December 31, 2022
Annual Report
Touchstone ETF Trust
Touchstone Dividend Select ETF
Touchstone Strategic Income Opportunities ETF
Touchstone Ultra Short Income ETF
Touchstone US Large Cap Focused ETF

 

Table of Contents
  Page
Letter from the President 3
Management's Discussion of Fund Performance (Unaudited) 4-14
Tabular Presentation of Portfolios of Investments (Unaudited) 15-16
Portfolios of Investments:  
Touchstone Dividend Select ETF 17
Touchstone Strategic Income Opportunities ETF 18-20
Touchstone Ultra Short Income ETF 21-22
Touchstone US Large Cap Focused ETF 23
Statements of Assets and Liabilities 24
Statements of Operations 25
Statements of Changes in Net Assets 26
Financial Highlights 27
Notes to Financial Statements 28-37
Report of Independent Registered Public Accounting Firm 38
Other Items (Unaudited) 39-43
Management of the Trust (Unaudited) 44-46
Privacy Protection Policy 47
This report identifies the Funds' investments on December 31, 2022. 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.
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Table of Contents
Letter from the President
Dear Shareholder:
We are pleased to provide you with the Touchstone ETF Trust Annual Report. Inside you will find key financial information, as well as manager commentaries for the Funds, from the Funds’ inception dates through the period ended December 31, 2022.
For the calendar year 2022, the U.S. Federal Reserve (Fed) initiated a series of Fed Funds rate hikes to combat persistent inflation.  Over the course of the year, the Fed raised overnight rates by over 4 percent in an effort to slow down economic growth.  The Fed’s attempt to engineer a “soft landing” for the economy created uncertainty at times throughout the year.  This uncertainty contributed to a selloff in nearly every major asset class in the capital markets, a rare negative annual return for both U.S. equities and fixed income markets.  Outside the U.S., global economic growth slowed due to various reasons such as the unexpected Russian invasion of Ukraine in February, disrupted supply chains and trade from continued COVID-related lockdowns in China, and political turbulence in the U.K.  However, the capital markets absorption of the Russian-Ukrainian conflict by mid-year and the loosening of China’s COVID lockdowns later in the year, were not enough to squelch economic headwinds that had been occurring since the beginning of 2022 including higher rates of inflation, slowing demand and higher energy prices.  
U.S. equity markets reported negative results for the year.  The equity style shift from Growth to Value that began in late 2020 continued throughout 2022.  Within the domestic markets, large cap value stocks outperformed their growth counterparts on a relative basis.  The aforementioned Fed rate hikes disproportionately impacted growth stocks due to their higher implied growth rates and longer duration of earnings growth included in their valuation multiples.  Value stocks generally benefit from higher commodity costs (e.g. Energy sector) and when equity investors seek refuge in defensive sectors such as Consumer Staples and Health Care – both of which occurred during 2022. 
In the fixed income markets, Fed rate hikes and persistent inflation pushed shorter maturity yields up compared to longer maturities on the yield curve, providing a headwind for the investment grade bonds.  Over the full year, credit spreads did not widen significantly despite slowing economic growth, hence below investment grade bonds outperformed their investment grade peers due to their yield advantage. 
We are reminded especially in periods like these of the importance of the steady hands of financial professionals, trust in your investment strategy, and the risks of trying to time the market. Additionally, we believe that environments that are more volatile create more opportunity for active managers to add value, especially those that are Distinctively Active with high Active Share.  We greatly value your continued support. Thank you for including Touchstone as part of your investment plan.
Sincerely,
E. Blake Moore Jr.
President
Touchstone ETF Trust
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Table of Contents
Management's Discussion of Fund Performance (Unaudited)
Touchstone Dividend Select ETF
Sub-Advised by Fort Washington Investment Advisors, Inc.
Investment Philosophy
The Touchstone Dividend Select ETF (the "Fund") seeks current income and capital appreciation by investing primarily in a portfolio of 40-55 dividend-paying large-capitalization equities.
Fund Performance
The Touchstone Dividend Select ETF outperformed its benchmark, the Russell 1000® Value Index, since its inception on August 2, 2022 through December 31, 2022. The Fund’s total return was 1.94 percent compared to the benchmark’s total return of 0.52 percent.
Market Environment
The period was characterized by increased volatility and high uncertainty amid persistently high inflation, tightening financial conditions, and increased geopolitical conflicts. Inflation remained elevated in the period and the U.S. Federal Reserve (Fed) solidified its hawkish stance, but the end of the period represented an important transition for markets. Data indicated slower growth and signs that inflation is beginning to ease, and the Fed slowed the pace of hikes.
Treasury yields moved sharply higher during the second half of the year, with short-term rates moving along with Fed hikes and at a faster pace than long-term rates. Following a 0.75% rate increase in November, the Fed stepped down the rate of increase to 0.50% in December, for a cumulative total of 4.25% of rate increases in 2022. Current expectations are for the Fed Funds rate to reach 4.75-5.00% in early-2023 and remain above 4.50% for the entire year. Credit spreads were somewhat volatile during the period but ended relatively unchanged to slightly tighter. 
US economic growth (GDP) in the third quarter 2022 was 3.2%, a rebound from prior quarters. The headline growth number was positively impacted by an outsized change in net exports which is unlikely to repeat, and the rest of the details indicated slower, near-trend growth.  Consumer and business demand rebounded from prior quarters, while residential investment (housing) and inventories subtracted from growth. This report, along with several other indicators, continues to signal that tighter financial conditions are having the desired effect of slowing the economy. 
While other economic indicators show weakness, job gains and wages have remained solid, supporting spending. Higher consumer income, along with accumulated savings from pandemic-era programs, have enabled consumers to maintain solid levels of spending.
Business spending rebounded somewhat during the period, but forward-looking data indicates further softening and represents another downside risk. The downshift in global growth has negatively impacted demand and various surveys of business confidence have fallen sharply over the past several months.  Importantly, inventories are plentiful and supply chains have largely normalized, contributing to reduced inflation pressures from this sector of the economy.
U.S. equities declined over the period as investors grappled with tight financial conditions and the looming possibility of an economic slowdown. The worst performing sectors in the Index for the period were Real Estate, Communication Services, and Information Technology. The benchmark sectors that outperformed the most during the period were Energy, Materials, and Consumer Staples.
Portfolio Review
The Fund’s outperformance was driven by positive stock selection within the Consumer Discretionary, Communication Services, and Materials sectors. Sectors where the Fund underperformed were Utilities, Energy, and Information Technology. The Fund’s overweight in Information Technology was a headwind which partially offset the Fund’s positive stock selection. Information Technology underperformed as higher interest rates and slowing economic growth pressured valuations for higher growth, long duration stocks.
Among the individual contributors to relative performance were overweight positions in Caterpillar Inc. (Industrials sector) ("Caterpillar"), and Merck & Co. Inc. (Health Care sector), and an underweight position to Starbucks Corp. (Consumer Discretionary sector) ("Starbucks").
Caterpillar outperformed during the period and added to performance. The company reported strong third quarter results on better than expected equipment demand, a welcomed change in tone from prior quarters.  A zero weight exposure to Meta Platforms Inc. ("Meta") contributed to relative performance during the period. Meta fell nearly 25% after reporting quarterly
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Table of Contents
Management's Discussion of Fund Performance (Unaudited) (Continued)
results that missed expectations on advertising revenue and increased spending on the Metaverse. Meta does not pay a dividend, resulting in an underweight position for the Fund.
Starbucks also contributed to relative returns. Starbucks had been a relative underperformer for much of 2022 until the third quarter. Headwinds from lingering effects from the global pandemic, unionization efforts, and CEO uncertainty has pressured the stock for much of the past year. The third quarter brought a shift in tone as the company announced its new CEO while also providing an update on strategic guidance that impressed investors.
Outlook and Conclusion
Looking ahead, the key issue for investors is whether Fed tightening will spawn a U.S. recession, and if so, how severe it will be.
The consensus among economists is that a recession will unfold in 2023, as aggressive interest rate hikes by the Fed have resulted in a substantial tightening of financial market conditions. The positive aspect is that most forecasters envision a recession that is short and mild.
Another consideration for investors is where the Fed Funds Rate will peak and when the Fed will relax policy. In this regard, Fed officials have emphasized their commitment to bring inflation back to the 2% average annual target. Fed chair Jerome Powell stated at the December Federal Open Markets Committee (FOMC) meeting that there is still work to do to ensure this goal is attained. The median forecast of FOMC members is the Fed funds rate will peak at 5.0%-5.25% early this year and remain there for the balance of 2023.
Our take is the outcome hinges on how high the unemployment rate increases. Because Fed officials anticipate only a modest rise in unemployment to 4.6%, they are focusing on bringing inflation down.  However, should unemployment rise to 5% or higher, we believe the Fed is more likely to lower rates. 
Finally, another consideration is that conditions abroad are worse than in the U.S. Europe already may be in recession as policymakers face the daunting task of alleviating shortages in natural gas stemming from Russia’s invasion of Ukraine. A spike in consumer price inflation in the Eurozone to 10% is further exacerbating the situation.
At the same time, the Chinese government confronts its biggest challenge since the COVID-19 pandemic struck three years ago. It recently had to scrap its zero tolerance policy in the wake of national protests, but it lacked a strategy to limit the fallout, and the country now faces a massive outbreak.
Our view is that if a U.S. recession were to materialize, it is likely to be less severe than recent recessions for two reasons: there are no major sectoral imbalances and consumer fundamentals remain healthy and have shown resilience to tightening financial conditions. Furthermore, we do not believe a recession is necessary to control inflation. Recent inflation data has continued to trend downward and forward-looking expectations remain anchored, both encouraging signs of progress and confidence in the Fed’s ability to control inflation.
Within the Fund, we are maintaining a cautious stance but are selectively finding bottom-up opportunities while reducing outperforming defensive names where valuations have become stretched. Earnings expectations remain elevated and are at risk to fall amid slowing economic growth. Despite most equity indices ending the year near or in a bear market, downside still remains should equity earnings deteriorate.
Although risks have risen, valuations have adjusted to reasonable levels and the long-term economic outlook is still promising. As such, we remain constructive on U.S. equities. As investors seek to avoid the risks of inflation, higher interest rates, and recession, dividend strategies are a compelling option. Dividend strategies have the potential to provide both capital appreciation and a growing stream of income while also providing a cushion through lower volatility during times of distress.
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Table of Contents
Management's Discussion of Fund Performance (Unaudited) (Continued)
Comparison of the Change in Value of a $10,000 Investment in the Touchstone Dividend Select ETF and the Russell 1000® Value Index
Cumulative Total Returns**
Touchstone Dividend Select ETF Since
Inception*
NAV 1.94%
Market Price 1.94%
Russell 1000® Value Index 0.52%
* The inception date of the Fund was August 2, 2022. The returns of the index listed above are based on the inception date of the Fund.
** Not annualized.
The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Investors buy and sell shares of an exchange-traded fund (“ETF”) at market price (not NAV) in the secondary market throughout the trading day. Shares of an ETF  are not individually available for direct purchase from or direct redemption to the ETF. The ETF’s per share NAV is the value of one share of the ETF and is calculated by dividing the value of total assets less total liabilities by the number of shares outstanding. Market price returns are typically based upon the official closing price of the ETF’s shares. These returns do not represent investors’ returns had they traded shares at other times. NAV and market price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and market price, respectively. As with other ETFs, NAV returns and market price returns may differ because of factors such as the supply and demand for Fund shares and investors’ assessment of the underlying value of the Fund’s portfolio securities.
Information showing the Fund’s net asset value, market price, premiums and discounts, and bid-ask spreads for various time periods is available by visiting the Fund’s website at TouchstoneInvestments.com/ETFs.
Notes to Chart
Russell 1000® Value Index measures those Russell 1000 companies with lower price-to-book ratios and lower expected growth values.
