Touchstone Investments has dropped ClearArc Capital as a subadvisor on the $811.5 million Touchstone Flexible Income fund due to parts of the Cincinnati-based boutique facing closure by its parent company.
ClearArc Capital is a subsidiary of Fifth Third Bank, which reportedly plans to shut down parts of the asset manager that run equity, core plus fixed income and strategic income strategies.
According to a report in the Cincinnati Business Courier, this will leave ClearArc running just traditional fixed income strategies.
A Fifth Third spokeswoman told the Cincinnati Business Courier that the rationale behind the closure of the other ClearArc strategies was because they lacked the critical mass to be successful.
Clear Arc had $7.6 billion in assets as of June 30 this year.
As a result of the move, Touchstone has decided to cut ClearArc from its Flexible Income fund and replace it with Bramshill Investments.
Four Citywire AAA-rated managers from ClearArc Capital - John Cassady, Peter Kwiatkowski, Mitchell L. Stapley and David L. Withrow have been replaced by Bramshill Investments’ chief investment officer Art DeGaetano, Derek Pines, Michael Hirschfield and Paul van Lingen.
Bramshill will manage the Touchstone fund based on its existing income performance strategy, which is also available via the Bramshill Income Performance fund.
Launched in 2016, it is ranked fourth out of 123 Core Bond Funds tracked by Citywire for one-year total returns to the end of October. Over that period, it returned 2.2% compared to the average fund in the category, which returned -1.7%, and the Bloomberg Barclays US Aggregate Bond TR index’s -1.34%.
Launched in 1998, the Touchstone Flexible Income fund is ranked 10 out of 17 Flexible Income Funds tracked by Citywire for three-year total returns to the end of October. Over that period, it returned 10.1% compared to the average fund in the category, which returned 10.8%, and the Bloomberg Barclays US Aggregate Bond TR index’s -1.34%.
Touchstone Investments is a Cincinnati, Ohio-based mutual fund shop that offers 39 funds, including three funds of funds, each subadvised by a single asset management firm, with a combined total of almost $20 billion in assets under management.
To see how Touchstone's top gatekeeper Tim Paulin picks subadvisors, please click here.