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: 811-5003

 

 

Blue Chip Value Fund, Inc.

 (Exact name of registrant as specified in charter)

 

 

1225 17th Street, 26th Floor, Denver, Colorado 80202

 (Address of principal executive offices) (Zip code)

 

Michael P. Malloy
Drinker Biddle & Reath LLP

One Logan Square

18^th & Cherry Streets

Philadelphia, Pennsylvania 19103-6996

 (Name and address of agent for service)

 

 

Registrant’s Telephone Number, including Area Code: (800) 624-4190

 

 

Date of fiscal year end: December 31

 

 

Date of reporting period: September 30, 2010

 

 

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Item 1 – Schedule of Investments.

 

Blue Chip Value Fund, Inc.

STATEMENT OF INVESTMENTS
September 30, 2010 (Unaudited)

			Market
	Shares	Cost	Value
COMMON STOCKS - 97.74%
BASIC MATERIALS - 6.13%
Chemicals - 1.02%
Ecolab Inc.	20,500	$                  930,335	$                1,040,170
Forestry & Paper - 4.04%
Ball Corp.	37,440	1,956,262	2,203,344
International Paper Co.	88,800	2,039,599	1,931,400
		3,995,861	4,134,744
Specialty Chemicals - 1.07%
Agrium Inc. (Canada)	14,600	980,794	1,094,854
TOTAL BASIC MATERIALS		5,906,990	6,269,768
CAPITAL GOODS - 4.31%
Aerospace & Defense - 2.45%
General Dynamics Corp.	19,700	1,287,864	1,237,357
Raytheon Co.	27,700	1,309,503	1,266,167
		2,597,367	2,503,524
Industrial Products - 1.86%
ITT Corp.	40,700	2,225,406	1,905,981
TOTAL CAPITAL GOODS		4,822,773	4,409,505
COMMERCIAL SERVICES - 4.38%
Business Products & Services - 1.88%
Quanta Services Inc.**	101,000	3,109,759	1,927,080
IT Services - 1.25%
Computer Sciences Corp.	27,750	1,457,061	1,276,500
Transaction Processing - 1.25%
The Western Union Co.	72,400	1,185,429	1,279,308
TOTAL COMMERCIAL SERVICES		5,752,249	4,482,888
COMMUNICATIONS - 5.53%
Networking - 1.73%
Cisco Systems Inc.**	81,000	1,931,857	1,773,900
Telecomm Equipment & Solutions - 3.80%
QUALCOMM Inc.	52,000	2,348,445	2,346,240
Research In Motion Ltd. (Canada)**	31,600	1,943,846	1,538,604
		4,292,291	3,884,844
TOTAL COMMUNICATIONS		6,224,148	5,658,744
CONSUMER CYCLICAL - 9.63%
Apparel & Footwear Manufacturers - 3.70%
Nike Inc. - Class B	27,850	1,749,317	2,231,899
VF Corp.	19,200	1,468,987	1,555,584
		3,218,304	3,787,483
Department Stores - 2.17%
Macy's Inc.	96,400	1,712,670	2,225,876

 

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Ltd. - Limited

N.V. - Naamloze Vennootschap is the Dutch term for a public limited liability corporation. PLC - Public Limited Co.

REIT - Real Estate Investment Trust

Sector and industry classifications presented herein are based on the sector and industry categorization methodology of the Investment Adviser to the Fund.

 

 Please note the country classification is based on the company headquarters. All of the Fund's investments are traded on U.S. exchanges.

See accompanying notes to statement of investments.

 

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BLUE CHIP VALUE FUND

NOTES TO STATEMENT OF INVESTMENTS

September 30, 2010 (Unaudited)

 

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

 

Blue Chip Value Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended, as a diversified, closed-end management investment company.

 

The following is a summary of significant accounting policies followed by the Fund in the preparation of its statement of investments.

 

Security Valuation – All securities of the Fund are valued as of the close of regular trading on the New York Stock Exchange (“NYSE”), currently 4:00 p.m. (Eastern Time), on each day that the NYSE is open. Listed securities are generally valued at the last sales price as of the close of regular trading on the NYSE. Securities traded on the National Association of Securities Dealers Automated Quotation (“NASDAQ”) are generally valued at the NASDAQ Official Closing Price (“NOCP”). In the absence of sales and NOCP, such securities are valued at the mean of the bid and asked prices.

 

Securities having a remaining maturity of 60 days or less are valued at amortized cost which approximates market value.

 

When market quotations are not readily available or when events occur that make established valuation methods unreliable, securities of the Fund may be valued at fair value determined in good faith by or under the direction of the Board of Directors.  Factors which may be considered when determining the fair value of a security include (a) the fundamental data relating to the investment; (b) an evaluation of the forces which influence the market in which the security is sold, including the liquidity and depth of the market; (c) the market value at date of purchase; (d) information as to any transactions or offers with respect to the security or comparable securities; and (e) any other relevant matters.

