | ||||||||
11,000 | Abbott Laboratories, 3.750%, 11/30/26 | 10,812 | ||||||
20,000 | AbbVie, Inc., 4.450%, 5/14/46 | 19,125 | ||||||
15,000 | Allergan Funding SCS (Luxembourg), 3.800%, 3/15/25 | 14,566 | ||||||
18,000 | Allergan Sales LLC, 144a, 5.000%, 12/15/21 | 18,624 | ||||||
17,000 | Celgene Corp., 5.000%, 8/15/45 | 16,646 | ||||||
23,000 | CVS Health Corp., 4.300%, 3/25/28 | 22,687 | ||||||
13,000 | CVS Health Corp., 5.125%, 7/20/45 | 13,173 | ||||||
17,000 | Express Scripts Holding Co., 3.300%, 2/25/21 | 16,938 | ||||||
30,000 | Johnson & Johnson, 2.900%, 1/15/28 | 28,634 | ||||||
14,000 | Thermo Fisher Scientific, Inc., 3.600%, 8/15/21 | 14,076 | ||||||
24,000 | UnitedHealth Group, Inc., 2.375%, 10/15/22 | 23,076 | ||||||
15,000 | Zimmer Biomet Holdings, Inc., 3.150%, 4/1/22 | 14,726 | ||||||
5,000 | Zimmer Biomet Holdings, Inc., 3.375%, 11/30/21 | 4,960 | ||||||
218,043 | ||||||||
Information Technology — 1.1% | ||||||||
23,000 | Activision Blizzard, Inc., 144a, 6.125%, 9/15/23 | 23,831 | ||||||
75,000 | Apple, Inc., 2.750%, 1/13/25 | 71,782 | ||||||
24,000 | Apple, Inc., 4.650%, 2/23/46 | 25,855 | ||||||
13,000 | Dell International LLC / EMC Corp., 144a, 6.020%, 6/15/26 | 13,655 | ||||||
11,000 | Microsoft Corp., 3.500%, 2/12/35 | 10,659 | ||||||
20,000 | Oracle Corp., 2.650%, 7/15/26 | 18,445 | ||||||
18,000 | QUALCOMM, Inc., 3.450%, 5/20/25 | 17,322 | ||||||
181,549 | ||||||||
Real Estate — 0.9% | ||||||||
24,000 | Boston Properties LP REIT, 3.200%, 1/15/25 | 22,843 | ||||||
22,000 | Crown Castle International Corp., 3.650%, 9/1/27 | 20,463 | ||||||
14,000 | Digital Realty Trust LP, 2.750%, 2/1/23 | 13,335 | ||||||
15,000 | Mid-America Apartments LP, 3.750%, 6/15/24 | 14,793 | ||||||
30,000 | Sabra Health Care LP. REIT, 5.125%, 8/15/26 | 28,666 |
12 |
Touchstone Balanced Fund (Unaudited) (Continued)
Principal | Market | |||||||
Amount | Value | |||||||
Corporate Bonds — 12.0% (Continued) | ||||||||
Real Estate — (Continued) | ||||||||
$ | 25,000 | SL Green Operating Partnership LP, 3.250%, 10/15/22 | $ | 24,294 | ||||
20,000 | VEREIT Operating Partnership LP REIT, 4.600%, 2/6/24 | 20,007 | ||||||
16,000 | Welltower, Inc. REIT, 4.250%, 4/1/26 | 15,831 | ||||||
160,232 | ||||||||
Telecommunication Services — 0.9% | ||||||||
20,000 | AT&T, Inc., 4.350%, 6/15/45 | 16,943 | ||||||
24,000 | Booking Holdings, Inc., 3.600%, 6/1/26 | 23,355 | ||||||
21,000 | Charter Communications Operating LLC / Charter Communications Operating Capital, 6.484%, 10/23/45 | 22,135 | ||||||
20,000 | Comcast Corp., 2.850%, 1/15/23 | 19,338 | ||||||
14,000 | Comcast Corp., 4.000%, 3/1/48 | 12,334 | ||||||
25,000 | Qwest Corp., 6.750%, 12/1/21 | 26,603 | ||||||
25,000 | Verizon Communications, Inc., 5.012%, 4/15/49 | 24,346 | ||||||
15,000 | Warner Media LLC, 3.800%, 2/15/27 | 14,166 | ||||||
159,220 | ||||||||
Utilities — 0.6% | ||||||||
21,000 | Dominion Energy, Inc., 2.000%, 8/15/21 | 20,024 | ||||||
15,000 | Duke Energy Progress LLC, 4.150%, 12/1/44 | 14,803 | ||||||
17,000 | Fortis, Inc. (Canada), 3.055%, 10/4/26 | 15,489 | ||||||
14,000 | NextEra Energy Capital Holdings, Inc., 2.800%, 1/15/23 | 13,534 | ||||||
16,000 | Oncor Electric Delivery Co. LLC, 3.800%, 9/30/47 | 15,288 | ||||||
27,000 | PacifiCorp., 5.750%, 4/1/37 | 32,458 | ||||||
111,596 | ||||||||
Consumer Staples — 0.6% | ||||||||
24,000 | Cargill, Inc., 144a, 3.050%, 4/19/21 | 23,870 | ||||||
11,000 | General Mills, Inc., 3.200%, 4/16/21 | 10,943 | ||||||
15,000 | Kraft Heinz Foods Co., 6.875%, 1/26/39 | 17,686 | ||||||
8,000 | Kroger Co. (The), 5.000%, 4/15/42 | 7,887 | ||||||
22,000 | Mondelez International, Inc., 4.125%, 5/7/28 | 21,812 | ||||||
6,000 | Moody's Corp., 2.750%, 12/15/21 | 5,860 | ||||||
20,000 | Reynolds American, Inc., 4.450%, 6/12/25 | 20,128 | ||||||
108,186 | ||||||||
Industrials — 0.5% | ||||||||
25,000 | Burlington Northern Santa Fe LLC, 5.750%, 5/1/40 | 29,622 | ||||||
20,000 | Eagle Materials, Inc., 4.500%, 8/1/26 | 20,093 | ||||||
16,000 | FedEx Corp., 5.100%, 1/15/44 | 16,775 | ||||||
28,000 | General Electric Co., 4.125%, 10/9/42 | 26,005 | ||||||
92,495 |
Materials — 0.1% | ||||||||
4,000 | Newcrest Finance Pty Ltd. (Australia), 144a, 4.200%, 10/1/22 | 4,004 | ||||||
7,000 | Newcrest Finance Pty Ltd. (Australia), 144a, 4.450%, 11/15/21 | 7,090 | ||||||
11,094 | ||||||||
Total Corporate Bonds | $ | 2,086,315 | ||||||
U.S. Treasury Obligations — 10.4% | ||||||||
160,000 | U.S. Treasury Bond, 3.000%, 2/15/48 | 160,538 | ||||||
339,000 | U.S. Treasury Note, 2.000%, 10/31/22 | 329,161 | ||||||
225,000 | U.S. Treasury Note, 2.500%, 5/31/20 | 224,895 | ||||||
585,000 | U.S. Treasury Note, 2.500%, 3/31/23 | 579,150 | ||||||
520,000 | U.S. Treasury Note, 2.875%, 5/15/28 | 521,036 | ||||||
Total U.S. Treasury Obligations | $ | 1,814,780 | ||||||
U.S. Government Mortgage-Backed Obligations — 7.8% | ||||||||
294,087 | FHLMC, Pool #G05624, 4.500%, 9/1/39 | 308,482 | ||||||
193,115 | FHLMC, Pool #Q29260, 4.000%, 10/1/44 | 197,628 | ||||||
117,719 | FNMA, Pool #725423, 5.500%, 5/1/34 | 128,056 | ||||||
111,699 | FNMA, Pool #725610, 5.500%, 7/1/34 | 121,515 | ||||||
28,236 | FNMA, Pool #890310, 4.500%, 12/1/40 | 29,704 | ||||||
113,646 | FNMA, Pool #AD9193, 5.000%, 9/1/40 | 121,679 | ||||||
440,763 | FNMA, Pool #AL5718, 3.500%, 9/1/44 | 441,170 | ||||||
Total U.S. Government Mortgage-Backed Obligations | $ | 1,348,234 |
Shares | ||||||||
Exchange-Traded Fund — 1.7% | ||||||||
2,738 | iShares JP Morgan USD Emerging Markets Bond ETF | $ | 292,336 |
Principal | ||||||||
Amount | ||||||||
Sovereign Bonds — 0.2% | ||||||||
$ | 20,000 | Province of Alberta Canada, 2.200%, 7/26/22 | 19,312 | |||||
22,000 | Province of Ontario Canada, 1.875%, 5/21/20 | 21,615 | ||||||
Total Sovereign Bonds | $ | 40,927 |
13 |
Touchstone Balanced Fund (Unaudited) (Continued)
Market | ||||||||
Shares | Value | |||||||
Preferred Stock — 0.1% | ||||||||
Utilities — 0.1% | ||||||||
796 | Integrys Holding, Inc., 6.000%, 8/1/73 | $ | 20,895 | |||||
Short-Term Investment Fund — 1.2% | ||||||||
201,441 | Dreyfus Government Cash Management, Institutional Shares, 1.81%∞Ω | $ | 201,441 | |||||
Total Investment Securities —100.0% | ||||||||
(Cost $15,662,964) | $ | 17,379,083 | ||||||
Other Assets in | ||||||||
Excess of Liabilities — 0.0% | 969 | |||||||
Net Assets — 100.0% | $ | 17,380,052 |
(A) | Variable rate security - Rate reflected is the rate in effect as of June 30, 2018. |
* | Non-income producing security. |
∞ | Open-End Fund. |
Ω | Represents the 7-day SEC yield as of June 30, 2018. |
Portfolio Abbreviations:
ADR - American Depositary Receipt
ETF - Exchange-Traded Fund
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
LIBOR - London Interbank Offered Rate
LLC - Limited Liability Company
LP - Limited Partnership
MTN - Medium Term Note
PLC - Public Limited Company
REIT - Real Estate Investment Trust
USD - United States Dollar
144a - This is a restricted security that was sold in a transaction qualifying for the exemption under Rule 144a of the Securities Act of 1933. This security may be sold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2018, these securities were valued at $213,066 or 1.2% of net assets. These securities were deemed liquid pursuant to procedures approved by the Board of Trustees.
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 Stocks | $ | 11,574,155 | $ | — | $ | — | $ | 11,574,155 | ||||||||
Corporate Bonds | — | 2,086,315 | — | 2,086,315 | ||||||||||||
U.S. Treasury Obligations | — | 1,814,780 | — | 1,814,780 | ||||||||||||
U.S. Government Mortgage-Backed Obligations | — | 1,348,234 | — | 1,348,234 | ||||||||||||
Exchange-Traded Fund | 292,336 | — | — | 292,336 | ||||||||||||
Sovereign Bonds | — | 40,927 | — | 40,927 | ||||||||||||
Preferred Stock | 20,895 | — | — | 20,895 | ||||||||||||
Short-Term Investment Fund | 201,441 | — | — | 201,441 | ||||||||||||
Total | $ | 12,088,827 | $ | 5,290,256 | $ | — | $ | 17,379,083 |
See accompanying Notes to Financial Statements.
14 |
Touchstone Bond Fund – June 30, 2018 (Unaudited)
Principal | Market | |||||||
Amount | Value | |||||||
Corporate Bonds — 38.0% | ||||||||
Financials — 11.5% | ||||||||
$ | 183,000 | American Express Co., 3.000%, 10/30/24 | $ | 174,609 | ||||
150,000 | Bank of America Corp., 3.705%, 4/24/28 | 144,665 | ||||||
221,000 | Bank of America Corp. MTN, 4.000%, 1/22/25 | 218,161 | ||||||
170,000 | Bank of Montreal (Canada), 3.803%, 12/15/32 | 157,473 | ||||||
170,000 | Bank of New York Mellon Corp. (The) MTN, 2.950%, 1/29/23 | 166,149 | ||||||
175,000 | Bank of Nova Scotia (The), (Canada), (3M LIBOR +0.620%), 2.946%, 9/19/22(A) | 175,431 | ||||||
200,000 | Barclays PLC (United Kingdom), 3.250%, 1/12/21 | 197,135 | ||||||
168,000 | BB&T Corp. MTN, 2.850%, 10/26/24 | 159,405 | ||||||
95,000 | Chubb INA Holdings, Inc., 4.350%, 11/3/45 | 97,227 | ||||||
139,000 | Citigroup, Inc., 3.300%, 4/27/25 | 133,266 | ||||||
85,000 | Citigroup, Inc., 4.750%, 5/18/46 | 80,829 | ||||||
142,000 | Fifth Third Bancorp, 2.875%, 7/27/20 | 141,201 | ||||||
200,000 | GE Capital International Funding Co. Unlimited Co. (Ireland), 4.418%, 11/15/35 | 193,756 | ||||||
400,000 | Goldman Sachs Group, Inc. (The), (3M LIBOR +1.000%), 3.359%, 7/24/23(A) | 401,462 | ||||||
99,000 | Goldman Sachs Group, Inc. (The), 3.691%, 6/5/28 | 93,850 | ||||||
147,000 | Goldman Sachs Group, Inc. (The), 5.250%, 7/27/21 | 154,487 | ||||||
238,000 | Huntington Bancshares, Inc./OH, 4.000%, 5/15/25 | 238,698 | ||||||
105,000 | JPMorgan Chase & Co., (3M LIBOR +0.730%), 3.092%, 4/23/24(A) | 104,457 | ||||||
112,000 | JPMorgan Chase & Co., 3.250%, 9/23/22 | 110,962 | ||||||
181,000 | JPMorgan Chase & Co., 3.509%, 1/23/29 | 171,489 | ||||||
200,000 | Lloyds Banking Group PLC (United Kingdom), 3.574%, 11/7/28 | 184,526 | ||||||
120,000 | Morgan Stanley, 3.737%, 4/24/24 | 119,280 | ||||||
199,000 | Morgan Stanley, 3.950%, 4/23/27 | 189,705 | ||||||
119,000 | New York Life Global Funding, 144a, 3.000%, 1/10/28 | 111,623 | ||||||
125,000 | Northwestern Mutual Life Insurance Co. (The), 144a, 3.850%, 9/30/47 | 114,461 | ||||||
250,000 | PNC Bank NA, 2.700%, 11/1/22 | 240,320 | ||||||
140,000 | Prudential Financial, Inc., 5.625%, 6/15/43 | 144,375 | ||||||
178,000 | Royal Bank of Canada (Canada) MTN, 3.200%, 4/30/21 | 177,923 | ||||||
160,000 | SunTrust Banks, Inc., 4.000%, 5/1/25 | 160,762 | ||||||
128,000 | Visa, Inc., 4.150%, 12/14/35 | 132,631 | ||||||
117,000 | Wells Fargo & Co., 2.100%, 7/26/21 | 112,422 | ||||||
113,000 | Wells Fargo & Co., 4.125%, 8/15/23 | 113,611 | ||||||
5,116,351 | ||||||||
Energy — 4.4% | ||||||||
96,000 | Boardwalk Pipelines LP, 4.450%, 7/15/27 | 93,218 | ||||||
143,000 | Cenovus Energy, Inc. (Canada), 4.250%, 4/15/27 | 137,737 | ||||||
127,000 | Columbia Pipeline Group, Inc., 4.500%, 6/1/25 | 126,709 | ||||||
108,000 | Concho Resources, Inc., 3.750%, 10/1/27 | 103,890 | ||||||
172,000 | Enbridge, Inc. (Canada), (3M LIBOR +0.700%), 3.041%, 6/15/20(A) | 172,673 | ||||||
102,000 | Energy Transfer Partners LP, 4.950%, 6/15/28 | 101,683 | ||||||
105,000 | EOG Resources, Inc., 3.900%, 4/1/35 | 101,868 | ||||||
185,000 | Kinder Morgan Energy Partners LP, 3.500%, 9/1/23 | 179,759 | ||||||
128,000 | Petroleos Mexicanos (Mexico), 4.500%, 1/23/26 | 120,090 | ||||||
165,000 | Petroleos Mexicanos (Mexico), 144a, 5.350%, 2/12/28 | 156,222 | ||||||
146,000 | Sabine Pass Liquefaction LLC, 5.000%, 3/15/27 | 148,363 | ||||||
166,000 | Shell International Finance BV (Netherlands), 1.875%, 5/10/21 | 160,934 | ||||||
128,000 | Valero Energy Corp., 4.350%, 6/1/28 | 127,434 | ||||||
210,000 | Williams Cos., Inc. (The), 3.700%, 1/15/23 | 203,175 | ||||||
1,933,755 | ||||||||
Consumer Discretionary — 4.1% | ||||||||
250,000 | Anheuser-Busch InBev Finance, Inc., 4.900%, 2/1/46 | 257,095 | ||||||
173,000 | Aptiv PLC (Jersey), 3.150%, 11/19/20 | 171,744 | ||||||
270,000 | BMW US Capital LLC, 144a, 3.100%, 4/12/21 | 268,315 | ||||||
178,000 | Dollar Tree, Inc., (3M LIBOR +0.700%), 3.055%, 4/17/20(A) | 178,364 | ||||||
94,000 | Ford Motor Co., 4.750%, 1/15/43 | 81,245 | ||||||
178,000 | Ford Motor Credit Co. LLC, 4.140%, 2/15/23 | 177,941 | ||||||
158,000 | General Motors Financial Co., Inc., 3.200%, 7/13/20 | 157,255 | ||||||
90,000 | General Motors Financial Co., Inc., 3.950%, 4/13/24 | 88,075 | ||||||
98,000 | General Motors Financial Co., Inc., 4.350%, 4/9/25 | 96,594 | ||||||
137,000 | Home Depot, Inc. (The), 5.950%, 4/1/41 | 169,173 | ||||||
178,000 | Toyota Motor Credit Corp. MTN, 2.950%, 4/13/21 | 177,083 | ||||||
1,822,884 | ||||||||
Telecommunication Services — 3.6% | ||||||||
60,000 | AT&T, Inc., 3.950%, 1/15/25 | 58,682 | ||||||
37,000 | AT&T, Inc., 4.350%, 6/15/45 | 31,344 | ||||||
116,000 | AT&T, Inc., 4.500%, 5/15/35 | 107,294 | ||||||
178,000 | Booking Holdings, Inc., 3.600%, 6/1/26 | 173,213 |
15 |
Touchstone Bond Fund (Unaudited) (Continued)
Principal | Market | |||||||
Amount | Value | |||||||
Corporate Bonds — 38.0% (Continued) | ||||||||
Telecommunication Services — (Continued) | ||||||||
$ | 167,000 | Charter Communications Operating LLC / Charter Communications Operating Capital, 6.484%, 10/23/45 | $ | 176,024 | ||||
151,000 | Comcast Corp., 2.850%, 1/15/23 | 146,005 | ||||||
94,000 | Comcast Corp., 4.000%, 3/1/48 | 82,815 | ||||||
198,000 | Qwest Corp., 6.750%, 12/1/21 | 210,692 | ||||||
200,000 | Telecom Italia SpA/Milano (Italy), 144a, 5.303%, 5/30/24 | 197,250 | ||||||
62,000 | Verizon Communications, Inc., 4.672%, 3/15/55 | 55,064 | ||||||
125,000 | Verizon Communications, Inc., 5.012%, 4/15/49 | 121,731 | ||||||
260,000 | Warner Media LLC, 3.800%, 2/15/27 | 245,537 | ||||||
1,605,651 | ||||||||
Health Care — 3.4% | ||||||||
85,000 | Abbott Laboratories, 3.750%, 11/30/26 | 83,548 | ||||||
