Touchstone Mid Cap Value Fund (TCVAX) N-CSRCertified annual shareholder report (management investment company)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number    811-08104    

Registrant's telephone number, including area code:   800-638-8194

Date of fiscal year end: September 30

Date of reporting period: September 30, 2020

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Reports to Stockholders.

The Report to Shareholders is attached herewith.

September 30, 2020

Annual Report

Touchstone Funds Group Trust

Touchstone Active Bond Fund

Touchstone Anti-Benchmark^® International Core Equity Fund

Touchstone Anti-Benchmark^® US Core Equity Fund

Touchstone Credit Opportunities II Fund

Touchstone High Yield Fund

Touchstone Impact Bond Fund

Touchstone International ESG Equity Fund

Touchstone Mid Cap Fund

Touchstone Mid Cap Value Fund

Touchstone Sands Capital Select Growth Fund

Touchstone Small Cap Fund

Touchstone Small Cap Value Fund

Touchstone Ultra Short Duration Fixed Income Fund

IMPORTANT NOTE: Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Touchstone Funds’ annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the shareholder reports from Touchstone Funds or from your financial intermediary, such as a broker-dealer or bank. Instead, annual and semi-annual shareholder reports will be available on the Touchstone Funds’ website (TouchstoneInvestments.com/Resources), and you will be notified by mail each time a report is posted and provided with a website link to access the report.

You may elect to receive all future annual and semi-annual shareholder reports in paper, free of charge. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. To elect to receive paper copies of shareholder reports through the mail or otherwise change your delivery method, contact your financial intermediary or, if you hold your shares directly through Touchstone Funds, visit TouchstoneInvestments.com/Resources/Edelivery or call Touchstone Funds toll-free at 1.800.543.0407. Your election to receive shareholder reports in paper will apply to all Touchstone Funds that you hold through the financial intermediary, or directly with Touchstone.

Table of Contents

This report identifies the Funds’ investments on September 30, 2020. These holdings are subject to change. Not all investments in each Fund performed the same, nor is there any guarantee that these investments will perform as well in the future. Market forecasts provided in this report may not occur.

Letter from the President

Dear Shareholder:

We are pleased to provide you with the Touchstone Funds Group Trust Annual Report. Inside you will find key financial information, as well as manager commentaries for the Funds for the 12 months ended September 30, 2020.

Trade-related rhetoric between the U.S. and China drove market volatility throughout 2019. However, by the end of calendar year, the U.S.-China trade discussions took a more constructive tone, culminating in an announcement of a Phase One Trade Agreement in early 2020 to reduce some tariff levels. The global economic outlook seemed poised to resume a tenuous, yet modest growth trajectory until progress was upended in the first half of 2020 as COVID-19 swept the globe, bringing with it containment measures resulting in massive shutdowns of economic activity. Following an economic lockdown during most of March and April 2020, U.S. state governors began slowly reopening their economies across the country. Although employment numbers and retail sales figures through the latter portion of the 12-month period rebounded strongly from their March 2020 lows, investor sentiment remains cautious as the stimulus programs put in place during the depths of the outbreak ended with an uncertain outlook for further support. Likewise, the rest of the world navigated a similar reopening process, though with varying paces and policies. China, for example, has seemingly been able to stem the spread of the virus and tended to recover more quickly than the U.S., Brazil and parts of Europe, who have struggled with pockets of outbreaks.

The last 12 months featured a lot of price action that at first glance resulted in little change. As alluded to previously, the S&P 500^® Index ended 2019 on a strong note and this continued into January of 2020, but then quickly reversed into a recession-like drawdown. The severe pullback during the first quarter was followed by a strong rebound late in the quarter, which carried into the second and third quarters before stalling in September 2020 to finish with a double-digit gain. Underneath the high-level results, U.S. equity performance varied widely primarily by style with growth equities far outperforming value equities during the 12-month period. U.S. growth stocks were predominately driven by Communication Services, Consumer Discretionary, Information Technology (IT) and Health Care stocks as these underlying companies were least impacted or even benefited from the COVID-19 lockdowns. Conversely, U.S. value equities faced significant headwinds as the sudden drop in economic activity in the first half of 2020 adversely impacted cyclical sectors and value equity-tilted sectors such as Financials, Energy, Materials and Real Estate. Large cap stocks held up better largely due to their ability to weather challenging economic conditions compared to their mid cap and small cap peers. Internet behemoths such as Amazon, Microsoft, Facebook and Netflix drove the strong aforementioned growth equity returns as they benefited from the COVID-19-induced lockdown impacting everyday life and working conditions.

Non-U.S. developed equity markets generally trailed the U.S. over the past 12 months. Japan performed relatively well with slow growth in COVID-19 cases and aggressive stimulus measures while Europe was hit harder by the pandemic. Similar to the U.S., IT and Health Care stocks were among the top contributors in developed markets while Energy and Financials lagged. In emerging markets, equities exhibited the same pattern as the U.S. and developed markets with IT and Asia-Pacific countries who experienced COVID-19 lockdowns earlier in the year, such as China, Taiwan and South Korea, leading the way. As previously described, Asia-Pacific countries experienced an abating COVID-19 virus by the second quarter and were able to reopen their economies earlier than the U.S. and Europe.

Within fixed income, Treasury prices benefited and yields compressed due to U.S. Federal Reserve Board (Fed) actions and a flight to safety during the rapid selloff of risk assets in the first half of 2020. Meanwhile, credit-sensitive sectors saw the strong results of 2019 nearly or completely erased as concerns over potential for rising defaults and technical selling pressures factored into the drawdown. During the first quarter of 2020, spreads across investment grade credit, high yield credit, bank loans and collateralized loan obligations (CLOs) all reached levels not seen since the 2008 Credit Crisis. The Fed stepped in during the volatility to provide liquidity, slashed overnight rates to zero, and provided support for the fixed income markets through new asset purchase programs. The Fed’s actions helped ease the volatility and negative sentiment that appeared in March, as credit spreads narrowed over the six subsequent months for a double-digit gain off the bottom.

Markets such as these reaffirm our belief in the importance of the steady hands of financial professionals, trust in your investment strategy, and awareness of the risks that accompany trying to time the market. Additionally, we believe that environments that are more volatile in fact create more opportunity for active managers to add value, especially those that are Distinctively Active. We greatly value your continued support. Thank you for including Touchstone as part of your investment plan.

Sincerely,

Jill T. McGruder

President

Touchstone Funds Group Trust

Management’s Discussion of Fund Performance (Unaudited)

Touchstone Active Bond Fund

Sub-Advised by Fort Washington Investment Advisors, Inc.

Investment Philosophy

The Touchstone Active Bond Fund seeks to provide as high a level of current income as is consistent with the preservation of capital. Capital appreciation is a secondary goal. In deciding what securities to buy and sell for the Fund, the overall investment opportunities and risks in different sectors of the debt securities market are analyzed by focusing on maximizing total return and reducing volatility of the Fund’s portfolio. A disciplined sector allocation process is followed in order to build a broadly diversified portfolio of bonds.

Fund Performance

The Touchstone Active Bond Fund (Class A Shares) outperformed its benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index, for the 12-month period ending September 30, 2020. The Fund’s total return was 7.91 percent (calculated excluding the maximum sales charge) while the total return of the benchmark was 6.98 percent.

Market Environment

During the first three months of the period U.S.-China trade tensions cooled with both sides headed toward an eventual resolution of the dispute. Additionally, tariffs, concern over global growth, inflation consistently below the Fed’s target, and modest but resilient U.S. growth kept a cap on rates providing an accommodative environment in terms of easy financial conditions.

Given this backdrop, the outlook coming into 2020 was optimistic – fundamentals were strong, the consumer was in good shape and spending money, business earnings were healthy and trade negotiations between China and the U.S. were turning a corner. Then the global economy hit an unexpected wall in March 2020, as fears surrounding the COVID-19 pandemic turned into a state of panic, bringing the risk-on bull market to a screeching halt. Economies around the world enacted quarantine measures, issuing shelter in place orders to curb the spread of the virus. This brought activity to a grinding halt – the slowdown reverberated through the global economy. Credit was hit hard as well with the lack of liquidity in the markets intensifying the selloff. Spreads on High Yield and Investment Grade Credit alike hit levels markets had not experienced since 2008. After the market retreat in late March, economic activity rebounded throughout the second and third quarters of 2020. Activity was supported by an increase in consumer spending, strong labor markets and easy financials conditions as a result of monetary policy enacted by the U.S. Federal Reserve Board (Fed) and a historic rally in risk assets. Markets reacted in line with the sharp rebound and the momentum that carried the rally in risk assets continued its torrent pace through August. The rally stalled briefly in September as hopes of another fiscal package that was anticipated by the markets did not come to fruition.

Portfolio Review

The Fund’s overweight spread risk versus the benchmark contributed to returns as spreads retraced a significant amount of the widening that took place in March. The Fund increased spread risk relative to the benchmark in late March and again in mid-April to take advantage of attractive valuations as a result of the sell-off in risk assets, specifically by allocating to High Yield and increasing spread risk within Investment Grade Credit. In the second and third quarters of 2020, markets continued to react to a solid rebound in economic activity due to the massive stimulus programs enacted by the Fed and Congress.

Interest rate management also contributed to performance as we made a number of tactical trades to position the Fund to be short and long duration versus the benchmark. The Fund was positioned to be both over- and underweight the long end of the yield curve at different points in time over the 12-month period, which contributed to returns.

Lastly, strong security selection in Investment Grade Credit and Securitized Assets contributed to returns. Within Investment Grade Credit, the Fund was positioned with overweights to non-defensive sectors, contributing to performance. Within Securitized Assets outperformance was largely driven by spread effects due to the retracement in out of index sectors - Commercial Mortgage-Backed Securities (CMBS), Agency Mortgage-Backed Securities (MBS) and Collateralized Loan Obligations (CLO) - as well as Residential Mortgage-Backed Securities (RMBS) 2.0, which were the top performers in the second and third quarters of 2020.

Outlook

While long-term prospects for a return to pre-COVID-19 levels exist, many near-term risks could provide some turbulence for the remainder of the year. For one, details of additional fiscal stimulus are still being debated and the chances of a package materializing before the November election are becoming slim. The necessity for additional support has been vocalized by Fed Chair Jerome Powell in recent remarks stating the Fed will continue to do its part to support financial markets; however, in order to maintain a sustainable recovery, the economy will need the aid of both monetary and fiscal stimulus. This can be seen through additional transfer payments that are needed in order to maintain consumer spending at its current level as well as ensuring businesses have the means to avoid permanent layoffs. Secondly, COVID-19 continues to linger throughout the U.S., as well as Europe, with some

Management’s Discussion of Fund Performance (Unaudited) (Continued)

areas showing another spike in cases as restrictions continue to ease and schools allow students to return to the classroom. Finally, uncertainty in the upcoming November election could usher volatility back into financial markets, especially in the case of a challenge to the outcome that could result in a drawn out transfer of office.

Even with the uncertainty facing markets in the near term, risk assets continue to offer attractive valuations from a long-term perspective. Non-Treasury sectors remain above median levels from a long-term historical perspective and the risk of defaults has decreased given a return of investor demand for yield and ample liquidity in credit markets. Record corporate profits have also been reported in recent earnings reports as companies have adapted to a changing landscape and lean work force, substantially reducing overhead costs. Certain sectors have shown incredible resiliency in this new world, particularly technology giants that have seen demand for their services increase dramatically in recent months. While some sectors (retail, leisure, airlines, and department stores) will likely feel the pain for months and probably years to come, the drivers of growth in the new economy have thrived.

