Touchstone Mid Cap Value Fund trailed the Russell Midcap Value Index in Q2 as growth stocks outperformed. Top contributors included MCHP; detractors included LDOS.
Touchstone Mid Cap Value Fund (Class A Shares, Load Waived) trailed its benchmark, the Russell Midcap Value Index, for the quarter ended June 30, 2026. The period kept favoring higher-growth companies even as value-oriented valuations stayed attractive, the fund's commentary said.
Style factors worked against the fund. Exposures in Information Technology, Industrials, Health Care, and Financials detracted from relative returns as investors chased higher-beta, high-growth names. Top contributors included PFGC, RRX, WCC, HXL, and MCHP. Top detractors were EPAM, PTC, LDOS, G, and COR, with AI-related concerns and sector-specific issues driving results.
During the quarter, the fund initiated positions in Devon Energy Corp. (Energy), Jones Lang LaSalle Inc. (Real Estate), and Rogers Corp. (Information Technology). The fund remains committed to a disciplined value process, seeking high-quality companies at attractive valuations. It continues to underweight Real Estate and Communication Services while emphasizing strong management and balance sheets.
Touchstone's process uses five valuation screens to identify companies selling at a discount to intrinsic value. The fund is sub-advised by institutional managers selected through Touchstone's integrated review process, which pairs standalone active strategies or complements passive approaches.
For the quarter, the fund's underperformance underscores the challenge of maintaining a classic value discipline in a market that has rewarded growth. The managers said they remain focused on the long-term thesis, holding positions where the gap between price and intrinsic value is widest.
Touchstone Funds are offered nationally through intermediaries, including broker-dealers, financial planners, registered investment advisors, and institutions, by Touchstone Securities Inc. The fund's next quarterly commentary is expected in October.
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