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 811-03651

Touchstone Strategic Trust – December Funds
(Exact name of registrant as specified in charter)

303 Broadway, Suite 1100
Cincinnati, Ohio 45202-4203
(Address of principal executive offices) (Zip code)

Jill T. McGruder
303 Broadway, Suite 1100
Cincinnati, Ohio 45202-4203
(Name and address of agent for service)

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

Date of fiscal year end: December 31

Date of reporting period: June 30, 2014

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, 100 F Street, NE, Washington, DC 20549. 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.

June 30, 2014

(Unaudited)

Semi-Annual Report

Touchstone Strategic Trust

Touchstone Dynamic Equity Fund

Touchstone Balanced Allocation Fund

Touchstone Conservative Allocation Fund

Touchstone Growth Allocation Fund

Touchstone Moderate Growth Allocation Fund

Table of Contents

	Page
Tabular Presentation of Portfolios of Investments	3 - 4
Portfolios of Investments:
Touchstone Dynamic Equity Fund	5
Touchstone Balanced Allocation Fund	8
Touchstone Conservative Allocation Fund	9
Touchstone Growth Allocation Fund	10
Touchstone Moderate Growth Allocation Fund	11
Statements of Assets and Liabilities	12 - 15
Statements of Operations	16 - 17
Statements of Changes in Net Assets	18 - 19
Statements of Changes in Net Assets - Capital Stock Activity	20 - 23
Statement of Cash Flows	24
Financial Highlights	25 - 36
Notes to Financial Statements	37 - 55
Other Items	56 - 58
Privacy Protection Policy	59

This report identifies the Funds' investments on June 30, 2014. 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.

2

Tabular Presentation of Portfolios of Investments (Unaudited)

June 30, 2014

The tables below provide each Fund’s sector allocation. We hope it will be useful to shareholders as it summarizes key information about each Fund’s investments.

Touchstone Dynamic Equity Fund
Sector Allocation*	(% of Net Assets)
Long Positions
Information Technology		21.2	%
Financials		16.3
Energy		14.8
Health Care		13.5
Industrials		11.3
Consumer Discretionary		11.0
Consumer Staples		9.5
Materials		4.2
Telecommunication Services		3.2
Utilities		2.1
Investment Fund		10.4
Other Assets/Liabilities (Net)		2.0
		119.5	%
Short Positions and Written Options
Energy		(5.6	)
Information Technology		(3.6	)
Industrials		(2.4	)
Financials		(2.1	)
Health Care		(1.8	)
Call and Put Options		(1.7	)
Consumer Discretionary		(1.1	)
Materials		(1.0	)
Telecommunication Services		(0.2	)
		(19.5	)
Total		100.0	%

Touchstone Balanced Allocation Fund
Sector Allocation	(% of Net Assets)
Government/Corporate		24.6	%
International Equity		12.0
Value		9.9
Growth		9.8
Equity Income		6.7
Balanced		4.9
Emerging Market-Equity		4.9
International Debt		4.9
Blue Chip		3.5
Various Assets		3.4
Taxable-Money Market		3.0
Growth Mid-Cap		2.9
Sector Fund Real-Estate		2.4
Value Small-Cap		2.0
Corporate/Preferred-High Yield		1.7
Growth Small-Cap		1.0
Mid Cap Value		0.9
Other Assets/Liabilities (Net)		1.5
Total		100.0	%

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

3

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

Touchstone Conservative Allocation Fund
Sector Allocation	(% of Net Assets)
Government/Corporate		45.2	%
International Debt		7.8
Balanced		6.9
Growth		5.9
International Equity		5.0
Taxable-Money Market		4.9
Various Assets		4.9
Value		4.9
Equity Income		4.3
Blue Chip		3.0
Corporate/Preferred-High Yield		1.7
Value Small-Cap		1.0
Emerging Market-Equity		1.0
Sector Fund Real-Estate		1.0
Value Mid-Cap		0.8
Other Assets/Liabilities (Net)		1.7
Total		100.0	%

Touchstone Growth Allocation Fund
Sector Allocation	(% of Net Assets)
International Equity		19.1	%
Value		17.0
Growth		12.9
Emerging Market-Equity		12.9
Equity Income		7.0
Value Small-Cap		6.5
Government/Corporate		6.0
Blue Chip		4.9
Sector Fund Real-Estate		4.5
Growth Small-Cap		4.0
Growth Mid-Cap		2.9
Value Mid-Cap		2.0
Various Assets		0.2
Other Assets/Liabilities (Net)		0.1
Total		100.0	%

Touchstone Moderate Growth Allocation Fund
Sector Allocation	(% of Net Assets)
Government/Corporate		15.6	%
International Equity		14.2
Value		14.0
Growth		13.0
Emerging Market-Equity		8.0
Equity Income		7.0
Value Small-Cap		5.0
Balanced		4.0
Blue Chip		4.0
Sector Fund Real-Estate		3.0
Growth Mid-Cap		2.9
International Debt		2.0
Various Assets		2.0
Growth Small-Cap		2.0
Value Mid-Cap		1.9
Corporate/Preferred-High Yield		1.5
Other Assets/Liabilities (Net)		(0.1	)
Total		100.0	%

4

Portfolio of Investments

Touchstone Dynamic Equity Fund – June 30, 2014 (Unaudited)

			Market
	Shares		Value
Common Stocks † — 107.1%
Information Technology — 21.2%
Accenture PLC (Ireland) - Class A		15,597	$	1,260,861
Activision Blizzard, Inc.		17,002		379,145
Apple, Inc.		11,767		1,093,507
Arrow Electronics, Inc.*		579		34,977
Avnet, Inc.		698		30,928
Booz Allen Hamilton Holding Corp.		8,404		178,501
Cognizant Technology Solutions Corp. -
Class A*		29,300		1,433,063
Computer Sciences Corp.		9,860		623,152
Electronic Arts, Inc.*		10,374		372,115
Facebook, Inc. - Class A*		3,304		222,326
Hewlett-Packard Co.		47,363		1,595,186
Ingram Micro, Inc. - Class A*		26,125		763,111
International Business Machines Corp.		15,546		2,818,023
Intuit, Inc.		4,535		365,204
Micron Technology, Inc.*		17,237		567,959
MICROS Systems, Inc.*		12,642		858,392
Oracle Corp.		38,196		1,548,084
QUALCOMM, Inc.		33,758		2,673,634
Science Applications International Corp.		3,495		154,339
Seagate Technology PLC (Ireland)		2,197		124,834
Xerox Corp.		8,354		103,924
				17,201,265
Financials — 16.3%
American International Group, Inc.		14,412		786,607
Berkshire Hathaway, Inc. - Class B*		13,593		1,720,330
CBRE Group, Inc. - Class A*		57,943		1,856,494
Everest Re Group Ltd. (Bermuda)		2,661		427,064
Fifth Third Bancorp		20,108		429,306
Host Hotels & Resorts, Inc. REIT		34,587		761,260
Jones Lang LaSalle, Inc.		8,755		1,106,544
JPMorgan Chase & Co.		15,090		869,486
Lazard Ltd. - Class A		1,876		96,727
Lincoln National Corp.		3,341		171,861
MBIA, Inc.*		12,145		134,081
Navient Corp.		45,452		804,955
Old Republic International Corp.		76,400		1,263,656
Popular, Inc. (Peru)*		13,571		463,857
Realogy Holdings Corp.*		11,544		435,324
St Joe Co. (The)*		17,289		439,659
T Rowe Price Group, Inc.		10,474		884,110
Voya Financial, Inc.		230		8,358
Waddell & Reed Financial, Inc. - Class A		8,968		561,307
				13,220,986
Energy — 14.8%
Chesapeake Energy Corp.		17,964		558,321
Chevron Corp.		22,395		2,923,667
ConocoPhillips		29,048		2,490,285
Devon Energy Corp.		2,402		190,719
Exxon Mobil Corp.		2,830		284,924
Marathon Petroleum Corp.		17,405		1,358,808
Nabors Industries Ltd.		16,764		492,359
Occidental Petroleum Corp.		2,087		214,189
Oil States International, Inc.*		946		60,629
PBF Energy, Inc. - Class A		5,189		138,287
Phillips 66		25,296		2,034,557
Valero Energy Corp.		24,884		1,246,688
				11,993,433
Health Care — 13.5%
AbbVie, Inc.		34,184		1,929,345
Alexion Pharmaceuticals, Inc.*		1,321		206,406
Allergan, Inc.		1,189		201,203
AmerisourceBergen Corp.		5,766		418,958
Amgen, Inc.		1,076		127,366
Eli Lilly & Co.		31,300		1,945,921
Express Scripts Holding Co.*		15,705		1,088,828
Forest Laboratories, Inc.*		992		98,208
Gilead Sciences, Inc.*		21,401		1,774,357
McKesson Corp.		7,663		1,426,927
Pfizer, Inc.		32,227		956,497
United Therapeutics Corp.*		2,412		213,438
UnitedHealth Group, Inc.		6,215		508,076
				10,895,530
Industrials — 11.3%
3M Co.		222		31,800
AGCO Corp.		4,965		279,132
Babcock & Wilcox Co. (The)		3,485		113,123
Boeing Co. (The)		5,003		636,532
FedEx Corp.		16,028		2,426,319
Lockheed Martin Corp.		13,118		2,108,456
Manpowergroup, Inc.		13,683		1,161,003
Robert Half International, Inc.		5,571		265,960
RR Donnelley & Sons Co.		26,382		447,439
Southwest Airlines Co.		49,722		1,335,533
WW Grainger, Inc.		1,416		360,046
				9,165,343
Consumer Discretionary — 11.0%
Aaron's, Inc.*		27,510		980,456
Apollo Education Group, Inc.*		8,405		262,656
Bed Bath & Beyond, Inc.*		2,046		117,399
Comcast Corp. - Class A		10,848		582,321
Dillard's, Inc. - Class A		374		43,612
DIRECTV*		18,989		1,614,255
Dollar Tree, Inc.*		2,162		117,743
Gap, Inc. (The)		20,690		860,083
Kohl's Corp.		1,693		89,187
Macy's, Inc.		27,578		1,600,076
PetSmart, Inc.		1,718		102,736
Starz - Class A*		20,461		609,533
Target Corp.		1,681		97,414
Thomson Reuters Corp.		6,277		228,232
Thor Industries, Inc.		2,703		153,720
Time Warner Cable, Inc.		903		133,012
Time Warner, Inc.		5,702		400,566
TRW Automotive Holdings Corp.*		10,095		903,704
				8,896,705

5

Touchstone Dynamic Equity Fund (Unaudited) (Continued)

				Market
	Shares			Value
Common Stocks † — 107.1% (Continued)
Consumer Staples — 9.5%
Archer-Daniels-Midland Co.		36,374		$	1,604,457
Bunge Ltd.		2,077			157,104
Coca-Cola Enterprises, Inc.		7,788			372,111
Constellation Brands, Inc. - Class A*		934			82,313
CVS Caremark Corp.		10,406			784,300
Dean Foods Co.		16,403			288,529
Herbalife Ltd. (Cayman Islands)*		9,626			621,262
Ingredion, Inc.		398			29,866
Kroger Co. (The)		38,468			1,901,473
Monster Beverage Corp.*		1,532			108,818
Nu Skin Enterprises, Inc. - Class A		1,819			134,533
PepsiCo, Inc.		8,944			799,057
Tyson Foods, Inc. - Class A		1,119			42,007
Wal-Mart Stores, Inc.		10,336			775,924
					7,701,754
Materials — 4.2%
Dow Chemical Co. (The)		26,786			1,378,408
Freeport-McMoRan Copper & Gold, Inc.		9,669			352,918
LyondellBasell Industries N.V. - Class A		17,297			1,689,052
					3,420,378
Telecommunication Services — 3.2%
Verizon Communications, Inc.		52,673			2,577,290
Utilities — 2.1%
Edison International		26,245			1,525,097
NRG Energy, Inc.		3,886			144,559
					1,669,656
Total Common Stocks				$	86,742,340
Investment Fund — 10.4%
Touchstone Institutional Money Market
Fund, 0.01%^∞Ω		8,442,064			8,442,064
Total Long Positions
(Cost $87,005,915)				$	95,184,404
Securities Sold Short — (17.8%)
Common Stocks — (17.8%)
Energy — (5.6%)
Cabot Oil & Gas Corp.		(257	)		(8,774	)
Cheniere Energy, Inc.*		(13,483	)		(966,731	)
Cobalt International Energy, Inc.*		(25,514	)		(468,182	)
Golar LNG Ltd.		(16,543	)		(994,235	)
Gulfport Energy Corp.*		(10,196	)		(640,309	)
McDermott International, Inc.*		(78,054	)		(631,457	)
Peabody Energy Corp.		(22,570	)		(369,020	)
Range Resources Corp.		(275	)		(23,911	)
Rice Energy, Inc.*		(13,440	)		(409,248	)
					(4,511,867	)
Information Technology — (3.6%)
Concur Technologies, Inc.*		(9,591	)		(895,224	)
CoreLogic, Inc.*		(435	)		(13,207	)
FireEye, Inc.*		(6,227	)		(252,505	)
FLIR Systems, Inc.		(15,500	)		(538,316	)
Nimble Storage, Inc.*		(1,525	)		(46,848	)
Rovi Corp.*		(28,123	)		(673,827	)
Twitter, Inc.*		(3,222	)		(132,005	)
VeriFone Systems, Inc.*		(10,382	)		(381,538	)
					(2,933,470	)
Industrials — (2.4%)
Allison Transmission Holdings, Inc.		(15,293	)		(475,612	)
American Airlines Group, Inc.*		(14,274	)		(613,211	)
Joy Global, Inc.		(5,560	)		(342,385	)
Navistar International Corp.*		(9,736	)		(364,905	)
TransDigm Group, Inc.		(1,067	)		(178,466	)
					(1,974,579	)
Financials — (2.1%)
Hatteras Financial Corp., REIT		(47,183	)		(934,695	)
Mack-Cali Realty Corp., REIT		(36,227	)		(778,156	)
					(1,712,851	)
Health Care — (1.8%)
Allscripts Healthcare Solutions, Inc.*		(2,429	)		(38,985	)
Ariad Pharmaceuticals, Inc.*		(46,002	)		(293,033	)
Endo International PLC*		(9,061	)		(634,451	)
Hologic, Inc.*		(9,988	)		(253,196	)
Premier, Inc. - Class A*		(3,175	)		(92,075	)
Theravance Biopharma, Inc. (Cayman
Islands)		(3,547	)		(113,078	)
					(1,424,818	)
Consumer Discretionary — (1.1%)
DreamWorks Animation SKG, Inc. - Class
A*		(12,255	)		(285,051	)
Dunkin' Brands Group, Inc.		(7,515	)		(344,262	)
Penn National Gaming, Inc.*		(14,474	)		(175,714	)
Tempur Sealy International, Inc.*		(1,754	)		(104,714	)
Tiffany & Co.		(95	)		(9,524	)
					(919,265	)
Materials — (1.0%)
Newmont Mining Corp.		(19,925	)		(506,892	)
Rockwood Holdings, Inc.		(4,211	)		(319,994	)
					(826,886	)
Telecommunication Services — (0.2%)
Windstream Holdings, Inc.		(12,180	)		(121,313	)
Total Common Stocks				$	(14,425,049	)
Total Securities Sold Short
(Proceeds $(13,642,892))				$	(14,425,049	)

6

Touchstone Dynamic Equity Fund (Unaudited) (Continued)

	Number
	of			Market
	Contracts			Value
Written Options Contracts — (1.7%)
Call Options — (1.7%)
NASDAQ-100 Index
July 2014
Strike Price $3,645		(10	)	$	(215,700	)
PHLX Housing Sector Index
July 2014
Strike Price $197.50		(45	)		(52,200	)
S&P 500 Index
July 2014
Strike Price $1,880		(130	)		(1,060,800	)
S&P 500 Index
July 2014
Strike Price $2,030		(220	)		(7,700	)
Total Call Options					(1,336,400	)
Put Options — 0.0%
S&P 500 Index
July 2014
Strike Price $1,955		(14	)		(19,670	)
Total Written Options Contracts
(Proceeds $(1,227,468))				$	(1,356,070	)
Total Investment Securities —98.0%
(Cost $72,135,555)				$	79,403,285
Other Assets in Excess of Liabilities — 2.0%					1,640,397
Net Assets — 100.0%				$	81,043,682

* Non-income producing security.

^ Affiliated Fund. See Note 4 in Notes to Financial Statements.

† All or a portion of these securities are held as collateral for securities sold short and written options. The total value of the securities held as collateral as of June 30, 2014 was $103,400,193.

^∞ Open-End Fund

^Ω Represents the 7-day SEC yield as of June 30, 2014.

Portfolio Abbreviations:

PLC - Public Limited Company

REIT - Real Estate Investment Trust

Other Information:

The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the security valuation section in the accompanying Notes to Financial Statements.

Valuation inputs at Reporting Date:

Description	Level 1			Level 2		Level 3		Total
Assets:
Long Positions
Common Stocks	$	86,742,340		$	—	$	—	$	86,742,340
Investment Fund		8,442,064			—		—		8,442,064
								$	95,184,404
Liabilities:
Securities Sold Short
Common Stocks	$	(14,425,049	)	$	—	$	—	$	(14,425,049	)
Other Financial Instruments
Liabilities:
Written Options
Equity Contracts		(1,356,070	)		—		—		(1,356,070	)
								$	(15,781,119	)

Transactions in written options for the period ended June 30, 2014:

	Number of
	Contracts			Premium
Beginning of Period, December 31, 2013		390		$	1,498,844
Call Options Written		3,129			9,059,036
Put Options Written		160			360,134
Call Options Closed		(2,179	)		(8,542,382	)
Put Options Closed		(54	)		(124,917	)
Call Options Expired		(920	)		(782,371	)
Put Options Expired		(107	)		(240,876	)
June 30, 2014		419		$	1,227,468

See accompanying Notes to Financial Statements.

7

Portfolio of Investments

Touchstone Balanced Allocation Fund – June 30, 2014 (Unaudited)

			Market
	Shares		Value
Affiliated Mutual Funds^∞ — 98.5%
Government/Corporate — 24.6%
Touchstone Active Bond Fund		319,654	$	3,375,546
Touchstone Total Return Bond Fund		1,276,506		13,135,248
Touchstone Ultra Short Duration Fixed
Income Fund		1,194,042		11,259,814
				27,770,608
International Equity — 12.0%
Touchstone International Small Cap
Fund		212,368		3,385,151
Touchstone International Value Fund		1,065,686		10,166,645
				13,551,796
Value — 9.9%
Touchstone Focused Fund*		89,900		3,305,612
Touchstone Value Fund		816,247		7,811,482
				11,117,094
Growth — 9.8%
Touchstone Growth Opportunities Fund		63,373		2,197,778
Touchstone Sands Capital Institutional
Growth Fund		389,067		8,812,357
				11,010,135
Equity Income — 6.7%
Touchstone Premium Yield Equity Fund,
Class Y		742,602		7,537,406
Balanced — 4.9%
Touchstone Flexible Income Fund		517,333		5,561,327
International Debt — 4.9%
Touchstone International Fixed Income
Fund		513,435		5,560,506
Emerging Market-Equity — 4.9%
Touchstone Emerging Markets Equity
Fund		186,419		2,235,163
Touchstone Sands Capital Emerging
Markets Growth Fund*		308,005		3,311,050
				5,546,213
Blue Chip — 3.5%
Touchstone Dynamic Equity Fund		283,145		3,924,385
Various Assets — 3.4%
Touchstone Arbitrage Fund*		386,394		3,836,891
Taxable-Money Market — 3.0%
Touchstone Institutional Money Market
Fund, 0.01%^Ω		3,354,382		3,354,382
Growth Mid-Cap — 2.9%
Touchstone Mid Cap Fund		134,754		3,231,407
Sector Fund Real-Estate — 2.4%
Touchstone Global Real Estate Fund		241,870		2,733,129
Value Small-Cap — 2.0%
Touchstone Small Cap Core Fund		52,239		1,118,968
Touchstone Small Cap Value Fund		42,811		1,095,521
				2,214,489
Corporate/Preferred-High Yield — 1.7%
Touchstone High Yield Fund		207,902		1,958,434
Growth Small-Cap — 1.0%
Touchstone Small Cap Growth Fund		181,947		1,084,405
Value Mid-Cap — 0.9%
Touchstone Mid Cap Value Fund		57,954		999,709
Total Affiliated Mutual Funds			$	110,992,316
Total Investment Securities —98.5%
(Cost $97,449,078)			$	110,992,316
Other Assets in Excess of Liabilities — 1.5%				1,736,316
Net Assets — 100.0%			$	112,728,632

* Non-income producing security.

