fp0007106_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:    March 31, 2013              
 
 
 
 
 
Item 1.  Schedule of Investments.
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
SCHEDULE OF INVESTMENTS - MARCH 31, 2013 (Unaudited)

Description  
No. of
Shares
    
Value
  
EQUITY SECURITIES - 99.39%            
 
CLOSED-END FUNDS - 46.16%
            
 
CONVERTIBLE SECURITIES - 0.80%
            
 
Advent Claymore Global Convertible Securities and Income Fund II
     112,916     $ 812,995  
 
AllianzGI Equity & Convertible Income Fund
     3,178       57,236  
                870,231  
 
CORE - 2.40%
                
 
Adams Express Company (The)
     20,400       239,496  
 
Advent/Claymore Enhanced Growth & Income Fund
     27,514       267,711  
 
General American Investors Company, Inc.
     32,041       1,000,640  
 
Royce Micro-Cap Trust, Inc.
     7,262       77,703  
 
Tri-Continental Corporation
     33,275       583,976  
 
Zweig Fund, Inc. (The)
     33,767       438,971  
                2,608,497  
                   
 
CORPORATE DEBT INVESTMENT GRADE-LEVERAGED - 2.04%
  
 
Western Asset/Claymore Inflation-Linked Opportunities & Income Fund
     100,155       1,327,054  
 
Western Asset/Claymore Inflation-Linked Securities & Income Fund
     65,367       885,723  
                2,212,777  
                   
 
CORPORATE DEBT INVESTMENT GRADE-RATED - 0.97%
          
 
Cutwater Select Income Fund
     4,259       85,436  
 
Federated Enhanced Treasury Income Fund
     47,044       644,032  
 
Invesco Van Kampen Bond Fund
     2,400       47,760  
 
Morgan Stanley Income Securities Inc.
     6,959       125,888  
 
Transamerica Income Shares, Inc.
     6,923       149,260  
                1,052,376  
 
DEVELOPED MARKET - 0.75%
                
 
Aberdeen Israel Fund, Inc.
     2,400       34,656  
 
New Germany Fund, Inc. (The)
     2,635       44,373  
 
Singapore Fund, Inc. (The)
     22,517       319,741  
 
Swiss Helvetia Fund, Inc. (The)
     34,349       421,119  
                819,889  
 
EMERGING MARKETS - 2.85%
                
 
Aberdeen Emerging Markets Smaller Company Opportunities Fund, Inc.
     3,400       71,502  
 
Central Europe and Russia Fund, Inc. (The)
     5,029       164,800  
 
India Fund, Inc. (The)
     31,656       672,373  
 
Morgan Stanley India Investment Fund, Inc. *
     55,098       977,990  
 
Templeton Dragon Fund, Inc
     43,000       1,200,990  
 
Templeton Russia and East European Fund, Inc.
     825       12,202  
                3,099,857  
 
EMERGING MARKETS DEBT - 0.41%
                
 
Morgan Stanley Emerging Markets Domestic Debt Fund, Inc.
     26,549       442,041  
                   
 
FLEXIBLE INCOME - 0.99%
                
 
Putnam Master Intermediate Income Trust
     55,158       287,373  
 
Putnam Premier Income Trust
     143,035       792,414  
                1,079,787  
 
GENERAL & INSURED LEVERAGED - 2.35%
                
 
Invesco Value Municipal Income Trust
     8,989       145,179  
 
Nuveen Dividend Advantage Municipal Fund 2
     23,200       351,944  
 
Nuveen Dividend Advantage Municipal Fund 3
     55,923       836,049  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
SCHEDULE OF INVESTMENTS - MARCH 31, 2013 (Unaudited) (Continued)

Description  
No. of
Shares
    
Value
  
 
Nuveen Dividend Advantage Municipal Income Fund
     17,255     $ 257,272  
 
Nuveen Premier Municipal Opportunity Fund, Inc.
     57,606       868,122  
 
Nuveen Quality Income Municipal Fund, Inc.
     6,102       92,994  
                2,551,560  
 
GENERAL BOND - 0.55%
                
 
Nuveen Build America Bond Opportunity Fund
     27,201       601,686  
                   
 
GLOBAL - 4.81%
                
 
AllianzGI Global Equity & Convertible Income Fund
     26,543       384,343  
 
Alpine Global Dynamic Dividend Fund
     55,432       266,074  
 
Alpine Total Dynamic Dividend Fund
     155,967       637,905  
 
Clough Global Allocation Fund
     32,004       482,300  
 
Clough Global Equity Fund
     49,799       732,045  
 
Clough Global Opportunities Fund
     98,420       1,266,665  
 
Delaware Enhanced Global Dividend and Income Fund
     68,251       831,980  
 
First Trust Active Dividend Income Fund
     38,918       323,409  
 
GDL Fund (The)
     3,800       44,764  
 
Lazard World Dividend & Income Fund, Inc.
     13,234       184,085  
 
Nuveen Global Value Opportunities Fund
     5,700       80,712  
                5,234,282  
 
