Touchstone Adds Growth ETF as Market Sees Historic Flows

Touchstone Investments launched its newest ETF focused on U.S. growth companies, joining the market as investor interest surges in actively managed exchange-traded products.

The Touchstone Sands Capital US Select Growth ETF (TSEL) began trading Jan. 2 on the Nasdaq Composite, according to a company release.

The launch comes as ETFs shattered previous records, taking in $1.15 trillion in 2024, with actively managed funds capturing $310 billion of those flows. U.S. equity ETFs dominated overall with $672 billion in inflows, representing 86% of all equity ETF flows, according to State Street Global Advisors data.

The fund takes a concentrated approach, typically holding between 25 to 35 large- and mid-cap U.S. companies that show potential for above-average revenue or earnings growth, according to the prospectus. The weighted average market cap of holdings will generally exceed $25 billion.

Frank Sands, chief investment officer at Sands Capital, said the firm will apply "analytical rigor and creative thinking to identify high quality, leading innovative companies."

Bringing Active Management to Growth

Touchstone partnered with Sands Capital Management to sub-advise the fund, according to the release. The investment team seeks companies demonstrating sustainable earnings growth, leadership positions, and competitive advantages.

"We have aimed to create a product option that aligns with investors' long-term goals," said Matt Barry, vice president of product management at Touchstone Investments, in the announcement.

The ETF carries a net expense ratio of 0.67% after fee waivers, according to the prospectus.

While focused on U.S. stocks, the fund may own ordinary shares of non-U.S. companies listed directly on U.S. exchanges while avoiding American Depository Receipts, which are bank-issued certificates representing foreign shares, fund documents show.

The managers also integrate environmental, social, and governance factors into their analysis, weighing how these considerations might affect a company's future growth potential, the prospectus revealed.

Touchstone Investments now has eight ETFs traded on U.S. markets with assets under management of $414.9 million, according to etf.com data. Its largest ETF is the $146.1 million Touchstone Strategic Income Opportunities ETF (SIO), followed by the $108.2 million Touchstone Securitized Income ETF (TSEC).