The Frank Russell Company (FRC) is the source and owner of the data contained or reflected in this material and all trademarks and copyrights related thereto. The material may contain confidential information and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. This is a Touchstone Investments presentation of the data, and FRC is not responsible for the formatting or configuration of this material or for any inaccuracy in the presentation thereof.
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Table of Contents
Management's Discussion of Fund Performance (Unaudited)
Touchstone Strategic Income Opportunities ETF
Sub-Advised by Fort Washington Investment Advisors, Inc.
Investment Philosophy
The Touchstone Strategic Income Opportunities ETF (the "Fund") seeks a high level of current income with a focus on capital preservation by investing primarily in income producing fixed income securities.
Fund Performance
The Touchstone Strategic Income Opportunities ETF outperformed its benchmark, the Bloomberg U.S. Aggregate Bond Index, since the Fund’s inception on July 21, 2022 through December 31, 2022.  The Fund’s total return was -0.03 percent compared to the benchmark’s total return of -3.93 percent.
Market Environment
The second half of 2022 was characterized by increased volatility and high uncertainty amid persistently high inflation, tightening financial conditions, and increased geopolitical conflicts.  Inflation remained elevated in the third quarter and the U.S. Federal Reserve (“Fed”) solidified its hawkish stance, but the fourth quarter represented an important transition for markets. Data indicated slower growth and signs that inflation is beginning to ease, and the Fed slowed the pace of hikes.
Treasury yields moved sharply higher during the second half of 2022, with short-term rates moving along with Fed hikes and at a faster pace than long-term rates.  Following a 0.75% rate increase in November, the Fed stepped down the rate of increase to 0.50% in December, for a cumulative total of 4.25% of rate increases in 2022.  Current expectations are for the Fed Funds rate to reach 4.75-5.00% in early-2023 and remain above 4.50% for the entire year.  Credit spreads were somewhat volatile during the period but ended relatively unchanged to slightly tighter. 
U.S. economic growth (GDP) in third quarter 2022 was 3.2%, a rebound from prior quarters. The headline growth number was positively impacted by an outsized change in net exports which is unlikely to repeat, and the rest of the details indicated slower, near-trend growth.  Consumer and business demand rebounded from prior quarters, while residential investment (housing) and inventories subtracted from growth. This report, along with several other indicators, continues to indicate that tighter financial conditions are having the desired effect of slowing the economy. 
Business spending rebounded somewhat in the period, but forward-looking data indicates further softening and represents another downside risk.  The downshift in global growth has negatively impacted demand and various surveys of business confidence have fallen sharply over the past several months.  Importantly, inventories are plentiful and supply chains have largely normalized, contributing to reduced inflation pressures from this sector of the economy.
An improvement in the inflation picture was a key driver of markets in the period, and will remain crucially important into 2023. During the period, inflation data decelerated notably, driven by declining commodity and other goods prices.  Services inflation remained strong, but forward-looking data indicates it will also move lower in mid-2023.  Along with slower growth, the improvement in inflation data allowed the Fed to downshift to a 0.50% rate increase in December. Further progress is needed to confidently say that inflation is heading back to 2.0%, but we believe recent optimism is justified and expect inflation to drift lower in 2023.  For their part, we believe the Fed will continue to indicate tighter policy as inflation will remain well above target for the next several months. However, in our view, the path of policy priced into markets is appropriate and slower growth/lower inflation will put downward pressure on rates in 2023.
Credit spreads across sectors and quality ranges are generally in the 50-60 percentile relative to history after the recovery late in the period. Credit spreads reflect some uncertainty, but are not indicating significant concern of an imminent or deep recession. If the economy slows more/faster than expected, credit spreads are likely to widen. However, if a soft landing is achieved or a recession is shallow, the current level of spreads is compelling. As a result, we believe current valuations support a modest overweight to risk in portfolios.
Portfolio Review
The Fund’s outperformance during the period occurred as interest rate positioning added to relative performance versus the benchmark. The portfolio maintained a duration between 4 and 5 years during the period, compared to 6 to 6.5 years for the benchmark.  Interest rates rose materially during the period, resulting in outperformance as the portfolio was positioned with a shorter duration compared to the benchmark. The yield curve moved materially higher and the curve flattened as short-term rates moved higher than long-term rates. 
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Table of Contents
Management's Discussion of Fund Performance (Unaudited) (Continued)
Sector allocation added to relative performance during the period. An overweight allocation to High Yield and Emerging Market Debt were the primary drivers of positive sector allocation. The sectors outperformed as credit spreads tightened.
Security selection was also a positive factor for relative performance. All sectors generated positive security selection during the period, including Investment Grade Credit, Securitized, High Yield, and Emerging Markets Debt.
The Fund reduced its exposure to Investment Grade Credit and High Yield during the period, and modestly increased Emerging Markets Debt. Spreads were volatile but tightened during the period and valuations became less compelling, presenting an opportunity to modestly reduce exposure to spread sectors.
Outlook and Conclusion
Overall growth has slowed to below-trend pace, but expected softening in job growth is a downside risk over coming months. Inflation has declined from recent highs, a welcome signal for markets. However, further deceleration is needed throughout 2023 to move inflation back toward 2.0 percent. The Fed has aggressively raised rates to combat inflation and we believe will continue to indicate restrictive policy until they see a string of data that confirms a lower inflation trajectory. We believe slowing growth and tight monetary policy represents the biggest risk to markets, but we do not believe a hard recession is necessary to control inflation. As our view of the economy and monetary policy changes, we will adjust positioning as these risks evolve. 
We believe the Fund is positioned to perform well in a stable to improving market environment. We believe an overweight to credit sectors should benefit investors as valuations are generally fair at current levels.  The Fund had previously and currently continues to generate an above average yield through a high conviction multi-sector approach, and we believe should also perform well in a stable environment through its excess carry. The portfolio's yield rose to historically high levels during the period and we believe should help offset potential risks. In today’s volatile and uncertain environment, we believe the Fund provides a compelling solution for fixed income investors due to its flexible and risk-oriented approach.
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Table of Contents
Management's Discussion of Fund Performance (Unaudited) (Continued)
Comparison of the Change in Value of a $10,000 Investment in the Touchstone Strategic Income Opportunities ETF and the Bloomberg U.S. Aggregate Bond Index
Cumulative Total Returns**
Touchstone Strategic Income Opportunities ETF Since
Inception*
NAV -0.03%
Market Price 0.25%
Bloomberg U.S. Aggregate Bond Index -3.93%
* The inception date of the Fund was July 21, 2022. The returns of the index listed above are based on the inception date of the Fund.
** Not annualized.
The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Investors buy and sell shares of an exchange-traded fund (“ETF”) at market price (not NAV) in the secondary market throughout the trading day. Shares of an ETF  are not individually available for direct purchase from or direct redemption to the ETF. The ETF’s per share NAV is the value of one share of the ETF and is calculated by dividing the value of total assets less total liabilities by the number of shares outstanding. Market price returns are typically based upon the official closing price of the ETF’s shares. These returns do not represent investors’ returns had they traded shares at other times. NAV and market price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and market price, respectively. As with other ETFs, NAV returns and market price returns may differ because of factors such as the supply and demand for Fund shares and investors’ assessment of the underlying value of the Fund’s portfolio securities.
Information showing the Fund’s net asset value, market price, premiums and discounts, and bid-ask spreads for various time periods is available by visiting the Fund’s website at TouchstoneInvestments.com/ETFs.
Note to Chart
Bloomberg U.S. Aggregate Bond Index is an unmanaged index comprised of U.S. investment grade, fixed rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and ten years.
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Table of Contents
Management's Discussion of Fund Performance (Unaudited)
Touchstone Ultra Short Income ETF
Sub-Advised by Fort Washington Investment Advisors, Inc.
Investment Philosophy
The Touchstone Ultra Short Income ETF (the “Fund”) seeks maximum total return consistent with the preservation of capital by primarily investing in a diversified portfolio of fixed income securities of different maturities, including U.S. Treasury securities, U.S. government agency and U.S. government-sponsored enterprise securities, corporate bonds, mortgage-backed securities, commercial mortgage-backed securities, asset-backed securities, municipal bonds, collateralized loan obligations  and cash equivalent securities including repurchase agreements and commercial paper. While the Fund may invest in securities of any maturity or duration, interest rate risk is managed by seeking to maintain an effective duration of one year or less under normal market conditions.
Fund Performance
The Touchstone Ultra Short Income ETF underperformed its primary benchmark, the ICE BofA 3-Month U.S. Treasury Bill Index, and outperformed its secondary benchmark, the ICE BofA 1-Year U.S. Treasury Note Index, since its inception on August 4, 2022 through December 31, 2022. The Fund’s total return was 0.87 percent while the total returns of its benchmarks were 1.22 percent and 0.20 percent, respectively.
Market Environment
The third quarter 2022 began on an optimistic note, as moderating energy and commodity prices fueled investor optimism that inflation may have peaked, and that the U.S. Federal Reserve (Fed) might soon be able to pare back its monetary tightening efforts and achieve the elusive soft landing. Risk markets enjoyed a brief rally—a welcomed reprieve from the steady negativity of the first half of the year. Optimism faded quickly, however, when Federal Reserve Chairman Jerome Powell delivered the annual speech at the Jackson Hole, Wyoming conference on August 26, 2022. While markets’ momentary optimism implied some expectation of a pivot to dovishness, Powell instead delivered a strong hawkish message. He reiterated the urgency of the Fed getting inflation under control at all costs, and conveyed his view that we were still a long way away from achieving that mandate.
August consumer price index (CPI) data was released in mid-September, showing worse-than expected persistence across all key segments—even acceleration in some areas. This undoubtedly contributed to the Fed’s decision to hike rates by 75 basis points in September (the third consecutive rate hike of that magnitude), bringing cumulative year-to-date Fed hikes to 300 basis points. In spite of this strong degree of monetary tightening, the labor market remained resilient, posting solid job gains throughout the quarter, and even a slight decline in the unemployment rate—back to the mid-summer low of 3.5%
The fourth quarter started with continued volatility across all markets and a divergence in spread movements across the fixed income sectors.  With the Fed raising rates at the end of the third quarter, markets continued to process whether a soft landing might actually be achievable, or alternatively how soon a recession might start. Corporate spreads generally trended tighter during the quarter, while securitized spreads spent the first half of fourth quarter widening. That changed mid-November as buyer demand shifted into securitized, driving spreads in tighter throughout the remainder of the quarter. The Treasury curve was dynamic throughout the quarter, with movements divisible into three parts: during October, the entire curve shifted higher, as the short end (6 months and in) moved +60-90 basis points (bps) and the long end rose by 20-40 bps.  A dramatic reversal occurred in November, as the front end 3 months and in rose by 25-30 bps, while the 3+year rallied 20-45 bps. December saw reversal again, as the longer part of the curve (5 years and longer) moved 20-25 bps higher and shorter tenors moved 10-15 bps higher. All-in for the quarter, markets saw short rates (1 year and in) rise 75-130 bps and longer rates move 5-10 bps in either direction.
The Fed raised rates twice in the period—75 bps in November and 50 basis points in December. After the November meeting, markets processed the possibility that the economy was slowing, and that we could see a hard landing. Markets began anticipating that the Fed would soon be pivoting from its hawkish tone, which helped drive the rally in longer treasury rates. The momentum was disrupted in December, however, as the Fed doubled down on its hawkish tone, reiterating the need to drag inflation down to the 2% target. This contrasted sharply with the September CPI of 7.7 and the October CPI at 7.1, although higher rates are certainly starting to have an effect on inflation.  The Fed dots plot from the December meeting shows the Fed expecting no rate cuts until at least 2024, after rates topping off just above 5% in 2023.
