fp0008557_nq.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM N-Q
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
 
Investment Company Act file number 811-05150         
 
Cornerstone Strategic Value Fund, Inc.
(Exact name of registrant as specified in charter)
 
200A Executive Drive         Edgewood, New York
11717
(Address of principal executive offices)
(Zip code)
 
Frank J. Maresca
 
AST Fund Solutions, LLC     200A Executive Drive
Edgewood, NY 11717
(Name and address of agent for service)
 
Registrant's telephone number, including area code:  (866) 668-6558         
 
Date of fiscal year end:      December 31                 
 
Date of reporting period:    September 30, 2013        
 
 
 
 
 
Item 1.  Schedule of Investments.
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
      
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2013 (Unaudited)
 
Description
  
No. of
Shares
    
Value
  
EQUITY SECURITIES - 98.30%
            
CLOSED-END FUNDS - 39.19%
            
CONVERTIBLE SECURITIES - 0.33%
            
AllianzGI Equity & Convertible Income Fund
     18,226     $ 338,457  
                 
CORE - 3.36%
                
Adams Express Company (The)
     45,300       561,267  
Advent/Claymore Enhanced Growth & Income Fund
     27,514       269,087  
General American Investors Company, Inc.
     33,741       1,151,918  
Guggenheim Equal Weight Enhanced Equity Income Fund
     15,973       277,770  
Royce Micro-Cap Trust, Inc.
     7,262       85,038  
Tri-Continental Corporation
     33,275       609,598  
Zweig Fund, Inc. (The)
     33,767       455,855  
              3,410,533  
CORPORATE DEBT INVESTMENT GRADE-LEVERAGED - 1.74%
                
Western Asset/Claymore Inflation-Linked Opportunities & Income Fund
     100,155       1,161,798  
Western Asset/Claymore Inflation-Linked Securities & Income Fund
     51,478       599,204  
              1,761,002  
CORPORATE DEBT INVESTMENT GRADE-RATED - 1.02%
                
Cutwater Select Income Fund
     4,259       75,768  
Federated Enhanced Treasury Income Fund
     47,044       604,986  
Invesco Van Kampen Bond Fund
     2,400       42,096  
Morgan Stanley Income Securities Inc.
     6,959       115,728  
Transamerica Income Shares, Inc.
     9,523       194,364  
              1,032,942  
DEVELOPED MARKET - 0.64%
                
Aberdeen Israel Fund, Inc.
     3,600       55,368  
New Germany Fund, Inc. (The)
     2,545       52,402  
Singapore Fund, Inc. (The)
     22,517       293,397  
Swiss Helvetia Fund, Inc. (The)
     17,749       252,391  
              653,558  
EMERGING MARKETS - 3.52%
                
Aberdeen Emerging Markets Smaller Company Opportunities Fund, Inc.
     2,400       46,704  
Central Europe and Russia Fund, Inc. (The)
     5,029       163,040  
India Fund, Inc. (The)
     27,192       520,727  
Morgan Stanley India Investment Fund, Inc. *
     90,820       1,368,657  
Templeton Dragon Fund, Inc
     43,000       1,119,290  
Templeton Russia and East European Fund, Inc.
     825       12,094  
Turkish Investment Fund, Inc. (The)
     22,948       345,138  
              3,575,650  
EMERGING MARKETS DEBT - 0.37%
                
Morgan Stanley Emerging Markets Domestic Debt Fund, Inc.
     26,549       374,341  
                 
FLEXIBLE INCOME - 1.01%
                
Putnam Master Intermediate Income Trust
     55,158       269,171  
Putnam Premier Income Trust
     143,035       752,364  
              1,021,535  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
      
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2013 (Unaudited) (Continued)
 
Description
    
No. of
Shares
      
Value
  
GENERAL & INSURED LEVERAGED - 1.29%
                
Invesco Value Municipal Income Trust
     0     $ 5  
Nuveen Dividend Advantage Municipal Fund 2
     23,200       300,904  
Nuveen Dividend Advantage Municipal Fund 3
     55,923       710,222  
Nuveen Dividend Advantage Municipal Income Fund
     17,255       218,966  
Nuveen Quality Income Municipal Fund, Inc.
     6,102       76,946  
              1,307,043  
GENERAL BOND - 0.50%
                
