The Touchstone Dynamic Large Cap Growth Fund (Class A Shares, Load Waived) demonstrated strong performance in the third quarter of 2025, surpassing its benchmark, the Russell 1000 Growth Index. This achievement is attributed to its strategic investment approach, which centers on U.S. large-capitalization equity securities and employs an adaptive quantitative model. The fund's methodology aims to achieve incremental returns while diligently controlling investment risk by maintaining a diversified portfolio of 80-120 securities. Simultaneously, the broader global equity markets experienced a positive surge in September, primarily driven by a significant dovish rate cut from the Federal Reserve and a notable improvement in investor sentiment.
This impressive performance underscores the fund's commitment to its 'Distinctively Active' investment philosophy. This philosophy involves a rigorous process for selecting and partnering with expert asset managers and advocating for robust portfolio construction. By adapting to evolving market conditions through its Dynamic Alpha Stock Model®, the fund not only seeks to outperform but also to provide stability and strategic positioning for its investors. The successful navigation of market dynamics, especially during periods influenced by key monetary policy decisions, highlights the efficacy of its adaptive and risk-controlled investment framework, reinforcing investor confidence in its long-term growth potential.
Exceptional Fund Performance in Q3 2025
The Touchstone Dynamic Large Cap Growth Fund (Class A Shares, Load Waived) delivered a commendable performance in the third quarter of 2025, outperforming its benchmark, the Russell 1000 Growth Index. The fund's strategy primarily involves investing in U.S. large-capitalization equity securities. This success is a testament to its adaptive quantitative investment process, known as the Dynamic Alpha Stock Model®, which constructs equity portfolios designed to adjust to prevailing market conditions. The fund's core objective is to generate returns that exceed its benchmark while effectively managing investment risks, typically holding a diverse portfolio of 80-120 securities.
This strong showing for the quarter ended September 30, 2025, reflects the fund's disciplined application of its investment philosophy. By leveraging sophisticated quantitative models, the fund actively seeks companies with robust fundamentals and growth potential within the large-cap segment. The strategic allocation and continuous adaptation to market shifts enable it to capitalize on opportunities while mitigating potential downsides. The outperformance against a significant benchmark like the Russell 1000 Growth Index indicates the efficacy of its selection process and risk management framework, providing investors with confidence in its ability to navigate complex market environments and achieve its investment goals.
Global Market Dynamics and Investment Strategy
In September, global equity markets experienced a significant upward trend, largely influenced by a dovish rate cut from the Federal Reserve and a general improvement in investor sentiment. This macroeconomic backdrop provided a favorable environment for growth-oriented funds like the Touchstone Dynamic Large Cap Growth Fund. The fund's investment strategy is particularly well-suited to capitalize on such conditions, given its focus on large-capitalization companies with strong growth prospects and its adaptive quantitative model.
The Dynamic Alpha Stock Model® employed by the fund is crucial in reacting to and leveraging broader market shifts. By continuously adjusting its portfolio based on evolving market conditions, the model aims to identify and invest in securities that are poised for growth, even amidst changing monetary policies. This proactive approach ensures that the fund remains agile and responsive, seeking to enhance returns while keeping a close watch on risk. The favorable market sentiment combined with the fund's robust, adaptive strategy created a powerful synergy, contributing to its notable outperformance and demonstrating its capacity to thrive in dynamic market landscapes.
