In 2022, Cincinnati, Ohio-based Touchstone Investments, which had previously been primarily a mutual fund company, launched its first four ETFs. The first four products included Touchstone Strategic Income Opportunities ETF, Touchstone US Large Cap Focused ETF, Touchstone Dividend Select ETF and Touchstone Ultra Short Income ETF.
Since then, the firm has launched three more ETFs over the last year: Climate Transition ETF (HEAT), Dynamic International ETF (TDI) and Securitised Income ETF (TSEC).
The HEAT Fund will invest at least 80% of its net assets in equity or equity-related securities of companies that it believes are engaged in developing net-zero emissions solutions or that are likely to benefit from favorable changes in the climate transition process.
TDI invests primarily in equities of non-U.S. companies based in developed and emerging markets. The third of the three, TSEC, invests in securitized fixed-income securities such as residential mortgage-backed securities, commercial mortgage-backed securities, asset-backed securities and collateralized loan obligations.
Reflecting on the progress the firm has made since entering the ETF market, Matt Barry, vice president of product management and head of capital markets at the firm, said: “We currently have just under $400 million in assets accumulated on our ETF platform.”
The company is also unlikely to stop at seven ETFs, with Burry predicting there will be more to come: “Our first ETFs were primarily focused on domestic stocks and bonds. I think we’ll see more coming later this year, particularly in the international equity space,” he said.
As for why the firm offers ETFs, Barry said: “Most of our clients like the cost efficiency, tax efficiency and liquidity that ETFs offer.”
Touchstone recently filed an application with the SEC to allow its mutual funds to offer ETF share classes alongside their mutual fund share classes. “We are excited about this application and its potential, and believe it will provide significant benefits to shareholders,” Barry said in a statement.
The company was founded 30 years ago as Touchstone Advisors and Touchstone Securities, offering mutual funds. A series of acquisitions followed, including the purchase of Countrywide Funds six years after Touchstone was founded. Then, in 2006, it bought Constellation Funds. Then, in 2012, Touchstone bought mutual funds from Old Mutual and Fifth Third Asset Management. Five years later, it bought Sentinel Funds, and in 2021, it acquired AIG’s retail mutual funds.
Barry, who earned his MBA from Duke University’s Fuqua School of Business in Durham, North Carolina, joined Touchstone’s parent company, Western & Southern Financial Group, as a leadership development associate 11 years ago and later served as assistant vice president of product management at Touchstone before assuming his current role.
Speaking of the company’s activities outside of ETFs, he said: “One of the ways we differentiate ourselves is by having a robust practice management program for financial advisors to help them manage their business. We started this in 2012 and have helped thousands of advisors since then.” The program offers a range of resources to help advisors grow their business, including access to seminars and presentation materials.