155,000 | AbbVie, Inc., 4.450%, 5/14/46 | 148,219 | ||||||
108,000 | Allergan Funding SCS (Luxembourg), 3.800%, 3/15/25 | 104,873 | ||||||
100,000 | Allergan Sales LLC, 144a, 5.000%, 12/15/21 | 103,465 | ||||||
131,000 | Celgene Corp., 5.000%, 8/15/45 | 128,274 | ||||||
120,000 | CVS Health Corp., 4.300%, 3/25/28 | 118,369 | ||||||
100,000 | CVS Health Corp., 5.125%, 7/20/45 | 101,328 | ||||||
136,000 | Express Scripts Holding Co., 3.300%, 2/25/21 | 135,501 | ||||||
39,000 | Medtronic Global Holdings SCA (Luxembourg), 3.350%, 4/1/27 | 37,996 | ||||||
169,000 | Shire Acquisitions Investments Ireland DAC (Ireland), 2.400%, 9/23/21 | 161,795 | ||||||
110,000 | Thermo Fisher Scientific, Inc., 3.600%, 8/15/21 | 110,600 | ||||||
182,000 | UnitedHealth Group, Inc., 2.375%, 10/15/22 | 174,994 | ||||||
118,000 | Zimmer Biomet Holdings, Inc., 3.150%, 4/1/22 | 115,841 | ||||||
1,524,803 | ||||||||
Real Estate — 2.7% | ||||||||
166,000 | Boston Properties LP REIT, 3.200%, 1/15/25 | 157,997 | ||||||
167,000 | Crown Castle International Corp. REIT, 3.650%, 9/1/27 | 155,336 | ||||||
107,000 | Digital Realty Trust LP REIT, 2.750%, 2/1/23 | 101,918 | ||||||
120,000 | Mid-America Apartments LP REIT, 3.750%, 6/15/24 | 118,346 | ||||||
215,000 | Sabra Health Care LP. REIT, 5.125%, 8/15/26 | 205,438 | ||||||
186,000 | SL Green Operating Partnership LP REIT, 3.250%, 10/15/22 | 180,748 | ||||||
164,000 | VEREIT Operating Partnership LP REIT, 4.600%, 2/6/24 | 164,061 | ||||||
130,000 | Welltower, Inc. REIT, 4.250%, 4/1/26 | 128,628 | ||||||
1,212,472 | ||||||||
Consumer Staples — 2.6% | ||||||||
180,000 | Cargill, Inc., 144a, 3.050%, 4/19/21 | 179,026 | ||||||
81,000 | General Mills, Inc., 3.200%, 4/16/21 | 80,580 | ||||||
160,000 | Grupo Bimbo SAB de CV (Mexico), 144a, 4.500%, 1/25/22 | 163,294 | ||||||
203,000 | Imperial Brands Finance PLC (United Kingdom), 144a, 4.250%, 7/21/25 | 202,072 | ||||||
115,000 | Kraft Heinz Foods Co., 6.875%, 1/26/39 | 135,592 | ||||||
101,000 | Mondelez International, Inc., 4.125%, 5/7/28 | 100,137 | ||||||
155,000 | Moody's Corp., 2.750%, 12/15/21 | 151,386 | ||||||
149,000 | Reynolds American, Inc., 4.450%, 6/12/25 | 149,954 | ||||||
1,162,041 | ||||||||
Information Technology — 1.8% | ||||||||
148,000 | Apple, Inc., 2.750%, 1/13/25 | 141,649 | ||||||
185,000 | Apple, Inc., 4.650%, 2/23/46 | 199,301 | ||||||
102,000 | Dell International LLC / EMC Corp., 144a, 6.020%, 6/15/26 | 107,140 | ||||||
88,000 | Microsoft Corp., 3.500%, 2/12/35 | 85,272 | ||||||
142,000 | Oracle Corp., 2.650%, 7/15/26 | 130,957 | ||||||
140,000 | QUALCOMM, Inc., 3.450%, 5/20/25 | 134,727 | ||||||
799,046 | ||||||||
Industrials — 1.4% | ||||||||
200,000 | CRH America Finance, Inc., 144a, 4.500%, 4/4/48 | 187,615 | ||||||
166,000 | Eagle Materials, Inc., 4.500%, 8/1/26 | 166,771 | ||||||
119,000 | Roper Technologies, Inc., 3.000%, 12/15/20 | 118,143 | ||||||
138,000 | Vulcan Materials Co., 4.500%, 4/1/25 | 138,681 | ||||||
611,210 | ||||||||
Utilities — 1.4% | ||||||||
161,000 | Dominion Energy, Inc., 2.000%, 8/15/21 | 153,513 | ||||||
101,000 | Duke Energy Progress LLC, 4.150%, 12/1/44 | 99,676 | ||||||
136,000 | Fortis, Inc. (Canada), 3.055%, 10/4/26 | 123,910 | ||||||
102,000 | NextEra Energy Capital Holdings, Inc., 2.800%, 1/15/23 | 98,602 | ||||||
123,000 | Oncor Electric Delivery Co. LLC, 3.800%, 9/30/47 | 117,528 | ||||||
593,229 | ||||||||
Materials — 1.1% | ||||||||
200,000 | Braskem America Finance Co., 144a, 7.125%, 7/22/41 | 224,000 | ||||||
25,000 | Newcrest Finance Pty Ltd. (Australia), 144a, 4.200%, 10/1/22 | 25,028 | ||||||
47,000 | Newcrest Finance Pty Ltd. (Australia), 144a, 4.450%, 11/15/21 | 47,605 |
16 |
Touchstone Bond Fund (Unaudited) (Continued)
Principal | Market | |||||||
Amount | Value | |||||||
Corporate Bonds — 38.0% (Continued) | ||||||||
Materials — (Continued) | ||||||||
$ | 200,000 | Suzano Austria GmbH (Austria), 144a, 5.750%, 7/14/26 | $ | 202,320 | ||||
498,953 | ||||||||
Total Corporate Bonds | $ | 16,880,395 | ||||||
U.S. Treasury Obligations — 21.2% | ||||||||
413,000 | U.S. Treasury Bond, 3.000%, 2/15/48 | 414,387 | ||||||
240,000 | U.S. Treasury Bond, 3.125%, 5/15/48 | 246,666 | ||||||
885,000 | U.S. Treasury Note, 2.500%, 5/31/20 | 884,585 | ||||||
4,265,000 | U.S. Treasury Note, 2.500%, 3/31/23 | 4,222,350 | ||||||
3,640,000 | U.S. Treasury Note, 2.875%, 5/15/28 | 3,647,252 | ||||||
Total U.S. Treasury Obligations | $ | 9,415,240 | ||||||
U.S. Government Mortgage-Backed Obligations — 20.4% | ||||||||
551,414 | FHLMC, Pool #G05624, 4.500%, 9/1/39 | 578,403 | ||||||
725,659 | FHLMC, Pool #Q29056, 4.000%, 10/1/44 | 742,592 | ||||||
316,494 | FHLMC, Pool #Q29260, 4.000%, 10/1/44 | 323,891 | ||||||
442,996 | FNMA, Pool #725423, 5.500%, 5/1/34 | 481,896 | ||||||
413,701 | FNMA, Pool #725610, 5.500%, 7/1/34 | 450,057 | ||||||
378,822 | FNMA, Pool #AD9193, 5.000%, 9/1/40 | 405,595 | ||||||
546,020 | FNMA, Pool #AL5718, 3.500%, 9/1/44 | 546,524 | ||||||
542,610 | FNMA, Pool #AR9195, 3.000%, 3/1/43 | 530,380 | ||||||
624,039 | FNMA, Pool #AS4707, 3.500%, 4/1/45 | 623,133 | ||||||
803,863 | FNMA, Pool #AS7234, 3.000%, 5/1/46 | 779,896 | ||||||
1,404,441 | FNMA, Pool #AS8703, 2.500%, 2/1/32 | 1,365,650 | ||||||
590,136 | FNMA, Pool #AT2016, 3.000%, 4/1/43 | 576,558 | ||||||
217,180 | FNMA, Pool #AZ7347, 3.000%, 11/1/45 | 211,013 | ||||||
731,591 | FNMA, Pool #BC1158, 3.500%, 2/1/46 | 730,340 | ||||||
646,571 | GNMA, Pool #5175, 4.500%, 9/20/41 | 680,222 | ||||||
28,926 | GNMA, Pool #679437, 6.000%, 11/15/22 | 28,950 | ||||||
Total U.S. Government Mortgage-Backed Obligations | $ | 9,055,100 |
Shares | ||||||||
Exchange-Traded Fund — 4.8% | ||||||||
20,047 | iShares JP Morgan USD Emerging Markets Bond ETF | $ | 2,140,418 |
Principal | ||||||||
Amount | ||||||||
Non-Agency Collateralized Mortgage Obligations — 4.3% | ||||||||
$ | 525,398 | Agate Bay Mortgage Trust, Ser 2015-7, Class B1, 144a, 3.765%, 10/25/45(A)(B) | 523,223 | |||||
524,275 | CSMC Trust, Ser 2015-1, Class B3, 144a, 3.943%, 1/25/45(A)(B) | 505,674 | ||||||
354,046 | CSMC Trust, Ser 2015-WIN1, Class B3, 144a, 3.867%, 12/25/44(A)(B) | 348,251 | ||||||
527,032 | PMT Loan Trust, Ser 2013-J1, Class A11, 144a, 3.500%, 9/25/43(A)(B) | 517,645 | ||||||
Total Non-Agency Collateralized Mortgage Obligations | $ | 1,894,793 | ||||||
Agency Collateralized Mortgage Obligation — 3.1% | ||||||||
1,305,229 | FHLMC REMIC, Ser 3859 Class JB, 5.000%, 5/15/41 | $ | 1,400,806 | |||||
Asset-Backed Securities — 2.3% | ||||||||
550,000 | Hertz Vehicle Financing II LP, Ser 2016-4A, Class A, 144a, 2.650%, 7/25/22 | 535,594 | ||||||
522,375 | Wendys Funding LLC, Ser 2018-1A, Class A2I, 144a, 3.573%, 3/15/48 | 508,020 | ||||||
Total Asset-Backed Securities | $ | 1,043,614 | ||||||
Sovereign Bonds — 1.3% | ||||||||
200,000 | Mexico Government International Bond, 4.350%, 1/15/47 | 178,700 | ||||||
147,000 | Province of Alberta Canada, 2.200%, 7/26/22 | 141,945 | ||||||
166,000 | Province of Ontario Canada, 1.875%, 5/21/20 | 163,099 | ||||||
114,000 | Uruguay Government International Bond, 4.975%, 4/20/55 | 110,580 | ||||||
Total Sovereign Bonds | $ | 594,324 | ||||||
Commercial Mortgage-Backed Security — 1.2% | ||||||||
550,000 | GS Mortgage Securities Trust, Ser 2017-FARM, Class B, 144a, 3.659%, 1/10/43(A)(B) | $ | 528,275 |
Shares | ||||||||
Preferred Stock — 0.4% | ||||||||
Utilities — 0.4% | ||||||||
6,400 | Integrys Holding, Inc., 6.000%, 8/1/73 | $ | 168,000 | |||||
Short-Term Investment Fund — 2.5% | ||||||||
1,120,409 | Dreyfus Government Cash Management, Institutional Shares, 1.81%∞Ω | $ | 1,120,409 | |||||
Total Investment Securities — 99.5% | ||||||||
(Cost $44,959,475) | $ | 44,241,374 | ||||||
Other Assets in Excess of Liabilities — 0.5% | 238,685 | |||||||
Net Assets — 100.0% | $ | 44,480,059 |
17 |
Touchstone Bond Fund (Unaudited) (Continued)
(A) | Variable rate security - Rate reflected is the rate in effect as of June 30, 2018. |
(B) | Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description. |
∞ | Open-End Fund. |
Ω | Represents the 7-day SEC yield as of June 30, 2018. |
Portfolio Abbreviations:
DAC - Designated Activity Company
ETF - Exchange-Traded Fund
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
LIBOR - London Inter Bank Offered Rate
LLC - Limited Liability Company
LP - Limited Partnership
MTN - Medium Term Note
PLC - Public Limited Company
REIT - Real Estate Investment Trust
REMIC - Real Estate Mortgage Investment Conduit
USD - United States Dollar
144a - This is a restricted security that was sold in a transaction qualifying for the exemption under Rule 144a of the Securities Act of 1933. This security may be sold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2018, these securities were valued at $5,756,118 or 12.9% of net assets. These securities were deemed liquid pursuant to procedures approved by the Board of Trustees.
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 | ||||||||||||
Assets: | ||||||||||||||||
Corporate Bonds | $ | — | $ | 16,880,395 | $ | — | $ | 16,880,395 | ||||||||
U.S. Treasury Obligations | — | 9,415,240 | — | 9,415,240 | ||||||||||||
U.S. Government Mortgage-Backed Obligations | — | 9,055,100 | — | 9,055,100 | ||||||||||||
Exchange-Traded Fund | 2,140,418 | — | — | 2,140,418 | ||||||||||||
Non-Agency Collateralized Mortgage Obligations | — | 1,894,793 | — | 1,894,793 | ||||||||||||
Agency Collateralized Mortgage Obligation | — | 1,400,806 | — | 1,400,806 | ||||||||||||
Asset-Backed Securities | — | 1,043,614 | — | 1,043,614 | ||||||||||||
Sovereign Bonds | — | 594,324 | — | 594,324 | ||||||||||||
Commercial Mortgage-Backed Security | — | 528,275 | — | 528,275 | ||||||||||||
Preferred Stock | 168,000 | — | — | 168,000 | ||||||||||||
Short-Term Investment Fund | 1,120,409 | — | — | 1,120,409 | ||||||||||||
Total Assets | $ | 3,428,827 | $ | 40,812,547 | $ | — | $ | 44,241,374 |
See accompanying Notes to Financial Statements.
18 |
Touchstone Common Stock Fund – June 30, 2018 (Unaudited)
Market | ||||||||
Shares | Value | |||||||
Common Stocks — 99.9% | ||||||||
Information Technology — 27.1% | ||||||||
Alphabet, Inc. - Class C* | 6,631 | $ | 7,397,875 | |||||
Apple, Inc. | 32,531 | 6,021,813 | ||||||
Avnet, Inc. | 62,085 | 2,662,826 | ||||||
Facebook, Inc. - Class A* | 33,041 | 6,420,527 | ||||||
International Business Machines Corp. | 16,156 | 2,256,993 | ||||||
Microsoft Corp. | 68,990 | 6,803,104 | ||||||
Oracle Corp. | 83,358 | 3,672,753 | ||||||
salesforce.com, Inc.* | 35,307 | 4,815,875 | ||||||
40,051,766 | ||||||||
Consumer Discretionary — 19.9% | ||||||||
Amazon.com, Inc.* | 5,270 | 8,957,946 | ||||||
Booking Holdings, Inc.* | 1,352 | 2,740,626 | ||||||
Carnival Corp. | 48,403 | 2,773,976 | ||||||
Charter Communications, Inc. - Class A* | 8,604 | 2,522,779 | ||||||
Comcast Corp. - Class A | 78,967 | 2,590,907 | ||||||
JD.com, Inc. (China) ADR* | 55,361 | 2,156,311 | ||||||
Starbucks Corp. | 46,391 | 2,266,200 | ||||||
Twenty-First Century Fox, Inc. - Class A | 75,547 | 3,753,930 | ||||||
Yum China Holdings, Inc. (China) | 44,236 | 1,701,317 | ||||||
29,463,992 | ||||||||
Financials — 16.4% | ||||||||
Bank of America Corp. | 122,226 | 3,445,551 | ||||||
Berkshire Hathaway, Inc. - Class B* | 64,775 | 12,090,254 | ||||||
Brookfield Asset Management, Inc. (Canada) - Class A | 80,042 | 3,244,903 | ||||||
Goldman Sachs Group, Inc. (The) | 14,583 | 3,216,572 | ||||||
Signature Bank/NewYork NY* | 18,010 | 2,303,119 | ||||||
24,300,399 | ||||||||
Health Care — 12.5% | ||||||||
AmerisourceBergen Corp. | 33,107 | 2,823,034 | ||||||
Biogen, Inc.* | 12,886 | 3,740,033 | ||||||
Bristol-Myers Squibb Co. | 66,806 | 3,697,044 | ||||||
Johnson & Johnson | 29,058 | 3,525,898 | ||||||
Novartis AG (Switzerland) ADR | 62,361 | 4,710,750 | ||||||
18,496,759 | ||||||||
Industrials — 8.3% | ||||||||
General Electric Co. | 146,950 | 1,999,989 | ||||||
Johnson Controls International PLC | 59,057 | 1,975,457 | ||||||
Stericycle, Inc.* | 37,322 | 2,436,753 | ||||||
Union Pacific Corp. | 17,334 | 2,455,881 | ||||||
United Technologies Corp. | 26,744 | 3,343,802 | ||||||
12,211,882 | ||||||||
Energy — 5.1% | ||||||||
Exxon Mobil Corp. | 32,202 | 2,664,071 | ||||||
Halliburton Co. | 45,060 | 2,030,404 | ||||||
Schlumberger Ltd. | 42,874 | 2,873,844 | ||||||
7,568,319 | ||||||||
Real Estate — 4.9% | ||||||||
Jones Lang LaSalle, Inc. | 20,315 | 3,372,087 | ||||||
Simon Property Group, Inc. REIT | 22,774 | 3,875,907 | ||||||
7,247,994 | ||||||||
Consumer Staples — 3.9% | ||||||||
JM Smucker Co. (The) | 11,820 | 1,270,414 | ||||||
Monster Beverage Corp.* | 34,144 | 1,956,451 | ||||||
Unilever NV (United Kingdom) | 44,821 | 2,497,426 | ||||||
5,724,291 | ||||||||
Telecommunication Services — 1.8% | ||||||||
AT&T, Inc. | 83,338 | 2,675,983 | ||||||
Total Common Stocks | $ | 147,741,385 | ||||||
Short-Term Investment Fund — 0.4% | ||||||||
Dreyfus Government Cash Management, Institutional Shares, 1.81%∞Ω | 592,199 | $ | 592,199 | |||||
Total Investment Securities —100.3% | ||||||||
(Cost $125,474,267) | $ | 148,333,584 | ||||||
Liabilities in Excess of Other Assets — (0.3%) | (385,003 | ) | ||||||
Net Assets — 100.0% | $ | 147,948,581 |
* | Non-income producing security. |
∞ | Open-End Fund. |
Ω | Represents the 7-day SEC yield as of June 30, 2018. |
Portfolio Abbreviations:
ADR - American Depositary Receipt
PLC - Public Limited Company
REIT - Real Estate Investment Trust
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 Stocks | $ | 147,741,385 | $ | — | $ | — | $ | 147,741,385 | ||||||||
Short-Term Investment Fund | 592,199 | — | — | 592,199 | ||||||||||||
Total | $ | 148,333,584 | $ | — | $ | — | $ | 148,333,584 |
See accompanying Notes to Financial Statements.
