When providing
investment supervisory services Cervino Capital Management will emphasize continuous and regular account supervision for the
purpose of client wealth accumulation, preservation and estate planning. Further, Cervino Capital Management will work with
its clients to identify their investment goals and timeframe as well as risk tolerance in order to create an initial portfolio
allocation designed to complement the clients’ financial priorities and objectives, including goals such as education
funding, major purchases, starting a business, retirement planning and wealth transfer, etc.
Cervino Capital
Management may create an investment portfolio consisting of individual foreign and domestic equities; fixed income instruments;
exchange traded funds (ETFs); closed-end funds; no-load mutual funds; load-waived mutual funds (front-end and back-end commissions
will not be charged); money market instruments; and other securities products. Each portfolio will be initially designed to
meet a particular investment goal and timeframe, which Cervino Capital Management has determined to be suitable to the client’s
circumstances. Nevertheless, each client will have the opportunity to place reasonable restrictions on the types of investments
to be held in the portfolio.
Once the
appropriate portfolio has been determined and implemented, Cervino Capital Management review the portfolio at least quarterly
and if necessary, rebalance the portfolio based upon changes in Cervino Capital Management’s economic outlook and market
opinion as well as changes that may have occurred in the client’s stated priorities, goals and objectives. Generally,
Cervino Capital Management’s strategy when providing investment supervisory services to clients will be to seek to meet
client investment objectives while providing clients with access to personal advisory services on at least an annual basis,
or more often, depending upon prior agreement.
Portfolio Management Services
When providing portfolio management services Cervino Capital Management will initially work with
the client to identify his/her investment goals and timeframe as well as risk tolerance in order to determine if one or a
combination of Cervino Capital Management’s standardized portfolio approaches is appropriate in meeting the client’s
long-term investment objectives. However, Cervino Capital Management does not customize its portfolio management services
based on the needs of any individual client, but rather Cervino Capital Management will manage client accounts within the
selected portfolios’ design parameters and long term investment objectives. Regular rebalancing of the portfolios as
well as tactical adjustments due to short or intermediate term market expectations will be based solely upon changes in Cervino
Capital Management’s economic outlook and market opinion.
Cervino Capital
Management offers the following three portfolio strategies:
Cornerstone Diversified Assets
This strategy utilizes Exchange Traded Funds (ETFs) in order to construct a core diversified portfolio exposing investors
to U.S. stocks and bonds, international stocks and bonds, and other asset classes
such as gold and real estate. The core investment focus is a strategic asset allocation approach establishing target portfolio
percentages for each asset class based on long-term capital market assumptions. The secondary investment focus is a tactical
overlay in which Cervino Capital Management makes adjustments to the portfolio based on shorter-term market expectations.
Because of the many different types of ETFs that are available, these instruments provide the means to diversify client accounts
in terms of asset class, market capitalization, credit quality, economic sectors, and geographic regions.
Energy Income Advantage
This investment strategy utilizes Master Limited Partnerships (MLPs) and oil tanker stocks in order to construct
a portfolio which combines the potential for appreciation plus high current yield and low correlation with other asset classes.
MLPs are publicly traded interests in businesses organized as limited partnerships but traded like stocks. Most MLPs are involved
in some form of energy distribution or transportation. MLPs typically distribute cash generated by the business and report
taxable income annually on Form K-1. Cervino Capital Management conducts fundamental analysis of individual MLPs and oil tankers
and then compares the mixture of expected growth and income in order to determine portfolio selection. After the portfolio
has been established, Cervino Capital Management closely monitors each MLP and oil tanker stock for company specific risks
and reduces or removes such positions when prudent.
Enhanced Yield Opportunities
This strategy utilizes both leveraged and non-leveraged Closed-End Funds (CEFs) in order to construct a portfolio
which combines attractive investment income plus potential for capital appreciation. Closed-end funds (CEFs) are professionally
managed investment companies that offer an array of benefits unique in the investment world. While often compared to open-end
mutual funds, CEF shares are listed on exchanges and bought and sold in the open market. Accordingly, they trade in relation
to, but independent of, their underlying net asset values (NAVs). Cervino Capital Management conducts fundamental analysis
of individual CEFs, and then compares historical discount/ premium pricing, as well as dividends and distributions for prospective
total return potential in order to determine relative value and the portfolio selection. After the portfolio has been established,
Cervino Capital Management closely monitors each CEF for specific risks and reduces or removes such positions when it deems
prudent.