We believe valuations of rates across the curve generally reflect the improving economic outlook and will remain low for some time given statements issued and policies enacted by the Fed. Risks to lower interest rates come from increased concerns over the global impact of COVID-19 and worse than expected economic data. Risks to higher interest rates include reopening progress and a better than expected rebound and/or a shift in Fed policy.

Our preference within the Securitized sector still rests in high-quality, non-government guaranteed bonds with limited COVID-19 exposure. These areas were greatly impacted given the halt in economic activity and given their focus on consumer related and retail oriented businesses. It is our belief that our preference to higher rated tranches within this sector will not result in permanent losses and will recover – the CARES Act focus on small businesses will be crucial in this regard.

Within Investment Grade Credit, the Fund is positioned to favor lower rated credit for non-cyclical sectors, such as utilities, while selectively adding higher quality names in cyclical sectors such as manufacturing and consumer. The Fund maintained the 15 percent nominal allocation to High Yield as current spreads continue to offer adequate compensation given current risks. The Fund continues to have a modest allocation to U.S. dollar denominated Emerging Markets debt but we will continue to monitor the impact of COVID-19 and how emerging economies are able to contain the virus and maintain sustainable economic growth.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

Comparison of the Change  in  Value  of  a  $10,000  Investment  in  the  Touchstone  Active  Bond  Fund  - Class  A^* and  the  Bloomberg  Barclays  U.S. Aggregate  Bond  Index

The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Note to Chart

Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index comprised of U.S. investment grade, fixed rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and ten years.

Management’s Discussion of Fund Performance (Unaudited)

Touchstone Anti-Benchmark^® International Core Equity Fund

Sub-Advised by TOBAM S.A.S.

Investment Philosophy

The Touchstone Anti-Benchmark^® International Core Equity Fund seeks capital appreciation. TOBAM’s methodology seeks to enhance the diversification of portfolio holdings to reduce market bias and potentially improve risk-adjusted returns. TOBAM’s process selects individual stocks and their weights in an effort to reduce the correlations between individual holdings. This enables the creation of portfolios that seek to mitigate the inherent concentration risks associated with capitalization-weighted benchmarks. The lower correlations have the potential to provide a differentiated source of value than other methods of diversification. This quantitative approach creates fully invested, long-only portfolios that do not use leverage, and are designed to help guard against structural biases.

Fund Performance

The Touchstone Anti-Benchmark^® International Core Equity Fund (Class Y Shares) outperformed its benchmark, the MSCI EAFE Index, for the 12-month period ending September 30, 2020. The Fund’s return was 8.74 percent compared to the 0.49 percent return of the benchmark.

Market Environment

Trade-related rhetoric between the U.S. and China and uncertainty surrounding Brexit drove market volatility throughout 2019. However, by the end of the calendar year, the U.S.-China trade discussions took a more constructive tone and a resounding British election victory by Prime Minister Boris Johnson, a Brexit supporter, provided a clear path for the future of Brexit. The global economic outlook seemed poised to resume a tenuous, yet modest growth trajectory until progress was upended in the first half of 2020 as COVID-19 swept the globe, bringing with it containment measures resulting in massive shutdowns of economic activity. After the downside market correction in the first quarter of 2020, with Financials, Real Estate and Energy being the worst performing sectors over the period, the second and third quarters were marked by a strong recovery. However, European markets and economies lagged significantly behind the U.S. and Japan in 2020. Europe’s perceived inability to get the virus under control is providing a considerable headwind for investors, as is the absence of support from a relative lack of information from the Information Technology and related Communication Services as well as the Consumer Discretionary sectors. In contrast, Japan appears to have the situation under greater control. Both Japan and Switzerland have acted as a safe harbor for investors wishing to diversify away from exposure to both the Euro and the area’s economic uncertainties.

Portfolio Review

During the March 2020 sell-off, the underperformance of the Financials and Industrials sectors created Fund outperformance that continued to persist throughout the second quarter. On the back of the better than expected economic data and “whatever it takes” central bank and fiscal policies, sectors that had been overly punished such as Industrials and Consumer Discretionary, rebounded strongly while Financials remained at a subdued level of performance. In the third quarter, the Health Care and Consumer Staples sectors lagged as the growth stocks related to the pandemic had already been priced in, while investors increasingly focused on industries that had suffered more through the first two quarters and were cheap, relative to long run valuations.

Outlook and Conclusion

TOBAM’s Anti-Benchmark strategy does not forecast but simply seeks to maximize diversification. Thus, it does not include fundamental analysis of individual stocks, countries, sectors, economic environments or factors. No discretionary tactical or strategic asset allocation decisions are made with respect to specific regions, sectors or industries. TOBAM’s investment process consists of seeking to maximize diversification from a bottom-up perspective. Securities are bought or sold in solely relation to their potential relative diversification benefits within the portfolio. A security will be completely sold when it no longer provides the most marginal diversification among all available stocks in the universe, and others purchased when they begin to provide more marginal diversification. TOBAM’s patented Anti-Benchmark approach is designed to avoid explicit and implicit biases in terms of sector, style, market cap and other statistical measures. For this reason, we apply as few constraints as possible and do not rely on any given view or forecast, in order to avoid unwanted systematic exposures. The Fund’s portfolio reflects even risk contributions from all independent effective risk factors in the investment universe, which may include sector and country factors.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

Comparison of the Change in Value of a $10,000 Investment in the Touchstone Anti-Benchmark^® International
Core Equity Fund - Class Y* and the MSCI EAFE Index

The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Note to Chart

The MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding U.S. and Canada.

MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. This report is not approved or produced by MSCI.

Management’s Discussion of Fund Performance (Unaudited)

Touchstone Anti-Benchmark^® US Core Equity Fund

Sub-Advised by TOBAM S.A.S.

Investment Philosophy

The Touchstone Anti-Benchmark^® U.S. Core Equity Fund seeks capital appreciation. TOBAM’s methodology seeks to enhance the diversification of portfolio holdings to reduce market bias and potentially improve risk-adjusted returns. TOBAM’s process selects individual stocks and their weights in an effort to reduce the correlations between individual holdings. This enables the creation of portfolios that seek to mitigate the inherent concentration risks associated with capitalization-weighted benchmarks. The lower correlations have the potential to provide a differentiated source of value than other methods of diversification. This quantitative approach creates fully invested, long-only portfolios that do not use leverage, and are designed to help guard against structural biases.

Fund Performance

The Touchstone Anti-Benchmark^® U.S. Core Equity Fund (Class Y Shares) underperformed its benchmark, the Russell 1000^® Index, for the 12-month period ending September 30, 2020. The Fund’s return was 14.63 percent compared to the 16.01 percent return of the benchmark.

Market Environment

Trade-related rhetoric between the U.S. and China drove market volatility throughout 2019. However, by the end of calendar year, the U.S.-China trade discussions took a more constructive tone, culminating in an announcement of a Phase One Trade Agreement in early 2020 to reduce some tariff levels. The global economic outlook seemed poised to resume a tenuous, yet modest growth trajectory until progress was upended in the first half of 2020 as COVID-19 swept the globe, bringing with it containment measures resulting in massive shutdowns of economic activity. After the downside market correction in the first quarter of 2020, with Financials, Industrials and Energy being the worst performing sectors over the period, the second and third quarters were marked by one of the steepest market recoveries observed in the history of the U.S. market. This strong rebound fueled and fired by a dovish U.S. Federal Reserve Board (Fed) and extensive fiscal spending packages, was to a large extent, led by the Information Technology and Consumer Discretionary stocks and more specifically the top five mega caps – Apple Inc., Amazon.com, Inc., Microsoft Corporation, Alphabet Inc. and Facebook, Inc. – that currently represent 20 percent of the market cap of the Russell 1000 Index. The top five-mega caps accounted for nearly all of the benchmark’s performance year to date and this contributed to an even higher market concentration in the U.S. market cap weighted indices.

In September 2020, investor uncertainty increased as a clear upward trend of new COVID-19 cases caused further full, or partial, lock down of restaurants, shops and public life. This puts the U.S. economy at further risk of a possible recession. Interestingly, the last few weeks of the quarter saw a significant downside correction, with the mega caps suffering more than the broader market. Investors have become weary of mega cap growth stocks and are cautious that an economic recovery might not be as strong as initially expected.

Portfolio Review

Over the period, one could have expected that given the evolution of the Information Technology and Communication Services sector along with the high market concentration of the Anti-Benchmark^® U.S. Core Equity strategy, the Fund should have underperformed by a wider margin. The underperformance of the Financials, Energy and Industrials sectors, coupled with a high asset return dispersion, contributed to Fund outperformance in the first quarter of 2020. The third quarter of 2020 however saw two different market regimes: first, a further concentration into the mega caps, which generated an outperformance for the benchmark over the first two months of the quarter. Then, an increase in dispersion and uncertainty, which detracted from the benchmark’s relative performance for the quarter.

Outlook and Conclusion

TOBAM’s Anti-Benchmark^® strategy does not forecast but simply seeks to maximize diversification. Thus, it does not include fundamental analysis of individual stocks, countries, sectors, economic environments or factors. No discretionary tactical or strategic asset allocation decisions are made with respect to specific regions, sectors or industries. TOBAM’s investment process consists of seeking to maximize diversification from a bottom-up perspective. Securities are bought or sold in solely relation to their potential relative diversification benefits within the portfolio. A security will be completely sold when it no longer provides the most marginal diversification among all available stocks in the universe, and others purchased when they begin to provide more marginal diversification. TOBAM’s patented Anti-Benchmark^® approach is designed to avoid explicit and implicit biases in terms of sector, style, market cap and other statistical measures. For this reason, we apply as few constraints as possible and do not rely on any given view or

Management’s Discussion of Fund Performance (Unaudited) (Continued)

forecast, in order to avoid unwanted systematic exposures. The Fund’s portfolio reflects even risk contributions from all independent effective risk factors in the investment universe, which may include sector and country factors.

Comparison of the Change in Value of a $10,000 Investment in the Touchstone Anti-Benchmark^® US Core Equity Fund - Class Y^*and the Russell 1000^® Index

The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Note to Chart

Russell 1000^® Index measures the performance of the 1,000 largest companies in the Russell 3000^® Index.

The Frank Russell Company (FRC) is the source and owner of the data contained or reflected in this material and all trademarks and copyrights related thereto. The material may contain confidential information and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. This is a Touchstone Investments presentation of the data, and FRC is not responsible for the formatting or configuration of this material or for any inaccuracy in the presentation thereof.

Management’s Discussion of Fund Performance (Unaudited)

Touchstone Credit Opportunities II Fund

Sub-Advised by Ares Capital Management II LLC

Investment Philosophy

The Touchstone Credit Opportunities II Fund seeks absolute total return, primarily from income and capital appreciation. The Touchstone Credit Opportunities II Fund employs a flexible investment approach by allocating assets among core investments and opportunistic investments as market conditions change. It invests in several broad investment categories, including high yield bonds, bank loans, special situations, structured credit and hedges.

Fund Performance

The Touchstone Credit Opportunities II Fund (Class A Shares) underperformed its benchmark, the ICE BofA Merrill Lynch 3-Month U.S. Treasury Bill Index, for the 12-month period ended September 30, 2020. The Fund’s total return was -0.29 percent (calculated excluding the maximum sales charge) while the total return of the benchmark was 1.10 percent.