19 |
Touchstone Focused Fund – June 30, 2018 (Unaudited)
Market | ||||||||
Shares | Value | |||||||
Common Stocks — 100.2% | ||||||||
Information Technology — 26.1% | ||||||||
Alphabet, Inc. - Class C* | 2,327 | $ | 2,596,118 | |||||
Apple, Inc. | 13,064 | 2,418,277 | ||||||
Avnet, Inc. | 22,760 | 976,176 | ||||||
Facebook, Inc. - Class A* | 11,553 | 2,244,979 | ||||||
International Business Machines Corp. | 7,775 | 1,086,168 | ||||||
Microsoft Corp. | 27,723 | 2,733,765 | ||||||
Oracle Corp. | 33,035 | 1,455,522 | ||||||
salesforce.com, Inc.* | 13,517 | 1,843,719 | ||||||
15,354,724 | ||||||||
Consumer Discretionary — 18.8% | ||||||||
Amazon.com, Inc.* | 2,076 | 3,528,785 | ||||||
Booking Holdings, Inc.* | 538 | 1,090,574 | ||||||
Carnival Corp. | 20,161 | 1,155,427 | ||||||
Comcast Corp. - Class A | 36,862 | 1,209,442 | ||||||
JD.com, Inc. (China) ADR* | 21,420 | 834,309 | ||||||
Starbucks Corp. | 16,860 | 823,611 | ||||||
Twenty-First Century Fox, Inc. - Class A | 36,300 | 1,803,747 | ||||||
Yum China Holdings, Inc. (China) | 15,110 | 581,131 | ||||||
11,027,026 | ||||||||
Financials — 16.4% | ||||||||
Bank of America Corp. | 59,644 | 1,681,364 | ||||||
Bank of the Ozarks | 14,083 | 634,298 | ||||||
Berkshire Hathaway, Inc. - Class B* | 26,428 | 4,932,786 | ||||||
Goldman Sachs Group, Inc. (The) | 6,639 | 1,464,364 | ||||||
Signature Bank/NewYork NY* | 7,082 | 905,646 | ||||||
9,618,458 | ||||||||
Health Care — 15.5% | ||||||||
AmerisourceBergen Corp. | 13,192 | 1,124,882 | ||||||
Biogen, Inc.* | 4,793 | 1,391,120 | ||||||
Bio-Rad Laboratories, Inc. - Class A* | 4,244 | 1,224,564 | ||||||
Bristol-Myers Squibb Co. | 30,612 | 1,694,068 | ||||||
Johnson & Johnson | 13,293 | 1,612,973 | ||||||
Novartis AG (Switzerland) ADR | 27,148 | 2,050,760 | ||||||
9,098,367 | ||||||||
Industrials — 7.8% | ||||||||
General Electric Co. | 52,063 | 708,577 | ||||||
Johnson Controls International PLC | 22,838 | 763,931 | ||||||
Stericycle, Inc.* | 13,842 | 903,744 | ||||||
Union Pacific Corp. | 8,543 | 1,210,372 | ||||||
United Technologies Corp. | 7,952 | 994,239 | ||||||
4,580,863 | ||||||||
Energy — 5.1% | ||||||||
Exxon Mobil Corp. | 11,768 | 973,567 | ||||||
Halliburton Co. | 20,737 | 934,409 | ||||||
Schlumberger Ltd. | 16,338 | 1,095,136 | ||||||
3,003,112 | ||||||||
Real Estate — 4.8% | ||||||||
Jones Lang LaSalle, Inc. | 8,116 | 1,347,175 | ||||||
Simon Property Group, Inc. REIT | 8,729 | 1,485,589 | ||||||
2,832,764 | ||||||||
Consumer Staples — 3.8% | ||||||||
JM Smucker Co. (The) | 4,623 | 496,880 | ||||||
Monster Beverage Corp.* | 13,185 | 755,501 | ||||||
Unilever NV (United Kingdom) | 17,530 | 976,772 | ||||||
2,229,153 | ||||||||
Telecommunication Services — 1.9% | ||||||||
AT&T, Inc. | 34,667 | 1,113,157 | ||||||
Total Common Stocks | $ | 58,857,624 | ||||||
Short-Term Investment Fund — 0.0% | ||||||||
Dreyfus Government Cash Management, Institutional Shares, 1.81%∞Ω | 213 | $ | 213 | |||||
Total Investment Securities —100.2% | ||||||||
(Cost $46,582,731) | $ | 58,857,837 | ||||||
Liabilities in Excess of Other Assets — (0.2%) | (115,622 | ) | ||||||
Net Assets — 100.0% | $ | 58,742,215 |
* | Non-income producing security. | |
∞ | Open-End Fund. | |
Ω | Represents the 7-day SEC yield as of June 30, 2018. |
Portfolio Abbreviations:
ADR - American Depositary Receipt
PLC - Public Limited Company
REIT - Real Estate Investment Trust
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 Stocks | $ | 58,857,624 | $ | — | $ | — | $ | 58,857,624 | ||||||||
Short-Term Investment Fund | 213 | — | — | 213 | ||||||||||||
Total | $ | 58,857,837 | $ | — | $ | — | $ | 58,857,837 |
See accompanying Notes to Financial Statements.
20 |
Touchstone Large Cap Core Equity Fund – June 30, 2018 (Unaudited)
Market | ||||||||
Shares | Value | |||||||
Common Stocks — 98.9% | ||||||||
Financials — 24.1% | ||||||||
Alleghany Corp. | 1,553 | $ | 892,928 | |||||
Bank of America Corp. | 17,534 | 494,284 | ||||||
Berkshire Hathaway, Inc. - Class B* | 10,798 | 2,015,447 | ||||||
BlackRock, Inc. | 2,432 | 1,213,665 | ||||||
Progressive Corp. (The) | 25,494 | 1,507,970 | ||||||
Wells Fargo & Co. | 17,781 | 985,779 | ||||||
7,110,073 | ||||||||
Consumer Discretionary — 23.4% | ||||||||
CarMax, Inc.* | 17,067 | 1,243,672 | ||||||
Carnival Corp. | 20,667 | 1,184,426 | ||||||
Dollar Tree, Inc.* | 14,121 | 1,200,285 | ||||||
Home Depot, Inc. (The) | 5,121 | 999,107 | ||||||
Lowe's Cos., Inc. | 4,439 | 424,235 | ||||||
NIKE, Inc. - Class B | 13,705 | 1,092,014 | ||||||
O'Reilly Automotive, Inc.* | 2,762 | 755,600 | ||||||
6,899,339 | ||||||||
Information Technology — 18.9% | ||||||||
Alphabet, Inc. - Class C* | 1,402 | 1,564,141 | ||||||
Apple, Inc. | 8,978 | 1,661,918 | ||||||
Cisco Systems, Inc. | 20,319 | 874,327 | ||||||
Visa, Inc. - Class A | 11,074 | 1,466,751 | ||||||
5,567,137 | ||||||||
Industrials — 13.4% | ||||||||
Deere & Co. | 5,545 | 775,191 | ||||||
FedEx Corp. | 2,835 | 643,715 | ||||||
General Dynamics Corp. | 4,466 | 832,507 | ||||||
Norfolk Southern Corp. | 7,907 | 1,192,929 | ||||||
Southwest Airlines Co. | 9,784 | 497,810 | ||||||
3,942,152 | ||||||||
Materials — 5.8% | ||||||||
Albemarle Corp. | 9,106 | 858,969 | ||||||
NewMarket Corp. | 2,102 | 850,259 | ||||||
1,709,228 | ||||||||
Health Care — 4.8% | ||||||||
Alexion Pharmaceuticals, Inc.* | 6,701 | 831,929 | ||||||
Bristol-Myers Squibb Co. | 10,410 | 576,089 | ||||||
1,408,018 | ||||||||
Consumer Staples — 4.6% | ||||||||
Altria Group, Inc. | 14,840 | 842,764 | ||||||
Coca-Cola Co. (The) | 11,753 | 515,487 | ||||||
1,358,251 | ||||||||
Energy — 2.4% | ||||||||
Chevron Corp. | 5,497 | 694,986 | ||||||
Telecommunication Services — 1.5% | ||||||||
Verizon Communications, Inc. | 9,014 | 453,494 | ||||||
Total Common Stocks | $ | 29,142,678 | ||||||
Short-Term Investment Fund — 0.7% | ||||||||
Dreyfus Government Cash Management, Institutional Shares, 1.81%∞Ω | 218,789 | $ | 218,789 | |||||
Total Investment Securities —99.6% | ||||||||
(Cost $23,997,927) | $ | 29,361,467 | ||||||
Other Assets in Excess of Liabilities — 0.4% | 114,491 | |||||||
Net Assets — 100.0% | $ | 29,475,958 |
* | Non-income producing security. |
∞ | Open-End Fund. |
Ω | Represents the 7-day SEC yield as of June 30, 2018. |
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 Stocks | $ | 29,142,678 | $ | — | $ | — | $ | 29,142,678 | ||||||||
Short-Term Investment Fund | 218,789 | — | — | 218,789 | ||||||||||||
Total | $ | 29,361,467 | $ | — | $ | — | $ | 29,361,467 |
See accompanying Notes to Financial Statements.
21 |
Touchstone Small Company Fund – June 30, 2018 (Unaudited)
Market | ||||||||
Shares | Value | |||||||
Common Stocks — 96.8% | ||||||||
Information Technology — 25.4% | ||||||||
8x8, Inc.* | 46,000 | $ | 922,300 | |||||
Acxiom Corp.* | 32,987 | 987,961 | ||||||
Aspen Technology, Inc.* | 9,623 | 892,437 | ||||||
Avaya Holdings Corp.* | 33,000 | 662,640 | ||||||
Bottomline Technologies (de), Inc.* | 18,911 | 942,335 | ||||||
Carbonite, Inc.* | 26,190 | 914,031 | ||||||
Cision Ltd.* | 37,000 | 553,150 | ||||||
CommVault Systems, Inc.* | 13,741 | 904,845 | ||||||
Finisar Corp.* | 52,292 | 941,256 | ||||||
GTT Communications, Inc.* | 20,123 | 905,535 | ||||||
j2 Global, Inc. | 10,868 | 941,277 | ||||||
MAXIMUS, Inc. | 14,687 | 912,210 | ||||||
NetScout Systems, Inc.* | 31,183 | 926,135 | ||||||
Nice Ltd. (Israel) ADR* | 8,868 | 920,232 | ||||||
Nuance Communications, Inc.* | 65,881 | 914,758 | ||||||
ON Semiconductor Corp.* | 35,141 | 781,360 | ||||||
Open Text Corp. (Canada) | 20,214 | 711,331 | ||||||
Plantronics, Inc. | 21,730 | 1,656,912 | ||||||
Verint Systems, Inc.* | 32,300 | 1,432,505 | ||||||
17,823,210 | ||||||||
Industrials — 19.6% | ||||||||
Clean Harbors, Inc.* | 17,500 | 972,125 | ||||||
Crane Co. | 11,182 | 896,014 | ||||||
EnerSys | 17,700 | 1,321,128 | ||||||
Esterline Technologies Corp.* | 11,968 | 883,238 | ||||||
Genesee & Wyoming, Inc. - Class A* | 11,857 | 964,211 | ||||||
Hillenbrand, Inc. | 18,400 | 867,560 | ||||||
Knight-Swift Transportation Holdings, Inc. | 22,852 | 873,175 | ||||||
Luxfer Holdings PLC (United Kingdom) | 22,000 | 384,560 | ||||||
Mobile Mini, Inc. | 20,079 | 941,705 | ||||||
Quanta Services, Inc.* | 40,933 | 1,367,162 | ||||||
Regal Beloit Corp. | 17,907 | 1,464,793 | ||||||
SkyWest, Inc. | 18,000 | 934,200 | ||||||
Terex Corp. | 22,000 | 928,180 | ||||||
Woodward, Inc. | 12,561 | 965,438 | ||||||
13,763,489 | ||||||||
Health Care — 19.6% | ||||||||
Allscripts Healthcare Solutions, Inc.* | 117,500 | 1,410,000 | ||||||
AngioDynamics, Inc.* | 43,373 | 964,616 | ||||||
Bio-Rad Laboratories, Inc. - Class A* | 3,096 | 893,320 | ||||||
Bio-Techne Corp. | 9,335 | 1,381,113 | ||||||
Diplomat Pharmacy, Inc.* | 1 | 26 | ||||||
Encompass Health Corp. | 14,183 | 960,473 | ||||||
Globus Medical, Inc. - Class A* | 16,949 | 855,247 | ||||||
Haemonetics Corp.* | 9,738 | 873,304 | ||||||
MEDNAX, Inc.* | 19,500 | 843,960 | ||||||
NuVasive, Inc.* | 27,753 | 1,446,486 | ||||||
Omnicell, Inc.* | 18,149 | 951,915 | ||||||
Orthofix International NV* | 17,262 | 980,827 | ||||||
Tactile Systems Technology, Inc.* | 17,500 | 910,000 | ||||||
Tivity Health, Inc.* | 36,350 | 1,279,520 | ||||||
13,750,807 | ||||||||
Consumer Discretionary — 12.5% | ||||||||
Aaron's, Inc. | 34,162 | 1,484,339 | ||||||
Adtalem Global Education, Inc.* | 19,885 | 956,468 | ||||||
Bloomin' Brands, Inc. | 46,176 | 928,138 | ||||||
Callaway Golf Co. | 47,300 | 897,281 | ||||||
KB Home | 33,524 | 913,194 | ||||||
Penn National Gaming, Inc.* | 25,843 | 868,066 | ||||||
Planet Fitness, Inc. - Class A* | 20,601 | 905,208 | ||||||
Texas Roadhouse, Inc. | 14,334 | 939,020 | ||||||
TRI Pointe Group, Inc.* | 54,342 | 889,035 | ||||||
8,780,749 | ||||||||
Financials — 10.8% | ||||||||
Chemical Financial Corp. | 19,100 | 1,063,297 | ||||||
Evercore, Inc. - Class A | 8,329 | 878,293 | ||||||
Glacier Bancorp, Inc. | 24,792 | 958,955 | ||||||
Heartland Financial USA, Inc. | 17,800 | 976,330 | ||||||
Stifel Financial Corp. | 16,541 | 864,267 | ||||||
Webster Financial Corp. | 15,373 | 979,260 | ||||||
Western Alliance Bancorp* | 16,099 | 911,364 | ||||||
WSFS Financial Corp. | 17,500 | 932,750 | ||||||
7,564,516 | ||||||||
Real Estate — 3.2% | ||||||||
Corporate Office Properties Trust REIT | 47,465 | 1,376,010 | ||||||
Outfront Media, Inc. REIT | 46,700 | 908,315 | ||||||
2,284,325 | ||||||||
Energy — 1.5% | ||||||||
Gulfport Energy Corp.* | 81,975 | 1,030,426 | ||||||
Consumer Staples — 1.4% | ||||||||
Sprouts Farmers Market, Inc.* | 45,000 | 993,150 | ||||||
Telecommunication Services — 1.4% | ||||||||
Cogent Communications Holdings, Inc. | 18,200 | 971,880 | ||||||
Materials — 1.4% | ||||||||
Innophos Holdings, Inc. | 20,200 | 961,520 | ||||||
Total Common Stocks | $ | 67,924,072 | ||||||
Short-Term Investment Fund — 3.7% | ||||||||
Dreyfus Government Cash Management, Institutional Shares, 1.81%∞Ω | 2,649,394 | $ | 2,649,394 | |||||
Total Investment Securities —100.5% | ||||||||
(Cost $53,608,695) | $ | 70,573,466 | ||||||
Liabilities in Excess of Other Assets — (0.5%) | (385,849 | ) | ||||||
Net Assets — 100.0% | $ | 70,187,617 |
22 |
Touchstone Small Company Fund (Unaudited) (Continued)
* | Non-income producing security. |
∞ | Open-End Fund. |
Ω | Represents the 7-day SEC yield as of June 30, 2018. |
Portfolio Abbreviations:
ADR - American Depositary Receipt
PLC - Public Limited Company
REIT - Real Estate Investment Trust
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 Stocks | $ | 67,924,072 | $ | — | $ | — | $ | 67,924,072 | ||||||||
Short-Term Investment Fund | 2,649,394 | — | — | 2,649,394 | ||||||||||||
Total | $ | 70,573,466 | $ | — | $ | — | $ | 70,573,466 |
See accompanying Notes to Financial Statements.
23 |
Touchstone Aggressive ETF Fund – June 30, 2018 (Unaudited)
Market | ||||||||
Shares | Value | |||||||
Exchange-Traded Funds — 98.6% | ||||||||
Equity Funds — 81.2% | ||||||||
Vanguard Extended Market ETF† | 20,035 | $ | 2,360,123 | |||||
Vanguard FTSE Developed Markets ETF | 92,265 | 3,958,168 | ||||||
Vanguard FTSE Emerging Markets ETF | 25,700 | 1,084,540 | ||||||
Vanguard S&P 500 ETF | 28,660 | 7,150,957 | ||||||
Vanguard Value ETF | 11,340 | 1,177,432 | ||||||
15,731,220 | ||||||||
Fixed Income Funds — 17.4% | ||||||||
iShares Core US Aggregate Bond ETF | 16,795 | 1,785,644 | ||||||
iShares Floating Rate Bond ETF | 9,700 | 494,700 | ||||||
iShares iBoxx $ High Yield Corporate Bond ETF† | 4,570 | 388,816 | ||||||
Vanguard Intermediate-Term Corporate Bond ETF | 8,270 | 690,710 | ||||||
3,359,870 | ||||||||
Total Exchange-Traded Funds | $ | 19,091,090 | ||||||
Short-Term Investment Funds — 8.7% | ||||||||
Dreyfus Government Cash Management, Institutional Shares, 1.81%∞Ω | 266,617 | 266,617 | ||||||
Invesco Government & Agency Portfolio, Institutional Class, 1.81%**∞Ω | 1,411,885 | 1,411,885 | ||||||
Total Short-Term Investment Funds | $ | 1,678,502 | ||||||
Total Investment Securities —107.3% | ||||||||
(Cost $18,268,984) | $ | 20,769,592 | ||||||
Liabilities in Excess of Other Assets — (7.3%) | (1,406,325 | ) | ||||||
Net Assets — 100.0% | $ | 19,363,267 |
** | Represents collateral for securities loaned. |
† | All or a portion of the security is on loan. The total market value of the securities on loan as of June 30, 2018 was $1,382,465. |
∞ | Open-End Fund. |
Ω | Represents the 7-day SEC yield as of June 30, 2018. |
Portfolio Abbreviations:
ETF - Exchange-Traded Fund
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 | ||||||||||||
Exchange-Traded Funds | $ | 19,091,090 | $ | — | $ | — | $ | 19,091,090 | ||||||||
Short-Term Investment Funds | 1,678,502 | — | — | 1,678,502 | ||||||||||||
Total | $ | 20,769,592 | $ | — | $ | — | $ | 20,769,592 |
See accompanying Notes to Financial Statements.
24 |
Touchstone Conservative ETF Fund – June 30, 2018 (Unaudited)
Market | ||||||||
Shares | Value | |||||||
Exchange-Traded Funds — 95.4% | ||||||||
Fixed Income Funds — 56.5% | ||||||||
Invesco Senior Loan ETF | 22,150 | $ | 507,235 | |||||
iShares Core US Aggregate Bond ETF | 59,875 | 6,365,910 | ||||||
iShares Floating Rate Bond ETF | 20,050 | 1,022,550 | ||||||
iShares iBoxx $ High Yield Corporate Bond ETF† | 10,745 | 914,185 | ||||||
Vanguard Intermediate-Term Corporate Bond ETF | 29,345 | 2,450,894 | ||||||
Vanguard Total International Bond ETF† | 7,515 | 411,146 | ||||||
11,671,920 | ||||||||
Equity Funds — 38.9% | ||||||||
Vanguard Extended Market ETF† | 10,590 | 1,247,502 | ||||||
Vanguard FTSE Developed Markets ETF | 42,685 | 1,831,186 | ||||||
Vanguard FTSE Emerging Markets ETF | 11,085 | 467,787 | ||||||
Vanguard S&P 500 ETF | 15,507 | 3,869,152 | ||||||
Vanguard Value ETF | 5,805 | 602,733 | ||||||
8,018,360 | ||||||||
Total Exchange-Traded Funds | $ | 19,690,280 | ||||||
Short-Term Investment Funds — 10.5% | ||||||||
Dreyfus Government Cash Management, Institutional Shares, 1.81%∞Ω | 973,514 | 973,514 | ||||||
Invesco Government & Agency Portfolio, Institutional Class, 1.81%**∞Ω | 1,198,532 | 1,198,532 | ||||||
Total Short-Term Investment Funds | $ | 2,172,046 | ||||||
Total Investment Securities —105.9% | ||||||||
(Cost $20,690,540) | $ | 21,862,326 | ||||||
Liabilities in Excess of Other Assets — (5.9%) | (1,211,031 | ) | ||||||
Net Assets — 100.0% | $ | 20,651,295 |
** | Represents collateral for securities loaned. |
† | All or a portion of the security is on loan. The total market value of the securities on loan as of June 30, 2018 was $1,172,551. |
∞ | Open-End Fund. |
Ω | Represents the 7-day SEC yield as of June 30, 2018. |
Portfolio Abbreviations:
ETF - Exchange-Traded Fund
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 | ||||||||||||
Exchange-Traded Funds | $ | 19,690,280 | $ | — | $ | — | $ | 19,690,280 | ||||||||
Short-Term Investment Funds | 2,172,046 | — | — | 2,172,046 | ||||||||||||
Total | $ | 21,862,326 | $ | — | $ | — | $ | 21,862,326 |
See accompanying Notes to Financial Statements.
