Cornerstone Strategic Value Fund, Inc. (NYSE American: CLM) (CUSIP:
21924B302) and Cornerstone Total Return Fund, Inc. (NYSE American:
CRF) (CUSIP: 21924U300), (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 15,
2024 |
October 31,
2024 |
$0.1086 |
CLM |
November
15, 2024 |
November
29, 2024 |
$0.1086 |
CLM |
December
16, 2024 |
December
31, 2024 |
$0.1086 |
|
|
|
|
CRF |
October 15,
2024 |
October 31,
2024 |
$0.1037 |
CRF |
November
15, 2024 |
November
29, 2024 |
$0.1037 |
CRF |
December
16, 2024 |
December
31, 2024 |
$0.1037 |
|
|
|
|
Each Fund’s distribution policy provides for the
resetting of the monthly distribution amount per share
(“Distribution Amount”) annually, based on each Fund’s net asset
value on the last business day of October and the annualized
distribution percentage approved by the respective Board of
Directors (individually the “Board”, or collectively, the
“Boards”).
Distribution Percentage for
2025
Each Board today announced the distribution
percentage for the calendar year 2025 will remain at 21%, which
will be applied to the net asset value of each Fund as of the end
of October 2024 to determine the Distribution Amount for 2025. The
Distribution Percentage for 2025 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 2025 will not be known until the end of
October 2024. 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, 2024, the monthly Distribution Amount for 2025 would be
reset from $0.1086 per share to $0.1240 per share for CLM and be
reset from $0.1037 per share to $0.1185 per share for CRF. The
actual Distribution Amount for each Fund for 2025 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
are 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 in each Fund.
Stockholders have the option of reinvesting these distributions in
additional shares of their Fund or receiving them in cash.
Stockholders may consider reinvesting their regular distributions
through their Fund’s dividend reinvestment plan which may at times
provide additional benefit to stockholders who participate in their
Fund’s plan. Stockholders should carefully read the description of
the dividend reinvestment plan contained in each Fund's report to
stockholders.
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
stockholder’s original investment.
Given the current economic environment and the
composition of each Fund’s portfolio, a portion of each Fund’s
distributions made during the current calendar year is expected to
consist of a return of the stockholder’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 2024 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
each Fund’s investment returns will exceed the amount of the net
distributions. To the extent the amount of distributions paid to
stockholders in cash exceeds the total net investment returns of
the 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 a
stockholder’s shares in the Fund. Stockholders can expect to
receive tax-reporting information for 2024 distributions by the
middle of February 2025 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, LLC (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 the 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. A
stockholder 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 the
Fund could be materially different from those projected,
anticipated or implied. Each Fund has no obligation to update or
revise forward-looking statements.
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