The Fed ended the period maintaining their hawkish bias. Markets still generally believe there will be a recession, but are also expecting that rates will need to remain “higher for longer” in order to get inflation down to the target level. The Russian/Ukrainian war continues to threaten not just geopolitical stability but also energy and commodity markets, although a milder winter is helping by softening demand on the energy front.  China is rescinding COVID restrictions to open up markets and manufacturing, while domestically we are starting to see large corporate layoffs being announced. Gross domestic product consensus forecast for 2023 is a soft 0.3%.
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Table of Contents
Management's Discussion of Fund Performance (Unaudited) (Continued)
Portfolio Review
The largest driver of performance was carry. Real short rates increased.  While spreads tightened overall for the quarter, this was not enough to offset the movements in rates.  Floating rate assets provided significant income, as coupons continued to reset at the higher rates.
Spreads across ultra short duration subsectors were volatile during the period. Markets stabilized toward period-end, especially at the top of the capital structure (AAA/AA). The strongest nominal subsector returns in the fund for the period were Collateralized Loan Obligations, Corporates, and Residential Mortgage-Backed Securities, while the lowest-returning subsectors were Commercial Mortgage-Backed Securities, and Asset- Backed Securities.
The Fund’s duration positioning at period end remained at the short end of our historical range for Ultra Short portfolios at 0.46 years.  Given the rise in rates on the short end, it detracted from performance as longer duration 2.5-3 year assets tightened and yield curve was lower.
The rise in rates in the front end added to the carry on the portfolio.  The reset to higher rates for floating rate assets also increased investment income in the portfolio.  Carry offset the move in short rates, resulting in a positive return for the fourth quarter.
Outlook and Conclusion
We expect to see continued volatility to start the year but more stabilization in fund outflows. We also expect spreads to tighten given slower new issue pipeline for structured products. We believe the key driver for markets will continue to be the Fed as markets anticipate how high rates will go, and how long they will have to remain elevated in order to tame inflation. Financial conditions are tightening, given the higher rate environment, and consumers have continued to increase their overall debt load with higher credit card utilization rates. Nonetheless, most consumer and corporate balance sheets seem to be in good shape heading into this higher rate environment. 
With the Fed keeping close watch on the markets, and our expectation for volatility to remain elevated, we continue to favor floating rate assets and shorter duration on our fixed rate securities. Although we increased cash equivalents during the fourth quarter as a defensive measure for potential seasonal outflows, we expect to reduce that to a normalized 7-10% range going forward.  We continue to favor structured products over corporates given the pickup in spread and quality.
Going forward we believe the Fund is positioned well. The portfolio holds most securities marked at a discount, and will benefit from a “pull to par” as those bonds amortize and mature. We believe the higher yields from the move in rates and spreads should provide a higher carry than we have seen in quite a while, and we look to take advantage of that opportunity by reinvesting portfolio cash flow into higher-yielding assets.  We still expect volatility to remain elevated, and we do expect to see some degree of recession in the near-term. With overall fund credit quality of AA-, we believe the Fund is positioned well to withstand that type of environment.
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Table of Contents
Management's Discussion of Fund Performance (Unaudited) (Continued)
Comparison of the Change in Value of a $10,000 Investment in the Touchstone Ultra Short Income ETF, the ICE BofA 3-Month U.S. Treasury Bill Index and the ICE BofA 1-Year U.S. Treasury Note Index
Cumulative Total Returns**
Touchstone Ultra Short Income ETF Since
Inception*
NAV 0.87%
Market Price 0.90%
ICE BofA 3-Month U.S. Treasury Bill Index 1.22%
ICE BofA 1-Year U.S. Treasury Note Index 0.20%
* The inception date of the Fund was August 4, 2022. The returns of the index listed above are based on the inception date of the Fund.
** Not annualized.
The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Investors buy and sell shares of an exchange-traded fund (“ETF”) at market price (not NAV) in the secondary market throughout the trading day. Shares of an ETF  are not individually available for direct purchase from or direct redemption to the ETF. The ETF’s per share NAV is the value of one share of the ETF and is calculated by dividing the value of total assets less total liabilities by the number of shares outstanding. Market price returns are typically based upon the official closing price of the ETF’s shares. These returns do not represent investors’ returns had they traded shares at other times. NAV and market price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and market price, respectively. As with other ETFs, NAV returns and market price returns may differ because of factors such as the supply and demand for Fund shares and investors’ assessment of the underlying value of the Fund’s portfolio securities.
Information showing the Fund’s net asset value, market price, premiums and discounts, and bid-ask spreads for various time periods is available by visiting the Fund’s website at TouchstoneInvestments.com/ETFs.
Notes to Chart
ICE BofA 3-Month U.S. Treasury Bill Index is an unmanaged index of Treasury securities maturing in 90 days that assumes reinvestment of all income.
ICE BofA 1-Year U.S. Treasury Note Index is an unmanaged index comprised of a single issue purchased at the beginning of the month and held for a full month. The issue selected at each month-end rebalancing is the outstanding two-year Treasury Note Bill that matures closest to, but, not beyond one year from the rebalancing date.
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Table of Contents
Management's Discussion of Fund Performance (Unaudited)
Touchstone US Large Cap Focused ETF
Sub-Advised by Fort Washington Investment Advisors, Inc.
Investment Philosophy
The Touchstone US Large Cap Focused ETF (the "Fund") seeks to provide investors with capital appreciation by investing in 25-45 U.S. companies of capitalizations above $5 billion at time of purchase that are trading below what is believed to be the estimate of their intrinsic value and have a sustainable competitive advantage or a high barrier to entry in place. The barrier(s) to entry can be created through a cost advantage, economies of scale, high customer loyalty or a government barrier (e.g. license or subsidy). Fort Washington believes that the strongest barrier to entry is the combination of economies of scale and high customer loyalty.
Fund Performance
The Touchstone US Large Cap Focused  ETF outperformed its benchmark, the S&P 500® Index, since its inception on July 27, 2022 through December 31, 2022.  The Fund’s total return was -3.25 percent compared to the benchmark’s total return of -3.82 percent.
Market Environment
U.S. equities declined over the five month period as investors grappled with tight financial conditions and the looming possibility of an economic slowdown. The worst performing sectors in the index for the period were Consumer Discretionary, Communication Services, and Real Estate. The benchmark sectors that outperformed the most during the period were Energy, Health Care, and Industrials.
Portfolio Review
Within the Fund’s holdings, sectors in which the Fund outperformed the benchmark include Energy, Materials, Industrials, Consumer Staples, Communication Services, Information Technology, and Health Care. Sectors where the Fund underperformed were Consumer Discretionary, Real Estate, and Financials. Sector allocation had a slightly negative impact to performance for the period.
Among the stocks that contributed to performance were Schlumberger Ltd. (Energy) ("Schlumberger"), Biomarin Pharmaceutical (Health Care) ("Biomarin"), and Hubbell Inc. (Industrials) ("Hubbell"). Schlumberger outperformed due to strong earnings and forward guidance as the company benefited from international oil and gas companies mobilizing rigs to capitalize on tight supply. Biomarin outperformed primarily due to third quarter results that surprised to the upside and promising activity in its pipeline. Hubbell outperformed primarily due to strong earnings results re-affirming that the company is a beneficiary of the need to improve the grid with the global energy transition.
Among the stocks that detracted the most from performance were Alphabet Inc. (Communication Services) ("Alphabet"), Amazon.com Inc. (Consumer Discretionary) ("Amazon"), and Salesforce Inc. (Information Technology) ("Salesforce"). Alphabet underperformed as online advertising has been under pressure for several reasons including consumer spending shifting toward offline channels post-COVID, inflationary pressures limiting discretionary spending, and Apple privacy changes impacting advertisers’ return on investment.  Amazon underperformed due to pull forward of demand and overbuilding of fulfillment capacity. Salesforce underperformed primarily due to concerns that macroeconomic headwinds would expand the length of its sales cycle and reduce deal sizes.
Outlook and Conclusion
Despite the fourth quarter rally in equities, the path for a soft landing remains narrow and we continue to see indications of the slowdown we thought was likely in the back half of 2022 and into 2023 mainly due to the lag effects of higher interest rates and higher prices. The labor market and consumer spending have been resilient buoyed by elevated pandemic savings. But with sustained tight financial conditions, we see additional downside risk to growth.
Based on our outlook, we have been mitigating risk through a combination of long standing elements of our process and gradual shifts in portfolio positioning. Several components seek to mitigate the impact of higher inflation and interest rates. First, we believe focusing on barriers to entry in fundamental analysis, specifically businesses with pricing power, is especially important today as companies look to pass on cost pressures. Second, consistently using conservative discount rates provides a cushion as rates rise. Last, prioritizing a margin of safety with each holding provides additional risk mitigation for challenging market environments. Additionally, we seek to gradually reduce portfolio risk in terms of both sector weights and exposures within sectors. Within sectors,
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Table of Contents
Management's Discussion of Fund Performance (Unaudited) (Continued)
we also take opportunities to swap out of positions in favor of new positions that come with some combination of fundamental risk reduction and higher margin of safety in valuation.
The Fund continues to emphasize businesses with higher barriers to entry and returns on capital. Portfolio positioning is fairly defensive as we look for opportunities that fit our framework through the volatility. We believe this risk posture combined with continued disciplined execution of our process will benefit the portfolio going forward.
Comparison of the Change in Value of a $10,000 Investment in the Touchstone US Large Cap Focused ETF and the S&P 500® Index
Cumulative Total Returns**
Touchstone US Large Cap Focused ETF Since
Inception*
NAV -3.25%
Market Price -3.29%
S&P 500® Index -3.82%
* The inception date of the Fund was July 27, 2022. The returns of the index listed above are based on the inception date of the Fund.
** Not annualized.
The performance of the above Fund does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Investors buy and sell shares of an exchange-traded fund (“ETF”) at market price (not NAV) in the secondary market throughout the trading day. Shares of an ETF are not individually available for direct purchase from or direct redemption to the ETF. The ETF’s per share NAV is the value of one share of the ETF and is calculated by dividing the value of total assets less total liabilities by the number of shares outstanding. Market price returns are typically based upon the official closing price of the ETF’s shares. These returns do not represent investors’ returns had they traded shares at other times. NAV and market price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and market price, respectively. As with other ETFs, NAV returns and market price returns may differ because of factors such as the supply and demand for Fund shares and investors’ assessment of the underlying value of the Fund’s portfolio securities.
Information showing the Fund’s net asset value, market price, premiums and discounts, and bid-ask spreads for various time periods is available by visiting the Fund’s website at TouchstoneInvestments.com/ETFs.
Note to Chart
S&P 500® Index is a group of 500 widely held stocks and is commonly regarded to be representative of the large capitalization stock universe.
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Table of Contents
Tabular Presentation of Portfolios of Investments (Unaudited)
December 31, 2022
The tables below provide each Fund’s credit quality and/or sector allocation. We hope it will be useful to shareholders as it summarizes key information about each Fund’s investments.
Touchstone Dividend Select ETF
Sector Allocation*(% of Net Assets)
Information Technology 23.2%
Health Care 13.6
Industrials 11.1
Consumer Discretionary 10.2
Financials 10.1
Consumer Staples 7.3
Communication Services 6.3
Energy 4.4
Materials 4.1
Utilities 3.2
Real Estate 2.7
Other Assets/Liabilities (Net) 3.8
Total 100.0%
Touchstone Strategic Income Opportunities ETF
Credit Quality**(% of Fixed Income Securities)
AAA/Aaa 21.7%
AA/Aa 4.5
A/A 7.6
BBB/Baa 41.7
BB/Ba 14.5
B/B 8.1
CCC 1.7
CC 0.2
Total 100.0%
Sector Allocation*(% of Net Assets)
Corporate Bonds 48.0%
U.S. Treasury Obligations 19.6
Asset-Backed Securities 11.9
Commercial Mortgage-Backed Securities 7.3
Common Stocks  
Industrials 0.8
Information Technology 0.8
Financials 0.7
Consumer Staples 0.4
Health Care 0.4
Materials 0.4
Energy 0.4
Communication Services 0.4
Sovereign Government Obligations 3.9
Non-Agency Collateralized Mortgage Obligations 2.0
Preferred Stocks  
Financials 0.3
Short-Term Investment Fund 1.0
Other Assets/Liabilities (Net) 1.7
Total 100.0%
 