25 |
Touchstone Moderate ETF Fund – June 30, 2018 (Unaudited)
Market | ||||||||
Shares | Value | |||||||
Exchange-Traded Funds — 98.2% | ||||||||
Equity Funds — 60.6% | ||||||||
Vanguard Extended Market ETF† | 16,780 | $ | 1,976,684 | |||||
Vanguard FTSE Developed Markets ETF | 72,215 | 3,098,024 | ||||||
Vanguard FTSE Emerging Markets ETF | 21,855 | 922,281 | ||||||
Vanguard S&P 500 ETF | 25,600 | 6,387,456 | ||||||
Vanguard Value ETF | 9,690 | 1,006,113 | ||||||
13,390,558 | ||||||||
Fixed Income Funds — 37.6% | ||||||||
Invesco Senior Loan ETF | 19,400 | 444,260 | ||||||
iShares Core US Aggregate Bond ETF | 40,195 | 4,273,532 | ||||||
iShares Floating Rate Bond ETF | 17,650 | 900,150 | ||||||
iShares iBoxx $ High Yield Corporate Bond ETF† | 7,830 | 666,176 | ||||||
Vanguard Intermediate-Term Corporate Bond ETF | 21,420 | 1,788,998 | ||||||
Vanguard Total International Bond ETF | 4,120 | 225,405 | ||||||
8,298,521 | ||||||||
Total Exchange-Traded Funds | $ | 21,689,079 | ||||||
Short-Term Investment Funds — 5.7% | ||||||||
Dreyfus Government Cash Management, Institutional Shares, 1.81%∞Ω | 402,659 | 402,659 | ||||||
Invesco Government & Agency Portfolio, Institutional Class, 1.81%**∞Ω | 851,078 | 851,078 | ||||||
Total Short-Term Investment Funds | $ | 1,253,737 | ||||||
Total Investment Securities —103.9% | ||||||||
(Cost $20,958,861) | $ | 22,942,816 | ||||||
Liabilities in Excess of Other Assets — (3.9%) | (861,331 | ) | ||||||
Net Assets — 100.0% | $ | 22,081,485 |
** | Represents collateral for securities loaned. |
† | All or a portion of the security is on loan. The total market value of the securities on loan as of June 30, 2018 was $832,739. |
∞ | Open-End Fund. |
Ω | Represents the 7-day SEC yield as of June 30, 2018. |
Portfolio Abbreviations:
ETF - Exchange-Traded Fund
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 | ||||||||||||
Exchange-Traded Funds | $ | 21,689,079 | $ | — | $ | — | $ | 21,689,079 | ||||||||
Short-Term Investment Funds | 1,253,737 | — | — | 1,253,737 | ||||||||||||
Total | $ | 22,942,816 | $ | — | $ | — | $ | 22,942,816 |
See accompanying Notes to Financial Statements.
26 |
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Statements of Assets and Liabilities
June 30, 2018 (Unaudited)
Touchstone | Touchstone | Touchstone | ||||||||||
Active Bond | Balanced | Bond | ||||||||||
Fund | Fund | Fund | ||||||||||
Assets | ||||||||||||
Investments, at cost | $ | 56,579,176 | $ | 15,662,964 | $ | 44,959,475 | ||||||
Investments, at market value (A) | $ | 55,856,259 | $ | 17,379,083 | $ | 44,241,374 | ||||||
Cash | — | — | 1,600 | |||||||||
Cash deposits held at prime broker* | 39,900 | — | — | |||||||||
Dividends and interest receivable | 387,520 | 42,567 | 273,104 | |||||||||
Receivable for capital shares sold | — | — | — | |||||||||
Receivable for investments sold | — | — | 45,886 | |||||||||
Securities lending income receivable | — | — | — | |||||||||
Receivable from other affiliates | — | — | 1,110 | |||||||||
Tax reclaim receivable | — | — | — | |||||||||
Other assets | 376 | — | 8,263 | |||||||||
Total Assets | 56,284,055 | 17,421,650 | 44,571,337 | |||||||||
Liabilities | ||||||||||||
Bank overdrafts | — | — | — | |||||||||
Payable for return of collateral for securities on loan | — | — | — | |||||||||
Payable for capital shares redeemed | 616 | 14,467 | 40,913 | |||||||||
Payable for investments purchased | 665 | — | — | |||||||||
Payable to Investment Advisor | 18,465 | 5,789 | 13,597 | |||||||||
Payable to other affiliates | 20,393 | 4 | — | |||||||||
Payable to Trustees | 3,612 | 2,476 | 2,476 | |||||||||
Payable for professional services | 9,659 | 9,144 | 7,935 | |||||||||
Payable for pricing services | 29,463 | 5,907 | 10,824 | |||||||||
Payable for reports to shareholders | 2,769 | 3,324 | 15,028 | |||||||||
Other accrued expenses and liabilities | 12,361 | 487 | 505 | |||||||||
Total Liabilities | 98,003 | 41,598 | 91,278 | |||||||||
Net Assets | $ | 56,186,052 | $ | 17,380,052 | $ | 44,480,059 | ||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 56,869,873 | $ | 10,659,261 | $ | 47,102,764 | ||||||
Undistributed net investment income | 1,826,379 | 301,066 | 1,549,848 | |||||||||
Accumulated net realized gains (losses) on investments, foreign currency transactions and futures contracts | (1,787,283 | ) | 4,703,610 | (3,454,425 | ) | |||||||
Net unrealized appreciation (depreciation) on investments and foreign currency transactions | (722,917 | ) | 1,716,115 | (718,128 | ) | |||||||
Net assets applicable to shares outstanding | $ | 56,186,052 | $ | 17,380,052 | $ | 44,480,059 | ||||||
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | 5,407,897 | 1,168,618 | 4,744,940 | |||||||||
Net asset value, offering price and redemption price per share | $ | 10.39 | $ | 14.87 | $ | 9.37 | ||||||
(A) Includes market value of securities on loan of: | $ | — | $ | — | $ | — | ||||||
* Represents segregated cash for futures contracts. |
See accompanying Notes to Financial Statements.
28 |
Statements of Assets and Liabilities (Unaudited) (Continued)
Touchstone | Touchstone | |||||||||||||||||||||||||
Touchstone | Touchstone | Large Cap | Touchstone | Touchstone | Conservative | Touchstone | ||||||||||||||||||||
Common Stock | Focused | Core Equity | Small Company | Aggressive ETF | ETF | Moderate ETF | ||||||||||||||||||||
Fund | Fund | Fund | Fund | Fund | Fund | Fund | ||||||||||||||||||||
$ | 125,474,267 | $ | 46,582,731 | $ | 23,997,927 | $ | 53,608,695 | $ | 18,268,984 | $ | 20,690,540 | $ | 20,958,861 | |||||||||||||
$ | 148,333,584 | $ | 58,857,837 | $ | 29,361,467 | $ | 70,573,466 | $ | 20,769,592 | $ | 21,862,326 | $ | 22,942,816 | |||||||||||||
— | — | — | — | — | — | — | ||||||||||||||||||||
— | — | — | — | — | — | — | ||||||||||||||||||||
54,426 | 21,623 | 30,707 | 24,337 | 40,589 | 21,869 | 35,842 | ||||||||||||||||||||
1,995 | — | 60 | 5,030 | — | — | — | ||||||||||||||||||||
146,394 | 298,436 | 138,826 | — | — | — | �� | — | |||||||||||||||||||
— | — | — | 46 | 1,308 | 1,426 | 1,047 | ||||||||||||||||||||
— | — | — | — | — | — | — | ||||||||||||||||||||
— | 7,431 | — | — | — | — | — | ||||||||||||||||||||
24,377 | 406 | 213 | 4,538 | 132 | 118 | 156 | ||||||||||||||||||||
148,560,776 | 59,185,733 | 29,531,273 | 70,607,417 | 20,811,621 | 21,885,739 | 22,979,861 | ||||||||||||||||||||
— | 155,186 | — | — | — | — | — | ||||||||||||||||||||
— | — | — | — | 1,411,885 | 1,198,532 | 851,078 | ||||||||||||||||||||
102,267 | 54,801 | 806 | 63,804 | 490 | 812 | 7,482 | ||||||||||||||||||||
414,760 | 105,861 | — | 292,346 | — | — | — | ||||||||||||||||||||
61,752 | 34,634 | 16,221 | 29,443 | 4,036 | 4,193 | 4,606 | ||||||||||||||||||||
4,049 | 74,411 | 18,333 | 5,100 | 13,776 | 12,688 | 16,851 | ||||||||||||||||||||
2,476 | 3,612 | 3,612 | 2,476 | 3,612 | 3,612 | 3,612 | ||||||||||||||||||||
6,870 | 10,059 | 9,571 | 8,069 | 9,756 | 9,759 | 9,768 | ||||||||||||||||||||
297 | 1,030 | 768 | 370 | 279 | 304 | 330 | ||||||||||||||||||||
19,313 | 2,380 | 2,874 | 18,192 | 2,771 | 2,771 | 2,771 | ||||||||||||||||||||
411 | 1,544 | 3,130 | — | 1,749 | 1,773 | 1,878 | ||||||||||||||||||||
612,195 | 443,518 | 55,315 | 419,800 | 1,448,354 | 1,234,444 | 898,376 | ||||||||||||||||||||
$ | 147,948,581 | $ | 58,742,215 | $ | 29,475,958 | $ | 70,187,617 | $ | 19,363,267 | $ | 20,651,295 | $ | 22,081,485 | |||||||||||||
$ | 44,085,048 | $ | 43,609,395 | $ | 21,703,283 | $ | 42,481,135 | $ | 15,364,459 | $ | 18,566,092 | $ | 18,408,372 | |||||||||||||
2,521,924 | 413,201 | 280,838 | 5,984 | 470,735 | 482,989 | 577,525 | ||||||||||||||||||||
78,482,292 | 2,444,774 | 2,128,297 | 10,735,727 | 1,027,465 | 430,428 | 1,111,633 | ||||||||||||||||||||
22,859,317 | 12,274,845 | 5,363,540 | 16,964,771 | 2,500,608 | 1,171,786 | 1,983,955 | ||||||||||||||||||||
$ | 147,948,581 | $ | 58,742,215 | $ | 29,475,958 | $ | 70,187,617 | $ | 19,363,267 | $ | 20,651,295 | $ | 22,081,485 | |||||||||||||
7,799,516 | 3,057,818 | 1,827,564 | 4,194,219 | 1,150,620 | 1,769,902 | 1,807,456 | ||||||||||||||||||||
$ | 18.97 | $ | 19.21 | $ | 16.13 | $ | 16.73 | $ | 16.83 | $ | 11.67 | $ | 12.22 | |||||||||||||
$ | — | $ | — | $ | — | $ | — | $ | 1,382,465 | $ | 1,172,551 | $ | 832,739 |
29 |
For the Six Months Ended June 30, 2018 (Unaudited)
Touchstone | Touchstone | Touchstone | ||||||||||
Active Bond | Balanced | Bond | ||||||||||
Fund | Fund | Fund | ||||||||||
Investment Income | ||||||||||||
Dividends (A) | $ | 36,860 | $ | 99,369 | $ | 28,873 | ||||||
Interest | 823,107 | 83,349 | 651,416 | |||||||||
Income from securities loaned | 9 | 20 | 23 | |||||||||
Total Investment Income | 859,976 | 182,738 | 680,312 | |||||||||
Expenses | ||||||||||||
Investment advisory fees | 112,599 | 48,276 | 89,801 | |||||||||
Administration fees | 40,817 | 12,727 | 32,553 | |||||||||
Compliance fees and expenses | 717 | 562 | 562 | |||||||||
Custody fees | 18,532 | 3,327 | 2,605 | |||||||||
Professional fees | 12,022 | 11,735 | 12,200 | |||||||||
Transfer Agent fees | 5,442 | 1,365 | 16,191 | |||||||||
Pricing expense | 25,278 | 5,245 | 7,668 | |||||||||
Reports to Shareholders | 2,704 | 2,680 | 6,858 | |||||||||
Shareholder servicing fees | 19,705 | — | — | |||||||||
Trustee fees | 7,099 | 5,963 | 5,963 | |||||||||
Other expenses | 3,475 | 626 | 873 | |||||||||
Total Expenses | 248,390 | 92,506 | 175,274 | |||||||||
Fees waived and/or reimbursed by the Advisor and/or Affiliates(B) | — | (17,898 | ) | (24,857 | ) | |||||||
Fees eligible for recoupment by the Advisor(B) | — | — | — | |||||||||
Net Expenses | 248,390 | 74,608 | 150,417 | |||||||||
Net Investment Income | 611,586 | 108,130 | 529,895 | |||||||||
Realized and Unrealized Gains (Losses) on Investments | ||||||||||||
Net realized gains (losses) on investments | (654,703 | ) | (19,171 | ) | (749,667 | ) | ||||||
Net realized losses on futures contracts | (57,141 | ) | — | — | ||||||||
Net change in unrealized appreciation (depreciation) on investments | (1,045,413 | ) | (55,661 | ) | (889,260 | ) | ||||||
Net change in unrealized appreciation (depreciation) on foreign currency transactions | (9 | ) | (5 | ) | (30 | ) | ||||||
Net change in unrealized appreciation (depreciation) on futures contracts | 7,086 | — | — | |||||||||
Net Realized and Unrealized Gains (Losses) on Investments | (1,750,180 | ) | (74,837 | ) | (1,638,957 | ) | ||||||
Change in Net Assets Resulting from Operations | $ | (1,138,594 | ) | $ | 33,293 | $ | (1,109,062 | ) | ||||
(A) Net of foreign tax withholding of: | $ | — | $ | — | $ | — | ||||||
(B)See Note 4 in Notes to Financial Statements. |
See accompanying Notes to Financial Statements.
30 |
Statements of Operations (Unaudited) (Continued)
Touchstone | Touchstone | |||||||||||||||||||||||||
Touchstone | Touchstone | Large Cap | Touchstone | Touchstone | Conservative | Touchstone | ||||||||||||||||||||
Common Stock | Focused | Core Equity | Small Company | Aggressive ETF | ETF | Moderate ETF | ||||||||||||||||||||
Fund | Fund | Fund | Fund | Fund | Fund | Fund | ||||||||||||||||||||
$ | 1,218,392 | $ | 509,309 | $ | 282,615 | $ | 268,939 | $ | 212,360 | $ | 219,588 | $ | 250,644 | |||||||||||||
— | — | — | — | — | — | — | ||||||||||||||||||||
657 | 200 | — | 286 | 3,401 | 5,887 | 4,498 | ||||||||||||||||||||
1,219,049 | 509,509 | 282,615 | 269,225 | 215,761 | 225,475 | 255,142 | ||||||||||||||||||||
383,581 | 213,429 | 104,524 | 173,185 | 24,814 | 23,312 | 28,306 | ||||||||||||||||||||
111,239 | 44,210 | 23,317 | 50,224 | 14,392 | 13,521 | 16,418 | ||||||||||||||||||||
562 | 717 | 717 | 562 | 717 | 717 | 717 | ||||||||||||||||||||
2,906 | 6,894 | 2,379 | 3,344 | 1,448 | 1,545 | 1,578 | ||||||||||||||||||||
14,454 | 11,491 | 10,282 | 12,370 | 10,184 | 10,147 | 10,255 | ||||||||||||||||||||
52,873 | 10,782 | 2,959 | 11,438 | 30 | 30 | 40 | ||||||||||||||||||||
— | 911 | 654 | 608 | 233 | 258 | 276 | ||||||||||||||||||||
8,247 | 2,670 | 2,669 | 7,899 | 2,704 | 2,704 | 2,703 | ||||||||||||||||||||
— | 62,539 | 22,570 | — | 24,814 | 23,312 | 25,858 | ||||||||||||||||||||
5,963 | 7,099 | 7,099 | 5,963 | 7,099 | 7,099 | 7,099 | ||||||||||||||||||||
2,188 | 2,035 | 1,661 | 1,091 | 1,515 | 1,495 | 1,565 | ||||||||||||||||||||
582,013 | 362,777 | 178,831 | 266,684 | 87,950 | 84,140 | 94,815 | ||||||||||||||||||||
(21,985 | ) | — | (8,377 | ) | (3,443 | ) | (13,507 | ) | (14,205 | ) | (9,896 | ) | ||||||||||||||
— | 6,150 | — | — | — | — | — | ||||||||||||||||||||
560,028 | 368,927 | 170,454 | 263,241 | 74,443 | 69,935 | 84,919 | ||||||||||||||||||||
659,021 | 140,582 | 112,161 | 5,984 | 141,318 | 155,540 | 170,223 | ||||||||||||||||||||
2,095,154 | 1,349,264 | 1,226,103 | 3,321,765 | 500,843 | 150,618 | 489,664 | ||||||||||||||||||||
— | — | — | — | — | — | — | ||||||||||||||||||||
(778,852 | ) | (354,794 | ) | (1,639,376 | ) | 1,003,394 | (640,242 | ) | (413,361 | ) | (736,073 | ) | ||||||||||||||
— | (107 | ) | — | — | — | — | — | |||||||||||||||||||
— | — | — | — | — | — | — | ||||||||||||||||||||
1,316,302 | 994,363 | (413,273 | ) | 4,325,159 | (139,399 | ) | (262,743 | ) | (246,409 | ) | ||||||||||||||||
$ | 1,975,323 | $ | 1,134,945 | $ | (301,112 | ) | $ | 4,331,143 | $ | 1,919 | $ | (107,203 | ) | $ | (76,186 | ) | ||||||||||
$ | 78,307 | $ | 14,605 | $ | — | $ | 861 | $ | — | $ | — | $ | — |
31 |
Statements of Changes in Net Assets
Touchstone | Touchstone | |||||||||||||||
Active Bond | Balanced | |||||||||||||||
Fund | Fund | |||||||||||||||
For the | For the | For the | For the | |||||||||||||
Six Months | Year | Six Months | Year | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
June 30, 2018 | December 31, | June 30, 2018 | December 31, | |||||||||||||
(Unaudited) | 2017 | (Unaudited) | 2017(A) | |||||||||||||
From Operations | ||||||||||||||||
Net investment income | $ | 611,586 | $ | 1,169,110 | $ | 108,130 | $ | 169,908 | ||||||||
Net realized gains (losses) on investments, foreign currency transactions and futures contracts | (711,844 | ) | 824,610 | (19,171 | ) | 4,772,363 | ||||||||||
Net change in unrealized appreciation (depreciation) on investments, foreign currency transactions and futures contracts | (1,038,336 | ) | (28,864 | ) | (55,666 | ) | (2,726,271 | ) | ||||||||
Change in Net Assets from Operations | (1,138,594 | ) | 1,964,856 | 33,293 | 2,216,000 | |||||||||||
Distributions to Shareholders from: | ||||||||||||||||
Net investment income | — | (1,484,379 | ) | — | — | |||||||||||
Net realized gains | — | — | — | — | ||||||||||||
Total Distributions | — | (1,484,379 | ) | — | — | |||||||||||
Share Transactions | ||||||||||||||||
Proceeds from Shares issued | 1,648,030 | 4,755,717 | 618,760 | 2,585,460 | ||||||||||||
Reinvestment of distributions | — | 1,484,379 | — | — | ||||||||||||
Cost of Shares redeemed | (1,691,912 | ) | (4,363,557 | ) | (1,235,638 | ) | (2,825,940 | ) | ||||||||
Change in Net Assets from Share Transactions | (43,882 | ) | 1,876,539 | (616,878 | ) | (240,480 | ) | |||||||||
Total Increase (Decrease) in Net Assets | (1,182,476 | ) | 2,357,016 | (583,585 | ) | 1,975,520 | ||||||||||
Net Assets | ||||||||||||||||
Beginning of period | 57,368,528 | 55,011,512 | 17,963,637 | 15,988,117 | ||||||||||||
End of period | $ | 56,186,052 | $ | 57,368,528 | $ | 17,380,052 | $ | 17,963,637 | ||||||||
Undistributed Net Investment Income | $ | 1,826,379 | $ | 1,214,793 | $ | 301,066 | $ | 192,936 | ||||||||
Share Transactions | ||||||||||||||||
Shares issued | 156,929 | 442,714 | 41,653 | 185,445 | ||||||||||||
Shares reinvested | — | 140,168 | — | — | ||||||||||||
Shares redeemed | (162,696 | ) | (403,875 | ) | (82,601 | ) | (203,604 | ) | ||||||||
Change in Shares Outstanding | (5,767 | ) | 179,007 | (40,948 | ) | (18,159 | ) |
(A) See Note 9 in Notes to Financial Statements.
See accompanying Notes to Financial Statements.
