Touchstone Balanced Fund

Investor Summary

The fund is managed by a three-person team with extensive experience: Daniel J. Carter (CFA, investment experience since 1996, joined fund management in 2017), James E. Wilhelm Jr. (senior portfolio manager since 2017), and Austin R. Kummer (CFA, sub-adviser since 2017). Fort Washington Investment Advisors serves as primary sub-adviser since October 2017. The management team has an average tenure exceeding 8 years, providing stability and continuity. Western & Southern Financial Group, established in 1888, ranks #310 on Fortune 500 with A+ BBB rating. Touchstone has grown through strategic acquisitions including 2021 AIG Life & Retirement assets ($7.5B), expanding total AUM beyond $30 billion. Previous acquisitions included Old Mutual Funds (2012) and Fifth Third Asset Management, demonstrating systematic capability building.

Fund Strategy

The Touchstone Balanced Fund seeks to provide investors with capital appreciation and current income through a diversified multi-asset portfolio. Active management is grounded in the logic that for a fund to have the opportunity to outperform its benchmark, it cannot mirror it. The fund maintains strategic allocation of approximately 60% equity securities and 40% fixed-income securities, focusing on companies with market capitalizations above $5 billion. Portfolio construction emphasizes fundamental analysis combined with active duration and yield curve management. The investment approach prioritizes established enterprises with proven business models rather than trend-following strategies. Management uses intensive due diligence processes commensurate with standards typically used by sophisticated institutional investors. The fund's philosophy recognizes that mastery of all investment disciplines is beyond the scope of any one firm, leading to strategic sub-advisor relationships with proven expertise.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
8.68%	7.26%	2.16%

Executive Summary

The Touchstone Balanced Fund delivered a 7.26% return in Q2 2026, underperforming its blended benchmark as equity security selection detracted, particularly underweight positions in Micron, AMD, and Intel within Information Technology. Economic growth remained resilient at approximately 2% GDP, supported by AI-driven capital investment and solid consumer spending, though inflation persists above the Federal Reserve's target. The Fund benefited from its equity overweight as equities significantly outperformed fixed income, with the S&P 500 gaining over 15%. Fixed income contributed positively through overweights to investment grade and high yield corporates, which benefited from tighter credit spreads. The Fund increased its target risk budget from 25% to 35%, supporting a modest increase to 64% equity exposure. Portfolio changes included exiting SS&C Technologies and Goldman Sachs while initiating positions in QXO, SAP, Blackstone, and Cencora. Looking forward, the Fund maintains its constructive stance balanced against elevated valuations across both equities and credit, emphasizing high-quality companies with durable competitive advantages while retaining flexibility to increase risk opportunistically should market weakness create more attractive valuations.

Core Thesis

The Touchstone Balanced Fund maintains a modest overweight to equities (64% vs 60% target) with emphasis on high-quality companies possessing durable competitive advantages, strong returns on capital, and pricing power, while overweighting investment grade credit, securitized products, and modestly high yield corporates within fixed income, positioning for moderate economic growth while acknowledging elevated valuations and maintaining flexibility to increase risk opportunistically should market weakness create more attractive entry points.

Forward Outlook

The Fund maintains a modest overweight to equities, reflecting a constructive outlook balanced against elevated valuations and continued policy and geopolitical uncertainty. The portfolio emphasizes high-quality companies with durable competitive advantages, strong returns on capital, and pricing power. While moderate economic growth should support the Fund's equity and credit exposures, the team continues to focus on bottom-up security selection as relative value opportunities remain limited. The Fund retains flexibility to increase risk opportunistically should market weakness create more attractive valuations.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Jul 29 2026	2026 Q2	AMD, BX, COR, GS, INTC, MU, QXO, SAP, SSNC, TSM	AI, Balanced, credit, inflation, large cap, Multi-Asset, rates, semiconductors	-	Fort Washington's Balanced Fund delivered 7.26% in Q2 2026, underperforming due to IT sector underweights in semiconductors. The Fund increased equity exposure to 64% amid AI-driven economic resilience and strong equity markets, while maintaining overweights to investment grade and high yield credit. Despite elevated valuations following a 15%+ S&P 500 rally, the manager remains constructive on moderate growth while emphasizing quality and maintaining flexibility for opportunistic deployment.
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.

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Jul 29 2026

2026 Q2

AMD, BX, COR, GS, INTC, MU, QXO, SAP, SSNC, TSM

AI, Balanced, credit, inflation, large cap, Multi-Asset, rates, semiconductors

Fort Washington's Balanced Fund delivered 7.26% in Q2 2026, underperforming due to IT sector underweights in semiconductors. The Fund increased equity exposure to 64% amid AI-driven economic resilience and strong equity markets, while maintaining overweights to investment grade and high yield credit. Despite elevated valuations following a 15%+ S&P 500 rally, the manager remains constructive on moderate growth while emphasizing quality and maintaining flexibility for opportunistic deployment.

