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.

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(Exact name of registrant as specified in charter)

 

48 Wall Street   New York, NY	10005
(Address of principal executive offices)	(Zip code)

 

Frank J. Maresca

 

AST Fund Solutions, LLC     48 Wall Street     New York, NY 10005

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(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, 2016

Item 1. Schedule of Investments.

 

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CORNERSTONE STRATEGIC VALUE FUND, INC.

SCHEDULE OF INVESTMENTS - MARCH 31, 2016 (Unaudited)

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Description		No. of Shares				Value
EQUITY SECURITIES - 99.34%
CLOSED-END FUNDS - 54.03%
CONVERTIBLE SECURITIES - 1.94%
Advent Claymore Convertible Securities and Income Fund			153,742			$	2,030,932
Advent Claymore Convertible Securities and Income Fund II			347				1,884
AllianzGI Convertible & Income Fund			430,640				2,385,746
AllianzGI Convertible & Income Fund II			270,926				1,322,119
Gabelli Convertible and Income Securities Fund Inc. (The)			55,045				253,207
							5,993,888
CORE - 6.40%
Adams Diversified Equity Fund, Inc.			93,759				1,186,051
General American Investors Company, Inc.			188,421				5,884,388
Guggenheim Enhanced Equity Income Fund			6,200				45,198
Guggenheim Enhanced Equity Strategy Fund			8,644				131,648
Guggenheim Equal Weight Enhanced Equity Income Fund			12,400				200,260
Liberty All-Star Equity Fund			1,050,894				5,222,943
Royce Micro-Cap Trust, Inc.			274,469				1,921,283
Royce Value Trust			387,696				4,539,920
Sprott Focus Trust, Inc.			102,446				623,896
							19,755,587
CORPORATE DEBT INVESTMENT GRADE-RATED - 0.00%
Cutwater Select Income Fund			1				26
DEVELOPED MARKET - 1.18%
Aberdeen Australia Equity Fund, Inc.			391,370				2,176,017
Aberdeen Israel Fund, Inc. *			468				7,923
Aberdeen Singapore Fund, Inc.			44,833				402,600
Japan Smaller Capitalization Fund, Inc.			31,105				300,163
New Ireland Fund, Inc. (The)			21,162				274,873
Swiss Helvetia Fund, Inc. (The)			48,225				490,931
							3,652,507
EMERGING MARKETS - 1.75%
Aberdeen Chile Fund, Inc.			149,715				899,787
Aberdeen Indonesia Fund, Inc.			10,986				65,696
First Trust/Aberdeen Emerging Opportunity Fund			17,465				243,287
India Fund, Inc. (The)			2,800				64,288
Morgan Stanley China A Share Fund, Inc.			73,600				1,245,312
Templeton Dragon Fund, Inc.			8,400				143,808
Turkish Investment Fund, Inc. (The)			28,031				257,044
Voya Emerging Markets High Dividend Equity Fund			320,993				2,481,276
							5,400,498
ENERGY MLP - 0.20%
Fiduciary/Claymore MLP Opportunity Fund			55,800				612,126
GENERAL & INSURED LEVERAGED - 0.00%
Invesco Value Municipal Income Trust			1				14

 

See accompanying notes to schedule of investments.

 

