Kurt Dupuis:
Welcome to The Whole Truth, where two wholesalers help financial professionals build great practices and thrive in a rapidly changing industry. We'll bring you the stories and voices from those on the front lines of this change and we'll have some fun along the way.
Steve Seid:
We're building a community of financial professionals who are growing, forward-thinking and want to get better. Thanks for listening and contributing to the discussion.
Disclosure:
The views expressed herein are those of the participants and not those of Touchstone Investments. We are joined by Steve Owen, CEO of The London Company, a sub-advisor of Touchstone Securities, Inc.
Kurt Dupuis:
And welcome to The Whole Truth, from Atlanta, Georgia, I'm Kurt Dupuis, and we have a bit of a twofer for you today, so two interviews, one person. The myth, the man, the legend is Steve Owen, a former colleague of ours that ran our institutional sales department for a number of years and was very successful until he ended up taking a CEO role with one of the sub-advisors with which we work.
So in part one of the conversation, we're really talking about asset managers and we're sort of answering a couple of questions. First of all, what is table stakes? What does everybody have or should have? And if they don't have it, that kind of indicates a red flag. But what we're all trying to find and the question that we're all trying to answer is this thing of “edge”. Who's got the edge? How did they get the edge? How did they maintain the edge? So a lot of great questions and thoughts around how he thinks about the world and all of his learnings through talking about different asset managers.
And then we'll transition to a more recent conversation where we talked about him in the role of CEO. What have been the challenges that he expected? What have been the challenges that he doesn't expect? So all great questions and content coming from a guy that's really, really bright, but also a really good communicator and has a storied history with us at Touchstone. It's a conversation you won't want to miss.
So as always, reach out to us at the wholetruth@touchstonefunds.com if you have any questions or comments or criticisms for Steve. And also smash that subscribe button on your favorite podcast app. And if you feel so inclined, write us a review on Apple Podcast. It helps others find the show. Without further ado, here's our conversation with Steve Owen.
Steve Seid:
And welcome everybody. We are delighted, delighted to have Steve Owen on the show. Steve Owen of The London Company. A lot of folks that listen to this podcast would've heard that name before, a prominent boutique manager. Steve, is it even reasonable to call you guys boutique anymore?
Steve Owen:
Yeah, I mean, we're a small boutique in Richmond, Virginia. I still think of this as a institutional boutique.
Steve Seid:
So despite the prominence of the firm, that absolutely makes sense to call you guys a boutique. So let me set up the premise here. Let's assume you're looking at a bunch of really good investments, the returns and what they've been able to generate for clients over time and they all look good. You got a handful of them. What is it that you do to go beyond the numbers? And we have a gentleman on the phone who I just introduced, who's probably the best person I could think of to help us think through that. Why don't you just kind of jump in with kind of an overview of your background?
Steve Owen:
Yeah, sure. Guys, thanks for having me. So by way of introduction, I've always had a passion for the investment business. I guess when I was younger I just didn't recognize it. And so thinking back to getting into the investment business, I started out with an undergrad in engineering, thinking I wanted to be an engineer, but investments was just something I did on the side. So I realized after getting three-fourths of the way through an engineering degree, that's not the career path I wanted to pursue. So, of course I got a dotcom job in year 2000. I was-
Kurt Dupuis:
Great timing.
Steve Owen:
... laid off. Yeah, great timing. I was laid off before I even started, if that's even possible. So ended up getting an MBA with a concentration in finance. Found myself in 2002 on the sales side, very quickly moved over to money manager or sub-advisor research, did that for a little while. Left Touchstone for a couple years to go work at an asset management consulting firm where I did money manager selection and then model portfolio construction. And then in 2007 I was recruited back to Touchstone to help build out and lead an institutional distribution. I did that for 13 years and in the spring of 2020 I left to become the CEO of The London Company based in Richmond, Virginia.
Kurt Dupuis:
What ended up drawing you over to The London Company?
Steve Owen:
Yeah, great question. I've always wanted to run an investment business and when the opportunity comes up to be the CEO of one of my favorite investment boutiques of all time, I mean that's a really hard thing to say no to. I have complete respect for the founder, a guy named Steve Goddard, a legend, an underserved legend in his own right, his entire investment team, differentiated process, just the focus on investment excellence, the phenomenal culture.
