GRT Concentric Strategy

Concentric Strategy from GRT Capital Partners, L.L.C.

The investment objective of the GRT Concentric strategy is to seek annualized returns over a market cycle exceeding the returns of the S&P 500, with a standard deviation lower than the historical volatility of the S&P 500. GRT Capital seeks to achieve this objective primarily through active trading in publicly traded equity securities, while maintaining a significant hedged position to reduce market risk and generate profit. GRT Capital uses a combination of proprietary quantitative screens and fundamental analysis to identify individual holdings that are expected to collectively result in a diversified portfolio of securities that has the potential to deliver absolute returns in normal market conditions. It is anticipated that the returns for the GRT Concentric strategy will have a low correlation to U.S. equity markets. The strategy may invest in domestic and foreign securities of companies of all sizes, from large capitalization to small capitalization. The strategy may also take short positions and engage in options transactions.

GRT Capital seeks to build a portfolio of long holdings believed to exhibit attractive long-term business characteristics, sound capital deployment strategies, positive working capital trends and attractive valuations. Conversely, short positions will typically exhibit excessive valuations, deteriorating balance sheets, and negative business momentum and capital trends. GRT Capital may engage in active hedging strategies, primarily through short selling. GRT Capital will also employ leverage from time to time. It is anticipated that the amount of leverage employed by the GRT Concentric strategy will not exceed 200% of the net asset value of an account following the strategy. GRT Capital may also invest substantial amounts in exchange traded funds (ETFs) and American Depository Receipts (ADRs). There is no assurance that the strategy will be diversified in all market conditions. Given the active trading involved under the strategy, it is anticipated that the portfolio turnover will be greater than many other startegies, resulting in, among other things, higher transaction costs.

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Portfolio Manager Ted Kellogg