Description			No. of Shares				Value
GENERAL BOND - 0.01%
Deutsche Strategic Income Trust			4,171			$	46,173
GLOBAL - 12.20%
Alpine Global Dynamic Dividend Fund			227,745				1,942,665
Alpine Global Total Dynamic Dividend Fund			1,091,449				8,185,868
Calamos Global Dynamic Income Fund			348,067				2,446,911
Clough Global Opportunities Fund			413,972				3,965,852
Calamos Global Total Return Fund			67,497				751,242
Clough Global Allocation Fund			94,468				1,095,829
Clough Global Equity Fund			155,715				1,694,179
Delaware Enhanced Global Dividend and Income Fund			352,791				3,228,038
Eaton Vance Tax-Advantaged Global Dividend Fund			192,914				2,787,607
Gabelli Multimedia Trust Inc. (The)			162,517				1,194,500
GDL Fund (The)			216,072				2,158,559
Lazard Global Total Return and Income Fund, Inc.			50,394				626,397
Lazard World Dividend & Income Fund, Inc.			92,813				838,101
Royce Global Value Trust, Inc.			116,882				861,420
Voya Infrastructure, Industrials and Materials Fund			185,105				2,308,259
Wells Fargo Advantage Global Dividend Opportunity Fund			599,840				3,581,045
							37,666,472
HIGH CURRENT YIELD (LEVERAGED) - 0.30%
Avenue Income Credit Strategies Fund			84,762				928,992
INCOME & PREFERRED STOCK - 2.59%
Calamos Strategic Total Return Fund			560,921				5,334,359
LMP Capital and Income Fund Inc.			214,854				2,657,744
							7,992,103
LOAN PARTICIPATION - 1.09%
Apollo Senior Floating Rate Fund Inc.			189,128				2,874,746
Nuveen Credit Strategies Income Fund			60,327				477,187
							3,351,933
NATURAL RESOURCES - 4.64%
Adams Natural Resources Fund, Inc.			56,689				1,019,835
BlackRock Resources & Commodities Strategy Trust			1,369,242				9,872,235
Tortoise Energy Independence Fund, Inc.			165,564				1,892,397
Voya Natural Resources Equity Income Fund			271,513				1,531,333
							14,315,800
OPTION ARBITRAGE/OPTIONS STRATEGIES - 3.88%
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund			612,731				7,512,082
BlackRock Global Opportunities Equity Trust			17,200				204,336
Cohen & Steers Global Income Builder, Inc.			234,119				2,055,565
First Trust Enhanced Equity Income Fund			17,600				224,224
Voya Global Advantage and Premium Opportunity Fund			17,100				174,420
Voya Global Equity Dividend and Premium Opportunity Fund			216,343				1,533,872
Voya International High Dividend Equity Fund			38,337				246,890
							11,951,389
PACIFIC EX JAPAN - 0.14%
Asia Pacific Fund, Inc. (The)			400				3,844
Aberdeen Greater China Fund, Inc.			50,582				419,831
							423,675

 

See accompanying notes to schedule of investments.

Description			No. of Shares				Value
REAL ESTATE - 11.28%
Alpine Global Premier Properties Fund			1,099,963			$	6,148,793
CBRE Clarion Global Real Estate Income Fund			1,141,140				8,912,303
Cohen & Steers Preferred Securities and Income Fund, Inc.			657,261				12,435,378
Cohen & Steers Quality Income Realty Fund, Inc.			101,619				1,261,092
LMP Real Estate Income Fund Inc.			78,836				1,076,900
Neuberger Berman Real Estate Securities Income Fund Inc.			294,962				1,501,357
Nuveen Real Estate Income Fund			94,353				1,022,787
RMR Real Estate Income Fund			127,145				2,461,526
							34,820,136
SECTOR EQUITY - 1.19%
GAMCO Natural Resources, Gold & Income Trust by Gabelli			123,147				810,307
Nuveen Real Asset Income and Growth Fund			175,000				2,689,750
Tekla Life Sciences Investors			9,866				176,996
							3,677,053
UTILITY - 5.24%
Cohen & Steers Infrastructure Fund, Inc.			312,263				6,185,930
Duff & Phelps Global Utility Income Fund Inc.			346,097				5,506,403
Gabelli Global Utility & Income Trust (The)			60,473				1,082,467
Macquarie Global Infrastructure Total Return Fund Inc.			169,522				3,405,697
							16,180,497
TOTAL CLOSED-END FUNDS							166,768,869
CONSUMER DISCRETIONARY - 5.53%
Amazon.com, Inc. *			10,500				6,233,220
Comcast Corporation - Class A			41,013				2,505,074
Dollar General Corporation			2,300				196,880
Home Depot, Inc. (The)			19,600				2,615,228
Lowe's Companies, Inc.			8,000				606,000
Ross Stores, Inc.			3,000				173,700
Starbucks Corporation			15,000				895,500
Time Warner Cable Inc.			4,000				818,480
Twenty-First Century Fox, Inc.			5,000				141,000
Walt Disney Company (The)			29,200				2,899,852
							17,084,934
CONSUMER STAPLES - 4.84%
ConAgra Foods, Inc.			7,500				334,650
Constellation Brands, Inc.			3,000				453,270
Costco Wholesale Corporation			9,000				1,418,220
CVS Caremark Corporation			18,430				1,911,744
General Mills, Inc.			3,900				247,065
Kimberly-Clark Corporation			5,000				672,550
Kraft Heinz Company (The)			4,000				314,240
Kroger Co. (The)			30,000				1,147,500
Mondelēz International, Inc. - Class A			12,000				481,440
Monster Beverage Corporation *			4,000				533,520
Reynolds American Inc.			22,000				1,106,820
Walgreens Boots Alliance, Inc.			15,000				1,263,600
Wal-Mart Stores, Inc.			73,700				5,047,713
							14,932,332

 

See accompanying notes to schedule of investments.