^ All affiliated fund investments are in Institutional Class shares, unless otherwise indicated. The financial statements of the underlying funds can be found on the SEC website. See Note 4 in Notes to Financial Statements.

^∞ Open-End Fund

^Ω Represents the 7-day SEC yield as of June 30, 2014.

Other Information:

The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the security valuation section in the accompanying Notes to Financial Statements.

Valuation inputs at Reporting Date:

Description	Level 1		Level 2		Level 3		Total
Affiliated Mutual Funds	$	110,992,316	$	—	$	—	$	110,992,316

See accompanying Notes to Financial Statements.

8

Portfolio of Investments

Touchstone Conservative Allocation Fund – June 30, 2014 (Unaudited)

			Market
	Shares		Value
Affiliated Mutual Funds^∞ — 98.3%
Government/Corporate — 45.2%
Touchstone Active Bond Fund		284,429	$	3,003,570
Touchstone Total Return Bond Fund		1,164,449		11,982,179
Touchstone Ultra Short Duration Fixed
Income Fund		1,315,497		12,405,134
				27,390,883
International Debt — 7.8%
Touchstone International Fixed Income
Fund		437,279		4,735,727
Balanced — 6.9%
Touchstone Flexible Income Fund		388,689		4,178,402
Growth — 5.9%
Touchstone Growth Opportunities Fund		17,125		593,886
Touchstone Sands Capital Institutional
Growth Fund		131,167		2,970,927
				3,564,813
International Equity — 5.0%
Touchstone International Small Cap
Fund		37,475		597,344
Touchstone International Value Fund		252,250		2,406,462
				3,003,806
Taxable-Money Market — 4.9%
Touchstone Institutional Money Market
Fund, 0.01%^Ω		2,989,058		2,989,058
Various Assets — 4.9%
Touchstone Arbitrage Fund*		300,852		2,987,463
Value — 4.9%
Touchstone Value Fund		311,801		2,983,932
Equity Income — 4.3%
Touchstone Premium Yield Equity Fund,
Class Y		258,416		2,622,926
Blue Chip — 3.0%
Touchstone Dynamic Equity Fund		129,427		1,793,855
Corporate/Preferred-High Yield — 1.7%
Touchstone High Yield Fund		111,099		1,046,553
Value Small-Cap — 1.0%
Touchstone Small Cap Core Fund		27,964		598,990
Emerging Market-Equity — 1.0%
Touchstone Emerging Markets Equity
Fund		49,910		598,423
Sector Fund Real-Estate — 1.0%
Touchstone Global Real Estate Fund		52,718		595,714
Value Mid-Cap — 0.8%
Touchstone Mid Cap Value Fund		29,279		505,055
Total Affiliated Mutual Funds			$	59,595,600
Total Investment Securities —98.3%
(Cost $55,288,068)			$	59,595,600
Other Assets in Excess of Liabilities — 1.7%				1,001,693
Net Assets — 100.0%			$	60,597,293

* Non-income producing security.

^ All affiliated fund investments are in Institutional Class shares, unless otherwise indicated. The financial statements of the underlying funds can be found on the SEC website. See Note 4 in Notes to Financial Statements.

^∞ Open-End Fund

^Ω Represents the 7-day SEC yield as of June 30, 2014.

Other Information:

The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the security valuation section in the accompanying Notes to Financial Statements.

Valuation inputs at Reporting Date:

Description	Level 1		Level 2		Level 3		Total
Affiliated Mutual Funds	$	59,595,600	$	—	$	—	$	59,595,600

See accompanying Notes to Financial Statements.

9

Portfolio of Investments

Touchstone Growth Allocation Fund – June 30, 2014 (Unaudited)

			Market
	Shares		Value
Affiliated Mutual Funds^∞ — 99.9%
International Equity — 19.1%
Touchstone International Small Cap
Fund		294,714	$	4,697,741
Touchstone International Value Fund		844,416		8,055,725
				12,753,466
Value — 17.0%
Touchstone Focused Fund*		145,503		5,350,144
Touchstone Value Fund		626,751		5,998,006
				11,348,150
Growth — 12.9%
Touchstone Growth Opportunities Fund		76,121		2,639,892
Touchstone Sands Capital Institutional
Growth Fund		263,050		5,958,093
				8,597,985
Emerging Market-Equity — 12.9%
Touchstone Emerging Markets Equity
Fund		335,400		4,021,451
Touchstone Sands Capital Emerging
Markets Growth Fund*		424,643		4,564,913
				8,586,364
Equity Income — 7.0%
Touchstone Premium Yield Equity Fund,
Class Y		458,272		4,651,462
Value Small-Cap — 6.5%
Touchstone Small Cap Core Fund		124,734		2,671,796
Touchstone Small Cap Value Fund		65,109		1,666,134
				4,337,930
Government/Corporate — 6.0%
Touchstone Ultra Short Duration Fixed
Income Fund		421,107		3,971,042
Blue Chip — 4.9%
Touchstone Dynamic Equity Fund		233,324		3,233,871
Sector Fund Real-Estate — 4.5%
Touchstone Global Real Estate Fund		265,686		3,002,249
Growth Small-Cap — 4.0%
Touchstone Small Cap Growth Fund		447,101		2,664,720
Growth Mid-Cap — 2.9%
Touchstone Mid Cap Fund		80,871		1,939,275
Value Mid-Cap — 2.0%
Touchstone Mid Cap Value Fund		77,253		1,332,606
Various Assets — 0.2%
Touchstone Arbitrage Fund*		11,192		111,132
Total Affiliated Mutual Funds			$	66,530,252
Total Investment Securities —99.9%
(Cost $54,069,670)			$	66,530,252
Other Assets in Excess of Liabilities — 0.1%				75,323
Net Assets — 100.0%			$	66,605,575

* Non-income producing security.

^ All affiliated fund investments are in Institutional Class shares, unless other wise indicated. The financial statements of the underlying funds can be found on the SEC website. See Note 4 in Notes to Financial Statements.

^∞ Open-End Fund

Other Information:

The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the security valuation section in the accompanying Notes to Financial Statements.

Valuation inputs at Reporting Date:

Description	Level 1		Level 2		Level 3		Total
Affiliated Mutual Funds	$	66,530,252	$	—	$	—	$	66,530,252

See accompanying Notes to Financial Statements.

10

Portfolio of Investments

Touchstone Moderate Growth Allocation Fund – June 30, 2014 (Unaudited)

			Market
	Shares		Value
Affiliated Mutual Funds^∞ — 100.1%
Government/Corporate — 15.6%
Touchstone Total Return Bond Fund		1,384,612	$	14,247,655
Touchstone Ultra Short Duration Fixed
Income Fund		770,728		7,267,968
				21,515,623
International Equity — 14.2%
Touchstone International Small Cap
Fund		349,416		5,569,688
Touchstone International Value Fund		1,465,592		13,981,746
				19,551,434
Value — 14.0%
Touchstone Focused Fund*		226,424		8,325,606
Touchstone Value Fund		1,158,296		11,084,897
				19,410,503
Growth — 13.0%
Touchstone Growth Opportunities Fund		159,510		5,531,810
Touchstone Sands Capital Institutional
Growth Fund		548,692		12,427,880
				17,959,690
Emerging Market-Equity — 8.0%
Touchstone Emerging Markets Equity
Fund		459,225		5,506,113
Touchstone Sands Capital Emerging
Markets Growth Fund*		514,019		5,525,701
				11,031,814
Equity Income — 7.0%
Touchstone Premium Yield Equity Fund,
Class Y		952,821		9,671,132
Value Small-Cap — 5.0%
Touchstone Small Cap Core Fund		193,911		4,153,575
Touchstone Small Cap Value Fund		108,047		2,764,930
				6,918,505
Balanced — 4.0%
Touchstone Flexible Income Fund		515,853		5,545,416
Blue Chip — 4.0%
Touchstone Dynamic Equity Fund		394,447		5,467,042
Sector Fund Real-Estate — 3.0%
Touchstone Global Real Estate Fund		366,801		4,144,855
Growth Mid-Cap — 2.9%
Touchstone Mid Cap Fund		165,980		3,980,203
International Debt — 2.0%
Touchstone International Fixed Income
Fund		255,688		2,769,096
Various Assets — 2.0%
Touchstone Arbitrage Fund*		276,730		2,747,924
Growth Small-Cap — 2.0%
Touchstone Small Cap Growth Fund		460,568		2,744,987
Value Mid-Cap — 1.9%
Touchstone Mid Cap Value Fund		155,930		2,689,787
Corporate/Preferred-High Yield — 1.5%
Touchstone High Yield Fund		220,849		2,080,399
Total Affiliated Mutual Funds			$	138,228,410
Total Investment Securities —100.1%
(Cost $115,904,580)			$	138,228,410
Liabilities in Excess of Other Assets — (0.1%)				(170,027	)
Net Assets — 100.0%			$	138,058,383

* Non-income producing security.

^ All affiliated fund investments are in Institutional Class shares, unless otherwise indicated. The financial statements of the underlying funds can be found on the SEC website. See Note 4 in Notes to Financial Statements.

^∞ Open-End Fund

Other Information:

The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the security valuation section in the accompanying Notes to Financial Statements.

Valuation inputs at Reporting Date:

Description	Level 1		Level 2		Level 3		Total
Affiliated Mutual Funds	$	138,228,410	$	—	$	—	$	138,228,410

See accompanying Notes to Financial Statements.

11

Statements of Assets and Liabilities

June 30, 2014 (Unaudited)

	Touchstone			Touchstone			Touchstone
	Dynamic			Balanced			Conservative
	Equity			Allocation			Allocation
	Fund			Fund			Fund
Assets
Investments, at cost	$	87,005,915		$	97,449,078		$	55,288,068
Affiliated securities, at market value	$	8,442,064		$	110,992,316		$	59,595,600
Non-affiliated securities, at market value		86,742,340			—			—
Investments, at market value	$	95,184,404		$	110,992,316		$	59,595,600
Cash deposits held at prime broker		1,313,132			—			—
Dividends and interest receivable		58,292			15,267			16,737
Receivable for capital shares sold		339,481			49,172			8,119
Receivable for investments sold		236,427			3,167,419			1,822,725
Tax reclaim receivable		207			—			—
Other assets		22,510			13,909			16,642
Total Assets		97,154,453			114,238,083			61,459,823
Liabilities
Written options, at market value (A)		1,356,070			—			—
Securities sold short (B)		14,425,049			—			—
Dividends for securities sold short payable		45,310			—			—
Bank overdrafts		—			792,228			453,833
Payable for capital shares redeemed		159,721			626,433			359,178
Payable to Investment Advisor		58,903			11,143			3,083
Payable to other affiliates		20,131			28,363			11,610
Payable to Trustees		3,191			3,300			3,194
Payable for professional services		8,240			7,066			7,478
Other accrued expenses and liabilities		34,156			40,918			24,154
Total Liabilities		16,110,771			1,509,451			862,530
Net Assets	$	81,043,682		$	112,728,632		$	60,597,293
Net assets consist of:
Paid-in capital	$	210,282,271		$	134,672,566		$	59,187,604
Accumulated net investment income (loss)		437,872			(20,915	)		(25	)
Accumulated net realized losses on investments, written options, short positions and capital gain distributions received		(136,944,191	)		(35,466,257	)		(2,897,818	)
Net unrealized appreciation on investments, written options and short positions		7,267,730			13,543,238			4,307,532
Net Assets	$	81,043,682		$	112,728,632		$	60,597,293
(A) Proceeds received for written options:	$	1,227,468		$	—		$	—
(B) Proceeds received for securities sold short:	$	13,642,892		$	—		$	—

See accompanying Notes to Financial Statements.

12

Statements of Assets and Liabilities (Unaudited) (Continued)

			Touchstone
Touchstone			Moderate
Growth			Growth
Allocation			Allocation
Fund			Fund
$	54,069,670		$	115,904,580
$	66,530,252		$	138,228,410
	—			—
$	66,530,252		$	138,228,410
	—			—
	5,216			9,546
	16,778			29,453
	544,673			846,925
	—			—
	13,888			14,155
	67,110,807			139,128,489
	—			—
	—			—
	—			—
	142,484			252,425
	294,653			693,081
	3,797			15,266
	16,595			36,976
	3,204			3,360
	7,296			6,945
	37,203			62,053
	505,232			1,070,106
$	66,605,575		$	138,058,383
$	93,573,442		$	150,949,956
	(31,227	)		(52,637	)
	(39,397,222	)		(35,162,766	)
	12,460,582			22,323,830
$	66,605,575		$	138,058,383
$	—		$	—
$	—		$	—

13

Statements of Assets and Liabilities (Unaudited) (Continued)

	Touchstone		Touchstone		Touchstone
	Dynamic		Balanced		Conservative
	Equity		Allocation		Allocation
	Fund		Fund		Fund
Pricing of Class A Shares
Net assets applicable to Class A shares	$	16,381,908	$	42,889,947	$	24,481,178
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value)		1,205,861		3,325,114		2,174,083
Net asset value price per share*	$	13.59	$	12.90	$	11.26
Maximum offering price per share	$	14.42	$	13.69	$	11.95
Pricing of Class C Shares
Net assets applicable to Class C shares	$	10,825,629	$	35,351,704	$	15,149,635
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value)		851,740		2,743,605		1,351,841
Net asset value, offering price per share**	$	12.71	$	12.89	$	11.21
Pricing of Class Y Shares
Net assets applicable to Class Y shares	$	39,312,032	$	34,449,956	$	20,892,884
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value)		2,842,109		2,666,650		1,854,847
Net asset value, offering price and redemption price per share	$	13.83	$	12.92	$	11.26
Pricing of Institutional Class Shares
Net assets applicable to Institutional Class Shares	$	14,524,113	$	37,025	$	73,596
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value)		1,047,761		2,879		6,528
Net asset value, offering price and redemption price per share	$	13.86	$	12.86	$	11.27

* There is no sales load on subscriptions of $1 million or more. Redemptions that were part of a $1 million or more subscription may be subject to a contingent deferred sales load if redeemed within a one-year period from the date of purchase.

** Redemption price per share varies by length of time shares are held.

See accompanying Notes to Financial Statements.

14

Statements of Assets and Liabilities (Unaudited) (Continued)

		Touchstone
Touchstone		Moderate
Growth		Growth
Allocation		Allocation
Fund		Fund
$	28,861,820	$	64,362,651
	1,982,340		4,723,024
$	14.56	$	13.63
$	15.45	$	14.46
$	23,734,107	$	47,405,082
	1,693,351		3,535,008
$	14.02	$	13.41
$	13,988,656	$	26,279,925
	951,326		1,914,436
$	14.70	$	13.73
$	20,992	$	10,725
	1,570		785
$	13.37	$	13.67

15

Statements of Operations

For the Six Months Ended June 30, 2014 (Unaudited)

	Touchstone			Touchstone			Touchstone
	Dynamic			Balanced			Conservative
	Equity			Allocation			Allocation
	Fund			Fund			Fund
Investment Income
Dividends from affiliated funds	$	174		$	1,019,971		$	661,447
Dividends from non-affiliated securities(A)		731,975			—			—
Total Investment Income		732,149			1,019,971			661,447
Expenses
Investment advisory fees		294,665			113,729			62,551
Administration fees		55,633			91,265			50,197
Compliance fees and expenses		850			850			850
Custody fees		11,613			2,406			2,403
Professional fees		10,172			10,937			9,578
Transfer Agent fees, Class A		13,577			23,042			10,863
Transfer Agent fees, Class C		7,927			14,635			5,435
Transfer Agent fees, Class Y		8,189			15,645			9,866
Transfer Agent fees, Institutional Class		49			20			34
Registration Fees, Class A		6,630			6,815			9,476
Registration Fees, Class C		6,576			6,815			6,753
Registration Fees, Class Y		6,855			6,858			7,158
Registration Fees, Institutional Class		6,758			6,651			6,694
Dividend expense on securities sold short		200,020			—			—
Reports to Shareholders, Class A		4,725			5,216			3,437
Reports to Shareholders, Class C		3,624			4,036			3,010
Reports to Shareholders, Class Y		3,733			2,078			2,485
Reports to Shareholders, Institutional Class		2,111			1,805			2,053
Distribution expenses, Class A		19,663			55,444			30,867
Distribution and shareholder servicing expenses, Class C		50,646			177,753			75,776
Trustee fees		6,040			6,010			6,038
Other expenses		12,179			16,829			8,353
Total Expenses		732,235			568,839			313,877
Fees waived and/or reimbursed by the Advisor and/or Affiliates(B)		(20,724	)		(228,965	)		(148,586	)
Fees recouped by Advisor(B)		5,770			—			—
Net Expenses		717,281			339,874			165,291
Net Investment Income		14,868			680,097			496,156
Realized and Unrealized Gains (Losses) on Investments
Net realized gains on investments from non-affiliated securities		4,610,538			—			—
Net realized gains on investments from affiliated securities		—			1,848,409			362,850
Net realized gains on written options		292,250			—			—
Net realized losses on securities sold short		(2,189,958	)		—			—
Capital gain distributions received from affiliated funds		—			48,517			—
Net change in unrealized appreciation (depreciation) on investments		(1,295,434	)		2,893,174			1,519,350
Net change in unrealized appreciation (depreciation) on written options		442,829			—			—
Net change in unrealized appreciation (depreciation) on securities sold
short		467,763			—			—
Net Realized and Unrealized Gains on Investments	$	2,327,988		$	4,790,100		$	1,882,200
Change in Net Assets Resulting from Operations	$	2,342,856		$	5,470,197		$	2,378,356
(A) Net of foreign tax withholding of:	$	311		$	—		$	—
(B) See Note 4 in Notes to Financial Statements.

See accompanying Notes to Financial Statements.

16

Statements of Operations (Unaudited) (Continued)

			Touchstone
Touchstone			Moderate
Growth			Growth
Allocation			Allocation
Fund			Fund
$	371,456		$	1,102,678
	—			—
	371,456			1,102,678
	84,049			176,567
	53,958			113,354
	850			850
	2,466			2,718
	9,760			11,649
	19,542			39,768
	14,266			23,852
	6,247			7,404
	46			17
	6,753			7,063
	6,753			7,063
	7,029			6,947
	6,590			6,651
	—			—
	4,463			8,812
	4,106			6,307
	2,107			3,020
	2,003			2,866
	35,723			81,591
	117,459			237,561
	6,035			5,993
	15,832			26,873
	406,037			776,926
	(189,786	)		(325,474	)
	—			—
	216,251			451,452
	155,205			651,226
	—			—
	863,353			2,121,399
	—			—
	—			—
	72,531			122,259
	2,571,297			4,492,978
	—			—
	—			—
$	3,507,181		$	6,736,636
$	3,662,386		$	7,387,862
$	—		$	—

17

Statements of Changes in Net Assets

	Touchstone						Touchstone
	Dynamic Equity						Balanced Allocation
	Fund						Fund
	For the			For the			For the			For the
	Six Months			Year			Six Months			Year
	Ended			Ended			Ended			Ended
	June 30, 2014			December 31,			June 30, 2014			December 31,
	(Unaudited)			2013			(Unaudited)			2013
From Operations
Net investment income	$	14,868		$	222,072		$	680,097		$	1,623,082
Net realized gain (loss) on investments, written options, securities sold short and capital gain distribution received		2,712,830			11,148,928			1,896,926			7,573,700
Net change in unrealized appreciation (depreciation) on investments, written options and securities sold short		(384,842	)		(136,692	)		2,893,174			6,379,801
Change in Net Assets from Operations		2,342,856			11,234,308			5,470,197			15,576,583
Distributions to Shareholders from:
Net investment income, Class A		—			—			(313,540	)		(888,587	)
Net investment income, Class C		—			—			(117,270	)		(425,415	)
Net investment income, Class Y		—			(8,135	)		(282,227	)		(803,034	)
Net investment income, Institutional Class		—			(7,882	)		(301	)		(734	)
Net realized gains, Class A		—			—			—			—
Net realized gains, Class C		—			—			—			—
Net realized gains, Class Y		—			—			—			—
Net realized gains, Institutional Class		—			—			—			—
Total Distributions		—			(16,017	)		(713,338	)		(2,117,770	)
Net Increase (Decrease) from Share Transactions(A)		13,551,208			(13,127,797	)		(9,108,532	)		(30,845,583	)
Total Increase (Decrease) in Net Assets		15,894,064			(1,909,506	)		(4,351,673	)		(17,386,770	)
Net Assets
Beginning of period		65,149,618			67,059,124			117,080,305			134,467,075
End of period	$	81,043,682		$	65,149,618		$	112,728,632		$	117,080,305
Accumulated Net Investment Income (loss)	$	437,872		$	423,004		$	(20,915	)	$	12,326

^(A) For details on share transaction by class, see statements of changes in net assets - capital stock activity on pages 20 to 23.