32 |
Statements of Changes in Net Assets (Continued)
Touchstone | Touchstone | Touchstone | ||||||||||||||||||||
Bond | Common Stock | Focused | ||||||||||||||||||||
Fund | Fund | Fund | ||||||||||||||||||||
For the | For the | For the | For the | For the | For the | |||||||||||||||||
Six Months | Year | Six Months | Year | Six Months | Year | |||||||||||||||||
Ended | Ended | Ended | Ended | Ended | Ended | |||||||||||||||||
June 30, 2018 | December 31, | June 30, 2018 | December 31, | June 30, 2018 | December 31, | |||||||||||||||||
(Unaudited) | 2017(A) | (Unaudited) | 2017(A) | (Unaudited) | 2017 | |||||||||||||||||
$ | 529,895 | $ | 877,747 | $ | 659,021 | $ | 1,871,277 | $ | 140,582 | $ | 245,941 | |||||||||||
(749,667 | ) | 57,822 | 2,095,154 | 76,595,002 | 1,349,264 | 1,521,636 | ||||||||||||||||
(889,290 | ) | 822,808 | (778,852 | ) | (48,297,867 | ) | (354,901 | ) | 6,093,467 | |||||||||||||
(1,109,062 | ) | 1,758,377 | 1,975,323 | 30,168,412 | 1,134,945 | 7,861,044 | ||||||||||||||||
— | — | — | (17,544 | ) | — | (319,068 | ) | |||||||||||||||
— | — | — | (944,237 | ) | — | — | ||||||||||||||||
— | — | — | (961,781 | ) | — | (319,068 | ) | |||||||||||||||
1,138,328 | 3,169,052 | 1,915,873 | 3,579,984 | 757,370 | 1,615,348 | |||||||||||||||||
— | — | — | 961,781 | — | 319,068 | |||||||||||||||||
(2,471,073 | ) | (6,685,628 | ) | (14,380,203 | ) | (24,548,603 | ) | (5,083,674 | ) | (9,770,104 | ) | |||||||||||
(1,332,745 | ) | (3,516,576 | ) | (12,464,330 | ) | (20,006,838 | ) | (4,326,304 | ) | (7,835,688 | ) | |||||||||||
(2,441,807 | ) | (1,758,199 | ) | (10,489,007 | ) | 9,199,793 | (3,191,359 | ) | (293,712 | ) | ||||||||||||
46,921,866 | 48,680,065 | 158,437,588 | 149,237,795 | 61,933,574 | 62,227,286 | |||||||||||||||||
$ | 44,480,059 | $ | 46,921,866 | $ | 147,948,581 | $ | 158,437,588 | $ | 58,742,215 | $ | 61,933,574 | |||||||||||
$ | 1,549,848 | $ | 1,019,953 | $ | 2,521,924 | $ | 1,862,903 | $ | 413,201 | $ | 272,619 | |||||||||||
120,764 | 335,983 | 98,875 | 210,424 | 39,743 | 89,251 | |||||||||||||||||
— | — | — | 54,678 | — | 16,837 | |||||||||||||||||
(262,532 | ) | (707,170 | ) | (751,790 | ) | (1,431,198 | ) | (262,914 | ) | (550,208 | ) | |||||||||||
(141,768 | ) | (371,187 | ) | (652,915 | ) | (1,166,096 | ) | (223,171 | ) | (444,120 | ) |
33 |
Statements of Changes in Net Assets (Continued)
Touchstone | Touchstone | |||||||||||||||
Large Cap Core | Small Company | |||||||||||||||
Equity Fund | Fund | |||||||||||||||
For the | For the | For the | For the | |||||||||||||
Six Months | Year | Six Months | Year | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
June 30, 2018 | December 31, | June 30, 2018 | December 31, | |||||||||||||
(Unaudited) | 2017 | (Unaudited) | 2017(A) | |||||||||||||
From Operations | ||||||||||||||||
Net investment income (loss) | $ | 112,161 | $ | 168,697 | $ | 5,984 | $ | (41,203 | ) | |||||||
Net realized gains on investments | 1,226,103 | 913,480 | 3,321,765 | 7,655,355 | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments | (1,639,376 | ) | 5,278,278 | 1,003,394 | 4,293,327 | |||||||||||
Change in Net Assets from Operations | (301,112 | ) | 6,360,455 | 4,331,143 | 11,907,479 | |||||||||||
Distributions to Shareholders from: | ||||||||||||||||
Net investment income | — | (215,126 | ) | — | (40,595 | ) | ||||||||||
Net realized gains | — | (490,437 | ) | — | (1,801,035 | ) | ||||||||||
Total Distributions | — | (705,563 | ) | — | (1,841,630 | ) | ||||||||||
Share Transactions | ||||||||||||||||
Proceeds from Shares issued | 598,190 | 1,723,328 | 1,275,364 | 2,951,421 | ||||||||||||
Reinvestment of distributions | — | 705,563 | — | 1,841,630 | ||||||||||||
Cost of Shares redeemed | (4,786,598 | ) | (6,609,878 | ) | (5,757,427 | ) | (11,622,746 | ) | ||||||||
Change in Net Assets from Share Transactions | (4,188,408 | ) | (4,180,987 | ) | (4,482,063 | ) | (6,829,695 | ) | ||||||||
Total Increase (Decrease) in Net Assets | (4,489,520 | ) | 1,473,905 | (150,920 | ) | 3,236,154 | ||||||||||
Net Assets | ||||||||||||||||
Beginning of period | 33,965,478 | 32,491,573 | 70,338,537 | 67,102,383 | ||||||||||||
End of period | $ | 29,475,958 | $ | 33,965,478 | $ | 70,187,617 | $ | 70,338,537 | ||||||||
Undistributed Net Investment Income | $ | 280,838 | $ | 168,677 | $ | 5,984 | $ | — | ||||||||
Share Transactions | ||||||||||||||||
Shares issued | 35,894 | 119,708 | 78,171 | 203,652 | ||||||||||||
Shares reinvested | — | 43,312 | — | 128,069 | ||||||||||||
Shares redeemed | (291,838 | ) | (448,031 | ) | (355,759 | ) | (800,526 | ) | ||||||||
Change in Shares Outstanding | (255,944 | ) | (285,011 | ) | (277,588 | ) | (468,805 | ) |
(A) See Note 9 in Notes to Financial Statements.
See accompanying Notes to Financial Statements.
34 |
Statements of Changes in Net Assets (Continued)
Touchstone | Touchstone | Touchstone | ||||||||||||||||||||
Aggressive ETF | Conservative ETF | Moderate ETF | ||||||||||||||||||||
Fund | Fund | Fund | ||||||||||||||||||||
For the | For the | For the | For the | For the | For the | |||||||||||||||||
Six Months | Year | Six Months | Year | Six Months | Year | |||||||||||||||||
Ended | Ended | Ended | Ended | Ended | Ended | |||||||||||||||||
June 30, 2018 | December 31, | June 30, 2018 | December 31, | June 30, 2018 | December 31, | |||||||||||||||||
(Unaudited) | 2017 | (Unaudited) | 2017 | (Unaudited) | 2017 | |||||||||||||||||
$ | 141,318 | $ | 329,440 | $ | 155,540 | $ | 327,477 | $ | 170,223 | $ | 407,322 | |||||||||||
500,843 | 522,299 | 150,618 | 280,856 | 489,664 | 618,545 | |||||||||||||||||
(640,242 | ) | 2,351,512 | (413,361 | ) | 1,112,874 | (736,073 | ) | 2,034,617 | ||||||||||||||
1,919 | 3,203,251 | (107,203 | ) | 1,721,207 | (76,186 | ) | 3,060,484 | |||||||||||||||
— | (351,189 | ) | — | (366,429 | ) | — | (468,727 | ) | ||||||||||||||
— | — | — | (1,756,495 | ) | — | (3,720,034 | ) | |||||||||||||||
— | (351,189 | ) | — | (2,122,924 | ) | — | (4,188,761 | ) | ||||||||||||||
177,858 | 432,285 | 5,624,810 | 2,994,108 | 421,241 | 414,787 | |||||||||||||||||
— | 351,189 | — | 2,122,924 | — | 4,188,761 | |||||||||||||||||
(1,200,355 | ) | (2,766,183 | ) | (1,697,316 | ) | (5,339,887 | ) | (1,717,346 | ) | (4,662,698 | ) | |||||||||||
(1,022,497 | ) | (1,982,709 | ) | 3,927,494 | (222,855 | ) | (1,296,105 | ) | (59,150 | ) | ||||||||||||
(1,020,578 | ) | 869,353 | 3,820,291 | (624,572 | ) | (1,372,291 | ) | (1,187,427 | ) | |||||||||||||
20,383,845 | 19,514,492 | 16,831,004 | 17,455,576 | 23,453,776 | 24,641,203 | |||||||||||||||||
$ | 19,363,267 | $ | 20,383,845 | $ | 20,651,295 | $ | 16,831,004 | $ | 22,081,485 | $ | 23,453,776 | |||||||||||
$ | 470,735 | $ | 329,417 | $ | 482,989 | $ | 327,449 | $ | 577,525 | $ | 407,302 | |||||||||||
10,516 | 27,391 | 481,831 | 236,683 | 34,401 | 30,330 | |||||||||||||||||
— | 20,879 | — | 178,076 | — | 337,511 | |||||||||||||||||
(70,910 | ) | (174,231 | ) | (145,360 | ) | (414,047 | ) | (139,375 | ) | (337,079 | ) | |||||||||||
(60,394 | ) | (125,961 | ) | 336,471 | 712 | (104,974 | ) | 30,762 |
35 |
Touchstone Active Bond Fund
Selected Data for a Share Outstanding Throughout Each Period
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2018 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Net asset value at beginning of period | $ | 10.60 | $ | 10.51 | $ | 10.13 | $ | 10.49 | $ | 10.37 | $ | 11.00 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.11 | 0.21 | 0.26 | 0.19 | 0.20 | 0.22 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments | (0.32 | ) | 0.16 | 0.35 | (0.32 | ) | 0.20 | (0.46 | ) | |||||||||||||||
Total from investment operations | (0.21 | ) | 0.37 | 0.61 | (0.13 | ) | 0.40 | (0.24 | ) | |||||||||||||||
Distributions from: | ||||||||||||||||||||||||
Net investment income | — | (0.28 | ) | (0.23 | ) | (0.23 | ) | (0.28 | ) | (0.34 | ) | |||||||||||||
Realized capital gains | — | — | — | — | — | (0.05 | ) | |||||||||||||||||
Total distributions | — | (0.28 | ) | (0.23 | ) | (0.23 | ) | (0.28 | ) | (0.39 | ) | |||||||||||||
Net asset value at end of period | $ | 10.39 | $ | 10.60 | $ | 10.51 | $ | 10.13 | $ | 10.49 | $ | 10.37 | ||||||||||||
Total return(A) | (1.98 | %)(B) | 3.54 | % | 5.98 | % | (1.28 | %) | 3.82 | % | (2.18 | %) | ||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 56,186 | $ | 57,369 | $ | 55,012 | $ | 52,026 | $ | 48,978 | $ | 48,388 | ||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||
Net expenses | 0.88 | %(C) | 0.89 | % | 0.92 | %(D) | 0.97 | %(D) | 0.98 | % | 1.00 | % | ||||||||||||
Gross expenses | 0.88 | %(C) | 0.89 | % | 0.90 | % | 0.91 | % | 1.01 | % | 1.05 | % | ||||||||||||
Net investment income | 2.17 | %(C) | 2.05 | % | 2.47 | % | 2.10 | % | 1.92 | % | 2.01 | % | ||||||||||||
Portfolio turnover rate | 218 | %(B) | 482 | % | 584 | % | 455 | %(E) | 287 | % | 508 | % |
(A) | Total returns do not include any insurance, sales or administrative charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. |
(B) | Not annualized. |
(C) | Annualized. |
(D) | Net expenses include amounts recouped by the Advisor. |
(E) | Portfolio turnover excludes the purchases and sales of the Touchstone High Yield Fund acquired on December 7, 2015. If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
36 |
Financial Highlights (Continued)
Touchstone Balanced Fund
Selected Data for a Share Outstanding Throughout Each Period
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2018 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Net asset value at beginning of period | $ | 14.85 | $ | 13.02 | $ | 12.49 | $ | 13.45 | $ | 13.53 | $ | 12.13 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.10 | 0.14 | 0.15 | (A) | 0.20 | (A) | 0.18 | (A) | 0.18 | (A) | ||||||||||||||
Net realized and unrealized gains (losses) on investments | (0.08 | ) | 1.69 | 0.78 | (0.19 | ) | 0.88 | 2.10 | ||||||||||||||||
Total from investment operations | 0.02 | 1.83 | 0.93 | 0.01 | 1.06 | 2.28 | ||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | (0.18 | ) | (0.25 | ) | (0.23 | ) | (0.21 | ) | ||||||||||||||
Realized capital gains | — | — | (0.20 | ) | (0.72 | ) | (0.91 | ) | (0.67 | ) | ||||||||||||||
Return of capital | — | — | (0.02 | ) | — | — | — | |||||||||||||||||
Total distributions | — | — | (0.40 | ) | (0.97 | ) | (1.14 | ) | (0.88 | ) | ||||||||||||||
Net asset value at end of period | $ | 14.87 | $ | 14.85 | $ | 13.02 | $ | 12.49 | $ | 13.45 | $ | 13.53 | ||||||||||||
Total return(B) | 0.14 | %(C) | 14.06 | % | 7.42 | % | 0.03 | % | 7.81 | % | 18.88 | % | ||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 17,380 | $ | 17,964 | $ | 15,988 | $ | 15,301 | $ | 15,963 | $ | 16,456 | ||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||
Net expenses | 0.85 | %(D) | 0.85 | % | 0.85 | % | 0.87 | % | 0.90 | % | 0.87 | % | ||||||||||||
Gross expenses | 1.05 | %(D) | 0.97 | % | 0.88 | % | 0.87 | % | 0.90 | % | 0.87 | % | ||||||||||||
Net investment income | 1.23 | %(D) | 1.01 | % | 1.16 | % | 1.50 | %(E) | 1.31 | % | 1.37 | % | ||||||||||||
Portfolio turnover rate | 100 | %(C) | 142 | % | 30 | % | 38 | % | 76 | % | 220 | % |
(A) | The net investment income per share was based on average shares outstanding for the period. |
(B) | Total returns do not include any insurance, sales or administrative charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. |
(C) | Not annualized. |
(D) | Annualized. |
(E) | Includes the impact of special dividends resulting from an acquisition of Covidien plc by Medtronic, Inc. on January 26, 2015 through the formation of a new holding company, Medtronic plc, incorporated in Ireland. These special dividends enhanced the ratio of net investment income by 0.47% for the fiscal year ended December 31, 2015. |
See accompanying Notes to Financial Statements.
37 |
Financial Highlights (Continued)
Touchstone Bond Fund
Selected Data for a Share Outstanding Throughout Each Period
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2018 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Net asset value at beginning of period | $ | 9.60 | $ | 9.26 | $ | 9.38 | $ | 9.83 | $ | 9.75 | $ | 10.10 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.12 | 0.18 | 0.14 | (A) | 0.27 | (A) | 0.29 | (A) | 0.26 | (A) | ||||||||||||||
Net realized and unrealized gains (losses) on investments | (0.35 | ) | 0.16 | (0.06 | ) | (0.40 | ) | 0.10 | (0.29 | ) | ||||||||||||||
Total from investment operations | (0.23 | ) | 0.34 | 0.08 | (0.13 | ) | 0.39 | (0.03 | ) | |||||||||||||||
Distributions from: | ||||||||||||||||||||||||
Net investment income | — | — | (0.20 | ) | (0.32 | ) | (0.31 | ) | (0.32 | ) | ||||||||||||||
Net asset value at end of period | $ | 9.37 | $ | 9.60 | $ | 9.26 | $ | 9.38 | $ | 9.83 | $ | 9.75 | ||||||||||||
Total return(B) | (2.40 | %)(C) | 3.67 | % | 0.81 | % | (1.29 | %) | 4.01 | % | (0.33 | %) | ||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 44,480 | $ | 46,922 | $ | 48,680 | $ | 57,312 | $ | 67,067 | $ | 61,664 | ||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||
Net expenses | 0.67 | %(D) | 0.68 | % | 0.67 | % | 0.67 | % | 0.65 | % | 0.67 | % | ||||||||||||
Gross expenses | 0.78 | %(D) | 0.71 | % | 0.67 | % | 0.67 | % | 0.65 | % | 0.67 | % | ||||||||||||
Net investment income | 2.36 | %(D) | 1.83 | % | 1.46 | % | 2.69 | % | 2.90 | % | 2.64 | % | ||||||||||||
Portfolio turnover rate | 321 | %(C) | 168 | % | 197 | % | 117 | % | 117 | % | 256 | % |
Touchstone Common Stock Fund
Selected Data for a Share Outstanding Throughout Each Period
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2018 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Net asset value at beginning of period | $ | 18.74 | $ | 15.52 | $ | 15.46 | $ | 17.69 | $ | 18.39 | $ | 15.15 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.10 | 0.22 | 0.25 | (A) | 0.44 | (A) | 0.30 | (A) | 0.26 | (A) | ||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.13 | 3.11 | 1.49 | (0.39 | ) | 1.61 | 4.52 | |||||||||||||||||
Total from investment operations | 0.23 | 3.33 | 1.74 | 0.05 | 1.91 | 4.78 | ||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||
Net investment income | — | (— | )(E) | (0.27 | ) | (0.49 | ) | (0.33 | ) | (0.28 | ) | |||||||||||||
Realized capital gains | — | (0.11 | ) | (1.41 | ) | (1.79 | ) | (2.28 | ) | (1.26 | ) | |||||||||||||
Total distributions | — | (0.11 | ) | (1.68 | ) | (2.28 | ) | (2.61 | ) | (1.54 | ) | |||||||||||||
Net asset value at end of period | $ | 18.97 | $ | 18.74 | $ | 15.52 | $ | 15.46 | $ | 17.69 | $ | 18.39 | ||||||||||||
Total return(B) | 1.23 | %(C) | 21.50 | % | 11.26 | % | 0.19 | % | 10.34 | % | 31.73 | % | ||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 147,949 | $ | 158,438 | $ | 149,238 | $ | 161,148 | $ | 198,524 | $ | 220,631 | ||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||
Net expenses | 0.73 | %(D) | 0.71 | % | 0.73 | % | 0.72 | % | 0.72 | % | 0.72 | % | ||||||||||||
Gross expenses | 0.76 | %(D) | 0.71 | % | 0.73 | % | 0.72 | % | 0.72 | % | 0.72 | % | ||||||||||||
Net investment income | 0.86 | %(D) | 1.21 | % | 1.58 | % | 2.48 | %(F) | 1.57 | % | 1.49 | % | ||||||||||||
Portfolio turnover rate | 5 | %(C) | 84 | % | 6 | % | 9 | % | 13 | % | 8 | % |
(A) | The net investment income per share was based on average shares outstanding for the period. |
(B) | Total returns do not include any insurance, sales or administrative charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. |
(C) | Not annualized. |
(D) | Annualized. |
(E) | Less than $0.005 per share. |
(F) | Includes the impact of special dividends resulting from an acquisition of Covidien plc by Medtronic, Inc. on January 26, 2015 through the formation of a new holding company, Medtronic plc, incorporated in Ireland. These special dividends enhanced the ratio of net investment income by 0.47% for the fiscal year ended December 31, 2015. |
See accompanying Notes to Financial Statements.