Market Environment

Following a positive fourth quarter in 2019, global capital markets experienced unprecedented volatility in 2020 because of the COVID-19 pandemic and its impact on the economy. Investor sentiment plunged in a dramatic manner in March as the impacts of the pandemic magnified and were further exacerbated by the onset of the Saudi-Russian oil price war. During this time default expectations increased and credit spreads rose to levels last seen during the Global Financial Crisis. Starting in late March, investor sentiment was boosted by unprecedented levels of financial stimulus being pumped into the economy and the expansion of eligibility of the U.S. Federal Reserve Board’s (Fed) credit facilities.

Credit markets rallied significantly since the drawdown in March. Despite the rally, high yield volatility occurred during the period. While inside the post-crisis median in both markets, yields appeared attractive compared to investment grade corporates. Spreads closed the period above their respective post-crisis medians, creating an interesting dynamic for active managers when combined with yield levels.

Portfolio Review

The Fund received positive contributions from High Yield bonds, Bank Loans, and Special Situations during the period, with hedges and structured credit detracting from absolute returns. Returns were negatively impacted by capital markets volatility, which unfolded during the first quarter of 2020, particularly within the Fund’s Structured Credit allocation and exposure to the Energy sector.

Outlook

Credit markets have been strong thus far in the fourth quarter despite a myriad of bearish headlines: election uncertainty in the U.S, a first wave of COVID-19 cases in the White House, a second wave in Europe, and finally, President Trump’s conflicting statements around additional fiscal stimulus. Loan and High Yield Bond spreads in the U.S. and Europe entered the month above their respective post-crisis medians, which we believe suggests an attractive opportunity exists, though much uncertainty remains around the economy and the U.S. elections. While many agree additional fiscal stimulus is needed in the U.S., there is much debate regarding the size and allocation of funds, pushing out the timeline of when and if a bill will be passed. Though default rates remain focused in the energy and retail sectors, and continue to trend lower, uncertainty around reopening plans suggests other industries may be vulnerable in the near term. In addition, loan documentation has started to revert to pre-pandemic standards, another potential landmine for inexperienced or pure beta investors. While this may be a lot to digest we would also note these factors, for the most part, impact capital markets overall, and that income-oriented alternatives such as Investment Grade Corporates and Sovereigns continue to yield below 3 percent and 1 percent, respectively. Overall, we believe these factors underscore the importance of active management and an allocation to leveraged credit within a balanced portfolio. In the near-term, we expect to actively rotate exposures, take advantage of pockets of volatility and continue to focus on mistake avoidance, particularly around the upcoming earnings season. We believe the macro backdrop favors experienced managers with collaborative platforms and will continue to utilize the power of our platform to manage the Fund.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

Comparison of the Change in Value of a $10,000 Investment in the Touchstone Credit Opportunities II Fund - Class A* and the ICE B of A Merrill Lynch 3-Month U.S. Treasury Bill Index

The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Note to Chart

ICE BofA Merrill Lynch 3-Month U.S. Treasury Bill Index is an unmanaged index of Treasury securities maturing in 90 days that assumes reinvestment of all income.

Management’s Discussion of Fund Performance (Unaudited)

Touchstone High Yield Fund

Sub-Advised by Fort Washington Investment Advisors, Inc.

Investment Philosophy

The Touchstone High Yield Fund seeks a high level of income. Capital appreciation is a secondary consideration. The Fund primarily invests in non-investment-grade securities.

Fund Performance

The Touchstone High Yield Fund (Class A Shares) underperformed its benchmark, ICE BofA Merrill Lynch High Yield Cash Pay Index, for the 12-month period ended September 30, 2020. The Fund’s total return was -0.13 percent (calculated excluding the maximum sales charge) while the benchmark’s total return was 2.35 percent.

Market Environment

The previous 12-month period has been one of the most volatile in financial history. From September 2019 through February 2020, risk assets on the whole performed well, with spreads tightening in High Yield and equities reaching their highs. The U.S. Federal Reserve Board (Fed) cut rates early in the fourth quarter of 2019, and then paused its positioning in December 2019 awaiting further economic data and developments.

Initial COVID-19 news in early 2020, such as the January 23 shutdown of the city of Wuhan in China, caused a brief hiccup in this rally. However, by February 20 the weight of the global spread of the virus, particularly in Italy and Iran, reached a tipping point that precipitated a historic sell-off in risk assets. Within High Yield, BB- and B-rated bonds widened in a breathtakingly short timeframe. The 10-Year U.S. Treasury yield spread tightened. All ratings categories reached recessionary levels. Outliers in the quarter were concentrated in Energy and sectors which were either most or least directly impacted by COVID-19.

In March 2020, the Fed initiated a surprise intra-meeting rate cut of 0.50 percent after a Group of Seven (G7) central bank meeting. A further 1 percent rate cut followed soon thereafter. In addition, a series of programs were launched to stabilize fixed income markets including commercial paper, money markets, investment grade credit and fallen angels.⁽¹⁾This level of support, the coordination of monetary and fiscal policy, was unprecedented and unleashed a recovery in risk assets that was as equally swift as their declines. Uncertainty surrounding the COVID-19 pandemic resulted in historic daily moves across markets that were eventually quelled as the response out of the Fed and the U.S. government took hold.

From a sector perspective, Energy markets continued to be volatile. West Texas Instrument (WTI), a specific grade of crude oil, spent the first half of the period between $50-$60 a barrel before dipping in early 2020 and bottoming at negative levels in April. Oil recovered beginning in May and has steadily been around $40 a barrel since June. The Energy space has led the increase in defaults and continues to be the worst performing sector within the High Yield market. The composition of the Energy sector has changed significantly as it has also led the way in fallen angels. Finally, the Consumer Services, Gaming, Leisure, Entertainment and Airlines were among sectors within the High Yield market that lagged due to headwinds related to the COVID-19 pandemic.

Portfolio Review

Overall, sector allocation posted negative returns for the 12-month period. A significant overweight to Electric Utilities and to Homebuilders were contributors as these sectors are higher quality and performed consistently through the previous 12-month volatile environment. A meaningful underweight to Aerospace was also a contributor as the sector had several highly leveraged and low-rated names that were directly impacted by the pandemic and the subsequent decline in Airline/Aerospace spending. Sector positioning within the Energy space (Oil Field Services, Midstream, and Independent Energy) detracted from performance as the Fund’s portfolio became significantly underweight to the sectors during the downgrade cycle, when a meaningful level of fallen angels came into the index and immediately began recovering in price.

Security selection contributed to performance. Positioning within Energy was mixed and produced many of the top and bottom individual contributors as the sector experienced significant volatility, and led defaults over the last 12 months. Defaults or distressed exchanges at Transocean, Valaris plc, Noble Corporation plc, and Whiting Petroleum Corporation were all additive while defaults at Unit Corp, Chesapeake Energy Corporation, and FTS International, Inc. detracted. An overweight position in Sprint Corporation contributed as the merger with T-Mobile was consummated. Default rates increased materially over the last 12 months as the economic shutdown rippled through companies and capital structures. Outside of Energy, the default of Intelsat Corporation was a contributor to performance while an overweight position in Hertz Corporation detracted.

⁽¹⁾ Investment grade bonds that have been downgraded to below-investment grade.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

Outlook and Conclusion

The investment outlook remains positive and cautious. The speed with which the economy ground to a halt and the subsequent move in risk assets from recessionary levels to recovery was unprecedented. There are a handful of large factors that we know about this cycle that have helped us develop our current outlook and positioning. We know that we have seen an enormous decline in gross domestic product (GDP) and the beginnings of a subsequent recovery. The Fed has provided unprecedented stimulus to the economy, financial conditions and risk assets while the federal government passed stimulus for individuals, households, and businesses. Default rates stand at 6-7 percent, and while we believe they are likely to peak above 10 percent, the pace of defaults is slowing as the economy heals. Finally, high yield spreads hit a wide of 1,100 basis points in March, which we believe is the largest for this cycle. All of these factors lead us to believe that we are in the “repair” stage of the credit cycle and should expect spreads to generally improve as companies recover from the recession, financial metrics improve and weak companies default and restructure. This outlook is balanced by a few factors that make this recovery uncertain. Foremost, the COVID-19 virus continues to spread and there remain several portions of the economy that do not have the opportunity to recover under the current circumstances. Vaccines and treatments are under development; however, the outcomes remain uncertain. The market has continued to show its resiliency as business models shift and adjust; however, with unemployment at high levels and a large portion of the economy (especially Services and Retail related segments) operating at sub-optimum levels, we believe that the pace of the recovery remains uncertain. Currently, our economic expectations are for the economy to return to 2019 levels by the end of 2021; the implication to that is there are several sectors that are recovering and growing in the current environment and there will still be several sectors by 2021 that have yet to recover.

At this stage, we believe the greatest opportunities for the Fund will come through credit selection. We seek to hold companies that have the ability and liquidity to withstand the volatility of the recovery and beyond. Aggregate yield levels remain low due to interest rates; however, we believe B-rated securities, in particular, look to be a good value at this stage of the cycle as a way to maximize income while limiting defaults. We remain cautious on CCC-rated securities as the market continues to shun default risk and illiquidity. The magnitude of this default cycle has yet to be determined as it will depend upon when the sectors hit hardest by this downturn (Airlines, Lodging, Restaurants, Retail, etc.) are able to generate enough revenue and margin to cover their expenses. The Fund remains underweight to these sectors, or holding higher quality positions, as we think current spreads and levels do not adequately compensate for an uncertain recovery, and potential lack of liquidity for the companies that may run into balance sheet problems. The Fund has increased its positioning within Energy as fallen angels and defaults have meaningfully changed the composition of the sector. Oil has recovered and stabilized at $40 a barrel, a level that is supportive of many higher quality credits that are now in High Yield. Many lower rated and lower quality companies remain at risk of default as liquidity for many Energy names remains thin.

Headwinds to our outlook would primarily be related to the pace and magnitude of the financial recovery. While the Fed has been extremely supportive of financial markets and financial conditions, a sustainable recovery needs to be predicated on consistent GDP growth. Large questions remain on how long it will take for the economy to recover to the levels of 2019, as well as when a treatment/vaccine for COVID-19 will be available to large portions of the population. We have seen structural shifts in the economy in response to the pandemic. The permanency of those shifts (employment, work from home, leisure activities, and how money is spent) has yet to be seen and the effects of those changes remain unknown. The High Yield market has experienced a significant level of repair in most of its sectors/categories. A large decline in growth or an external shock that causes a tightening of financial conditions or liquidity would also be potentially negative as the recovery remains fragile.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

Comparison of the Change in Value of a $10,000 Investment in the Touchstone High Yield Fund - Class A^* and

the ICE BofA Merrill Lynch High Yield Cash Pay Index

The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Note to Chart

ICE BofA Merrill Lynch High Yield Cash Pay Index is an unmanaged index used as a general measure of market performance consisting of fixed-rate, coupon-bearing bonds with an outstanding par which is greater than or equal to $50 million, a maturity range greater than or equal to one year and must be less than BBB/Baa3 rated but not in default.

Management’s Discussion of Fund Performance (Unaudited)

Touchstone Impact Bond Fund

Sub-Advised by EARNEST Partners LLC

Investment Philosophy

The Touchstone Impact Bond Fund seeks current income. Capital appreciation is a secondary goal. The Fund invests primarily in fixed income securities or sectors that are considered undervalued for their risk characteristics.