Nuveen Build America Bond Opportunity Fund
     27,201       504,307  
                 
GLOBAL - 4.86%
                
Alpine Global Dynamic Dividend Fund
     67,832       322,880  
Alpine Total Dynamic Dividend Fund
     592,900       2,383,458  
Clough Global Allocation Fund
     32,004       487,101  
Clough Global Equity Fund
     20,848       313,762  
Clough Global Opportunities Fund
     13,473       173,398  
Delaware Enhanced Global Dividend and Income Fund
     68,251       812,187  
First Trust Active Dividend Income Fund
     38,918       325,354  
GDL Fund (The)
     3,800       42,864  
Nuveen Global Value Opportunities Fund
     5,700       74,043  
              4,935,047  
GLOBAL INCOME - 1.00%
                
Nuveen Multi-Currency Short-Term Government Income Fund
     97,079       1,017,388  
                 
HIGH CURRENT YIELD (LEVERAGED) - 2.56%
                
DWS High Income Opportunities Fund, Inc.
     76,315       1,079,857  
First Trust Strategic High Income Fund II
     55,245       878,948  
Neuberger Berman High Yield Strategies Fund Inc.
     48,481       633,162  
              2,591,967  
HIGH YIELD - 0.54%
                
First Trust High Income Long/Short Fund
     31,411       550,949  
                 
INCOME & PREFERRED STOCK - 1.15%
                
John Hancock Premium Dividend Fund
     4,000       47,880  
Nuveen Quality Preferred Income Fund 3
     10,400       82,056  
Zweig Total Return Fund, Inc. (The)
     78,736       1,031,442  
              1,161,378  
OPTION ARBITRAGE/OPTIONS STRATEGIES - 9.95%
                
AllianzGI International & Premium Strategy Fund
     64,083       676,716  
BlackRock Enhanced Capital & Income Fund, Inc.
     38,744       501,347  
BlackRock Enhanced Equity Dividend Trust
     286,419       2,153,871  
BlackRock Global Opportunities Equity Trust
     330,406       4,622,380  
BlackRock International Growth and Income Trust
     263,713       2,030,590  
Madison Strategic Sector Premium Fund
     9,260       107,046  
              10,091,950  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
      
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2013 (Unaudited) (Continued)
 
Description
    
No. of
Shares
      
Value
  
PACIFIC EX JAPAN - 0.44%
                
China Fund, Inc. (The)
     5,200     $ 112,892  
Greater China Fund, Inc. (The)
     2,400       27,336  
Taiwan Fund, Inc. *
     8,200       146,862  
Thai Fund, Inc. (The)
     7,850       155,979  
              443,069  
REAL ESTATE - 0.12%
                
Neuberger Berman Real Estate Securities Income Fund Inc.
     26,593       119,934  
                 
SECTOR EQUITY - 4.79%
                
BlackRock EcoSolutions Investment Trust
     24,379       190,156  
BlackRock Energy and Resources Trust
     40,081       1,034,491  
BlackRock Real Asset Equity Trust
     101,967       915,664  
BlackRock Utility and Infrastructure Trust
     12,000       209,400  
ING Risk Managed Natural Resources Fund
     36,366       364,387  
Petroleum & Resources Corporation
     24,609       665,920  
Reaves Utility Income Fund
     59,014       1,479,481  
              4,859,499  
                 
