Distinctively Active

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What is Distinctively Active?

At Touchstone Investments, we recognize that not all mutual fund companies are created equal. Our commitment to being Distinctively Active means the employment of a fully integrated and rigorous process for identifying and partnering with asset managers who sub-advise our mutual funds and advocating a robust approach to portfolio construction that either uses active strategies as a standalone or serves as a complement to passive strategies. That is the power of Distinctively Active.


Active Share

Active share is a relatively new metric. It measures the proportion of a fund's portfolio holdings that are different than its relevant benchmark. If a fund is 100% like the benchmark in securities and weights that fund would be deemed to have 0% active share. Conversely, a fund with holdings that differ entirely from the benchmark would be given a score of 100%.

Why is this important? Funds that closely resemble their benchmark will find it difficult, if not impossible, to outperform that benchmark. Finding that fund that has the wherewithal to outperform its benchmark is becoming increasingly difficult. As the following chart illustrates, the percent of assets in U.S. Equity Mutual Funds with high “active share” has declined precipitously.

A high degree of Active Share does not assure outperformance of a fund relative to its benchmark index.

Steve Graziano 

Percent of Assets in U.S. Equity Mutual Funds with Active Share >80%

 

At Touchstone, Our Equity Funds Have Concentrated, High-Conviction Portfolios

Touchstone’s rigorous due diligence process has led us to managers whose portfolios tend to be concentrated and are generally different than their respective benchmark. These characteristics are an outgrowth of independent thought and deep fundamental analysis. There are no assurances that any strategy or investment approach will meet its objectives.

 

Let Active Share Work For You

 

 

Dec. 2016
Touchstone Securities, Inc., has partnered with Professor Martijn Cremers to provide consulting services. Touchstone and Professor Martijn Cremers are independent of each other.

Active Share measures the percentage of the Fund's holdings that differ from those of the benchmark. It is calculated by taking the sum of the absolute difference between all of the holdings and weights in the portfolio and those of the benchmark holdings and weights and dividing the result by two. Index performance is not indicative of fund performance. Investing in an index is not possible. Active Share is not a performance measurement. There are no assurances that any strategy or investment approach will meet its objectives. This information should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Past performance is not indicative of future results.

Please consider the investment objectives, risks, charges and expenses of the fund carefully before investing. The prospectus and the summary prospectus contain this and other information about the fund. To obtain a prospectus or a summary prospectus, contact your financial advisor or download and/or request one at TouchstoneInvestments.com/literature-center or call Touchstone at 800.638.8194. Please read the prospectus and/or summary prospectus carefully before investing.

Investment return and principal value of an investment in a Fund will fluctuate so that investor's shares, when redeemed, may be worth more or less than their original cost.

Investment products offered are not FDIC insured, may lose value and have no bank guarantee.

Touchstone Funds are distributed by Touchstone Securities, Inc.*

*A registered broker-dealer and member FINRA/SIPC

Touchstone is a member of Western & Southern Financial Group

© 2017 Touchstone Securities, Inc. All rights reserved.

The Touchstone Investments service mark has been registered with the U.S. Patent and Trademark Office for financial services.

TSF-2000-1612