Touchstone has prioritized growth in assets under management over the past six years. The firm made two multi-billion-dollar acquisitions since 2017 that expanded its mutual fund lineup and its AUM, which currently sits around $25 billion. While a few of the same portfolio managers continue to run acquired funds, most do not, and many funds were merged and assigned to other subadvisors, including Fort Washington Investment Advisors. (That firm is Touchstone’s largest partner and is also owned by Touchstone’s parent, Western & Southern Financial Group.) Meanwhile, Touchstone has also liquidated small funds that it says aren’t poised to grow while launching several new funds and, over the past year, exchange-traded funds, including its first thematic ETF, Touchstone Climate Transition.
Touchstone deserves credit for maintaining a long-term view in its subadvisory relationships and for a well-articulated approach to manager selection, but its investment team is quite small compared with competitors’ and has experienced some turnover in the past couple of years. Unlike at other firms using a subadvisory model, the product-development and investment-management functions lie within the same team.