CLM Cornerstone Strategic Value Fund New

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

 

Investment Company Act file number

811-05150

 

Cornerstone Strategic Value Fund, Inc.

(Exact name of registrant as specified in charter)

 

225 Pictoria Drive, Suite 450 Cincinnati, OH		45246
(Address of principal executive offices)		(Zip code)

 

Ultimus Fund Solutions, LLC 225 Pictoria Drive, Suite 450 Cincinnati, Ohio 45246

(Name and address of agent for service)

 

Registrant's telephone number, including area code:

(513) 587-3400

 

Date of fiscal year end:	December 31
Date of reporting period:	June 30, 2024

 

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

 

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1.

Reports to Stockholders.

 

(a)

 

Cornerstone Strategic
Value Fund, Inc.

 

June 30, 2024

 

 

CONTENTS

 

Letter to Stockholders	1
Portfolio Summary	3
Schedule of Investments	4
Statement of Assets and Liabilities	11
Statement of Operations	12
Statements of Changes in Net Assets	13
Financial Highlights	14
Notes to Financial Statements	15
Results of Annual Meeting of Stockholders	20
Investment Management Agreement Approval Disclosure	21
Description of Dividend Reinvestment Plan	23
Proxy Voting and Portfolio Holdings Information	25
Summary of General Information	25
Stockholder Information	25

 

Letter to Stockholders

 

August 5, 2024

 

Dear Fellow Stockholders:

 

Following is the semi-annual report for Cornerstone Strategic Value Fund, Inc. (the “Fund”) for the six-month period ended June 30, 2024. At the end of the period, the Fund’s net assets were $1,713.7 million and the Net Asset Value per share (“NAV”) was $7.11. The share price closed at $7.70. After reflecting the reinvestment of monthly distributions totaling $0.65 per share, the Fund achieved a total investment return at market value of 17.52% for the period ended June 30, 2024.

 

Economic and Market Summary

 

So far this year, the U.S. economy has done rather well by most metrics. 2024 has started slowly, but worries of a recession have subsided, inflation is decreasing, consumer spending is solid, and the labor market, while slowing, is still robust. Job growth was positive in the first half of the year, although the pace of expansion slowed in the second quarter. The unemployment rate started the year near an all-time low but gradually ticked up into the summer, hitting 4.0% in May for the first time since January 2022. At the beginning of the year, investors were unsure of the path the Federal Reserve (the “Fed”) would take. Some economists predicted multiple interest rate cuts, while others predicted no changes. The Fed has maintained rates in a range between 5.00% and 5.25% since July 2023, but economists are now predicting just one cut in the second half of 2024. The first half of the year saw a slowdown in U.S. economic growth, which was below economists’ forecasts. There were concerns that economic growth would be impacted by trade disruptions resulting from the Francis Scott Key Bridge collapse in Baltimore, but the negative effects were short-lived. Inflation metrics improved, but progress toward returning it to its pre-pandemic averages of just under 2% has slowed in recent months. The information technology and communication services sectors were strong contributors to gains in the S&P 500 during the first half of the year. Returns were significantly boosted by positive corporate returns from some of the Magnificent Seven technology companies. The first quarter saw weakness in the real estate and utilities sectors, while the second quarter saw weakness in the materials and industrials sectors.

 

Managed Distribution Policy

 

The Fund has maintained its policy of regular distributions to stockholders, which continues to be popular with investors. These distributions are not tied to the Fund’s investment income and capital gains and do not represent yield or investment return on the Fund’s portfolio. The policy of maintaining regular monthly distributions is designed to enhance stockholder value by increasing liquidity for individual investors and providing greater flexibility to manage their investment in the Fund. As always, stockholders have the option of taking their distributions in cash or reinvesting them in shares of the Fund pursuant to the Fund’s reinvestment plan. The Board of Directors believes that the Fund’s distribution policy maintains a stable, high rate of distribution for stockholders. As always, the monthly distributions are reviewed and approved by the Board throughout the year and are subject to change at their discretion. In addition, please note the Fund’s reinvestment plan which may provide additional benefit to participating stockholders, as explained further below. Please read the disclosure notes in the Fund’s report for details on the Fund’s distribution policy and reinvestment plan. As in previous years, stockholders will receive a final determination of the total distribution attributable to income, capital gains, or return-of-capital after the end of each year. The allocation among these categories may vary greatly from year to year. In any given year, there is no

 

1

 

Letter to Stockholders (concluded)

 

guarantee that the Fund’s investment returns will exceed the amount of the distributions. To the extent that the amount of distributions taken in cash exceeds the total net investment returns of the Fund, the assets of the Fund will decline. If the total net investment returns exceed the amount of cash distributions, the assets of the Fund will increase. In both cases, the Fund’s individual stockholders have complete flexibility to take their distributions in cash or to reinvest in Fund shares through the Fund’s reinvestment plan, and they can change this election as they desire.

 

Distribution Reinvestment Considerations

 

The Fund’s distribution reinvestment plan may at times provide significant benefits to plan participants; therefore, stockholders should evaluate the advantages of reinvesting their distribution payments through the plan. Under the plan, the method for determining the number of newly issued shares received when distributions are reinvested is determined by dividing the amount of the distribution either by the Fund’s last reported NAV or by a price equal to the average closing price of the Fund over the five trading days preceding the payment date of the distribution, whichever is lower. When the Fund trades at a premium to its NAV, as it has in recent history, stockholders may find that reinvestments through the plan provide potential advantages worth considering.

 

Outlook

 

Uncertainties persist surrounding the path of inflation as well as the timing and magnitude of Fed rate cuts. Growth is expected to continue moderating in the second half of 2024. Although many factors will influence the trajectory of the stock market, American consumers are still strong after years of hiring and wage growth, which will continue to have an outsized impact. The U.S. Presidential election in November could increase volatility but its effects will likely be short-term in nature.

 

The Fund’s Board of Directors, its officers, and its investment adviser appreciate your ongoing support and are aware that investors have placed their trust in us. We know you have a choice, and we all remain committed to continuing to provide our service to you.

 

Joshua G. Bradshaw Portfolio Manager	Daniel W. Bradshaw Portfolio Manager

 

2

 

Cornerstone Strategic Value Fund, Inc. Portfolio Summary – As Of June 30, 2024 (Unaudited)

 

SECTOR ALLOCATION

 

Sector	Percent of Net Assets
Information Technology	24.1
Closed-End Funds	15.6
Financials	10.2
Health Care	9.4
Communication Services	8.1
Consumer Discretionary	8.1
Exchange-Traded Funds	7.2
Consumer Staples	5.8
Industrials	5.8
Energy	2.4
Utilities	1.5
Materials	0.6
Real Estate	0.5
Other	0.7

 

TOP TEN HOLDINGS, BY ISSUER

	Holding	Sector	Percent of Net Assets
1.	Apple Inc.	Information Technology	6.8
2.	Microsoft Corporation	Information Technology	6.6
3.	NVIDIA Corporation	Information Technology	5.2
4.	Alphabet Inc. - Class C	Communication Services	4.5
5.	Amazon.com, Inc.	Consumer Discretionary	4.0
6.	Technology Select Sector SPDR® Fund (The)	Exchange-Traded Funds	2.4
7.	Eli Lilly and Company	Health Care	1.7
8.	Meta Platforms, Inc. - Class A	Communication Services	1.6
9.	Gabelli Dividend & Income Trust (The)	Closed-End Funds	1.4
10.	JPMorgan Chase & Co.	Financials	1.3

 

 

3

 

 

 

Cornerstone Strategic Value Fund, Inc. Schedule of Investments – June 30, 2024 (Unaudited)

 

 