See accompanying Notes to Financial Statements.

18

Statements of Changes in Net Assets (Continued)

Touchstone						Touchstone						Touchstone
Conservative Allocation						Growth Allocation						Moderate Growth Allocation
Fund						Fund						Fund
For the			For the			For the			For the			For the			For the
Six Months			Year			Six Months			Year			Six Months			Year
Ended			Ended			Ended			Ended			Ended			Ended
June 30, 2014			December 31,			June 30, 2014			December 31,			June 30, 2014			December 31,
(Unaudited)			2013			(Unaudited)			2013			(Unaudited)			2013
$	496,156		$	1,185,767		$	155,205		$	552,922		$	651,226		$	1,686,407
	362,850			1,961,058			935,884			7,624,883			2,243,658			12,118,343
	1,519,350			1,089,766			2,571,297			6,276,724			4,492,978			10,548,517
	2,378,356			4,236,591			3,662,386			14,454,529			7,387,862			24,353,267
	(211,329	)		(493,274	)		(109,476	)		(552,769	)		(398,057	)		(1,327,579	)
	(72,659	)		(193,431	)		(13,429	)		(284,682	)		(119,551	)		(669,021	)
	(215,909	)		(577,063	)		(74,093	)		(389,522	)		(197,590	)		(716,754	)
	(763	)		(7,428	)		(112	)		(451	)		(76	)		(216	)
	—			—			—			(203,688	)		—			—
	—			—			—			(171,688	)		—			—
	—			—			—			(122,883	)		—			—
	—			—			—			(147	)		—			—
	(500,660	)		(1,271,196	)		(197,110	)		(1,725,830	)		(715,274	)		(2,713,570	)
	(4,724,355	)		(24,984,211	)		(6,940,008	)		(26,047,307	)		(16,907,039	)		(37,159,833	)
	(2,846,659	)		(22,018,816	)		(3,474,732	)		(13,318,608	)		(10,234,451	)		(15,520,136	)
	63,443,952			85,462,768			70,080,307			83,398,915			148,292,834			163,812,970
$	60,597,293		$	63,443,952		$	66,605,575		$	70,080,307		$	138,058,383		$	148,292,834
$	(25	)	$	4,479		$	(31,227	)	$	10,678		$	(52,637	)	$	11,411

19

Statements of Changes in Net Assets - Capital Stock Activity

	Touchstone Dynamic
	Equity Fund
	For the Six Months
	Ended						For the Year
	June 30, 2014						Ended
	(Unaudited)						December 31, 2013
	Shares			Dollars			Shares			Dollars
Class A
Proceeds from Shares sold		256,852		$	3,345,217			374,104		$	4,480,414
Reinvestment of distributions		—			—			—			—
Cost of Shares redeemed		(214,823	)		(2,876,610	)		(671,945	)		(8,052,047	)
Change from Class A Share Transactions		42,029			468,607			(297,841	)		(3,571,633	)
Class C
Proceeds from Shares sold		113,369			1,511,390			52,021			605,939
Reinvestment of distributions		—			—			—			—
Cost of Shares redeemed		(92,831	)		(1,150,970	)		(217,239	)		(2,471,586	)
Change from Class C Share Transactions		20,538			360,420			(165,218	)		(1,865,647	)
Class Y
Proceeds from Shares sold		1,277,468			17,445,277			1,090,242			13,522,101
Reinvestment of distributions		—			—			549			7,337
Cost of Shares redeemed		(235,539	)		(3,202,501	)		(1,109,120	)		(13,620,139	)
Change from Class Y Share Transactions		1,041,929			14,242,776			(18,329	)		(90,701	)
Institutional Class
Proceeds from Shares sold		52,516			726,008			33,833			417,533
Reinvestment of distributions		—			—			589			7,882
Cost of Shares redeemed		(163,695	)		(2,246,603	)		(663,484	)		(8,025,231	)
Change from Institutional Class Share Transactions		(111,179	)		(1,520,595	)		(629,062	)		(7,599,816	)
Net Increase (Decrease) from Share Transactions		993,317		$	13,551,208			(1,110,450	)	$	(13,127,797	)

See accompanying Notes to Financial Statements.

20

Statements of Changes in Net Assets - Capital Stock Activity (Continued)

Touchstone Balanced Allocation Fund												Touchstone Conservative Allocation Fund
For the Six Months												For the Six Months
Ended						For the Year						Ended						For the Year
June 30, 2014						Ended						June 30, 2014						Ended
(Unaudited)						December 31, 2013						(Unaudited)						December 31, 2013
Shares			Dollars			Shares			Dollars			Shares			Dollars			Shares			Dollars
	123,932		$	1,549,789			280,981		$	3,311,134			160,591		$	1,786,215			462,199		$	4,982,787
	22,623			286,920			67,601			815,079			14,551			162,282			37,844			407,407
	(562,922	)		(7,074,937	)		(1,019,792	)		(12,047,014	)		(275,038	)		(3,064,276	)		(1,364,874	)		(14,641,844	)
	(416,367	)		(5,238,228	)		(671,210	)		(7,920,801	)		(99,896	)		(1,115,779	)		(864,831	)		(9,251,650	)
	49,410			615,364			135,642			1,604,319			43,968			482,635			98,690			1,052,995
	6,279			79,478			23,260			283,302			4,860			53,926			12,887			138,300
	(280,402	)		(3,516,139	)		(628,273	)		(7,414,630	)		(101,106	)		(1,115,873	)		(426,779	)		(4,586,185	)
	(224,713	)		(2,821,297	)		(469,371	)		(5,527,009	)		(52,278	)		(579,312	)		(315,202	)		(3,394,890	)
	192,384			2,419,428			514,994			6,094,088			162,524			1,800,985			697,450			7,531,888
	21,297			270,686			63,081			758,122			17,679			197,145			49,467			532,491
	(297,816	)		(3,739,422	)		(2,051,080	)		(24,250,717	)		(449,893	)		(5,016,498	)		(1,794,484	)		(19,263,173	)
	(84,135	)		(1,049,308	)		(1,473,005	)		(17,398,507	)		(269,690	)		(3,018,368	)		(1,047,567	)		(11,198,794	)
	—			—			—			—			—			—			1,241			13,469
	24			301			61			734			68			763			593			6,326
	—			—			—			—			(1,032	)		(11,659	)		(108,251	)		(1,158,672	)
	24			301			61			734			(964	)		(10,896	)		(106,417	)		(1,138,877	)
	(725,191	)	$	(9,108,532	)		(2,613,525	)	$	(30,845,583	)		(422,828	)	$	(4,724,355	)		(2,334,017	)	$	(24,984,211	)

21

Statements of Changes in Net Assets - Capital Stock Activity (Continued)

	Touchstone Growth Allocation Fund
	For the Six Months
	Ended						For the Year
	June 30, 2014						Ended
	(Unaudited)						December 31, 2013
	Shares			Dollars			Shares			Dollars
Class A
Proceeds from Shares sold		67,526		$	942,188			144,721		$	1,858,211
Reinvestment of distributions		7,152			101,333			50,827			695,151
Cost of Shares redeemed		(210,217	)		(2,947,663	)		(753,611	)		(9,731,501	)
Change from Class A Share Transactions		(135,539	)		(1,904,142	)		(558,063	)		(7,178,139	)
Class C
Proceeds from Shares sold		29,700			397,600			156,664			1,958,269
Reinvestment of distributions		735			9,860			24,735			326,028
Cost of Shares redeemed		(144,542	)		(1,950,776	)		(498,883	)		(6,235,592	)
Change from Class C Share Transactions		(114,107	)		(1,543,316	)		(317,484	)		(3,951,295	)
Class Y
Proceeds from Shares sold		63,791			901,154			349,010			4,506,727
Reinvestment of distributions		4,974			71,148			36,184			496,016
Cost of Shares redeemed		(314,921	)		(4,464,950	)		(1,538,044	)		(19,907,914	)
Change from Class Y Share Transactions		(246,156	)		(3,492,648	)		(1,152,850	)		(14,905,171	)
Institutional Class
Proceeds from Shares sold		—			—			329			3,691
Reinvestment of distributions		8			112			48			598
Cost of Shares redeemed		(1	)		(14	)		(1,497	)		(16,991	)
Change from Institutional Class Share Transactions		7			98			(1,120	)		(12,702	)
Net Decrease from Share Transactions		(495,795	)	$	(6,940,008	)		(2,029,517	)	$	(26,047,307	)

See accompanying Notes to Financial Statements.

22

Statements of Changes in Net Assets - Capital Stock Activity (Continued)

Touchstone Moderate Growth Allocation Fund
For the Six Months
Ended						For the Year
June 30, 2014						Ended
(Unaudited)						December 31, 2013
Shares			Dollars			Shares			Dollars
	80,668		$	1,059,105			281,126		$	3,458,840
	27,053			360,771			94,159			1,194,334
	(632,309	)		(8,332,213	)		(1,434,032	)		(17,450,279	)
	(524,588	)		(6,912,337	)		(1,058,747	)		(12,797,105	)
	67,015			874,350			141,827			1,718,675
	6,140			80,381			34,847			440,284
	(416,995	)		(5,393,052	)		(697,559	)		(8,395,893	)
	(343,840	)		(4,438,321	)		(520,885	)		(6,236,934	)
	162,090			2,150,583			488,950			6,004,836
	13,462			180,862			52,336			664,249
	(591,460	)		(7,887,902	)		(2,041,647	)		(24,795,095	)
	(415,908	)		(5,556,457	)		(1,500,361	)		(18,126,010	)
	—			—			—			—
	6			76			17			216
	—			—			—			—
	6			76			17			216
	(1,284,330	)	$	(16,907,039	)		(3,079,976	)	$	(37,159,833	)

23

Statement of Cash Flows

For the Six Months Ended June 30, 2014 (Unaudited)

	Touchstone
	Dynamic
	Equity
	Fund
Cash Flows Used in Operating Activities
Change in net assets resulting from operations	$	2,342,856
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities:
Purchases of investments		(102,335,177	)
Proceeds from disposition of investments		99,349,488
Net proceeds from purchased options		(2,027,382	)
Premiums on call and put options written		9,419,170
Costs to cover written options		(9,398,296	)
Proceeds from securities sold short		22,038,803
Covers of securities sold short		(22,608,740	)
Net sales of short term securities		(6,762,375	)
Increase in receivable for investments sold		(236,427	)
Cash received from litigation claim		396
Increase in deposits with Prime Broker		(593,165	)
Decrease in dividends and interest receivable		21,027
Increase in tax reclaim receivable		(207	)
Increase in other assets		(8,785	)
Decrease in dividends for securities sold short payable		(170,041	)
Decrease in payable to Trustees		(3,759	)
Increase in payable to Investment Advisor		9,780
Decrease in payable to other affiliates		(3,696	)
Decrease in other accrued expenses and liabilities		(12,113	)
Net realized (gains) on investments		(4,610,538	)
Net realized (gains) losses on written options		(292,250	)
Net realized losses from securities sold short		2,189,958
Net change in unrealized (appreciation) depreciation on investments		1,295,434
Net change in unrealized (appreciation) depreciation on written options		(442,829	)
Net change in unrealized (appreciation) depreciation on securities sold short		(467,763	)
Net cash used in operating activities		(13,306,631	)
Cash Flows Provided by Financing Activities
Decrease in bank overdrafts		(3,572	)
Proceeds from shares sold		22,769,017
Payment of shares redeemed		(9,458,814	)
Net cash provided by financing activities		13,306,631
Net change in cash		—
Net change in cash
Cash - beginning of the period		—
Cash - end of period	$	—

24

Financial Highlights

Touchstone Dynamic Equity Fund—Class A

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	13.15		$	11.05		$	11.20		$	10.26		$	9.02		$	8.68		$	11.88
Income (loss) from investment operations:
Net investment income (loss)		(—	)(B)(C)		0.04			0.04	(C)		(0.07	)(C)		0.06	(C)		0.05	(C)		0.02	(C)
Net realized and unrealized gains (losses) on investments		0.44			2.06			(0.19	)		1.09			1.18			0.29			(3.22	)
Total from investment operations		0.44			2.10			(0.15	)		1.02			1.24			0.34			(3.20	)
Distributions from:
Net investment income		—			—			—			(0.08	)		—			—			—
Net asset value at end of period	$	13.59		$	13.15		$	11.05		$	11.20		$	10.26		$	9.02		$	8.68
Total return(D)		3.35	%(E)		19.01	%		(1.34	%)(E)		10.00	%		13.75	%		3.92	%		(26.94	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	16,382		$	15,300		$	16,156		$	17,919		$	23,505		$	38,274		$	83,169
Ratio to average net assets:
Net expenses (including dividend expense on securities sold short)(F)		2.13	%(G)		2.21	%		2.46	%(G)		2.80	%		1.82	%		1.78	%		2.07	%
Gross expenses (including dividend expense on securities sold short)(H)		2.27	%(G)		2.41	%		2.65	%(G)		3.08	%		2.16	%		2.27	%		2.41	%
Net investment income (loss)		(0.02	%)(G)		0.30	%		0.88	%(G)		(0.63	%)		0.66	%		0.52	%		0.24	%
Portfolio turnover rate		126	%(E)		382	%		105	%(E)		234	%		231	%		168	%		195	%

^(A) The Fund changed its fiscal year end from July 31 to December 31.

^(B) Less than $0.005 per share.

^(C) The net investment income (loss) per share is based on average shares outstanding for the period.

^(D) Total returns shown exclude the effect of applicable sales loads. If these charges were included, the returns would be lower.

^(E) Not annualized.

^(F) The ratio of net expenses to average net assets excluding dividend expense on securities sold short is 1.55%, 1.55%, 1.55%, 1.55%, 1.66%, 1.65% and 1.71% for the six months ended June 30, 2014, year ended December 31, 2013, period ended December 31, 2012 and years ended July 31, 2012, 2011, 2010 and 2009, respectively.

^(G) Annualized.

^(H) The ratio of gross expenses to average net assets excluding dividend expense on securities sold short is 1.70%, 1.75%, 1.74%, 1.82%, 2.00%, 2.14% and 2.05% for the six months ended June 30, 2014, year ended December 31, 2013, the period ended December 31, 2012 and years ended July 31, 2012, 2011, 2010 and 2009, respectively.

See accompanying Notes to Financial Statements.

25

Financial Highlights (Continued)

Touchstone Dynamic Equity Fund—Class C

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	12.35		$	10.46		$	10.63		$	9.79		$	8.67		$	8.40		$	11.59
Income (loss) from investment operations:
Net investment income (loss)		(0.05	)(B)		(0.08	)		0.01	(B)		(0.14	)(B)		(0.01	)(B)		(0.02	)(B)		(0.05	)(B)
Net realized and unrealized gains (losses) on investments		0.41			1.97			(0.18	)		1.03			1.13			0.29			(3.14	)
Total from investment operations		0.36			1.89			(0.17	)		0.89			1.12			0.27			(3.19	)
Distributions from:
Net investment income		—			—			—			(0.05	)		—			—			—
Net asset value at end of period	$	12.71		$	12.35		$	10.46		$	10.63		$	9.79		$	8.67		$	8.40
Total return(C)		2.92	%(D)		18.07	%		(1.60	%)(D)		9.09	%		12.92	%		3.21	%		(27.52	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	10,826		$	10,261		$	10,420		$	11,684		$	14,243		$	20,558		$	51,879
Ratio to average net assets:
Net expenses (including dividend expense on securities sold short)(E)		2.88	%(F)		2.96	%		3.21	%(F)		3.55	%		2.57	%		2.53	%		2.82	%
Gross expenses (including dividend expense on securities sold short)(G)		3.06	%(F)		3.20	%		3.48	%(F)		3.75	%		2.78	%		2.91	%		2.97	%
Net investment income (loss)		(0.77	%)(F)		(0.45	%)		0.13	%(F)		(1.38	%)		(0.10	%)		(0.23	%)		(0.52	%)
Portfolio turnover rate		126	%(D)		382	%		105	%(D)		234	%		231	%		168	%		195	%

^(A) The Fund changed its fiscal year end from July 31 to December 31.

^(B) The net investment income (loss) per share is based on average shares outstanding for the period.

^(C) Total returns shown exclude the effect of applicable sales loads. If these charges were included, the returns would be lower.

^(D) Not annualized.

^(E) The ratio of net expenses to average net assets excluding dividend expense on securities sold short is 2.30%, 2.30%, 2.30%, 2.30%, 2.41%, 2.40% and 2.46% for the six months ended June 30, 2014, year ended December 31, 2013, period ended December 31, 2012 and years ended July 31, 2012, 2011, 2010 and 2009, respectively.

^(F) Annualized.

^(G) The ratio of gross expenses to average net assets excluding dividend expense on securities sold short is 2.49%, 2.54%, 2.57%, 2.50%, 2.62%, 2.78% and 2.61% for the six months ended June 30, 2014, year ended December 31, 2013, period ended December 31, 2012 and years ended July 31, 2012, 2011, 2010 and 2009, respectively.

See accompanying Notes to Financial Statements.

26

Financial Highlights (Continued)

Touchstone Dynamic Equity Fund—Class Y

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31, 2013
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	13.37		$	11.22		$	11.35		$	10.40		$	9.11		$	8.75		$	11.94
Income (loss) from investment operations:
Net investment income (loss)		0.02	(B)		0.07			0.05	(B)		(0.04	)(B)		0.08	(B)		0.07	(B)		0.04	(B)
Net realized and unrealized gains (losses) on investments		0.44			2.08			(0.18	)		1.09			1.21			0.29			(3.23	)
Total from investment operations		0.46			2.15			(0.13	)		1.05			1.29			0.36			(3.19	)
Distributions from:
Net investment income		—			—	(C)		—			(0.10	)		—			—			—
Net asset value at end of period	$	13.83		$	13.37		$	11.22		$	11.35		$	10.40		$	9.11		$	8.75
Total return		3.44	%(D)		19.20	%		(1.15	%)(D)		10.14	%		14.16	%		4.11	%		(26.72	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	39,312		$	24,066		$	20,397		$	24,054		$	30,511		$	22,347		$	29,734
Ratio to average net assets:
Net expenses (including dividend expense on securities sold short)(E)		1.88	%(F)		1.96	%		2.21	%(F)		2.56	%		1.59	%		1.52	%		1.81	%
Gross expenses (including dividend expense on securities sold short)(G)		1.84	%(F)		1.95	%		2.31	%(F)		2.60	%		1.68	%		1.68	%		1.97	%
Net investment income (loss)		0.24	%(F)		0.55	%		1.13	%(F)		(0.38	%)		0.77	%		0.81	%		0.45	%
Portfolio turnover rate		126	%(D)		382	%		105	%(D)		234	%		231	%		168	%		195	%

^(A) The Fund changed its fiscal year end from July 31 to December 31.

^(B) The net investment income (loss) per share is based on average shares outstanding for the period.

^(C) Amount rounds to less than $0.005 per share.

^(D) Not annualized.

