In the second quarter of 2026, the Touchstone Mid Cap Value Fund (Class A Shares, Load Waived) experienced a period of underperformance compared to its designated benchmark, the Russell Midcap® Value Index. This divergence in returns occurred within a broader market context where investor preference leaned heavily towards companies exhibiting high growth potential, even as fundamental value propositions remained attractive. The fund's managers maintain a consistent, value-centric investment philosophy, focusing on identifying companies trading below their intrinsic worth. Throughout this quarter, the fund strategically incorporated new holdings, notably in the energy, real estate, and information technology sectors, demonstrating an active approach to portfolio management despite the challenging market dynamics for value investing.

The second quarter of 2026 presented a challenging landscape for value-oriented investment strategies. The market continued to favor high-growth companies, a trend that began earlier in the year and persisted throughout this period. This preference for growth over value significantly impacted the Touchstone Mid Cap Value Fund’s relative performance against its benchmark, the Russell Midcap® Value Index. Despite the attractive valuations of many value stocks, investor sentiment remained anchored to businesses promising rapid expansion, which inherently put pressure on funds adhering strictly to value principles.

During this quarter, the fund’s management team, in line with its classic value-driven fundamental investment process, made several strategic portfolio adjustments. New positions were initiated in Devon Energy Corp., a prominent player in the Energy sector, Jones Lang LaSalle Inc. from the Real Estate sector, and Rogers Corp., an entity within the Information Technology sector. These additions underscore the fund's commitment to identifying companies that are believed to be trading at a discount relative to their inherent value. The investment process involves a rigorous application of five distinct valuation screens designed to pinpoint attractively priced opportunities in the market.

The fund's core philosophy remains centered on a disciplined value approach, emphasizing high-quality companies with robust balance sheets and strong management teams. This strategy seeks to provide long-term capital appreciation by investing in businesses whose market prices do not fully reflect their true worth. Despite the recent underperformance driven by broader market trends, the fund continues to selectively invest in sectors and companies that align with its intrinsic value criteria, anticipating a eventual market recognition of these undervalued assets. The current market environment, characterized by a preference for growth, highlights the cyclical nature of investment styles and the importance of a consistent, long-term approach to value investing.

In conclusion, the Touchstone Mid Cap Value Fund navigated a quarter where market sentiment disproportionately rewarded growth over value. Adhering to its established investment methodology, the fund continued to identify and invest in companies deemed undervalued, with new strategic entries in key sectors. The management team remains committed to a disciplined, value-focused strategy, seeking high-quality businesses at attractive prices for sustained long-term performance.