Steve Seid:
That's fantastic. Set the background of what it was like and how often you were interacting with different managers?
Steve Owen:
So directly or indirectly for 15 years or so, I was working with active managers, and I guess the one thing I recognize was there's not one blueprint for success from being an active manager, but there are successful attributes that in hindsight you can use to evaluate active managers. There's three key tenets that I tend to repeat over and over again.
So one is active share.1 So in its simplest form, active share is how active are you relative to your benchmark. So if you can buy the S&P effectively for free, if somebody has a 7% weight in Apple and the S&P has a 7% weight in Apple, you shouldn't pay your portfolio manager to make that decision. That's 7% you can get for free. So active share is how differentiated are you? So you want to have an overweight or underweight to that 7% in Apple, that's your active component, rinse and repeat, add it up across the portfolio. So to outperform the index, you need to be different than the index measured by active share.
Another element that I've picked up along the way is fund duration. And by the way, I didn't invent these. These are based in empirical research from named Martijn Cremers who's now at The University of Notre Dame. So if you have high active share and then you have, they call it, fund duration2. So think of that as the amount of time you're holding onto a stock. And that just makes intuitive sense, right? Like Benjamin Graham says, "In the short-term, the market is a voting machine and in the long term it's a weighing machine.
Now, the third thing is active fee3. So it's a way to reframe fees within the industry. So if you can get those three things right when evaluating active managers by focusing on how active are they relative to their index, what's their turnover and are you paying a reasonable fee for that active portfolio? And then of course you have to be a good stock picker. Those are the things that really matter.
Steve Seid:
Make sure that you hit all of those and then we could dig further. Is that how you think about it?
Steve Owen:
Absolutely.
Kurt Dupuis:
I want to ask you a couple questions and just agree or disagree. Most people put way too much emphasis on the quantitative, so stock returns and not enough emphasis on the qualitative.
Steve Owen:
I totally agree. Selecting your investment manager, that is a very complex decision. If you only screen on a one and three and five-year basis for performance, if you think you found the holy grail from that or you look at the number of stars a product has, there's always more to it than that. So maybe you think of it in an analog with picking a potential spouse, are you going to pick your potential spouse based on how tall they are and how old they are? Because those are two easy quantitative data points to screen on, and it's really easy to measure, but it's really hard to say that your future results will be what you desire if you're just using a couple of data points.
Steve Seid:
I picked my spouse wrong. Is that what you're saying to me right now, Steve? Because that's what we were-
Steve Owen:
I mean, it depends on what your quantitative measures were-
Kurt Dupuis:
How many stars does she have, Seid?
Steve Seid:
How many stars does... She has seven stars, Kurt. Seven stars. All right. So let's talk about for the financial professionals, what a good hit rate looks like. So if I'm running a portfolio, let's say I'm picking a handful of active managers, whether they're alone or you're satelliting with ETF or stocks, doesn't matter. Let's say I'm picking five active managers. What's a good hit rate? Should the expectation be that I get every one of those right over time? Is that a reasonable expectation, or do you think about it differently? Talk about it from a portfolio construction perspective.
Steve Owen:
Yeah, so it's all about the puzzle pieces and how they fit together in the puzzle. So can your hit rate be five for five in your question? Yeah, of course it can. But it depends on your time period for measurement. So maybe a way to reframe your thinking around that would be the way to measure an active manager might be along the lines of thinking about their turnover and then measuring them relative to that.
So for example, at The London Company, our turnover is 20% per year on average over a 20-year period. So how are you going to know if we're successful? You can't measure us on a one or three year basis. You need to measure us on a rolling five-year period to accommodate for the 20% turnover.
Steve Seid:
Yeah.
Steve Owen:
You're not going to get them all right, but if your batting average is pretty good from an excess return standpoint, I think you found a really good formula for measuring active managers. If somebody's turnover is 100%, you probably need to measure them on a rolling 12-month period.
Steve Seid:
So I reflect on some of the managers that I sort of bought into early on in my tenure and I got burned a little bit on them. What did I miss when I was evaluating them? And I've come to some of my own conclusions, but I wonder, think back over your career of evaluating managers and think about the couple, the one or two, the whatever, that disappointed you. What did you get wrong? Why did they disappoint? What happened? Was it a matter of all your process and your selection criteria was good but they just didn't execute, or a PM left?
Steve Owen:
I'll probably take a lot of arrows for this one from other active managers.
