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| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
As of Oct 28, 2026
The Touchstone Ares Credit Opportunities Fund outperformed its benchmark, the ICE BofA U.S. High Yield Constrained Index, during the third quarter of 2026, delivering a net return of -1.75% for Class A Shares (Load Waived) compared to -1.82% for the benchmark, bringing year-to-date net performance to -0.30%. Relative outperformance was driven by both asset allocation and high-yield bond security selection, with floating-rate credit providing stability amid sharp Treasury rate volatility. Conversely, the fund's equity sleeve detracted due to issuer-specific developments. Credit positioning shifted modestly as BB/Ba exposure rose to 43.7% and single-B exposure increased to 32.5%, while BBB/Baa debt dropped to 6.0% and CCC exposure held steady at 9.1% across an expanded base of 303 issuers. The broader market backdrop reflected mixed macro signals characterized by resilient economic growth and solid labor conditions countered by sticky inflation, elevated energy prices tied to Iranian geopolitical conflicts, and interest-rate volatility following a 25 basis point Federal Reserve rate hike in September. High-yield spreads remained tight by historical standards, though benchmark yield levels widened to 8.3% in bonds and 9.6% in syndicated loans following a 50 basis point parallel shift in the Treasury curve. Portfolio management maintains a neutral risk posture, balancing modest overweights in lower-rated credits against higher-quality anchors and diversified allocations across CLO debt, CLO equity, and bank loans. The management team remains disciplined, deploying capital selectively into secondary-market relative value opportunities while navigating sector dispersion stemming from technological disruption.
Employs a flexible credit mandate allocating across high-yield bonds, bank loans, and structured credit to capture attractive risk-adjusted yields while actively hedging credit and duration risks.
Management anticipates persistent issuer dispersion driven by technology disruption and macro headwinds, remaining focused on bottom-up security selection and relative value opportunities in secondary credit while preserving a neutral risk posture.
Moderate Conviction Bearish
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