^(E) The ratio of net expenses to average net assets excluding dividend expense on securities sold short is 1.30%, 1.30%, 1.30%, 1.30%, 1.42%, 1.40% and 1.46% for the six months ended June 30, 2014, year ended December 31, 2013, period ended December 31, 2012 and years ended July 31, 2012, 2011, 2010 and 2009, respectively.

^(F) Annualized.

^(G) The ratio of gross expenses to average net assets excluding dividend expense on securities sold short is 1.26%, 1.29%, 1.40%, 1.35%, 1.51%, 1.56% and 1.62% for the six months ended June 30, 2014, year ended December 31, 2013, period ended December 31, 2012 and years ended July 31, 2012, 2011, 2010 and 2009, respectively.

See accompanying Notes to Financial Statements.

27

Financial Highlights (Continued)

Touchstone Dynamic Equity Fund—Institutional Class

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	13.39		$	11.23		$	11.36		$	10.40		$	9.12		$	8.76		$	11.96
Income (loss) from investment operations:
Net investment income (loss)		0.02	(B)		0.12			0.06	(B)		(0.04	)(B)		0.09	(B)		0.11	(B)		0.05	(B)
Net realized and unrealized gains (losses) on investments		0.45			2.05			(0.19	)		1.10			1.19			0.25			(3.25	)
Total from investment operations		0.47			2.17			(0.13	)		1.06			1.28			0.36			(3.20	)
Distributions from:
Net investment income		—			(0.01	)		—			(0.10	)		—			—			—
Net asset value at end of period	$	13.86		$	13.39		$	11.23		$	11.36		$	10.40		$	9.12		$	8.76
Total return		3.51	%(C)		19.29	%		(1.15	%)(C)		10.27	%		14.04	%		4.11	%		(26.76	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	14,524		$	15,523		$	20,085		$	6,168		$	2		$	2		$	12,547
Ratio to average net assets:
Net expenses (including dividend expense on securities sold short)(D)		1.83	%(E)		1.91	%		2.16	%(E)		2.50	%		1.52	%		1.41	%		1.77	%
Gross expenses (including dividend expense on securities sold short)(F)		1.83	%(E)		1.95	%		2.18	%(E)		2.95	%		816.82	%		2.84	%		1.87	%
Net investment income (loss)		0.28	%(E)		0.60	%		1.18	%(E)		(0.33	%)		0.92	%		1.31	%		0.55	%
Portfolio turnover rate		126	%(C)		382	%		105	%(C)		234	%		231	%		168	%		195	%

^(A) The Fund changed its fiscal year end from July 31 to December 31.

^(B) The net investment income (loss) per share is based on average shares outstanding for the period.

^(C) Not annualized.

^(D) The ratio of net expenses to average net assets excluding dividend expense on securities sold short is 1.25%, 1.25%, 1.25%, 1.25%, 1.35%, 1.36% and 1.41% for the six months ended June 30, 2014, year ended December 31, 2013, period ended December 31, 2012 and years ended July 31, 2012, 2011, 2010 and 2009, respectively.

^(E) Annualized.

^(F) The ratio of gross expenses to average net assets excluding dividend expense on securities sold short is 1.25%, 1.29%, 1.27%, 1.70%, 816.65%, 2.79% and 1.51% for the six months ended June 30, 2014, year ended December 31, 2013, period ended December 31, 2012 and years ended July 31, 2012, 2011, 2010 and 2009, respectively.

See accompanying Notes to Financial Statements.

28

Financial Highlights (Continued)

Touchstone Balanced Allocation Fund—Class A

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	12.37		$	11.13		$	11.18		$	11.03		$	9.99		$	9.28		$	11.27
Income (loss) from investment operations:
Net investment income		0.09			0.17			0.13	(B)		0.17	(B)		0.18	(B)		0.22	(B)		0.29	(B)
Net realized and unrealized gains (losses) on investments		0.53			1.30			0.35			0.14			1.13			0.80			(1.46	)
Total from investment operations		0.62			1.47			0.48			0.31			1.31			1.02			(1.17	)
Distributions from:
Net investment income		(0.09	)		(0.23	)		(0.24	)		(0.16	)		(0.27	)		(0.31	)		(0.36	)
Realized capital gains		—			—			(0.29	)		—			—			—			(0.46	)
Total distributions		(0.09	)		(0.23	)		(0.53	)		(0.16	)		(0.27	)		(0.31	)		(0.82	)
Net asset value at end of period	$	12.90		$	12.37		$	11.13		$	11.18		$	11.03		$	9.99		$	9.28
Total return(C)		5.02	%(D)		13.28	%		4.37	%(D)		2.89	%		13.21	%		10.99	%		(9.30	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	42,890		$	46,285		$	49,118		$	9,839		$	12,650		$	21,312		$	25,356
Ratio to average net assets:
Net expenses(E)		0.44	%(F)		0.35	%		0.41	%(F)		0.64	%		0.64	%		0.64	%		0.65	%
Gross expenses(E)		0.83	%(F)		0.86	%		0.83	%(F)		0.97	%		0.94	%		0.93	%		0.79	%
Net investment income(E)		1.36	%(F)		1.42	%		2.75	%(F)		1.58	%		1.71	%		2.26	%		3.30	%
Portfolio turnover rate		7	%(D)		32	%		74	%(D)(G)		76	%		6	%		33	%		30	%

Touchstone Balanced Allocation Fund—Class C

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	12.36		$	11.12		$	11.14		$	11.01		$	9.97		$	9.26		$	11.17
Income (loss) from investment operations:
Net investment income		0.04			0.08			0.09	(B)		0.09	(B)		0.10	(B)		0.15	(B)		0.22	(B)
Net realized and unrealized gains (losses) on investments		0.53			1.30			0.35			0.14			1.13			0.79			(1.44	)
Total from investment operations		0.57			1.38			0.44			0.23			1.23			0.94			(1.22	)
Distributions from:
Net investment income		(0.04	)		(0.14	)		(0.17	)		(0.10	)		(0.19	)		(0.23	)		(0.23	)
Realized capital gains		—			—			(0.29	)		—			—			—			(0.46	)
Total distributions		(0.04	)		(0.14	)		(0.46	)		(0.10	)		(0.19	)		(0.23	)		(0.69	)
Net asset value at end of period	$	12.89		$	12.36		$	11.12		$	11.14		$	11.01		$	9.97		$	9.26
Total return(C)		4.63	%(D)		12.45	%		4.03	%(D)		2.13	%		12.41	%		10.19	%		(10.00	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	35,352		$	36,681		$	38,226		$	38,388		$	50,108		$	59,480		$	77,330
Ratio to average net assets:
Net expenses(E)		1.19	%(F)		1.10	%		1.16	%(F)		1.39	%		1.39	%		1.39	%		1.40	%
Gross expenses(E)		1.57	%(F)		1.58	%		1.60	%(F)		1.59	%		1.59	%		1.62	%		1.51	%
Net investment income(E)		0.61	%(F)		0.67	%		2.00	%(F)		0.84	%		0.98	%		1.51	%		2.46	%
Portfolio turnover rate		7	%(D)		32	%		74	%(D)(G)		76	%		6	%		33	%		30	%

^(A) The Fund changed its fiscal year end from July 31 to December 31.

^(B) The net investment income per share is based on average shares outstanding for the period.

^(C) Total returns shown exclude the effect of applicable sales loads. If these charges were included, the returns would be lower.

^(D) Not annualized.

^(E) Ratio does not include income and expenses of the underlying funds.

^(F) Annualized.

^(G) Portfolio turnover excludes the purchase and sales of the Fifth Third LifeModel Moderate Fund acquired on September 10, 2012. If these transactions were included, portfolio turnover would have been higher.

See accompanying Notes to Financial Statements.

29

Financial Highlights (Continued)

Touchstone Balanced Allocation Fund—Class Y

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	12.39		$	11.15		$	11.21		$	11.05		$	10.01		$	9.30		$	11.31
Income (loss) from investment operations:
Net investment income		0.11			0.22			0.14	(B)		0.20	(B)		0.23	(B)		0.24	(B)		0.31	(B)
Net realized and unrealized gains (losses) on investments		0.53			1.28			0.35			0.14			1.11			0.80			(1.46	)
Total from investment operations		0.64			1.50			0.49			0.34			1.34			1.04			(1.15	)
Distributions from:
Net investment income		(0.11	)		(0.26	)		(0.26	)		(0.18	)		(0.30	)		(0.33	)		(0.40	)
Realized capital gains		—			—			(0.29	)		—			—			—			(0.46	)
Total distributions		(0.11	)		(0.26	)		(0.55	)		(0.18	)		(0.30	)		(0.33	)		(0.86	)
Net asset value at end of period	$	12.92		$	12.39		$	11.15		$	11.21		$	11.05		$	10.01		$	9.30
Total return		5.14	%(C)		13.54	%		4.45	%(C)		3.18	%		13.49	%		11.25	%		(9.00	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	34,450		$	34,079		$	47,092		$	1,287		$	1,866		$	929		$	672
Ratio to average net assets:
Net expenses(D)		0.19	%(E)		0.10	%		0.16	%(E)		0.39	%		0.39	%		0.39	%		0.40	%
Gross expenses(D)		0.57	%(E)		0.59	%		0.52	%(E)		1.40	%		1.41	%		2.28	%		1.41	%
Net investment income(D)		1.61	%(E)		1.67	%		3.00	%(E)		1.84	%		2.11	%		2.46	%		3.53	%
Portfolio turnover rate		7	%(C)		32	%		74	%(C)(F)		76	%		6	%		33	%		30	%

Touchstone Balanced Allocation Fund—Institutional Class

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	12.33		$	11.10		$	11.16		$	11.00		$	9.97		$	9.26		$	11.28
Income (loss) from investment operations:
Net investment income		0.10			0.20			0.14	(B)		0.20	(B)		0.21	(B)		0.35	(B)		0.30	(B)
Net realized and unrealized gains (losses) on investments		0.54			1.29			0.35			0.14			1.12			0.69			(1.46	)
Total from investment operations		0.64			1.49			0.49			0.34			1.33			1.04			(1.16	)
Distributions from:
Net investment income		(0.11	)		(0.26	)		(0.26	)		(0.18	)		(0.30	)		(0.33	)		(0.40	)
Realized capital gains		—			—			(0.29	)		—			—			—			(0.46	)
Total distributions		(0.11	)		(0.26	)		(0.55	)		(0.18	)		(0.30	)		(0.33	)		(0.86	)
Net asset value at end of period	$	12.86		$	12.33		$	11.10		$	11.16		$	11.00		$	9.97		$	9.26
Total return		5.17	%(C)		13.51	%		4.47	%(C)		3.19	%		13.44	%		11.29	%		(9.13	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	37		$	35		$	31		$	30		$	31		$	27		$	2,011
Ratio to average net assets:
Net expenses(D)		0.19	%(E)		0.11	%		0.16	%(E)		0.39	%		0.39	%		0.39	%		0.40	%
Gross expenses(D)		48.14	%(E)		63.11	%		56.07	%(E)		28.86	%		46.94	%		2.29	%		0.58	%
Net investment income(D)		1.61	%(E)		1.66	%		3.00	%(E)		1.85	%		1.97	%		3.55	%		3.35	%
Portfolio turnover rate		7	%(C)		32	%		74	%(C)(F)		76	%		6	%		33	%		30	%

^(A) The Fund changed its fiscal year end from July 31 to December 31.

^(B) The net investment income per share is based on average shares outstanding for the period.

^(C) Not annualized.

^(D) Ratio does not include income and expenses of the underlying funds.

^(E) Annualized.

^(F) Portfolio turnover excludes the purchase and sales of the Fifth Third LifeModel Moderate Fund acquired on September 10, 2012. If these transactions were included, portfolio turnover would have been higher.

See accompanying Notes to Financial Statements.

30

Financial Highlights (Continued)

Touchstone Conservative Allocation Fund—Class A

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	10.93		$	10.50		$	10.98		$	10.87		$	10.38		$	9.84		$	10.76
Income (loss) from investment operations:
Net investment income		0.09			0.19	(B)		0.10	(B)		0.21	(B)		0.26	(B)		0.34	(B)		0.48	(B)
Net realized and unrealized gains (losses) on investments		0.33			0.45			0.17			0.13			0.64			0.66			(0.61	)
Total from investment operations		0.42			0.64			0.27			0.34			0.90			1.00			(0.13	)
Distributions from:
Net investment income		(0.09	)		(0.21	)		(0.28	)		(0.23	)		(0.41	)		(0.46	)		(0.57	)
Realized capital gains		—			—			(0.47	)		—			—			—			(0.22	)
Total distributions		(0.09	)		(0.21	)		(0.75	)		(0.23	)		(0.41	)		(0.46	)		(0.79	)
Net asset value at end of period	$	11.26		$	10.93		$	10.50		$	10.98		$	10.87		$	10.38		$	9.84
Total return(C)		3.90	%(D)		6.14	%		2.47	%(D)		3.23	%		8.81	%		10.27	%		(0.49	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	24,481		$	24,857		$	32,965		$	8,466		$	11,138		$	12,141		$	13,632
Ratio to average net assets:
Net expenses(E)		0.44	%(F)		0.35	%		0.40	%(F)		0.61	%		0.61	%		0.61	%		0.65	%
Gross expenses(E)		0.89	%(F)		0.89	%		0.85	%(F)		1.02	%		0.91	%		0.94	%		0.86	%
Net investment income(E)		1.68	%(F)		1.74	%		2.28	%(F)		1.95	%		2.43	%		3.36	%		5.09	%
Portfolio turnover rate		5	%(D)		30	%		79	%(D)(G)		89	%		13	%		33	%		40	%

Touchstone Conservative Allocation Fund—Class C

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	10.88		$	10.45		$	10.92		$	10.81		$	10.33		$	9.80		$	10.66
Income (loss) from investment operations:
Net investment income		0.05			0.11	(B)		0.07	(B)		0.13	(B)		0.18	(B)		0.27	(B)		0.39	(B)
Net realized and unrealized gains (losses) on investments		0.33			0.45			0.17			0.13			0.63			0.64			(0.58	)
Total from investment operations		0.38			0.56			0.24			0.26			0.81			0.91			(0.19	)
Distributions from:
Net investment income		(0.05	)		(0.13	)		(0.24	)		(0.15	)		(0.33	)		(0.38	)		(0.45	)
Realized capital gains		—			—			(0.47	)		—			—			—			(0.22	)
Total distributions		(0.05	)		(0.13	)		(0.71	)		(0.15	)		(0.33	)		(0.38	)		(0.67	)
Net asset value at end of period	$	11.21		$	10.88		$	10.45		$	10.92		$	10.81		$	10.33		$	9.80
Total return(C)		3.53	%(D)		5.36	%		2.18	%(D)		2.50	%		7.93	%		9.37	%		(1.20	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	15,150		$	15,275		$	17,972		$	17,104		$	20,000		$	23,985		$	31,465
Ratio to average net assets:
Net expenses(E)		1.19	%(F)		1.10	%		1.15	%(F)		1.36	%		1.36	%		1.36	%		1.41	%
Gross expenses(E)		1.65	%(F)		1.64	%		1.67	%(F)		1.70	%		1.61	%		1.65	%		1.54	%
Net investment income(E)		0.93	%(F)		0.99	%		1.53	%(F)		1.20	%		1.72	%		2.61	%		4.23	%
Portfolio turnover rate		5	%(D)		30	%		79	%(D)(G)		89	%		13	%		33	%		40	%

^(A) The Fund changed its fiscal year end from July 31 to December 31.

^(B) The net investment income per share is based on average shares outstanding for the period.

^(C) Total returns shown exclude the effect of applicable sales loads. If these charges were included, the returns would be lower.

^(D) Not annualized.

^(E) Ratio does not include income and expenses of the underlying funds.

^(F) Annualized.

^(G) Portfolio turnover excludes the purchase and sales of the Fifth Third LifeModel Conservative Fund and Fifth Third LifeModel Moderately Conservative Fund acquired on September 10, 2012. If these transactions were included, portfolio turnover would have been higher.

See accompanying Notes to Financial Statements.

31

Financial Highlights (Continued)

Touchstone Conservative Allocation Fund—Class Y

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	10.93		$	10.51		$	10.99		$	10.87		$	10.39		$	9.85		$	10.78
Income (loss) from investment operations:
Net investment income		0.11			0.21	(B)		0.12	(B)		0.24	(B)		0.29	(B)		0.35	(B)		0.44	(B)
Net realized and unrealized gains (losses) on investments		0.33			0.45			0.16			0.14			0.62			0.67			(0.54	)
Total from investment operations		0.44			0.66			0.28			0.38			0.91			1.02			(0.10	)
Distributions from:
Net investment income		(0.11	)		(0.24	)		(0.29	)		(0.26	)		(0.43	)		(0.48	)		(0.61	)
Realized capital gains		—			—			(0.47	)		—			—			—			(0.22	)
Total distributions		(0.11	)		(0.24	)		(0.76	)		(0.26	)		(0.43	)		(0.48	)		(0.83	)
Net asset value at end of period	$	11.26		$	10.93		$	10.51		$	10.99		$	10.87		$	10.39		$	9.85
Total return		4.03	%(C)		6.31	%		2.60	%(C)		3.60	%		8.97	%		10.54	%		(0.17	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	20,893		$	23,230		$	33,329		$	2,156		$	1,370		$	1,129		$	234
Ratio to average net assets:
Net expenses(D)		0.19	%(E)		0.10	%		0.15	%(E)		0.36	%		0.36	%		0.34	%		0.40	%
Gross expenses(D)		0.62	%(E)		0.62	%		0.57	%(E)		1.38	%		1.65	%		1.65	%		7.77	%
Net investment income(D)		1.93	%(E)		1.99	%		2.53	%(E)		2.20	%		2.72	%		3.40	%		4.56	%
Portfolio turnover rate		5	%(C)		30	%		79	%(C)(F)		89	%		13	%		33	%		40	%

Touchstone Conservative Allocation Fund—Institutional Class

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	10.95		$	10.51		$	10.99		$	10.89		$	10.40		$	9.86		$	10.79
Income (loss) from investment operations:
Net investment income		0.16			0.21	(B)		0.12	(B)		0.24	(B)		0.29	(B)		0.37	(B)		0.47	(B)
Net realized and unrealized gains (losses) on investments		0.27			0.47			0.16			0.12			0.63			0.65			(0.58	)
Total from investment operations		0.43			0.68			0.28			0.36			0.92			1.02			(0.11	)
Distributions from:
Net investment income		(0.11	)		(0.24	)		(0.29	)		(0.26	)		(0.43	)		(0.48	)		(0.60	)
Realized capital gains		—			—			(0.47	)		—			—			—			(0.22	)
Total distributions		(0.11	)		(0.24	)		(0.76	)		(0.26	)		(0.43	)		(0.48	)		(0.82	)
Net asset value at end of period	$	11.27		$	10.95		$	10.51		$	10.99		$	10.89		$	10.40		$	9.86
Total return		4.02	%(C)		6.40	%		2.50	%(C)		3.52	%		9.06	%		10.52	%		(0.19	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	74		$	82		$	1,198		$	1,342		$	6,459		$	6,158		$	6,017
Ratio to average net assets:
Net expenses(D)		0.19	%(E)		0.09	%		0.15	%(E)		0.36	%		0.36	%		0.36	%		0.40	%
Gross expenses(D)		21.88	%(E)		4.85	%		1.93	%(E)		0.66	%		0.63	%		0.56	%		1.43	%
Net investment income(D)		1.93	%(E)		2.00	%		2.53	%(E)		2.20	%		2.70	%		3.62	%		4.85	%
Portfolio turnover rate		5	%(C)		30	%		79	%(C)(F)		89	%		13	%		33	%		40	%

^(A) The Fund changed its fiscal year end from July 31 to December 31.

^(B) The net investment income per share is based on average shares outstanding for the period.

^(C) Not annualized.

^(D) Ratio does not include income and expenses of the underlying funds.

^(E) Annualized.

^(F) Portfolio turnover excludes the purchase and sales of the Fifth Third LifeModel Conservative Fund and Fifth Third LifeModel Moderately Conservative Fund acquired on September 10, 2012. If these transactions were included, portfolio turnover would have been higher.