38 |
Financial Highlights (Continued)
Touchstone Focused Fund
Selected Data for a Share Outstanding Throughout Each Period
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2018 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Net asset value at beginning of period | $ | 18.88 | $ | 16.70 | $ | 17.95 | $ | 18.64 | $ | 18.81 | $ | 14.20 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) | 0.05 | 0.09 | 0.09 | (0.01 | ) | (0.08 | ) | (0.05 | ) | |||||||||||||||
Net realized and unrealized gains on investments | 0.28 | 2.19 | 2.31 | 0.37 | 2.49 | 4.98 | ||||||||||||||||||
Total from investment operations | 0.33 | 2.28 | 2.40 | 0.36 | 2.41 | 4.93 | ||||||||||||||||||
Distributions from: | ||||||||||||||||||||||||
Net investment income | — | (0.10 | ) | — | — | — | — | |||||||||||||||||
Realized capital gains | — | — | (3.65 | ) | (1.05 | ) | (2.58 | ) | (0.32 | ) | ||||||||||||||
Total distributions | — | (0.10 | ) | (3.65 | ) | (1.05 | ) | (2.58 | ) | (0.32 | ) | |||||||||||||
Net asset value at end of period | $ | 19.21 | $ | 18.88 | $ | 16.70 | $ | 17.95 | $ | 18.64 | $ | 18.81 | ||||||||||||
Total return(A) | 1.75 | %(B) | 13.64 | % | 13.11 | % | 1.97 | % | 13.10 | % | 34.81 | % | ||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 58,742 | $ | 61,934 | $ | 62,227 | $ | 68,317 | $ | 25,178 | $ | 27,506 | ||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||
Net expenses | 1.21 | %(C)(D) | 1.21 | %(E) | 1.21 | %(E) | 1.21 | % | 1.23 | % | 1.26 | % | ||||||||||||
Gross expenses | 1.19 | %(C) | 1.17 | % | 1.17 | % | 1.32 | % | 1.33 | % | 1.36 | % | ||||||||||||
Net investment income (loss) | 0.46 | %(C) | 0.40 | % | 0.55 | % | (0.07 | %) | (0.43 | %) | (0.32 | %) | ||||||||||||
Portfolio turnover rate | 5 | %(B) | 12 | % | 21 | % | 286 | %(F) | 72 | % | 77 | % |
Touchstone Large Cap Core Equity Fund
Selected Data for a Share Outstanding Throughout Each Period
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2018 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Net asset value at beginning of period | $ | 16.30 | $ | 13.72 | $ | 14.07 | $ | 14.90 | $ | 13.09 | $ | 10.09 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.07 | 0.09 | 0.08 | 0.18 | 0.18 | 0.17 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments | (0.24 | ) | 2.83 | 1.18 | (0.77 | ) | 1.78 | 3.01 | ||||||||||||||||
Total from investment operations | (0.17 | ) | 2.92 | 1.26 | (0.59 | ) | 1.96 | 3.18 | ||||||||||||||||
Distributions from: | ||||||||||||||||||||||||
Net investment income | — | (0.10 | ) | (0.11 | ) | (0.24 | ) | (0.15 | ) | (0.18 | ) | |||||||||||||
Realized capital gains | — | (0.24 | ) | (1.50 | ) | — | — | — | ||||||||||||||||
Total distributions | — | (0.34 | ) | (1.61 | ) | (0.24 | ) | (0.15 | ) | (0.18 | ) | |||||||||||||
Net asset value at end of period | $ | 16.13 | $ | 16.30 | $ | 13.72 | $ | 14.07 | $ | 14.90 | $ | 13.09 | ||||||||||||
Total return(A) | (1.04 | %)(B) | 21.32 | % | 8.84 | % | (4.01 | %) | 14.93 | % | 31.52 | % | ||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 29,476 | $ | 33,965 | $ | 32,492 | $ | 29,894 | $ | 40,664 | $ | 36,697 | ||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||
Net expenses | 1.06 | %(C) | 1.06 | % | 1.06 | % | 1.06 | % | 1.04 | % | 1.00 | % | ||||||||||||
Gross expenses | 1.11 | %(C) | 1.15 | % | 1.17 | % | 1.14 | % | 1.16 | % | 1.21 | % | ||||||||||||
Net investment income | 0.70 | %(C) | 0.52 | % | 0.75 | % | 0.73 | % | 1.30 | % | 1.16 | % | ||||||||||||
Portfolio turnover rate | 9 | %(B) | 12 | % | 50 | % | 111 | % | 41 | % | 54 | % |
(A) | Total returns do not include any insurance, sales or administrative charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. |
(B) | Not annualized. |
(C) | Annualized. |
(D) | Net expenses include amounts eligible for recoupment by the Advisor. |
(E) | Net expenses include amounts recouped by the Advisor. |
(F) | Portfolio turnover excludes the purchases and sales of the Touchstone Baron Small Cap Growth Fund and Touchstone Third Avenue Value Fund acquired on December 7, 2015. If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
39 |
Financial Highlights (Continued)
Touchstone Small Company Fund
Selected Data for a Share Outstanding Throughout Each Period
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2018 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Net asset value at beginning of period | $ | 15.73 | $ | 13.58 | $ | 12.14 | $ | 14.63 | $ | 16.32 | $ | 14.13 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) | — | (A) | (0.01 | ) | 0.01 | (B) | (0.02 | )(B) | 0.07 | (B) | 0.01 | (B) | ||||||||||||
Net realized and unrealized gains (losses) on investments | 1.00 | 2.57 | 2.44 | (0.15 | ) | 1.03 | 4.88 | |||||||||||||||||
Total from investment operations | 1.00 | 2.56 | 2.45 | (0.17 | ) | 1.10 | 4.89 | |||||||||||||||||
Distributions from: | ||||||||||||||||||||||||
Net investment income | — | (0.01 | ) | (0.01 | ) | — | (0.08 | ) | (0.01 | ) | ||||||||||||||
Realized capital gains | — | (0.40 | ) | (1.00 | ) | (2.32 | ) | (2.71 | ) | (2.69 | ) | |||||||||||||
Total distributions | — | (0.41 | ) | (1.01 | ) | (2.32 | ) | (2.79 | ) | (2.70 | ) | |||||||||||||
Net asset value at end of period | $ | 16.73 | $ | 15.73 | $ | 13.58 | $ | 12.14 | $ | 14.63 | $ | 16.32 | ||||||||||||
Total return(C) | 6.36 | %(D) | 19.12 | % | 20.23 | % | (1.34 | %) | 6.68 | % | 34.72 | % | ||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 70,188 | $ | 70,339 | $ | 67,102 | $ | 48,938 | $ | 57,935 | $ | 62,134 | ||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||
Net expenses | 0.76 | %(E) | 0.76 | % | 0.76 | % | 0.78 | % | 0.78 | % | 0.80 | % | ||||||||||||
Gross expenses | 0.77 | %(E) | 0.76 | % | 0.76 | % | 0.78 | % | 0.78 | % | 0.80 | % | ||||||||||||
Net investment income (loss) | 0.02 | %(E) | (0.06 | %) | 0.08 | % | (0.10 | %) | 0.45 | % | 0.09 | % | ||||||||||||
Portfolio turnover rate | 28 | %(D) | 68 | % | 68 | % | 77 | % | 72 | % | 47 | % |
Touchstone Aggressive ETF Fund
Selected Data for a Share Outstanding Throughout Each Period
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2018 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Net asset value at beginning of period | $ | 16.83 | $ | 14.60 | $ | 13.73 | $ | 13.98 | $ | 13.28 | $ | 11.13 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.14 | 0.30 | 0.30 | 0.22 | 0.21 | 0.13 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments | (0.14 | ) | 2.22 | 0.79 | (0.23 | ) | 0.78 | 2.41 | ||||||||||||||||
Total from investment operations | — | 2.52 | 1.09 | (0.01 | ) | 0.99 | 2.54 | |||||||||||||||||
Distributions from: | ||||||||||||||||||||||||
Net investment income | — | (0.29 | ) | (0.22 | ) | (0.24 | ) | — | (0.33 | ) | ||||||||||||||
Realized capital gains | — | — | — | — | (0.29 | ) | (0.06 | ) | ||||||||||||||||
Total distributions | — | (0.29 | ) | (0.22 | ) | (0.24 | ) | (0.29 | ) | (0.39 | ) | |||||||||||||
Net asset value at end of period | $ | 16.83 | $ | 16.83 | $ | 14.60 | $ | 13.73 | $ | 13.98 | $ | 13.28 | ||||||||||||
Total return(C) | 0.00 | %(D) | 17.29 | % | 7.96 | % | (0.10 | %) | 7.49 | % | 22.91 | % | ||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 19,363 | $ | 20,384 | $ | 19,514 | $ | 21,067 | $ | 24,099 | $ | 26,822 | ||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||
Net expenses(F) | 0.75 | %(E) | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | ||||||||||||
Gross expenses(F) | 0.89 | %(E) | 0.90 | % | 0.90 | % | 0.87 | % | 0.87 | % | 1.09 | % | ||||||||||||
Net investment income | 1.42 | %(E) | 1.64 | % | 1.80 | % | 1.26 | % | 1.42 | % | 1.49 | % | ||||||||||||
Portfolio turnover rate | 10 | %(D) | 21 | % | 109 | % | 7 | % | 12 | % | 11 | %(G) |
(A) | Less than $0.005 per share. |
(B) | The net investment income (loss) per share was based on average shares outstanding for the period. |
(C) | Total returns do not include any insurance, sales or administrative charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. |
(D) | Not annualized. |
(E) | Annualized. |
(F) | Ratio does not include expenses of the underlying funds. |
(G) | Portfolio turnover excludes the purchases and sales of the Touchstone Enhanced ETF Fund acquired on December 13, 2013. If these transactions were included, portfolio turnover would have been higher. |
See accompanying Notes to Financial Statements.
40 |
Financial Highlights (Continued)
Touchstone Conservative ETF Fund |
Selected Data for a Share Outstanding Throughout Each Period |
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2018 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Net asset value at beginning of period | $ | 11.74 | $ | 12.18 | $ | 11.84 | $ | 12.68 | $ | 12.61 | $ | 12.15 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.04 | 0.23 | 0.29 | 0.17 | 0.18 | 0.12 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments | (0.11 | ) | 0.99 | 0.37 | (0.20 | ) | 0.48 | 0.91 | ||||||||||||||||
Total from investment operations | (0.07 | ) | 1.22 | 0.66 | (0.03 | ) | 0.66 | 1.03 | ||||||||||||||||
Distributions from: | ||||||||||||||||||||||||
Net investment income | — | (0.26 | ) | (0.19 | ) | (0.19 | ) | (0.15 | ) | (0.18 | ) | |||||||||||||
Realized capital gains | — | (1.40 | ) | (0.13 | ) | (0.62 | ) | (0.44 | ) | (0.39 | ) | |||||||||||||
Total distributions | — | (1.66 | ) | (0.32 | ) | (0.81 | ) | (0.59 | ) | (0.57 | ) | |||||||||||||
Net asset value at end of period | $ | 11.67 | $ | 11.74 | $ | 12.18 | $ | 11.84 | $ | 12.68 | $ | 12.61 | ||||||||||||
Total return(A) | (0.60 | %)(B) | 10.06 | % | 5.58 | % | (0.24 | %) | 5.23 | % | 8.50 | % | ||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 20,651 | $ | 16,831 | $ | 17,456 | $ | 19,964 | $ | 23,389 | $ | 26,071 | ||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||
Net expenses(C) | 0.75 | %(D) | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | ||||||||||||
Gross expenses(C) | 0.90 | %(D) | 0.93 | % | 0.90 | % | 0.87 | % | 0.89 | % | 0.99 | % | ||||||||||||
Net investment income | 1.67 | %(D) | 1.82 | % | 1.78 | % | 1.13 | % | 1.20 | % | 1.09 | % | ||||||||||||
Portfolio turnover rate | 10 | %(B) | 31 | % | 109 | % | 9 | % | 13 | % | 29 | % |
Touchstone Moderate ETF Fund |
Selected Data for a Share Outstanding Throughout Each Period |
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2018 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Net asset value at beginning of period | $ | 12.26 | $ | 13.10 | $ | 13.33 | $ | 15.49 | $ | 14.72 | $ | 12.89 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.11 | 0.21 | 0.28 | 0.21 | 0.31 | 0.23 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments | (0.15 | ) | 1.56 | 0.64 | (0.24 | ) | 0.72 | 1.87 | ||||||||||||||||
Total from investment operations | (0.04 | ) | 1.77 | 0.92 | (0.03 | ) | 1.03 | 2.10 | ||||||||||||||||
Distributions from: | ||||||||||||||||||||||||
Net investment income | — | (0.25 | ) | (0.22 | ) | (0.27 | ) | (0.26 | ) | (0.27 | ) | |||||||||||||
Realized capital gains | — | (2.36 | ) | (0.93 | ) | (1.86 | ) | — | — | |||||||||||||||
Total distributions | — | (2.61 | ) | (1.15 | ) | (2.13 | ) | (0.26 | ) | (0.27 | ) | |||||||||||||
Net asset value at end of period | $ | 12.22 | $ | 12.26 | $ | 13.10 | $ | 13.33 | $ | 15.49 | $ | 14.72 | ||||||||||||
Total return(A) | (0.33 | %)(B) | 13.66 | % | 6.85 | % | (0.18 | %) | 6.96 | % | 16.32 | % | ||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||
Net assets at end of period (000's) | $ | 22,081 | $ | 23,454 | $ | 24,641 | $ | 27,923 | $ | 33,200 | $ | 41,687 | ||||||||||||
Ratio to average net assets: | ||||||||||||||||||||||||
Net expenses(C) | 0.75 | %(D) | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | ||||||||||||
Gross expenses(C) | 0.84 | %(D) | 0.84 | % | 0.82 | % | 0.80 | % | 0.79 | % | 0.92 | % | ||||||||||||
Net investment income | 1.50 | %(D) | 1.72 | % | 1.83 | % | 1.30 | % | 1.41 | % | 1.29 | % | ||||||||||||
Portfolio turnover rate | 8 | %(B) | 21 | % | 98 | % | 9 | % | 11 | % | 9 | % |
(A) | Total returns do not include any insurance, sales or administrative charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. |
(B) | Not annualized. |
(C) | Ratio does not include expenses of the underlying funds. |
(D) | Annualized. |
See accompanying Notes to Financial Statements.
41 |
June 30, 2018 (Unaudited)
1. Organization
The Touchstone Variable Series Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Massachusetts business trust pursuant to an Agreement and Declaration of Trust dated February 7, 1994. The Trust consists of the following ten funds (individually, a “Fund”, and collectively, the “Funds”):
Touchstone Active Bond Fund (“Active Bond Fund”)
Touchstone Balanced Fund (“Balanced Fund”)
Touchstone Bond Fund (“Bond Fund”)
Touchstone Common Stock Fund (“Common Stock Fund”)
Touchstone Focused Fund (“Focused Fund”)
Touchstone Large Cap Core Equity Fund (“Large Cap Core Equity Fund”)
Touchstone Small Company Fund (“Small Company Fund”)
Touchstone Aggressive ETF Fund (“Aggressive ETF Fund”)
Touchstone Conservative ETF Fund (“Conservative ETF Fund”)
Touchstone Moderate ETF Fund (“Moderate ETF Fund”)
Each Fund is diversified with the exception of the Common Stock Fund, Focused Fund and the Large Cap Core Equity Fund which are non-diversified.
The Agreement and Declaration of Trust permits the Trust to issue an unlimited number of shares of beneficial interest of each Fund. Shares of beneficial interest of each Fund are available as a funding vehicle for the separate accounts of life insurance companies issuing variable annuity and variable life insurance policies. As of June 30, 2018, a majority of the outstanding shares of the Active Bond Fund, Focused Fund, Large Cap Core Equity Fund, Aggressive ETF Fund, Conservative ETF Fund and Moderate ETF Fund were issued to separate accounts of Western-Southern Life Assurance Company, The Western & Southern Life Insurance Company, Integrity Life Insurance Company, National Integrity Life Insurance Company, and Columbus Life Insurance Company, which are all part of Western & Southern Financial Group, Inc. (“Western & Southern”), and certain supplemental executive retirement plans sponsored by Western & Southern and its affiliates.
All Funds offer a single class of shares. The assets of each Fund are segregated, and a shareholder’s interest is limited to the Fund in which shares are held. The Funds’ prospectus provides a description of each Fund’s investment goal, policies, and strategies along with information on the class of shares currently being offered.
2. Significant Accounting Policies
The following is a summary of the Funds’ significant accounting policies:
Each Fund is an investment company that follows the accounting and reporting guidance of Accounting Standards Codification Topic 946 applicable to investment companies.
Security valuation and fair value measurements — U.S. generally accepted accounting principles (“U.S. GAAP”) define fair value as the price the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. All investments in securities are recorded at their fair value. The Funds define the term “market value”, as used throughout this report, as the estimated fair value. The Funds use various methods to measure fair value of their portfolio securities on a recurring basis. U.S. GAAP fair value measurement standards require disclosure of a hierarchy that prioritizes inputs to valuation methods.
42 |
Notes to Financial Statements (Unaudited) (Continued)
These inputs are summarized in the three broad levels listed below:
· | Level 1 – | quoted prices in active markets for identical securities |
· | Level 2 – | other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) |
· | Level 3 – | significant unobservable inputs (including a 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.
The aggregate value by input level, as of June 30, 2018, for each Fund’s investments, as well as a reconciliation of assets for which significant unobservable inputs (Level 3) were used in determining value, if applicable, is included in the Funds’ Portfolio of Investments, which also includes a breakdown of the Funds’ investments by portfolio or sector allocation. The Funds did not hold any Level 3 categorized securities during the six months ended June 30, 2018.
Changes in valuation techniques may result in transfers into or out of an investment’s assigned level within the hierarchy. All transfers in and out of the levels are recognized at the value at the end of the period. At June 30, 2018, there were no transfers between Levels 1, 2 and 3 for all Funds.
During the six months ended June 30, 2018, there were no material changes to the valuation policies and techniques.
The Funds’ portfolio securities are valued as of the close of the regular session of trading on the New York Stock Exchange (“NYSE”) (currently 4:00 p.m., Eastern time or at the times of which the NYSE establishes official closing prices). Portfolio securities traded on stock exchanges are valued at the last reported sale price, official close price, or last bid price if no sales are reported. Portfolio securities quoted by NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”) or from the primary exchange on which the security trades. To the extent these securities are actively traded, they are categorized in Level 1 of the fair value hierarchy. Options and futures are valued at the last quoted sales price. If there is no such reported sale on the valuation date, long option positions are valued at the most recent bid price, and short option positions are valued at the most recent ask price on the valuation date and are categorized in Level 1. Shares of mutual funds in which the Funds invest are valued at their respective net asset value (“NAV”) as reported by the underlying funds and are categorized in Level 1.
Debt securities held by the Funds are valued at their evaluated bid by an independent pricing service or at their last broker-quoted bid prices as obtained from one or more of the major market makers for such securities. Independent pricing services use information provided by market makers or estimates of market values through accepted market modeling conventions. Observable inputs to the models may include prepayment speeds, pricing spread, yield, trade information, dealer quotes, market color, cash flow models, the securities’ terms and conditions, among others, and are generally categorized in Level 2. The Active Bond Fund’s investments in asset-backed and mortgage-backed securities are valued by independent pricing services using models that consider estimated cash flows of each tranche of the security, establish a benchmark yield and develop an estimated tranche specific spread to the benchmark yield based on the unique attributes of the tranche, and are generally categorized in Level 2. Debt securities with remaining maturities of 60 days or less may be valued at amortized cost, provided such amount approximates market value and are categorized in Level 2. While this method provides consistency in valuation (and may only be used if it approximates market value), it may result in periods during which fair value, as determined by amortized cost, is higher or lower than the price that would be received if the Fund sold the investment.
43 |
Notes to Financial Statements (Unaudited) (Continued)
Securities mainly traded on a non-U.S. exchange or denominated in foreign currencies are generally valued according to the preceding closing values on that exchange, translated to U.S. dollars using currency exchange rates as of the close of regular trading on the NYSE, and are generally categorized in Level 1. However, if an event that may change the value of a security occurs after the time that the closing value on the non-U.S. exchange was determined, but before the close of regular trading on the NYSE, the security may be priced based on fair value and is generally categorized in Level 2. This may cause the value of the security, if held on the books of a Fund, to be different from the closing value on the non-U.S. exchange and may affect the calculation of that Fund’s NAV.
The Funds may use fair value pricing under the following circumstances, among others:
· | If the value of a security has been materially affected by events occurring before the Funds’ pricing time but after the close of the primary markets on which the security is traded. |
· | If the exchange on which a portfolio security is principally traded closes early or if trading in a particular portfolio security was halted during the day and did not resume prior to the Funds’ NAV calculation. |
· | If a security is so thinly traded that reliable market quotations are unavailable due to infrequent trading. |
· | If the validity of market quotations is not reliable. |
Securities held by the Funds that do not have readily available market quotations, significant observable inputs, or securities for which the available market quotations are not reliable, are priced at their estimated fair value using procedures approved by the Funds’ Board and are generally categorized in Level 3.
Collateralized Loan Obligations — The Active Bond Fund may invest in collateralized loan obligations (“CLOs”). CLOs are types of asset-backed securities. A CLO is an entity that is backed by syndicated bank loans. The cash flows of the CLO can be split into multiple segments, called “tranches,” which will vary in risk profile and yield. The riskiest segment is the subordinated or “equity” tranche. This tranche bears the greatest risk of defaults from the underlying assets in the CLO and serves to protect the other, more senior, tranches from default in all but the most severe circumstances. Since it is shielded from defaults by the more junior tranches, a “senior” tranche will typically have higher credit ratings and lower yields than their underlying securities, and often receive investment grade ratings from one or more of the nationally recognized rating agencies. Despite the protection from the more junior tranches, senior tranches can experience substantial losses due to actual defaults, increased sensitivity to future defaults and the disappearance of one or more protecting tranches as a result of changes in the credit profile of the underlying pool of assets.
Investment companies — The Funds may invest in securities of other investment companies, including exchange-traded funds (“ETFs”), open-end funds and closed-end funds. Open-end funds are investment companies that issue new shares continuously and redeem shares daily. Closed-end funds are investment companies that typically issue a fixed number of shares that trade on a securities exchange or over-the-counter (“OTC”). An ETF is an investment company that typically seeks to track the performance of an index by holding in its portfolio shares of all the companies, or a representative sample of the companies, that are components of a particular index. ETF shares are traded on a securities exchange based on their market value. The risks of investment in other investment companies typically reflect the risks of the types of securities in which the other investment companies invest. Investments in ETFs and closed-end funds are subject to the additional risk that their shares may trade at a premium or discount to their NAV. When a Fund invests in another investment company, shareholders of the Fund indirectly bear their proportionate share of the other investment company’s fees and expenses, including operating, registration, trustee, licensing, and marketing, as well as their share of the Fund’s fees and expenses.