Steve Seid:
Good, we like that.
Steve Owen:
Yeah, here we go. I think quant4 is just really hard to figure out. I've had a bias against quant. I think most gatekeepers, professional buyers, research analysts have that bias.
So if you have a small investment team and a really large investment portfolio and your turnover is really high, even if your numbers are good, you're just going to have a hard time keeping up that alpha5 generation because you're going to have to consistently get it right.
Steve Seid:
I tend to fall back on team size heavily. Especially you get into those universes like the small caps or some of the international where you better have a deep team to do it.
Steve Owen:
Yep, I agree.
Kurt Dupuis:
What are the qualities of an asset manager that they have to possess? What are table stakes to even really be considered?
Steve Owen:
Yeah, I mean, the table stakes items that people tend to think of are, it's your repeatable investment process. It's how deep is your investment team? Do you maintain your style? Those are just the very obvious criteria. I think the hardest thing to figure out is what is the investment edge of the investment team that you're evaluating? You need to try and figure out what the advantage of the investment team is and how they're going to create that alpha in the future over a full market cycle.
I think it was Michael Mauboussin that talked about three competitive advantages an investment manager can have. So one is an analytical advantage, second one would be an informational advantage, and the third one is a behavioral advantage. So if you tick through those one by one, the analytical advantage would be “I'm better at analyzing this stock and the competitors and the peers than the person next door”.
Informational advantage is really hard to come by these days with Reg FD6 and Twitter, there's just a lot of information flying around. So it's hard to say that you've got an information advantage. Hedge funds used to use satellites to evaluate parking lot coverage for retailers and that was an information advantage, but now everybody has access to that data. The only thing I think that you can get an advantage on today is a behavioral advantage. And why is that? It's because human behavior is irrational and you can capitalize on that.
One other thing I'll mention about asset manager due diligence, and this is the really hard stuff, is it's very holistic. So what do they stand for? Do they have a clear mission? Do they have a vision for the future? Do they have core values, and what is their culture like? And you can only figure out the culture part by spending time with somebody.
Steve Seid:
I want to dive into that concept of edge with specific examples because I think getting it, this is kind of the heart of what we're talking about is understanding what is a manager doing that's different from the market that's worth paying a fee for? Is it with, I've got a list of questions I'm going to answer them and if they don't answer them well then I know something. At The London Company, what do you guys think that your investment edge is?
Steve Owen:
Sure. So when I think about The London Company and I think about my prior framework and what advantage are we trying to capitalize on, it would be on more of the behavioral side. And there's really two inefficiencies that we're trying to exploit. One would be the time arbitrage. So we take a long-term approach to investing and we think like a business owner and we allow our positions to compound over time.
And the second thing is that we think the market is much less efficient at assessing risk than reward. And instead we focus on risk mitigation at every step and recognize the power of losing less in down markets. So we try to limit the loss of any individual holding, and that's just basic math. If you have $100 stock that goes down 50%, you now need 100% rate of return to get back to breakeven.
And something else we do, I think that is somewhat unique is we do take a private equity approach to publicly traded equities utilizing what we call a balance sheet optimization framework. So somewhat complicated, but if you think like a private equity investor, you want to build the investment thesis around what exists in the form of the balance sheet, and that is under the tangible control of the business. So if you’re the CEO of a business, you can't control revenue which flows through the income statement, but what you can control is how your balance sheet is structured.
And so people will say, well, this business has no debt. Well, then your cost of capital or cost of equity, which with an equity risk premium is more expensive than debt. So if you can prudently use a little bit of leverage, you can reduce that cost of capital and increase the returns over time. So you've got to find a C-suite of executives that think like you do. If you've ever read the book, The Outsiders by William Thorndike, that's a great summary for how we think about investing and we just want prudent capital allocators in our business.
Steve Seid:
We talked about some of the things, the characteristics before that Steve referenced, but also understand what that investment edge is and also how we expect it to behave in different environments. It's also good understanding when a manager's likely to lag, right?
Steve Owen:
Absolutely. And if you can figure that out, you can actually use that to your advantage.
Kurt Dupuis:
What are some of the often ignored items in manager selection that people really should think about more?