TOTAL CLOSED-END FUNDS
             39,750,549  
                 
CONSUMER DISCRETIONARY - 7.76%
                
CBS Corporation - Class B
     5,000       275,800  
Comcast Corporation - Class A
     20,655       932,573  
CST Brands, Inc.
     333       9,923  
DIRECTV *
     5,000       298,750  
Ford Motor Company
     25,000       421,750  
Gap, Inc. (The)
     4,000       161,120  
Home Depot, Inc. (The)
     14,600       1,107,410  
Johnson Controls, Inc.
     5,000       207,500  
Macy's, Inc.
     4,000       173,080  
McDonald's Corporation
     5,000       481,050  
News Corporation - Class B *
     1,250       20,537  
NIKE, Inc. - Class B
     8,000       581,120  
Omnicom Group Inc.
     2,500       158,600  
Starbucks Corporation
     4,000       307,880  
Time Warner Cable Inc.
     2,000       223,200  
Time Warner Inc.
     7,900       519,899  
TJX Companies, Inc. (The)
     14,000       789,460  
Twenty-First Century Fox, Inc.
     5,000       167,000  
Viacom Inc. - Class B
     2,950       246,561  
Walt Disney Company (The)
     12,200       786,778  
              7,869,991  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
      
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2013 (Unaudited) (Continued)
 
Description
    
No. of
Shares
      
Value
  
CONSUMER STAPLES - 5.50%
                
Altria Group, Inc.
     20,800     $ 714,480  
Coca-Cola Company (The)
     19,000       719,720  
Costco Wholesale Corporation
     2,500       287,800  
CVS Caremark Corporation
     10,430       591,903  
General Mills, Inc.
     5,000       239,600  
Kellogg Company
     3,000       176,190  
Kimberly-Clark Corporation
     3,000       282,660  
Kroger Co. (The)
     4,000       161,360  
Walgreen Co.
     8,000       430,400  
Wal-Mart Stores, Inc.
     26,700       1,974,732  
              5,578,845  
ENERGY - 7.09%
                
Chevron Corporation
     11,732       1,425,438  
ConocoPhillips
     13,974       971,333  
EOG Resources, Inc.
     3,500       592,480  
Exxon Mobil Corporation
     29,936       2,575,693  
Marathon Oil Corporation
     5,000       174,400  
Phillips 66
     7,487       432,898  
Schlumberger Limited
     10,000       883,600  
Valero Energy Corporation
     3,000       102,450  
WPX Energy, Inc. *
     1,666       32,087  
              7,190,379  
FINANCIALS - 10.00%
                
AFLAC, Inc.
     5,500       340,945  
Allstate Corporation (The)
     5,000       252,750  
Ameriprise Financial, Inc.
     2,500       227,700  
Aon plc
     5,500       409,420  
BB&T Corporation
     6,000       202,500  
Berkshire Hathaway Inc. - Class B *
     11,000       1,248,610  
BlackRock, Inc. - Class A
     1,500       405,930  
Capital One Financial Corporation
     4,500       309,330  
Citigroup, Inc.
     11,000       533,610  
Discover Financial Services
     6,000       303,240  
Fifth Third Bancorp
     9,000       162,360  
Franklin Resources, Inc.
     7,500       379,125  
JPMorgan Chase & Co.
     34,132       1,764,283  
Marsh & McLennan Companies, Inc.
     5,000       217,750  
MetLife, Inc.
     7,000       328,650  
Prudential Financial, Inc.
     4,000       311,920  
State Street Corporation
     3,500       230,125  
SunTrust Banks, Inc.
     6,000       194,520  
T. Rowe Price Group, Inc.
     2,000       143,860  
Wells Fargo & Company
     47,800       1,975,096  
Weyerhaeuser Company
     7,000       200,410  
              10,142,134  
HEALTH CARE - 7.50%
                
Abbott Laboratories
     13,200       438,108  
AbbVie Inc.
     13,200       590,436  
Aetna Inc.
     3,000       192,060  
Allergan, Inc.
     3,000       271,350  
Amgen Inc.
     7,800       873,132  
Becton, Dickinson and Company
     2,000       200,040  
Boston Scientific Corporation *
     12,000       140,880  
Cardinal Health, Inc.
     2,950       153,843  
Cigna Corporation
     2,500       192,150  
Eli Lilly & Company
     10,000       503,300  
Johnson & Johnson
     20,000       1,733,800  
Mallinckrodt public limited company *
     262       11,552  
McKesson Corporation
     1,800       230,940  
Medtronic, Inc.
     7,000       372,750  
Merck & Company, Inc.
     22,267       1,060,132  
St. Jude Medical, Inc.
     3,000       160,920  
Thermo Fisher Scientific Inc.
     3,000       276,450  
Wellpoint, Inc.
     2,500       209,025  
              7,610,868  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
      