* Sector classifications are based upon the Global Industry Classification Standard (GICS®).
** Credit quality ratings are from S&P Global Ratings ("S&P") and Moody's Investors Service (“Moody's”). If agency ratings differ, the higher rating will be used. Where no rating has been assigned, it may be for reasons unrelated to the creditworthiness of the issuer.
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Table of Contents
Tabular Presentation of Portfolios of Investments (Unaudited) (Continued)
Touchstone Ultra Short Income ETF
Credit Quality*(% of Fixed Income Securities)
AAA/Aaa 46.4%
AA/Aa 13.7
A/A 13.2
BBB/Baa 18.4
BB/Ba 1.3
Cash Equivalents 7.0
Total 100.0%
Touchstone US Large Cap Focused ETF
Sector Allocation**(% of Net Assets)
Information Technology 27.3%
Health Care 17.9
Financials 11.9
Communication Services 11.0
Industrials 8.6
Consumer Discretionary 6.6
Consumer Staples 4.8
Energy 4.4
Materials 1.7
Real Estate 1.2
Other Assets/Liabilities (Net) 4.6
Total 100.0%
* Credit quality ratings are from S&P Global Ratings ("S&P") and Moody's Investors Service (“Moody's”). If agency ratings differ, the higher rating will be used. Where no rating has been assigned, it may be for reasons unrelated to the creditworthiness of the issuer.
** Sector classifications are based upon the Global Industry Classification Standard (GICS®).
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Table of Contents
Portfolio of Investments
Touchstone Dividend Select ETF – December 31, 2022
Shares       Market
Value
  Common Stocks — 96.2%  
  Information Technology — 23.2%  
 4,032 Apple, Inc. $   523,878
   966 Broadcom, Inc.    540,120
10,290 Cisco Systems, Inc.    490,216
14,226 Intel Corp.    375,993
 4,032 International Business Machines Corp.    568,068
 1,470 KLA Corp.    554,234
 3,738 Microsoft Corp.    896,447
 8,106 Oracle Corp.    662,584
 3,822 QUALCOMM, Inc.    420,191
 3,066 Texas Instruments, Inc.    506,565
 2,978 Visa, Inc. - Class A    618,709
         6,157,005
  Health Care — 13.6%  
 2,856 AmerisourceBergen Corp.    473,268
 3,226 Bristol-Myers Squibb Co.    232,111
 5,154 CVS Health Corp.    480,301
 3,528 Johnson & Johnson    623,221
 7,301 Medtronic PLC    567,434
 5,670 Merck & Co., Inc.    629,086
 1,128 UnitedHealth Group, Inc.    598,043
         3,603,464
  Industrials — 11.1%  
 2,968 3M Co.    355,922
 2,184 Caterpillar, Inc.    523,199
 2,502 Eaton Corp. PLC    392,689
 1,302 Lockheed Martin Corp.    633,410
 5,964 Raytheon Technologies Corp.    601,887
 5,967 Stanley Black & Decker, Inc.    448,241
         2,955,348
  Consumer Discretionary — 10.2%  
 1,882 Dollar General Corp.    463,442
 1,680 Home Depot, Inc. (The)    530,645
 2,065 McDonald's Corp.    544,189
 6,300 Starbucks Corp.    624,960
 4,284 Yum! Brands, Inc.    548,695
         2,711,931
  Financials — 10.1%  
15,116 Bank of America Corp.    500,642
   939 BlackRock, Inc.    665,404
 1,764 Goldman Sachs Group, Inc. (The)    605,722
 3,444 JPMorgan Chase & Co.    461,840
10,836 Wells Fargo & Co.    447,419
         2,681,027
  Consumer Staples — 7.3%  
 7,056 Coca-Cola Co. (The)    448,832
 2,646 PepsiCo, Inc.    478,026
 5,513 Philip Morris International, Inc.    557,971
 3,318 Walmart, Inc.    470,459
         1,955,288
Shares       Market
Value
     
