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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 811-22066
---------------------------------------------
Cornerstone Progressive Return Fund
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(Exact name of registrant as specified in charter)
305 Madison Avenue, Suite 740 New York, New York 10165
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(Address of principal executive offices) (Zip code)
Frank J. Maresca
Ultimus Fund Solutions, LLC 305 Madison Avenue, Suite 740 New York, NY 10165
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(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 652-6155
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Date of fiscal year end: December 31, 2009
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Date of reporting period: March 31, 2009
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Form N-Q is to be used by management investment companies other than small
business investment companies registered on Form N-5 (ss.ss. 239.24 and 274.5 of
this chapter), to file reports with the Commission, not later than 60 days after
the close of the first and third fiscal quarters, pursuant to Rule 30b1-5 under
the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use
the information provided on Form N-Q in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and
the Commission will make this information public. A registrant is not required
to respond to the collection of information contained in Form N-Q unless the
Form displays a currently valid Office of Management and Budget ("OMB") control
number. Please direct comments concerning the accuracy of the information
collection burden estimate and any suggestions for reducing the burden to
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington,
DC 20549-0609. The OMB has reviewed this collection of information under the
clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. SCHEDULE OF INVESTMENTS.
CORNERSTONE PROGRESSIVE RETURN FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2009 (UNAUDITED)
DESCRIPTION NO. OF SHARES VALUE
--------------------------------------------------------------------------------
EQUITY SECURITIES - 99.28%
CLOSED-END FUNDS - 28.12%
Advent/Claymore Enhanced Growth & Income Fund 49,761 $ 382,165
Alpine Global Premier Properties Fund ^ 13,700 40,278
BlackRock Enhanced Capital & Income Fund 20,300 202,797
Blue Chip Value Fund 17,500 39,025
Calamos Strategic Total Return Fund 240,600 1,369,014
Clough Global Allocation Fund ^ 2,300 24,564
Clough Global Equity Fund 74,200 724,934
Clough Global Opportunities Fund 163,000 1,499,600
Dreman/Claymore Dividend & Income Fund ^ 214,755 311,395
Eaton Vance Tax-Advantaged Dividend
Income Fund 50,000 446,000
Eaton Vance Tax-Advantaged Global Dividend
Income Fund ^ 73,000 584,730
Eaton Vance Tax-Managed Global Buy-Write
Opportunities Fund 70,900 667,169
Eaton Vance Tax-Managed Global Diversified
Equity Income Fund 124,550 1,071,130
Evergreen Global Dividend Opportunity Fund 500 4,030
First Trust Enhanced Equity Income Fund 9,100 71,162
Gabelli Dividend & Income Trust 45,414 379,207
General American Investors Company, Inc. 27,081 415,693
H&Q Healthcare Investors 37,800 380,646
H&Q Life Sciences Investors 65,000 507,000
ING Risk Managed Natural Resources Fund ^ 42,720 586,118
John Hancock Bank & Thrift Opportunity Fund 6,400 68,800
Liberty All-Star Equity Fund 306,100 896,873
Liberty All-Star Growth Fund 141,200 340,292
LMP Capital & Income Fund, Inc. 141,031 981,576
Madison Strategic Sector Premium Fund 200 1,616
Morgan Stanley High Yield Fund, Inc. 20,600 78,280
NFJ Dividend, Interest & Premium Strategy Fund 177,000 1,770,000
Nuveen Core Equity Alpha Fund 4,000 33,440
Nuveen Diversified Dividend & Income Fund 29,900 159,666
Nuveen Equity Premium & Growth Fund 6,000 57,600
Nuveen Equity Premium Advantage Fund 4,000 39,520
Nuveen Tax-Advantaged Dividend Growth Fund 9,000 62,460
Nuveen Tax-Advantaged Total Return
Strategy Fund ^ 7,800 49,764
CORNERSTONE PROGRESSIVE RETURN FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2009 (UNAUDITED) (CONTINUED)
CLOSED-END FUNDS (CONTINUED)
