Touchstone Investments plans to start aggressive growth in the 401k and trust space once the firm completes its purchase of 16 former Fifth Third mutual funds this Fall.

These funds, which Touchstone stated its intention to acquire in April, already have distribution systems and existing relationships within this space, particularly small plans. Touchstone will leverage this infrastructure to promote all of its funds into this market.

"We're getting a twofer with this purchase," Touchstone president Steven Graziano told MFwire. "Not only are we getting new funds to sell, but we get the ability to sell through the Fifth Third distribution channel and get some momentum in the small plan market."

That is not the only marketing boon that Touchstone plans to capitalize upon this Fall. It also expects to see a near-doubling of the number of Touchstone funds meriting 4-or-5 Star Morningstar ratings at the end of September: from 11 to as much as 22. The funds expected to garner this new rating were all seeded during the Financial Crisis of 2008, took advantage of a number of bargains at the time, and will all hit their three-year performance milestones win September.

Graziano says that this strategy of leveraging of off the distribution resources of acquired funds is important for Touchstone, which only sells its funds through intermediaries. It also helps Touchstone to outmaneuver larger firms with much bigger marketing resources, he said.

"Registered investment advisors are used to buying products from those larger firms," Graziano said. "For us to get their attention, we need to focus on only a couple of strategies. We don't want to try to be everywhere. We just want to be in a few places and do it exceptionally well."

 

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