Description		No.of Shares				Value
EQUITY SECURITIES — 99.33%
CLOSED-END FUNDS — 15.62%
CONVERTIBLE SECURITY FUNDS — 0.32%
Bancroft Fund Ltd.			69,035			$	1,081,778
Ellsworth Growth and Income Fund Ltd.			197,451				1,626,996
Gabelli Convertible & Income Securities Fund Inc. (The)			563				2,061
Virtus Convertible & Income Fund			520,738				1,702,814
Virtus Convertible & Income Fund II			232,071				677,647
Virtus Diversified Income & Convertible Fund			352				7,469
Virtus Equity & Convertible Income Fund			20,484				476,048
							5,574,813
DIVERSIFIED EQUITY — 4.20%
Adams Diversified Equity Fund, Inc.			12,054				259,040
Eaton Vance Tax-Advantaged Dividend Income Fund			769,270				17,916,298
Gabelli Dividend & Income Trust (The)			1,076,136				24,439,049
General American Investors Company, Inc.			255,911				12,723,895
John Hancock Tax-Advantaged Dividend Income Fund			41,245				833,561
Liberty All-Star® Equity Fund			185,972				1,264,610
Liberty All-Star® Growth Fund, Inc.			968,506				5,171,822
Royce Value Trust, Inc.			424,806				6,146,943
Tri-Continental Corporation			102,657				3,179,287
							71,934,505
GLOBAL — 1.76%
abrdn Global Dynamic Dividend Fund			40,165				392,010
abrdn Total Dynamic Dividend Fund			456,336				3,837,786
Clough Global Dividend and Income Fund			147,425				840,323
Clough Global Equity Fund			209,816				1,463,466
Clough Global Opportunities Fund			499,217				2,685,787
Eaton Vance Tax-Advantaged Global Dividend Income Fund			769,840				14,326,723
Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund			205,625				5,243,438
Gabelli Global Small and Mid Cap Value Trust (The)			27,712				312,868
GDL Fund (The)			109,514				858,590
Lazard Global Total Return and Income Fund, Inc.			7,194				119,852
Royce Global Value Trust, Inc.			2,186				24,308
							30,105,151
INCOME & PREFERRED STOCK — 0.60%
Calamos Long/Short Equity & Dynamic Income Trust			52,154				795,349
Calamos Strategic Total Return Fund			561,277				9,451,904
LMP Capital and Income Fund Inc.			2,662				41,208
							10,288,461
NATURAL RESOURCES — 0.31%
Adams Natural Resources Fund, Inc.			225,677				5,328,234

 

 

See accompanying notes to financial statements.

 

4

 

 

 

Cornerstone Strategic Value Fund, Inc. Schedule of Investments – June 30, 2024 (Unaudited) (continued)

 

 

Description		No.of Shares				Value
OPTION ARBITRAGE/OPTIONS STRATEGIES — 7.17%
BlackRock Enhanced Capital and Income Fund, Inc.			117,107			$	2,340,969
BlackRock Enhanced Equity Dividend Trust			874,828				7,147,345
BlackRock Enhanced Global Dividend Trust			527,568				5,597,496
BlackRock Enhanced International Dividend Trust			289,338				1,614,506
Eaton Vance Enhanced Equity Income Fund			78,433				1,523,953
Eaton Vance Enhanced Equity Income Fund II			295,151				6,428,389
Eaton Vance Risk-Managed Diversified Equity Income Fund			764,354				6,711,028
Eaton Vance Tax-Managed Buy-Write Income Fund			315,293				4,451,937
Eaton Vance Tax-Managed Buy-Write Opportunities Fund			1,238,473				16,929,927
Eaton Vance Tax-Managed Diversified Equity Income Fund			772,318				10,851,068
Eaton Vance Tax-Managed Global Buy-Write Opportunities Fund			1,006,667				8,325,136
Eaton Vance Tax-Managed Global Diversified Equity Income Fund			1,790,432				15,129,151
First Trust Enhanced Equity Income Fund			13,012				259,199
Nuveen Dow 30SM Dynamic Overwrite Fund			420,012				5,884,368
Nuveen Nasdaq 100 Dynamic Overwrite Fund			690,900				17,327,772
Nuveen S&P 500 Buy-Write Income Fund			589,490				7,958,115
Nuveen S&P 500 Dynamic Overwrite Fund			123,509				2,016,902
Virtus Dividend, Interest & Premium Strategy Fund			171,406				2,104,866
Voya Global Equity Dividend and Premium Opportunity Fund			52,493				269,814
							122,871,941
REAL ESTATE — 0.14%
Cohen & Steers Quality Income Realty Fund, Inc.			140,133				1,636,753
Cohen & Steers Total Return Realty Fund, Inc.			61,386				709,622
Nuveen Real Estate Income Fund			9,431				72,053
							2,418,428
SECTOR EQUITY — 0.62%
abrdn Healthcare Investors			31,240				545,450
abrdn Healthcare Opportunities Fund			2,841				57,900
abrdn Life Sciences Investors			22,339				316,544
BlackRock Health Sciences Term Trust			1,773				27,233
BlackRock Innovation and Growth Term Trust			904,388				6,538,725
Gabelli Healthcare & WellnessRx Trust (The)			105,646				1,012,089
John Hancock Financial Opportunities Fund			52,666				1,475,174
Nuveen Real Asset Income and Growth Fund			49,968				608,111
							10,581,226

 

 

See accompanying notes to financial statements.

 

5

 

 

 

Cornerstone Strategic Value Fund, Inc. Schedule of Investments – June 30, 2024 (Unaudited) (continued)

 

 

Description		No.of Shares				Value
UTILITY — 0.50%
Allspring Utilities and High Income Fund			69,908			$	686,497
BlackRock Utilities, Infrastructure & Power Opportunities Trust			158,367				3,507,829
Duff & Phelps Utility and Infrastructure Fund Inc.			444,375				4,368,206
							8,562,532
TOTAL CLOSED-END FUNDS							267,665,291
COMMON STOCK — 76.49%
COMMUNICATION SERVICES — 8.10%
Alphabet Inc. - Class C			422,500				77,494,950
Comcast Corporation - Class A			141,600				5,545,056
Meta Platforms, Inc. - Class A			54,900				27,681,678
Netflix, Inc. *			15,500				10,460,640
T-Mobile US, Inc.			38,900				6,853,402
Verizon Communications Inc.			115,400				4,759,096
Walt Disney Company (The)			60,300				5,987,187
							138,782,009
CONSUMER DISCRETIONARY — 8.08%
Amazon.com, Inc. *			356,600				68,912,950
AutoZone, Inc. *			600				1,778,460
Booking Holdings Inc.			1,300				5,149,950
Chipotle Mexican Grill, Inc. *			55,000				3,445,750
eBay Inc.			16,900				907,868
General Motors Company			45,500				2,113,930
Hilton Worldwide Holdings Inc.			8,200				1,789,240
Home Depot, Inc. (The)			28,800				9,914,112
Lowe’s Companies, Inc.			20,000				4,409,200
McDonald’s Corporation			20,400				5,198,736
NIKE, Inc. - Class B			41,000				3,090,170
O’Reilly Automotive, Inc. *			2,400				2,534,544
Ross Stores, Inc.			6,500				944,580
Starbucks Corporation			29,700				2,312,145
Tesla, Inc. *			109,200				21,608,496
TJX Companies, Inc. (The)			39,200				4,315,920
							138,426,051
CONSUMER STAPLES — 5.81%
Altria Group, Inc.			36,100				1,644,355
Archer-Daniels-Midland Company			8,000				483,600
Coca-Cola Company (The)			242,900				15,460,585
Colgate-Palmolive Company			21,931				2,128,184
Constellation Brands, Inc. - Class A			2,300				591,744
Costco Wholesale Corporation			21,300				18,104,787
Dollar General Corporation			7,600				1,004,948
General Mills, Inc.			11,800				746,468
Hershey Company (The)			5,200				955,916
Keurig Dr Pepper Inc.			27,500				918,500
Kimberly-Clark Corporation			4,900				677,180
Kraft Heinz Company (The)			18,400				592,848
Mondelēz International, Inc. - Class A			38,000				2,486,720
Monster Beverage Corporation *			54,900				2,742,255
PepsiCo, Inc.			56,000				9,236,080
Philip Morris International Inc.			60,700				6,150,731
Procter & Gamble Company (The)			84,000				13,853,280
Target Corporation			11,400				1,687,656

 

 

See accompanying notes to financial statements.