  Communication Services — 6.3%  
21,079 AT&T, Inc. $   388,065
13,198 Comcast Corp. - Class A    461,534
10,878 Fox Corp. - Class A    330,365
12,883 Verizon Communications, Inc.    507,590
         1,687,554
  Energy — 4.4%  
 5,931 Exxon Mobil Corp.    654,190
 4,077 Valero Energy Corp.    517,208
         1,171,398
  Materials — 4.1%  
 1,620 Air Products & Chemicals, Inc.    499,381
 8,728 DuPont de Nemours, Inc.    599,003
         1,098,384
  Utilities — 3.2%  
 6,300 Dominion Energy, Inc.    386,316
 4,410 Duke Energy Corp.    454,186
           840,502
  Real Estate — 2.7%  
 1,919 American Tower Corp. REIT    406,559
 2,562 Simon Property Group, Inc. REIT    300,984
           707,543
  Total Common Stocks $25,569,444
  Total Investment Securities—96.2%
(Cost $25,198,627) 		$25,569,444
  Other Assets in Excess of Liabilities — 3.8%  1,000,816
  Net Assets — 100.0% $26,570,260
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
Common Stocks $25,569,444 $— $— $25,569,444
See accompanying Notes to Financial Statements.
 
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Table of Contents
Portfolio of Investments
Touchstone Strategic Income Opportunities ETF – December 31, 2022
Principal
Amount 		      Market
Value
  Corporate Bonds — 48.0%  
  Financials — 10.3%  
$  800,000 Allstate Corp. (The), Ser B, 5.750%, 8/15/53 $   752,000
   826,000 Bank of Nova Scotia (The) (Canada), 3.625%, 10/27/81    602,567
   831,000 Barclays PLC (United Kingdom), 2.894%, 11/24/32    635,350
   363,000 Charles Schwab Corp. (The), 5.000%(A)    331,418
   363,000 Charles Schwab Corp. (The), Ser H, 4.000%(A)    289,474
   576,000 Citigroup, Inc., Ser W, 4.000%(A)    501,765
   412,000 Corestates Capital III, 144a, (3M LIBOR +0.570%), 5.176%, 2/15/27(B)    383,740
   327,000 Credit Acceptance Corp., 6.625%, 3/15/26    309,878
   561,000 First Maryland Capital II, (3M LIBOR +0.850%), 5.290%, 2/1/27(B)    518,603
   230,000 FirstCash, Inc., 144a, 4.625%, 9/1/28    201,931
   898,000 Golub Capital BDC, Inc., 2.050%, 2/15/27    731,248
   422,000 Icahn Enterprises LP / Icahn Enterprises Finance Corp., 5.250%, 5/15/27    386,383
   650,000 JPMorgan Chase & Co., 5.717%, 9/14/33    639,171
   538,000 Morgan Stanley, 5.297%, 4/20/37    493,522
   611,000 PNC Capital Trust, (3M LIBOR +0.570%), 5.331%, 6/1/28(B)    563,270
   604,000 Prudential Financial, Inc., 5.125%, 3/1/52    549,640
   419,000 Sabra Health Care LP REIT, 3.900%, 10/15/29    351,455
   815,000 Sixth Street Specialty Lending, Inc., 2.500%, 8/1/26†    713,832
   832,000 Truist Bank, Ser A, (3M LIBOR +0.670%), 5.320%, 5/15/27(B)    771,041
  508,000 Truist Financial Corp., Ser Q, 5.100%(A)    469,900
        10,196,188
  Consumer Discretionary — 7.2%  
   783,000 Brunswick Corp., 4.400%, 9/15/32    663,241
   385,000 Carriage Services, Inc., 144a, 4.250%, 5/15/29    305,564
   413,000 Churchill Downs, Inc., 144a, 4.750%, 1/15/28    369,635
   369,000 Coty, Inc. / HFC Prestige Products, Inc. / HFC Prestige International US LLC, 144a, 4.750%, 1/15/29    333,945
   727,000 Ferguson Finance PLC, 144a, 4.650%, 4/20/32    663,827
   204,000 Ford Motor Co., 4.750%, 1/15/43    146,520
   227,000 Ford Motor Credit Co. LLC, 4.125%, 8/17/27    203,165
   310,000 GEMS MENASA Cayman Ltd. / GEMS Education Delaware LLC (United Arab Emirates), 7.125%, 7/31/26    297,850
1,173,000 General Motors Financial Co., Inc., 3.100%, 1/12/32    922,368
   525,000 GENM Capital Labuan Ltd. (Malaysia), 144a, 3.882%, 4/19/31    393,333
   831,000 Imperial Brands Finance PLC (United Kingdom), 144a, 3.500%, 7/26/26    764,654
   395,000 Royal Caribbean Cruises Ltd., 144a, 5.375%, 7/15/27    319,832
   722,000 Toll Brothers Finance Corp., 3.800%, 11/1/29    617,163
   168,000 Warnermedia Holdings, Inc., 144a, 4.279%, 3/15/32    138,578
   727,000 Warnermedia Holdings, Inc., 144a, 5.141%, 3/15/52    531,086
  529,000 Wynn Macau Ltd. (Macao), 144a, 4.875%, 10/1/24†    499,449
         7,170,210
  Industrials — 6.8%  
   377,000 ADT Security Corp. (The), 144a, 4.875%, 7/15/32    320,385
   425,000 American Axle & Manufacturing, Inc., 6.500%, 4/1/27    383,435
   367,000 Amsted Industries, Inc., 144a, 4.625%, 5/15/30    312,868
   267,000 Boeing Co. (The), 5.805%, 5/1/50    248,585
   381,000 Canpack SA / Canpack US LLC (Poland), 144a, 3.125%, 11/1/25    333,825
   415,000 Cimpress PLC (Ireland), 144a, 7.000%, 6/15/26    286,890
   458,000 Fortress Transportation & Infrastructure Investors LLC, 144a, 6.500%, 10/1/25    430,613
   634,000 General Electric Co., Ser D, (3M LIBOR +3.330%), 8.099%(A)    622,869
   453,000 Granite US Holdings Corp., 144a, 11.000%, 10/1/27    477,349
   783,000 Mohawk Industries, Inc., 3.625%, 5/15/30†    676,507
  782,000 Oshkosh Corp., 3.100%, 3/1/30     661,555
Principal
Amount 		      Market
Value
     
  Industrials — (Continued)  
$  434,000 Pactiv Evergreen Group Issuer, Inc. / Pactiv Evergreen Group Issuer LLC, 144a, 4.000%, 10/15/27 $   384,675
   392,000 Seaspan Corp. (Hong Kong), 144a, 5.500%, 8/1/29    297,058
   363,000 Stericycle, Inc., 144a, 3.875%, 1/15/29    316,717
   322,000 TransDigm, Inc., 144a, 6.250%, 3/15/26    317,553
  753,000 Weir Group PLC (The) (United Kingdom), 144a, 2.200%, 5/13/26    668,580
         6,739,464
  Energy — 4.9%  
   502,000 Cenovus Energy, Inc. (Canada), 5.250%, 6/15/37    459,354
   344,000 CQP Holdco LP / BIP-V Chinook Holdco LLC, 144a, 5.500%, 6/15/31    300,487
   408,000 DCP Midstream Operating LP, 144a, 5.850%, 5/21/43    398,012
   218,000 Genesis Energy LP / Genesis Energy Finance Corp., 5.625%, 6/15/24    210,369
   158,000 Genesis Energy LP / Genesis Energy Finance Corp., 6.500%, 10/1/25    150,068
   382,000 Hilcorp Energy I LP / Hilcorp Finance Co., 144a, 6.000%, 2/1/31    329,497
   430,000 MC Brazil Downstream Trading SARL (Brazil), 144a, 7.250%, 6/30/31    354,679
   536,000 Murphy Oil Corp., 6.375%, 7/15/28    515,927
   596,000 NGPL PipeCo LLC, 144a, 7.768%, 12/15/37    622,675
   371,000 Parkland Corp. (Canada), 144a, 4.500%, 10/1/29    309,559
   770,000 Petroleos Mexicanos (Mexico), 6.625%, 6/15/35    558,944
   371,000 Precision Drilling Corp. (Canada), 144a, 6.875%, 1/15/29    345,404
  340,000 YPF SA (Argentina), 9.000%, 2/12/26    325,658
         4,880,633
  Utilities — 4.7%  
   727,000 CMS Energy Corp., 4.750%, 6/1/50    628,825
   598,000 Edison International, 4.125%, 3/15/28    555,713
   452,000 Edison International, Ser B, 5.000%(A)    379,680
   450,000 Eskom Holdings SOC Ltd. (South Africa), 144a, 8.450%, 8/10/28    394,023
   513,000 FirstEnergy Transmission LLC, 144a, 5.450%, 7/15/44    480,025
   515,000 Minejesa Capital BV (Indonesia), 4.625%, 8/10/30    450,728
   598,000 Pacific Gas & Electric Co., 2.500%, 2/1/31    467,270
   658,000 PPL Capital Funding, Inc., Ser A, (3M LIBOR +2.665%), 7.395%, 3/30/67(B)    565,551
  844,000 WEC Energy Group, Inc., (3M LIBOR +2.112%), 6.719%, 5/15/67(B)    706,040
         4,627,855
  Communication Services — 3.9%  
   379,000 Arches Buyer, Inc., 144a, 4.250%, 6/1/28    296,416
   155,000 Belo Corp., 7.750%, 6/1/27    151,319
   472,000 British Telecommunications PLC (United Kingdom), 5.125%, 12/4/28    459,138
   341,000 British Telecommunications PLC (United Kingdom), 144a, 3.250%, 11/8/29    291,301
   597,000 CCO Holdings LLC / CCO Holdings Capital Corp., 144a, 4.250%, 2/1/31    478,863
   591,000 Charter Communications Operating LLC / Charter Communications Operating Capital, 6.484%, 10/23/45    535,229
   362,000 Connect Finco SARL / Connect US Finco LLC (United Kingdom), 144a, 6.750%, 10/1/26    335,487
   429,000 CSC Holdings LLC, 144a, 4.625%, 12/1/30    237,046
   374,000 Gray Escrow II, Inc., 144a, 5.375%, 11/15/31    269,523
  450,000 Paramount Global, 4.200%, 5/19/32     369,608
 
