| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 7.79% | -4.75% | -4.75% |
The Touchstone Balanced Fund underperformed its blended benchmark in Q1 2026, declining 4.75% as geopolitical tensions between the U.S., Israel, and Iran disrupted oil supplies through the Strait of Hormuz. This drove energy prices higher and complicated the Federal Reserve's outlook, reducing expectations for rate cuts despite mixed labor market signals. The fund's equity overweight detracted from performance, with notable weakness from overweight positions in Microsoft and Oracle within Information Technology. Fixed income also weighed on results due to negative sector allocation and interest rate positioning, though security selection was positive. The fund reduced securitized exposure while increasing investment grade corporates and maintained its modest equity overweight at 63%. Looking forward, the fund retains a risk-on posture with flexibility to add risk if markets weaken further. Management focuses on high-quality companies with pricing power while navigating ongoing uncertainty from energy volatility and softening labor conditions through disciplined security selection.
Maintain modest risk-on posture with 63% equity allocation, focusing on high-quality companies while selectively positioning in credit markets despite expensive valuations.
The Fund is positioned to navigate ongoing uncertainty and moderate growth, with flexibility to add risk if markets weaken further. While stable growth should support equities and credit, downside risks from energy volatility and a softening labor market remain, making disciplined security selection central to generating returns.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| May 4 2026 | 2026 Q1 | MSFT, ORCL | Allocation, Balanced, credit, duration, equities, fixed income, Multi-Asset | - | Balanced fund underperformed in Q1 2026 due to geopolitical oil supply disruptions and equity overweight positioning. Technology overweights in Microsoft and Oracle detracted while fixed income suffered from duration and allocation decisions. Fund maintains 63% equity allocation with focus on quality companies, positioned for moderate growth while managing energy volatility and labor market risks. |
| Jan 31 2026 | 2025 Q4 | AMAT, GOOGL, RTX | asset allocation, Balanced, Equity, fixed income, Quality, rates | - | The Fund outperformed in Q4 2025 with strong security selection driving equity outperformance and tactical fixed income positioning adding value. Management maintains a modest equity overweight with quality bias, emphasizing businesses with strong fundamentals. Despite economic resilience and optimism for 2026, elevated uncertainty from trade tensions and full valuations warrant disciplined positioning. |
| Nov 4 2025 | 2025 Q3 | DD, DE, LPLA, META, PM, SLB, TSLA | Balanced, credit, duration, Fed, Multi-Asset, Trade Policy | - | Balanced fund underperformed in Q3 despite positive equity allocation effects, hurt by security selection in Consumer Discretionary and Communication Services. Fixed income outperformed through credit positioning as spreads tightened. Fund maintains 62.5% equity weighting with quality focus, positioned for elevated uncertainty environment while benefiting from Fed rate cuts and manufacturing investment incentives. |
| Aug 2 2025 | 2025 Q2 | DD, DE, LPLA, META, PM, SLB, TSLA | Balanced, equities, Fed, fixed income, Multi-Asset, Trade Policy | - | Balanced fund underperformed in Q3 due to poor equity selection despite positive fixed income contribution. Portfolio maintains 60/40 allocation with tactical adjustments including new positions in LPL Financial and Deere. Fed rate cuts and manufacturing investment incentives provide tailwinds, but trade policy uncertainty and labor market weakness create headwinds. High-conviction security selection approach targets excess returns across market cycles. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
OilGeopolitical tensions between the U.S., Israel, and Iran led to disruptions in the Strait of Hormuz, which handles roughly 20% of global oil supply. This drove a sharp rise in crude and gasoline prices, raising concerns about broader inflation through higher transportation, food, and supply chain costs. |
Oil Energy Geopolitical Inflation Supply |
RatesRenewed inflation pressures from energy disruptions have reduced expectations for Fed rate cuts in 2026 despite mixed labor market signals. The Fed remains in a wait-and-see stance, with Treasury yields moving higher and the 10-year ending near 4.3%. |
Rates Fed Inflation Treasury Monetary Policy | |
Credit StressCredit spreads widened modestly during the quarter, though they remain historically tight. The fund maintains overweight positions in investment grade credit and securitized assets despite expensive valuations, focusing on selective bottom-up opportunities. |
Credit Spreads Investment Grade Valuations Fixed Income | |
| 2025 Q4 |
AIAI enthusiasm supported large-cap growth companies and drove technology earnings. Long-term capital investment in AI reflects demographic pressures and labor scarcity. AI-related investment pace expected to slow from exceptionally fast levels. |
Artificial Intelligence Technology Investment Growth Productivity |
ValuationsS&P 500 trading at 23x forward earnings, well above long-term average of 15.6x. Elevated valuations constrain longer-term returns and increase market sensitivity to earnings disappointments. Current levels suggest returns will depend more on earnings durability than multiple expansion. |
Multiples Earnings Risk Premium Compression | |
EarningsStrong corporate earnings drove market gains, particularly in technology and communication services. Consensus expects continued earnings growth in low-double-digit range. Much of technology-led earnings growth supported by long-term capital investment rather than leverage. |
Corporate Growth Technology Investment Durability | |
DollarU.S. dollar weakened 9.4% in 2025, providing notable tailwind for foreign assets. Dollar decline helped boost international equity returns to U.S. dollar terms, with European equities gaining 35.4% and emerging markets 33.6%. |
Currency International Tailwind Foreign Returns | |
RatesFederal Reserve cut rates three times in 2025, bringing policy rate to 3.5%-3.75%. Fed expects one more cut in 2026 while markets price in roughly two additional cuts. Higher yields have improved income potential with 10-year Treasury at 4.18%. |
Federal Reserve Policy Cuts Treasury Income | |
| 2025 Q3 |
Trade PolicyTrade policy continues to be a primary source of uncertainty for investors. While the White House has announced a handful of deals and frameworks for deals, there are still a lot of details that remain unknown, especially related to China. Questions remain around the legality of certain tariffs that utilized International Emergency Economic Powers Act authority. |
Tariffs China Uncertainty Legal Framework |
RatesThe U.S. Federal Reserve delivered its first rate cut of the year in September with a 25-basis point risk management cut. The Fed adjusted their expectations for the path of rates, forecasting two more cuts this year and one in 2026. This rate adjustment and forward guidance continue to ease financial conditions for the economy. |
Fed Rate Cuts Financial Conditions Forward Guidance Monetary Policy | |
| 2025 Q2 |
Trade PolicyTrade policy continues to be a primary source of uncertainty for investors. While the White House has announced a handful of deals and frameworks for deals, there are still a lot of details that remain unknown, especially related to China. Questions remain around the legality of certain tariffs that utilized International Emergency Economic Powers Act authority. |
Tariffs China Trade |
RatesThe U.S. Federal Reserve delivered its first rate cut of the year in September with a 25-basis point risk management cut. The Fed adjusted their expectations for the path of rates, forecasting two more cuts this year and one in 2026. This rate adjustment and forward guidance continue to ease financial conditions for the economy. |
Fed Rate Cuts Monetary Policy |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| MSFT | Overweight positions in Microsoft Corp. and Oracle Corp. (both IT sector) were notable detractors. |
| ORCL | Overweight positions in Microsoft Corp. and Oracle Corp. (both IT sector) were notable detractors. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
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| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
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| Industry | Prev Quarter % | Current Quarter % | Change |
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| No industry data available | |||
