### INVESTMENT DEFINITIONS

Active Share

Active Share measures the percentage of equity holdings in a representative portfolio that differ from the index constituents. It is calculated by summing the absolute difference of the weight of each holding in the representative portfolio versus the index and dividing by two.

Alpha

Alpha is a measure of performance on a risk-adjusted basis over a specified time period. Alpha takes the volatility (price risk) of a composite and compares its risk-adjusted performance to a benchmark index. The excess return of the composite relative to the return of the benchmark index is a strategy’s alpha.

Annualized Alpha

Annualized Alpha measures Alpha, as defined above, over a time period and annualizes it, or averages it, to provide the alpha on an annualized (12 month) basis, on average, for the time period. Annualized alpha is helpful when reviewing longer time periods to understand how a strategy has performed on average over the defined period.

Beta

Beta measures the relationship between the representative portfolio's excess return over T-bills (representing a risk-free rate) relative to the excess return of the portfolio's benchmark. A low beta does not imply that the representative portfolio has a low level of volatility; rather, a low beta means that the representative portfolio's market-related risk is low. Beta is often referred to as systematic risk.

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its share price. Dividend yield is represented as a percentage and can be calculated by dividing the dollar value of dividends paid in a given year per share of stock held by the dollar value of one share of stock. The Dividend Yield listed by Granite is for a representative portfolio as a whole, as calculated by FactSet.

Downside Capture Ratio

The downside capture ratio measures a manager's composite performance in down markets relative to a particular benchmark. A down market is one in which the market's quarterly (or monthly) return is less than zero. For example, a ratio of 50% means that the portfolio's value fell half as much as its benchmark index during down markets.

Earnings Per Share (EPS)

Earnings Per Share (EPS) is a company’s profits per share of common stock.

Estimated 3-5 Year Earnings Growth Rate

Indicates the long-term forecasted EPS growth of the companies in the representative portfolio, calculated using the weighted average of the available 3-to-5 year forecasted growth rates for each of the stocks in the representative portfolio provided by FactSet estimates.

Excess Return

Excess return, which can be positive or negative, identifies the extent to which a composite has out- or underperformed its benchmark index. It is calculated as the composite’s total return minus the benchmark’s total return.

Information Ratio

The information ratio (IR) measures a composite’s ability to generate excess returns relative to a benchmark, but also attempts to identify the consistency of the composite. The higher the IR, the more consistent a manager is.

Median Market Cap

The midpoint of market capitalization (market price multiplied by the number of shares outstanding) of the stocks in a representative portfolio. Half the stocks in the representative portfolio will have higher market capitalizations; half will have lower.

Price/earnings Ratio (P/E)

Price/earnings (or P/E) ratio is a comparison of the company's closing stock price and its trailing 12-month earnings per share.

Price to Book

The price-to-book ratio (P/B Ratio) is a ratio used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share.

R2

Measures how closely the Strategy’s composite performance correlates to the performance of the benchmark index, and thus is a measurement of what portion of its performance can be explained by the performance of the index. Values for R-Squared range from 0 to 100, where 0 indicates no correlation and 100 indicates perfect correlation.

Sharpe Ratio

The Sharpe ratio is calculated using standard deviation and excess return to determine reward per unit of risk. The higher the Sharpe ratio, the better the composite’s historical risk-adjusted performance.

Standard Deviation

Annualized standard deviation is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is calculated as the square root of variance.

Tracking Error

Tracking error indicates the consistency of a composite’s excess return during that same time period. Tracking error measures the standard deviation of the excess returns a composite generates compared to its benchmark. If a manager tracks a benchmark closely, then tracking error will be low. If a manager tracks a benchmark perfectly, then tracking error will be zero.

Upside Capture Ratio

The upside capture ratio is a measure of a manager's composite performance in up markets relative to a particular benchmark. An up market is one in which the market's quarterly (or monthly) return is greater than or equal to zero. For example, a ratio of 50% means that the portfolio's value increased half as much as its benchmark index during up markets.

Weighted Average Market Cap

The weighted average of market capitalization (market price multiplied by the number of shares outstanding) of the stocks in a portfolio.

Sources: Granite Investment Partners, LLC; FactSet; eVestment Alliance