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Touchstone Strategic Income Opportunities ETF (Continued)
Principal
Amount 		      Market
Value
  Corporate Bonds — 48.0% (Continued)  
  Communication Services — (Continued)  
$  330,000 Stagwell Global, 144a, 5.625%, 8/15/29 $   272,111
  177,000 TEGNA, Inc., 5.000%, 9/15/29    167,938
         3,863,979
  Materials — 3.1%  
   890,000 Braskem Netherlands Finance BV (Brazil), 144a, 5.875%, 1/31/50    689,407
   781,000 Celanese US Holdings LLC, 6.165%, 7/15/27    771,438
   500,000 Freeport Indonesia PT (Indonesia), 144a, 5.315%, 4/14/32    458,617
   760,000 GCC SAB de CV, 144a, 3.614%, 4/20/32    632,500
   116,000 Hudbay Minerals, Inc. (Canada), 144a, 4.500%, 4/1/26    105,367
  550,000 OCP SA (Morocco), 3.750%, 6/23/31    459,800
         3,117,129
  Consumer Staples — 2.3%  
   285,000 Coruripe Netherlands BV (Brazil), 144a, 10.000%, 2/10/27    228,000
   571,000 JBS USA LUX SA / JBS USA Food Co. / JBS USA Finance, Inc., 144a, 6.500%, 12/1/52    543,344
   415,000 QVC, Inc., 4.375%, 9/1/28    247,963
   500,000 Turning Point Brands, Inc., 144a, 5.625%, 2/15/26    431,255
   450,000 Ulker Biskuvi Sanayi AS (Turkey), 144a, 6.950%, 10/30/25    377,303
  515,000 United Rentals North America, Inc., 3.750%, 1/15/32    420,152
         2,248,017
  Health Care — 1.9%  
   519,000 CVS Health Corp., 5.050%, 3/25/48    468,185
   361,000 Medline Borrower LP, 144a, 3.875%, 4/1/29    290,562
   368,000 MEDNAX, Inc., 144a, 5.375%, 2/15/30    319,781
   569,000 Mylan, Inc., 4.550%, 4/15/28    527,994
  369,000 US Acute Care Solutions LLC, 144a, 6.375%, 3/1/26    327,459
         1,933,981
  Real Estate — 1.9%  
   383,000 Iron Mountain, Inc. REIT, 144a, 4.875%, 9/15/27    352,207
   421,000 RHP Hotel Properties LP / RHP Finance Corp. REIT, 144a, 4.500%, 2/15/29    363,152
   703,000 SBA Tower Trust REIT, 144a, 6.599%, 1/15/28    705,231
   222,000 STORE Capital Corp. REIT, 4.500%, 3/15/28    200,558
  258,000 STORE Capital Corp. REIT, 4.625%, 3/15/29    231,829
         1,852,977
  Information Technology — 1.0%  
   372,000 Clarivate Science Holdings Corp., 144a, 4.875%, 7/1/29    316,330
   589,000 Micron Technology, Inc., 2.703%, 4/15/32    444,002
  258,000 Micron Technology, Inc., 6.750%, 11/1/29    262,969
         1,023,301
  Total Corporate Bonds $47,653,734
  U.S. Treasury Obligations — 19.6%
1,273,609 U.S. Treasury Bond, 0.125%, 2/15/52        824,712
2,925,000 U.S. Treasury Bond, 2.375%, 2/15/42      2,249,279
1,285,000 U.S. Treasury Bond, 3.250%, 5/15/42      1,134,213
3,600,000 U.S. Treasury Note, 0.500%, 11/30/23      3,463,594
4,950,000 U.S. Treasury Note, 0.750%, 5/31/26      4,420,002
8,015,000 U.S. Treasury Note, 2.750%, 8/15/32      7,324,959
  Total U.S. Treasury Obligations $19,416,759
  Asset-Backed Securities — 11.9%
   900,000 AMMC CLO 16 Ltd. (Cayman Islands), Ser 2015-16A, Class CR2, 144a, (3M LIBOR +1.950%), 5.961%, 4/14/29(B)        873,498
1,000,000 CFIP CLO Ltd. (Cayman Islands), Ser 2014-1A, Class BR, 144a, (3M LIBOR +1.850%), 5.791%, 7/13/29(B)        978,926
1,000,000 CFIP CLO Ltd. (Cayman Islands), Ser 2018-1A, Class D, 144a, (3M LIBOR +3.240%), 7.434%, 7/18/31(B)         884,882
Principal
Amount 		      Market
Value
  Asset-Backed Securities — 11.9% (Continued)
$1,099,688 Driven Brands Funding LLC, Ser 2020-1A, Class A2, 144a, 3.786%, 7/20/50     $   942,763
1,080,000 FOCUS Brands Funding LLC, Ser 2018-1, Class A2, 144a, 5.184%, 10/30/48        989,385
1,000,000 Franklin Park Place CLO I LLC (Cayman Islands), Ser 2022-1A, Class B, 144a, (TSFR3M +2.000%), 5.827%, 4/14/35(B)        935,881
1,000,000 Golub Capital Partners CLO 25M Ltd. (Cayman Islands), Ser 2015-25A, Class BR, 144a, (3M LIBOR +1.900%), 6.432%, 5/5/30(B)        955,122
1,019,738 Hardee's Funding LLC, Ser 2018-1A, Class A2II, 144a, 4.959%, 6/20/48        957,556
1,000,000 NBC Funding LLC, Ser 2021-1, Class B, 144a, 4.970%, 7/30/51        856,073
1,182,000 Neighborly Issuer LLC, Ser 2021-1A, Class A2, 144a, 3.584%, 4/30/51        945,211
   685,000 Prestige Auto Receivables Trust, Ser 2019-1A, Class E, 144a, 3.900%, 5/15/26        672,422
1,075,000 Tesla Auto Lease Trust, Ser 2021-A, Class E, 144a, 2.640%, 3/20/25      1,006,038
  987,500 Zaxby's Funding LLC, Ser 2021-1A, Class A2, 144a, 3.238%, 7/30/51        794,323
  Total Asset-Backed Securities $11,792,080
  Commercial Mortgage-Backed Securities — 7.3%
2,000,000 BBCMS Mortgage Trust, Ser 2022-C17, Class XD, 144a, 3.040%, 9/15/55(B)(C)(D)        408,010
   800,000 Benchmark Mortgage Trust, Ser 2020-B18, Class AGND, 144a, 3.744%, 7/15/53        679,253
   752,659 BX Commercial Mortgage Trust, Ser 2019-XL, Class A, 144a, (1M LIBOR +0.920%), 5.370%, 10/15/36(B)        743,380
1,250,000 BX Commercial Mortgage Trust, Ser 2020-VIV2, Class C, 144a, 3.542%, 3/9/44(B)(D)        979,261
   992,505 CHC Commercial Mortgage Trust 2019 - CHC, Ser 2019-CHC, Class D, 144a, (1M LIBOR +2.050%), 6.368%, 6/15/34(B)        911,947
1,125,000 Citigroup Commercial Mortgage Trust, Ser 2013-375P, Class C, 144a, 3.518%, 5/10/35(B)(D)      1,036,013
1,100,000 Citigroup Commercial Mortgage Trust, Ser 2014-GC25, Class D, 144a, 3.548%, 10/10/47        957,289
1,250,000 Citigroup Commercial Mortgage Trust, Ser 2017-P8, Class D, 144a, 3.000%, 9/15/50        896,761
  600,000 WFRBS Commercial Mortgage Trust, Ser 2013-C13, Class D, 144a, 4.147%, 5/15/45(B)(D)        580,636
  Total Commercial Mortgage-Backed Securities  $7,192,550
Shares        
  Common Stocks — 4.3%  
  Industrials — 0.8%  
      802 Lockheed Martin Corp.    390,165
    4,080 Raytheon Technologies Corp.    411,753
           801,918
  Information Technology — 0.8%  
    2,668 International Business Machines Corp.    375,895
    2,333 Texas Instruments, Inc.    385,458
           761,353
  Financials — 0.7%  
   10,569 Bank of America Corp.    350,045
    1,036 Goldman Sachs Group, Inc. (The)    355,742
           705,787
  Consumer Staples — 0.4%  
    4,457 Philip Morris International, Inc.    451,093
 
19

 

Table of Contents
Touchstone Strategic Income Opportunities ETF (Continued)
Shares       MarketValue
  Common Stocks — 4.3% (Continued)  
  Health Care — 0.4%  
    2,326 Johnson & Johnson $   410,888
  Materials — 0.4%  
    5,690 DuPont de Nemours, Inc.    390,505
  Energy — 0.4%  
    3,501 Exxon Mobil Corp.    386,160
  Communication Services — 0.4%  
   20,709 AT&T, Inc.    381,253
  Total Common Stocks  $4,288,957
Principal
Amount 		       
  Sovereign Government Obligations — 3.9%
$  590,000 Angolan Government International Bond, 144a, 8.000%, 11/26/29        516,581
   350,000 Bahamas Government International Bond, 144a, 6.000%, 11/21/28        266,913
   350,000 Chile Government International Bond, 3.100%, 5/7/41        250,942
   450,000 Colombia Government International Bond, 3.250%, 4/22/32        327,157
   550,000 Dominican Republic International Bond, 144a, 4.875%, 9/23/32        456,541
   420,000 Ecuador Government International Bond, 2.500%, 7/31/35        193,090
   190,000 Ecuador Government International Bond, 144a, 5.500%, 7/31/30        122,088
   610,000 Egypt Government International Bond, 144a, 8.500%, 1/31/47        405,452
   290,000 Gabon Government International Bond, 144a, 6.625%, 2/6/31        236,785
   580,000 Ghana Government International Bond, 144a, 8.627%, 6/16/49        199,810
   490,000 Nigeria Government International Bond, 144a, 7.625%, 11/28/47        314,394
   290,000 Republic of Uzbekistan International Bond, 144a, 3.700%, 11/25/30        242,303
   400,000 Serbia International Bond, 2.125%, 12/1/30        286,880
  400,000 Ukraine Government International Bond, 144a, 7.253%, 3/15/35*         71,994
  Total Sovereign Government Obligations  $3,890,930
  Non-Agency Collateralized Mortgage Obligations — 2.0%
1,000,000 Fannie Mae Connecticut Avenue Securities, Ser 2017-C06, Class 1B1, (1M LIBOR +4.150%), 8.539%, 2/25/30(B)      1,029,533
1,000,000 Freddie Mac STACR REMIC Trust, Ser 2022-DNA3, Class M1B, 144a, (SOFR30A +2.900%), 6.828%, 4/25/42(B)        988,133
  Total Non-Agency Collateralized Mortgage Obligations  $2,017,666
Shares        
  Preferred Stocks — 0.3%  
  Financials — 0.3%  
   18,000 First Republic Bank, Ser K, 4.125%(A)    288,000
  Total Preferred Stocks    $288,000
Shares       MarketValue
  Short-Term Investment Fund — 1.0%  
  941,841 Dreyfus Institutional Preferred Government Plus Money Market, Institutional Class, 4.19%∞Ω** $   941,841
  Total Investment Securities—98.3%
(Cost $99,572,524) 		$97,482,517
  Other Assets in Excess of Liabilities — 1.7%  1,717,845
  Net Assets — 100.0% $99,200,362
(A) Perpetual Bond - A bond or preferred stock with no definite maturity date.
(B) Variable rate security - Rate reflected is the rate in effect as of December 31, 2022.
(C) Interest only security - This type of security represents the right to receive the monthly interest payments on an underlying pool of mortgages. Payments of principal on the pool reduce the value of the “interest only” holding.
(D) Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description.
* Non-income producing security.
** Represents collateral for securities loaned.
† All or a portion of the security is on loan. The total market value of the securities on loan as of December 31, 2022 was $906,812.
∞ Open-End Fund.
Ω Represents the 7-Day SEC yield as of December 31, 2022.
Portfolio Abbreviations:
CLO – Collateralized Loan Obligation
LIBOR – London Interbank Offered Rate
LLC – Limited Liability Company
LP – Limited Partnership
PLC – Public Limited Company
REIT – Real Estate Investment Trust
REMIC – Real Estate Mortgage Investment Conduit
SOC – State-Owned Company
SOFR30A – Secured Overnight Financing Rate 30 Day Average
TSFR3M – Three Month Term Secured Overnight Financing Rate
144a - This is a restricted security that was sold in a transaction qualifying for the exemption under Rule 144a of the Securities Act of 1933. This security may be sold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2022, these securities were valued at $43,713,334 or 44.1% of net assets. These securities were deemed liquid pursuant to procedures approved by the Board of Trustees.
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
Corporate Bonds $— $47,653,734 $— $47,653,734
U.S. Treasury Obligations — 19,416,759 — 19,416,759
Asset-Backed Securities — 11,792,080 — 11,792,080
Commercial Mortgage-Backed Securities — 7,192,550 — 7,192,550
Common Stocks 4,288,957 — — 4,288,957
Sovereign Government Obligations — 3,890,930 — 3,890,930
Non-Agency Collateralized Mortgage Obligations — 2,017,666 — 2,017,666
Preferred Stocks 288,000 — — 288,000
Short-Term Investment Fund 941,841 — — 941,841
Total $5,518,798 $91,963,719 $— $97,482,517
See accompanying Notes to Financial Statements.
 