Steve Owen:
Evaluate things like the firm. So how stable is your investment firm? And you can think of the big tier ones and you're going to say they're stable or you should be saying that, but with passive headwinds and them losing market share, are they as stable as you think? Something else over time, is the infrastructure supporting the clients? Is that built in a strong foundation with compliance, with marketing materials, with client support? And then I think the alignment of incentives. So if you're a low turnover investor, are your financial incentives focused on the long-term? Incentives do drive behavior, and so how the investment team is paid needs to be aligned with portfolio construction and with your client's timeframe.
Steve Seid:
What are some of the things you hear a lot but doesn't really tell you much?
Steve Owen:
I mean, the stars. Granted it was built 30 years ago on the back of very little data, computers were hardly in use, so you had to come up with something.
The one thing I do think that could be powerful around the star ranking system is there is a little bit of a “reversion to the mean element”. So what I mean is if you've got a fund that's four or five stars on a five and 10-year basis and on a three-year basis is one star, if the turnover is low enough and they own things for five years and they've kind of had a tough one or two or three years, you’re probably due for a snapback, assuming nothing's changed with stock selection, the personnel and process. If nothing's changed there, you could take advantage of the manager when they're out of favor, you can just capture that alpha that's negative right now to get a reversion to the mean, to the benchmark.
Steve Seid:
You could only get there if you know these managers well, because just picking one-star funds doesn't work either, right? That's what the whole discussion here is about. It's about knowing our managers well enough.
Steve Owen:
Yeah, or ask your salesperson. They come in your office, they're selling you the hotdot, and say like, "All right, you know your lineup really well, what do you think I should be looking at?" And then listen to them, because they're going to have an information advantage that you don't have that you can use to your advantage. And they can tell you in 10 minutes what would take you all day to figure out. Use that to your advantage and be a better fund selector.
Steve Seid:
All right, Steve, so this has all been super insightful.
Kurt Dupuis:
Awesome, yeah.
Steve Seid:
There's a lot to take away here, but we've got two final questions we want to hit you with. Under what circumstances should you own a manager's, let's start with a couple different tiers. Under what circumstances should I own a manager's hundredth best idea?
Steve Owen:
My answer would be never. But since never-
Steve Seid:
That's what I-
Steve Owen:
... is typically not the right answer, I would say there are very few exceptions to the rule that you shouldn't use a manager with a hundred ideas. The exception would be a quant manager in order to diversify away a lot of the risk. That would probably be the only situation where I would say a 100 stock portfolio would work.
The other part would be fixed income. Given the binary outcome of fixed income, you probably are going to want to have more than a hundred ideas in a fixed income portfolio. But those are really the only two exceptions to the rule that I can think of.
Steve Seid:
Let's go with 70. Let's go with 70. When would you own 70 holdings?
Steve Owen:
To me on an equity portfolio, I think 70 is still too high. Even 50 is too high. If you think about any high-performing team, think about any high performing sports team. How often does any high-performing sports team, NFL, NBA, you pick it. How often do they have a hundred best athletes? They don't. I think the NFL is what, 55 people on a team. If you're telling me a stock picker, you got more than 55 great athletes, you want to put in your portfolio, I mean, more power to you, but I have a hard time believing you. It's more likely you've got 20 ideas and 35 “I don't knows” and then you're sprinkling in another 35 to diversify the 35 “I don't knows”.
And something else that I think is talked about very little is the market is moving away from a “star” PM to more of a team-based approach. I think a PM team is a little bit better, a team approach is better. There's this quote by Tecumseh that says, "A single twig will break, but a bundle of twigs is strong." Think of that with your portfolio management team too. It is amazing what you can accomplish when you don't care who gets the credit and when you don't have that “star” PM system in place, everybody's rowing in the same direction.
Kurt Dupuis:
So this has been a fantastic discussion, but it's probably worth kind of summing it up and giving what I think could go into someone's qualitative scorecard. First of which unequivocally has to be active share. Why would you pay an active manager and want to own their hundredth best idea? And I think another one is fund duration or turnover or fund duration as an alternative way to look at turnover where you're not just analyzing the trims of the buys and sells, but when does a new idea come into the portfolio? When does that idea exit the portfolio?
Also, thirdly, active fee, really simple equation, it's expenses over active share just says how expensive the active portion of the portfolio is for you. What else, Steve?
Steve Seid:
Yeah, the four more things I had noted. The first was evaluating a manager based on their turnover, which was a really profound thing I got from Steve Owen. So if my turnover is 25% a year, then what I want to do is judge that manager on rolling four-year periods. And so that's a good way to see, does this manager actually work?