Description			No. of Shares				Value
ENERGY - 2.14%
Chevron Corporation			11,000			$	1,049,400
Exxon Mobil Corporation			39,936				3,338,250
Occidental Petroleum Corporation			6,000				410,580
Phillips 66			7,987				691,594
Schlumberger Limited			8,000				590,000
Valero Energy Corporation			8,000				513,120
							6,592,944
EXCHANGE-TRADED FUNDS - 1.00%
iShares Core S&P 500 ETF			15,000				3,099,750
FINANCIALS - 7.38%
Allstate Corporation (The)			4,000				269,480
American Express Company			13,000				798,200
American International Group, Inc.			8,000				432,400
American Tower Corporation			4,000				409,480
Aon plc			8,500				887,825
Berkshire Hathaway Inc. - Class B *			44,000				6,242,720
Chubb Limited			6,000				714,900
Intercontinental Exchange, Inc.			2,500				587,850
JPMorgan Chase & Co.			66,132				3,916,337
Marsh & McLennan Companies, Inc.			8,500				516,715
McGraw Hill Financial, Inc.			2,000				197,960
Moody’s Corporation			3,000				289,680
PNC Financial Services Group, Inc. (The)			8,000				676,560
Travelers Companies, Inc. (The)			6,000				700,260
Wells Fargo & Company			126,800				6,132,048
							22,772,415
HEALTH CARE - 6.39%
Abbott Laboratories			26,200				1,095,946
AbbVie Inc.			11,200				639,744
Aetna Inc.			11,000				1,235,850
Allergan plc *			6,577				1,762,833
Amgen Inc.			17,800				2,668,754
Anthem, Inc.			4,000				555,960
Boston Scientific Corporation *			2,000				37,620
Cardinal Health, Inc.			6,000				491,700
Celgene Corporation *			10,000				1,000,900
Cigna Corporation			5,000				686,200
Eli Lilly and Company			11,000				792,110
Express Scripts Holding Company *			8,000				549,520
Gilead Sciences, Inc.			7,000				643,020
Johnson & Johnson			13,000				1,406,600
McKesson Corporation			3,000				471,750
Merck & Company, Inc.			35,267				1,865,977
Stryker Corporation			8,000				858,320
Thermo Fisher Scientific Inc.			10,000				1,415,900
UnitedHealth Group Incorporated			12,000				1,546,800
							19,725,504

 

See accompanying notes to schedule of investments.

 

Description			No. of Shares				Value
INDUSTRIALS - 4.41%
3M Company			5,000			$	833,150
Danaher Corporation			13,000				1,233,180
Delta Air Lines, Inc.			18,000				876,240
FedEx Corporation			6,000				976,320
General Dynamics Corporation			6,000				788,220
General Electric Company			74,000				2,352,460
Honeywell International Inc.			22,400				2,509,920
Illinois Tool Works Inc.			8,000				819,520
Lockheed Martin Corporation			4,000				886,000
Northrop Grumman Corporations			5,000				989,500
Raytheon Company			5,000				613,150
Southwest Airlines Co.			12,000				537,600
Waste Management, Inc.			3,100				182,900
							13,598,160
INFORMATION TECHNOLOGY - 9.73%
Alphabet Inc. - Class A *			2,000				1,525,800
Alphabet Inc. - Class C *			16,005				11,922,925
Apple Inc.			43,000				4,686,570
Automatic Data Processing, Inc.			7,000				627,970
Cisco Systems, Inc.			35,000				996,450
Cognizant Technology Solutions Corporation *			6,000				376,200
Facebook, Inc. *			21,000				2,396,100
Fiserv, Inc. *			4,000				410,320
Intel Corporation			36,000				1,164,600
MasterCard Incorporated			7,000				661,500
Microsoft Corporation			62,000				3,424,260
Oracle Corporation			26,272				1,074,788
Visa Inc.			10,000				764,800
							30,032,283
MATERIALS - 1.49%
Air Products & Chemicals, Inc.			5,000				720,250
Dow Chemical Company (The)			29,500				1,500,370
Ecolab Inc.			5,500				613,360
LyondellBasell Industries N.V.			7,000				599,060
PPG Industries, Inc.			8,000				891,920
Sherwin-Williams Company (The)			1,000				284,670
							4,609,630
TELECOMMUNICATION SERVICES - 1.41%
AT&T, Inc.			7,568				296,439
Verizon Communications, Inc.			75,000				4,056,000
							4,352,439
UTILITIES - 0.99%
American Electric Power Company, Inc.			4,200				278,880
Dominion Resources, Inc.			10,000				751,200
Duke Energy Corporation			5,300				427,604
Edison International			2,500				179,725
NextEra Energy, Inc.			6,000				710,040
PPL Corporation			6,000				228,420
Public Service Enterprises Group, Inc.			6,500				306,410