20

 

Table of Contents
Portfolio of Investments
Touchstone Ultra Short Income ETF – December 31, 2022
Principal
Amount 		      Market
Value
  Asset-Backed Securities — 47.2%
$  900,000 American Credit Acceptance Receivables Trust, Ser 2019-1, Class E, 144a, 4.840%, 4/14/25     $   899,006
1,000,000 American Credit Acceptance Receivables Trust, Ser 2019-2, Class E, 144a, 4.290%, 6/12/25        993,987
   715,137 American Credit Acceptance Receivables Trust, Ser 2020-2, Class C, 144a, 3.880%, 4/13/26        711,879
1,000,000 Americredit Automobile Receivables Trust, Ser 2019-1, Class D, 3.620%, 3/18/25        983,839
   800,000 Barings CLO Ltd. (Cayman Islands), Ser 2013-IA, Class BR, 144a, (3M LIBOR +1.250%), 5.493%, 1/20/28(A)        786,278
   837,022 CarNow Auto Receivables Trust, Ser 2021-2A, Class B, 144a, 1.300%, 1/15/26        822,120
1,000,000 CFIP CLO Ltd. (Cayman Islands), Ser 2014-1A, Class BR, 144a, (3M LIBOR +1.850%), 5.791%, 7/13/29(A)        978,926
   618,441 Dell Equipment Finance Trust, Ser 2021-2, Class A2, 144a, 0.330%, 12/22/26        611,041
   955,000 Driven Brands Funding LLC, Ser 2018-1A, Class A2, 144a, 4.739%, 4/20/48        886,848
   758,716 DT Auto Owner Trust, Ser 2018-3A, Class E, 144a, 5.330%, 11/17/25        758,533
1,000,000 DT Auto Owner Trust, Ser 2019-1A, Class E, 144a, 4.940%, 2/17/26        996,029
   900,000 First Investors Auto Owner Trust, Ser 2018-2A, Class E, 144a, 5.360%, 1/15/25        899,977
   635,020 First Investors Auto Owner Trust, Ser 2019-1A, Class D, 144a, 3.550%, 4/15/25        632,214
   890,981 GLS Auto Receivables Issuer Trust, Ser 2020-4A, Class C, 144a, 1.140%, 11/17/25        875,920
1,000,000 Golub Capital Partners CLO 34M Ltd. (Cayman Islands), Ser 2017-34A, Class AR, 144a, (3M LIBOR +1.7000%), 6.232%, 3/14/31(A)        978,139
   301,327 GreatAmerica Leasing Receivables Funding LLC Series, Ser 2021-2, Class A2, 144a, 0.380%, 3/15/24        296,163
1,000,000 HPEFS Equipment Trust, Ser 2020-1A, Class D, 144a, 2.260%, 2/20/30        989,786
   864,233 JFIN CLO 2017 Ltd. (Cayman Islands), Ser 2017-1A, Class A1R, 144a, (3M LIBOR +1.000%), 5.325%, 4/24/29(A)        853,556
   865,079 LCM XIII LP (Cayman Islands), Ser 13A, Class AR3, 144a, (3M LIBOR +0.870%), 5.097%, 7/19/27(A)        855,456
   433,691 MVW Owner Trust, Ser 2017-1A, Class A, 144a, 2.420%, 12/20/34        423,813
1,000,000 Prestige Auto Receivables Trust, Ser 2019-1A, Class D, 144a, 3.010%, 8/15/25        989,575
1,000,000 Prestige Auto Receivables Trust, Ser 2020-1A, Class D, 144a, 1.620%, 11/16/26        976,552
   626,731 SCF Equipment Leasing LLC, Ser 2020-1A, Class A3, 144a, 1.190%, 10/20/27        614,450
   971,856 Shackleton CLO Ltd. (Cayman Islands), Ser 2015-8A, Class A1R, 144a, (3M LIBOR +0.920%), 5.163%, 10/20/27(A)        962,951
   905,333 Sierra Timeshare Receivables Funding LLC, Ser 2018-2A, Class B, 144a, 3.650%, 6/20/35        871,714
   825,934 Sierra Timeshare Receivables Funding LLC, Ser 2018-3A, Class B, 144a, 3.870%, 9/20/35        809,601
   733,763 Sierra Timeshare Receivables Funding LLC, Ser 2019-1A, Class D, 144a, 4.750%, 1/20/36        691,248
1,000,000 STWD Ltd. (Cayman Islands), Ser 2019-FL1, Class B, 144a, (TSFR1M +1.714%), 6.040%, 7/15/38(A)        939,109
1,050,000 Tesla Auto Lease Trust, Ser 2020-A, Class D, 144a, 2.330%, 2/20/24      1,038,792
  Total Asset-Backed Securities $24,127,502
Principal
Amount 		      Market
Value
  Commercial Mortgage-Backed Securities — 21.6%
$1,000,000 ACRE Commercial Mortgage Ltd., Ser 2021-FL4, Class B, 144a, (1M LIBOR +1.400%), 5.739%, 12/18/37(A)     $   968,329
   500,000 BFLD Trust, Ser 2020-OBRK, Class A, 144a, (1M LIBOR +2.050%), 6.368%, 11/15/28(A)        494,152
    95,000 BPR Trust, Ser 2021-KEN, Class A, 144a, (1M LIBOR +1.250%), 5.568%, 2/15/29(A)         92,399
1,009,316 BX Commercial Mortgage Trust, Ser 2019-XL, Class A, 144a, (1M LIBOR +0.920%), 5.370%, 10/15/36(A)        996,872
   992,505 CHC Commercial Mortgage Trust 2019 - CHC, Ser 2019-CHC, Class A, 144a, (1M LIBOR +1.120%), 5.438%, 6/15/34(A)        968,533
1,000,000 Citigroup Commercial Mortgage Trust, Ser 2013-GC11, Class B, 3.732%, 4/10/46(A)(B)        992,583
1,000,000 COMM Mortgage Trust, Ser 2013-CR7, Class B, 144a, 3.613%, 3/10/46        986,324
   606,000 Great Wolf Trust, Ser 2019-WOLF, Class B, 144a, (1M LIBOR +1.334%), 5.652%, 12/15/36(A)        584,104
1,000,000 GS Mortgage Securities Trust, Ser 2018-HART, Class A, 144a, (1M LIBOR +1.090%), 5.410%, 10/15/31(A)        947,888
1,000,000 JP Morgan Chase Commercial Mortgage Securities Trust, Ser 2018-WPT, Class BFX, 144a, 4.549%, 7/5/33        888,424
1,000,000 JPMBB Commercial Mortgage Securities Trust, Ser 2013-C12, Class AS, 4.052%, 7/15/45(A)(B)        986,732
1,000,000 PFP Ltd. (Cayman Islands), Ser 2019-6, Class D, 144a, (1M LIBOR +2.450%), 6.776%, 4/14/37(A)        983,184
   859,544 ReadyCap Commercial Mortgage Trust, Ser 2018-4, Class A, 144a, 3.390%, 2/27/51        814,674
  336,357 Slide, Ser 2018-FUN, Class C, 144a, (1M LIBOR +1.800%), 6.118%, 6/15/31(A)        332,024
  Total Commercial Mortgage-Backed Securities $11,036,222
  Corporate Bonds — 19.9%  
  Financials — 4.9%  
   500,000 Allstate Corp. (The), (3M LIBOR +0.630%), 5.356%, 3/29/23(A)    500,553
   500,000 Metropolitan Life Insurance Co., 144a, 7.875%, 2/15/24    511,047
1,000,000 Retail Opportunity Investments Partnership LP REIT, 5.000%, 12/15/23    988,684
  500,000 Synovus Financial Corp., 5.200%, 8/11/25    493,659
         2,493,943
  Health Care — 3.4%  
   750,000 Elevance Health, Inc., 0.450%, 3/15/23    743,771
1,000,000 Mylan, Inc., 144a, 3.125%, 1/15/23    999,232
         1,743,003
  Industrials — 2.9%  
1,000,000 CNH Industrial NV (United Kingdom), 4.500%, 8/15/23    993,647
  500,000 Graphic Packaging International LLC, 144a, 0.821%, 4/15/24    468,102
         1,461,749
  Energy — 2.0%  
1,000,000 Energy Transfer LP, 3.450%, 1/15/23    999,165
  Utilities — 1.9%  
1,000,000 National Fuel Gas Co., 3.750%, 3/1/23    997,310
  Real Estate — 1.9%  
1,000,000 American Tower Trust #1 REIT, Ser 13, Class 2A, 144a, 3.070%, 3/15/48    994,401
  Consumer Staples — 1.0%  
  500,000 Coca-Cola Europacific Partners PLC (United Kingdom), 144a, 0.500%, 5/5/23    491,849
 
21

 

Table of Contents
Touchstone Ultra Short Income ETF (Continued)
Principal
Amount 		      Market
Value
  Corporate Bonds — 19.9% (Continued)  
  Communication Services — 1.0%  
$  500,000 Charter Communications Operating LLC / Charter Communications Operating Capital, 4.908%, 7/23/25 $   490,449
  Consumer Discretionary — 0.9%  
  500,000 AutoNation, Inc., 3.500%, 11/15/24    480,108
  Total Corporate Bonds $10,151,977
  Commercial Paper — 6.9%
2,000,000 Ameren Illinois Co., 4.502%, 1/3/23(C)      1,998,990
1,500,000 Union Electric Co., 4.502%, 1/3/23(C)      1,499,243
  Total Commercial Paper  $3,498,233
  Non-Agency Collateralized Mortgage Obligations — 3.9%
   830,669 CIM Trust, Ser 2018-R3, Class A1, 144a, 5.000%, 12/25/57(A)(B)        814,211
   855,232 Metlife Securitization Trust, Ser 2019-1A, Class A1A, 144a, 3.750%, 4/25/58(A)(B)        828,487
  382,816 Mill City Mortgage Loan Trust, Ser 2017-3, Class A1, 144a, 2.750%, 1/25/61(A)(B)        370,075
  Total Non-Agency Collateralized Mortgage Obligations  $2,012,773
  Total Investment Securities—99.5%
(Cost $51,161,867) 		$50,826,707
  Other Assets in Excess of Liabilities — 0.5%    253,464
  Net Assets — 100.0% $51,080,171
(A) Variable rate security - Rate reflected is the rate in effect as of December 31, 2022.
(B) Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description.
(C) Rate reflects yield at the time of purchase.
Portfolio Abbreviations:
CLO – Collateralized Loan Obligation
LIBOR – London Interbank Offered Rate
LLC – Limited Liability Company
LP – Limited Partnership
PLC – Public Limited Company
REIT – Real Estate Investment Trust
TSFR1M – One Month Term Secured Overnight Financing Rate
144a - This is a restricted security that was sold in a transaction qualifying for the exemption under Rule 144a of the Securities Act of 1933. This security may be sold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2022, these securities were valued at $37,677,974 or 73.8% of net assets. These securities were deemed liquid pursuant to procedures approved by the Board of Trustees.
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
Asset-Backed Securities $— $24,127,502 $— $24,127,502
Commercial Mortgage-Backed Securities — 11,036,222 — 11,036,222
Corporate Bonds — 10,151,977 — 10,151,977
Commercial Paper — 3,498,233 — 3,498,233
Non-Agency Collateralized Mortgage Obligations — 2,012,773 — 2,012,773
Total $— $50,826,707 $— $50,826,707
See accompanying Notes to Financial Statements.
 