Next on the list is team depth. We're not going to give you a specific calculation, but try to think about the size of the team, the breadth of the team, the depth of the team versus the opportunity set. Repeatable investment process, and specifically what is the edge? The market is really hard to beat. So if you don't have a true and specific sense of that, what that manager is doing is different from everybody else out there. So what is that investment edge?
The last thing that he talked about was culture, hard one to get sometimes to evaluate, but some of the things that he mentioned was, do you see passion when they describe what they're doing? What do the incentives of the firm look like? And just listening to them talk about stocks. If you hear them go into their individual holdings and just really be excited and have the level of depth, that can tell you something.
So there are seven things that you can now take and supplement what you're already doing in terms of evaluating the numbers. And I think it will raise your game.
Kurt Dupuis:
Well, I hope you enjoyed that first part of our conversation with good old Steve O, and here we go into the second part of our conversation with Steve O where we talk about his view from the CEO perch.
I started at Touchstone in 2017 and I came from an international background, I mean, I was wholesaling and I was like, "Oh, I've done this wholesaling thing for a while, transitioning to Touchstone, not going to be a big deal." And I was wrong, I had a lot more to learn than I even realized. Tell us about that transition from going to kind of institutional sales distribution to running a business, albeit an asset manager where you have familiarity, but I'm curious how that story plays out.
Steve Owen:
Running an intermediary distribution team, I mean this business is hard enough and after 13 years of doing it, you feel like you have figured out. And right as soon as you feel like you have something figured out, you get walloped on the back of the head.
Being a CEO of a business, there are a lot more moving parts. It's not just one division, it's operations, marketing, compliance, distribution, all those things have a lot of different personnel and reporting structures and challenges that are somewhat unique to each department. So you've got to learn quickly and on the run. Now, great news was that the infrastructure was already built here and nothing was broken, but I had to really get up to speed quickly on a lot of those things that were happening at the firm and try to figure out how do we optimize for the future so that we can have a very scalable business and are well-prepared for the future, which they already were, but there were again, a lot of moving parts.
Steve Seid:
Take us through a day in the life. So you come in, you've got all these different departments, areas, certainly your focus is much wider and there's a much greater span of influence. So day-to-day, what does that look like?
Steve Owen:
Every business is unique. Everybody has their own unique challenges, asset management is the exact same way, but at the end of the day, my responsibility is to focus on business strategy and then execution against the plan. And then maybe secondarily, it's about culture and collaboration at the firm and leadership development.
Kurt Dupuis:
As a business owner, what are those universalities that come along when you think long-term?
Steve Owen:
If you own a business, asset management business, financial advisor business, RIA7, it doesn't really matter what the business is, you've got to figure out what your end game is, and I think that's what a lot of people miss. They have a great idea, they start a business, but what is your end game? And really there's only a couple of main choices. One is to monetize the business and the other one is to transition the business, and there's going to be a different playbook for each side of the business.
If you want to monetize it, you look for the highest price when you can create that highest multiple on the business and then you sell it and hope you can find a buyer at the right time. The other part is transitioning the business. If you're an advisor, do you have a junior advisor you want to transition it to, and how are you going to do it? So the playbook's a little bit different.
We here at The London Company want a multi-generational sustainable firm. And so the pieces that come along with that, you've got to build an equity transition plan to get more equity in the hands of the second and third generation, and we've done that. We mentor the next generation. We got to bring them up to speed on how the firm is focused and how you're going to drive value for our clients going forward. And then you want to develop the next generation of leaders that are going to manage and mentor the remainder of the team that you're bringing up along with it.
So a little bit of a different playbook, if you want to monetize it, I think those things are less important, but if you really want to keep this thing going and have that firm going in perpetuity, these are the things that need to be the focus from the beginning.
Steve Seid:
Anything else that you'd mention as being important when it comes to running a business?
Steve Owen:
Yeah, I think people underestimate the value of culture and collaboration, and this whole “work from home mantra” right now, everybody wants to stay home. Well, if you're an employee that just works from home, you are now just a mercenary for the business, because then there's nothing tying you to the group. It's more about compensation and benefits. And so you don't need to even live in the same city. You can do your job from somewhere else. So if that's how you feel as an employee, there's still value in that, but I think you can't really rally around the same cause if you're not working together. So our “work from home plan” is we returned to the office earlier than most other firms, and I think that's really important.