 

See accompanying notes to schedule of investments.

 

Description			No. of Shares				Value
Xcel Energy Inc.			4,000			$	167,280
							3,049,559
TOTAL EQUITY SECURITIES (cost - $300,365,152)							306,618,819
SHORT-TERM INVESTMENT - 0.89%
MONEY MARKET FUND - 0.89%
Fidelity Institutional Money Market Government Portfolio - Class I, 0.23%^ (cost - $2,740,177)			2,740,177				2,740,177
TOTAL INVESTMENTS - 100.23% (cost - $303,105,329)							309,358,996
LIABILITIES IN EXCESS OF OTHER ASSETS - (0.23)%							(711,685	)
NET ASSETS - 100.00%						$	308,647,311

 

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*	Non-income producing security.

^	The rate shown is the 7-day effective yield as of March 31, 2016.

 

See accompanying notes to schedule of investments.

CORNERSTONE STRATEGIC VALUE FUND, INC.

NOTES TO SCHEDULE OF INVESTMENTS

MARCH 31, 2016 (UNAUDITED)

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Federal Income Tax Cost: The following information is computed on a tax basis for each item as of March 31, 2016:

Cost of portfolio investments		$	304,403,015
Gross unrealized appreciation		$	24,901,711
Gross unrealized depreciation			(19,945,730	)
Net unrealized appreciation		$	4,955,981

The difference between the federal income tax cost of portfolio investments and the Schedule of Investments cost for the Fund is due to certain timing differences in the recognition of capital gains or losses under income tax regulations and generally accepted accounting principles.  These "book/tax" differences are temporary in nature and are due to the tax deferral of losses on wash sales.

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, 2016 in valuing the Fund's investments carried at value:

 

VALUATION INPUTS		INVESTMENTS IN SECURITIES				OTHER FINANCIAL INSTRUMENTS*
Level 1 – Quoted Prices
Equity Investments		$	306,618,819			$	-
Short-Term Investments			-				-
Level 2 – Other Significant Observable Inputs			-				-
Level 3 – Significant Unobservable Inputs			-				-
Total		$	306,618,819			$	-

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

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

As of March 31, 2016, 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, 2016.

In May 2015, the FASB issued ASU No. 2015-07 “Disclosure for Investments in Certain Entities that Calculate Net Asset Value (“NAV”) per Share (or Its Equivalent).” The amendments in ASU No. 2015-07 remove the requirement to categorize within the fair value hierarchy investments measured using the NAV practical expedient. The ASU also removes certain disclosure requirements for investments that qualify, but do not utilize, the NAV practical expedient. The amendments in the ASU are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Fund's investment in Fidelity Institutional Money Market Government Portfolio - Class I has been removed from Level 1 disclosure under the guidance provided by the amendment to such ASU.

The  Fund  is  exposed  to  financial   market  risks,  including  the  valuations  of  its  investment portfolio. During the three months ended March 31, 2016, 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 2, 2016 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 26, 2016
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 26, 2016
By (Signature and Title)*		/s/ Frank J. Maresca
		Frank J. Maresca, Treasurer (Principal Financial Officer)
Date	May 26, 2016

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