See accompanying Notes to Financial Statements.

32

Financial Highlights (Continued)

Touchstone Growth Allocation Fund—Class A

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	13.82		$	11.75		$	11.28		$	11.40		$	9.58		$	8.66		$	12.33
Income (loss) from investment operations:
Net investment income		0.05			0.12			0.14	(B)		0.13	(B)		0.08	(B)		0.12	(B)		0.10	(B)
Net realized and unrealized gains (losses) on investments		0.74			2.31			0.67			(0.14	)		1.80			0.99			(3.12	)
Total from investment operations		0.79			2.43			0.81			(0.01	)		1.88			1.11			(3.02	)
Distributions from:
Net investment income		(0.05	)		(0.26	)		(0.34	)		(0.11	)		(0.06	)		(0.19	)		—
Realized capital gains		—			(0.10	)		—			—			—			—			(0.65	)
Total distributions		(0.05	)		(0.36	)		(0.34	)		(0.11	)		(0.06	)		(0.19	)		(0.65	)
Net asset value at end of period	$	14.56		$	13.82		$	11.75		$	11.28		$	11.40		$	9.58		$	8.66
Total return(C)		5.76	%(D)		20.69	%		7.29	%(D)		(0.04	%)		19.65	%		12.78	%		(23.55	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	28,862		$	29,279		$	31,432		$	10,320		$	13,619		$	16,721		$	20,556
Ratio to average net assets:
Net expenses(E)		0.44	%(F)		0.35	%		0.39	%(F)		0.57	%		0.57	%		0.57	%		0.56	%
Gross expenses(E)		0.98	%(F)		1.01	%		1.04	%(F)		1.21	%		1.13	%		1.18	%		1.03	%
Net investment income(E)		0.67	%(F)		0.87	%		2.95	%(F)		1.17	%		0.77	%		1.26	%		1.14	%
Portfolio turnover rate		10	%(D)		50	%		65	%(D)(G)		77	%		8	%		41	%		27	%

Touchstone Growth Allocation Fund—Class C

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,						Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	13.32		$	11.32		$	10.80		$	10.90		$	9.18		$	8.30		$	11.95
Income (loss) from investment operations:
Net investment income		(0.01	)		0.02			0.10	(B)		0.04	(B)		—	(B)(H)		0.04	(B)		0.03	(B)
Net realized and unrealized gains (losses) on investments		0.72			2.24			0.63			(0.12	)		1.72			0.96			(3.03	)
Total from investment operations		0.71			2.26			0.73			(0.08	)		1.72			1.00			(3.00	)
Distributions from:
Net investment income		(0.01	)		(0.16	)		(0.21	)		(0.02	)		—			(0.12	)		—
Realized capital gains		—			(0.10	)		—			—			—			—			(0.65	)
Total distributions		(0.01	)		(0.26	)		(0.21	)		(0.02	)		—			(0.12	)		(0.65	)
Net asset value at end of period	$	14.02		$	13.32		$	11.32		$	10.80		$	10.90		$	9.18		$	8.30
Total return(C)		5.39	%(D)		19.88	%		6.82	%(D)		(0.75	%)		18.74	%		12.03	%		(24.16	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	23,734		$	24,066		$	24,065		$	23,968		$	33,477		$	36,655		$	48,126
Ratio to average net assets:
Net expenses(E)		1.19	%(F)		1.10	%		1.14	%(F)		1.32	%		1.32	%		1.32	%		1.31	%
Gross expenses(E)		1.73	%(F)		1.73	%		1.81	%(F)		1.87	%		1.75	%		1.84	%		1.75	%
Net investment income(E)		(0.08	%)(F)		0.12	%		2.20	%(F)		0.42	%		0.02	%		0.47	%		0.42	%
Portfolio turnover rate		10	%(D)		50	%		65	%(D)(G)		77	%		8	%		41	%		27	%

^(A) The Fund changed its fiscal year end from July 31 to December 31.

^(B) The net investment income per share is based on average shares outstanding for the period.

^(C) Total returns shown exclude the effect of applicable sales loads. If these charges were included, the returns would be lower.

^(D) Not annualized.

^(E) Ratio does not include income and expenses of the underlying funds.

^(F) Annualized.

^(G) Portfolio turnover excludes the purchase and sales of the Fifth Third LifeModel Aggressive Fund acquired on September 10, 2012. If these transactions were included, portfolio turnover would have been higher.

^(H) Less than $0.005 per share.

See accompanying Notes to Financial Statements.

33

Financial Highlights (Continued)

Touchstone Growth Allocation Fund—Class Y

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	13.96		$	11.86		$	11.43		$	11.57		$	9.72		$	8.77		$	12.45
Income (loss) from investment operations:
Net investment income		0.08			0.18			0.16	(B)		0.15	(B)		0.12	(B)		0.05	(B)		0.12	(B)
Net realized and unrealized gains (losses) on investments		0.73			2.31			0.67			(0.14	)		1.81			1.11			(3.15	)
Total from investment operations		0.81			2.49			0.83			0.01			1.93			1.16			(3.03	)
Distributions from:
Net investment income		(0.07	)		(0.29	)		(0.40	)		(0.15	)		(0.08	)		(0.21	)		—
Realized capital gains		—			(0.10	)		—			—			—			—			(0.65	)
Total distributions		(0.07	)		(0.39	)		(0.40	)		(0.15	)		(0.08	)		(0.21	)		(0.65	)
Net asset value at end of period	$	14.70		$	13.96		$	11.86		$	11.43		$	11.57		$	9.72		$	8.77
Total return		5.83	%(C)		21.06	%		7.35	%(C)		0.22	%		19.94	%		13.22	%		(23.40	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	13,989		$	16,716		$	27,873		$	881		$	3,561		$	2,322		$	667
Ratio to average net assets:
Net expenses(D)		0.19	%(E)		0.10	%		0.14	%(E)		0.32	%		0.32	%		0.32	%		0.32	%
Gross expenses(D)		0.72	%(E)		0.68	%		0.65	%(E)		1.62	%		1.13	%		1.33	%		3.50	%
Net investment income(D)		0.92	%(E)		1.12	%		3.20	%(E)		1.42	%		1.11	%		0.56	%		1.46	%
Portfolio turnover rate		10	%(C)		50	%		65	%(C)(F)		77	%		8	%		41	%		27	%

Touchstone Growth Allocation Fund—Institutional Class

Selected Data for a Share Outstanding Throughout Each Period

	Six Month			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012 (A)			2012			2011			2010			2009
Net asset value at beginning of period	$	12.70		$	10.82		$	10.58		$	11.56		$	9.71		$	8.77		$	12.44
Income (loss) from investment operations:
Net investment income		0.06			0.15			0.14	(B)		0.15	(B)		0.11	(B)		0.32	(B)		0.12	(B)
Net realized and unrealized gains (losses) on investments		0.68			2.12			0.61			(0.25	)		1.83			0.83			(3.14	)
Total from investment operations		0.74			2.27			0.75			(0.10	)		1.94			1.15			(3.02	)
Distributions from:
Net investment income		(0.07	)		(0.29	)		(0.51	)		(0.88	)		(0.09	)		(0.21	)		—
Realized capital gains		—			(0.10	)		—			—			—			—			(0.65	)
Total distributions		(0.07	)		(0.39	)		(0.51	)		(0.88	)		(0.09	)		(0.21	)		(0.65	)
Net asset value at end of period	$	13.37		$	12.70		$	10.82		$	10.58		$	11.56		$	9.71		$	8.77
Total return		5.85	%(C)		21.06	%		7.30	%(C)		(0.26	%)		20.01	%		13.10	%		(23.34	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	21		$	20		$	29		$	13		$	788		$	674		$	17,845
Ratio to average net assets:
Net expenses(D)		0.19	%(E)		0.10	%		0.14	%(E)		0.32	%		0.32	%		0.32	%		0.31	%
Gross expenses(D)		87.19	%(E)		98.07	%		94.73	%(E)		7.68	%		2.29	%		0.67	%		0.50	%
Net investment income(D)		0.92	%(E)		1.12	%		3.20	%(E)		1.42	%		0.96	%		3.37	%		1.39	%
Portfolio turnover rate		10	%(C)		50	%		65	%(C)(F)		77	%		8	%		41	%		27	%

^(A) The Fund changed its fiscal year end from July 31 to December 31.

^(B) The net investment income per share is based on average shares outstanding for the period.

^(C) Not annualized.

^(D) Ratio does not include income and expenses of the underlying funds.

^(E) Annualized.

^(F) Portfolio turnover excludes the purchase and sales of the Fifth Third LifeModel Aggressive Fund acquired on September 10, 2012. If these transactions were included, portfolio turnover would have been higher.

See accompanying Notes to Financial Statements.

34

Financial Highlights (Continued)

Touchstone Moderate Growth Allocation Fund—Class A

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	12.99		$	11.30		$	11.13		$	11.11		$	9.66		$	8.87		$	11.91
Income (loss) from investment operations:
Net investment income		0.07			0.17			0.14	(B)		0.15	(B)		0.12	(B)		0.15	(B)		0.17	(B)
Net realized and unrealized gains (losses) on investments		0.65			1.77			0.51			0.02	(C)		1.47			0.87	(D)		(2.37	)
Total from investment operations		0.72			1.94			0.65			0.17			1.59			1.02			(2.20	)
Distributions from:
Net investment income		(0.08	)		(0.25	)		(0.30	)		(0.15	)		(0.14	)		(0.23	)		(0.16	)
Realized capital gains		—			—			(0.18	)		—			—			—			(0.68	)
Total distributions		(0.08	)		(0.25	)		(0.48	)		(0.15	)		(0.14	)		(0.23	)		(0.84	)
Net asset value at end of period	$	13.63		$	12.99		$	11.30		$	11.13		$	11.11		$	9.66		$	8.87
Total return(E)		5.57	%(F)		17.23	%		5.96	%(F)		1.65	%		16.56	%		11.52	%(D)		(17.27	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	64,363		$	68,184		$	71,235		$	15,181		$	18,848		$	22,740		$	25,782
Ratio to average net assets:
Net expenses(G)		0.44	%(H)		0.35	%		0.39	%(H)		0.57	%		0.57	%		0.57	%		0.57	%
Gross expenses(G)		0.90	%(H)		0.93	%		0.90	%(H)		1.03	%		1.01	%		1.08	%		0.99	%
Net investment income(G)		1.12	%(H)		1.27	%		2.90	%(H)		1.38	%		1.17	%		1.53	%		2.00	%
Portfolio turnover rate		7	%(F)		38	%		73	%(F)(I)		77	%		9	%		38	%		32	%

Touchstone Moderate Growth Allocation Fund—Class C

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	12.79		$	11.13		$	10.89		$	10.86		$	9.44		$	8.67		$	11.63
Income (loss) from investment operations:
Net investment income		0.02			0.06			0.10	(B)		0.07	(B)		0.05	(B)		0.07	(B)		0.11	(B)
Net realized and unrealized gains (losses) on investments		0.63			1.77			0.50			0.02	(C)		1.43			0.86	(D)		(2.31	)
Total from investment operations		0.65			1.83			0.60			0.09			1.48			0.93			(2.20	)
Distributions from:
Net investment income		(0.03	)		(0.17	)		(0.18	)		(0.06	)		(0.06	)		(0.16	)		(0.08	)
Realized capital gains		—			—			(0.18	)		—			—			—			(0.68	)
Total distributions		(0.03	)		(0.17	)		(0.36	)		(0.06	)		(0.06	)		(0.16	)		(0.76	)
Net asset value at end of period	$	13.41		$	12.79		$	11.13		$	10.89		$	10.86		$	9.44		$	8.67
Total return(E)		5.11	%(F)		16.49	%		5.52	%(F)		0.89	%		15.70	%		10.71	%(D)		(17.90	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	47,405		$	49,601		$	48,985		$	47,508		$	61,074		$	70,934		$	92,373
Ratio to average net assets:
Net expenses(G)		1.19	%(H)		1.11	%		1.14	%(H)		1.32	%		1.32	%		1.32	%		1.32	%
Gross expenses(G)		1.64	%(H)		1.65	%		1.68	%(H)		1.74	%		1.69	%		1.74	%		1.69	%
Net investment income(G)		0.37	%(H)		0.52	%		2.15	%(H)		0.63	%		0.46	%		0.78	%		1.33	%
Portfolio turnover rate		7	%(F)		38	%		73	%(F)(I)		77	%		9	%		38	%		32	%

^(A) The Fund changed its fiscal year end from July 31 to December 31.

^(B) The net investment income per share is based on average shares outstanding for the period.

^(C) The amounts shown for a share outstanding throughout the period does not accord with the change in net realized and unrealized gains (losses) on investments for the period due to the timing of purchases and sales of fund shares in relation to fluctuating market values during the period.

^(D) Impact of payment from affiliate was less than $0.01 per share and 0.01%, respectively.

^(E) Total returns shown exclude the effect of applicable sales loads. If these charges were included, the returns would be lower.

^(F) Not annualized.

^(G) Ratio does not include income and expenses of the underlying funds.

^(H) Annualized.

^(I) Portfolio turnover excludes the purchase and sales of the Fifth Third LifeModel Moderately Aggressive Fund acquired on September 10, 2012. If these transactions were included, portfolio turnover would have been higher.

See accompanying Notes to Financial Statements.

35

Financial Highlights (Continued)

Touchstone Moderate Growth Allocation Fund—Class Y

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012(A)			2012			2011			2010			2009
Net asset value at beginning of period	$	13.09		$	11.38		$	11.24		$	11.23		$	9.75		$	8.95		$	12.02
Income (loss) from investment operations:
Net investment income		0.11			0.21			0.15	(B)		0.18	(B)		0.18	(B)		0.17	(B)		0.20	(B)
Net realized and unrealized gains (losses) on investments		0.63			1.78			0.52			0.01	(C)		1.46			0.88	(D)		(2.40	)
Total from investment operations		0.74			1.99			0.67			0.19			1.64			1.05			(2.20	)
Distributions from:
Net investment income		(0.10	)		(0.28	)		(0.35	)		(0.18	)		(0.16	)		(0.25	)		(0.19	)
Realized capital gains		—			—			(0.18	)		—			—			—			(0.68	)
Total distributions		(0.10	)		(0.28	)		(0.53	)		(0.18	)		(0.16	)		(0.25	)		(0.87	)
Net asset value at end of period	$	13.73		$	13.09		$	11.38		$	11.24		$	11.23		$	9.75		$	8.95
Total return		5.66	%(E)		17.57	%		6.04	%(E)		1.84	%		16.93	%		11.77	%(D)		(17.07	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	26,280		$	30,498		$	43,585		$	763		$	1,289		$	635		$	508
Ratio to average net assets:
Net expenses(F)		0.19	%(G)		0.10	%		0.14	%(G)		0.32	%		0.32	%		0.32	%		0.32	%
Gross expenses(F)		0.60	%(G)		0.60	%		0.54	%(G)		1.89	%		1.65	%		2.59	%		2.64	%
Net investment income(F)		1.37	%(G)		1.53	%		3.15	%(G)		1.63	%		1.63	%		1.72	%		2.34	%
Portfolio turnover rate		7	%(E)		38	%		73	%(E)(H)		77	%		9	%		38	%		32	%

Touchstone Moderate Growth Allocation Fund—Institutional Class

Selected Data for a Share Outstanding Throughout Each Period

	Six Months			Year			Five Months
	Ended			Ended			Ended
	June 30, 2014			December 31,			December 31,			Year Ended July 31,
	(Unaudited)			2013			2012 (A)			2012			2011			2010			2009
Net asset value at beginning of period	$	13.03		$	11.33		$	11.18		$	11.16		$	9.75		$	8.95		$	12.01
Income (loss) from investment operations:
Net investment income		0.09			0.19			0.15	(B)		0.18	(B)		0.15	(B)		0.28	(B)		0.19	(B)
Net realized and unrealized gains (losses) on investments		0.65			1.79			0.52			0.02	(C)		1.48			0.78	(D)		(2.38	)
Total from investment operations		0.74			1.98			0.67			0.20			1.63			1.06			(2.19	)
Distributions from:
Net investment income		(0.10	)		(0.28	)		(0.34	)		(0.18	)		(0.22	)		(0.26	)		(0.19	)
Realized capital gains		—			—			(0.18	)		—			—			—			(0.68	)
Total distributions		(0.10	)		(0.28	)		(0.52	)		(0.18	)		(0.22	)		(0.26	)		(0.87	)
Net asset value at end of period	$	13.67		$	13.03		$	11.33		$	11.18		$	11.16		$	9.75		$	8.95
Total return		5.68	%(E)		17.57	%		6.11	%(E)		1.92	%		16.88	%		11.79	%(D)		(16.99	%)
Ratios and supplemental data:
Net assets at end of period (000's)	$	11		$	10		$	9		$	8		$	8		$	7		$	7,948
Ratio to average net assets:
Net expenses(F)		0.19	%(G)		0.11	%		0.14	%(G)		0.32	%		0.32	%		0.32	%		0.32	%
Gross expenses(F)		186.97	%(G)		228.55	%		230.25	%(G)		111.34	%		183.59	%		0.99	%		0.61	%
Net investment income(F)		1.37	%(G)		1.52	%		3.15	%(G)		1.63	%		1.43	%		2.99	%		2.21	%
Portfolio turnover rate		7	%(E)		38	%		73	%(E)(H)		77	%		9	%		38	%		32	%

^(A) The Fund changed its fiscal year end from July 31 to December 31.

^(B) The net investment income per share is based on average shares outstanding for the period.

^(C) The amounts shown for a share outstanding throughout the period does not accord with the change in net realized and unrealized gains (losses) on investments for the period due to the timing of purchases and sales of fund shares in relation to fluctuating market values during the period.

^(D) Impact of payment from affiliate was less than $0.01 per share and 0.01%, respectively.

^(E) Not annualized.

^(F) Ratio does not include income and expenses of the underlying funds.

^(G) Annualized.

^(H) Portfolio turnover excludes the purchase and sales of the Fifth Third LifeModel Moderately Aggressive Fund acquired on September 10, 2012. If these transactions were included, portfolio turnover would have been higher.

See accompanying Notes to Financial Statements.

36

Notes to Financial Statements

June 30, 2014 (Unaudited)

1. Organization

The Touchstone Strategic Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Massachusetts business trust pursuant to a Declaration of Trust dated November 18, 1982. The Trust consists of seventeen funds, including the following five funds (individually, a “Fund”, and collectively, the “Funds”):

Touchstone Dynamic Equity Fund (“Dynamic Equity Fund”)

Touchstone Balanced Allocation Fund (“Balanced Allocation Fund”)

Touchstone Conservative Allocation Fund (“Conservative Allocation Fund”)

Touchstone Growth Allocation Fund (“Growth Allocation Fund”)

Touchstone Moderate Growth Allocation Fund (“Moderate Growth Allocation Fund”)

Each Fund is an open-end, diversified, management investment company. Additionally, the Balanced Allocation Fund, Conservative Allocation Fund, Growth Allocation Fund and Moderate Growth Allocation Fund (collectively, the “Allocation Funds”) are “Funds of Funds”, sub-advised by Ibbotson Associates, Inc., which seek to achieve their investment goals by primarily investing in a diversified portfolio of affiliated underlying equity and fixed income funds. These underlying funds, in turn, invest in a variety of U.S. and foreign equity and fixed income securities. Under normal circumstances, the Allocation Funds expect to invest their assets among equity and fixed income funds in the following ranges:

	Equity	Fixed Income
	Allocation Fund	Allocation Fund
Balanced Allocation Fund	50-70%	30-50%
Conservative Allocation Fund	20-40%	60-80%
Growth Allocation Fund	90-100%	0-10%
Moderate Growth Allocation Fund	70-90%	10-30%

The investment goal of each of the underlying funds that the Allocation Funds invest in is as follows:

Fund	Investment Goal
Touchstone Arbitrage Fund	The Fund seeks to achieve positive absolute returns regardless of market conditions.
Touchstone Active Bond Fund (formerly known as Touchstone Core Bond Fund)	The Fund seeks to provide as high a level of current income as is consistent with the preservation of capital by investing primarily in bonds.
Touchstone Dynamic Equity Fund	Seeks to obtain long-term capital appreciation from hedged equity investments with less risk than a fully invested, unhedged equity portfolio.
Touchstone Emerging Markets Equity Fund	Seeks capital appreciation by primarily investing in equity securities of companies in emerging markets.
Touchstone Flexible Income Fund	Seeks a high level of income consistent with reasonable risk by investing primarily in income producing securities. Capital appreciation is a secondary goal.
Touchstone Focused Fund	Seeks capital appreciation by primarily investing in equity securities.
Touchstone Global Real Estate Fund	Seeks capital appreciation by primarily investing in common stocks and other equity securities of U.S. and foreign real estate companies without regard to market capitalization.
Touchstone Growth Opportunities Fund	Seeks long-term growth of capital by investing primarily in stocks of U.S. companies of any size.
Touchstone High Yield Fund	Seeks to achieve a high level of income by primarily investing in non-investment grade debt securities. Capital appreciation is a secondary consideration.
Touchstone Institutional Money Market Fund	Seeks high current income, consistent with liquidity and stability of principal. It invests in U.S. government securities and high quality money market instruments rated in one of the top two short-term rating categories or determined to be of comparable quality.
Touchstone International Fixed Income Fund	Seeks total return by investing primarily in fixed income securities of issuers located outside the United States.