22

 

Table of Contents
Portfolio of Investments
Touchstone US Large Cap Focused ETF – December 31, 2022
Shares       Market
Value
  Common Stocks — 95.4%  
  Information Technology — 27.3%  
11,958 Apple, Inc. $ 1,553,703
 2,731 International Business Machines Corp.    384,771
 8,113 Microsoft Corp.  1,945,660
 6,844 Oracle Corp.    559,428
 3,021 PayPal Holdings, Inc.*    215,156
 3,164 Salesforce, Inc.*    419,515
 5,591 SS&C Technologies Holdings, Inc.    291,067
 3,137 Texas Instruments, Inc.    518,295
 2,845 Visa, Inc. - Class A    591,077
 1,580 Workday, Inc. - Class A*    264,381
         6,743,053
  Health Care — 17.9%  
 3,370 AmerisourceBergen Corp.    558,443
 5,187 BioMarin Pharmaceutical, Inc.*    536,803
 6,676 Bristol-Myers Squibb Co.    480,338
 2,424 HCA Healthcare, Inc.    581,663
 5,004 Johnson & Johnson    883,956
 5,254 Medtronic PLC    408,341
 1,837 UnitedHealth Group, Inc.    973,941
         4,423,485
  Financials — 11.9%  
18,989 Bank of America Corp.    628,916
 3,820 Berkshire Hathaway, Inc. - Class B*  1,179,998
 2,031 Goldman Sachs Group, Inc. (The)    697,405
   340 Markel Corp.*    447,946
         2,954,265
  Communication Services — 11.0%  
12,572 Alphabet, Inc. - Class C*  1,115,514
 9,847 AT&T, Inc.    181,283
10,607 Comcast Corp. - Class A    370,927
 2,514 Fox Corp. - Class A     76,350
 4,130 Meta Platforms, Inc. - Class A*    497,004
   934 Netflix, Inc.*    275,418
 2,179 Walt Disney Co. (The)*    189,311
 2,408 Warner Bros Discovery, Inc.*     22,828
         2,728,635
  Industrials — 8.6%  
 1,951 Boeing Co. (The)*    371,646
   578 Deere & Co.    247,823
   919 FedEx Corp.    159,171
 1,894 Hubbell, Inc.    444,484
 6,276 Raytheon Technologies Corp.    633,374
 7,810 Southwest Airlines Co.*    262,962
         2,119,460
Shares       Market
Value
     
  Consumer Discretionary — 6.6%  
 2,170 Airbnb, Inc. - Class A* $   185,535
 9,614 Amazon.com, Inc.*    807,576
 2,445 Hilton Worldwide Holdings, Inc.    308,950
 3,243 Starbucks Corp.    321,706
         1,623,767
  Consumer Staples — 4.8%  
 5,798 Monster Beverage Corp.*    588,671
 5,838 Philip Morris International, Inc.    590,864
         1,179,535
  Energy — 4.4%  
 6,066 Exxon Mobil Corp.    669,080
 8,065 Schlumberger Ltd.    431,155
         1,100,235
  Materials — 1.7%  
 6,044 DuPont de Nemours, Inc.    414,800
  Real Estate — 1.2%  
 1,911 Jones Lang LaSalle, Inc.*    304,556
  Total Common Stocks $23,591,791
  Total Investment Securities—95.4%
(Cost $24,513,622) 		$23,591,791
  Other Assets in Excess of Liabilities — 4.6%  1,146,983
  Net Assets — 100.0% $24,738,774
* Non-income producing security.
Portfolio Abbreviations:
PLC – Public Limited Company
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
Common Stocks $23,591,791 $— $— $23,591,791
See accompanying Notes to Financial Statements.
 
23

 

Table of Contents
Statements of Assets and Liabilities
December 31, 2022
  Touchstone
Dividend
Select ETF 		Touchstone
Strategic
Income
Opportunities ETF 		Touchstone
Ultra Short
Income ETF 		Touchstone
US Large
Cap Focused
ETF
Assets        
Investments, at cost $25,198,627 $99,572,524 $51,161,867 $24,513,622
Investments, at market value $25,569,444 $97,482,517 $50,826,707 $23,591,791
Cash 1,015,907 1,788,799 70,973 1,177,778
Dividends and interest receivable 27,659 964,045 231,310 14,149
Receivable for securities lending income — 1,148 — —
Tax reclaim receivable 788 — — —
Other assets 17,820 25,522 20,979 20,350
Total Assets 26,631,618 100,262,031 51,149,969 24,804,068
 
Liabilities        
Payable for return of collateral for securities on loan — 941,841 — —
Payable to Investment Adviser 12,589 46,634 10,846 15,007
Payable to other affiliates 5,337 14,311 8,184 5,511
Payable to Trustees 6,419 6,419 6,419 6,419
Payable for custodian fees — 9,844 — —
Payable for professional services 26,259 32,680 32,191 26,604
Payable for reports to shareholders 4,107 4,372 3,987 4,231
Payable for transfer agent services 2,349 2,818 3,130 2,818
Other accrued expenses and liabilities 4,298 2,750 5,041 4,704
Total Liabilities 61,358 1,061,669 69,798 65,294
Net Assets $26,570,260 $99,200,362 $51,080,171 $24,738,774
Net assets consist of:        
Paid-in capital 26,264,381 101,334,509 51,360,868 25,771,629
Distributable earnings (deficit) 305,879 (2,134,147) (280,697) (1,032,855)
Net Assets $26,570,260 $99,200,362 $51,080,171 $24,738,774
 
Pricing of shares outstanding        
Net assets applicable to shares outstanding $26,570,260 $99,200,362 $51,080,171 $24,738,774
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) 1,050,000 4,050,000 2,054,000 1,025,000
Net asset value, offering price and redemption price per share $25.31 $24.49 $24.87 $24.14
*Includes market value of securities on loan of: $— $906,812 $— $—
See accompanying Notes to Financial Statements.
24

 

Table of Contents
Statements of Operations For the Period December 31, 2022
  Touchstone
Dividend
Select ETF(A) 		Touchstone
Strategic
Income
Opportunities ETF(B) 		Touchstone
Ultra Short
Income ETF(C) 		Touchstone
US Large
Cap Focused
ETF(D)
Investment Income        
Dividends $242,796 $69,760 $— $120,950
Interest — 2,070,458 780,109 —
Income from securities loaned — 1,178 — —
Total Investment Income 242,796 2,141,396 780,109 120,950
Expenses        
Investment advisory fees 48,000 228,193 48,867 62,856
Administration fees 12,105 57,399 27,070 12,449
Compliance fees and expenses 3,292 3,965 3,292 3,965
Custody fees 1,953 9,844 2,604 2,344
Professional fees 26,294 32,979 32,309 26,646
Transfer Agent fees 2,349 2,818 3,130 2,818
Reports to Shareholders 4,410 4,684 4,300 4,574
Trustee fees 12,966 12,966 12,966 12,966
Other expenses 11,328 14,961 12,053 9,731
Total Expenses 122,697 367,809 146,591 138,349
Fees waived and/or reimbursed by the Adviser and/or Affiliates(E) (64,225) (98,127) (79,410) (76,391)
Net Expenses 58,472 269,682 67,181 61,958
Net Investment Income (Loss) 184,324 1,871,714 712,928 58,992
Realized and Unrealized Gains (Losses) on Investments        
Net realized gains (losses) on investments(F) 263,630 (7,826) 27,875 139,950
Net change in unrealized appreciation (depreciation) on investments 370,817 (2,090,007) (335,160) (921,831)
Net Realized and Unrealized Gains (Losses) on Investments 634,447 (2,097,833) (307,285) (781,881)
Change in Net Assets Resulting from Operations $818,771 $(226,119) $405,643 $(722,889)
(A) Represents the period from commencement of operations (August 2, 2022) through December 31, 2022.
(B) Represents the period from commencement of operations (July 21, 2022) through December 31, 2022.
(C) Represents the period from commencement of operations (August 4, 2022) through December 31, 2022.
(D) Represents the period from commencement of operations (July 27, 2022) through December 31, 2022.
(E) See Note 4 in Notes to Financial Statements.
(F) Net realized gains on investments includes realized gains of $329,192 and $251,613 for the Dividend Select ETF and the US Large Cap Focused ETF, respectively, for redemptions-in-kind activity, which will not be recognized by the Funds for tax purposes.
See accompanying Notes to Financial Statements.
25

 

Table of Contents
Statements of Changes in Net Assets
  Touchstone
Dividend
Select ETF 		Touchstone
Strategic Income
Opportunities ETF 		Touchstone
Ultra Short
Income ETF 		Touchstone
US Large Cap
Focused ETF
  For the
Period Ended
December 31,
2022(A) 		For the
Period Ended
December 31,
2022(B) 		For the
Period Ended
December 31,
2022(C) 		For the
Period Ended
December 31,
2022(D)
From Operations        
Net investment income $184,324 $1,871,714 $712,928 $58,992
Net realized gains (losses) on investments 263,630 (7,826) 27,875 139,950
Net change in unrealized appreciation (depreciation) on investments 370,817 (2,090,007) (335,160) (921,831)
Change in Net Assets from Operations 818,771 (226,119) 405,643 (722,889)
 
Distributions to Shareholders:        
Distributed earnings (183,700) (1,908,028) (686,340) (58,353)
Total Distributions (183,700) (1,908,028) (686,340) (58,353)
 
Share Transactions        
Proceeds from Shares issued 27,851,716 101,334,509 51,360,868 27,969,085
Cost of Shares redeemed (1,916,527) — — (2,449,069)
Change in Net Assets from Share Transactions 25,935,189 101,334,509 51,360,868 25,520,016
 
Total Increase (Decrease) in Net Assets 26,570,260 99,200,362 51,080,171 24,738,774
 
Net Assets        
Beginning of period — — — —
End of period $26,570,260 $99,200,362 $51,080,171 $24,738,774
 
Share Transactions        
Shares issued 1,125,000 4,050,000 2,054,000 1,125,000
Shares redeemed (75,000) — — (100,000)
Change in Shares Outstanding 1,050,000 4,050,000 2,054,000 1,025,000
(A) Represents the period from commencement of operations (August 2, 2022) through December 31, 2022.
(B) Represents the period from commencement of operations (July 21, 2022) through December 31, 2022.
(C) Represents the period from commencement of operations (August 4, 2022) through December 31, 2022.
(D) Represents the period from commencement of operations (July 27, 2022) through December 31, 2022.
See accompanying Notes to Financial Statements.
26

 

Table of Contents
Financial Highlights
Touchstone Dividend Select ETF
Period ended   Net
asset
value at
beginning
of period 		  Net
investment
income 		  Net
realized
and
unrealized
gains (losses)
on investments 		  Total from
investment
operations 		  Distributions
from net
investment
income 		  Total
distributions 		  Net
asset
value
at end
of period 		  Total
return
based
on NAV 		  Net
assets
at end
of period
(000's) 		  Ratio of net
expenses
to average
net assets 		  Ratio of gross
expenses
to average
net assets 		  Ratio
of net
investment
income (loss)
to average
net assets 		  Portfolio
turnover
rate
 
12/31/22(1)   $25.00   $0.18   $0.31   $0.49   $(0.18)   $(0.18)   $25.31