Futures Contracts — The Active Bond Fund may buy and sell futures contracts and related options to manage its exposure to changing interest rates and securities prices. Some strategies reduce the Fund’s exposure to price fluctuations, while others tend to increase its market exposure. Futures and options on futures can be volatile
44 |
Notes to Financial Statements (Unaudited) (Continued)
instruments and involve certain risks that could negatively impact the Fund’s return. In order to avoid leveraging and related risks, when the Fund purchases futures contracts, it will collateralize its position by depositing an amount of cash or liquid securities, equal to the market value of the futures positions held, less margin deposits, in a segregated account with its custodian or otherwise “cover” its position in a manner consistent with the 1940 Act, or the rules of the Securities and Exchange Commission (the “SEC”) or interpretations thereunder. Collateral equal to the current fair value of the futures position will be determined on a daily basis.
When the contract is closed, the Fund records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transactions and the Fund’s basis in the contract. Risks of entering into futures contracts include the possibility that a change in the value of the contract may not correlate with the changes in the value of the underlying instruments. Second, it is possible that a lack of liquidity for futures contracts could exist in the secondary market resulting in an inability to close a futures position prior to its maturity date. Third, the purchase of a futures contract involves the risk that the Fund could lose more than the original margin deposit required to initiate the futures transaction. Finally, the risk exists that losses could exceed amounts disclosed on the Statements of Assets and Liabilities. There is minimal counterparty credit risk involved in entering into futures contracts since they are exchange-traded instruments and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
As of June 30, 2018, the Active Bond Fund did not hold any futures contracts.
Foreign currency translation — The books and records of the Funds are maintained in U.S. dollars and translated into U.S. dollars on the following basis:
(1) | market value of investment securities, assets and liabilities at the current rate of exchange on the valuation date; and |
(2) | purchases and sales of investment securities, income, and expenses at the relevant rates of exchange prevailing on the respective dates of such transactions. |
The Funds do not isolate that portion of gains and losses on investments in equity securities that is due to changes in the foreign exchange rates from that which is due to changes in market prices of equity securities.
Real Estate Investment Trusts — The Funds may invest in real estate investment trusts (“REITs”) that involve risks not associated with investing in stocks. Risks associated with investments in REITs include declines in the value of real estate, general and economic conditions, changes in the value of the underlying property and defaults by borrowers. The value of assets in the real estate industry may go through cycles of relative underperformance and outperformance in comparison to equity securities markets in general. Dividend income is recorded using management’s estimate of the income included in distributions received from REIT investments. The actual amounts of income, return of capital and capital gains are only determined by each REIT after its fiscal year-end and may differ from the estimated amount. Estimates of income are adjusted in the Funds to the actual amounts when the amounts are determined.
Derivative instruments and hedging activities — The Active Bond Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement” or “MNA”) or similar agreement with certain counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and foreign exchange contracts, and typically contains, among other things, collateral posting terms and master netting provisions in the event of a default or termination. Under an ISDA Master Agreement, a party may, under certain circumstances, offset with the counterparty certain derivative financial instrument’s payables or receivables with collateral held or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default (close-out netting). These default events include bankruptcy or insolvency of the counterparty.
45 |
Notes to Financial Statements (Unaudited) (Continued)
Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset.
When entering into a derivative transaction, the Fund may be required to post and maintain collateral or margin (including both initial and maintenance margin). Collateral and margin requirements differ by type of derivative. Margin requirements are established by the broker or clearing house for exchange-traded and centrally cleared derivatives (financial futures contracts, options, and centrally cleared swaps). Brokers can ask for margining in excess of the clearing house’s minimum in certain circumstances. Collateral terms are contract specific for OTC derivatives (forward foreign currency contracts, options, and swaps). For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the marked-to-market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by the Fund and the counterparty. For financial reporting purposes, cash collateral that has been pledged to cover obligations of the Fund and cash collateral received from the counterparty, if any, are reported separately on the Statements of Assets and Liabilities as cash deposits held at prime broker and due to prime broker, respectively. Non-cash collateral pledged by the Fund, if any, is noted in the Portfolio of Investments. To the extent amounts due to the Fund from its counterparties are not fully collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty non-performance.
Certain ISDA Master Agreements allow counterparties to OTC derivatives transactions to terminate derivative contracts prior to maturity in the event the Fund’s net assets decline by a stated percentage or the Fund fails to meet the terms of its ISDA Master Agreement, which would cause the Fund (counterparty) to accelerate payment of any net liability owed to the counterparty (Fund).
For financial reporting purposes, the Active Bond Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statements of Assets and Liabilities.
As of June 30, 2018, the Funds did not hold any assets and liabilities that were subject to netting arrangements.
The following table sets forth the effect of the Active Bond Fund’s derivative financial instruments by primary risk exposure on the Statements of Operations for the six months ended June 30, 2018:
The Effect of Derivative Investments on the Statements of Operations for the Six Months Ended June 30, 2018 | ||||||||||
Change in | ||||||||||
Unrealized | ||||||||||
Realized Gain | Appreciation | |||||||||
Derivatives not accounted for as hedging | (Loss) | (Depreciation) | ||||||||
Fund | instruments under ASC 815 | on Derivatives | on Derivatives | |||||||
Active Bond Fund | Futures - Interest Rate Contracts* | $ | (57,141 | ) | $ | 7,086 |
* Statements of Operations Location: Net realized losses on futures contracts and net change in unrealized appreciation (depreciation) on futures contracts.
For the six months ended June 30, 2018, the average quarterly notional value of outstanding derivative financial instruments was as follows:
Active Bond | ||||
Fund | ||||
Interest rate contracts: | ||||
Futures - Notional value | $ | 2,223,328 |
Portfolio securities loaned — The Funds may lend their portfolio securities. Lending portfolio securities exposes the Funds 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 Funds 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
46 |
Notes to Financial Statements (Unaudited) (Continued)
cash collateral with the Funds’ custodian. The loaned securities are secured by collateral valued at least equal, at all times, to the market value of the loaned securities plus accrued interest, if any. When the collateral falls below specified amounts the lending agent will use its best effort to obtain additional collateral on the next business day to meet required amounts under the security lending agreement. The cash collateral is reinvested by the Funds’ custodian into an approved short-term investment vehicle. The approved short-term investment vehicle is subject to market risk.
As of June 30, 2018, the following Funds loaned securities and received collateral as follows:
Market | Market | |||||||||||||
Value of | Value of | |||||||||||||
Securities | Collateral | Net | ||||||||||||
Fund | Security Type | Loaned* | Received** | Amount*** | ||||||||||
Aggressive ETF Fund | Exchange-Traded Funds | $ | 1,382,465 | $ | 1,411,885 | $ | 29,420 | |||||||
Conservative ETF Fund | Exchange-Traded Funds | 1,172,551 | 1,198,532 | 25,981 | ||||||||||
Moderate ETF Fund | Exchange-Traded Funds | 832,739 | 851,078 | 18,339 |
* | The remaining contractual maturity is overnight for all securities. |
** | Gross amount of recognized liabilities for securities lending included in the Statements of Assets and Liabilities. |
*** | Net amount represents the net amount payable due to the borrower in the event of default. |
All cash collateral is received, held, and administered by the Funds’ custodian for the benefit of the lending Fund in its custody account or other account established for the purpose of holding collateral in cash equivalents.
Funds participating in securities lending receive compensation in the form of fees. Securities lending income is derived from lending long securities from the Funds to creditworthy approved borrowers at rates that are determined based on daily trading volumes, float, short-term interest rates and market liquidity and is shown net of fees on the Statements of Operations. When a Fund lends securities, it retains the interest or dividends on the investment of any cash received as collateral, and the Fund continues to receive interest or dividends on the loaned securities.
Unrealized gain or loss on the market value of the loaned securities that may occur during the term of the loan is recognized by the Fund. The Fund has the right under the lending agreement to recover any loaned securities from the borrower on demand.
When-issued or delayed delivery transactions — Each Fund may purchase or sell securities on a when-issued or delayed delivery basis. These transactions involve a commitment by the Fund to purchase or sell securities for a predetermined price or yield, with payment and delivery taking place beyond the customary settlement period. When delayed delivery purchases are outstanding, the Fund will set aside liquid assets in an amount sufficient to meet the purchase price. When purchasing a security on a delayed delivery basis, the Fund assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations, and takes such fluctuations into account when determining NAV. The Fund may dispose of or renegotiate a delayed delivery transaction after it is entered into, and may sell when-issued securities before they are delivered, which may result in a capital gain or loss. When the Fund has sold a security on a delayed delivery basis, the Fund does not participate in future gains and losses with respect to the security.
Share valuation — The NAV per share of each Fund is calculated daily by dividing the total value of a Fund’s assets, less liabilities, by its number of outstanding shares.
Investment income — Dividend income from securities is recognized on the ex-dividend date, net of foreign withholding taxes, if any, which are reduced by any amounts reclaimable by the Funds, where applicable. Interest income from securities is recorded on the basis of interest accrued, premium amortized and discount accreted.
47 |
Notes to Financial Statements (Unaudited) (Continued)
Realized gains and losses resulting from principal paydowns on mortgage-backed and asset-backed securities are included in interest income. Market discounts, original issue discount and market premiums on debt securities are accreted/amortized to interest income over the life of the security with a corresponding adjustment in the cost basis of that security.
Distributions to shareholders — Each Fund intends to distribute to its shareholders substantially all of its income and capital gains. Each Fund declares and distributes net investment income, if any, annually as a dividend to shareholders. Each Fund makes distributions of capital gains, if any, at least annually, net of applicable capital loss carryforwards. Income distributions and capital gain distributions are determined in accordance with income tax regulations. Recognition of the Funds’ net investment income from investments in underlying funds is affected by the timing of dividend declarations by the underlying funds.
Allocations — Expenses not directly billed to a Fund are allocated proportionally among all the Funds in the Trust, and, if applicable, Touchstone Funds Group Trust, Touchstone Institutional Funds Trust and Touchstone Strategic Trust (collectively with the Trust, “Touchstone Fund Complex”), daily in relation to net assets of each Fund or another reasonable measure.
Security transactions — Security transactions are reflected for financial reporting purposes as of the trade date. Realized gains and losses on sales of portfolio securities are calculated using the identified cost 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. Investment Transactions
Investment transactions (excluding short-term investments and U.S. Government securities) were as follows for the six months ended June 30, 2018:
Active Bond | Balanced | Bond | Common Stock | |||||||||||||
Fund | Fund | Fund | Fund | |||||||||||||
Purchases of investment securities | $ | 12,842,862 | $ | 1,347,982 | $ | 22,610,105 | $ | 7,837,596 | ||||||||
Proceeds from sales and maturities | $ | 6,466,548 | $ | 574,170 | $ | 13,331,715 | $ | 14,861,287 |
Large Cap | Small | |||||||||||||||
Focused | Core Equity | Company | Aggressive | |||||||||||||
Fund | Fund | Fund | ETF Fund | |||||||||||||
Purchases of investment securities | $ | 3,267,173 | $ | 2,769,946 | $ | 18,160,953 | $ | 1,934,755 | ||||||||
Proceeds from sales and maturities | $ | 6,295,195 | $ | 6,651,051 | $ | 23,323,499 | $ | 2,449,864 |
Conservative | Moderate | |||||||||||||||
ETF Fund | ETF Fund | |||||||||||||||
Purchases of investment securities | $ | 5,513,257 | $ | 1,834,092 | ||||||||||||
Proceeds from sales and maturities | $ | 1,876,626 | $ | 2,635,751 |
For the six months ended June 30, 2018, purchases and proceeds from sales and maturities in U.S. Government Securities were $109,381,836 and $113,848,517, respectively, for the Active Bond Fund, $15,927,185 and $16,732,262, respectively, for the Balanced Fund, and $119,069,394 and $125,354,191, respectively, for the Bond Fund.
48 |
Notes to Financial Statements (Unaudited) (Continued)
4. Transactions with Affiliates and Other Related Parties
Certain officers of the Trust are also officers of Touchstone Advisors, Inc. (the “Advisor”),Touchstone Securities, Inc. (the “Underwriter”), or The Bank of New York Mellon, the Sub-Administrator to the Funds, and BNY Mellon Investment Servicing (U.S.) Inc., the Transfer Agent to the Funds (collectively referenced to herein as “BNY Mellon”). Such officers receive no compensation from the Trust. The Advisor and the Underwriter are each wholly-owned, indirect subsidiaries of Western & Southern.
On behalf of the Funds, the Advisor pays each Independent Trustee a quarterly retainer plus additional retainers to the Lead Independent Trustee and the chairs of each standing committee. Interested Trustees do not receive compensation from the Funds. Each Independent Trustee also receives compensation for each board meeting and committee meeting attended. Each standing committee chair receives additional compensation for each committee meeting that he or she oversees. The Advisor is reimbursed by the Funds for the Independent Trustees’ compensation and out-of-pocket expenses relating to their services. The Funds accrued Trustee-related expenses of $66,446 for the six months ended June 30, 2018.
MANAGEMENT & EXPENSE LIMITATION AGREEMENTS
The Advisor provides general investment supervisory services for the Funds, under terms of an advisory agreement (the “Advisory Agreement”). Under the Advisory Agreement, each Fund pays the Advisor a fee, which is computed and accrued daily and paid monthly, at an annual rate based on average daily net assets of each Fund as shown in the table below.
Active Bond Fund | 0.40% on the first $300 million |
0.35% on such assets over $300 million | |
Balanced Fund | 0.55% on all assets |
Bond Fund | 0.40% on all assets |
Common Stock Fund | 0.50% on the first $200 million |
Small Company Fund | 0.45% on the next $300 million |
0.40% on such assets over $500 million | |
Focused Fund | 0.70% on the first $100 million |
0.65% on the next $400 million | |
0.60% on such assets over $500 million | |
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% on such assets over $300 million | |
Aggressive ETF Fund | 0.25% on the first $50 million |
Conservative ETF Fund | 0.23% on the next $50 million |
Moderate ETF Fund | 0.20% on such assets over $100 million |
The Advisor has entered into investment sub-advisory agreements with the following parties (each, a “Sub-Advisor”):
Fort Washington Investment Advisors, Inc.* | Wilshire Associates Incorporated |
Active Bond Fund | Aggressive ETF Fund |
Balanced Fund | Conservative ETF Fund |
Bond Fund | Moderate ETF Fund |
Common Stock Fund | |
Focused Fund | |
Small Company Fund | |
The London Company | |
Large Cap Core Equity Fund |
* | Affiliate of the Advisor and wholly-owned subsidiary of Western & Southern. |
49 |
Notes to Financial Statements (Unaudited) (Continued)
The Advisor, not the Funds, pays sub-advisory fees to each Sub-Advisor.
The Advisor entered into an expense limitation agreement (the “Expense Limitation Agreement”) to contractually limit the annual operating expenses of the Funds, excluding: dividend and interest expenses relating to short sales; interest; taxes; brokerage commissions and other transaction costs; portfolio transaction and investment related expenses, including expenses associated with the Funds’ liquidity provider; other expenditures which are capitalized in accordance with U.S. GAAP; the cost of “Acquired Fund Fees and Expenses”, if any; and other extraordinary expenses not incurred in the ordinary course of business. The maximum annual 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 separately waive advisory fees and administration fees, and to reimburse expenses in order to maintain the following expense limitations for the Funds:
Fund | ||||
Active Bond Fund | 0.97 | % | ||
Balanced Fund | 0.85 | % | ||
Bond Fund | 0.67 | % | ||
Common Stock Fund | 0.73 | % | ||
Focused Fund | 1.21 | % | ||
Large Cap Core Equity Fund | 1.06 | % | ||
Small Company Fund | 0.76 | % | ||
Aggressive ETF Fund | 0.75 | % | ||
Conservative ETF Fund | 0.75 | % | ||
Moderate ETF Fund | 0.75 | % |
These expense limitations will remain in effect for all Funds through at least April 29, 2019, except for the Balanced Fund, Bond Fund, Common Stock Fund and Small Company Fund, which will remain in effect until at least October 27, 2019.
During the six months ended June 30, 2018, the Advisor or its affiliates waived investment advisory fees, administration fees or shareholder servicing fees of the Funds as follows:
Investment | Administration | Shareholder | ||||||||||||||
Advisory | Fees | Servicing | ||||||||||||||
Fund | Fees Waived | Waived | Fees Waived | Total | ||||||||||||
Balanced Fund | $ | 5,171 | $ | 12,727 | $ | — | $ | 17,898 | ||||||||
Bond Fund | — | 24,857 | — | 24,857 | ||||||||||||
Common Stock Fund | — | 21,985 | — | 21,985 | ||||||||||||
Large Cap Core Equity Fund | — | 8,377 | — | 8,377 | ||||||||||||
Small Company Fund | — | 3,443 | — | 3,443 | ||||||||||||
Aggressive ETF Fund | — | 13,507 | — | 13,507 | ||||||||||||
Conservative ETF Fund | — | 13,521 | 684 | 14,205 | ||||||||||||
Moderate ETF Fund | — | 9,896 | — | 9,896 |
Under the terms of the Expense Limitation Agreement, the Advisor is entitled to recover, subject to approval by the Funds’ Board, such amounts waived or reimbursed for a period of up to three years from the date on which the Advisor reduced its compensation or assumed expenses for the Funds. No recoupment will occur unless a Fund’s operating expenses are below the expense limitation amount in effect at the time of the waiver or reimbursement and the Fund’s current expense limitation.
50 |
Notes to Financial Statements (Unaudited) (Continued)
As of June 30, 2018, the Advisor may seek recoupment of previously waived fees and reimbursed expenses as follows:
Expiration | Expiration | Expiration | Expiration | |||||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||||||
Fund | 2018 | 2019 | 2020 | 2021 | Total | |||||||||||||||
Balanced Fund | $ | — | $ | — | $ | 21,573 | $ | 17,898 | $ | 39,471 | ||||||||||
Bond Fund | — | — | 13,965 | 24,857 | 38,822 | |||||||||||||||
Common Stock Fund | — | — | — | 21,985 | 21,985 | |||||||||||||||
Focused Fund | 22,381 | — | — | — | 22,381 | |||||||||||||||
Large Cap Core Equity Fund | 21,023 | 30,423 | 30,024 | 8,377 | 89,847 | |||||||||||||||
Small Company Fund | — | — | 538 | 3,443 | 3,981 | |||||||||||||||
Aggressive ETF Fund | 17,403 | 28,846 | 29,081 | 13,507 | 88,837 | |||||||||||||||
Conservative ETF Fund | 17,387 | 30,025 | 26,022 | 13,521 | 86,955 | |||||||||||||||
Moderate ETF Fund | 13,686 | 16,916 | 22,530 | 9,896 | 63,028 |
For the six months ended June 30, 2018, the Advisor is eligible to recoup previously waived fees or reimbursed expenses from the Focused Fund of $6,150.
ADMINISTRATION AGREEMENT
The Advisor entered into an Administration 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 SEC and state securities authorities, as well as materials for meetings of the Board; calculating the daily NAV per share; and maintaining the financial books and records of each Fund.
For its services, the Advisor’s annual administrative fee is:
0.145% on the first $20 billion of the aggregate average daily net assets;
0.11% on the next $10 billion of aggregate average daily net assets;
0.09% on the next $10 billion of aggregate average daily net assets; and
0.07% on the aggregate average daily net assets over $40 billion.
The fee is computed and allocated among the Touchstone Fund Complex (excluding Touchstone Institutional Funds Trust) on the basis of relative daily net assets.
The Advisor has engaged BNY Mellon as the Sub-Administrator to the Trust. BNY Mellon provides administrative and accounting services to the Trust and is compensated directly by the Advisor, not the Trust.
TRANSFER AGENT AGREEMENT
Under the terms of the Transfer Agent Agreement between the Trust and BNY Mellon, BNY Mellon 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, BNY Mellon receives a monthly fee from each Fund. In addition, each Fund pays out-of-pocket expenses incurred by BNY Mellon, including, but not limited to, postage and supplies.