 

6

 

 

 

Cornerstone Strategic Value Fund, Inc. Schedule of Investments – June 30, 2024 (Unaudited) (continued)

 

 

Description		No.of Shares				Value
CONSUMER STAPLES (Continued)
Walmart Inc.			298,000			$	20,177,580
							99,643,417
ENERGY — 2.43%
Chevron Corporation			56,200				8,790,804
ConocoPhillips			40,700				4,655,266
Devon Energy Corporation			31,200				1,478,880
Exxon Mobil Corporation			186,063				21,419,573
Kinder Morgan, Inc. - Class P			121,900				2,422,153
Occidental Petroleum Corporation			36,600				2,306,898
Phillips 66			1,400				197,638
Schlumberger Limited			4,300				202,874
Valero Energy Corporation			100				15,676
Williams Companies, Inc. (The)			3,100				131,750
							41,621,512
FINANCIALS — 10.16%
Aflac Incorporated			16,500				1,473,615
American Express Company			23,500				5,441,425
American International Group, Inc.			8,100				601,344
Aon plc - Class A			9,300				2,730,294
Arthur J. Gallagher & Co.			8,000				2,074,480
Bank of America Corporation			347,800				13,832,006
Berkshire Hathaway Inc. - Class B *			49,700				20,217,960
BlackRock, Inc.			5,200				4,094,064
Capital One Financial Corporation			2,200				304,590
Charles Schwab Corporation (The)			83,100				6,123,639
Chubb Limited			13,500				3,443,580
Citigroup Inc.			66,900				4,245,474
CME Group Inc.			13,300				2,614,780
Fiserv, Inc. *			12,100				1,803,384
Goldman Sachs Group, Inc. (The)			12,300				5,563,536
Intercontinental Exchange, Inc.			18,300				2,505,087
JPMorgan Chase & Co.			110,100				22,268,826
Marsh & McLennan Companies, Inc.			18,300				3,856,176
Mastercard Incorporated - Class A			33,200				14,646,512
MetLife, Inc.			22,200				1,558,218
Moody’s Corporation			8,100				3,409,533
Morgan Stanley			64,900				6,307,631
MSCI Inc.			3,800				1,830,650
PayPal Holdings, Inc. *			46,300				2,686,789
PNC Financial Services Group, Inc. (The)			13,800				2,145,624
Progressive Corporation (The)			26,700				5,545,857
S&P Global Inc.			11,700				5,218,200
Travelers Companies, Inc. (The)			3,000				610,020
U.S. Bancorp			57,700				2,290,690
Visa, Inc. - Class A			62,000				16,273,140
Wells Fargo & Company			140,900				8,368,051
							174,085,175
HEALTH CARE — 9.39%
Abbott Laboratories			53,000				5,507,230
AbbVie Inc.			55,100				9,450,752
Amgen Inc.			15,800				4,936,710
Becton, Dickinson and Company			1,800				420,678
Biogen Inc. *			3,600				834,552
Boston Scientific Corporation *			51,300				3,950,613
Bristol-Myers Squibb Company			74,800				3,106,444
Centene Corporation *			4,800				318,240
Cigna Group (The)			11,200				3,702,384

 

 

See accompanying notes to financial statements.

 

7

 

 

 

Cornerstone Strategic Value Fund, Inc. Schedule of Investments – June 30, 2024 (Unaudited) (continued)

 

 

Description		No.of Shares				Value
HEALTH CARE (Continued)
CVS Health Corporation			12,800			$	755,968
Danaher Corporation			26,900				6,720,965
DexCom, Inc. *			13,600				1,541,968
Edwards Lifesciences Corporation *			2,700				249,399
Elevance Health, Inc.			8,700				4,714,182
Eli Lilly and Company			32,900				29,787,002
Gilead Sciences, Inc.			47,300				3,245,253
HCA Healthcare, Inc.			10,500				3,373,440
Humana Inc.			4,000				1,494,600
Intuitive Surgical, Inc. *			8,000				3,558,800
IQVIA Holdings Inc. *			4,600				972,624
Johnson & Johnson			80,300				11,736,648
McKesson Corporation			5,200				3,037,008
Medtronic plc			35,500				2,794,205
Merck & Co., Inc.			94,800				11,736,240
Mettler-Toledo International Inc. *			700				978,313
Pfizer Inc.			170,100				4,759,398
Regeneron Pharmaceuticals, Inc. *			4,000				4,204,120
Solventum Corporation *			2,725				144,098
Stryker Corporation			14,400				4,899,600
Thermo Fisher Scientific Inc.			10,700				5,917,100
UnitedHealth Group Incorporated			35,000				17,824,100
Vertex Pharmaceuticals Incorporated *			9,100				4,265,352
							160,937,986
INDUSTRIALS — 5.80%
3M Company			9,000				919,710
Automatic Data Processing, Inc.			7,500				1,790,175
Boeing Company (The) *			28,800				5,241,888
Carrier Global Corporation			13,700				864,196
Caterpillar Inc.			23,700				7,894,470
Cintas Corporation			1,400				980,364
CSX Corporation			107,500				3,595,875
Deere & Company			16,300				6,090,169
Eaton Corporation plc			5,000				1,567,750
Emerson Electric Co.			33,600				3,701,376
FedEx Corporation			3,900				1,169,376
GE Vernova Inc. *			7,825				1,342,066
General Dynamics Corporation			16,400				4,758,296
General Electric Company			31,000				4,928,070
Honeywell International Inc.			28,800				6,149,952
Illinois Tool Works Inc.			15,300				3,625,488
Johnson Controls International plc			8,900				591,583
Lockheed Martin Corporation			12,000				5,605,200
Norfolk Southern Corporation			14,200				3,048,598
Northrop Grumman Corporation			3,000				1,307,850
Old Dominion Freight Line, Inc.			3,300				582,780
PACCAR Inc.			30,100				3,098,494
Parker-Hannifin Corporation			1,900				961,039
Paychex, Inc.			5,300				628,368
Republic Services, Inc.			5,200				1,010,568
Rockwell Automation, Inc.			6,900				1,899,432
RTX Corporation			66,600				6,685,974
Trane Technologies plc - Class A			3,200				1,052,576
TransDigm Group Incorporated			2,800				3,577,308
Union Pacific Corporation			27,300				6,176,898
United Parcel Service, Inc. - Class B			19,800				2,709,630
Veralto Corporation			10,766				1,027,830

 

 

See accompanying notes to financial statements.

