Cornerstone Strategic Value Fund, Inc. (NYSE Alternext US: CLM) and Cornerstone Total Return Fund, Inc. (NYSE Alternext US: CRF), (individually the “Fund” or, collectively, the “Funds”), each a closed-end management investment company, today announced that in keeping with each Fund’s previously adopted monthly distribution policy, each Fund is declaring the following distributions.
|Record Date||Payable Date||Per Share|
|CLM||October 15, 2009||October 30, 2009||$0.1746|
|CLM||November 13, 2009||November 30, 2009||$0.1746|
|CLM||December 15, 2009||December 31, 2009||$0.1746|
|CRF||October 15, 2009||October 30, 2009||$0.1580|
|CRF||November 13, 2009||November 30, 2009||$0.1580|
|CRF||December 15, 2009||December 31, 2009||$0.1580|
Each Fund’s distribution policy provides for the resetting of the monthly distribution amount per share (“Distribution Amount”) annually, based on the Fund’s net asset value on the last business day of each October and the annualized Distribution Percentage approved by the Boards. For the calendar year 2009, each Board previously approved a Distribution Percentage of 21%, which was unchanged from the previous year.
Distribution Percentage for 2010
Each Board today announced that the Distribution Percentage for the calendar year 2010 will remain at 21%, which will be applied to the net asset value of each Fund as of the end of October, 2009 to determine the Distribution Amount for 2010. This percentage is unchanged from the previous three years. The Distribution Percentage is not a function of, nor is it related to, the investment return on a Fund’s portfolio.
The actual data that will determine the monthly Distribution Amount for 2010 will not be known until the end of October, 2009. However, as an example, if the value of the net assets and the number of shares outstanding were the same as those on July 31, 2009, the monthly Distribution Amount for 2010 would be reset from $0.1746 per share to $0.1413 per share for CLM, and from $0.1580 per share to $0.1244 per share for CRF. The actual Distribution Amount for each Fund for 2010 may be higher or lower than those shown in the above examples.
Each Board of Directors believes that each Fund’s distribution policy maintains a stable, high rate of distribution. These distributions are not tied to the Fund’s investment income or capital gains and do not represent yield or investment return on the 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 and the Distribution Percentage approved by the Board for each year. The terms of each distribution policy will be reviewed and approved at least annually by the respective Board of Directors and, as always, can be modified at their discretion for the benefit of the Fund and its shareholders.
Each Fund’s Board of Directors remains convinced that its shareholders are well served by a policy of regular distributions which increase liquidity and provide flexibility to individual shareholders in managing their investment. Shareholders have the option of reinvesting these distributions in additional shares of the Fund or receiving them in cash. Shareholders may consider reinvesting all or a portion of their regular distributions through their Fund’s reinvestment plan. Shareholders should carefully read the description of the dividend reinvestment plan contained in each Fund's Reports to Shareholders.
Under its policy, each Fund may distribute to shareholders each month 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 to adopt this policy, the Board of Directors of each Fund sought to make regular monthly distributions throughout the year. Under each policy, the Fund’s distributions will consist either of (1) earnings, (2) capital gains, or (3) return-of-capital, also known as paid-in-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 made during this current calendar quarter may consist 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 2009 cannot be determined until after the end of the year and is subject to change depending on market conditions during the year and the magnitude of income and realized gains for the year.
In any given year, there can be no guarantee that the Fund’s investment returns will exceed the amount of the net 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. Distributions designated as return-of-capital are not taxed as ordinary income dividends and are sometimes 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. Shareholders can expect to receive tax-reporting information for 2009 distributions by the middle of February 2010 indicating the exact composition per share of the distributions received during the calendar year. Shareholders should consult their tax advisor for proper tax treatment of the Fund’s distributions.
Cornerstone Strategic Value Fund, Inc. and Cornerstone Total Return Fund, Inc. are traded on the NYSE Alternext US LLC under the trading symbols “CLM” and “CRF”, respectively. Each Fund’s investment adviser is Cornerstone Advisors, Inc., which also serves as investment adviser to another closed-end fund, Cornerstone Progressive Return Fund (NYSE Alternext US: CFP).
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 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 Funds have no obligation to update or revise forward-looking statements.