Fund Performance

The Touchstone Impact Bond Fund (Class A Shares) underperformed its benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index, for the 12-month period ending September 30, 2020. The Fund’s total return was 5.46 percent (calculated excluding the maximum sales charge) while the benchmark’s total return was 6.98 percent.

Market Environment

The macroeconomic environment has changed drastically over the 12 months ending September 30, 2020. Entering the fourth quarter of 2019, the biggest investment risk on most peoples’ radar was the type of trade deal that could be accomplished with China. What was ultimately passed was considered the Phase One Trade Agreement, meant to be a building block for a more substantial deal. It would be difficult to succinctly describe the economic data of the last twelve months. Possibly the easiest is to consider the unemployment figures. The unemployment rate began the fiscal year at 3.5 percent. It peaked at 14.7 percent in April, and finished at 7.9 percent in September. The labor force participation rate fell to 61.4 percent, the lowest it has been since 1977. Over 68 million initial jobless claims have been filed during this period.

Away from the devastating economic impact COVID-19 has had, the other most tangible outcome it has caused is an aggressive fiscal and monetary response. Fiscal policies provided relief to small businesses, households and corporations alike. The U.S. Federal Reserve Board (Fed) unleashed a new round of quantitative easing, lowered interest rates and created a complex of liquidity facilities designed to settle the extreme volatility experienced in financial markets. To fund this the U.S. Treasury has issued vast amounts of debt. The federal deficit is now expected to approach $4 trillion for this fiscal year ending in September; the assets on the Fed’s balance sheet grew to over $7 trillion, nearly double where it stood last August. While the Fed’s actions calmed financial markets, fiscal stimulus measures have run out with no new deal in sight. While some of the economic figures have turned better, many believe these advances represent the initial easy gains one would expect to recuperate after a fall.

The Fed shifted not just a policy but also its overall monetary framework. In August, it stated it would no longer view a hypothetical figure of maximum employment as a proxy for inflation risk. Instead, it will consider the actual materialization of inflation as an indicator that employment is truly full. In this way, and in other more explicit ways, the Fed communicated its intention to keep interest rates at low levels for several years. It is important to definitively state that the Fed does not have a magic crystal ball to see around the bend. The central bank will be at the wheel and change its course based on the temperature of the economy. No less, it demonstrated a soured outlook on the economy, and its intent is to keep interest rates low until a significant recovery is underway.

While stable for most of the fourth quarter of 2019, interest rates fell hard and fast during the first quarter of 2020. While they have given some of this decline back in recent months, overall rates are down considerably. As a proxy, the yield on the 10-year U.S. Treasury started the trailing 12-months at 1.66 percent and finished the period at 0.68 percent.

Though spread products outperformed matched duration U.S. Treasuries in three of the last four quarters, trailing 12-month results were due primarily to the large underperformance of spread products during the first quarter of 2020 with higher quality bonds performing best during the fiscal year.

As the most economically sensitive sector, U.S. Credit was the weakest during the period. Agency Single-Family Mortgage-Backed Securities (MBS) was one of the strongest performing spread sectors, as investors sought the securities due to their high quality and superbly liquid markets. Other high-quality sectors, such as Agency Multi-Family and U.S. Agencies, performed roughly in-line with matched duration U.S. Treasuries.

Portfolio Review

Due to the Fund’s overweight to spread products, any macro-economic events that shift the demand profile for these products will likely affect the Fund’s relative returns. With risk sentiment downshifting during the last 12-months, a headwind was created. While sector allocations acted as headwinds to the Fund during the period, security selection within the sectors broadly benefited the portfolio. Security selection within U.S. Agencies and Agency Multi-Family MBS in particular helped offset some of the weakness due to overall sector performance. The Fund’s preference for secured and generally higher quality corporate bonds also benefited the Fund. However, much of this benefit was eliminated by the large underperformance of a handful of airline enhanced equipment trust certificate (EETC) bonds held by the Fund.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

The Fund does not make any active interest rate bets and, accordingly, its effective duration was approximately matched to that of the benchmark at the end of the period. By approximately matching the benchmark’s duration, the Fund’s interest rate risk is effectively equal to that of the benchmark over time. Furthermore, while changes in the yield curve can impact total returns, the Fund attempts to remain approximately curve neutral. Changes in interest rates had little impact on the Fund’s relative performance during the period.

Outlook

The pace of the economic recovery remains at the center of the fundamental backdrop. Though economic data has been better than expected, recent gains have already slowed and the expectation of a rapid “V-shaped” recovery has largely dwindled. The decline in the recovery outlook has been highly correlated with the government’s inability to strike another stimulus deal. While an 11th hour compromise is still an outside possibility, financial markets have largely shifted their expectations where a new deal is not passed until a new government is seated next year. While uncertainty appears to be at a premium, so are the prices and risks of U.S. Credit. This does not mean that all credit is doomed to underperform and pockets of value exist. However, the generally tight credit spreads contrasted with the high levels of economic uncertainty represent one of the bigger challenges for the Fund and markets broadly. We believe this challenge is best managed by having a targeted fundamental approach to picking credit investments, and not investing in broad market exposures.

This uncertain environment has led the Fed to make it painstakingly clear that it has no intention of raising interest rates unless the economic recovery is well underway and creating an inflationary environment. This has created several opportunities. Investors may continue to seek additional spread of U.S. Agency debt to avoid the low yields provided by U.S. Treasuries. In addition to the general attractiveness of spread sectors, the interest rate environment has caused prepayments on Agency Single-Family MBS to run at lightning speed. Involuntary prepayments accelerated in-line with the strained economy. Voluntary prepayments remained elevated due to attractive refinancing opportunities. With the Fed signaling that rates will remain low and the mortgage origination market’s margins having ample room to narrow, the prospect of fast prepayments remaining in place has become a general expectation. These forces have caused the sector to underperform. The Fund’s material underweight to the sector has provided an opportunity to find a bottom-up theme in the sector. As such, we have found ways to navigate some of the prepayment risks within the sector which we think are ultimately constructive.

Government support for small businesses has translated into an environment of low prepay speeds. While we think this is unlikely to continue, it has also provided an opportunity to focus new investments in the space on lower premium paper. A similar situation has taken place with Agency Multi-Family MBS. Despite the rate environment, prepayments have remained subdued due to the combination of prepayment restrictions and lending standards. We are positive about the Fund’s positioning for a variety of reasons. First, as investors balance their preferences for yield and risk, we think having a portfolio which performs strongest during a flight to quality is compelling.

We also believe that the risk management of the Fund positioning is important. The additional spread that is built into the portfolio does not come at the cost of lower overall quality. We believe that the Agency Multi-Family MBS held by the portfolio are well structured securities, backed by strong underwriting. The Fund’s overweight to this type of structure is used to complement the structure of Agency Single-Family MBS. In a low-rate, potentially volatile environment, having a portfolio of high-quality bonds can create the positioning to handle events with less disruption. Being a good shock absorber is often an important goal of fixed income investments.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

Comparison of the Change in Value of a $10,000 Investment in the Touchstone Impact Bond Fund - Class A^* and the Bloomberg Barclays U.S. Aggregate Bond Index

The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Note to Chart

Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index comprised of U.S. investment grade, fixed rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and ten years.

Management’s Discussion of Fund Performance (Unaudited)

Touchstone International ESG Equity Fund

Sub-Advised by Rockefeller & Co. LLC

Investment Philosophy

The Touchstone International ESG Equity Fund seeks long-term growth of capital. The Fund primarily invests in equity securities of non-U.S. companies and generally focuses on larger, more established companies. The Fund selects investments based on an evaluation of a company’s sustainability and impact practices which considers environmental, social and governance (ESG) impacts and risks of a company, how well the company manages these impacts and risks and ascertains the company’s willingness and ability to take a leadership position in implementing best practices.

Fund Performance

The Touchstone International ESG Equity Fund (Class A Shares) outperformed its benchmark, the MSCI All Country World ex-USA Index, for the 12-month period ended September 30, 2020.The Fund’s total return was 7.93 percent (calculated excluding the maximum sales charge), while the total return of the benchmark was 3.00 percent.

Market Environment

Global equities, as measured by the MSCI All Country World Index, generated a modest, positive return during the 12-month period ended September 30, 2020. Global equities posted strong gains during the fourth quarter of 2019, but performance was primarily driven by multiple expansion as opposed to earnings growth. There was also a significant bifurcation in the markets as stocks characterized as growth outperformed, while cyclical value stocks were overlooked by the market. However, a global pandemic in the early part of 2020 led to a sharp, deep sell-off. While the pandemic had a negative impact on equity markets, it also unleashed significant levels of fiscal and monetary stimulus. This led to a sharp rebound in global equity markets, but negatively impacted interest rate sensitive financials and traditional energy companies. Factors such as growth continued their relative outperformance over value, while international markets also lagged U.S. markets. However, companies with long-term secular growth opportunities, particularly those tied to renewable energy, performed well.

Portfolio Review

The Fund’s outperformance during the period was largely driven by strong stock selection in the Industrials, Real Estate and Communication Services sectors. The Fund’s sector allocation, particularly its underweight to the underperforming Energy and Financials sectors, also contributed to outperformance.

On a regional basis, Europe was the strongest contributor to relative performance for the period, as we took advantage of the heightened volatility to initiate positions in European companies where we believed valuations were attractive relative to business prospects. Companies such as Deutsche Post AG (Industrials sector) benefited from heightened e-commerce demand due to the pandemic. Banks detracted from relative performance, due to the low interest rate environment and heightened credit costs related to the economic downturn.

We made several changes to the Fund’s portfolio during the 12-month period. In early 2020 we exited positions that typically exhibit higher levels of economic cyclicality or positions in those industries that we believed would be negatively impacted by the pandemic. These include Royal Caribbean Cruises Ltd (Consumer Discretionary sector), and other European financial holdings. We added positions which tend to exhibit less economic cyclicality such as Intact Financial Corp. (Financials sector), a Canadian property and casualty insurance company. We also exited Total SA (Energy sector) on concern that traditional oil companies will continue to be challenged given regulatory pressures. We believe these regulatory pressures, however, should benefit renewable energy companies, to which we initiated several positions including Vestas Wind Systems A/S (Energy sector), a Danish manufacturer of wind turbines.

Outlook

The epic equity rally from April through August 2020 was driven by positive catalysts including exceedingly loose monetary policy, massive fiscal spending, a V-shaped recovery, and progress in therapeutics and vaccines. By now many of these catalysts are in the rearview mirror. The U.S. Federal Reserve Board (Fed) has fired most of its bullets and is urging more fiscal stimulus. Unfortunately, partisan politics has so far failed to deliver on the phase 4 stimulus bill. Rising daily, new COVID-19 cases could also slow the economic recovery. While corporate earnings for the third quarter may surprise on the upside, forward guidance might be cautious if the recovery loses momentum. We still expect good news on the vaccine front, but it will take time to get much of the population vaccinated to create herd immunity. We suspect the upcoming U.S. general election will be the main driver of performance in the fourth quarter, especially at the sector level with the candidates presenting starkly different policies and priorities. As we look further down the road, we believe value and non-U.S. stocks are likely to be the new market leaders as a more sustained cyclical recovery takes hold.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

While we have shifted the Fund’s portfolio slightly away from more economically cyclical stocks to those less economically cyclical, we are optimistic about the opportunity given portfolio positioning. We look to invest in companies where we believe there is lower risk of structural impairment and that have the potential to come out of the pandemic stronger.