 

8

 

 

 

Cornerstone Strategic Value Fund, Inc. Schedule of Investments – June 30, 2024 (Unaudited) (continued)

 

 

Description		No.of Shares				Value
INDUSTRIALS (Continued)
Waste Management, Inc.			22,600			$	4,821,484
							99,404,833
INFORMATION TECHNOLOGY — 24.11%
Accenture plc - Class A			18,600				5,643,426
Adobe Inc. *			16,900				9,388,626
Advanced Micro Devices, Inc. *			44,800				7,267,008
Analog Devices, Inc.			8,800				2,008,688
Apple Inc.			549,900				115,819,938
Applied Materials, Inc.			31,700				7,480,883
Autodesk, Inc. *			5,600				1,385,720
Broadcom Inc.			11,900				19,105,807
Cisco Systems, Inc.			110,600				5,254,606
Intuit Inc.			10,400				6,834,984
Lam Research Corporation			5,100				5,430,735
Microsoft Corporation			254,400				113,704,080
NVIDIA Corporation			720,000				88,948,800
Oracle Corporation			62,600				8,839,120
Roper Technologies, Inc.			3,100				1,747,346
Salesforce, Inc.			35,500				9,127,050
Texas Instruments Incorporated			26,500				5,155,045
							413,141,862
MATERIALS — 0.63%
Air Products and Chemicals, Inc.			4,800				1,238,640
Corteva, Inc.			13,500				728,190
Ecolab Inc.			6,800				1,618,400
Freeport-McMoRan Inc.			8,000				388,800
Linde plc			10,800				4,739,148
Nucor Corporation			4,400				695,552
Sherwin-Williams Company (The)			4,900				1,462,307
							10,871,037
REAL ESTATE — 0.48%
American Tower Corporation			6,800				1,321,784
AvalonBay Communities, Inc.			3,000				620,670
CBRE Group, Inc. - Class A *			12,100				1,078,231
Equinix, Inc.			2,700				2,042,820
Equity Residential			8,500				589,390
Public Storage			4,300				1,236,895
Realty Income Corporation			17,200				908,504
SBA Communications Corporation - Class A			2,200				431,860
							8,230,154
UTILITIES — 1.50%
American Electric Power Company, Inc.			23,900				2,096,986
American Water Works Company, Inc.			13,500				1,743,660
Constellation Energy Corporation			17,133				3,431,226
Dominion Energy, Inc.			22,700				1,112,300
Duke Energy Corporation			25,600				2,565,888
Exelon Corporation			66,800				2,311,948
NextEra Energy, Inc.			62,200				4,404,382
Sempra			31,500				2,395,890
Southern Company (The)			61,300				4,755,041
WEC Energy Group, Inc.			12,300				965,058
							25,782,379
TOTAL COMMON STOCKS							1,310,926,415
EXCHANGE-TRADED FUNDS — 7.22%
Communication Services Select Sector SPDR® Fund (The)			14,700				1,259,202
Consumer Discretionary Select Sector SPDR® Fund (The)			7,300				1,331,520

 

 

See accompanying notes to financial statements.

 

9

 

 

 

Cornerstone Strategic Value Fund, Inc. Schedule of Investments – June 30, 2024 (Unaudited) (concluded)

 

 

Description		No.of Shares				Value
EXCHANGE-TRADED FUNDS (Continued)
Consumer Staples Select Sector SPDR® Fund (The)			59,000			$	4,518,220
Energy Select Sector SPDR® Fund (The)			148,800				13,563,120
Financial Select Sector SPDR® Fund (The)			4,300				176,773
Health Care Select Sector SPDR® Fund (The)			38,700				5,640,525
Industrial Select Sector SPDR® Fund (The)			181,900				22,168,153
Materials Select Sector SPDR® Fund (The)			171,500				15,145,165
Real Estate Select Sector SPDR® Fund (The)			495,000				19,012,950
Technology Select Sector SPDR® Fund (The)			180,600				40,857,138
TOTAL EXCHANGE-TRADED FUNDS							123,672,766
TOTAL EQUITY SECURITIES
(cost - $1,267,105,860)							1,702,264,472
SHORT-TERM INVESTMENT — 0.56%
MONEY MARKET FUNDS — 0.56%
Fidelity Institutional Money Market Government Portfolio - Class I, 5.21% ^ (cost - $9,572,340)			9,572,340				9,572,340
TOTAL INVESTMENTS — 99.89% (cost - $1,276,678,200)							1,711,836,812
OTHER ASSETS IN EXCESS OF LIABILITIES — 0.11%							1,909,815
NET ASSETS — 100.00%						$	1,713,746,627

 

*

Non-income producing security.

 

^

The rate shown is the 7-day effective yield as of June 30, 2024.

 

plc

Public Limited Company.

 

See accompanying notes to financial statements.

 

10

 

 

 

Cornerstone Strategic Value Fund, Inc. Statement of Assets and Liabilities – June 30, 2024 (Unaudited)

 

 

ASSETS
Investments, at value (cost – $1,276,678,200) (Notes B and C)		$	1,711,836,812
Receivables:
Investments sold			2,417,294
Dividends			1,248,303
Prepaid expenses			54,250
Total Assets			1,715,556,659
LIABILITIES
Payables:
Investment management fees (Note D)			1,387,967
Administration and fund accounting fees (Note D)			112,305
Directors’ fees and expenses			76,472
Investments purchased			56,138
Other accrued expenses			177,150
Total Liabilities			1,810,032
NET ASSETS (applicable to 240,941,149 shares of common stock)		$	1,713,746,627
NET ASSET VALUE PER SHARE ($1,713,746,627 ÷ 240,941,149)		$	7.11
NET ASSETS CONSISTS OF
Common stock, $0.001 par value; 240,941,149 shares issued and outstanding (800,000,000 shares authorized)		$	240,941
Paid-in capital			1,279,136,480
Accumulated earnings			434,369,206
Net assets applicable to shares outstanding		$	1,713,746,627

 

 

See accompanying notes to financial statements.

 

11

 

 

 

Cornerstone Strategic Value Fund, Inc. Statement of Operations – for the Six Months Ended June 30, 2024 (Unaudited)

 

 

INVESTMENT INCOME
Income:
Dividends		$	19,947,946
Expenses:
Investment management fees (Note D)			8,170,471
Administration and fund accounting fees (Note D)			345,361
Directors’ fees and expenses			159,332
Printing			113,970
Custodian fees			96,241
Legal and audit fees			38,080
Transfer agent fees			26,551
Stock exchange listing fees			16,914
Insurance			14,474
Miscellaneous			23,137
Total Expenses			9,004,531
Net Investment Income			10,943,415
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investments			60,451,529
Long-term capital gain distributions from regulated investment companies			38,952
Net change in unrealized appreciation/(depreciation) in value of investments			164,336,880
Net realized and unrealized gain on investments			224,827,361
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		$	235,770,776

 

 

See accompanying notes to financial statements.

 

12

 

 

 

Cornerstone Strategic Value Fund, Inc. Statements of Changes in Net Assets

 

 

		For the Six Months Ended June 30, 2024 (Unaudited)					For the Year Ended December 31, 2023
INCREASE IN NET ASSETS
Operations:
Net investment income		$	10,943,415				$	5,719,087
Net realized gain from investments			60,490,481					120,041,542
Net change in unrealized appreciation/(depreciation) in value of investments			164,336,880					267,486,319
Net increase in net assets resulting from operations			235,770,776					393,246,948
Distributions to stockholders (Note B):
From earnings			(70,695,789	)				(124,050,838	)
Return-of-capital			(83,465,296	)				(205,965,385	)
Total distributions to stockholders			(154,161,085	)				(330,016,223	)
Common stock transactions:
Proceeds from 7,462,032 and 17,467,548 shares newly issued in reinvestment of dividends and distributions, respectively			51,944,559					116,621,678
Net increase in net assets from common stock transactions			51,944,559					116,621,678
Total increase in net assets			133,554,250					179,852,403
NET ASSETS
Beginning of period			1,580,192,377					1,400,339,974
End of period		$	1,713,746,627				$	1,580,192,377

 

 

 

See accompanying notes to financial statements.

 

13

 

 

 

Cornerstone Strategic Value Fund, Inc. Financial Highlights

Contained below is per share operating performance data for a share of common stock outstanding, total investment return, ratios to average net assets and other supplemental data for each period indicated. This information has been derived from information provided in the financial statements and market price data for the Fund’s shares.