37

Notes to Financial Statements (Unaudited) (Continued)

Fund	Investment Goal
Touchstone International Small Cap Fund	Seeks capital appreciation by primarily investing in equity securities of non-U.S. small capitalization companies, including companies located in countries with emerging markets.
Touchstone International Value Fund	Seeks long-term capital growth by primarily investing in equity securities of non-U.S. companies.
Touchstone Mid Cap Fund	Seeks long-term capital growth by investing primarily in common stocks of mid-cap U.S. listed companies.
Touchstone Mid Cap Value Fund	Seeks capital appreciation by primarily investing in common stocks of medium capital- ization companies.
Touchstone Premium Yield Equity Fund	Seeks long-term growth of capital and high current income by investing primarily in equity securities of any size.
Touchstone Sands Capital Emerging Markets Growth Fund	Seeks long-term capital appreciation by investing primarily in equity securities of emerging market countries.
Touchstone Sands Capital Institutional Growth Fund	Seeks long-term capital appreciation by primarily investing in common stocks of U.S. companies believed to have above-average potential for earnings or revenue growth.
Touchstone Small Cap Core Fund	Seeks capital appreciation by primarily investing in common stocks of small capitalization U.S. companies.
Touchstone Small Cap Growth Fund	Seeks long-term capital growth by investing primarily in stocks of small-cap companies.
Touchstone Small Cap Value Fund	Seeks long-term capital appreciation by primarily investing in common stocks of small-cap companies.
Touchstone Total Return Bond Fund	Seeks to provide current income, by primarily investing in fixed-income securities. Capital appreciation is a secondary goal.
Touchstone Ultra Short Duration Fixed Income Fund	Seeks maximum total return consistent with the preservation of capital by investing primarily in fixed income securities.
Touchstone Value Fund	Seeks long-term capital growth by primarily investing in equity securities of large- and mid-capitalization companies believed to be undervalued.

The Declaration of Trust permits the Trust to issue an unlimited number of shares of beneficial interest of each Fund. The Funds are registered to offer the following classes of shares: Class A shares, Class C shares, Class Y shares, and Institutional Class shares. The assets of each Fund are segregated, and a shareholder’s interest is limited to the Fund in which shares are held. The Funds’ prospectus provides a description of each Fund’s investment goals, policies, and strategies along with information on the classes of shares currently being offered.

2. Significant Accounting Policies

The following is a summary of the Funds’ significant accounting policies:

Security valuation and fair value measurements — All investments in securities are recorded at their estimated fair value. The Funds define the term “market value”, as used throughout this report, as the estimated fair value. The Funds use various methods to measure fair value of their portfolio securities on a recurring basis. Generally accepted accounting principles in the United States (“U.S. GAAP”) establish a hierarchy that prioritizes inputs to valuation methods. These inputs are summarized in the three broad levels listed below:

•	Level 1	–	quoted prices in active markets for identical securities
•	Level 2	–	other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

38

Notes to Financial Statements (Unaudited) (Continued)

• Level 3 – significant unobservable inputs (including a Fund’s own assumptions in determining the fairvalue of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For example, money market instruments are valued using amortized cost, in accordance with rules under the 1940 Act. Generally, amortized cost approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.

The aggregate value by input level, as of June 30, 2014, for each Fund’s investments, as well as a reconciliation of assets for which significant unobservable inputs (Level 3) were used in determining value, if applicable, is included in each Fund’s Portfolio of Investments, which also includes a breakdown of the Fund’s investments by sector allocation. The Funds did not hold any Level 3 categorized securities during the six months ended June 30, 2014.

All transfers in and out of the levels are recognized at the value at the end of the period. During the six months ended June 30, 2014, there were no transfers between Levels 1, 2 and 3 for all Funds.

The Funds’ portfolio securities are valued as of the close of the regular session of trading on the New York Stock Exchange (“NYSE”) (currently 4:00 p.m., Eastern time). Portfolio securities traded on stock exchanges are valued at the last bid price, and to the extent these securities are actively traded, they are categorized in Level 1 of the fair value hierarchy. Portfolio securities quoted by NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). Securities not traded on a particular day, or for which the last bid price is not readily available, are valued at their last broker-quoted bid prices as obtained from one or more of the major market makers for such securities by an independent pricing service and are categorized in Level 2. Money market instruments and other debt securities with a remaining maturity of less than 60 days are valued at amortized cost, which approximates market value and are categorized in Level 2. While this method provides consistency in valuation (and may only be used if it approximates market value), it may result in periods during which value, as determined by amortized cost, is higher or lower than the price that would be received if the Fund sold the investment. Securities for which market quotations or the NOCP are not readily available are fair valued as determined by or under the direction of the Board of Trustees (the “Board”) and are categorized in Level 3. Shares of open-end mutual funds in which the Funds invest are valued at their respective net asset values (“NAV”) as reported by the underlying funds and are categorized in Level 1. The prices for foreign securities are reported in local currency and translated into U.S. dollars using currency exchange rates.

Level 2 Valuation — Securities mainly traded on a non-U.S. exchange are generally valued according to the preceding closing values on that exchange. However, if an event that may change the value of a security occurs after the time that the closing value on the non-U.S. exchange was determined, but before the close of regular trading on the NYSE, the security may be priced based on fair value. This may cause the value of the security, if held on the books of a Fund, to be different from the closing value on the non-U.S. exchange and may affect the calculation of that Fund’s NAV.

Level 3 Valuation — Securities held by the Funds that do not have readily available market quotations, significant observable inputs, or securities for which the available market quotations are not reliable, are priced at their fair value using procedures approved by the Funds’ Board.

The Funds may use fair value pricing under the following circumstances, among others:

• If the value of a security has been materially affected by events occurring before the Funds’ pricing time but after the close of the primary markets on which the security is traded.

• If the exchange on which a portfolio security is principally traded closes early or if trading in a particular portfolio security was halted during the day and did not resume prior to the Funds’ NAV calculation.

39

Notes to Financial Statements (Unaudited) (Continued)

• If a security is so thinly traded that reliable market quotations are unavailable due to infrequent trading.

• If the validity of market quotations is not reliable.

Allocation Funds — The Allocation Funds invest in securities of affiliated mutual funds (the “Underlying Funds”). The value of an investment in the Allocation Funds is based on the performance of the Underlying Funds in which they invest and the allocation of their assets among those funds. Because the Allocation Funds invest in mutual funds, shareholders of the Allocation Funds indirectly bear a proportionate share of the expenses charged by the Underlying Funds in which they invest as well as their share of the Allocation Funds’ fees and expenses. The principal risks of an investment in the Allocation Funds include the principal risks of investing in the Underlying Funds. Investments in the Underlying Funds are valued at the NAV per share of each class of the Underlying Funds and are categorized as Level 1.

Investment companies — Certain Funds may invest in securities of other investment companies, including exchange-traded funds (“ETFs”), open-end funds and closed-end funds. Open-end funds are investment companies that issue new shares continuously and redeem shares daily. Closed-end funds are investment companies that typically issue a fixed number of shares that trade on a securities exchange or over-the-counter. An ETF is an investment company that typically seeks to track the performance of an index by holding in its portfolio shares of all the companies, or a representative sample of the companies, that are components of a particular index. ETFs are traded on a securities exchange based on their market value. The risks of investment in other investment companies typically reflect the risks of the types of securities in which investment companies invest. Investments in ETFs and closed-end funds are subject to the additional risk that their shares may trade at a premium or discount to their NAV. When a Fund invests in another investment company, shareholders of the Fund indirectly bear their proportionate share of the other investment company’s fees and expenses, including operating, registration, trustee, licensing, and marketing, as well as their share of the Fund’s fees and expenses.

Cash and cash equivalents — The Funds consider liquid assets deposited with a bank, money market funds, and certain short term debt instruments with maturities of 3 months or less to be cash equivalents and are included in the investments on the financial statements. These investments represent amounts held with financial institutions that are readily accessible to pay Fund expenses or investments. Cash and cash equivalents are valued at cost plus accrued interest, which approximates market value. The value of cash equivalents denominated in foreign currencies is determined by converting to U.S. dollars on the date of the Statement of Assets and Liabilities.

Securities sold short — The Dynamic Equity Fund periodically engages in selling securities short, which obligates the Fund to replace a security borrowed by purchasing the same security at the current market value. The Fund would incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund would realize a gain if the price of the security declines between those dates. As of June 30, 2014, the Dynamic Equity Fund held securities sold short with a fair value of $14,425,049 and had securities with a fair value of $103,400,193 held as collateral and cash collateral of $1,313,132 for both securities sold short and options written.

Options — The Funds may write or purchase financial option contracts primarily to hedge against changes in the value of equity securities (or securities that the Funds intend to purchase), against fluctuations in fair value caused by changes in prevailing market interest rates or foreign currency exchange rates and against changes in overall equity market volatility. In addition, the Funds may utilize options in an attempt to generate gains from option premiums or to reduce overall portfolio risk. The Funds’ option strategy primarily focuses on the use of writing call options on equity indexes. When the Funds write or purchase an option, an amount equal to the premium received or paid by the Funds is recorded as a liability or an asset and is subsequently adjusted to the current market value of the option written or purchased. Premiums received or paid from writing or purchasing options which expire unexercised are treated by the Funds on the expiration date as

40

Notes to Financial Statements (Unaudited) (Continued)

realized gains or losses. The difference between the premium and the amount paid or received on effecting a closing purchase or sale transaction, including brokerage commissions, is also treated as a realized gain or loss. If an option is exercised, the premium paid or received is added to the cost of the purchase or proceeds from the sale in determining whether the Funds have realized a gain or loss on investment transactions. The Funds, as writers of an option, may have no control over whether the underlying securities may be sold (call) or purchased (put) and as a result bear the market risk of an unfavorable change in the price of the security underlying the written option. The Funds, as purchasers of an option, bear the risk that the counterparties to the option may not have the ability to meet the terms of the option contracts. There is minimal counterparty credit risk involved in entering into option contracts since they are exchange-traded instruments and the exchange’s clearinghouse, as counterparty to all exchange-traded options, guarantees the options against default. Options are valued at the last quoted sales price. If there is no such reported sale on the valuation date, long option positions are valued at the most recent bid price, and short option positions are valued at the most recent ask price. As of June 30, 2014, and the six months then ended, the Dynamic Equity Fund held written options with a fair value of $1,356,070 and had securities with a fair value of $103,400,193 held as collateral and cash collateral of $1,313,132 for both securities sold short and written options.

Derivative instruments and hedging activities — In order to better define its contractual rights and to secure rights that will help the Funds mitigate their counterparty risk, the Funds may enter into an International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreement” or “MNA”) or similar agreement with certain counterparties. An ISDA Master Agreement is a bilateral agreement between a Fund and a counterparty that governs over-the-counter (“OTC”) derivatives and foreign exchange contracts, and typically contains, among other things, collateral posting terms and master netting provisions in the event of a default or termination. Under an ISDA Master Agreement, a party may, under certain circumstances, offset with the counterparty certain derivative financial instrument’s payables or receivables with collateral held or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default (close-out netting). These default events include bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset.

When entering into a derivative transaction, a Fund may be required to post and maintain collateral or margin (including both initial and maintenance margin). Collateral and margin requirements differ by type of derivative. Margin requirements are established by the broker or clearing house for exchange traded and centrally cleared derivatives (financial futures contracts, options, and centrally cleared swaps). Brokers can ask for margining in excess of the clearing house’s minimum in certain circumstances. Collateral terms are contract specific for OTC derivatives (foreign currency exchange contracts, options, and swaps). For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the marked-to-market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by the Fund and the counterparty. For financial reporting purposes, cash collateral that has been pledged to cover obligations of the Fund and cash collateral received from the counterparty, if any, is reported separately on the Statements of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by the Fund, if any, is noted in the Portfolio of Investments. To the extent amounts due to the Fund from its counterparties are not fully collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty non-performance. A Fund attempts to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.

Certain ISDA Master Agreements allow counterparties to OTC derivatives transactions to terminate derivative contracts prior to maturity in the event the Fund’s net assets decline by a stated percentage or the Fund fails

41

Notes to Financial Statements (Unaudited) (Continued)

to meet the terms of its ISDA Master Agreement, which would cause the Fund to accelerate payment of any net liability owed to the counterparty.

For financial reporting purposes, the Funds do not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statements of Assets and Liabilities.

As of June 30, 2014, the Dynamic Equity Fund’s derivative assets and liabilities (by type) on a gross basis were as follows:

	Assets		Liabilities
Derivative Financial Instruments:
Written Options	$	—	$	1,356,070
Total gross amount of assets and liabilities subject to MNA	$	—	$	1,356,070

The following table presents the Dynamic Equity Fund’s derivative liabilities net of amounts available for offset under a MNA and net of the related collateral pledged by the Fund as of June 30, 2014:

			Gross Amounts
			Available for Offset
	Gross Amount of		in Statement of		Non-cash						Net Amount of
	Recognized		Assets and		Collateral			Cash Collateral			Derivative
	Liabilities(A)		Liabilities		Pledged(B)			Pledged(B)			Liabilities(C)
Written Options	$	1,356,070	$	—	$	(1,243,272	)	$	(112,798	)	$	—
Total	$	1,356,070	$	—	$	(1,243,272	)	$	(112,798	)	$	—

(A) Gross and net amounts are equal.

(B) Pershing is the counterparty.

(C) Net amount represents the net amount payable due to the counterparty in the event of default.

The following table sets forth the fair value of the Funds’ derivative financial instruments by primary risk exposure as of June 30, 2014:

Fair Value of Derivative Investments
As of June 30, 2014
	Derivatives not accounted for as hedging	Asset		Liability
Fund	instruments under ASC 815	Derivatives*		Derivatives*
Dynamic Equity Fund	Options - Equity Contracts	$	—	$	1,356,070

* Statements of Assets and Liabilities Location: Written options, at market value.

42

Notes to Financial Statements (Unaudited) (Continued)

The following table sets forth the operations of the Funds’ derivative financial instruments by primary risk exposure as of June 30, 2014.

The Effect of Derivative Investments on the Statement of Operations
for the Six Months Ended June 30, 2014
					Change in
		Realized			Unrealized
	Derivatives not accounted for as hedging	Gain(Loss)			Appreciation
Fund	instruments under ASC 815	on Derivatives			on Derivatives
Dynamic Equity Fund	Purchased Options - Equity Contacts*	$	(2,027,382	)	$	—
	Written Options - Equity Contacts**		292,250			442,829

*  Statements of Operations Location: Net realized gains on investments from non-affiliated securities.

**  Statements of Operations Location: Net realized gains on written options and net change in unrealized appreciation (depreciation) on written options, respectively.

For the six months ended June 30, 2014, the average quarterly balances of outstanding derivative financial instruments were as follows:

	Dynamic
	Equity
	Fund
Equity contracts:
Written Options - Average number of contracts		413

Share valuation — The NAV per share of each class of shares of each Fund is calculated daily by dividing the total value of a Fund’s assets attributable to that class, less liabilities attributable to that class, by the number of outstanding shares of that class.

The maximum offering price per share of Class A shares of the Funds is equal to the NAV per share plus a sales load equal to 6.10% of the NAV (or 5.75% of the offering price). There is no sales load on purchases of $1 million or more of Class A shares. The maximum offering price per share of Classes C, Y, and Institutional Class shares of the Funds is equal to the NAV per share.

The redemption price per share of each class of shares of the Funds is generally equal to the NAV per share. However, Class A redemptions that were part of a no-load $1 million subscription may be subject to a contingent deferred sales charge (“CDSC”) of up to 1.00%. Additionally, purchases of Class C shares of the Funds are subject to a CDSC of 1.00%. The CDSC will be assessed on an amount equal to the lesser of (1) the NAV at the time of purchase of the shares being redeemed or (2) the NAV of such shares being redeemed if redeemed within a one-year period from the date of purchase.

Investment income — Dividend income from securities is recognized on the ex-dividend date, net of foreign withholding taxes, if any, which are reduced by any amounts reclaimable by the Funds, where applicable. Interest income from securities is recorded on the basis of interest accrued, premium amortized and discount accreted.

Distributions to shareholders — Each Fund intends to distribute to its shareholders substantially all of its income and capital gains. The Dynamic Equity Fund declares and distributes net investment income, if any, annually as a dividend to shareholders. The Balanced Allocation Fund, Conservative Allocation Fund, Growth Allocation Fund, and Moderate Growth Allocation Fund each declare and distribute net investment income, if any, quarterly as a dividend to shareholders. Each Fund makes distributions of capital gains, if any, at least annually, net of applicable capital loss carryforwards. Income distributions and capital gain distributions are determined in accordance with income tax regulations. Recognition of the Funds’ net investment income that invests in Underlying Funds is affected by the timing of dividend declarations by those Underlying Funds.

43

Notes to Financial Statements (Unaudited) (Continued)

Allocations — Investment income earned, realized capital gains and losses, and unrealized appreciation and depreciation for a Fund are allocated daily to each class of shares based upon its proportionate share of total net assets of the Fund. Class-specific expenses are charged directly to the class incurring the expense. Common expenses, which are not attributable to a specific class, are allocated daily to each class of shares based upon their proportionate share of total net assets of the Fund. Expenses not directly billed to a Fund are allocated proportionally among all Funds in the Trust, and, if applicable, Touchstone Investment Trust, Touchstone Institutional Funds Trust, Touchstone Variable Series Trust, Touchstone Funds Group Trust, and Touchstone Tax-Free Trust (collectively with the Trust, “Touchstone Fund Complex”), daily in relation to net assets of each Fund or another reasonable measure.

Security transactions — Security transactions are reflected for financial reporting purposes as of the trade date. Realized gains and losses on sales of portfolio securities are calculated using the identified cost basis.

Estimates — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

3. Investment Transactions

Investment transactions (excluding short-term investments and U.S. Government securities) were as follows for the six months ended June 30, 2014:

	Dynamic		Balanced		Conservative
	Equity		Allocation		Allocation
	Fund		Fund		Fund
Purchases of investment securities	$	102,335,177	$	7,999,911	$	3,127,868
Proceeds from sales and maturities	$	99,349,488	$	19,919,668	$	9,581,154

			Moderate
	Growth		Growth
	Allocation		Allocation
	Fund		Fund
Purchases of investment securities	$	6,791,366	$	9,513,818
Proceeds from sales and maturities	$	14,948,710	$	27,400,277

There were no purchases or proceeds from sales and maturities of U.S. Government securities by the Funds for the six months ended June 30, 2014.

4. Transactions with Affiliates and Other Related Parties

Certain officers of the Trust are also officers of Touchstone Advisors, Inc. (the “Advisor”),Touchstone Securities, Inc. (the “Underwriter”), or BNY Mellon Investment Servicing (US) Inc. (“BNY Mellon”), the Sub-Administrator and Transfer Agent to the Funds. Such officers receive no compensation from the Trust. The Advisor and the Underwriter are each wholly-owned, indirect subsidiaries of Western & Southern Financial Group, Inc.

