Navigating Volatility: A Quarterly Look at Value Investing Dynamics
Unpacking the Third Quarter Performance of the Touchstone Value Fund
For the quarter concluding September 30, 2025, the Touchstone Value Fund (Class A Shares, Load Waived) posted results that did not align with those of its established benchmark, the Russell 1000® Value Index, indicating a period of relative underperformance for the fund.
Consumer Discretionary Sector: Aptiv plc's Positive Impact
A notable highlight within the Fund's Consumer Discretionary sector allocation was Aptiv plc. This company significantly bolstered the fund's relative performance during the quarter, driven by stronger-than-expected earnings and positive momentum across its core business segments.
Financials Sector: American International Group's Drag on Performance
Conversely, the Financials sector experienced a drag on relative performance due to American International Group. Despite reporting headline earnings that surpassed expectations, investor sentiment was negatively impacted by a mix of underlying business trends.
Key Influences on Investment Outcomes: Philip Morris International and Keurig Dr. Pepper
Philip Morris International (PM) encountered headwinds primarily from fluctuations in ZYN product shipments and evolving regulatory landscapes. Meanwhile, Keurig Dr. Pepper's (KDP) acquisition of JDE Peet's raised investor concerns, leading to stock depreciation and increased balance sheet complexities.
Future Growth Drivers: Oracle and Vertiv Holdings
Looking ahead, Oracle (ORCL) and Vertiv Holdings (VRT) are positioned as significant growth catalysts for the portfolio. Oracle's robust multi-billion-dollar AI cloud contracts and Vertiv's strong demand for AI infrastructure, substantial order backlog, and strategic acquisitions are expected to fuel their continued expansion.