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 Q2	AI AI-driven capital investment supported economic growth through the first half of 2026, contributing to GDP remaining near its long-term trend of approximately 2%. The Fund's equity rally was partly driven by AI-related momentum, though the manager notes elevated valuations across both equity and fixed income following the strong rally.	Capital Investment Economic Growth Technology Semiconductors
	Semiconductors The Fund experienced detraction from equity security selection in the Information Technology sector, primarily due to underweight positions in Micron, AMD, and Intel that lagged the benchmark. The Fund initiated a new position in Taiwan Semiconductor Manufacturing Co Ltd ADR during the quarter, suggesting selective engagement with semiconductor opportunities.	Memory Chip Designers Foundries Technology
	Credit Fixed income contributed positively to relative performance through sector allocation and security selection. Overweights to investment grade and high yield corporates benefited from tighter credit spreads. The Fund maintains overweights to Investment Grade Credit and modestly High Yield corporates, though the team acknowledges historically expensive credit valuations and emphasizes quality, liquidity, and attractive risk-adjusted opportunities.	Investment Grade High Yield Credit Spreads Fixed Income
	Rates The Federal Reserve maintained a restrictive stance with rates left unchanged, as new Chair Kevin Warsh emphasized price stability and reduced reliance on forward guidance, increasing uncertainty around future policy. Two-year Treasury yields pushed meaningfully higher due to sticky inflation and the Fed's hawkish tone, while longer-term rates rose more modestly. The Fund's interest rate management was largely neutral during the quarter.	Federal Reserve Treasury Yields Monetary Policy Duration
	Inflation Inflation pressures moderated but remain above the Federal Reserve's target, prompting the FOMC to maintain a restrictive stance. Higher oil prices from Middle East tensions weighed on consumers early in the quarter, and wage gains continued to lag inflation for many households, though easing geopolitical risks helped energy prices retreat.	Consumer Prices Federal Reserve Oil Wages
2026 Q1	Oil Geopolitical 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
	Rates Renewed 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 Stress Credit 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	AI AI 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
	Valuations S&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
	Earnings Strong 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
	Dollar U.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
	Rates Federal 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 Policy Trade 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
	Rates The 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 Policy Trade 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
	Rates The 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

QUARTER

THEMES

AI

AI-driven capital investment supported economic growth through the first half of 2026, contributing to GDP remaining near its long-term trend of approximately 2%. The Fund's equity rally was partly driven by AI-related momentum, though the manager notes elevated valuations across both equity and fixed income following the strong rally.

Capital Investment Economic Growth Technology Semiconductors

Semiconductors

The Fund experienced detraction from equity security selection in the Information Technology sector, primarily due to underweight positions in Micron, AMD, and Intel that lagged the benchmark. The Fund initiated a new position in Taiwan Semiconductor Manufacturing Co Ltd ADR during the quarter, suggesting selective engagement with semiconductor opportunities.

Memory Chip Designers Foundries Technology

Credit

Fixed income contributed positively to relative performance through sector allocation and security selection. Overweights to investment grade and high yield corporates benefited from tighter credit spreads. The Fund maintains overweights to Investment Grade Credit and modestly High Yield corporates, though the team acknowledges historically expensive credit valuations and emphasizes quality, liquidity, and attractive risk-adjusted opportunities.

Investment Grade High Yield Credit Spreads Fixed Income

Rates

The Federal Reserve maintained a restrictive stance with rates left unchanged, as new Chair Kevin Warsh emphasized price stability and reduced reliance on forward guidance, increasing uncertainty around future policy. Two-year Treasury yields pushed meaningfully higher due to sticky inflation and the Fed's hawkish tone, while longer-term rates rose more modestly. The Fund's interest rate management was largely neutral during the quarter.

Federal Reserve Treasury Yields Monetary Policy Duration

Inflation

Inflation pressures moderated but remain above the Federal Reserve's target, prompting the FOMC to maintain a restrictive stance. Higher oil prices from Middle East tensions weighed on consumers early in the quarter, and wage gains continued to lag inflation for many households, though easing geopolitical risks helped energy prices retreat.