On behalf of the Funds, the Advisor pays each Independent Trustee a quarterly retainer plus additional retainers to the Lead Independent Trustee and the chairs of each standing committee. Interested Trustees do not receive compensation from the Funds. Each Independent Trustee will also receive compensation for each board meeting and committee meeting attended. Each standing committee chair will receive additional compensation for each committee meeting that he or she oversees. The Advisor is reimbursed by the Funds for the Independent Trustees’ compensation and out-of-pocket expenses relating to their services. The Funds accrued Trustee-related expenses of $30,116 for the six months ended June 30, 2014.

44

Notes to Financial Statements (Unaudited) (Continued)

MANAGEMENT & EXPENSE LIMITATION AGREEMENTS

The Advisor provides general investment supervisory services for the Funds, under terms of an advisory agreement (the “Advisory Agreement”). Under the Advisory Agreement, each Fund pays the Advisor a fee, which is computed and accrued daily and paid monthly, at an annual rate based on average daily net assets of each Fund as shown in the table below.

Dynamic Equity Fund	0.85% on the first $300 million of assets
	0.80% on the next $200 million of assets
	0.75% on the next $250 million of assets
	0.70% on the next $250 million of assets
	0.65% on the next $500 million of assets
	0.60% on the next $500 million of assets
	0.55% on such assets in excess of $2 billion
Balanced Allocation Fund	0.20% on the first $1 billion of assets
Conservative Allocation Fund	0.175% on the next $1 billion of assets
	0.150% on the next $1 billion of assets
	0.125% of such assets in excess of $3 billion
Growth Allocation Fund	0.25% on the first $1 billion of assets
Moderate Growth Allocation Fund	0.225% on the next $1 billion of assets
	0.20% on the next $1 billion of assets
	0.175% of such assets in excess of $3 billion

The Advisor has entered into investment sub-advisory agreements with the following parties (each, a “Sub-Advisor”):

Analytic Investors, LLC	Ibbotson Associates, Inc.
Dynamic Equity Fund	Balanced Allocation Fund
	Conservative Allocation Fund
	Growth Allocation Fund
	Moderate Growth Allocation Fund

The Advisor, not the Funds, pays sub-advisory fees to each Sub-Advisor.

The Advisor entered into an expense limitation agreement (the “Expense Limitation Agreement”) to contractually limit operating expenses of the Funds, excluding: dividend and interest expenses on short sales; interest; taxes; brokerage commissions; other expenditures which are capitalized in accordance with GAAP; the cost of “Acquired Fund Fees and Expenses”, if any; and other extraordinary expenses not incurred in the ordinary course of business. The maximum operating expense limit in any year with respect to the Funds is based on a percentage of the average daily net assets of the Funds. The Advisor has agreed to separately waive class-level expenses, advisory fees and administration fees, and to reimburse expenses in order to maintain the following expense limitations for the Funds:

							Institutional		Termination
Fund	Class A		Class C		Class Y		Class		Date
Dynamic Equity Fund		1.55%		2.30%		1.30%		1.25%	April 30, 2015
Balanced Allocation Fund		0.49%		1.24%		0.24%		0.24%	April 30, 2015
Conservative Allocation Fund		0.49%		1.24%		0.24%		0.24%	April 30, 2015
Growth Allocation Fund		0.49%		1.24%		0.24%		0.24%	April 30, 2015
Moderate Growth Allocation Fund		0.49%		1.24%		0.24%		0.24%	April 30, 2015

45

Notes to Financial Statements (Unaudited) (Continued)

For the period September 10, 2013 to April 29, 2014, the expense limitations for the Allocation Funds were as follows:

							Institutional
Fund	Class A		Class C		Class Y		Class
Balanced Allocation Fund		0.41%		1.16%		0.16%		0.16%
Conservative Allocation Fund		0.41%		1.16%		0.16%		0.16%
Growth Allocation Fund		0.41%		1.16%		0.16%		0.16%
Moderate Growth Allocation Fund		0.41%		1.16%		0.16%		0.16%

Prior to September 10, 2013, the expense limitations for the Allocation Funds were as follows:

							Institutional
Fund	Class A		Class C		Class Y		Class
Balanced Allocation Fund		0.33%		1.08%		0.08%		0.08%
Conservative Allocation Fund		0.33%		1.08%		0.08%		0.08%
Growth Allocation Fund		0.33%		1.08%		0.08%		0.08%
Moderate Growth Allocation Fund		0.33%		1.08%		0.08%		0.08%

During the six months ended June 30, 2014, the Advisor or its affiliates waived investment advisory fees and administration fees or reimbursed expenses, including distribution fees, of the Funds as follows:

	Investment				Other
	Advisory				Operating
	Fees		Administration		Expenses
	Waived		Fees Waived		Reimbursed		Total
Dynamic Equity Fund	$	—	$	—	$	20,724	$	20,724
Balanced Allocation Fund		44,252		91,265		93,448		228,965
Conservative Allocation Fund		31,527		50,197		66,862		148,586
Growth Allocation Fund		56,012		53,958		79,816		189,786
Moderate Growth Allocation Fund		92,183		113,354		119,937		325,474

Under the terms of the Expense Limitation Agreement, the Advisor is entitled to recover, subject to approval by the Funds’ Board, such amounts waived or reimbursed for a period of up to three years from the year in which the Advisor reduced its compensation or assumed expenses for the Funds. No recoupment will occur unless a Fund’s operating expenses are below the expense limitation amount in effect at the time of the waiver or reimbursement.

As of June 30, 2014, the Advisor may seek recoupment of previously waived fees and reimbursed expenses as follows:

	Expiration		Expiration		Expiration		Expiration
	July 31,		December 31,		December 31,		December 31,
Fund	2015		2015		2016		2017		Total
Dynamic Equity Fund	$	—	$	3,819	$	6,904	$	—	$	10,723
Balanced Allocation Fund		18,241		172,469		513,519		168,517		872,746
Conservative Allocation Fund		24,108		115,995		320,973		109,840		570,916
Growth Allocation Fund		32,481		138,241		396,930		133,939		701,591
Moderate Growth Allocation Fund		31,679		231,358		666,379		232,396		1,161,812

For the six months ended June 30, 2014, the Advisor may recoup fees and expenses, subject to Board approval, from the Dynamic Equity Fund of $5,770.

46

Notes to Financial Statements (Unaudited) (Continued)

ADMINISTRATION AGREEMENT

The Advisor entered into an Administration Agreement with the Trust, whereby the Advisor is responsible for: supplying executive and regulatory compliance services; supervising the preparation of tax returns; coordinating the preparation of reports to shareholders and reports to, and filings with, the Securities and Exchange Commission (“SEC”) and state securities authorities, as well as materials for meetings of the Board; calculating the daily NAV per share; and maintaining the financial books and records of each Fund. For its services, the Advisor receives an annual fee of 0.20% on the first $6 billion of the aggregate average daily net assets of the Touchstone Fund Complex (excluding Touchstone Institutional Money Market Fund, Touchstone Institutional Funds Trust, and Touchstone Variable Series Trust); 0.16% of the next $4 billion of aggregate average daily net assets; and 0.12% of the aggregate average daily net assets over $10 billion. The fee is allocated among the funds of the Touchstone Fund Complex (excluding Touchstone Institutional Money Market Fund, Touchstone Institutional Funds Trust, and Touchstone Variable Series Trust) on the basis of relative daily net assets.

The Advisor has engaged BNY Mellon as the Sub-Administrator to the Trust. BNY Mellon provides administrative and accounting services to the Trust and is compensated directly by the Advisor, not the Trust.

TRANSFER AGENT AGREEMENT

Under the terms of the Transfer Agent Agreement between the Trust and BNY Mellon, BNY Mellon maintains the records of each shareholder’s account, answers shareholders’ inquiries concerning their accounts, processes purchases and redemptions of each Fund’s shares, acts as dividend and distribution disbursing agent, and performs other shareholder service functions. For these services, BNY Mellon receives a monthly fee per shareholder account from each Fund. In addition, each Fund pays out-of-pocket expenses incurred by BNY Mellon, including, but not limited to, postage and supplies.

The Funds may reimburse the Advisor for fees paid to intermediaries such as banks, broker-dealers, financial advisors or other financial institutions for sub-transfer agency, sub-administration and other services provided to investors whose shares of record are held in omnibus, other group accounts, retirement plans or accounts traded through registered securities clearing agents. These fees may vary based on, for example, the nature of services provided, but generally range up to 0.15% of the assets of the class serviced or maintained by the intermediary or up to $17 per sub-account maintained by the intermediary. The Funds will only reimburse the Advisor up to $17 per sub-account maintained by the intermediary.

PLANS OF DISTRIBUTION AND SHAREHOLDER SERVICING FEE ARRANGEMENTS

The Trust has adopted distribution plans pursuant to Rule 12b-1 under the 1940 Act for each class of shares it offers that is subject to 12b-1 distribution fees. The plans allow each Fund to pay distribution and other fees for the sale and distribution of its shares and for services provided to shareholders. The fees charged to the Funds are limited to the actual expenses incurred. Under the Class A plan, each Fund offering Class A shares pays an annual fee of up to 0.25% of average daily net assets that are attributable to Class A shares. Under the Class C plan, each Fund offering Class C shares pays an annual fee of up to 1.00% of average daily net assets that are attributable to Class C shares (of which up to 0.75% is a distribution fee and up to 0.25% is a shareholder servicing fee).

47

Notes to Financial Statements (Unaudited) (Continued)

UNDERWRITING AGREEMENT

The Underwriter is the Funds’ principal underwriter and, as such, acts as exclusive agent for distribution of the Funds’ shares. Under the terms of the Underwriting Agreement between the Trust and the Underwriter, the Underwriter earned the following from underwriting and broker commissions on the sale of Class A shares of the Funds listed below during the six months ended June 30, 2014:

Fund	Amount
Dynamic Equity Fund	$	2,680
Balanced Allocation Fund		6,679
Conservative Allocation Fund		6,669
Growth Allocation Fund		4,920
Moderate Growth Allocation Fund		5,234

In addition, the Underwriter collected CDSC on the redemption of Class C shares of the Funds listed below during the six months ended June 30, 2014:

Fund	Amount
Balanced Allocation Fund	$	12
Conservative Allocation Fund		26
Growth Allocation Fund		175
Moderate Growth Allocation Fund		326

AFFILIATED INVESTMENTS

Each Fund may invest in the Touchstone Institutional Money Market Fund, subject to compliance with several conditions set forth in an exemptive order received by the Trust from the SEC. To the extent that the Funds are invested in the Touchstone Institutional Money Market Fund, the Advisor and Administrator will be paid additional fees from the Touchstone Institutional Money Market Fund that will not be waived or reimbursed.

A summary of the Dynamic Equity Fund’s investment, as applicable, in the Touchstone Institutional Money Market Fund for the six months ended June 30, 2014, is as follows:

	Share Activity
												Market
	Balance							Balance				Value
Fund	12/31/13		Purchases		Sales			06/30/14		Dividends		06/30/14
Dynamic Equity Fund		1,679,688		20,780,338		(14,017,962	)		8,442,064	$	174	$	8,442,064

A summary of each Allocation Fund’s transactions in affiliated Underlying Funds during the six months ended June 30, 2014 is as follows:

Balanced Allocation Fund
	Purchases at		Proceeds		Market Value		Dividend		Net Realized
Underlying Fund	cost		from sale		06/30/14		Income		Gain/Loss
Touchstone Active Bond Fund	$	65,737	$	287,201	$	3,375,546	$	56,503	$	(5,865	)
Touchstone Total Return Bond Fund		482,739		1,167,164		13,135,248		216,104		(32,752	)
Touchstone Ultra Short Duration Fixed Income Fund		186,310		920,556		11,259,814		96,340		(12,769	)
Touchstone International Small Cap Fund		17,613		408,682		3,385,151		—		93,951
Touchstone International Value Fund		44,707		2,672,985		10,166,645		—		397,989
Touchstone Focused Fund		3,329		1,734,407		3,305,612		—		427,277

48

Notes to Financial Statements (Unaudited) (Continued)

Balanced Allocation Fund
	Purchases at		Proceeds		Market Value		Dividend		Net Realized
Underlying Fund	cost		from sale		06/30/14		Income		Gain/Loss
Touchstone Value Fund	$	124,391	$	2,380,361	$	7,811,482	$	118,356	$	701,694
Touchstone Growth Opportunities Fund		14,179		333,908		2,197,778		—		54,104
Touchstone Sands Capital Institutional Growth Fund		379,064		1,270,318		8,812,357		—		(15,581	)
Touchstone Premium Yield Equity Fund, Class Y		249,644		1,748,374		7,537,406		247,834		167,531
Touchstone Flexible Income Fund		133,535		678,683		5,561,327		133,535		1,066
Touchstone International Fixed Income Fund		7,921		612,785		5,560,506		—		(9,116	)
Touchstone Emerging Markets Equity Fund		181,004		2,917,631		2,235,163		—		(85,958	)
Touchstone Sands Capital Emerging Markets Growth Fund		3,300,000		4,350		3,311,050		—		—
Touchstone Dynamic Equity Fund		8,761		979,101		3,924,385		—		160,381
Touchstone Arbitrage Fund		532,048		180,959		3,836,891		—		28
Touchstone Institutional Money Market Fund		30,929		189,108		3,354,382		171		(1	)
Touchstone Mid Cap Fund		1,012,345		253,323		3,231,407		—		47,111
Touchstone Global Real Estate Fund		85,602		570,606		2,733,129		85,602		(75,741	)
Touchstone Small Cap Core Fund		1,078		90,582		1,118,968		—		15,985
Touchstone Small Cap Value Fund^		70,456		147,768		1,095,521		13,088		50,772
Touchstone High Yield Fund		52,438		200,527		1,958,434		52,438		5,978
Touchstone Small Cap Growth Fund		16,081		168,839		1,084,405		—		10,842
Touchstone Mid Cap Value Fund		1,000,000		1,450		999,709		—		—
Total:	$	7,999,911	$	19,919,668	$	110,992,316	$	1,019,971	$	1,896,926

Conservative Allocation Fund
	Purchases at		Proceeds		Market Value		Dividend		Net Realized
Underlying Fund	cost		from sale		06/30/14		Income		Gain/Loss
Touchstone Active Bond Fund	$	70,508	$	354,460	$	3,003,570	$	51,787	$	6,950
Touchstone Total Return Bond Fund		329,495		1,524,613		11,982,179		206,663		(38,088	)
Touchstone Ultra Short Duration Fixed Income Fund		276,713		1,185,370		12,405,134		107,201		(16,363	)
Touchstone International Fixed Income		63,521		737,324		4,735,727		—		(8,153	)
Touchstone Flexible Income Fund		127,307		629,205		4,178,402		102,421		(16,418	)
Touchstone Growth Opportunities Fund		51,975		139,369		593,886		—		17,995
Touchstone Sands Capital Institutional Growth Fund		499,339		799,562		2,970,927		—		(19,822	)
Touchstone International Small Cap Fund		56,797		137,650		597,344		—		20,984

49

Notes to Financial Statements (Unaudited) (Continued)

Conservative Allocation Fund
	Purchases at		Proceeds		Market Value		Dividend		Net Realized
Underlying Fund	cost		from sale		06/30/14		Income		Gain/Loss
Touchstone International Value Fund	$	234,525	$	591,301	$	2,406,462	$	—	$	61,383
Touchstone Institutional Money Market Fund		49,701		268,586		2,989,058		157		(2	)
Touchstone Arbitrage Fund		66,873		250,368		2,987,463		—		(928	)
Touchstone Value Fund		212,369		631,104		2,983,932		39,336		154,347
Touchstone Premium Yield Equity Fund, Class Y		284,562		1,484,222		2,622,926		106,557		164,164
Touchstone Dynamic Equity Fund		107,691		303,220		1,793,855				33,832
Touchstone High Yield Fund		33,496		140,426		1,046,553		28,765		5,105
Touchstone Small Cap Core Fund		54,298		109,416		598,990		—		14,818
Touchstone Emerging Markets Equity Fund		66,626		153,668		598,423		—		(10,243	)
Touchstone Global Real Estate		35,067		138,754		595,714		18,560		(6,711	)
Touchstone Mid Cap Value Fund		507,005		2,536		505,055		—
Total:	$	3,127,868	$	9,581,154	$	59,595,600	$	661,447	$	362,850

Growth Allocation Fund
	Purchases at		Proceeds		Market Value		Dividend		Net Realized
Underlying Fund	cost		from sale		06/30/14		Income		Gain/Loss
Touchstone International Small Cap Fund	$	11,207	$	587,233	$	4,697,741	$	—	$	114,744
Touchstone International Value Fund		15,085		1,917,885		8,055,725		—		302,567
Touchstone Focused Fund		—		700,364		5,350,144		—		170,986
Touchstone Value Fund		78,420		887,287		5,998,006		78,420		63,090
Touchstone Growth Opportunities Fund		6,264		1,151,126		2,639,892		—		188,368
Touchstone Sands Capital Institutional Growth Fund		128,091		742,501		5,958,093		—		(12,800	)
Touchstone Emerging Markets Equity Fund		291,714		4,390,184		4,021,451		—		(130,031	)
Touchstone Sands Capital Emerging Markets Growth Fund		4,600,000		56,318		4,564,913		—		(1	)
Touchstone Premium Yield Equity Fund, Class Y		145,797		915,301		4,651,462		145,797		75,346
Touchstone Small Cap Core Fund		6,770		242,338		2,671,796		—		41,120
Touchstone Small Cap Value Fund^		105,766		196,981		1,666,134		19,447		75,722
Touchstone Ultra Short Duration Fixed Income Fund		76,869		330,977		3,971,042		33,108		(4,464	)
Touchstone Dynamic Equity Fund		602,460		320,370		3,233,871		—		49,553
Touchstone Global Real Estate Fund		92,032		545,341		3,002,249		90,825		(76,912	)
Touchstone Small Cap Growth Fund		13,794		319,198		2,664,720		—		16,976

50

Notes to Financial Statements (Unaudited) (Continued)

Growth Allocation Fund
	Purchases at		Proceeds		Market Value		Dividend		Net Realized
Underlying Fund	cost		from sale		06/30/14		Income		Gain/Loss
Touchstone Mid Cap Fund	$	600,000	$	148,813	$	1,939,275	$	—	$	40,415
Touchstone Mid Cap Value Fund		3,858		193,655		1,332,606		3,859		27,271
Touchstone Arbitrage Fund		13,239		1,302,838		111,132		—		(6,066	)
Total:	$	6,791,366	$	14,948,710	$	66,530,252	$	371,456	$	935,884

Moderate Growth Allocation Fund
	Purchases at		Proceeds		Market Value		Dividend		Net Realized
Underlying Fund	cost		from sale		06/30/14		Income		Gain/Loss
Touchstone Total Return Bond Fund	$	250,509	$	1,494,316	$	14,247,655	$	238,216	$	(40,958	)
Touchstone Ultra Short Duration Fixed Income Fund		60,770		525,372		7,267,968		61,321		(7,072	)
Touchstone International Small Cap Fund		10,073		823,461		5,569,688		—		164,606
Touchstone International Value Fund		13,718		3,856,913		13,981,746		—		645,206
Touchstone Focused Fund		—		1,246,441		8,325,606		—		364,377
Touchstone Value Fund		144,389		1,798,335		11,084,897		144,390		612,519
Touchstone Growth Opportunities Fund		—		846,316		5,531,810		—		121,201
Touchstone Sands Capital Institutional Growth Fund		119,705		1,509,076		12,427,880		—		(7,675	)
Touchstone Emerging Markets Equity Fund		113,397		6,873,626		5,506,113		—		(181,243	)
Touchstone Sands Capital Emerging Markets Growth Fund		5,500,000		—		5,525,701		—		—
Touchstone Premium Yield Equity Fund, Class Y		308,966		2,045,779		9,671,132		308,966		144,467
Touchstone Small Cap Core Fund		—		439,669		4,153,575		—		79,817
Touchstone Small Cap Value Fund^		160,470		371,454		2,764,930		32,314		125,238
Touchstone Flexible Income Fund		131,901		743,414		5,545,416		131,901		(22,923	)
Touchstone Dynamic Equity Fund		2,096		727,608		5,467,042		—		114,383
Touchstone Global Real Estate Fund		125,940		799,505		4,144,855		125,940		(109,998	)
Touchstone Mid Cap Fund		1,200,000		349,228		3,980,203		—		89,895
Touchstone International Fixed Income Fund		—		323,875		2,769,096		—		(5,595	)
Touchstone Arbitrage Fund		1,715		181,671		2,747,924		—		91
Touchstone Small Cap Growth Fund		10,539		1,965,044		2,744,987		—		124,240
Touchstone Mid Cap Value Fund		1,303,988		220,313		2,689,787		3,988		28,349
Touchstone High Yield Fund		55,642		258,861		2,080,399		55,642		4,733
Total:	$	9,513,818	$	27,400,277	$	138,228,410	$	1,102,678	$	2,243,658

^ Includes activity of the Touchstone Small Company Value Fund prior to merging into the Touchstone Small Cap Value Fund on March 21, 2014.