Reaves Utility Income Fund (The) ^ 4,907 $ 52,897
Royce Value Trust, Inc. 24,000 168,960
SunAmerica Focused Alpha Growth Fund, Inc. 16,000 142,560
Zweig Fund, Inc. ^ 184,902 460,406
Zweig Total Return Fund, Inc. (The) ^ 65,000 204,100
------------
15,275,467
------------
CONSUMER DISCRETIONARY - 6.27%
Amazon.com, Inc. ^ * 5,500 403,920
Best Buy Company, Inc. 2,000 75,920
Coach, Inc. ^ * 4,000 66,800
Comcast Corporation - Class A 15,358 209,483
DIRECTV Group, Inc. (The) ^ * 8,000 182,320
Ford Motor Company ^ * 15,000 39,450
GameStop Corporation - Class A ^ * 2,500 70,050
Gap, Inc. (The) 11,000 142,890
Home Depot, Inc. (The) ^ 9,000 212,040
Kohl's Corporation ^ * 3,695 156,372
Lowe's Companies, Inc. 10,000 182,500
McDonald's Corporation 11,000 600,270
NIKE, Inc. - Class B 5,000 234,450
Omnicom Group, Inc. ^ 2,000 46,800
Staples, Inc. 5,000 90,550
Target Corporation 5,614 193,066
Time Warner Cable, Inc. 2,510 62,250
Time Warner, Inc. ^ 2,000 38,600
TJX Companies, Inc. (The) ^ 2,000 51,280
Walt Disney Company (The) ^ 19,000 345,040
------------
3,404,051
------------
CONSUMER STAPLES - 8.87%
Altria Group, Inc. 11,922 190,990
Archer-Daniels-Midland Company 4,000 111,120
Coca-Cola Company (The) 11,000 483,450
Colgate-Palmolive Company 5,000 294,900
CVS Caremark Corporation 8,746 240,427
General Mills, Inc. 3,000 149,640
H.J. Heinz Company ^ 2,000 66,120
Kraft Foods, Inc. - Class A 15,000 334,350
Kroger Company (The) 7,000 148,540
PepsiCo, Inc. 9,000 463,320
Philip Morris International, Inc. ^ 12,337 438,951
Procter & Gamble Company (The) 14,733 693,777
CORNERSTONE PROGRESSIVE RETURN FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2009 (UNAUDITED) (CONTINUED)
CONSUMER STAPLES (CONTINUED)
Sysco Corporation ^ 3,000 $ 68,400
Walgreen Company 5,500 142,780
Wal-Mart Stores, Inc. 19,000 989,900
------------
4,816,665
------------
ENERGY - 9.68%
Apache Corporation 3,500 224,315
Chesapeake Energy Corporation ^ 4,244 72,403
Chevron Corporation 11,251 756,517
Devon Energy Corporation ^ 2,000 89,380
EOG Resources, Inc. ^ 2,000 109,520
Exxon Mobil Corporation 40,475 2,756,348
Halliburton Company 5,163 79,871
National Oilwell Varco, Inc. * 2,500 71,775
Peabody Energy Corporation 5,000 125,200
Schlumberger Ltd. ^ 12,598 511,731
Southwestern Energy Company * 3,000 89,070
Transocean Ltd. ^ * 2,156 126,859
Williams Companies, Inc. ^ 13,000 147,940
XTO Energy, Inc. ^ 3,139 96,116
------------
5,257,045
------------
FINANCIALS - 7.27%
AFLAC, Inc. ^ 4,000 77,440
American Express Company 6,252 85,215
Aon Corporation ^ 3,000 122,460
Bank of America Corporation 29,792 203,181
BB&T Corporation ^ 10,000 169,200
Charles Schwab Corporation (The) ^ 9,000 139,500
Chubb Corporation (The) 3,000 126,960
Franklin Resources, Inc. ^ 5,000 269,350
Goldman Sachs Group, Inc. (The) ^ 3,000 318,060
Hudson City Bancorp, Inc. 5,000 58,450
JPMorgan Chase & Company 35,498 943,537
Loews Corporation 5,000 110,500
Marsh & McLennan Companies, Inc. ^ 3,000 60,750
MetLife, Inc. ^ 3,194 72,727
Morgan Stanley ^ 5,232 119,133
PNC Financial Services Group, Inc. * 4,000 117,160
Public Storage, Inc. ^ 2,500 138,125
State Street Corporation 5,081 156,393
T. Rowe Price Group, Inc. ^ 2,000 57,720
Travelers Companies, Inc. (The) 5,000 203,200
CORNERSTONE PROGRESSIVE RETURN FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2009 (UNAUDITED) (CONTINUED)
FINANCIALS (CONTINUED)
U.S. Bancorp 4,000 $ 58,440
Wells Fargo & Company 24,206 344,694
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3,952,195
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HEALTH CARE - 10.61%
Abbott Laboratories ^ 9,229 440,223
Aetna, Inc. 9,000 218,970
Amgen, Inc. ^ * 9,119 451,573
Becton, Dickinson and Company 3,000 201,720
Bristol-Myers Squibb Company 16,418 359,883
Celgene Corporation * 2,000 88,800
Eli Lilly & Company 6,000 200,460
Express Scripts, Inc. ^ * 4,078 188,281
Gilead Sciences, Inc. * 10,000 463,200
Johnson & Johnson 30,000 1,578,000
Medco Health Solutions, Inc. ^ * 5,000 206,700
Medtronic, Inc. 10,000 294,700
Schering-Plough Corporation ^ 10,768 253,586
St. Jude Medical, Inc. * 7,000 254,310
Stryker Corporation 4,000 136,160