GLOBAL INCOME - 1.16%
                
 
Nuveen Multi-Currency Short-Term Government Income Fund
     97,079       1,258,144  
                   
 
HIGH CURRENT YIELD (LEVERAGED) - 2.43%
                
 
DWS High Income Opportunities Fund, Inc.
     76,315       1,183,646  
 
First Trust Strategic High Income Fund II
     45,045       777,477  
 
Neuberger Berman High Yield Strategies Fund Inc.
     48,281       685,590  
                2,646,713  
 
HIGH YIELD - 0.55%
                
 
First Trust High Income Long/Short Fund
     31,411       596,181  
                   
 
INCOME & PREFERRED STOCK - 1.25%
                
 
John Hancock Premium Dividend Fund
     4,000       56,680  
 
Nuveen Quality Preferred Income Fund 3
     10,400       94,224  
 
Zweig Total Return Fund, Inc. (The)
     92,536       1,204,819  
                1,355,723  
 
OPTION ARBITRAGE/OPTIONS STRATEGIES - 17.28%
                
 
AllianzGI International & Premium Strategy Fund
     56,283       565,644  
 
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
     33,629       565,640  
 
BlackRock Enhanced Capital & Income Fund, Inc.
     7,093       92,280  
 
BlackRock Enhanced Equity Dividend Trust
     286,419       2,239,797  
 
BlackRock Global Opportunities Equity Trust
     330,406       4,586,035  
 
BlackRock International Growth and Income Trust
     251,613       1,919,807  
 
Eaton Vance Enhanced Equity Income Fund
     108,700       1,269,616  
 
Eaton Vance Enhanced Equity Income Fund II
     145,200       1,648,020  
 
Eaton Vance Tax-Managed Diversified Equity Income Fund
     371,208       3,771,473  
 
Eaton Vance Tax-Managed Global Diversified Equity Income Fund
     142,415       1,327,308  
 
ING Global Equity Dividend and Premium Opportunity Fund
     72,000       666,720  
 
Madison Strategic Sector Premium Fund
     11,612       135,860  
                18,788,200  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
SCHEDULE OF INVESTMENTS - MARCH 31, 2013 (Unaudited) (Continued)

Description  
No. of
Shares
    
Value
  
 
PACIFIC EX JAPAN - 0.28%
                
 
Taiwan Fund, Inc. *
     8,200     $ 134,316  
 
Thai Fund, Inc. (The)
     7,100       169,761  
                304,077  
 
REAL ESTATE - 0.13%
                
 
Neuberger Berman Real Estate Securities Income Fund Inc.
     26,593       137,486  
                   
 
SECTOR EQUITY - 4.16%
                
 
BlackRock EcoSolutions Investment Trust
     24,379       222,093  
 
BlackRock Energy and Resources Trust
     30,081       777,594  
 
BlackRock Real Asset Equity Trust
     101,967       1,019,670  
 
BlackRock Utility and Infrastructure Trust
     12,000       234,600  
 
ING Risk Managed Natural Resources Fund
     36,366       405,481  
 
Petroleum & Resources Corporation
     24,609       639,342  
 
Reaves Utility Income Fund
     46,214       1,223,747  
                4,522,527  
                   
