Touchstone Investments Launches Merger Arbitrage Fund

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Aug 25, 2011, 05:08 ET

CINCINNATI, Aug. 25, 2011 /PRNewswire/ -- Touchstone Investments announced an addition to its alternative investment offerings by launching the Touchstone Merger Arbitrage Fund. The Fund will be sub-advised by Longfellow Investment Management Co., which also serves as sub-advisor to the Touchstone Short Duration Fixed Income Fund.

The Touchstone Merger Arbitrage Fund seeks to achieve positive returns regardless of market conditions over the long-term. It primarily invests in securities of companies that are involved in publicly announced mergers and other corporate reorganizations. Merger arbitrage is an investment strategy that seeks to capture the "arbitrage spread" represented by the difference between the market price of the securities of the company that is being purchased and the value that is offered for these securities by the acquiring company. The Fund will be offered across several share classes.

"Volatile equity markets and an uncertain interest rate path have prompted many investors to embrace alternative sources of investment returns. The Touchstone Merger Arbitrage Fund represents one such alternative for investors seeking low-correlated returns to traditional stocks and bonds," said Steven Graziano, president of Touchstone Investments. "We are pleased to offer Longfellow's merger arbitrage investment expertise as a mutual fund."

Identifying, quantifying and managing risk forms the foundation of Longfellow's strategy. Focus is placed on what are considered to be low-to-moderate risk transactions of small-to-mid cap size deals of publicly listed and traded equity and fixed income securities. The Fund's portfolio management team includes Barbara J. McKenna, CFA; David W. Seeley, CFA; Alexander R. Graham; and Andrew A. Shafter. Collectively, the team brings more than four decades of merger arbitrage experience to Touchstone.

A Word About Risk

The Fund invests in companies that are expected to be, or already are, the subject of a publicly announced transaction that carry the risk that the proposed or expected transaction may not be completed or may be completed on less favorable terms than originally expected. It invests in stocks that are subject to the risk that stock prices will rise or fall over short or extended periods of time. The Fund invests in large-cap companies which may be unable to respond quickly to new competitive challenges, such as changes in technology and consumer tastes, and which may not be able to attain the high growth rate of successful smaller companies. The Fund invests in stocks of small-cap and mid-cap companies which tend to be more volatile and can be less liquid than stocks of large-cap companies. The Fund invests in securities of foreign companies and thus carries the associated risks of economic and political instability, market liquidity and currency volatility. There is no guarantee that the use of long and short positions will succeed in limiting the Fund's exposure to stock market movements, capitalization and sector swings or other risk factors. Investment in a Fund involved in long and short selling may have higher portfolio turnover rates. Short selling involves certain risks, including additional costs associated with covering short positions and a possibility of unlimited loss on certain short sale positions. The Fund invests in fixed income securities which can lose their value as interest rates rise and an investor can lose principal. The Fund invests in a limited number of securities which may involve greater risk and more price volatility than funds that do not limit the number of securities in which they invest. Diversification does not guarantee a profit or protect against loss. Current and future portfolio holdings are subject to risk.

About Touchstone Investments

Touchstone Investments is a mutual fund company committed to providing investors with access to institutional asset managers who act in a sub-advisory capacity. While its sub-advisors are held to strict performance standards, they work with a large measure of independence and operate within their own demonstrated areas of expertise. Touchstone's rigorous asset manager evaluation process and robust oversight approach are designed to ensure delivery on Touchstone's commitment of achieving competitive long-term results. The Touchstone Funds are advised by Touchstone Advisors, Inc., a registered investment advisor, and are distributed nationally through intermediaries including broker-dealers, financial planners and institutions by Touchstone Securities, Inc., a registered broker-dealer and member FINRA/SIPC.

Important Additional Information

Please consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. The prospectus and the summary prospectus contain this and other information about the Fund. To obtain a prospectus or a summary prospectus, contact your financial advisor or download and/or request one at TouchstoneInvestments.com/home/formslit/ or call Touchstone at 800.638.8194. Please read the prospectus and/or summary prospectus carefully before investing.

Investment return and principal value of an investment in a Fund will fluctuate so that investor's shares, when redeemed, may be worth more or less than their original cost.

Touchstone, Touchstone Funds and Touchstone Investments are federal service mark registrations and applications owned by IFS Financial Services, Inc. Touchstone Securities, Inc., Touchstone Advisors, Inc. and IFS Financial Services, Inc. are members of Western & Southern Financial Group. For more information, please visit TouchstoneInvestments.com.

About Longfellow Investment Management Co.

Longfellow Investment Management Co. (LIM) provides domestic fixed income and alternative investment strategies for institutions. Founded in 1986, the Boston-based firm utilizes a disciplined strategy focused on bottom-up fundamental analysis, seeking to preserve capital and minimize volatility while earning attractive risk-adjusted returns.

Investment products offered are not FDIC insured, may lose value and have no bank guarantee.
Touchstone Funds are distributed by Touchstone Securities, Inc.*
*A registered broker-dealer and member FINRA/SIPC
Touchstone is a member of Western & Southern Financial Group
TSF-1638-1107