51

Notes to Financial Statements (Unaudited) (Continued)

5. Federal Tax Information

Federal income tax — It is each Fund’s policy to continue to comply with the special provisions of the Internal Revenue Code applicable to regulated investment companies. As provided therein, in any fiscal year in which a Fund so qualifies and distributes at least 90% of its investment company taxable income, the Fund (but not the shareholders) will be relieved of federal income tax on the income distributed. It is each Fund’s policy to distribute all of its taxable income and accordingly, no provision for income taxes has been made.

In order to avoid imposition of the excise tax applicable to regulated investment companies, it is also each Fund’s intention to declare and pay as dividends in each calendar year at least 98% of its investment company taxable income (earned during the calendar year) and 98.2% of its net realized capital gains (earned during the twelve months ending October 31) plus undistributed amounts from prior years.

The tax character of distributions paid are as follows:

	Dynamic						Balanced
	Equity Fund						Allocation Fund
			Five Months						Five Months
	Year Ended		Ended		Year Ended		Year Ended		Ended		Year Ended
	December 31,		December 31,		July 31,		December 31,		December 31,		July 31,
	2013		2012		2012		2013		2012		2012
From ordinary income	$	16,017	$	—	$	514,890	$	2,117,770	$	6,140,882	$	607,351
From long-term capital gains		—		—		—		—		137,848		—
Total distributions	$	16,017	$	—	$	514,890	$	2,117,770	$	6,278,730	$	607,351

	Conservative						Growth
	Allocation Fund						Allocation Fund
			Five Months						Five Months
	Year Ended		Ended		Year Ended		Year Ended		Ended		Year Ended
	December 31,		December 31,		July 31,		December 31,		December 31,		July 31,
	2013		2012		2012		2013		2012		2012
From ordinary income	$	1,271,196	$	5,215,403	$	589,089	$	1,227,505	$	1,600,296	$	180,489
From long-term capital gains		—		—		—		498,325		462		—
Total distributions	$	1,271,196	$	5,215,403	$	589,089	$	1,725,830	$	1,600,758	$	180,489

	Moderate Growth
	Allocation Fund
			Five Months
	Year Ended		Ended		Year Ended
	December 31,		December 31,		July 31,
	2013		2012		2012
From ordinary income	$	2,713,570	$	3,961,419	$	572,935
From long-term capital gains		—		1,675,414		—
Total distributions	$	2,713,570	$	5,636,833	$	572,935

52

Notes to Financial Statements (Unaudited) (Continued)

The following information is computed on a tax basis for each item as of December 31, 2013:

	Dynamic			Balanced			Conservative
	Equity Fund			Allocation Fund			Allocation Fund
Tax cost of portfolio investments	$	70,754,886		$	108,081,943		$	62,096,269
Gross unrealized appreciation		9,801,260			12,098,216			3,567,839
Gross unrealized depreciation		(461,896	)		(2,005,546	)		(1,496,871	)
Net unrealized appreciation (depreciation)		9,339,364			10,092,670			2,070,968
Net unrealized appreciation (depreciation) on written options and short sales		(1,264,205	)		—			—
Accumulated capital and other losses		(140,077,305	)		(36,805,789	)		(2,543,454	)
Undistributed ordinary income		423,004			12,326			4,479
Other temporary differences		(2,303	)		—			—
Accumulated earnings (deficit)	$	(131,581,445	)	$	(26,700,793	)	$	(468,007	)

				Moderate
	Growth			Growth
	Allocation Fund			Allocation Fund
Tax cost of portfolio investments	$	62,304,087		$	133,344,456
Gross unrealized appreciation		10,810,384			19,946,602
Gross unrealized depreciation		(1,855,154	)		(3,781,206	)
Net unrealized appreciation (depreciation)		8,955,230			16,165,396
Accumulated capital and other losses		(39,399,051	)		(35,780,435	)
Undistributed ordinary income		10,678			11,411
Other temporary differences		—			39,467
Accumulated earnings (deficit)	$	(30,433,143	)	$	(19,564,161	)

The difference between the tax cost of portfolio investments and the financial statement cost is primarily due to wash sale loss deferrals.

As of December 31, 2013, the Funds had the following capital loss carryforwards for federal income tax purposes:

												No		No
	Short Term Expiring On											Expiration		Expiration
	2015		2016			2017			2018			Short Term*		Long Term*		Total
Dynamic Equity Fund	$	30,908,342	$	31,726,954		$	77,442,009		$	—		$	—	$	—	$	140,077,305
Balanced Allocation Fund		—		7,630,450			24,373,973	**		4,801,366	**		—		—		36,805,789
Conservative Allocation
Fund		—		—			2,520,133	**		23,321			—		—		2,543,454
Growth Allocation Fund		—		2,474,920	**		26,260,412	**		10,663,719	**		—		—		39,399,051
Moderate Growth
Allocation Fund		—		—			26,652,778	**		9,127,657	**		—		—		35,780,435

* The Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted on December 22, 2010. The Act made changes to several tax rules impacting the Funds. The provisions of the Act are effective for each fiscal year for the Funds beginning January 1, 2011. Although the Act provides several benefits, including the unlimited carryover of future capital losses, there may be a greater likelihood that all or a portion of each Fund’s pre-enactment capital loss carryovers may expire without being utilized due to the fact that post-enactment capital losses must be utilized before pre-enactment capital loss carryovers may be utilized. Under the Act, new capital losses may now be carried forward indefinitely, and retain the character of the original loss as compared with pre-enactment law, where capital losses could be carried forward for up to eight years, and carried forward as short-term capital losses, irrespective of the character of the original loss.

**May be subject to limitation.

The capital loss carryforwards may be utilized in future years to offset net realized capital gains, if any, prior to distributing such gains to shareholders.

53

Notes to Financial Statements (Unaudited) (Continued)

The Funds have analyzed their tax positions taken on federal income tax returns for all open tax years (tax years ended December 31, 2012 through 2013 and July 31, 2010 through 2012) and have concluded that no provision for income tax is required in their financial statements.

As of June 30, 2014, the Trust had the following federal tax cost resulting in net unrealized appreciation (depreciation) as follows:

								Net
			Gross		Gross			Unrealized
	Federal Tax		Unrealized		Unrealized			Appreciation
Fund	Cost		Appreciation		Depreciation			(Depreciation)
Dynamic Equity Fund	$	87,005,915	$	8,915,090	$	(736,601	)	$	8,178,489
Balanced Allocation Fund		97,449,078		13,706,080		(162,842	)		13,543,238
Conservative Allocation Fund		55,288,068		4,470,852		(163,320	)		4,307,532
Growth Allocation Fund		54,069,670		12,507,115		(46,533	)		12,460,582
Moderate Growth Allocation Fund		115,904,580		22,429,155		(105,325	)		22,323,830

6. Commitments and Contingencies

The Funds indemnify the Trust’s officers and Trustees for certain liabilities that might arise from their performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds. However, based on experience, the Funds expect the risk of loss to be remote.

7. Risk Associated with Concentration

Certain Funds invest a high percentage of their assets in specific sectors of the market in order to achieve a potentially greater investment return. As a result, these Funds may be more susceptible to economic, political, and regulatory developments in a particular sector of the market, positive or negative, and may experience increased volatility on the Funds’ NAVs and magnified effect on the total return.

8. Risks Associated with Credit

An issuer may be unable to make timely payments of either principal or interest. This may cause the issuer’s securities to decline in value. Credit risk is particularly relevant to those Funds that invest a significant amount of their assets in junk bonds or lower-rated securities.

9. Risks Associated with Interest Rate Changes

As interest rates rise, the value of fixed-income securities a Fund owns will likely decrease. The price of debt securities is generally linked to the prevailing market interest rates. In general, when interest rates rise, the price of debt securities falls, and when interest rates fall, the price of debt securities rises. The price volatility of a debt security also depends on its maturity. Longer-term securities are generally more volatile, so the longer the average maturity or duration of these securities, the greater their price risk. Duration is a measure of the expected life, taking into account any prepayment or call features of the security, that is used to determine the price sensitivity of the security for a given change in interest rates. Specifically, duration is the change in the value of a fixed-income security that will result from a 1% change in interest rates, and generally is stated in years. For example, as a general rule a 1% rise in interest rates means a 1% fall in value for every year of duration. Maturity, on the other hand, is the date on which a fixed-income security becomes due for payment of principal.

54

Notes to Financial Statements (Unaudited) (Continued)

There may be less governmental intervention in the securities markets in the near future. The negative impact on fixed income securities if interest rates increase as a result could negatively impact a Fund’s net asset value.

10. Risks Associated with Leverage

By investing the proceeds received from selling securities short, the Dynamic Equity Fund is employing leverage, which creates special risks. The use of leverage may increase the Fund’s exposure to long or short equity positions and may cause the Fund’s NAV to be more volatile than if the Fund had not used leverage. This could result in increased volatility of returns.

11. Subsequent Events

Subsequent events occurring after the date of this report have been evaluated for potential impact to this report through the date the financial statements were issued. There were no subsequent events that necessitated recognition or disclosure in the Funds’ financial statements.

55

Other Items (Unaudited)

Proxy Voting Guidelines and Proxy Voting Records

The Sub-Advisors are responsible for exercising the voting rights associated with the securities purchased and held by the Funds. A description of the policies and procedures that the Sub-Advisors use in fulfilling this responsibility is available as an appendix to the most recent Statement of Additional Information, which can be obtained without charge upon request by calling toll free 1.800.543.0407 or by visiting the Touchstone website at www.touchstoneinvestments.com or on the Securities and Exchange Commission’s (the “Commission”) website at www.sec.gov. Information regarding how those proxies were voted during the most recent twelve-month period ended June 30 is also available without charge by calling toll free 1.800.543.0407 or on the Commission’s website at www.sec.gov.

Quarterly Portfolio Disclosure

The Trust files a complete listing of portfolio holdings for each Fund as of the end of the first and third quarters of each fiscal year on Form N-Q. The complete listing (i) is available on the Commission’s website; (ii) may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC; (iii) will be made available to shareholders upon request by calling 1.800.543.0407; or (iv) can be obtained on the Touchstone website at www.touchstoneinvestments.com. Information on the operation of the Public Reference Room may be obtained by calling 1.800.SEC.0330.

Schedule of Shareholder Expenses

As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including reinvested dividends or other distributions; and (2) ongoing costs, including investment advisory fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2014 through June 30, 2014).

Actual Expenses

The first line of the table below for each share class of a Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Six Months Ended June 30, 2014” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below for each share class of a Fund provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line for each share class of a Fund in the table below is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

56

Other Items (Unaudited) (Continued)

		Net Expense			Beginning		Ending		Expenses
		Ratio			Account		Account		Paid During
		Annualized			Value		Value		the Period
		June 30,			January 1,		June 30,		Ended
		2014			2014		2014		June 30, 2014*
Touchstone Dynamic Equity Fund
Class A	Actual		2.13	%	$	1,000.00	$	1,033.50	$	10.74	**
Class A	Hypothetical		2.13	%	$	1,000.00	$	1,014.23	$	10.64
Class C	Actual		2.88	%	$	1,000.00	$	1,029.20	$	14.49	**
Class C	Hypothetical		2.88	%	$	1,000.00	$	1,010.51	$	14.36
Class Y	Actual		1.88	%	$	1,000.00	$	1,034.40	$	9.48	**
Class Y	Hypothetical		1.88	%	$	1,000.00	$	1,015.47	$	9.39
Institutional Class	Actual		1.83	%	$	1,000.00	$	1,035.10	$	9.23	**
Institutional Class	Hypothetical		1.83	%	$	1,000.00	$	1,015.72	$	9.15
Touchstone Balanced Allocation Fund***
Class A	Actual		0.44	%	$	1,000.00	$	1,050.20	$	2.24
Class A	Hypothetical		0.44	%	$	1,000.00	$	1,022.61	$	2.21
Class C	Actual		1.19	%	$	1,000.00	$	1,046.30	$	6.04
Class C	Hypothetical		1.19	%	$	1,000.00	$	1,018.89	$	5.96
Class Y	Actual		0.19	%	$	1,000.00	$	1,051.40	$	0.97
Class Y	Hypothetical		0.19	%	$	1,000.00	$	1,023.85	$	0.95
Institutional Class	Actual		0.19	%	$	1,000.00	$	1,051.70	$	0.97
Institutional Class	Hypothetical		0.19	%	$	1,000.00	$	1,023.85	$	0.95
Touchstone Conservative Allocation Fund***
Class A	Actual		0.44	%	$	1,000.00	$	1,039.00	$	2.22
Class A	Hypothetical		0.44	%	$	1,000.00	$	1,022.61	$	2.21
Class C	Actual		1.19	%	$	1,000.00	$	1,035.30	$	6.01
Class C	Hypothetical		1.19	%	$	1,000.00	$	1,018.89	$	5.96
Class Y	Actual		0.19	%	$	1,000.00	$	1,040.30	$	0.96
Class Y	Hypothetical		0.19	%	$	1,000.00	$	1,023.85	$	0.95
Institutional Class	Actual		0.19	%	$	1,000.00	$	1,040.20	$	0.96
Institutional Class	Hypothetical		0.19	%	$	1,000.00	$	1,023.85	$	0.95
Touchstone Growth Allocation Fund***
Class A	Actual		0.44	%	$	1,000.00	$	1,057.60	$	2.24
Class A	Hypothetical		0.44	%	$	1,000.00	$	1,022.61	$	2.21
Class C	Actual		1.19	%	$	1,000.00	$	1,053.90	$	6.06
Class C	Hypothetical		1.19	%	$	1,000.00	$	1,018.89	$	5.96
Class Y	Actual		0.19	%	$	1,000.00	$	1,058.30	$	0.97
Class Y	Hypothetical		0.19	%	$	1,000.00	$	1,023.85	$	0.95
Institutional Class	Actual		0.19	%	$	1,000.00	$	1,058.50	$	0.97
Institutional Class	Hypothetical		0.19	%	$	1,000.00	$	1,023.85	$	0.95

57

Other Items (Unaudited) (Continued)

		Net Expense			Beginning		Ending		Expenses
		Ratio			Account		Account		Paid During
		Annualized			Value		Value		the Period
		June 30,			January 1,		June 30,		Ended
		2014			2014		2014		June 30, 2014*
Touchstone Moderate Growth Allocation Fund***
Class A	Actual		0.44	%	$	1,000.00	$	1,055.70	$	2.24
Class A	Hypothetical		0.44	%	$	1,000.00	$	1,022.61	$	2.21
Class C	Actual		1.19	%	$	1,000.00	$	1,051.10	$	6.05
Class C	Hypothetical		1.19	%	$	1,000.00	$	1,018.89	$	5.96
Class Y	Actual		0.19	%	$	1,000.00	$	1,056.60	$	0.97
Class Y	Hypothetical		0.19	%	$	1,000.00	$	1,023.85	$	0.95
Institutional Class	Actual		0.19	%	$	1,000.00	$	1,056.80	$	0.97
Institutional Class	Hypothetical		0.19	%	$	1,000.00	$	1,023.85	$	0.95

* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect one-half year period).

** Excluding interest and dividend expenses on securities sold short, your actual cost of investment in Class A, Class C, Class Y and Institutional Class would be $7.82, $11.57, $6.56 and $6.31, respectively.

*** The annualized expense ratios for the Allocation Funds do not include fees and expenses of the Underlying Funds in which the Allocation Funds invest.

58

PRIVACY PROTECTION POLICY

We Respect Your Privacy

Thank you for your decision to invest with us. Touchstone and its affiliates have always placed a high value on the trust and confidence our clients place in us. We believe that confidence must be earned and validated through time. In today’s world, when technology allows the sharing of information at light speeds, trust must be reinforced by our sincere pledge to take the steps necessary to ensure that the information you share with us is treated with respect and confidentiality.

Our Pledge to Our Clients

• We collect only the information we need to service your account and administer our business.

• We are committed to keeping your information confidential and we place strict limits and controls on the use and sharing of your information.

• We make every effort to ensure the accuracy of your information.

We Collect the Following Nonpublic Personal Information About You:

• Information we receive from you on or in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income and date of birth; and

• Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payment history, parties to transactions, cost basis information, and other financial information.

Categories of Information We Disclose and Parties to Whom We Disclose

We do not disclose any nonpublic personal information about our current or former clients to nonaffiliated third parties, except as required or permitted by law.

We Place Strict Limits and Controls on the Use and Sharing of Your Information

• We restrict access to nonpublic personal information about you to authorized employees who need the information to administer your business.

• We maintain physical, electronic and procedural safeguards that comply with federal standards to protect this information.

• We do not disclose any nonpublic personal information about our current or former clients to anyone, except as required or permitted by law or as described in this document.

• We will not sell your personal information to anyone.

We May Provide Information to Service Your Account

Sometimes it is necessary to provide information about you to various companies such as transfer agents, custodians, broker-dealers and marketing service firms to facilitate the servicing of your account. These organizations have a legitimate business need to see some of your personal information in order for us to provide service to you. We may disclose to these various companies the information that we collect as described above. We require that these companies, including our own subsidiaries and affiliates, strictly maintain the confidentiality of this information and abide by all applicable laws. Companies within our corporate family that may receive this information are financial service providers and insurance companies. We do not permit these associated companies to sell the information for their own purposes, and we never sell our customer information.

This policy is applicable to the following affiliated companies: Touchstone Funds Group Trust, Touchstone Investment Trust, Touchstone Strategic Trust, Touchstone Tax-Free Trust, Touchstone Variable Series Trust, Touchstone Institutional Funds Trust, Touchstone Securities, Inc.* and W&S Brokerage Services, Inc.

* Touchstone Securities, Inc. serves as the underwriter to the Touchstone Funds.

A Member of Western & Southern Financial Group^®

The Privacy Protection Policy is not part of the Semi-Annual Report.

59

 

 

Touchstone Investments

Distributor

Touchstone Securities, Inc.*
303 Broadway

Cincinnati, Ohio 45202-4203 800.638.8194
www.touchstoneinvestments.com

Investment Advisor

Touchstone Advisors, Inc.*

 303 Broadway

 Cincinnati, Ohio 45202-4203

Transfer Agent

 BNY Mellon Investment Servicing (US) Inc.

 4400 Computer Drive

 Westborough, MA 01581

Shareholder Service

 800.543.0407

* A Member of Western & Southern Financial Group

 TSF-54CC-TST-SAR-1406

Item 2. Code of Ethics.

Not applicable.

Item 3. Audit Committee Financial Expert.

Not applicable.

Item 4. Principal Accountant Fees and Services.

Not applicable.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Investments.

(a) Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.

Item 11. Controls and Procedures.

(a) The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)(1)	Not applicable.
(a)(2)	Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3)	Not applicable.
(b)	Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Touchstone Strategic Trust

By (Signature and Title)* /s/ Jill T. McGruder

Jill T. McGruder, President

(principal executive officer)

Date 08/22/14

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)* /s/ Jill T. McGruder

Jill T. McGruder, President

(principal executive officer)

Date 08/22/14

By (Signature and Title)* /s/ Terrie A. Wiedenheft

Terrie A. Wiedenheft, Controller and Treasurer

(principal financial officer)

Date 08/22/14

^* Print the name and title of each signing officer under his or her signature.