Cornerstone Funds Announce Continuing Monthly Distributions and Approval of New Investment Management Agreements
11 May 2019 - 6:30AM
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 |
July 15, 2019 |
July 31, 2019 |
$0.2053 |
CLM |
August 15, 2019 |
August 30, 2019 |
$0.2053 |
CLM |
September 16, 2019 |
September 30, 2019 |
$0.2053 |
|
|
|
|
CRF |
July 15, 2019 |
July 31, 2019 |
$0.1985 |
CRF |
August 15, 2019 |
August 30, 2019 |
$0.1985 |
CRF |
September 16, 2019 |
September 30, 2019 |
$0.1985 |
At each Fund’s annual meeting of stockholders
held on April 16, 2019, stockholders of each Fund approved a new
investment agreement with Cornerstone Advisors Asset Management LLC
(the “Adviser”). As disclosed in each Fund’s proxy statement, it is
anticipated that the Adviser’s name will soon be changed to
Cornerstone Advisors LLC. The new investment management agreement
for each Fund became effective May 1, 2019.
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”).
Each Board believes each Fund’s distribution
policy maintains a stable, high rate of distribution. These
distributions are not tied to each Funds’ investment income or
capital gains and do not represent yield or investment return on
each Funds’ portfolios. 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 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 all of their regular
distributions through their Fund’s 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
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 2019 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 taken 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 an investor’s shares in the
Fund. Stockholders can expect to receive tax-reporting information
for 2019 distributions by the middle of February 2020 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 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. 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 the
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