 
TOTAL CLOSED-END FUNDS
             50,182,034  
                   
 
CONSUMER DISCRETIONARY - 5.57%
                
 
CBS Corporation - Class B
     5,000       233,450  
 
Comcast Corporation - Class A
     20,655       867,717  
 
Gap, Inc. (The)
     4,000       141,600  
 
Home Depot, Inc. (The)
     11,600       809,448  
 
Lowe's Companies, Inc.
     9,000       341,280  
 
News Corporation - Class B
     5,000       153,800  
 
NIKE, Inc. - Class B
     8,000       472,080  
 
Omnicom Group Inc.
     2,500       147,250  
 
Starbucks Corporation
     4,000       227,840  
 
Target Corporation
     8,800       602,360  
 
Time Warner Cable Inc.
     1,966       188,854  
 
Time Warner Inc.
     7,900       455,198  
 
TJX Companies, Inc. (The)
     14,000       654,500  
 
Viacom Inc. - Class B
     2,950       181,632  
 
Walt Disney Company (The)
     10,200       579,360  
                6,056,369  
 
CONSUMER STAPLES - 5.81%
                
 
Altria Group, Inc.
     20,800       715,312  
 
Coca-Cola Company (The)
     19,000       768,360  
 
Colgate-Palmolive Company
     5,000       590,150  
 
Costco Wholesale Corporation
     2,500       265,275  
 
CVS Caremark Corporation
     10,430       573,546  
 
Kimberly-Clark Corporation
     3,000       293,940  
 
Philip Morris International, Inc.
     12,000       1,112,520  
 
Wal-Mart Stores, Inc.
     26,700       1,997,961  
                6,317,064  
 
ENERGY - 6.27%
                
 
Chevron Corporation
     11,732       1,393,996  
 
Cameron International Corporation *
     2,000       130,400  
 
ConocoPhillips
     13,974       839,837  
 
EOG Resources, Inc.
     3,500       448,245  
 
Exxon Mobil Corporation
     29,936       2,697,533  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
SCHEDULE OF INVESTMENTS - MARCH 31, 2013 (Unaudited) (Continued)

Description  
No. of
Shares
    
Value
  
 
Marathon Oil Corporation
     5,000     $ 168,600  
 
Phillips 66
     7,487       523,865  
 
Schlumberger Limited
     6,000       449,340  
 
Valero Energy Corporation
     3,000       136,470  
 
WPX Energy, Inc. *
     1,666       26,689  
                6,814,975  
 
FINANCIALS - 8.98%
                
 
AFLAC, Inc.
     5,500       286,110  
 
Allstate Corporation (The)
     5,000       245,350  
 
American Express Company
     6,400       431,744  
 
Ameriprise Financial, Inc.
     2,500       184,125  
 
Aon plc
     5,500       338,250  
 
BB&T Corporation
     6,000       188,340  
 
Berkshire Hathaway Inc. - Class B *
     11,000       1,146,200  
 
BlackRock, Inc. - Class A
     1,500       385,320  
 
Capital One Financial Corporation
     4,500       247,275  
 
Discover Financial Services
     6,000       269,040  
 
Fifth Third Bancorp
     9,000       146,790  
 
Franklin Resources, Inc.
     2,500       377,025  
 
JPMorgan Chase & Co.
     34,132       1,619,905  
 
Marsh & McLennan Companies, Inc.
     5,000       189,850  
 
MetLife, Inc.
     7,000       266,140  
 
Public Storage
     2,000       304,640  
 
State Street Corporation
     3,500       206,815  
 
SunTrust Banks, Inc.
     6,000       172,860  
 
T. Rowe Price Group, Inc.
     2,000       149,740  
 
U.S. Bancorp
     18,401       624,346  
 
Wells Fargo & Company
     47,800       1,768,122  
 
Weyerhaeuser Company
     7,000       219,660  
                9,767,647  
 
HEALTH CARE - 6.48%
                
 
Abbott Laboratories
     13,200       466,224  
 
AbbVie Inc.
     13,200       538,296  
 
Allergan, Inc.
     3,000       334,890  
 
Amgen Inc.
     7,800       799,578  
 
Biogen Idec Inc. *
     4,000       771,640  
 
Bristol-Myers Squibb Company
     19,000       782,610  
 
Cardinal Health, Inc.
     2,950       122,779  
 
Celgene Corporation *
     6,000       695,460  
 
Cigna Corporation
     2,500       155,925  
 
Covidien plc
     2,099       142,396  
 
Intuitive Surgical, Inc. *
     500       245,595  
 
Johnson & Johnson
     10,000       815,300  
 
McKesson Corporation
     1,800       194,328  
 
Merck & Company, Inc.
     22,267       984,869  
                7,049,890  
 
INDUSTRIALS - 5.23%
                
 
3M Company
     7,000       744,170  
 
Deere & Company
     6,500       558,870  
 
Dover Corporation
     2,000       145,760  
 
Emerson Electric Company
     7,000       391,090  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
SCHEDULE OF INVESTMENTS - MARCH 31, 2013 (Unaudited) (Continued)

Description  
No. of
Shares
    
Value
  
 
General Electric Company
     59,000     $ 1,364,080  
 
Honeywell International Inc.
     5,000       376,750  
 
Illinois Tool Works, Inc.
     5,000       304,700  
 
Lockheed Martin Corporation
     3,000       289,560  
 
Precision Castparts Corporation
     2,000       379,240  
 
Union Pacific Corporation
     4,000       569,640  
 
United Technologies Corporation
     6,000       560,580  
                5,684,440  
 