 

Investment Transactions – Investment transactions are accounted for on the date the investments are purchased or sold (trade date). Realized gains and losses from investment transactions and unrealized appreciation and depreciation of investment are determined on the “specific identification” basis for both financial statement and federal income tax purposes. Dividend income is recorded on the ex-dividend date. Interest income, which includes interest earned on money market funds, is accrued and recorded daily.

 

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to the financial statements. Actual results could differ from those estimates.

 

 

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2. FAIR VALUE MEASUREMENTS

 

A three-tier hierarchy has been established for fair value measurement based on the extent of use of “observable inputs” as compared to “unobservable inputs” for disclosure purposes and requires additional disclosures about these valuations measurements. Inputs refer broadly to the assumptions that market participants would use in pricing a security. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the security developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the security developed based on the best information available in the circumstances.

 

The three-tier hierarchy is summarized as follows:

 

Level 1 – Quoted and Unadjusted Prices in active markets for identical investments.

 

Level 2 – Other Significant Observable Inputs (including quoted prices for similar

investments, interest rates, prepayment speeds, credit risk, etc.).

 

Level 3 – Significant Unobservable Inputs (including the Fund’s own assumptions in

determining the fair value of investments).

 

 

The following is a summary of the inputs used as of September 30, 2010 in valuing the

Fund’s assets:

 

 

 

*For detailed Industry descriptions, see accompanying Statement of Investments

All securities of the Fund were valued using Level 1 inputs during the three months ended September 30, 2010. Thus a reconciliation of assets in which significant unobservable inputs (Level 3) were used is not applicable.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

 

 

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3. UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS (TAX BASIS)

 

As of September 30, 2010:

 

Gross appreciation (excess of value over tax cost)	$                              5,708,123
Gross depreciation (excess of tax cost over value)	(6,900,254)
Net unrealized appreciation / (depreciation)	$                           (1,192,131)
Cost of investments for income tax purposes	$                         103,415,673

 

4. LOAN OUTSTANDING

 

The Fund has a line of credit with The Bank of New York Mellon (“BONY”) in which the Fund may borrow up to the lesser of 15% of the Fund’s total assets, $15,000,000 or the maximum amount the Fund is permitted to borrow under the Investment Company Act of 1940. For the period January 1, 2010 through February 28, 2010 the interest rate reset daily at overnight Federal Funds Rate plus 1.00%. Effective March 1, 2010, the interest rate changed to overnight Federal Funds Rate plus 1.25% and the Fund pays an annual loan facility fee of 0.03%. The borrowings under the BONY loan are secured by a perfected security interest on all of the Funds’ assets.

 

Details of the loan outstanding are as follows:

 

 

		Average for the
	As of	Nine Months Ended
	September 30,  2010	September 30, 2010
Loan outstanding	$ 0.00	$10,439,441
Interest rate	N/A	1.28 %
% of Fund's total assets	0.00 %	10.20 %
Amount of debt per share outstanding	$ 0.00	$ 0.37
Number of shares outstanding (in thousands)	28,464	28,464 *

 

*Weighted Average

 

 

5. SUBSEQUENT EVENT

 

Effective December 1, 2010 the line of credit with BONY will be terminated.

 

On November 18, 2010, the Fund’s Board of Directors and the Board of Trustees of the Westcore Trust announced formal approval to a proposal to reorganize the Fund into Westcore Blue Chip Fund, a registered open-end fund with a similar investment objective and strategies.  The reorganization must be approved by the Blue Chip Value Fund’s shareholders. The Fund has set the close of business on November 19, 2010 as the record date for the special meeting of shareholders of the Fund to consider the reorganization. It is anticipated that proxy materials will be distributed to Blue Chip Value Fund’s shareholders later this year or in early 2011 and that the special meeting will be held on February 8, 2011.

 

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Item 2 - Controls and Procedures.

 

(a)        The registrant's  Principal Executive Officer and Principal Financial Officer have evaluated the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) within 90 days of the filing date of this report and have concluded that the registrant's disclosure controls and procedures were effective, as of that date.

 

(b)        There was no change 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 registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

 

Item 3 – Exhibits.

 

Separate certifications for the registrant's Principal Executive Officer and Principal Financial Officer, as required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached as Ex99.CERT.

 

 

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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.

 

BLUE CHIP VALUE FUND, INC.

 

By:       /s/ Todger Anderson

            Todger Anderson

            President / Principal   Executive Officer

 

Date:    November 29, 2010

 

 

            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:       /s/ Todger Anderson

            Todger Anderson

            President / Principal   Executive Officer

 

Date:    November 29, 2010

 

 

By:       /s/ Jasper R. Frontz

            Jasper R. Frontz

            Treasurer / Principal Financial Officer

 

Date:    November 29, 2010