 

 

		For the Six Months Ended June 30,				For the Years Ended December 31,
		2024 (Unaudited)				2023				2022				2021				2020				2019
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period		$	6.77			$	6.48			$	10.23			$	9.93			$	10.80			$	10.50
Net investment income #			0.05				0.03				0.02				0.01				0.05				0.10
Net realized and unrealized gain/(loss) on investments			0.94				1.74				(2.20	)			1.86				1.31				2.66
Net increase/(decrease) in net assets resulting from operations			0.99				1.77				(2.18	)			1.87				1.36				2.76
Dividends and distributions to stockholders:
Net investment income			(0.05	)			(0.03	)			(0.03	)			(0.01	)			(0.05	)			(0.10	)
Net realized capital gains			(0.25	)			(0.53	)			(0.22	)			(0.92	)			(0.78	)			(0.52	)
Return-of-capital			(0.35	)			(0.92	)			(1.91	)			(0.99	)			(1.40	)			(1.84	)
Total dividends and distributions to stockholders			(0.65	)			(1.48	)			(2.16	)			(1.92	)			(2.23	)			(2.46	)
Common stock transactions:
Anti-dilutive effect due to shares issued:
Rights offering			—				—				0.59				0.35				—				—
Reinvestment of dividends and distributions			0.00	+			0.00	+			0.00	+			0.00	+			0.00	+			0.00	+
Common stock repurchases			—				—				—				—				0.00	+			—
Total common stock transactions			—				—				0.59				0.35				0.00	+			0.00	+
Net asset value, end of period		$	7.11			$	6.77			$	6.48			$	10.23			$	9.93			$	10.80
Market value, end of period		$	7.70			$	7.19			$	7.37			$	14.29			$	11.73			$	11.21
Total investment return (a)			17.52	%(b)			21.40	%			(32.21	)%			47.04	%			31.58	%			25.42	%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)		$	1,713,747			$	1,580,192			$	1,400,340			$	1,227,371			$	769,031			$	810,598
Ratio of net expenses to average net assets (c)			1.10	%(d)			1.11	%			1.11	%			1.12	%			1.14	%			1.13	%(e)
Ratio of net investment income to average net assets (f)			1.34	%(d)			0.38	%			0.31	%			0.14	%			0.47	%			0.95	%(e)
Portfolio turnover rate			13	%(b)			46	%			39	%			72	%			95	%			45	%

 

#

Based on average shares outstanding.

+

Amount rounds to less than $0.01 per share.

(a)

Total investment return at market value is based on the changes in market price of a share during the period and assumes reinvestment of dividends and distributions, if any, at actual prices pursuant to the Fund’s dividend reinvestment plan. Total investment return does not reflect brokerage commissions.

(b)

Not annualized.

(c)

Expenses do not include expenses of investment companies in which the Fund invests.

(d)

Annualized.

(e)

Includes the reimbursement of proxy solicitation costs by the investment manager. If these costs had not been reimbursed by the investment manager, the ratio of expenses to average net assets would have been 1.14% for the year ended December 31, 2019.

(f)

Recognition of net investment income by the Fund may be affected by the timing of the declaration of dividends, if any, by investment companies in which the Fund invests.

 

See accompanying notes to financial statements.

 

14

 

 

 

Cornerstone Strategic Value Fund, Inc. Notes to Financial Statements (Unaudited)

 

 

NOTE A. ORGANIZATION

 

Cornerstone Strategic Value Fund, Inc. (the “Fund” or “CLM”) was incorporated in Maryland on May 1, 1987 and commenced investment operations on June 30, 1987. Its investment objective is to seek long-term capital appreciation through investment primarily in equity securities of U.S. and non-U.S. companies. The Fund is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a closed-end, diversified management investment company. As an investment company, the Fund follows the accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, “Financial Services–Investment Companies.”

 

NOTE B. SIGNIFICANT ACCOUNTING POLICIES

 

Management Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of increase (decrease) in net assets from operations during the reporting period. Actual results could differ from those estimates.

 

Subsequent Events: The Fund has evaluated the need for additional disclosures and/or adjustments resulting from subsequent events through the date its financial statements were issued. Based on this evaluation, no additional disclosures or adjustments were required to such financial statements.

 

Portfolio Valuation: Investments are stated at value in the accompanying financial statements. Readily marketable portfolio securities listed on the New York Stock Exchange (“NYSE”) are valued, except as indicated below, at the last sale price reflected on the consolidated tape at the close of the NYSE on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices on such day. If no bid or asked prices are quoted on such day or if market prices may be unreliable because of events occurring after the close of trading, then the security is valued by such method as the Board of Directors shall determine in good faith to reflect its fair market value. Readily marketable securities not listed on the NYSE but listed on other domestic or foreign securities exchanges are valued in a like manner. Portfolio securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined as reflected on the consolidated tape at the close of the exchange representing the principal market for such securities. Securities trading on the Nasdaq Stock Market, Inc. (“NASDAQ”) are valued at the NASDAQ Official Closing Price.

 

Readily marketable securities traded in the over-the counter market, including listed securities whose primary market is believed by Cornerstone Advisors, LLC (the “Investment Manager” or “Cornerstone”) to be over-the-counter, are valued at the mean of the current bid and asked prices as reported by the NASDAQ or, in the case of securities not reported by the NASDAQ or a comparable source, as the Board of Directors deem appropriate to reflect their fair market value. Where securities are traded on more than one exchange and also over-the-counter, the securities will generally be valued using the quotations the Board of Directors believes reflect most closely the value of such securities. At June 30, 2024, the Fund held no securities valued in good faith by the Board of Directors.

 

The net asset value per share of the Fund is calculated weekly and on the last business day of the month with the exception of those days on which the NYSE is closed.

 

The Fund is exposed to financial market risks, including the valuations of its investment portfolio. During the six months ended June 30, 2024, the Fund did not invest in derivative instruments or engage in hedging activities.

 

15

 

Cornerstone Strategic Value Fund, Inc. Notes to Financial Statements (Unaudited) (continued)

 

Investment Transactions and Investment Income: Investment transactions are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes. Interest income is recorded on an accrual basis; dividend income is recorded on the ex-dividend date.

 

The Fund holds certain investments which pay distributions to their stockholders based upon available funds from operations. It is possible for these dividends to exceed the underlying investments’ taxable earnings and profits resulting in the excess portion of such dividends being designated as a return of capital. Distributions received from investments in securities that represent a return of capital or long-term capital gains are treated as a reduction of the cost of investments or as a realized gain, respectively.

 

Taxes: No provision is made for U.S. federal income or excise taxes as it is the Fund’s intention to continue to qualify as a regulated investment company and to make the requisite distributions to its stockholders which will be sufficient to relieve it from all or substantially all U.S. federal income and excise taxes.

 

The Accounting for Uncertainty in Income Taxes Topic of the FASB Accounting Standards Codification defines the threshold for recognizing the benefits of tax-return positions in the financial statements as “more-likely-than-not” to be sustained by the taxing authority and requires measurement of a tax position meeting the more-likely-than-not criterion, based on the largest benefit that is more than 50 percent likely to be realized. The Fund’s policy is to classify interest and penalties associated with underpayment of federal and state income taxes, if any, as income tax expense on its Statement of Operations. As of June 30, 2024, the Fund does not have any interest or penalties associated with the under-payment of any income taxes. Management reviewed any uncertain tax positions for open tax years 2021 through 2023, and for the six months ended June 30, 2024. There was no material impact to the financial statements.