Comparison of the Change in Value of a $10,000 Investment in the Touchstone International ESG Equity Fund - Class A* and the MSCI All Country World Ex-USA Index

The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Notes to Chart

MSCI All Country World Ex-USA Index is an unmanaged capitalization-weighted index composed of companies representative of both developed and emerging markets, excluding the USA.

MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. This report is not approved or produced by MSCI.

Management’s Discussion of Fund Performance (Unaudited)

Touchstone Mid Cap Fund

Sub-Advised by The London Company

Investment Philosophy

The Touchstone Mid Cap Fund seeks long-term capital growth by investing primarily in common stocks of mid-cap U.S.-listed companies. The Fund utilizes a bottom-up security selection process that screens potential investments against a proprietary quantitative model for return on capital, earnings-to-enterprise value ratio, and free cash flow yield. Its goal is to purchase financially stable companies that are believed to consistently generate high returns on unleveraged operating capital, are run by shareholder-oriented managements and are trading at a discount to their respective private market values.

Fund Performance

The Touchstone Mid Cap Fund (Class A Shares) underperformed its benchmark, the Russell Midcap^® Index, for the 12-month period ended September 30, 2020. The Fund’s total return was 3.32 percent (calculated excluding the maximum sales charge) while the benchmark’s total return was 4.55 percent.

Market Environment

The emergence of, and global response to, the COVID-19 pandemic dominated the period. After a strong final quarter of 2019, the market sold off in the first quarter of 2020 as the severity of the impact of the pandemic became apparent. The market rebounded in the second quarter and the strength continued into the third quarter as the Government responded with strong monetary and fiscal stimulus and businesses adapted to the new environment.

Large-cap growth stocks, especially the so-called FAANG stocks, contributed most to the performance of the Russell 1000^® Growth Index. Conversely, the Russell 1000^® Value Index was down during the period. The small and mid-cap indices did not fare as well as their large cap brethren. Growth significantly outperformed Value across the market cap spectrum. Information Technology, Health Care, and Communication Services sectors generally led while Energy, Real Estate, Financials and Utilities sectors lagged accordingly.

Portfolio Review

During the 12-month period, the Fund’s sector allocation contributed to performance, but was offset by stock selection. At the sector level, an underweight to the Energy, Real Estate, and Utilities sectors had a positive impact on relative performance, partially offset by the negative impact of an underweight to Health Care.

Among the individual stocks that contributed to Fund performance were Skyworks Solutions Inc., Entegris Inc., Black Knight Inc., Citrix Systems Inc. (all from the Information Technology sector), and Old Dominion Freight Line Inc. (Industrials sector). Skyworks’ contribution was driven by strong earnings results reported early in 2020. The stock also had positive momentum as evidence mounted that the 5G wireless cycle is continuing and perhaps building strength. Further evidence that Apple Inc., Skywork’s largest customer, is continuing with its plans to build a 5G phone helped build sentiment. Despite some industry headwinds earlier in the year, Entegris continues to gain share in its specialty chemical consumable business. These results have translated into higher returns throughout the year. We believe long-term growth drivers around advanced nodes, higher materials per wafer and higher purity requirements should add to further gain. Over the last few years, Entegris has drastically increased its size and scale while becoming one of the most diversified players in the semi-materials industry. We remain attracted to the industry’s high barriers to entry, limited competitors, and high switching costs. Old Dominion Freight Line was up 43 percent in 2020 on continued strength of execution. Management quickly reduced its variable costs early in the pandemic while maintaining its focus on providing “best-in-class” service to its customers. Management discipline has allowed it to steadily increase margins over the past several years. Citrix Systems has been a major beneficiary of the work-from-home situation required by the COVID-19 outbreak as its software products allow workers to securely access applications from almost anywhere. As such, in the early stages of the COVID-19 outbreak in the first quarter, the stock performed well. However, as the economy moved toward reopening and workers returning to the office, the stock generated positive absolute performance but lagged on a relative basis during the second quarter. Black Knight reported solid numbers in the first half of 2020 on both the top and bottom lines. Results were helped by the massive surge in mortgage refinance volumes, though partially offset by reduced foreclosure volumes (government mandated foreclosure moratorium). Even during the pandemic, Black Knight continues to win new conversions even after the large PennyMac Loan Services deconversion last year.

Among the individual stocks that detracted from performance were M&T Bank Corp. and Alleghany Corp. (both Financials sector), Armstrong World Industries Inc. (Industrials sector), NewMarket Corp. (Materials sector), and Store Capital Corp. (Real Estate sector). M&T Bank has underperformed this year, hit by low interest rates and concerns on credit. Interest rates are low and expected to stay low, potentially pressuring net interest income for the foreseeable future. There is also concern about worsening credit, particularly for the hospitality portfolio, as many borrowers remain heavily impacted by COVID-19 measures. Armstrong World Industries

Management’s Discussion of Fund Performance (Unaudited) (Continued)

had a rough second quarter, as mandatory government shutdowns in its top seven markets disproportionately hurt sales and margins. As a result, management issued second half of 2020 guidance below consensus. Unlike the rest of the market, Alleghany and the other property & casualty insurers did not experience a continued rebound during the third quarter. The return to zero interest rate policy as well as the business interruption claim overhang weigh on the industry. NewMarket lagged the market all year. The stock underperformed due to the company’s nearly 100 percent exposure to the automotive industry and miles driven by motor vehicles, which is currently weak due to COVID-19. The company’s second quarter earnings report was weaker than expected, as management highlighted that the global transportation market came to a near halt during the early parts of the second quarter, which greatly affected the consumption of its products. Retail-focused REIT, Store Capital declined early in the year as concern around rent collection due to the pandemic hurt the stock. Since then, the stock has rallied off its lows as rent collections have improved and economic activity has picked up, particularly in middle America. Store has been able to maintain its dividend and has resumed investment activity.

The Fund initiated new positions in Black Knight Inc. (Information Technology sector), Cincinnati Financial Corp. (Financials sector), and Steris PLC (Health Care sector). Black Knight is the industry leader in mortgage servicing, with approximately 60 percent market share on first liens and 19 percent on second liens. In our view, mortgage servicing is the vast majority of total Black Knight profits, but it also has an origination business and data and analytics segment. Mortgage servicing is a great recurring revenue business because it is the stock of mortgages outstanding that they get paid on, not the volume of originations. The business is characterized by highly recurring revenue and high returns on capital. We have seen insider buying of Black Knight over the past year. Cincinnati Financial is a leading provider of property and casualty insurance across the United States. We believe a history of conservative underwriting and a strong balance sheet with cash and investments exceeding debt and policy liabilities should lead to solid downside protection in the future. The stock is down in 2020 as investors fear the company will have to make large payments for business interruption insurance. We believe these fears are overblown and don’t expect a material charge to the company from any future payments related to business interruption cases. The controversy is around whether or not the virus could trigger a liability. The company claims it won’t have to pay without any physical damage to property. There will certainly be cases filed and we will have to see how the courts rule. Separately, the company has greater equity exposure in its reserves versus other insurance companies and the recent rally in the market could offset any lost book value from business interruption cases. Finally, pricing across the company’s products has shown recent improvement, which is a good sign for future earnings. Steris is a provider of equipment, consumables, and services to hospitals, medical device manufacturers, and pharmaceutical manufacturers. Steris is the market leader in the U.S. in sterilization equipment for hospitals and contract sterilization for medical device original equipment manufacturers. We view Steris as a solid mid-single digit revenue growth story, underpinned by secular tailwinds from aging population and growth of procedures. Margins could expand and the company has historically done a good job converting adjusted net income to cash flow.

The Fund exited its positions in Paychex Inc., Penske Automotive Group Inc., and T. Rowe Price Group Inc.

Outlook

Looking ahead, we are encouraged by the improvement in the economic data, but risks remain. In the near term, the U.S. economy faces the dual risks of a spike in the virus across parts of the country potentially leading to delayed openings or business closings, and reduced unemployment benefits possibly limiting consumer income and consumer spending. In that environment, we anticipate significant volatility. Longer term, we remain optimistic about the prospects for the U.S. economy.

The companies that the Fund holds seek higher returns on capital with stronger balance sheets relative to their peers. We believe the Fund provides the opportunity to own a group of competitively advantaged businesses (judged by return on capital), with stronger balance sheets lower net debt earnings before earnings, interest, taxes, depreciation and amortization (EBITDA) at a valuation that is slightly more than the market. Typically, a higher quality portfolio of companies will trade at a premium to the market.

We believe the quality of the Fund’s portfolio positions it well for the next few years, even if the market trades modestly higher.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

Comparison of the Change in Value of a $10,000 Investment in the Touchstone Mid Cap Fund - Class A* and the Russell Midcap^® Index

The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Notes to Chart

Russell Midcap^® Index measures the performance of the 800 smallest companies in the Russell 1000^® Index.

The Frank Russell Company (FRC) is the source and owner of the Index data contained or reflected in this material and all trademarks and copyrights related thereto. The material may contain confidential information and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. This is a Touchstone Investments presentation of the data, and FRC is not responsible for the formatting or configuration of this material or for any inaccuracy in the presentation thereof.

Management’s Discussion of Fund Performance (Unaudited)

Touchstone Mid Cap Value Fund

Sub-Advised by LMCG Investments, LLC

Investment Philosophy

The Touchstone Mid Cap Value Fund seeks capital appreciation by investing primarily in common stocks of medium capitalization companies. The Fund seeks to identify companies believed to be selling at a discount to their intrinsic value.

Fund Performance

The Touchstone Mid Cap Value Fund (Class A Shares) outperformed its benchmark, the Russell Midcap^® Value Index, for the 12-month period ended September 30, 2020, although both posted negative returns. The Fund’s total return was -6.20 percent (calculated excluding the maximum sales charge) while the benchmark’s total return was -7.30 percent.

Market Environment

To say markets were volatile in the 12 months ending September 30, 2020 would be an understatement. On the heels of strong absolute market performance in 2019, markets declined severely in 2020 with the onset of the COVID-19 pandemic. Risk-off sentiment prevailed in the first quarter as investors struggled to price in downside scenarios related to the COVID-19 pandemic. The market regained some ground in the second quarter as U.S. Federal Reserve Board (Fed) actions, stimulus checks, and states reopening their economies drove investors to embrace risk. Volatility returned to make equity performance choppy during the third quarter, despite the strength in the second quarter. Investors have continued to favor growth over value.

Portfolio Review

During the 12-month period, the Fund’s strongest contributors were the Information Technology, Consumer Staples, and Real Estate sectors. Primary detractors were the Industrials, Utilities, and Financials sectors.

The Information Technology sector benefited from strong stock selection, as well as a relative overweight allocation. Semiconductor holding MACOM Technology Solutions Holdings Inc. and software company Synopsys Inc. were standout performers within the sector. MACOM was well positioned for strength in the telecom and datacenter industries and it started to see revenue from several long awaited product introductions. Synopsys, a maker of design software for semiconductors, saw one of its strongest booking quarters ever earlier in 2020.

The Consumer Staples sector’s relative performance was driven by strong stock selection, led by food product producers, Darling Ingredients Inc. and The Hain Celestial Group Inc. Darling Ingredients’ earnings recovered toward the end of the period after the stock declined significantly during the first quarter. Hain Celestial benefited from COVID-19 lockdown stockpiling as consumers increased purchases of packaged food.

The Fund’s underweight to Real Estate, combined with good stock selection, drove performance in that sector.

