TM Cerno Select 2017-11-16T16:29:17+00:00

TM Cerno Select

TM Cerno Select Fund Information

TM Cerno Select is a global strategy investing across multiple asset classes with an unconstrained approach to asset allocation. The return target is CPI +3%.

We aim to preserve and grow capital through investing in an approved range of investment vehicles, including direct securities, passive funds and specialist active managers.

The fund is domiciled in the UK under the UCITS regime and trades daily at net asset value (NAV). A sister fund, Cerno Unconstrained, follows the same strategy and is domiciled in Ireland, also under the UCITS regime.

For more information on TM Cerno Select please contact:

Tom Milnes – Business Development Director
Telephone – 02070 364126
Email – [email protected]

Funds page ink drawing

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Key Investors Information

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Please ensure you read the Key Investor Information Document (KIID) for the fund selected before making an investment decision. The document contains important information including risk factors and details of charges.

TM Cerno Select Fund Managers

James Spence
James SpenceCo-fund Manager
James is a co-founder of Cerno Capital and lead manages a number of the firm’s collective and private portfolios. After qualifying as a chartered accountant in London (Coopers & Lybrand, 1989) he relocated to Asia. Between 1991 and 2004 he worked as an equity analyst, head of research, and latterly as an equity strategist at WI Carr, Paribas, HSBC and UBS, based variously in Hong Kong, Singapore and Jakarta. James graduated from the University of St Andrews, Scotland with an MA in Philosophy & Logic in 1986. James is a Member of the Chartered Institute for Securities & Investment.
Fergus Shaw
Fergus ShawCo-Fund Manager
Fergus is a Partner at Cerno Capital and surveys the full range of the firm’s investments on a bottom up basis and is principally engaged in manager and security selection. He began his investment career at Valu-Trac Investment Management in 1995, where he worked in their global equity and asset allocation products. He worked for Russell Investments as a Portfolio Manager of UK equities (2001-2006) and Asian equities (2006-2009). Fergus graduated from Edinburgh University with a BCom (Hons), holds the CFA charter and is a member of the CFA Society of the UK. Fergus is a Director of the Salters’ Management Company.

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Latest Investment Letter by James Spence

Stock markets could fall 10% next week.

This is a perfunctorily true statement but not worth tuppence as a prediction. For it is true every week of the year. 2017, so far, is an unusual year in that it has not featured a correction of 5% or more in world stocks.

It remains our view that the chief risk in front line asset classes is the gravitational pressures exerted by valuations which have crept ever higher in the past 5 years. A correction in the equity market would have the effect of clearing the air. We are of the view that it would be unwise to be active selling during such a correction.

For, in the lee of any correction, the proximate fundamentals will remain shaped by a picture of synchronous global growth, rising aggregates of industrial production, recovery in Europe and rising market shares of the world’s best companies in many industries. None of this plausibly presages a recession in corporate profits, in the near future.

Other fundamentals to keep well in mind are interest rates and inflation.

We are in the upward swing of an interest rate rising cycle and ultimately rates may do for the market but not, we surmise, for a while. It is a matter of conjecture how far the rates cycle will go. Consumer confidence and activity will be watched avidly for signs of fatigue. All the world’s main Central Banks have effectively become “dual mandate” even those that do not operate under the constitutional imperative to promote growth and control inflation. We continue to believe inflation will creep back into the picture. The main measures of inflation remain abeyant even if conditions precedent is in place. Output gaps are being progressively closed: Germany and Japan are already closed, and UBS economists estimate that it will close in US by the third quarter of next year.

It is dangerous to be complacent on this front as the prospect of higher inflation is not front of minds and therefore, were the data to trend that way, it would have a pronounced effect on relative performance of the main asset classes. The direction of travel within our clients’ portfolios is to bulwark inflation protection and add assets which will plausibly respond well to a flick up in bond yields.

Looking around the world as the year draws to its end, we note the exceptional performance of Asian markets which have been as hot as woks in a busy restaurant. Our portfolio engagement with this was segmentary via significant allocations in India and Japan: two markets that are far apart in geography and with few if no confluent themes. Also relevant to performance has been the Asian subsidiaries and Asian customers of constituent stocks in the Global Leader strategy. The Asian dimension of these businesses are available at lower implied earnings multiples than pure plays. We note that Unilever Indonesia – an example of a pure play – now trades on 48x forward earnings.

Drilling down into the detail it is worth noting that whilst overall earnings estimates within that region are running strongly positive in aggregate, there are more Asian sectors on an earnings downgrade path than an upgrade. Sector fortunes are far from uniform. The better areas are concentrated in Technology Hardware and Software.

On the hardware side, we are in years of plenty for chip makers with demand progressing from multiple sources: examples being autonomous vehicle development, the Internet of Things and of course the smart phone. Samsung Electronics enjoys the happy coincidence of leading in both microchips and screens and sustaining a leading presence in smart-phones.