The other thing would be clearly articulating your value proposition to your clients. Not everybody gets that right, and our value proposition tends to be around downside protection, concentration, low turnover. We want clients to know The London Company for those things. So if you can clearly articulate your value, I think that creates a little bit more intentionality with your business.
Kurt Dupuis:
Leadership is about getting the right people on the bus, but also getting them in the right seat on the bus. How do you think about that both in your business but also for our audience in the financial professional space?
Steve Owen:
Really, hiring is about hiring for the gaps you're trying to fill and finding those people with the right character and the right fit for your culture. I think too many people run down a resume and look at hot sales numbers for a sales provider or sales team member and you hire based on that. This person's been able to achieve whatever the results are. At the end of the day, maybe it's the character attributes that that person has that might clash with the rest of the culture. And you guys have seen in your careers where you hire the wrong wholesaler and they're a clash against the rest of the culture at the firm.
The other side of the coin is if you have somebody that's a challenging employee, let's say, somebody who might not be your fit for your business, you've really got to decide is it a matter of skill or a matter of will? If they don't have the skills, you can train them. If it's a lack of will around doing a good job for end client, then that's probably the wrong person in the wrong seat on the bus.
Steve Seid:
How quick of a trigger finger do you have for something like that?
Steve Owen:
When I first joined, I put together a PowerPoint after going through the business and I gave this to the entire firm, and I said, "If you don't want to be here, I will help you find something that... I won't fire you, but come to me first." Because it does hurt the business, when you have a small business and somebody leaves.
Steve Seid:
Yeah, right.
Steve Owen:
So I said, "If you don't want to be here, let's find a way to get you into something that you're going to be happier with. Maybe that's a new role within our current company of which if you have the skill and you have the life passion, you're going to be successful at that. And if it's somewhere else, we can write you a nice letter and get you over there, but then also tell us so that we can backfill you along the way." And we did have some people self-select based on that, which was ok.
Steve Seid:
Oh, you’re kidding.
Steve Owen:
Yeah, we did.
Steve Seid:
Oh, interesting.
Steve Owen:
I think it does create a better partnership and they're a better voice and advocate for you out in the marketplace if you just don't can them, right? I think that carries a lot more credibility, and I think getting rid of somebody is really hard. It's disruptive to not only your business but to their personal life. So do the best that you can, make sure they have the right skills and they want to be here and those are the people that are going to move you forward.
Steve Seid:
You mentioned taking a long-term view and knowing what the end game is. So where is The London Company five, 10 years from now?
Steve Owen:
We've got a long way to go with the core products that we have today. So being really focused around client expectations and meeting those expectations around those portfolios, but longer-term, to have that multi-generational sustainable firm, you want to be able to career path people into different areas in the business. I'm not exactly sure what the right plan is there yet, but if we want to keep people engaged and interested in the business, you've got to be able to provide for them from a career perspective.
Kurt Dupuis:
Yeah, so I know you primarily came from the institutional side, but had plenty of exposure to the retail side as well. Given that our core audience is financial professionals, can you give us a sense from your seat, what do you see financial professionals doing well, and where do you see is potential area for growth?
Steve Owen:
The ones that articulate their value proposition the best, seem to have the best and stickiest clients and those clients are more of a partner than just a client. And putting that client's best interest first. If you want to create scalability and repeatability and value to your business, your business is valuable, have that niche, target it, do a great job articulating your value proposition. Have everybody in your group rally around that cause and have intentionality to everything you're doing for that select subset of clients.
Kurt Dupuis:
Well, that was a great chat. Thank you, Steve O for your time today and the relationship that we have ongoing. I love working with you guys. So thanks for everything that you do. Stick with us. This is The Whole Truth. When we come back, we'll have the Costanza Corner. And welcome back to the Costanza Corner where we end the show on a high note. Steve, what'd you have for us today?
Steve Seid:
When I think of uplifting segments, is curing a child's blindness good enough for you, Kurt? Is there any better than that?
Kurt Dupuis:
Wow, going big for the top ropes.
Steve Seid:
I mean, there's been a couple of themes with our Costanza Corner, and one of those themes have been medical progress that we've seen and that are doing amazing things. And so this is another medical potential breakthrough that has the potential to cure or to stop blindness in a lot of people.