INFORMATION TECHNOLOGY - 10.41%
                
 
Apple Inc.
     6,900       3,054,147  
 
Automatic Data Processing, Inc.
     4,000       260,080  
 
Cognizant Technology Solutions Corporation - Class A *
     2,500       191,525  
 
eBay Inc. *
     10,000       542,200  
 
Google Inc. - Class A *
     1,000       794,030  
 
International Business Machines Corporation
     6,100       1,301,130  
 
Intuit Inc.
     2,500       164,125  
 
MasterCard Incorporated - Class A
     1,200       649,356  
 
Microsoft Corporation
     41,800       1,195,898  
 
Oracle Corporation
     34,272       1,108,356  
 
QUALCOMM Incorporated
     13,000       870,350  
 
Visa Inc. - Class A
     6,000       1,019,040  
 
Yahoo! Inc. *
     7,000       164,710  
                11,314,947  
 
MATERIALS - 1.37%
                
 
Air Products & Chemicals, Inc.
     2,000       174,240  
 
Dow Chemical Company (The)
     7,000       222,880  
 
Ecolab Inc.
     2,500       200,450  
 
International Paper Company
     2,000       93,160  
 
Monsanto Company
     5,000       528,150  
 
PPG Industries, Inc.
     2,000       267,880  
                1,486,760  
 
TELECOMMUNICATION SERVICES - 1.57%
                
 
AT&T, Inc.
     25,039       918,681  
 
Verizon Communications, Inc.
     16,000       786,400  
                1,705,081  
 
UTILITIES - 1.54%
                
 
Consolidated Edison, Inc.
     4,000       244,120  
 
Duke Energy Corporation
     7,879       571,937  
 
NextEra Energy, Inc.
     4,000       310,720  
 
Public Service Enterprises Group, Inc.
     4,500       154,530  
 
Southern Company (The)
     6,000       281,520  
 
Xcel Energy Inc.
     4,000       118,800  
                1,681,627  
 
TOTAL EQUITY SECURITIES (cost - $90,777,793)
             108,060,834  
                   
 
SHORT-TERM INVESTMENTS - 1.27%
                
 
MONEY MARKET FUNDS - 1.27%
                
 
Fidelity Institutional Money Market Government Portfolio - Class I, 0.01%^ (cost - $1,382,535)
     1,382,535       1,382,535  
                   
 
TOTAL INVESTMENTS - 100.66% (cost - $92,160,328)
             109,443,369  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
SCHEDULE OF INVESTMENTS - MARCH 31, 2013 (Unaudited) (Concluded)

Description  
No. of
Shares
    
Value
  
 
LIABILITIES IN EXCESS OF OTHER ASSETS  - (0.66)%
           $ (723,139 )
                   
 
NET ASSETS - 100.00%
           $ 108,720,230  
 
*
Non-income producing security.
^
The rate shown is the 7-day effective yield as of March 31, 2013.
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE STRATEGIC VALUE FUND, INC.
NOTES TO SCHEDULE OF INVESTMENTS
MARCH 31, 2013 (UNAUDITED)
 
Federal Income Tax Cost: The following information is computed on a tax basis for each item as of March 31, 2013:

Cost of portfolio investments
   $ 92,160,328  
Gross unrealized appreciation
   $ 17,797,612  
Gross unrealized depreciation
     (514,571 )
Net unrealized appreciation
   $ 17,283,041  

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 March 31, 2013 in valuing the Fund's investments carried at value:
 
 
 
VALUATION INPUTS
  
INVESTMENTS
IN
SECURITIES
    
OTHER FINANCIAL INSTRUMENTS*
  
             
Level 1 – Quoted Prices
            
  Equity Investments
   $ 108,060,834     $ -  
  Short-Term Investments
     1,382,535       -  
Level 2 – Other Significant Observable Inputs
     -       -  
Level 3 – Significant Unobservable Inputs
     -       -  
Total
   $ 109,443,369     $ -  

* 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 March 31, 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 March 31, 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 three months ended March 31, 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 annual report previously filed with the Securities and Exchange Commission on the Form N-CSR on March 4, 2013 with a file number 811-05150.

Other information regarding the Fund is available in the Fund’s most recent 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
May 20, 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
May 20, 2013
    
       
By (Signature and Title)*
/s/ Frank J. Maresca
  
   
Frank J. Maresca, Treasurer (Principal Financial Officer)
       
Date
May 20, 2013
    
 
* Print the name and title of each signing officer under his or her signature.