When it comes to Asia and software, most heads turn to the “BAT” stocks: Baidu, Alibaba and Tencent. However, a wider phenomenon is at work. Expenditure on software by companies in the US now eclipses that on capital goods. There are many ways to gain exposure to this: via smart adopters of technology as well as providers themselves. We own Oracle in client portfolios as it has leadership in cloud database provision to companies. Oracle is no longer the noise in the software industry as other more consumer oriented players are operating on larger scale at the commodity end of the market for cloud enabled services. However, Oracle remains the leading player in the business segment via the tool set it places around the databases. Oracle’s customers include Amazon itself and SAP.

In an analogous development, within the payments arena, all the buzz is concentrated around Financial Technology (FinTech) start-ups and smartphone enabled platforms. Most of these piggy-back on existing credit card platforms. VISA makes twice the money from a phone activated payment than one via a card.

We have just finished reading Niall Ferguson’s excellent new book The Tower and the Square in which he analyses the multi-fold tensions between hierarchical structures (such as governments) and the disruptive effects of networks (starting with the Gutenberg press and running up to the advent of Facebook). Ferguson is entertainingly caustic about the true intentions of Facebook and Alphabet (parent of Google). He points out that they have been masters at turning their customers into the product and their monopolistic intentions. The Brins and the Zuckerbergs of this generation learnt at the knees of Gates and Jobs: all share common instincts.

At some point, it may prove unwise to overweight the new monopolists. For now, the Tech Titans can try to dismiss the attentions of EU Commissioner Margrethe Vestarger as “political crap” (Tim Cook, Apple CEO on CBS 20/11/16), but what if the US’s own Department of Justice took an interest in their practices? The notion that anti-competitive behaviour cannot take place in tandem with (favourable to the consumer) price declines warrants re-examining. There is ample possibility of giant missteps by the tee shirted capitalists, especially given their hard-to-credit dyslexia on matters of editorial responsibility and blind spots toward the negative aspects of the “communities” they help build.

On the one hand, capitalism looks very well. Leading companies have become very adept on so many fronts. On the other hand, trends now well underway look to undermine wider society. America, for example, is already home to many failing communities. 10 years from now, when we have had successive waves of automation, AI and robotics, business owners with access to capital markets will be richer still and the rest who are not engaged in servicing their whims may be very sad indeed. Some form of income re-distribution will be needed.

A letter detailing some changes to portfolio manager responsibilities can be found on the page that follows. Please also reference our new website which has been developed by Adam Hawkins who has joined from Clyde & Co to run the firm’s infrastructure.

By | November 10th, 2017|

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TM Cerno Select Key Contacts

Tom Milnes
Tom MilnesBusiness Development Director
Tom joined Cerno Capital to help with the firm’s intermediary client relationships. Before joining Cerno, Tom was Business Development Director at Investec Wealth & Investment, where he was responsible for intermediary relationships in London. Prior to this, he had roles in investment sales at LV Asset Management and Rathbones. Tom also spent five years at BAE Systems to his previous career in finance, most notably as a lobbyist in Washington DC. Tom graduated with an MA (Hons) from the University of Edinburgh in 2001, holds a Licence d’Histoire from the Université Grenoble Alpes and is an Associate member of the CISI.
Olivia Martin
Olivia MartinClient Relations and Business Development
Olivia is a member of the Client Relations and Business Development team at Cerno Capital. She has a particular focus on client relations and in her role she assists with various forms of business development with all aspects of existing and prospective investor contact. Olivia joined the Cerno Capital team in July 2016, having previously worked as an Education Consultant for an Education and Tuition Consultancy firm. Olivia is a graduate from Durham University where she studied Geography with additional modules in Business, Accounting and Finance.

TM Cerno Select Unit Price

£0
CLASS B – LAST UPDATED 16/11/2017 16:00
£0
CLASS C – LAST UPDATED 16/11/2017 16:00

Fund Facts

Fund Size £73.0mn
Fund Launch Date 04/09/13
Legal Structure UK OEIC (UCITS)
Dealing Frequency Daily
Suitable for SIPPs/ISAs/JISAs Yes

Available Share Classes

Name B Number C Number
Ongoing Charges 1.46% 1.21%
Cerno Capital AMC 1.00% 0.75%
Allocated Managers’ Fees 0.23% 0.23%
Other Fees (incl. running costs) 0.23% 0.23%
Investment Minimums £5,000 £1mn

Risk Data

Net Equity Exposure* 58.4%
Gross Equity Exposure* 58.4%
Short Equity Exposure* 0%
Long Equity Exposure* 58.4%
Best Month* 4.1%
Worst Month* -3.8%
Sharpe Ratio 1.0
Calmar Ratio 0.9
Upside Capture* 50.2%
Downside Capture* 53.2%
Maximum Drawdown* -7.7%
Annualised Volatility* 6.1%
Beta (vs World Equity Index)* 0.8

Top 5 Equity Holdings

Cerno Global Leaders Strategy* 24.9%
Infrastructure Equity Basket 9.1%
Baillie Gifford Global Discovery 8.3%
Ocean Dial Gateway to India 7.0%
Michinori Japan Equity 5.4%