 

Distributions to Stockholders: Effective June 25, 2002, the Fund initiated a fixed, monthly distribution to stockholders. On November 29, 2006, this distribution policy was updated to provide for the annual resetting of the monthly distribution amount per share based on the Fund’s net asset value on the last business day in each October. The terms of the distribution policy will be reviewed and approved at least annually by the Fund’s Board of Directors and can be modified at their discretion. To the extent that these distributions exceed the current earnings of the Fund, the balance will be generated from sales of portfolio securities held by the Fund, which will either be short-term or long- term capital gains or a tax-free return-of-capital. To the extent these distributions are not represented by net investment income and capital gains, they will not represent yield or investment return on the Fund’s investment portfolio. The Fund plans to maintain this distribution policy even if regulatory requirements would make part of a return-of-capital, necessary to maintain the distribution, taxable to stockholders and to disclose that portion of the distribution that is classified as ordinary income. Although it has no current intention to do so, the Board may terminate this distribution policy at any time and such termination may have an adverse effect on the market price for the Fund’s common shares. The Fund determines annually whether to distribute any net realized long-term capital gains in excess of net realized short-term capital losses, including capital loss carryovers, if any. To the extent that the Fund’s taxable income in any calendar year exceeds the aggregate amount distributed pursuant to this distribution policy, an additional distribution may be made to avoid the payment of a 4% U.S. federal excise tax, and to the extent that the aggregate amount distributed in any calendar year exceeds the Fund’s taxable income, the amount of that excess may constitute a return-of-capital for tax purposes. A return-of-capital distribution reduces the cost basis of an investor’s shares in the Fund. Dividends and distributions to stockholders are recorded by the Fund on the ex-dividend date.

 

16

 

Cornerstone Strategic Value Fund, Inc. Notes to Financial Statements (Unaudited) (continued)

 

NOTE C. FAIR VALUE

 

As required by the Fair Value Measurement and Disclosures Topic of the 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.

 

Securities or other assets that are not publicly traded or for which a market price is not otherwise readily available will be valued at a price that reflects such security’s fair value, as determined by the Investment Manager and ratified by the Board in accordance with the Fund’s Policy for Valuation of Portfolio Securities. In making such fair value determinations, the Investment Manager is required to consider all appropriate factors relevant to the value of securities for which other pricing sources are not available or reliable as described above. No single method exists for determining fair value, because fair value depends upon the circumstances of each individual case. As a general principle, the current fair value of a security being valued by the Investment Manager would be the amount that the Fund might reasonably expect to receive upon the current sale. Methods that are in accordance with this principle may, for example, be based on (i) a multiple of earnings; (ii) a discount from market prices of a similar freely traded security (including a derivative security or a basket of securities traded on other markets, exchanges or among dealers); or (iii) yield to maturity with respect to debit issues, or a combination of these and other methods. Fair-value pricing is permitted if, in the Investment Manager’s opinion, the validity of market quotations appears to be questionable based on factors such as evidence of a thin market in the security based on a small number of quotations, a significant event occurs after the close of a market but before the Fund’s NAV calculation that may affect a security’s value, or the Investment Manager is aware of any other data that calls into question the reliability of market quotations.

 

The following is a summary of the Fund’s investments and the inputs used as of June 30, 2024, in valuing the investments carried at value:

 

Valuation Inputs		Investments in Securities				Other Financial Instruments*
Level 1 – Quoted Prices
Equity Securities		$	1,702,264,472			$	—
Short-Term Investment			9,572,340				—
Level 2 – Other Significant Observable Inputs			—				—
Level 3 – Significant Unobservable Inputs			—				—
Total		$	1,711,836,812			$	—

 

*	Other financial instruments include futures, forwards and swap contracts, if any.

 

17

 

Cornerstone Strategic Value Fund, Inc. Notes to Financial Statements (Unaudited) (continued)

 

The breakdown of the Fund’s investments into major categories is disclosed in its Schedule of Investments.

 

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 June 30, 2024.

 

NOTE D. AGREEMENTS WITH AFFILIATES

 

At June 30, 2024, certain officers of the Fund are also officers of Cornerstone or Ultimus Fund Solutions, LLC (“Ultimus”). Such officers are paid no fees by the Fund for serving as officers of the Fund.

 

Investment Management Agreement

 

Cornerstone serves as the Fund’s Investment Manager with respect to all investments. As compensation for its investment management services, Cornerstone receives from the Fund an annual fee, calculated weekly and paid monthly, equal to 1.00% of the Fund’s average weekly net assets. For the six months ended June 30, 2024, Cornerstone earned $8,170,471 for investment management services.

 

Fund Accounting and Administration Agreement

 

Under the fund accounting and administration agreement with the Fund, Ultimus is responsible for generally managing the administrative affairs of the Fund, including supervising the preparation of reports to stockholders, reports to and filings with the Securities and Exchange Commission (“SEC”) and materials for meetings of the Board.

 

Ultimus is also responsible for calculating the net asset value per share and maintaining the financial books and records of the Fund. Ultimus is entitled to receive a fee in accordance with the agreements. For the six months ended June 30, 2024, Ultimus earned $345,361 as fund accounting agent and administrator.

 

NOTE E. INVESTMENT IN SECURITIES

 

For the six months ended June 30, 2024, purchases and sales of securities, other than short-term investments, were $204,115,277 and $297,150,524, respectively.

 

NOTE F. SHARES OF COMMON STOCK

 

The Fund has 800,000,000 shares of common stock authorized and 240,941,149 shares issued and outstanding at June 30, 2024. Transactions in common stock for the six months ended June 30, 2024, were as follows:

 

Shares at beginning of period			233,479,117
Shares newly issued from rights offering			—
Shares issued in reinvestment of dividends and distributions			7,462,032
Shares at end of period			240,941,149

 

NOTE G. FEDERAL INCOME TAXES

 

Income and capital gains distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are primarily due to differing treatments of losses deferred due to wash sales.

 

The tax character of dividends and distributions paid to stockholders during the periods ended June 30, 2024 and December 31, 2023 was as follows:

 

		June 30, 2024				December 31, 2023
Ordinary Income		$	10,943,415			$	14,232,381
Long-Term Capital Gains			59,752,374				109,818,457
Return-of-Capital			83,465,296				205,965,385
Total Distributions		$	154,161,085			$	330,016,223

 

18

 

Cornerstone Strategic Value Fund, Inc. Notes to Financial Statements (Unaudited) (concluded)

 

At December 31, 2023, the components of accumulated earnings on a tax basis for the Fund were as follows:

 

Net unrealized appreciation		$	269,294,218
Total accumulated earnings		$	269,294,218

 

The following information is computed on a tax basis for each item as of June 30, 2024:

 

Cost of portfolio investments		$	1,277,467,606
Gross unrealized appreciation		$	469,361,227
Gross unrealized depreciation			(34,992,021	)
Net unrealized appreciation		$	434,369,206

 

19

 

Results of Annual Meeting of Stockholders (unaudited)

 

On April 16, 2024, the Annual Meeting of Stockholders of the Fund was held and the following matter was voted upon based on 234,744,009 shares of common stock outstanding on the record date of February 15, 2024:

 

(1) To approve the election of three Directors to hold office until the year 2027 Annual Meeting of Stockholders.

 

Name of Director		For		Withheld
Ralph W. Bradshaw		138,967,042		8,830,563
Matthew W. Morris		139,165,049		8,632,556
Scott B. Rogers		139,356,526		8,441,079

 

20

 

Investment Management Agreement Approval Disclosure (unaudited)

 

The Board of Directors (the “Board”) of Cornerstone Strategic Value Fund, Inc. (the “Fund”) , including those members of the Board who are not “interested persons,” as such term is defined by the 1940 Act (the “Independent Directors”), considers the approval of the continuation of the Investment Management Agreement (the “Agreement”) between Cornerstone Advisors, LLC (the “Investment Manager”) and the Fund on an annual basis. The most recent approval of the continuation of the Agreement occurred at an in-person meeting of the Board held on February 9, 2024.