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2013 (Unaudited) (Continued)
 
Description
    
No. of
Shares
      
Value
  
INDUSTRIALS - 5.89%
                
Boeing Company (The)
     5,000     $ 587,500  
Deere & Company
     6,500       529,035  
Dover Corporation
     2,000       179,660  
Emerson Electric Company
     7,000       452,900  
General Dynamics Corporation
     3,000       262,560  
General Electric Company
     75,000       1,791,750  
Honeywell International Inc.
     5,000       415,200  
Lockheed Martin Corporation
     4,000       510,200  
Precision Castparts Corporation
     2,000       454,480  
Union Pacific Corporation
     4,000       621,360  
Waste Management, Inc.
     4,000       164,960  
              5,969,605  
INFORMATION TECHNOLOGY - 10.90%
                
Apple Inc.
     6,900       3,289,575  
Cisco Systems, Inc.
     10,000       234,200  
eBay Inc. *
     10,000       557,900  
Google Inc. - Class A *
     1,000       875,910  
Hewlett-Packard Company
     12,000       251,760  
International Business Machines Corporation
     6,100       1,129,598  
MasterCard Incorporated - Class A
     1,200       807,336  
Microsoft Corporation
     41,800       1,392,358  
Oracle Corporation
     34,272       1,136,802  
Visa Inc. - Class A
     6,000       1,146,600  
Yahoo! Inc. *
     7,000       232,120  
              11,054,159  
MATERIALS - 1.48%
                
Air Products & Chemicals, Inc.
     2,000       213,140  
Dow Chemical Company (The)
     10,000       384,000  
Ecolab Inc.
     2,500       246,900  
International Paper Company
     4,000       179,200  
Newmont Mining Corporation
     5,000       140,500  
PPG Industries, Inc.
     2,000       334,120  
              1,497,860  
TELECOMMUNICATION SERVICES - 1.57%
                
AT&T, Inc.
     25,039       846,819  
Verizon Communications, Inc.
     16,000       746,560  
              1,593,379  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
      
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2013 (Unaudited) (Concluded)
 
Description
    
No. of
Shares
      
Value
  
UTILITIES - 1.42%
                
AES Corporation (The)
     8,000     $ 106,320  
Consolidated Edison, Inc.
     3,000       165,420  
Entergy Corporation
     2,000       126,380  
Exelon Corporation
     5,000       148,200  
NextEra Energy, Inc.
     4,000       320,640  
Public Service Enterprises Group, Inc.
     6,500       214,045  
Southern Company (The)
     6,000       247,080  
Xcel Energy Inc.
     4,000       110,440  
              1,438,525  
                 
TOTAL EQUITY SECURITIES (cost - $85,449,271)
             99,696,294  
                 
SHORT-TERM INVESTMENTS - 1.82%
                
MONEY MARKET FUNDS - 1.82%
                
Fidelity Institutional Money Market Government Portfolio - Class I, 0.01%^ (cost - $1,847,452)
     1,847,452       1,847,452  
                 
TOTAL INVESTMENTS - 100.12% (cost - $87,296,723)
             101,543,746  
                 
LIABILITIES IN EXCESS OF OTHER ASSETS - (0.12)%
             (120,718 )
                 
NET ASSETS - 100.00%
           $ 101,423,028  
 
*
Non-income producing security. 
^
The rate shown is the 7-day effective yield as of September 30, 2013. 
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
NOTES TO SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2013 (UNAUDITED)
 
Federal Income Tax Cost: The following information is computed on a tax basis for each item as of September 30, 2013:

Cost of portfolio investments
   $ 87,296,723  
Gross unrealized appreciation
   $ 16,679,412  
Gross unrealized depreciation
     (2,432,389 )
Net unrealized appreciation
   $ 14,247,023  
 
As required by the Fair Value Measurement and Disclosures Topic of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification, the Fund has performed an analysis of all assets and liabilities measured at fair value to determine the significance and character of all inputs to their fair value determination.
 
