NEW YORK, NY--(Marketwired - Nov 14, 2014) - Cornerstone Strategic Value Fund, Inc. (
The amounts set forth below reflect the effect of a one-for-four reverse stock split expected to occur in December 2014. Should the reverse stock splits not become effective, the per share amounts would be proportionally adjusted and a future announcement regarding the adjusted per share amounts will be provided.
| Record Date | Payable Date | Per Share | |||
| CLM | January 15, 2015 | January 30, 2015 | $0.3680 | ||
| CLM | February 16, 2015 | February 27, 2015 | $0.3680 | ||
| CLM | March 16, 2015 | March 31, 2015 | $0.3680 | ||
CRF |
January 15, 2015 |
January 31, 2015 |
$0.3319 |
||
| CRF | February 16, 2015 | February 25, 2015 | $0.3319 | ||
| CRF | March 16, 2015 | March 31, 2015 | $0.3319 |
Related to the timing of the expected reverse stock splits, the December 2014 monthly distributions payable date for each Fund has been changed to December 19, 2014. The record date for each Fund of December 15, 2014 is unchanged. The per share amounts previously reported are unaffected by such reverse stock splits.
Each Fund's distribution policy provides for the resetting of the monthly distribution amount per share ("Distribution Amount") annually, based on each Fund's net asset value on the last business day of October and the annualized distribution percentage approved by each Fund's Board of Directors (each a "Board", or collectively, the "Boards"). Each Board previously announced that the distribution percentage for the calendar year 2015 would remain unchanged from the previous year at 21% of the net asset value of each Fund.
Each Board believes that each Fund's distribution policy maintains a stable, high rate of distribution. The distributions are not tied to each Fund's investment income or capital gains and do not represent yield or investment return on each Fund's portfolio. The Distribution Amount from one calendar year to the next will increase or decrease based on the change in each Fund's net asset value. The terms of each distribution policy will be reviewed and approved at least annually by each Fund's Board and, may be modified at each Board's discretion for the benefit of each Fund and its stockholders.
Each Fund's Board remains convinced that its stockholders are well served by a policy of regular distributions which increase liquidity and provide flexibility to individual stockholders in managing their investment. Stockholders have the option of reinvesting the distributions in additional shares of the Fund or receiving cash. Stockholders may consider reinvesting all or a portion of their regular distributions through each Fund's reinvestment plan. Stockholders should carefully read the description of the dividend reinvestment plan contained in each Fund's report to stockholders, which may provide an additional benefit to stockholders who participate in the plan.
Under each Fund's distribution policy, each Fund may distribute to stockholders on a monthly basis a minimum fixed percentage per year of the net asset value or market price per share of its common stock or at least a minimum fixed dollar amount per year. In determining whether to adopt the distribution policy, the Board of each Fund sought to make regular monthly distributions throughout the year. Under each policy, each Fund's distributions will consist either of (1) earnings, (2) capital gains, or (3) return-of-capital, or some combination of one or more of the above. A return-of-capital is the return of a portion of the investor's original investment.
Given the current economic environment and the composition of each Fund's portfolio, a substantial portion of each Fund's distributions for the current calendar year is expected to consist substantially of a return of the investor's capital. Accordingly, these distributions should not be confused with yield or investment return on the Fund's portfolio. The final composition of the distributions for 2014 cannot be determined until after the end of the year and is subject to change depending on market conditions, the magnitude of income and realized gains for the year.
In any given year, there can be no guarantee that each Fund's investment returns will exceed the amount of its net distributions. To the extent that the amount of distributions taken in cash exceeds the total net investment returns of each Fund, the assets of each Fund will decline. If the total net investment returns exceed the amount of cash distributions, the assets of each Fund will increase. Distributions designated as return-of-capital are not taxed as ordinary income dividends and are referred to as tax-free dividends or nontaxable distributions. A return-of-capital distribution reduces the cost basis of an investor's shares in the Fund. Stockholders can expect to receive tax-reporting information for 2014 distributions by the middle of February 2015 indicating the exact composition per share of the distributions received during the calendar year. Stockholders should consult their tax advisor for proper tax treatment of each Fund's distributions.
Volatility in the world economy helps to create what Cornerstone Advisors, Inc. (the "Adviser") views as significant opportunities through investments in closed-end funds. In addition to holding closed-end funds that invest substantially all of their assets in equity securities, the Adviser may also choose to take advantage of situations in funds that invest in fixed income or other investment categories. Closed-end funds, with their broadly diversified holdings, enhance diversification within each Fund's portfolio.
Investing in other investment companies involves substantially the same risks as investing directly in the underlying instruments, but the total return on such investments at the investment company level is reduced by the operating expenses and fees of such other investment companies, including advisory fees. To the extent each Fund invests its assets in investment company securities, those assets will be subject to the risks of the purchased investment company's portfolio securities, and a stockholder in the Fund will bear not only their proportionate share of the expenses of the Fund, but also, indirectly the expenses of the purchased investment company. There can be no assurance that the investment objective of any investment company in which the Fund invests will be achieved.
Under the managed distribution policy, each Fund makes monthly distributions to stockholders at a rate that may include periodic distributions of its net income and net capital gains, ("Net Earnings"), or return-of-capital. If, for any fiscal year where total cash distributions exceed Net Earnings (the "Excess"), the Excess would decrease the Fund's total assets and, as a result, would increase the Fund's expense ratio. There is a risk that the total Net Earnings from the Fund's portfolio would not be great enough to offset the amount of cash distributions paid to Fund stockholders. If this were to occur, the Fund's assets would be depleted, and there is no guarantee that the Fund would be able to replace the assets. In addition, in order to make such distributions, the Fund may have to sell a portion of its investment portfolio at a time when independent investment judgment might not dictate such action. Furthermore, such assets used to make distributions will not be available for investment pursuant to the Fund's investment objective.
Each Fund's Board had previously approved a share repurchase program. The share repurchase program authorizes management to make open market purchases, from time to time. Such purchases may be made opportunistically at certain discounts to net asset value per share when management reasonably believes that such repurchases may enhance shareholder value. There is no assurance that each Fund will purchase any shares or that the share repurchase program will have an impact on the liquidity or value of the respective Fund or the Fund's shares. To the extent that each Fund engages in share repurchase activity, such activity will be disclosed in each Fund's stockholder reports for the relevant fiscal periods.
Cornerstone Strategic Value Fund, Inc. and Cornerstone Total Return Fund, Inc. are traded on the NYSE MKT LLC under the trading symbols "CLM" and "CRF", respectively. Each Fund's Adviser also serves as the investment adviser to another closed-end fund, Cornerstone Progressive Return Fund (
Past performance is no guarantee of future performance. An investment in a Fund is subject to certain risks, including market risk. In general, shares of closed-end funds often trade at a discount from their net asset value and at the time of sale may be trading on the exchange at a price that is more or less than the original purchase price or the net asset value. An investor should carefully consider a Fund's investment objective, risks, charges and expenses. Please read a Fund's disclosure documents before investing.
In addition to historical information, this report contains forward-looking statements, which may concern, among other things, domestic and foreign markets, industry and economic trends and developments and government regulation and their potential impact on the Fund's investment portfolio. These statements are subject to risks and uncertainties, including the factors set forth in the Fund's disclosure documents, filed with the SEC, and actual trends, developments and regulations, in the future and their impact on the Fund could be materially different from those projected, anticipated or implied. The Fund has no obligation to update or revise forward-looking statements.