UnitedHealth Group, Inc. 5,179 108,397
Wyeth 7,395 318,281
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5,763,244
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INDUSTRIALS - 7.07%
3M Company 5,067 251,931
Burlington Northern Santa Fe Corporation ^ 2,000 120,300
Caterpillar, Inc. ^ 7,000 195,720
CSX Corporation 3,000 77,550
Danaher Corporation 4,000 216,880
Emerson Electric Company 11,000 314,380
General Electric Company ^ 71,918 727,091
Honeywell International, Inc. ^ 3,236 90,155
Illinois Tool Works, Inc. 3,000 92,550
Lockheed Martin Corporation 4,000 276,120
Norfolk Southern Corporation 3,500 118,125
Raytheon Company 7,161 278,849
United Parcel Service, Inc. - Class B 9,191 452,381
United Technologies Corporation 10,108 434,442
Waste Management, Inc. ^ 7,500 192,000
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3,838,474
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INFORMATION TECHNOLOGY - 12.75%
Agilent Technologies, Inc. * 7,000 107,590
CORNERSTONE PROGRESSIVE RETURN FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2009 (UNAUDITED) (CONTINUED)
INFORMATION TECHNOLOGY (CONTINUED)
Apple, Inc. * 4,068 $ 427,628
Automatic Data Processing, Inc. 9,000 316,440
Cisco Systems, Inc. * 46,470 779,302
eBay, Inc. * 7,000 87,920
EMC Corporation ^ * 21,000 239,400
Google, Inc. - Class A * 2,032 707,258
Hewlett-Packard Company 11,265 361,156
Intel Corporation 31,599 475,565
International Business Machines Corporation 9,000 872,010
Linear Technology Corporation 2,500 57,450
Microsoft Corporation 48,913 898,532
Oracle Corporation * 45,555 823,179
Paychex, Inc. ^ 5,000 128,350
QUALCOMM, Inc. 11,308 439,994
Texas Instruments, Inc. 9,000 148,590
Xilinx, Inc. 3,000 57,480
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6,927,844
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MATERIALS - 2.31%
Air Products & Chemicals, Inc. 2,500 140,625
Dow Chemical Company (The) ^ 7,000 59,010
E.I. Du Pont de Nemours & Company 5,500 122,815
Freeport-McMoRan Copper & Gold, Inc. ^ 2,119 80,755
International Paper Company ^ 5,000 35,200
Monsanto Company 6,000 498,600
Nucor Corporation 3,061 116,838
Praxair, Inc. 3,000 201,870
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1,255,713
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REAL ESTATE INVESTMENT TRUST - 0.33%
Simon Property Group, Inc. ^ 5,118 177,288
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TELECOMMUNICATION SERVICES - 2.87%
AT&T, Inc. 36,636 923,227
Verizon Communications, Inc. ^ 21,000 634,200
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1,557,427
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UTILITIES - 3.13%
American Electric Power Company, Inc. 7,000 176,820
Dominion Resources, Inc. ^ 9,000 278,910
Duke Energy Corporation 13,000 186,160
Entergy Corporation 2,000 136,180
Exelon Corporation 3,128 141,980
FPL Group, Inc. ^ 7,000 355,110
CORNERSTONE PROGRESSIVE RETURN FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2009 (UNAUDITED) (CONTINUED)
UTILITIES (CONTINUED)
Questar Corporation 4,000 $ 117,720
Southern Company (The) 10,000 306,200
------------
1,699,080
------------
TOTAL EQUITY SECURITIES (cost $81,242,020) $ 53,924,493
------------
SHORT-TERM INVESTMENTS - 9.44%
MONEY MARKET SECURITY - 0.46%
JPMorgan U.S. Government Money Market Fund 250,541 250,541
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PRINCIPAL
AMOUNT (000'S)
--------------
REPURCHASE AGREEMENTS - 8.98%
J.P. Morgan Securities, Inc.+ ++
(Agreement dated 3/31/2009 to be repurchased
at $559,429, 0.1562%, 4/1/2009, collateralized
by $578,805 in United States Treasury Notes) $ 559 559,427
J.P. Morgan Securities, Inc.+ ++
(Agreement dated 3/31/2009 to be repurchased
at $4,318,796, 0.3125%, 4/1/2009,
collateralized by $4,447,935 in United
States Treasury Notes) 4,319 4,318,758
$ 4,878,185
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TOTAL SHORT-TERM INVESTMENTS (cost - $5,128,726) 5,128,726
TOTAL INVESTMENTS - 108.72% (cost $86,370,746) 59,053,219
------------
LIABILITIES IN EXCESS OF OTHER ASSETS - (8.72)% (4,735,924)
------------
NET ASSETS - 100.00% $ 54,317,295
============
^ Security or a portion thereof is out on loan.