The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into the following three broad categories.
 
·
Level 1 - quoted unadjusted prices for identical instruments in active markets to which the Fund has access at the date of measurement.
 
·
Level 2 - quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.
 
·
Level 3 - model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Fund's own assumptions that market participants would use to price the asset or liability based on the best available information.
 
 
 
 

The following is a summary of the inputs used as of September 30, 2013 in valuing the Fund's investments carried at value:
 
 
 
VALUATION INPUTS
  
INVESTMENTS
IN
SECURITIES
    
OTHER FINANCIAL INSTRUMENTS*
  
             
Level 1 – Quoted Prices
            
 Equity Investments
   $ 99,696,294     $ -  
 Short-Term Investments
     1,847,452       -  
Level 2 – Other Significant Observable Inputs
     -       -  
Level 3 – Significant Unobservable Inputs
     -       -  
Total
   $ 101,543,746     $ -  
 
*
Other financial instruments include futures, forwards and swap contracts, if any.
 
The breakdown of the Fund's investments into major categories 1s disclosed in its Schedule of Investments.
 
As of September 30, 2013, the Fund did not have any transfers in and out of any Level.
 
The Fund did not have any assets or liabilities that were measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at September 30, 2013.
 
The disclosures for the Fund's fiscal year beginning January 1, 2013 relate to presenting separately any Level 3 purchases, sales, issuances and settlements on a gross basis instead of one net amount. Management has evaluated the impact of ASU No. 2010-6 for the required disclosures.
 
The Fund is exposed to financial market risks, including the valuations of its investment portfolio. During the nine months ended September 30, 2013, the Fund did not engage in derivative instruments and other hedging activities.
 
The Fund has evaluated the need for additional disclosures and/or adjustments resulting through the date its financial statements were issued. Based on this evaluation, no additional disclosures or adjustments were required to such Schedule of Investments.
 
Securities valuation policies and other investment related disclosures are hereby incorporated by reference to the Fund's semi-annual report previously filed with the Securities and Exchange Commission on the Form N-CSR on September 6, 2013 with a file number 811-05150.
 
Other information regarding the Fund is available in the Fund’s most recent semi-annual report. This information is also available on the Fund’s website at www.cornerstonestrategicvaluefund.com; or on the website of the Securities and Exchange Commission at www.sec.gov.
 
 
 
 
 
 Item 2.  Controls and Procedures.
 
(a)   Based on their evaluation of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) as of a date within 90 days of the filing date of this report, the registrant’s principal executive officer and principal financial officer have concluded that such disclosure controls and procedures are reasonably designed and are operating effectively to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to them by others within those entities, particularly during the period in which this report is being prepared, and that such information is recorded, processed, summarized, and reported on a timely basis.
 
(b)   There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
 
Item 3.  Exhibits.
 
File as exhibits as part of this Form a separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)):  Attached hereto

 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
(Registrant) Cornerstone Strategic Value Fund, Inc.         
 
By (Signature and Title)*
/s/ Ralph W. Bradshaw
  
   
Ralph W. Bradshaw, President and Chairman
  
   
(Principal Executive Officer)
  
       
Date
November 25, 2013
    
       
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
       
By (Signature and Title)*
/s/ Ralph W. Bradshaw
  
   
Ralph W. Bradshaw, President and Chairman
  
   
(Principal Executive Officer)
  
       
Date
November 25, 2013
    
       
By (Signature and Title)*
/s/ Frank J. Maresca
  
   
Frank J. Maresca, Treasurer
(Principal Financial Officer)
  
       
Date
November 25, 2013
    
 
*
Print the name and title of each signing officer under his or her signature.