So this is covering a child who's eight-years-old in Canada, his name is Sam, and it says, Sam suffers from a rare disorder, retina pigmentosa, a form of progressive blindness caused by a genetic retinal degeneration that results from mutations in some genes, and essentially it goes on and it says you lose the perception of light, et cetera, et cetera.
Now, however, thanks to a new form of gene therapy, many patients, including Sam, are seeing huge improvements in their eyesight. The science behind the protocol is impressive. After being modified with a healthy copy of the gene, the one that's failing an inactivated virus is injected directly into the retina. The healthy gene then goes to work enabling cells to produce a protein that converts light into electrical signals, et cetera, et cetera. So this boy, this eight-year-old who had basically lost all his sight completely, through this process can now see. And the potential for this to reduce blindness across the spectrum, not just with children, is huge and gives me the chills just reading the story.
Kurt Dupuis:
Wow. I like the science ones, I have to say. I've said before, I'm not a science guy. I'm married to a science lady and I so appreciate how her brain works. But the fact that people invest so much time and effort into this and have the mental capacity to invest here, I love it. I love this cutting edge science stuff.
Steve Seid:
I have high ideals for our industry. I think what we do is really important. Retirement and people's well-beings. I think our industry does a lot of good stuff, but compared to some of these other people that are doing things like curing blindness, that kind of puts it into perspective as well. So anyway, I hope this uplifted you all. This definitely did for me. We'll see you next time.
Kurt Dupuis:
You can find The Whole Truth and subscribe for free on Apple Podcast, Spotify or your favorite podcast app. We'd love it if you took the time to rate and review the show on Apple Podcast. It helps others find the show. And for more episodes of the whole truth, go to www.touchstoneinvestments.com/thewholetruth. That's touchstoneinvestments.com/thewholetruth. All one word.
As of December 31, 2022, Apple Inc. made up 5.57%, of the Touchstone Large Cap Fund. Current and future portfolio holdings are subject to change.
1 Active Share measures the percentage of the Fund’s holdings that differ from those of the benchmark. It is calculated by taking the sum of the absolute difference between all of the holdings and weights in the portfolio and those of the benchmark holdings and weights and dividing the result by two. Active Share is not a performance measurement. A high level of Active Share does not assure outperformance of a fund relative to its benchmark index. Index performance is not indicative of fund performance. Investing in an index is not possible.
2 Fund Duration - Holdings Duration represents the weighted-average length of time that stocks in the fund were held in the portfolio.
3 Active Fee is the annual expense ratio of the fund adjusted for the Active Share with respect to the self-declared benchmark and the expenses of investing in the self-declared benchmark index.
4 Quant is short for quantitative trading.
5 Alpha is the portion of a fund’s total return that is unique to that fund and is independent of movements in the benchmark.
6Reg FD is an abbreviation for the term: Regulation Fair Disclosure, which is a rule passed by the Securities and Exchange Commission in an effort to prevent selective disclosure by public companies to market professionals and certain shareholders.
7RIA is an acronym for Registered Investment Advisor which is a person or firm who advises high-net-worth individuals on investments and manages their portfolios. RIAs are required to register either with the Securities and Exchange Commission (SEC) or state securities administrators.
Touchstone Investments has partnered with Martijn Cremers to provide consulting services. Touchstone and Professor Cremers are independent of each other.
Disclosure:
Please note that this content was created as of the specific date indicated and reflects views as of that date. It will be kept solely for historical purposes and opinions may change without notice in reacting to shifting economic market, business and other conditions. Touchstone funds are distributed by Touchstone Securities Incorporated, a registered broker dealer and member FINRA and SIPC.
Disclosure:
This commentary is for informational purposes only and should not be used or construed as an offer to sell a solicitation of an offer to buy or a recommendation to buy, sell or hold any security. Investing involves risk, including the possible loss of principle and fluctuation of value. Past performance is no guarantee of future results.
Please consider the investment objectives, risks, charges, and expenses of the fund carefully before investing. The prospectus and the summary prospectus contain this and other information about the fund. To obtain a prospectus or a summary prospectus, contact your financial professional or download and/or request one at touchstoneinvestments.com/resources, or call Touchstone at (800) 638-8194. Please read the prospectus and/or summary prospectus carefully before investing.