Consumer Prices Federal Reserve Oil Wages

2026 Q1

Oil

Geopolitical 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

Rates

Renewed 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 Stress

Credit 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

AI

AI 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

Valuations

S&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

Earnings

Strong 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

Dollar

U.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

Rates

Federal 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 Policy

Trade 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

Rates

The 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 Policy

Tariffs China Trade

Rates

Fed Rate Cuts Monetary Policy

Date	Pitch Type	Author	Ticker	Company	Industry	Sub Industry	Bull / Bear	Exchange	Keywords	Action
No Elevator Pitches found

Date

Pitch Type

Author

Ticker

Company

Industry

Sub Industry

Bull / Bear

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Action

No Elevator Pitches found

TICKER	COMMENTARY
MU	The Fund benefited from its overweight to equities, as equities significantly outperformed fixed income during the quarter. However, equity security selection detracted from relative performance, primarily due to Information Technology (IT) sector, where underweight positions in Micron, AMD, and Intel lagged the benchmark.
AMD	The Fund benefited from its overweight to equities, as equities significantly outperformed fixed income during the quarter. However, equity security selection detracted from relative performance, primarily due to Information Technology (IT) sector, where underweight positions in Micron, AMD, and Intel lagged the benchmark.
INTC	The Fund benefited from its overweight to equities, as equities significantly outperformed fixed income during the quarter. However, equity security selection detracted from relative performance, primarily due to Information Technology (IT) sector, where underweight positions in Micron, AMD, and Intel lagged the benchmark.
SSNC	Equity changes included exiting SS&C Technologies Holdings, Inc. (Industrials sector) and Goldman Sachs Group, Inc. (Financials sector) while initiating positions in QXO, Inc. (Industrials sector), SAP SE (IT sector), Blackstone, Inc. (Financials sector), and Cencora, Inc. (Health Care sector).
GS	Equity changes included exiting SS&C Technologies Holdings, Inc. (Industrials sector) and Goldman Sachs Group, Inc. (Financials sector) while initiating positions in QXO, Inc. (Industrials sector), SAP SE (IT sector), Blackstone, Inc. (Financials sector), and Cencora, Inc. (Health Care sector).
QXO	Equity changes included exiting SS&C Technologies Holdings, Inc. (Industrials sector) and Goldman Sachs Group, Inc. (Financials sector) while initiating positions in QXO, Inc. (Industrials sector), SAP SE (IT sector), Blackstone, Inc. (Financials sector), and Cencora, Inc. (Health Care sector).
SAP	Equity changes included exiting SS&C Technologies Holdings, Inc. (Industrials sector) and Goldman Sachs Group, Inc. (Financials sector) while initiating positions in QXO, Inc. (Industrials sector), SAP SE (IT sector), Blackstone, Inc. (Financials sector), and Cencora, Inc. (Health Care sector).
BX	Equity changes included exiting SS&C Technologies Holdings, Inc. (Industrials sector) and Goldman Sachs Group, Inc. (Financials sector) while initiating positions in QXO, Inc. (Industrials sector), SAP SE (IT sector), Blackstone, Inc. (Financials sector), and Cencora, Inc. (Health Care sector).
COR	Equity changes included exiting SS&C Technologies Holdings, Inc. (Industrials sector) and Goldman Sachs Group, Inc. (Financials sector) while initiating positions in QXO, Inc. (Industrials sector), SAP SE (IT sector), Blackstone, Inc. (Financials sector), and Cencora, Inc. (Health Care sector).

TICKER

COMMENTARY

The Fund benefited from its overweight to equities, as equities significantly outperformed fixed income during the quarter. However, equity security selection detracted from relative performance, primarily due to Information Technology (IT) sector, where underweight positions in Micron, AMD, and Intel lagged the benchmark.

AMD

INTC

SSNC

Equity changes included exiting SS&C Technologies Holdings, Inc. (Industrials sector) and Goldman Sachs Group, Inc. (Financials sector) while initiating positions in QXO, Inc. (Industrials sector), SAP SE (IT sector), Blackstone, Inc. (Financials sector), and Cencora, Inc. (Health Care sector).

QXO

SAP

COR

Ticker	Put/Call	Amount Bought	Shares Bought	% Change	Weight %
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No Recent Sells Data

Industry	Prev Quarter %	Current Quarter %	Change
No industry data available

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No industry data available

Investment Summary

Investor Summary

Fund Strategy

FUND PERFORMANCE AS OF 30th June 2026

Investor Letters

Latest Executive Summary:

Executive Summary

Core Thesis

Forward Outlook

Investment Themes

AI

Semiconductors

Credit

Rates

Inflation

Oil

Rates

Credit Stress

AI

Valuations

Earnings

Dollar

Rates

Trade Policy

Rates

Trade Policy

Rates

Investor Pitches

Current Portfolio as of ( 30th June 2026 )

Key Risks identified by Manager:

Key catalysts include:

Portfolio Implications

Ticker Commentary

Daniel J. Carter Top Holdings

Recent Buys (13F)

Recent Sells (13F)

13F Sector Summary

Portfolio Distribution

Latest 13D & 13G Filings

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Touchstone Balanced Fund