Stock selection in the Industrials sector weighed on Fund performance, as did the underweight to the sector. Hexcel Corp. and Aercap Holdings NV, two stocks with aerospace exposure, were among the largest detractors. Both stocks continued to be impacted by weak travel demand because of the pandemic. We like the competitive positioning of both stocks and are closely monitoring their balance sheets and future prospects.

Natural gas utility, Spire Inc. weighed on returns in the Utilities sector. The company took a write-down against the value of natural gas storage assets that were acquired in 2018 and are taking longer and costing more to revamp than expected. The gas utility space is also seeing some pressure around decarbonization and ESG (environmental, social and governance) considerations. This theme has occurred before and we think is a little overdone. Natural gas will likely be a vital source of cleaner energy used in conjunction with renewables and we believe these distribution companies have long-term opportunities in the burgeoning hydrogen distribution field.

The Fund’s underweight to the benchmark in the Financials sector helped relative performance, nevertheless, subpar stock selection more than offset it resulting in a drag overall. Much of the headwind came from banks like Signature Bank and Sterling Bancorp. Despite solid results and a strong balance sheet, Signature Bank has continued to sell off due to the slow return of New York City economic activity after shutdowns in the spring.

On a sector basis, the Fund maintained overweight positions to the Consumer Staples and Health Care sectors, and underweight positions to the Real Estate, Communication Services and Financials sectors.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

Outlook

Some circumstances have changed but uncertainty still reigns supreme. This election season has already been unlike any seen before, with less than a month still left to go. Despite polls suggesting a Biden win, most investors still feel that the results and aftermath are unpredictable. COVID-19 infection numbers are again on the upswing in the U.S. and Europe, and while we are now three months closer to a potential vaccine, we believe widespread distribution is still nine months away at best. Unemployment has improved, but stimulus programs to businesses are set to expire and the statistic has benefited from people exiting the labor force. Another fiscal stimulus could be close, but discussions over the last four months have been unable to reach consensus. The upcoming winter season will undoubtedly be challenging, with further shutdowns a possibility (and consumers once again homebound), children in and out of school, and the onset of cold and flu season.

Yet despite all of this continued uncertainty, the market continues to chug higher driven by the prospect of low interest rates until 2023. Monetary policy has been accommodative over the decade. We believe every business and consumer that has been able to take advantage of low rates has done so. Japan and Europe have tried to stoke inflation through negative interest rates, with minimal success. Whether low rates will stimulate the economy further is an open question. We think that the likely result will be asset inflation, with equities leading the charge. Whether this develops into a bubble and when that bubble may pop is difficult to predict. Investor ebullience is not yet an issue that has been solved by quantitative models and artificial intelligence.

The Fund utilizes a classic value-driven philosophy based on the belief that leading businesses selling at a discount to fair value have the potential to generate excess returns. The Fund’s strategy focuses on stocks that are temporarily out of favor in the market, specifically companies with higher returns on capital, free cash flow and strong balance sheets. Emphasis is placed on those companies having the cash flow characteristics as well as the balance sheet strength necessary to buffer the company from any prolonged weakness. While the companies we select often dominate a particular industry niche and generally have significant barriers to entry, we believe they are able to perpetuate a higher return on capital over time. The Fund’s overall investment process utilizes fundamental bottom-up security selection, while risk-control measures ensure security and sector diversification.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

Comparison of the Change in Value of a $10,000 Investment in the Touchstone Mid Cap Value Fund - Class

A^* and the Russell Midcap^® Value Index

The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Notes to Chart

Russell Midcap^® Value Index measures the performance of those Russell Midcap companies with lower price-to-book ratios and lower forecasted growth values.

The Frank Russell Company (FRC) is the source and owner of the data contained or reflected in this material and all trademarks and copyrights related thereto. The material may contain confidential information and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. This is a Touchstone Investments presentation of the data, and FRC is not responsible for the formatting or configuration of this material or for any inaccuracy in the presentation thereof.

Management’s Discussion of Fund Performance (Unaudited)

Touchstone Sands Capital Select Growth Fund

Sub-Advised by Sands Capital Management, LLC

Investment Philosophy

The Touchstone Sands Capital Select Growth Fund seeks long-term capital appreciation by primarily investing in common stocks of large-capitalization U.S. companies that are believed to have above-average potential for revenue or earnings growth. The Fund typically invests in 25 to 35 companies. Sands Capital generally seeks stocks with sustainable above-average earnings growth and capital appreciation potential. In addition, Sands Capital looks for companies that have a significant competitive advantage, a leadership position or proprietary niche, a clear mission in an understandable business, financial strength and are valued rationally in relation to comparable companies, the market and the business prospects for that particular company.

Fund Performance

The Touchstone Sands Capital Select Growth Fund (Class A shares) outperformed its benchmark, the Russell 1000^® Growth Index, for the 12-month period ended September 30, 2020. The Fund’s total return was 58.43 percent (calculated excluding the maximum sales charge) while the total return of the benchmark was 37.53 percent.

Market Environment

U.S. growth equities (as measured by the Russell 1000^® Growth Index) posted strong gains for the 12-month period, despite the global economic devastation caused by the coronavirus pandemic, which ended the decade-long bull market. Growth equities for the period benefited from both technical and fundamental tailwinds, as low rates bolstered the value of future earnings, and as the recessionary environment put a premium on the growth generated by tech and tech-enabled businesses.

Gains were broad based among sectors, with only the Energy and Utilities sectors trading lower during the period. However, the contribution was concentrated among the faster-growing Information Technology, Consumer Discretionary, Health Care, and Communication Services sectors, which together accounted for virtually all of the benchmark’s gain.

Portfolio Review

During the period, digital stay-at-home beneficiaries drove Fund results, which were largely attributable to security selection. Allocation effect was also a modest contributor. From a sector perspective, Communication Services was the standout contributor. No sectors detracted from results for the period.

The top five individual absolute contributors for the period were Sea Ltd., Amazon.com Inc., Netflix Inc., ServiceNow Inc. and Adobe Inc. The top five detractors were Texas Instruments Incorporated, Uber Technologies Inc., Abiomed Inc., Warner Music Group Corp., and Workday Inc.

The Fund’s sector exposures are largely a byproduct of our bottom-up investment process. While the Fund’s exposures remained directionally the same, the Fund’s Communication Services’ weight—its largest sector overweight a year ago—rose due to adds, initiations, and relative market appreciation. The bulk of this addition came from the Consumer Discretionary sector through proceeds from the sale of Alibaba Group Holding Ltd. The Fund maintained a zero percent weight in the Energy, Financials, Materials, Real Estate, and Utilities sectors.

Turnover for the period was elevated relative to history. In the Fund, we seek to own large weights in what we view as clear winners, build positions in next-generation growth leaders, and mitigate risk through high-quality duration growers with durable competitive advantages. The pandemic-induced volatility created opportunities for us to upgrade the Fund’s portfolio, shedding businesses that we viewed as more mature and understood by the market, while adding and/or purchasing businesses that we believe are better positioned for a new period of disruption and opportunity.

During the period, the Fund purchased Charter Communications Inc. (Communication Services sector), Coupa Software Inc. (Information Technology sector), Dexcom Inc. (Health Care sector), Grocery Outlet Holding Corp. (Consumer Staples sector), Sea Ltd. (Communication Services sector), Snowflake Inc. and Square Inc. (both Information Technology sector), Uber Technologies Inc. (Industrials sector), Warner Music Group Corp. (Communication Services sector), and Zillow Group Inc. (Communication Services sector). The Fund sold Abiomed Inc. (Health Care sector), Activision Blizzard Inc. (Communication Services sector), Alibaba Group Holding Ltd. (Consumer Discretionary sector), BioMarin Pharmaceutical Inc. (Health Care sector), Palo Alto Networks Inc., Salesforce.com Inc., Texas Instruments Incorporated, and Workday Inc. (all Information Technology sector).

Outlook

The adage “you have to be there, not getting there” is often spoken by our founder Frank Sands, Sr., and is especially important in today’s rapidly changing environment for both managing risk and opportunity. Today, many of the businesses benefit from one or

Management’s Discussion of Fund Performance (Unaudited) (Continued)

more of the following secular trends. Many of these trends have accelerated amid the pandemic, and we believe their growth trajectory will persist beyond the crisis:

Internet 2.0

Digitization of the economy continues, and the next generation of internet businesses are disrupting the status quo by reducing transactional frictions, increasing transparency, and eliminating inefficiencies. These companies are focusing on large verticals and delivering industry-specific solutions that result in a better customer experience while reinforcing their competitive moats. Potential portfolio beneficiaries include CoStar Group Inc., Match Group Inc., Uber Technologies Inc., and Zillow Group Inc.

Life Sciences Innovation

Advances in health care and technology are enabling companies to run clinical trials and bring drugs and devices to market more efficiently than ever before. Innovative treatments are being developed for patients with diseases that were previously incurable. Medical devices are becoming increasingly sophisticated and are disrupting traditional standards of care. Potential portfolio beneficiaries include Align Technology Inc., Dexcom Inc., Edwards Lifesciences Corp., and Zoetis Inc.

Shifting IT Spend from Maintenance to Agility

Information technology spending continues to shift toward innovations that make enterprises more agile and efficient. Unlike the last decade—where suboptimal legacy processes were replaced by cloud-based software—the next generation of SaaS leaders are enabling new businesses and processes through component functions and ecosystem integration. Fast deployment, scalability, lower total cost of ownership, and easy/frequent updates create a compelling customer value proposition. Potential portfolio beneficiaries include Atlassian Corp. PLC, Coupa Software Inc., ServiceNow Inc., and Twilio Inc.

Financial Services Digital Revolution

The combination of modern technology and disruptive customer acquisition models are fundamentally changing how financial products are designed, manufactured, and distributed. New technologies are enabling access to basic financial products and services for the underbanked segments and disintermediating traditional banks through innovative offerings. We think that Smartphone proliferation, online distribution, and modern data techniques result in strong unit economics. Potential portfolio beneficiaries include Intuit Inc., Sea Ltd., Square Inc., and Visa Inc.

The primary risk we seek to manage is permanent loss of capital resulting from a negative business or investment outcome. Since earnings growth tends to drive stock-price returns over the long term, we closely monitor factors that could erode the underlying earnings power of the Fund’s businesses. Conversely, we also seek to mitigate opportunity cost, as failing to invest in value-creating businesses is also detrimental to long-term results. In both cases, we believe that our six criteria are our most powerful risk management tool, as they help us identify those businesses most likely to sustainably generate above-average growth over our investment horizon.

We anticipate market volatility in the near term, given the uncertainty around the U.S. election, fiscal and monetary policy, the pandemic and vaccine progress, and valuation concerns. However, we do not perceive volatility itself as “risk,” and will continue to monitor how and if these issues affect the long-term earnings power of the Fund’s businesses. Volatility can create opportunity for long-term investors as prices disconnect from fundamentals, and we will look to be opportunistic.

In the current environment, we believe the Fund’s businesses will benefit from accelerating secular trends, and believe that growth and earnings scarcity globally will merit a premium for the types of businesses the Fund seeks to own. COVID-19 will likely have a lasting impact on economies, business spaces, behaviors, and geopolitics. It is accelerating existing trends, ending others, and we believe will widen the gap between winners and losers. However, it is unlikely to change the fact that investors need appropriate absolute returns to achieve their goals, and our belief is that earnings drive equity returns over the long run, and only a select few businesses are capable of sustaining above-average growth. Leadership, innovation, and competitive advantage will distinguish the winning businesses even more in the years ahead, in our view.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

Comparison of the Change in Value of a $10,000 Investment in the Touchstone Sands Capital Select Growth Fund - Class A* and the Russell 1000^® Growth Index

The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Notes to Chart

Russell 1000^® Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.