 

The Board requested and received extensive materials and information from the Investment Manager to assist them in considering the approval of the continuance of the Agreement. Based on the Board’s review of the materials and information as well as discussions with management of the Investment Manager, the Board determined that the approval of the continuation of the Agreement was consistent with the best interests of the Fund and its stockholders. The Board decided that the continuation of the Agreement would enable the Fund to continue to receive high quality services at a cost that is appropriate, reasonable, and in the best interests of the Fund and its stockholders. The Board made these determinations on the basis of the following factors, among others: (1) the nature, extent, and quality of the services provided by the Investment Manager; (2) the cost to the Investment Manager for providing such services, with special attention to the Investment Manager’s profitability (and whether the Investment Manager realizes any economies of scale); (3) the direct and indirect benefits received by the Investment Manager from its relationship with the Fund and the other investment companies advised by the Investment

 

Manager; and (4) comparative information as to the management fees, expense ratios and performance of other similarly situated closed-end investment companies.

 

In response to a questionnaire distributed by Fund counsel to the Investment Manager in accordance with Section 15(c) of the 1940 Act, as amended, the Investment Manager provided certain information to the independent members of the Board in advance of the meeting held on February 9, 2024. The materials provided by the Investment Manager described the services offered by the Investment Manager to the Fund and included an overview of the Investment Manager’s investment philosophy, management style and plan, including the Investment Manager’s extensive knowledge and experience in the closed-end fund industry. The Board noted that the Investment Manager provides quarterly reviews of the performance of the Fund and the Investment Manager’s services for the Fund. The Board also discussed the experience and knowledge of the Investment Manager with respect to managing the Fund’s monthly distribution policy and the extent to which such policy contributes to the market’s positive valuation of the Fund.

 

The Board also reviewed and discussed a comparison of the Fund’s performance for the one-year, three-year, five-year and since inception periods ending December 31, 2023 with the performance of comparable closed-end funds for the same periods and a comparison of the Fund’s expense ratios and management fees with those of comparable funds. Additionally, the Investment Manager presented an analysis of its profitability based on its contractual relationship with the Fund and the other investment companies advised by the Investment Manager.

 

The Board carefully evaluated this information, taking into consideration many factors including the overall high quality of the personnel, operations, financial condition, investment management capabilities, methodologies, and performance of the Investment Manager. The Independent Directors met in executive session to discuss the information provided and was advised by independent legal counsel with respect to their deliberations and their duties when considering the Agreement’s continuance. Based on their review of the information requested and provided, the Independent Directors determined that: (i) the Investment Manager is expected to continue to provide a high-caliber quality of service to the Fund for the benefit of its stockholders; (ii) the Fund’s

 

21

 

Investment Management Agreement Approval Disclosure (unaudited)
(Concluded)

 

performance was satisfactory; (iii) the management fees payable to the Investment Manager under the Agreement, in light of the services to be provided, were not unreasonable; and (iv) the Investment Manager’s estimated profitability with respect to the Fund was not excessive. The Independent Directors concluded that the Fund’s fee structure was not unreasonable and that the renewal of the Agreement with respect to the Fund was in the best interests of its stockholders. In considering the Agreement’s renewal, the Independent Directors considered a variety of factors, including those discussed above, and also considered other factors (including conditions and trends prevailing generally in the economy and the securities markets). The Independent Directors did not identify any one factor as determinative, and each Independent Director may have weighed each factor differently. The Independent Directors’ noted that their conclusions may be based in part on the Board’s ongoing regular review of the Fund’s performance and operations throughout the year. Accordingly, in light of the above considerations and such other factors and information it considered relevant, the Board by a unanimous vote (including a separate vote of the Independent Directors) approved the continuance of the Agreement with respect to the Fund.

 

22

 

Description of Dividend Reinvestment Plan (unaudited)

 

Cornerstone Strategic Value Fund, Inc. (the “Fund”) operates a Dividend Reinvestment Plan (the “Plan”), administered by Equiniti Trust Company, LLC (the “Agent”), pursuant to which the Fund’s income dividends or capital gains or other distributions (each, a “Distribution” and collectively, “Distributions”), net of any applicable U.S. withholding tax, are reinvested in shares of the Fund.

 

Stockholders automatically participate in the Fund’s Plan, unless and until an election is made to withdraw from the Plan on behalf of such participating stockholder. Stockholders who do not wish to have Distributions automatically reinvested should so notify the Agent at 48 Wall Street, 23rd Floor, New York, NY 10005. Under the Plan, the Fund’s Distributions to stockholders are reinvested in full and fractional shares as described below.

 

When the Fund declares a Distribution the Agent, on the stockholder’s behalf, will (i) receive additional authorized shares from the Fund either newly issued or repurchased from stockholders by the Fund and held as treasury stock (“Newly Issued Shares”) or (ii) purchase outstanding shares on the open market, on the NYSE American or elsewhere, with cash allocated to it by the Fund (“Open Market Purchases”).

 

The method for determining the number of Newly Issued Shares received when Distributions are reinvested will be determined by dividing the amount of the Distribution either by the Fund’s last reported net asset value per share or by a price equal to the average closing price of the Fund over the five trading days preceding the payment date of the Distribution, whichever is lower. However, if the last reported net asset value of the Fund’s shares is higher than the average closing price of the Fund over the five trading days preceding the payment date of the Distribution ice (i.e., the Fund is selling at a discount), shares may be acquired by the Agent in Open Market Purchases and allocated to the reinvesting stockholders based on the average cost of such Open Market Purchases. Upon notice from the Fund, the Agent will receive the distribution in cash and will purchase shares of common stock in the open market, on the NYSE American or elsewhere, for the participants’ accounts, except that the Agent will endeavor to terminate purchases in the open market and cause the Fund to issue the remaining shares if, following the commencement of the purchases, the market value of the shares, including brokerage commissions, exceeds the net asset value at the time of valuation. These remaining shares will be issued by the Fund at a price equal to the net asset value at the time of valuation.

 

In a case where the Agent has terminated open market purchases and caused the issuance of remaining shares by the Fund, the number of shares received by the participant in respect of the cash dividend or distribution will be based on the weighted average of prices paid for shares purchased in the open market, including brokerage commissions, and the price at which the Fund issues the remaining shares. To the extent that the Agent is unable to terminate purchases in the open market before the Agent has completed its purchases, or remaining shares cannot be issued by the Fund because the Fund declared a dividend or distribution payable only in cash, and the market price exceeds the net asset value of the shares, the average share purchase price paid by the Agent may exceed the net asset value of the shares, resulting in the acquisition of fewer shares than if the dividend or distribution had been paid in shares issued by the Fund.

 

Whenever the Fund declares a Distribution and the last reported net asset value of the Fund’s shares is higher than its market price, the Agent will apply the amount of such Distribution payable to Plan participants of the Fund in Fund shares (less such Plan participant’s pro rata share of brokerage commissions incurred with respect to Open Market Purchases in connection with the reinvestment of such Distribution) to the purchase on the open market of Fund shares for such Plan participant’s account. Such purchases will be made on or after the payable date for such Distribution, and in no event more than 30 days after such date except where temporary curtailment or suspension of purchase

 

23

 

Description of Dividend Reinvestment Plan (unaudited) (concluded)

 

is necessary to comply with applicable provisions of federal securities laws. The Agent may aggregate a Plan participant’s purchases with the purchases of other Plan participants, and the average price (including brokerage commissions) of all shares purchased by the Agent shall be the price per share allocable to each Plan participant.

 

Registered stockholders who do not wish to have their Distributions automatically reinvested should so notify the Fund in writing. If a stockholder has not elected to receive cash Distributions and the Agent does not receive notice of an election to receive cash Distributions prior to the record date of any Distribution, the stockholder will automatically receive such Distributions in additional shares.

