The Touchstone Mid Cap Growth Fund demonstrated a strong performance in the third quarter of 2025, outperforming its benchmark, the Russell Midcap\u00ae Growth Index. This achievement was largely attributed to the fund's strategic allocation, particularly its overweight exposure to company size, which proved to be a significant advantage. Additionally, superior stock selection within the Consumer Discretionary and Financials sectors played a crucial role, alongside adept risk management through timely position adjustments.
A notable aspect of the fund's strategy involved adjusting its exposure to the Industrials sector. Amidst ongoing sector volatility and economic uncertainties such as tariffs, the fund reduced its holdings in this area. Instead, it sharpened its focus on identifying and investing in high-quality businesses characterized by strong pricing power and unique growth opportunities, often driven by advancements in artificial intelligence. This selective approach aimed to mitigate risks while capitalizing on promising long-term trends.
Looking ahead, the fund's top holdings, including Robinhood (HOOD) and AutoZone (AZO), are poised for continued expansion. Robinhood's growth is anticipated to be fueled by ongoing product innovation, its inclusion in the S&P 500, and enhanced monetization strategies. Meanwhile, AutoZone is expected to benefit from expanding its store footprint, maintaining robust profit margins, and executing aggressive capital return programs, signaling a positive outlook for these key investments.
Investing in funds that prioritize strategic asset allocation, rigorous stock selection, and proactive risk management can lead to significant outperformance. By focusing on businesses with inherent strengths like pricing power and innovative growth drivers, especially during uncertain times, investors can achieve their long-term financial aspirations. This thoughtful approach not only navigates market complexities but also identifies opportunities for sustained value creation, embodying a forward-thinking and positive investment philosophy.