The Frank Russell Company (FRC) is the source and owner of the data contained or reflected in this material and all trademarks and copyrights related thereto. The material may contain confidential information and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. This is a Touchstone Investments presentation of the data, and FRC is not responsible for the formatting or configuration of this material or for any inaccuracy in the presentation thereof.

Management’s Discussion of Fund Performance (Unaudited)

Touchstone Small Cap Fund

Sub-Advised by The London Company

Investment Philosophy

The Touchstone Small Cap Fund seeks capital appreciation by investing primarily in common stocks of U.S. companies with small market capitalizations. The Fund utilizes a bottom-up security selection process that screens potential investments against a proprietary quantitative model for return on capital, earnings-to-enterprise value ratio, and free cash flow yield. Its goal is to purchase financially stable companies that are believed to consistently generate high returns on unleveraged operating capital, are run by shareholder-oriented managements and are trading at a discount to their respective private market values.

Fund Performance

The Touchstone Small Cap Fund (Class A Shares) underperformed its benchmark, the Russell 2000^® Index, for the 12-month period ended September 30, 2020. The Fund’s total return was -8.92 percent (calculated excluding the maximum sales charge) while the benchmark’s total return was 0.39 percent.

Market Environment

The emergence of, and global response to, the COVID-19 pandemic dominated the period. After a strong final quarter of 2019, the market sold off in the first quarter of 2020 as the severity of the impact of the pandemic became apparent. The market rebounded in the second quarter and the strength continued into the third quarter as the Government responded with strong monetary and fiscal stimulus and businesses adapted to the new environment.

Large cap growth stocks, especially the so-called FAANG stocks, contributed most to the performance of the Russell 1000^® Growth Index. Conversely, the Russell 1000^® Value Index was down during the period. The small and mid-cap indices did not fare as well as their large cap brethren. Growth significantly outperformed Value across the market cap spectrum. Information Technology, Health Care, and Consumer Discretionary sectors generally led while Energy, Real Estate, and Financials sectors lagged accordingly.

Portfolio Review

Both sector allocation and stock selection were headwinds. At the sector level, an underweight to both Health Care and Information Technology had a negative impact on relative performance, partially offset by the positive impact of an underweight to both Financials and Utilities.

Among the individual stocks that contributed to Fund performance were Entegris Inc. (Information Technology sector), Masonite International Corp. (Industrials sector), Churchill Downs Inc. (Consumer Discretionary sector), Tempur-Sealy International Inc. (Consumer Discretionary), and Sturm Ruger & Co. Inc. (Consumer Discretionary). Despite some industry headwinds earlier in the year, Entegris continued to gain share in its specialty chemical consumable business. Over the last few years, Entegris has drastically increased its size and scale while becoming one of the most diversified players in the semi-materials industry. Masonite’s outperformance was mainly due to the positive impact of the pricing actions which took effect earlier in 2020. Those price hikes turned a double-digit decline in sales from weaker volumes into a double-digit percentage jump in EBITDA (earnings before interest, taxes, depreciation and amortization). The stock rallied further as its only competitor followed along with its own price hikes. Similar to other companies in the gaming and entertainment industries, 2020 has been an anomalous year for Churchill Downs. The Kentucky Derby was held later than usual and without fans, and the company’s casinos were shut down earlier in the year, though operations have since resumed. However, the stock performed well on strong performance from the TwinSpires online betting platform as well as industry-wide optimism around iGaming and sports betting. Tempur-Sealy held up well despite the market backdrop, and the stock rallied off of its March lows. New products, distribution network expansion, and e-commerce growth have all helped boost profitability and sales. Tempur-Sealy continued to gain share in both the traditional and alternative retail channels. Sturm Ruger surged as consumers stocked up on firearms during the pandemic and amidst the riots that appeared across the country earlier in the year. In stark contrast, sales were in a deep slump right before the beginning of the year.

Among the individual stocks that detracted from performance were NewMarket Corp. (Materials sector), Alexander & Baldwin Inc. (Real Estate sector), White Mountains Insurance Group Ltd. (Financials sector), Armstrong World Industries Inc. (Industrials sector) and Kaman Corp. (Industrials sector). NewMarket lagged the market all year. The stock underperformed due to the company’s nearly 100 percent exposure to the automotive industry and miles driven by motor vehicles, which is currently weak due to COVID-19. The company’s second quarter earnings report was weaker than expected, as management highlighted that the global transportation market came to a near halt during the early parts of the second quarter, which greatly affected the consumption of its products. Alexander & Baldwin is a pure-play on Hawaiian commercial real estate, and operating performance has suffered with the state largely shut down to tourists. Given the situation, we believe management has done as good a job as can be expected, working with tenants and preventing cash burn. White Mountains underperformed in 2020 as the broader market rebounded from pandemic-driven

Management’s Discussion of Fund Performance (Unaudited) (Continued)

lows due to undeployed capital within its investment portfolio. Armstrong World Industries had a rough second quarter, as mandatory government shutdowns in its top seven markets disproportionately hurt sales and margins. As a result, management issued second half of 2020 guidance below consensus. Kaman underperformed reflecting its exposure to commercial airplanes. We are encouraged that Kaman has worked to diversify its end markets in the past year, with now only 30 percent of revenues coming from commercial aerospace. The remaining revenues were more defensive, serving end markets such as healthcare, defense, and food manufacturing.

The Fund initiated new positions in Graham Holdings Co. (Consumer Discretionary sector), LivaNova PLC (Health Care sector), Store Capital Corp. (Real Estate sector), Cannae Holdings, Inc. (Financials sector), and ACI Worldwide Inc. (Information Technology sector) . Graham Holdings is a family-controlled conglomerate that used to own the Washington Post. Today it operates as an education and media company. The high margin broadcast TV business generates a lot of cash, funding investment in other segments, capital return, and bolt-on acquisitions. The company has a strong balance sheet with $200 million of net cash and management has been shareholder oriented regarding capital allocation. LivaNova is a medical device company that operates in two primary segments: approximately 40 percent of sales from neuromodulation (vagus nerve stimulators) and approximately 60 percent of sales from cardiovascular, which consists of heart-lung machines and other cardiopulmonary equipment, advanced circulatory support, and a small valve business. We believe the company is unique among small/SMID medical device companies due to its robust pipeline, which includes neuromodulation approaches to treatment-resistant depression, obstructive sleep apnea, and heart failure. Store Capital fills a niche in the over $3 Trillion middle market sale lease back space, providing lessees (without credit ratings) customer centric solutions to free up capital. Store Capital seeks to focus exclusively on profit center stores, receiving property level financial statements on 98 percent of assets. These underlying units generally have a better credit rating than tenants, as all other debts are subordinate to rent payments (because lessees need to continue to keep profit centers open and Store knows the profitability on a per store level). Store Capital also has a diversified client base with no single tenant representing greater than 3 percent of sales. Cannae Holdings, Inc. is a holding company that has compounded at a 20 percent return per year since its 2014 initial public offering. Through divestitures and acquisitions, today it is really just two main assets, Ceridian and Dun and Bradstreet, both driven by Bill Foley. Ceridian is now mostly a passive equity worth $1.7 Billion that they are actively monetizing. We believe Dun and Bradstreet is a unique asset with data on 360 million companies, public and private. Founded in 1841, it is still a vital source of information needed by creditors and sales departments. The attraction today revolves around the restructuring of the business and significant reinvestment opportunities. ACI Worldwide, Inc. engages in the development, marketing, installation, and support of software products and solutions primarily focused on facilitating real-time, any-to-any electronic payments. We believe revenue, margins, and return on invested capital should improve over time as ACI benefits from new management initiatives to accelerate growth, supported by the secular tailwind towards the digitization of payments and the use of real-time payments. The trend toward digital payments has only accelerated due to the pandemic.

The Fund sold its positions in Versum Materials (Information Technology sector), LCI Industries (Consumer Discretionary sector), MSG Networks Inc. (Communications Services sector) and Sturm, Ruger &Co. Inc. (Consumer Discretionary sector).

Outlook

Looking ahead, we are encouraged by the improvement in the economic data, but risks remain. In the near term, the U.S. economy faces the dual risks of a spike in the virus across parts of the country potentially leading to delayed openings or business closings, and reduced unemployment benefits possibly limiting consumer income and consumer spending. In that environment, we anticipate significant volatility. Longer term, we remain optimistic about the prospects for the U.S. economy.

We believe the quality of the portfolio positions the Fund well for the next few years, even if the market trades modestly higher.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

Comparison of the Change in Value of a $10,000 Investment in the Touchstone Small Cap Fund - Class A^* and the Russell 2000^® Index

The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Notes to Chart

Russell 2000^® Index measures the performance of the small-cap segment of the U.S. equity universe.

The Frank Russell Company (FRC) is the source and owner of the data contained or reflected in this material and all trademarks and copyrights related thereto. The material may contain confidential information and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. This is a Touchstone Investments presentation of the data, and FRC is not responsible for the formatting or configuration of this material or for any inaccuracy in the presentation thereof.

Management’s Discussion of Fund Performance (Unaudited)

Touchstone Small Cap Value Fund

Sub-Advised by LMCG Investments, LLC

Investment Philosophy

The Touchstone Small Cap Value Fund seeks long-term capital growth by investing primarily in common stocks of small capitalization companies. The Fund seeks to identify companies believed to be selling at a discount to their intrinsic value.

Fund Performance

The Touchstone Small Cap Value Fund (Class A Shares) outperformed its benchmark, the Russell 2000^® Value Index, for the 12-month period ended September 30, 2020, although both posted negative returns. The Fund’s total return was -13.83 percent (calculated excluding the maximum sales charge) while the benchmark’s total return was -14.88 percent.

Market Environment

To say markets were volatile in the 12 months ending September 30, 2020 would be an understatement. On the heels of strong absolute market performance in 2019, markets declined severely in 2020 with the onset of the COVID-19 pandemic. Risk-off sentiment prevailed in the first quarter as investors struggled to price in downside scenarios related to the COVID-19 pandemic. The market regained some ground in the second quarter as U.S. Federal Reserve Board (Fed) actions, stimulus checks, and states reopening their economies drove investors to embrace risk. Volatility returned to make equity performance choppy during the third quarter, despite the strength in the second quarter. Investors have continued to favor growth over value.

Portfolio Review

During the 12-month period, the Fund’s performance was strongest in the Consumer Staples, Energy, Real Estate and Communication Services sectors, and weakest in Health Care, Industrials, Utilities, and Materials. The outperformance was due mainly from the Fund’s allocation among sectors, and stock selection results were mixed yet detracted overall.

Stock selection contributed in the Consumer Staples sector, particularly in the food products segment. The top performing stock overall was Darling Ingredients Inc., in the food products segment of Consumer Staples. Darling converts the waste stream from meatpacking plants into a variety of refined products for usage in food and fuel. Stockpiling of basic necessities related to the pandemic drove sales up 100 percent at retail for some food brands in March. This also contributed to the outperformance of packaged food company Hain Celestial Group Inc. and warehouse club store BJ’s Wholesale Club Holdings Inc., two other top performers during the 12-month period.

The Fund benefited from its underweight positions to Real Estate, Energy, and Financials, as those sectors in the benchmark were down significantly in the period, respectively.