 

Participants in the Plan may withdraw from the Plan by providing written notice to the Agent at least 30 days prior to the applicable Distribution payment date. The Agent will maintain all stockholder accounts in the Plan and furnish written confirmations of all transactions in the accounts, including information needed by stockholders for personal and tax records The Agent will hold shares in the account of the Plan participant in non-certificated form in the name of the participant, and each stockholder’s proxy will include those shares purchased pursuant to the Plan. The Agent will distribute all proxy solicitation materials to participating stockholders.

 

In the case of stockholders, such as banks, brokers or nominees, that hold shares for others who are beneficial owners participating in the Plan, the Agent will administer the Plan on the basis of the number of shares certified from time to time by the record stockholder as representing the total amount of shares registered in the stockholder’s name and held for the account of beneficial owners participating in the Plan.

 

Neither the Agent nor the Fund shall have any responsibility or liability beyond the exercise of ordinary care for any action taken or omitted pursuant to the Plan, nor shall they have any duties, responsibilities or liabilities except such as expressly set forth herein. Neither shall they be liable hereunder for any act done in good faith or for any good faith omissions to act, including, without limitation, failure to terminate a participants account prior to receipt of written notice of his or her death or with respect to prices at which shares are purchased or sold for the participants account and the terms on which such purchases and sales are made, subject to applicable provisions of the federal securities laws.

 

The automatic reinvestment of Distributions will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such Distributions. The Fund reserves the right to amend or terminate the Plan. There is no direct service charge to participants with regard to purchases in the Plan.

 

Participants may at any time sell some or all their shares though the Agent. Shares may be sold via the internet at www.equiniti.com or through the toll free number. Participants can also use the tear off portion attached to the bottom of their statement and mail the request to Equiniti Trust Company, LLC, 48 Wall Street, 23rd Floor, New York, NY 10005. There is a commission of $0.05 per share.

 

All correspondence concerning the Plan should be directed to Equiniti Trust Company, LLC, 48 Wall Street, 23rd Floor, New York, NY 10005. Certain transactions can be performed online at www.equiniti.com or by calling the toll-free number (866) 668-6558.

 

24

 

Proxy Voting and Portfolio Holdings Information (unaudited)

 

The policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities are available:

 

●

without charge, upon request, by calling toll-free (866) 668-6558; and

 

●

on the website of the SEC, www.sec.gov.

 

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling toll-free (866) 668-6558, and on the SEC’s website at www.sec.gov or on the Fund’s website at www.cornerstonestrategicvaluefund.com (See Form N-PX).

 

The Fund files a complete schedule of its portfolio holdings for the first and third quarters of its fiscal year with the SEC as an exhibit to Form N-PORT. The Fund’s Form N-PORT is available on the SEC’s website at www.sec.gov.

 

Summary of General Information (unaudited)

 

Cornerstone Strategic Value Fund, Inc. is a closed-end, diversified investment company whose shares trade on the NYSE American. Its investment objective is to seek capital appreciation with current income as a secondary objective. The Fund is managed by Cornerstone Advisors, LLC.

 

Stockholder Information (unaudited)

 

The Fund is listed on the NYSE American (symbol “CLM”). The previous week’s net asset value per share, market price, and related premium or discount are available on the Fund’s website at www.cornerstonestrategicvaluefund.com.

 

Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that Cornerstone Strategic Value Fund, Inc. may from time to time purchase shares of its common stock in the open market.

 

This report, including the financial statements herein, is sent to the stockholders of the Fund for their information. The financial information included herein is taken from the records of the Fund without examination by the independent registered public accountants who do not express an opinion thereon. It is not a prospectus, circular or representation intended for use in the purchase or sale of shares of the Fund or of any securities mentioned in the report.

 

 

25

 

 

 

Cornerstone Strategic Value Fund, Inc.

 

 

 

(b)

Not applicable

 

Item 2.

Code of Ethics.

 

Not applicable.

 

Item 3.

Audit Committee Financial Expert.

 

Not applicable

 

Item 4.

Principal Accountant Fees and Services.

 

Not applicable

 

Item 5.

Audit Committee of Listed Registrants.

 

Not applicable

 

Item 6.

Investments.

 

(a)

The Registrant(s) schedule(s) of investments is included in the Financial Statements under Item 1 of this form.

 

(b)

Not applicable

 

Item 7.

Financial Statements and Financial Highlights for Open-End Management Investment Companies

 

(a)

Not applicable

  

(b)

Not applicable

 

Item 8.

Changes in and Disagreements with Accountants for Open-End Management Investment Companies.

 

Not applicable

 

Item 9.

Proxy Disclosures for Open-End Management Investment Companies.

 

Not applicable

 

Item 10.

Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.

 

Not applicable

Item 11.

Statement Regarding Basis for Approval of Investment Advisory Contract.

 

Included under Item 1

 

Item 12.

Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

 

Not applicable

 

Item 13.

Portfolio Managers of Closed-End Management Investment Companies.

 

Not applicable

 

Item 14.

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

 

Not applicable

 

Item 15.

Submission of Matters to a Vote of Security Holders.

 

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors that have been implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) or this Item.

 

Item 16.

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 the information required in filings on Form N-CSR 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 period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 17.

Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

 

This Registrant does not engage in securities lending activities.

 

Item 18.

Recovery of Erroneously Awarded Compensation.

 

(a)

Not applicable

 

(b)

Not applicable

Item 19.

Exhibits.

 

File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated.

 

(a)(1) Not applicable

 

(a)(2) Not applicable

 

(a)(3) 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

 

(1) Not applicable

 

(2) Change in the registrant’s independent public accountant: Not applicable

 

(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)): Attached hereto

 

Exhibit 99.CERT	Certifications required by Rule 30a-2(a) under the Act
Exhibit 99.906CERT	Certifications required by Rule 30a-2(b) under the Act

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, Chairman and President
			(Principal Executive Officer)
Date	August 29, 2024

 

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, Chairman and President
			(Principal Executive Officer)
Date	August 29, 2024
By (Signature and Title)*			/s/ Brian J. Lutes
			Brian J. Lutes, Treasurer and Principal Financial Officer
Date	August 29, 2024

 

*

Print the name and title of each signing officer under his or her signature.

EX-99.CERT

 

CERTIFICATIONS

 

I, Ralph W. Bradshaw, certify that:

 

1.

I have reviewed this report on Form N-CSR of Cornerstone Strategic Value Fund, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

 

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 29, 2024		/s/ Ralph W. Bradshaw
		Ralph W. Bradshaw, Chairman and President
		(Principal Executive Officer)

CERTIFICATIONS

 

I, Brian J. Lutes, certify that:

 

1.

I have reviewed this report on Form N-CSR of Cornerstone Strategic Value Fund, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

 

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 29, 2024		/s/ Brian J. Lutes
		Brian J. Lutes, Treasurer and Principal Financial Officer

 

EX-99.906CERT

 

CERTIFICATIONS

 

Ralph W. Bradshaw, Principal Executive Officer, and Brian J. Lutes, Principal Financial Officer, of Cornerstone Strategic Value Fund, Inc. (the “Registrant”), each certify to the best of his knowledge that:

 

1.

The Registrant’s periodic report on Form N-CSR for the period ended June 30, 2024 (the “Form N-CSR”) fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934, as amended; and

 

2.

The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

PRINCIPAL EXECUTIVE OFFICER		PRINCIPAL FINANCIAL OFFICER
Cornerstone Strategic Value Fund, Inc.		Cornerstone Strategic Value Fund, Inc.
/s/ Ralph W. Bradshaw		/s/ Brian J. Lutes
Ralph W. Bradshaw, Chairman and President (Principal Executive Officer)		Brian J. Lutes, Treasurer and Principal Financial Officer
Date:  August 29, 2024		Date:  August 29, 2024

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Cornerstone Strategic Value Fund, Inc. and will be retained by Cornerstone Strategic Value Fund, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. 1350 and is not being filed as part of the Form N-CSR filed with the Commission.

 

 

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