Back in 2022, Cincinnati, Ohio-based Touchstone Investments launched its first four ETFs, having previously been predominantly a mutual fund company. The first four products included Touchstone Strategic Income Opportunities ETF; Touchstone US Large Cap Focused ETF; Touchstone Dividend Select ETF and the Touchstone Ultra Short Income ETF.
Since then, the firm has launched another three ETFs, all in the last year – the Climate Transition ETF (HEAT), Dynamic International ETF (TDI) and the Securitised Income ETF (TSEC).
The HEAT fund invests at least 80 per cent of its net assets in equity or equity-related securities of companies believed to be engaged in development of solutions for net-zero emissions or those which might benefit from positive changes in climate-transition processes.
TDI mainly invests in equity securities of non-US companies, based in both developed and emerging markets. The third of the three, TSEC, invests in securitised fixed-income securities, such as residential-mortgage-backed, commercial-mortgage-backed and asset-backed securities, as well as collateralised loan obligations.
Reflecting on progress since the firm’s move into the ETF market, Matt Barry, vice president of product management and head of capital markets at the firm reports: “We now have just shy of USD400 million worth of assets on our ETF platform.”
And the firm is unlikely to stop at seven ETFs, as Barry anticipates more products on the horizon: “Our first ETFs were mainly focused on domestic equities and fixed income. I think we’ll see more products later this year, especially in the international-equity space,” he comments.
Reflecting on the firm’s reasons for offering ETFs, Barry says: “Most of our clients like the cost-efficiency, the tax efficiency and the liquidity that ETFs provide.”
Touchstone also recently filed an application with the SEC to allow its mutual funds to offer ETF share classes alongside their mutual-fund share classes: “We’re excited about the filing and its potential. We think it could benefit shareholders significantly,” Barry comments.
The firm first opened its doors 30 years ago, starting as Touchstone Advisors and Touchstone Securities, and offering mutual funds. A string of acquisitions followed, starting with Countrywide Funds six years after Touchstone started up. Constellation Funds was then acquired in 2006. Next, in 2012, Touchstone acquired some mutual funds from Old Mutual and Fifth Third Asset Management. Five years later, it acquired Sentinel Funds, then AIG retail mutual funds in 2021.
Barry, who has an MBA from Duke University’s Fuqua School of Business in Durham, North Carolina joined Touchstone’s parent company, Western & Southern Financial Group 11 years ago, as a leadership-development associate. He then took up the role of an assistant vice president in product management at Touchstone, before moving into his current position.
Considering the firm’s activities, beyond ETFs, he says: “One of the ways that we differentiate ourselves is by having a robust practice-management programme for financial advisers, supporting them in managing their businesses. We launched this in 2012 and have helped thousands of advisers since then.” The programme offers a range of resources to help advisers grow their business, including access to seminars and presentation materials.