Top 5 Non-Equity Holdings

US Treasuries (Inflation Protected) 14.6%
Gold 5.0%
John Laing Infrastructure 3.5%
HICL Infrastructure 3.4%
Options 0.5%

Fund Codes

ISIN SEDOL Bloomberg
B GB00BCZXTM29 BCZXTM2 TMCESBA
C GB00BCZXTP59 BCZXTP5 TMCESCA

Fund & Risk Ratings

Dynamic Planner 5 Profiled
ARC 2015 3D Awarded
Cerno Defaqto 2017

Disclaimer

CERNO CAPITAL’s website contains certain information about its approach to providing investment management services but does not provide specific investment advice and is presented for informational purposes only. It does not represent that the services described on the site are suitable for any specific investor. You are advised not to rely on any information contained in this site in the process of making a fully informed investment decision. Instead, you are urged to base investment decisions upon a thorough investigation and to obtain all necessary professional advice.

The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution, publication or use would be contrary to local law or regulation or in which CERNO CAPITAL does not hold any necessary registration or license. Individuals or legal entities in respect of whom such prohibitions apply, whether on grounds of their nationality, their place of residence or on other grounds, must not access or use this website.

 

DISCLAIMER

CERNO CAPITAL’s website contains certain information about its approach to providing investment management services but does not provide specific investment advice and is presented for informational purposes only. It does not represent that the services described on the site are suitable for any specific investor. You are advised not to rely on any information contained in this site in the process of making a fully informed investment decision. Instead, you are urged to base investment decisions upon a thorough investigation and to obtain all necessary professional advice.

The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution, publication or use would be contrary to local law or regulation or in which CERNO CAPITAL does not hold any necessary registration or license. Individuals or legal entities in respect of whom such prohibitions apply, whether on grounds of their nationality, their place of residence or on other grounds, must not access or use this website.

Persons who wish to access this section of the website are required by CERNO CAPITAL to inform themselves of the legal or regulatory restrictions which may affect their eligibility to access the website or subscribe for units in the funds described herein.

The information on this website is only intended to be viewed by persons who fall outside the scope of laws that seek to regulate financial promotions in their country of residence. Examples of such persons may be governmental agencies, persons sufficiently experienced in investment business to appreciate the risks associated with investment services promoted on this site, large corporations and trusts and high net worth individuals. These examples are not country specific, may not be relevant to your country of residence and are provided for illustration purposes only. If you are uncertain about your position under the laws of your country of residence then you should seek clarification by obtaining legal advice from a lawyer practising in your country of residence before accessing our site.

In particular, CERNO CAPITAL is not registered as an investment adviser with the Securities and Exchange Commission and therefore this website is neither directed at nor intended for use by any person or entity in the United States.

Any past performance data contained on this website is no indication of future performance and nothing on this website should be interpreted to state or imply otherwise. The value of investments may fall as well as rise and investors may not get back the full amount invested. In addition, the information and materials herein shall not constitute an offer or solicitation, or an offer to sell, shares of any of the funds or any advisory or management service in any jurisdiction.

Additionally, the information on this website is provided “as is” and “as available”. CERNO CAPITAL is under no obligation to update the information to reflect changes after the publication date. It is presented without warranty of any kind, either express or implied, including without limitation of any warranties concerning the availability, reliability, accuracy, completeness, timeliness or sequencing of the site or the content, products or services available on or via the website. Also, the information offered does not carry a guarantee of accuracy, completeness or timeliness for any particular purpose and neither expressly or impliedly carries warranties or implied warranties regarding its merchantability and fitness for a particular purpose.

CERNO CAPITAL reserves the right to change the information displayed on the website or this legal notice at any time. They will not be responsible for any loss or damage that could result from interception by third parties of any information available on this website. In no event shall CERNO CAPITAL be liable for any indirect, incidental, special, punitive or consequential damages (including, without limitation, damages for loss of data, business or profits) arising out of or in connection with this legal notice, the website, the inability to use the site or any products, services or content purchased, obtained or stored in or from the site, whether based on contract, tort, strict liability or otherwise, even if CERNO CAPITAL has been advised of the possibility of such damages, and notwithstanding the failure of the essential purpose of any remedy without limiting the foregoing provisions of this paragraph, these limitations also apply to any third party claims against you.

This Legal Notice is governed by English Law and the English courts shall have exclusive jurisdiction over any matter arising out of this Legal Notice or from your accessing of the website. It is your responsibility to be aware of and to observe all applicable laws and regulations of any relevant jurisdiction.

The information contained herein does not constitute an offer to sell or the solicitation of any offer to buy or sell securities and or any derivatives and may not be reproduced, further distributed or published by any recipient without prior permission from CERNO CAPITAL.

This website has been published by CERNO CAPITAL which is authorised and regulated in the UK by the Financial Conduct Authority.

CERNO CAPITAL is a registered limited liability partnership in England and Wales (Incorporation Number OC326579), registered office: 34 Sackville Street, London, W1S 3ED.

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