The Funds may reimburse the Advisor for fees paid to intermediaries such as banks, broker-dealers, financial advisors or other financial institutions for sub-transfer agency, sub-administration and other services provided to investors whose shares of record are held in omnibus, other group accounts, retirement plans or accounts traded through registered securities clearing agents. These fees may vary based on, for example, the nature of
51 |
Notes to Financial Statements (Unaudited) (Continued)
services provided, but generally range up to 0.15% of the assets of the class serviced or maintained by the intermediary or up to $22 per sub-account maintained by the intermediary.
PLANS OF DISTRIBUTION
The Trust has adopted a Shareholder Services Plan under which shares of each Fund, except for the Balanced Fund, Bond Fund, Common Stock Fund and Small Company Fund, may directly or indirectly bear expenses for shareholder services provided. Each Fund will incur or reimburse expenses for shareholder services at an annual rate not to exceed 0.25% of the average daily net assets.
UNDERWRITING AGREEMENT
The Underwriter acts as exclusive agent for the distribution of the Funds’ shares. The Underwriter receives no compensation under this agreement.
INTERFUND TRANSACTIONS
The Funds may engage in purchase and sale transactions with funds that have a common investment advisor (or affiliated investment advisors), common Trustees and/or common Officers. During the six months ended June 30, 2018, the Funds did not engage in any Rule 17a-7 transactions as defined under the 1940 Act.
5. Liquidity
Interfund Lending — Pursuant to an Exemptive Order issued by the SEC on March 28, 2017, the Funds, along with certain other funds in the Touchstone Fund Complex, may participate in an interfund lending program. The interfund lending program provides an alternate credit facility that allows the Funds to lend to or borrow from other participating funds in the Touchstone Fund Complex, subject to the conditions of the Exemptive Order. The Funds may not borrow under the facility for leverage purposes and the loans’ duration may be no more than 7 days.
During the six months ended June 30, 2018, the program was not utilized.
6. Federal Tax Information
Federal Income Tax — It is each Fund’s policy to continue to comply with the special provisions of the Internal Revenue Code applicable to regulated investment companies. As provided therein, in any fiscal year in which a Fund so qualifies and distributes at least 90% of its investment company taxable income, the Fund (but not the shareholders) will be relieved of federal income tax on the income distributed. It is each Fund’s policy to distribute all of its taxable income and accordingly, no provision for income taxes has been made.
The tax character of distributions paid for the years ended December 31, 2017 and 2016 is as follows:
Active Bond | Balanced | Bond | ||||||||||||||||||||||
Fund | Fund | Fund | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
From ordinary income | $ | 1,484,379 | $ | 1,153,828 | $ | — | $ | 215,074 | $ | — | $ | 1,007,643 | ||||||||||||
From long-term capital gains | — | — | — | 234,823 | — | — | ||||||||||||||||||
Return of Capital | — | — | — | 23,950 | — | 2,706 | ||||||||||||||||||
Total distributions | $ | 1,484,379 | $ | 1,153,828 | $ | — | $ | 473,847 | $ | — | $ | 1,010,349 |
52 |
Notes to Financial Statements (Unaudited) (Continued)
Common Stock | Focused | Large Cap | ||||||||||||||||||||||
Fund | Fund | Core Equity Fund | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
From ordinary income | $ | 17,544 | $ | 2,612,001 | $ | 319,068 | $ | 430,606 | $ | 215,126 | $ | 266,434 | ||||||||||||
From long-term capital gains | 944,237 | 12,124,363 | — | 10,814,833 | 490,437 | 3,215,261 | ||||||||||||||||||
Total distributions | $ | 961,781 | $ | 14,736,364 | $ | 319,068 | $ | 11,245,439 | $ | 705,563 | $ | 3,481,695 |
Small | Aggressive | Conservative | Moderate | |||||||||||||||||||||||||||||
Company Fund | ETF Fund | ETF Fund | ETF Fund | |||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||
From ordinary income | $ | 193,590 | $ | 504,105 | $ | 351,189 | $ | 291,966 | $ | 492,618 | $ | 264,086 | $ | 608,441 | $ | 412,823 | ||||||||||||||||
From long-term capital gains | 1,648,040 | 4,199,039 | — | — | 1,630,306 | 188,777 | 3,580,320 | 1,606,591 | ||||||||||||||||||||||||
Total distributions | $ | 1,841,630 | $ | 4,703,144 | $ | 351,189 | $ | 291,966 | $ | 2,122,924 | $ | 452,863 | $ | 4,188,761 | $ | 2,019,414 |
The following information is computed on a tax basis for each item as of December 31, 2017:
Balanced | Bond | |||||||||||
Active Bond Fund | Fund | Fund | ||||||||||
Tax cost of portfolio investments | $ | 57,226,291 | $ | 15,949,862 | $ | 47,207,179 | ||||||
Gross unrealized appreciation on investments | 706,837 | 1,842,520 | 424,224 | |||||||||
Gross unrealized depreciation on investments | (434,554 | ) | (80,352 | ) | (299,016 | ) | ||||||
Net unrealized appreciation (depreciation) on investments | 272,283 | 1,762,168 | 125,208 | |||||||||
Gross unrealized appreciation on derivatives and foreign currency transactions | 9 | — | 3 | |||||||||
Accumulated capital losses and other losses | (1,033,239 | ) | — | (2,658,807 | ) | |||||||
Undistributed ordinary income | 1,215,720 | 249,569 | 1,019,953 | |||||||||
Undistributed long-term capital gains | — | 4,675,761 | — | |||||||||
Accumulated earnings (deficit) | $ | 454,773 | $ | 6,687,498 | $ | (1,513,643 | ) |
Common Stock | Focused | Large Cap | ||||||||||
Fund | Fund | Core Equity Fund | ||||||||||
Tax cost of portfolio investments | $ | 134,898,463 | $ | 50,544,771 | $ | 27,038,665 | ||||||
Gross unrealized appreciation on investments | 24,822,038 | 14,208,608 | 7,270,800 | |||||||||
Gross unrealized depreciation on investments | (1,185,866 | ) | (1,653,641 | ) | (271,963 | ) | ||||||
Net unrealized appreciation (depreciation) on investments | 23,636,172 | 12,554,967 | 6,998,837 | |||||||||
Net unrealized appreciation (depreciation) on foreign currency | — | (154 | ) | — | ||||||||
Undistributed ordinary income | 3,054,818 | 272,619 | 258,516 | |||||||||
Undistributed long-term capital gains | 75,197,220 | 1,170,443 | 816,434 | |||||||||
Accumulated earnings (deficit) | $ | 101,888,210 | $ | 13,997,875 | $ | 8,073,787 |
Small Company | Aggressive | Conservative | Moderate | |||||||||||||
Fund | ETF Fund | ETF Fund | ETF Fund | |||||||||||||
Tax cost of portfolio investments | $ | 54,452,288 | $ | 17,357,156 | $ | 15,295,743 | $ | 20,811,404 | ||||||||
Gross unrealized appreciation on investments | 17,324,699 | 3,169,188 | 1,603,036 | 2,787,155 | ||||||||||||
Gross unrealized depreciation on investments | (1,706,549 | ) | (28,338 | ) | (22,469 | ) | (67,127 | ) | ||||||||
Net unrealized appreciation (depreciation) on investments | 15,618,150 | 3,140,850 | 1,580,567 | 2,720,028 | ||||||||||||
Undistributed ordinary income | 1,585,442 | 587,404 | 566,839 | 712,191 | ||||||||||||
Undistributed long-term capital gains | 6,171,747 | 268,635 | 45,000 | 317,080 | ||||||||||||
Accumulated earnings (deficit) | $ | 23,375,339 | $ | 3,996,889 | $ | 2,192,406 | $ | 3,749,299 |
The difference between the tax cost of portfolio investments and the financial statement cost is primarily due to wash sale loss deferrals.
53 |
Notes to Financial Statements (Unaudited) (Continued)
As of December 31, 2017 the Funds had the following capital loss carryforwards for federal income tax purposes:
No | No | |||||||||||
Expiration | Expiration | |||||||||||
Short Term | Long Term | Total | ||||||||||
Active Bond Fund | $ | — | $ | 1,020,157 | $ | 1,020,157 | ||||||
Bond Fund | 866,063 | 1,792,744 | 2,658,807 |
The capital loss carryforwards may be utilized in future years to offset net realized capital gains, if any, prior to distributing such gains to shareholders.
Under current laws, certain capital losses realized after October 31 and ordinary losses realized after December 31 may be deferred (and certain ordinary losses after October and/or December 31 may be deferred) and treated as occurring on the first day of the following fiscal year. For the year ended December 31, 2017, the Funds did not elect to defer any losses.
The Funds have analyzed their tax positions taken on federal income tax returns for all open tax years (tax years ended December 31, 2014 through 2017) and have concluded that no provision for income tax is required in their financial statements.
As of June 30, 2018, the Trust had the following federal tax cost resulting in net unrealized appreciation (depreciation) as follows:
Gross | Gross | Gross | Gross | |||||||||||||||||||||
Unrealized | Unrealized | Unrealized | Unrealized | Net | ||||||||||||||||||||
Federal | Appreciation | Depreciation | Appreciation | Depreciation | Unrealized | |||||||||||||||||||
Tax | on | on | on | on | Appreciation | |||||||||||||||||||
Fund | Cost | Investments | Investments | Other* | Other* | (Depreciation) | ||||||||||||||||||
Active Bond Fund | $ | 56,579,176 | $ | 248,241 | $ | (971,158 | ) | $ | — | $ | — | $ | (722,917 | ) | ||||||||||
Balanced Fund | 15,662,964 | 2,159,886 | (443,767 | ) | — | (4 | ) | 1,716,115 | ||||||||||||||||
Bond Fund | 44,959,475 | 43,059 | (761,160 | ) | — | (27 | ) | (718,128 | ) | |||||||||||||||
Common Stock Fund | 125,474,267 | 27,773,877 | (4,914,560 | ) | — | — | 22,859,317 | |||||||||||||||||
Focused Fund | 46,582,731 | 14,479,337 | (2,204,231 | ) | — | (261 | ) | 12,274,845 | ||||||||||||||||
Large Cap Core Equity Fund | 23,997,927 | 5,629,317 | (265,777 | ) | — | — | 5,363,540 | |||||||||||||||||
Small Company Fund | 53,608,695 | 17,585,918 | (621,147 | ) | — | — | 16,964,771 | |||||||||||||||||
Aggressive ETF Fund | 18,268,984 | 2,636,515 | (135,907 | ) | — | — | 2,500,608 | |||||||||||||||||
Conservative ETF Fund | 20,690,540 | 1,295,613 | (123,827 | ) | — | — | 1,171,786 | |||||||||||||||||
Moderate ETF Fund | 20,958,861 | 2,280,188 | (296,233 | ) | — | — | 1,983,955 |
* | Other includes Foreign Currency Transactions. |
7. Commitments and Contingencies
The Funds indemnify the Trust’s officers and Trustees for certain liabilities that might arise from their performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds.
8. Principal Risks
Risks Associated with Foreign Investments — Some of the Funds may invest in the securities of foreign issuers. Investing in securities issued by companies whose principal business activities are outside the U.S. may involve significant risks not present in domestic investments. For example, there is generally less publicly available information about foreign companies, particularly those not subject to the disclosure and reporting requirements of the U.S. securities laws. Foreign issuers are generally not bound by uniform accounting, auditing, and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers. Investments
54 |
Notes to Financial Statements (Unaudited) (Continued)
in foreign securities also involve the risk of possible adverse changes in investment or exchange control regulations, expropriation or confiscatory taxation, limitations on the removal of funds or other assets of a Fund, political or financial instability or diplomatic and other developments which could affect such investments. Foreign stock markets, while growing in volume and sophistication, are generally not as developed as those in the U.S., and securities of some foreign issuers (particularly those located in developing countries) may be less liquid and more volatile than securities of comparable U.S. companies. In general, there is less overall governmental supervision and regulation of foreign securities markets, broker-dealers, and issuers than in the U.S.
Risks Associated with Concentration — Certain Funds may invest a high percentage of their assets in specific sectors of the market in order to achieve a potentially greater investment return. As a result, these Funds may be more susceptible to economic, political, and regulatory developments in a particular sector of the market, positive or negative, and may experience increased volatility on the Funds’ NAVs and magnified effect on the total return.
Risks Associated with Credit — An issuer may be unable to make timely payments of either principal or interest. This may cause the issuer’s securities to decline in value. Credit risk is particularly relevant to those Funds that invest a significant amount of their assets in junk bonds or lower-rated securities.
Risks Associated with Interest Rate Changes — As interest rates rise, the value of fixed-income securities a Fund owns will likely decrease. The price of debt securities is generally linked to the prevailing market interest rates. In general, when interest rates rise, the price of debt securities falls, and when interest rates fall, the price of debt securities rises. The price volatility of a debt security also depends on its maturity. Longer-term securities are generally more volatile, so the longer the average maturity or duration of these securities, the greater their price risk. Duration is a measure of the expected life, taking into account any prepayment or call features of the security, that is used to determine the price sensitivity of the security for a given change in interest rates. Specifically, duration is the change in the value of a fixed-income security that will result from a 1% change in interest rates, and generally is stated in years. For example, as a general rule a 1% rise in interest rates means a 1% fall in value for every year of duration. Maturity, on the other hand, is the date on which a fixed-income security becomes due for payment of principal. The negative impact on fixed income securities if interest rates increase as a result could negatively impact a Fund’s NAV.
Please see the Funds’ prospectus for a complete discussion of these and other risks.
9. Reorganizations
The shareholders of the Former Sentinel Funds (the “Reorganizing Fund”), each a series of Sentinel Variable Products Trust, approved an Agreement and Plan of Reorganization providing for the transfer of all assets and liabilities of each Reorganizing Fund to the corresponding Touchstone Fund as noted below. The Balanced Fund, Bond Fund, Common Stock Fund and Small Company Fund, each a new series of the Trust, assumed the financial and performance history of the respective Reorganizing Fund. The tax-free mergers took place on October 27, 2017.
Shares | ||||||||||
Reorganizing Funds | Touchstone Funds | Net Assets | Outstanding | |||||||
Sentinel Variable Products Balanced Fund | Balanced Fund | $ | 17,335,447 | 1,196,835 | ||||||
Sentinel Variable Products Bond Fund | Bond Fund | 47,002,432 | 4,927,906 | |||||||
Sentinel Variable Products Common Stock Fund | Common Stock Fund | 157,774,597 | 8,668,827 | |||||||
Sentinel Variable Products Small Company Fund | Small Company Fund | 68,759,207 | 4,596,838 |
55 |
Notes to Financial Statements (Unaudited) (Continued)
10. Subsequent Events
Subsequent events occurring after the date of this report have been evaluated for potential impact to this report through the date the financial statements were issued. There were no subsequent events that necessitated recognition or disclosure in the Funds’ financial statements.
56 |
Proxy Voting Guidelines
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 is available as an appendix to the most recent Statement of Additional Information, which can be obtained without charge by calling toll free 1.800.543.0407 or by visiting the Touchstone website at TouchstoneInvestments.com or on the Securities and Exchange Commission’s (the Commission) website at sec.gov. Information regarding how those proxies were voted during the most recent twelve-month period ended June 30 is also available without charge by calling toll free 1.800.543.0407 or on the Commission’s website at 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; or (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; shareholder servicing fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2018 through June 30, 2018).
Actual Expenses
The first line of the table below for each Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the six months ended June 30, 2018” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below for each Fund 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.
Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table below for each Fund is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
57 |
Other Items (Unaudited) (Continued)
Expenses | ||||||||||||||||
Net Expense | Beginning | Ending | Paid During | |||||||||||||
Ratio | Account | Account | the Six Months | |||||||||||||
Annualized | Value | Value | Ended | |||||||||||||
June 30, | January 1, | June 30, | June 30, | |||||||||||||
2018 | 2018 | 2018 | 2018* | |||||||||||||
Touchstone Active Bond Fund | ||||||||||||||||
Actual | 0.88 | % | $ | 1,000.00 | $ | 980.20 | $ | 4.32 | ||||||||
Hypothetical | 0.88 | % | $ | 1,000.00 | $ | 1,020.43 | $ | 4.41 | ||||||||
Touchstone Balanced Fund | ||||||||||||||||
Actual | 0.85 | % | $ | 1,000.00 | $ | 1,001.40 | $ | 4.22 | ||||||||
Hypothetical | 0.85 | % | $ | 1,000.00 | $ | 1,020.58 | $ | 4.26 | ||||||||
Touchstone Bond Fund | ||||||||||||||||
Actual | 0.67 | % | $ | 1,000.00 | $ | 976.00 | $ | 3.28 | ||||||||
Hypothetical | 0.67 | % | $ | 1,000.00 | $ | 1,021.47 | $ | 3.36 | ||||||||
Touchstone Common Stock Fund | ||||||||||||||||
Actual | 0.73 | % | $ | 1,000.00 | $ | 1,012.30 | $ | 3.64 | ||||||||
Hypothetical | 0.73 | % | $ | 1,000.00 | $ | 1,021.17 | $ | 3.66 | ||||||||
Touchstone Focused Fund | ||||||||||||||||
Actual | 1.21 | % | $ | 1,000.00 | $ | 1,017.50 | $ | 6.05 | ||||||||
Hypothetical | 1.21 | % | $ | 1,000.00 | $ | 1,018.79 | $ | 6.06 | ||||||||
Touchstone Large Cap Core Equity Fund | ||||||||||||||||
Actual | 1.06 | % | $ | 1,000.00 | $ | 989.60 | $ | 5.23 | ||||||||
Hypothetical | 1.06 | % | $ | 1,000.00 | $ | 1,019.54 | $ | 5.31 | ||||||||
Touchstone Small Company Fund | ||||||||||||||||
Actual | 0.76 | % | $ | 1,000.00 | $ | 1,063.60 | $ | 3.89 | ||||||||
Hypothetical | 0.76 | % | $ | 1,000.00 | $ | 1,021.03 | $ | 3.81 | ||||||||
Touchstone Aggressive ETF Fund** | ||||||||||||||||
Actual | 0.75 | % | $ | 1,000.00 | $ | 1,000.00 | $ | 3.72 | ||||||||
Hypothetical | 0.75 | % | $ | 1,000.00 | $ | 1,021.08 | $ | 3.76 | ||||||||
Touchstone Conservative ETF Fund** | ||||||||||||||||
Actual | 0.75 | % | $ | 1,000.00 | $ | 994.00 | $ | 3.71 | ||||||||
Hypothetical | 0.75 | % | $ | 1,000.00 | $ | 1,021.08 | $ | 3.76 | ||||||||
Touchstone Moderate ETF Fund** | ||||||||||||||||
Actual | 0.75 | % | $ | 1,000.00 | $ | 996.70 | $ | 3.71 | ||||||||
Hypothetical | 0.75 | % | $ | 1,000.00 | $ | 1,021.08 | $ | 3.76 |
* | Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect one-half year period). |
** | The annualized expense ratio for the Fund does not include fees and expenses of the underlying funds in which the Fund invests. |
58 |
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
· | We collect only the information we need to service your account and administer our business. |
· | We are committed to keeping your information confidential and we place strict limits and controls on the use and sharing of your information. |
· | We make every effort to ensure the accuracy of your information. |
We Collect the Following Nonpublic Personal Information About You:
· | 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 |
· | 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
· | We restrict access to nonpublic personal information about you to authorized employees who need the information to administer your business. |
· | We maintain physical, electronic and procedural safeguards that comply with federal standards to protect this information. |
· | 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. |
· | 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 Strategic Trust, Touchstone Variable Series Trust, Touchstone Institutional Funds Trust, Touchstone Securities, Inc.,* and W&S Brokerage Services, Inc.
* Touchstone Securities, Inc. serves as the underwriter to the Touchstone Funds.
A Member of Western & Southern Financial Group®
The Privacy Protection Policy is not part of the Semi-Annual Report.
59 |
TSF-1006-TVST-SAR-1806
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. |
(b) | Not applicable. |
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.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. Controls and Procedures.
(a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
(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 (17 CFR 270.30a-3(d))) that occurred during the registrant’s last fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13. Exhibits.
(a)(1) | Not applicable. |
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
(a)(3) | Not applicable. |
(a)(4) | Not applicable. |
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
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 Variable Series Trust
By (Signature and Title)* /s/ Jill T. McGruder
Jill T. McGruder, President
(principal executive officer)
Date August 24, 2018
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
(principal executive officer)
Date August 24, 2018
By (Signature and Title)* /s/ Terrie A. Wiedenheft
Terrie A. Wiedenheft, Controller and Treasurer
(principal financial officer)
Date August 24, 2018
* Print the name and title of each signing officer under his or her signature.