Cornerstone Strategic Value Fund, Inc. (NYSE American:CLM) and
Cornerstone Total Return Fund, Inc. (NYSE American: CRF),
(individually the “Fund” or, collectively, the “Funds”), each a
closed-end management investment company, 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 13, 2017 |
October 31, 2017 |
$ |
0.2326 |
CLM |
November 15, 2017 |
November 30, 2017 |
$ |
0.2326 |
CLM |
December 15, 2017 |
December 29, 2017 |
$ |
0.2326 |
|
|
|
|
CRF |
October 13, 2017 |
October 31, 2017 |
$ |
0.2289 |
CRF |
November 15, 2017 |
November 30, 2017 |
$ |
0.2289 |
CRF |
December 15, 2017 |
December 29, 2017 |
$ |
0.2289 |
|
|
|
|
|
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 respective Board of
Directors (individually the “Board”, or collectively, the
“Boards”). Each Board previously announced the distribution
percentage for the calendar year 2017 would remain unchanged from
the previous year at 21% of the net asset value of each Fund.
Distribution Percentage for
2018
Each Board today announced the Distribution
Percentage for the calendar year 2018 will remain at 21%, which
will be applied to the net asset value of each Fund as of the end
of October 2017 to determine the Distribution Amount for 2018. The
Distribution Percentage is not a function of, nor is it related to,
the investment return on a Fund's portfolio.
The actual data which will determine the monthly
Distribution Amount for 2018 will not be known until the end of
October 2017. 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, 2017, the monthly Distribution Amount for 2018 would
remain unchanged at $0.2326 per share for CLM, and be reset from
$0.2289 per share to $0.2249 per share for CRF. The actual
Distribution Amount for each Fund for 2018 may be higher or lower
than those shown in the above examples.
Each Board believes each Fund’s distribution
policy maintains a stable, high rate of distribution. These
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 their discretion for
the benefit of each Fund and its stockholders.
Each Fund’s Board remains convinced 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 these distributions in additional shares of
their Fund or receiving them in cash. Stockholders may
consider reinvesting all or a portion of their regular
distributions through their 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 at
times provide additional benefit to stockholders who participate in
their Fund’s plan.
Under each Fund’s distribution policy, each Fund
may distribute to stockholders 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 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 these
categories. 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 the current calendar year is
expected to consist of a return of the investor’s capital.
Accordingly, these distributions should not be confused with yield
or investment return on each Fund’s portfolio. The final
composition of the distributions for 2017 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 each Fund’s investment returns will exceed the amount of the
net distributions. To the extent the amount of distributions taken
in cash exceeds the total net investment returns of a Fund, the
assets of a Fund will decline. If the total net investment returns
exceed the amount of cash distributions, the assets of a 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 2017 distributions by the middle of February 2018 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 which invest
substantially all of their assets in equity securities, the Adviser
may also choose to take advantage of situations in funds which
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 a Fund will bear not only their proportionate share
of the expenses of a Fund, but also, indirectly the expenses of the
purchased investment company. There can be no assurance the
investment objective of any investment company in which a Fund
invests will be achieved.
Under the managed distribution policy, each Fund
makes monthly distributions to stockholders at a rate which may
include periodic distributions of its net income and net capital
gains, (“Net Earnings”), or from return-of-capital. If, for
any fiscal year where total cash distributions exceeded Net
Earnings (the "Excess"), the Excess would decrease each Fund's
total assets and, as a result, would have the likely effect of
increasing each Fund's expense ratio. There is a risk the total Net
Earnings from each Fund’s portfolio would not be great enough to
offset the amount of cash distributions paid to Fund
stockholders. If this were to occur, a Fund’s assets would be
depleted, and there is no guarantee a Fund would be able to replace
the assets. In addition, in order to make such distributions, a
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.
Cornerstone Strategic Value Fund, Inc. and
Cornerstone Total Return Fund, Inc. are traded on the NYSE American
LLC under the trading symbols “CLM” and “CRF”, respectively. For
more information regarding each Fund please visit
www.cornerstonestrategicvaluefund.com and
www.cornerstonetotalreturnfund.com.
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 which 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
release 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 a Fund’s investment portfolio. These
statements are subject to risks and uncertainties, including the
factors set forth in each Fund’s disclosure documents, filed with
the U.S. Securities and Exchange Commission, and actual trends,
developments and regulations, in the future and their impact on
each Fund could be materially different from those projected,
anticipated or implied. Each Fund has no obligation to update or
revise forward-looking statements.
Contact: (866) 668-6558