The Fund’s lack of exposure to biotech companies was responsible for most of the stock selection drag in the Health Care sector. The risk/reward proposition in many biotech holdings is typically too binary for LMCG’s philosophy in process. Though biotech is only a small portion of the benchmark, the trailing one-year period was particularly strong in that segment. For example, a stock that was in the sector was NuVasive, a med-tech business focused on minimally invasive spine repair. The stock underperformed early in the pandemic, as it has a higher mix of elective procedures and deferrable procedures, and COVID-19-related hospital shutdowns and higher unemployment led to increased uncertainty for surgical volumes. We believe that following a period for deferrals of elective procedures, hospitals will return to a more normal mix of procedures. We believe the company is positioned well competitively and has the potential for higher normalized profitability as management drives margins higher.

The Utilities sector experienced stock specific headwinds from Portland General Electric Co. Portland General suffered from elevated losses in its energy trading group and wildfires in its service area. We view both issues as transitory and added to the Fund’s position.

The Fund benefited from an overweight to the Materials sector, though that was offset by weaker stock selection in the metals & mining and chemicals segments.

Lastly, in the Industrials sector, performance was mixed among industries – electrical equipment, building products and machinery all added to relative performance while commercial and professional services detracted. The largest detractor was Team Inc. Much of the underperformance in the company occurred in the first quarter, as the refinery services company faced an uncertain future given the COVID-19 shocks to gasoline demand. Refiners are running at bare minimum utilization rates and shutting down whole swaths of capacity.

The Fund maintained an overweight to the Information Technology, Materials, and Consumer Staples sectors, and an underweight to the Real Estate, Financials, and Consumer Discretionary sectors.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

Outlook

Some circumstances have changed but uncertainty still reigns supreme. This election season has already been unlike any seen before, with less than a month still left to go. Despite polls suggesting a Biden win, most investors still feel that the results and aftermath are unpredictable. COVID-19 infection numbers are again on the upswing in the U.S. and Europe, and while we believe we are now three months closer to a potential vaccine, widespread distribution is still nine months away at best. Unemployment has improved, but stimulus programs to businesses are set to expire and the statistic has benefited from people exiting the labor force. Another fiscal stimulus could be close, but discussions over the last four months have been unable to reach consensus. The upcoming winter season will undoubtedly be challenging, with further shutdowns a possibility (and consumers once again homebound), children in and out of school, and the onset of cold and flu season.

Yet despite all of this continued uncertainty, the market continues to chug higher driven by the prospect of low interest rates until 2023. Monetary policy has been accommodative over the decade. We believe every business and consumer that has been able to take advantage of low rates has done so. Japan and Europe have tried to stoke inflation through negative interest rates, with minimal success. Whether low rates will stimulate the economy further is an open question. We think that the likely result will be asset inflation, with equities leading the charge. Whether this develops into a bubble and when that bubble may pop is difficult to predict. Investor ebullience is not yet an issue that has been solved by quantitative models and artificial intelligence.

The Fund utilizes a classic value-driven philosophy based on the belief that leading businesses selling at a discount to fair value have the potential to generate excess returns. The Fund’s strategy focuses on stocks that are temporarily out of favor in the market, specifically companies with higher returns on capital, free cash flow and strong balance sheets. Emphasis is placed on those companies having the cash flow characteristics as well as the balance sheet strength necessary to buffer the company from any prolonged weakness. While the companies we select often dominate a particular industry niche and generally have significant barriers to entry, we believe they are able to perpetuate a higher return on capital over time. The Fund’s overall investment process utilizes fundamental bottom-up security selection, while risk-control measures ensure security and sector diversification.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

Comparison of the Change in Value of a $10,000 Investment in the Touchstone Small Cap Value Fund - Class A* and the Russell 2000^® Value Index

The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Notes to Chart

Russell 2000^® Value Index measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.

The Frank Russell Company (FRC) is the source and owner of the data contained or reflected in this material and all trademarks and copyrights related thereto. The material may contain confidential information and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. This is a Touchstone Investments presentation of the data, and FRC is not responsible for the formatting or configuration of this material or for any inaccuracy in the presentation thereof.

Management’s Discussion of Fund Performance (Unaudited)

Touchstone Ultra Short Duration Fixed Income Fund

Sub-Advised by Fort Washington Investment Advisors, Inc.

Investment Philosophy

The Touchstone Ultra Short Duration Fixed Income Fund seeks maximum total return consistent with the preservation of capital by primarily investing in a diversified portfolio of fixed income securities of different maturities, including U.S. Treasury securities, U.S. government agency and U.S. government-sponsored enterprise securities, corporate bonds, mortgage-backed securities, commercial mortgage-backed securities, asset-backed securities, municipal bonds and cash equivalent securities including repurchase agreements and commercial paper. While the Fund may invest in securities of any maturity or duration, interest rate risk is managed by seeking to maintain an effective duration of one year or less under normal market conditions.

Fund Performance

The Touchstone Ultra Short Duration Fixed Income Fund (Class A Shares) outperformed its first benchmark, the ICE BofA Merrill Lynch 3-Month U.S. Treasury Bill Index, but underperformed its second benchmark, the ICE BofA Merrill Lynch 1-Year U.S. Treasury Note Index, for the 12-month period ended September 30, 2020. The Fund’s total return was 1.32 percent (calculated excluding the maximum sales charge) while the total returns of its benchmarks were 1.10 percent and 2.37 percent, respectively.

Market Environment

While the 12-month period began with a docile macroeconomic environment during the fourth quarter of 2019, the remainder of the period was anything but that. Top-of-mind concerns at the end of 2019 included the fallout from the U.S.-China trade conflict, which had disrupted manufacturing, supply chain/global trade and business confidence. In spite of those concerns, overall economic fundamentals in the U.S. were stable or positive, with unemployment and the consumer balance sheet in historically strong shape. While the trade conflict had weighed heavily on spreads and had pressured rates lower globally, valuations of short duration assets overall were relatively full heading into year-end.

As news of the highly contagious COVID-19 virus began to infiltrate headlines around the beginning of the year, risk assets in the U.S. continued to rally early on. As the world watched the localized, Chinese epidemic evolve toward a full-fledged global pandemic, the reality of a total economic shutdown came into view, driving markets into a steep and unprecedented selloff. Stay-at-home orders began to sweep across the U.S. drawing many components of the economy to a standstill while fixed income spreads widened out at a rate and to a degree unparalleled even in the Great Financial Crisis. Liquidity seized up across all markets, as risk assets began trading in correlated fashion. The U.S. Federal Reserve Board (Fed), having three rate cuts during 2019 to offset recessionary risk stemming from the trade war, took action in early March 2020 to cut rates by 50 basis points. As the crisis unfolded, the Fed held an emergency Sunday meeting two weeks later to further cut rates to zero, also announcing a quantitative easing program initially sized at $700 billion. This announcement was followed by a multitude of emergency lending and liquidity facilities over the subsequent weeks demonstrating to markets that the Fed would do everything in its power to provide a backstop for markets.

As the economic shutdown and stay-at-home orders took effect beginning in March, weekly initial jobless claims spiked during the last week of the month. The economy went on to lose approximately 22 million jobs in total over subsequent weeks. The federal government stepped in to pass the $2.2 trillion CARES Act stimulus toward the end of March, providing much needed direct-to-consumer stimulus checks and a $600/week federal unemployment benefit among other support programs.

As abruptly, as risk assets sold off in March and April 2020, the sweeping efforts by the Fed and the federal government were meaningful and effective in calming markets and helping return them to functionality during the second quarter. After reaching its recessionary trough in late March, the S&P 500^® Index steadily recovered through the remainder of the Fund’s fiscal year, ultimately returning a double-digit gain. Short duration index spreads followed a similar pattern over that time period with short-term corporates moving wider in late March before spending the second quarter recovering sharply as Fed support and federal government stimulus took effect.

Portfolio Review

With the Fund’s average duration positioning of 0.50 years over the course of the year, the rate move gave the Fund an advantage over the 3-month benchmark and a disadvantage versus the 1-year benchmark.

The other key driver of performance relative to the primary benchmark was the extreme volatility and subsequent recovery coinciding with the COVID-19 pandemic and associated economic shutdowns. While even high-quality, short duration assets experienced an unprecedented rate and magnitude of spread widening during late March and early April, spreads had recovered 80-85 percent of that widening by the end of the second quarter, and by the end of the 12-month period had nearly fully round-tripped.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

Outlook

Given the current relatively tight level of spreads in short assets and the historically low all-in yields, Fund management is cautious to add risk in the current environment. Fundamental risk remains elevated, and yet valuations in most short assets seem to be priced “for perfection.” In such an environment, we believe the best opportunity is to maintain a higher quality bias and look for pockets of value particularly in short Structured Products sectors where pricing inefficiencies and/or over-simplified cash flow modeling can create opportunities to add value. We are willing to be patient for these and other opportunities to add risk when/where valuations offer more attractive compensation.

Consumer and commercial real estate fundamentals are key areas to watch as the economic recovery continues to play out in the U.S. With unemployment at a very high level and government talks for additional stimulus seemingly at a standstill, consumer fundamentals remain at risk for further deterioration. Likewise, certain segments of commercial real estate continue to struggle, with many hotel/leisure and retail assets suffering significantly from the broad economic shutdowns and slow reopening process.

We do not believe that current valuations justify increasing risk in the portfolio. As we work to reinvest cash flows in the Fund, we are doing so with a higher quality bias. Given the minimal additional compensation available for taking risk, we are managing the Fund in a way that would allow us to take advantage of potential dislocation if we were to see additional volatility in the near term.

Management’s Discussion of Fund Performance (Unaudited) (Continued)

Comparison of the Change in Value of a $10,000 Investment in the Touchstone Ultra Short Duration Fixed Income Fund - Class A^*, the ICE BofA Merrill Lynch 3-Month U.S. Treasury Bill Index and the ICE BofA Merrill Lynch 1-Year U.S. Treasury Note Index

The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Notes to Chart

ICE BofA Merrill Lynch 3-Month U.S. Treasury Bill Index is an unmanaged index of Treasury securities maturing in 90 days that assumes reinvestment of all income.

ICE BofA Merrill Lynch 1-Year U.S. Treasury Note Index is an unmanaged index comprised of a single issue purchased at the beginning of the month and held for a full month. The issue selected at each month-end rebalancing is the outstanding two-year Treasury Note Bill that matures closest to, but, not beyond one year from the rebalancing date.

Tabular Presentation of Portfolios of Investments (Unaudited)

September 30, 2020

The tables below provide each Fund’s geographic allocation, sector allocation and/or credit quality. We hope it will be useful to shareholders as it summarizes key information about each Fund’s investments.

Tabular Presentation of Portfolios of Investments (Unaudited) (Continued)

Tabular Presentation of Portfolios of Investments (Unaudited) (Continued)

*  Sector Classifications are based upon the Global Industry Classification Standard (GICS^®).

Tabular Presentation of Portfolios of Investments (Unaudited) (Continued)

*  Sector Classifications are based upon the Global Industry Classification Standard (GICS^®).

**  Credit quality ratings are from Standard & Poor's (“S&P”) and Moody's Investors Service (“Moody's”). If agency ratings differ, the higher rating will be used. Where no rating has been assigned, it may be for reasons unrelated to the creditworthiness of the issuer.

Portfolio of Investments

Touchstone Active Bond Fund – September 30, 2020

Touchstone Active Bond Fund (Continued)

Touchstone Active Bond Fund (Continued)

Touchstone Active Bond Fund (Continued)