* Non-income producing security.
+ Stated interest rate, before rebate earned by borrower of securities on
loan.
++ Represents investment purchased with collateral received for securities on
loan.
See accompanying notes to schedule of investments.
CORNERSTONE PROGRESSIVE RETURN FUND, INC.
NOTES TO SCHEDULES OF INVESTMENTS
MARCH 31, 2009 (UNAUDITED)
================================================================================
Federal Income Tax Cost: At March 31, 2009 the identified cost for federal
income tax purposes, as well as the gross unrealized appreciation from
investments for those securities having an excess of value over cost, gross
unrealized depreciation from investments for those securities having an excess
of cost over value and the net unrealized depreciation from investments were
$86,397,198, $968,759, $(28,312,738) and $(27,343,979), respectively.
The Fund adopted Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 157, Fair Value Measurements ("FAS 157"), effective
January 1, 2008. In accordance with FAS 157, fair value is defined as the price
that the Fund would receive upon selling an investment in a timely transaction
to an independent buyer in the principal or most advantageous market of the
investment. FAS 157 established a three-tier hierarchy to maximize the use of
observable market data and minimize the use of unobservable inputs and to
establish classification of fair value measurements for disclosure purposes.
Inputs refer broadly to the assumptions that market participants would use in
pricing the asset or liability, including assumptions about risk, for example,
the risk inherent in a particular valuation technique used to measure fair value
including such a pricing model and/or the risk inherent in the inputs to the
valuation technique. Inputs may be observable or unobservable. Observable inputs
are inputs that reflect the assumptions market participants would use in pricing
the asset or liability 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 asset or liability developed based on the best
information available in the circumstances. The three-tier hierarchy of inputs
is summarized in the three broad Levels listed below.
o Level 1 - quoted prices in active markets for identical investments
o Level 2 - other significant observable inputs (including quoted
prices for similar investments, interest rates, prepayment speeds,
credit risks, etc.)
o Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The following is a summary of the inputs used as of March 31, 2009 in valuing
the Fund's investments carried at value:
OTHER
INVESTMENTS IN FINANCIAL
Valuation Inputs SECURITIES INSTRUMENTS*
---------------------------------------------- ------------ ------------
Level 1 - Quoted Prices $ 59,053,219 $ --
Level 2 - Other Significant Observable Inputs -- --
Level 3 - Significant Unobservable Inputs -- --
============ ============
Total $ 59,053,219 $ --
============ ============
* Other financial instruments include futures, forwards and swap contracts.
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, 2009.
As of January 1, 2009, the Fund adopted SFAS No. 161, DISCLOSURES ABOUT
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. This standard amends and expands
the disclosure requirements of SFAS No. 133, ACCOUNTING FOR DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES, to illustrate how and why an entity uses
derivative instruments; how derivative instruments and related hedged items are
accounted for under SFAS No. 133; and how derivative instruments and related
hedged items affect an entity's financial position, financial performance and
cash flows. SFAS No. 161 is effective for financial statements issued for fiscal
years beginning after November 15, 2008 and interim periods within those fiscal
years.
The Fund is exposed to financial market risks, including the valuations of its
investment portfolio. For the period ended March 31, 2009, the Fund did not
engage in derivative instruments and other hedging activities.
Securities valuation policies and other investment related disclosures are herby
incorporated by reference to the Fund's annual report previously filed with the
Securities and Exchange Commission on the Form N-CSR on March 6, 2009 with a
file number 811-22066.
Other information regarding the Fund is available in the Fund's most recent
annual report filed with the Securities and Exchange Commission on the Form
N-CSR on March 6, 2009, file number 811-22066. This information is also
available to registered shareholders by calling (800) 937-5449. For general
inquiries, please call (513) 326-3597. This information is also available on the
website of the Securities and Exchange Commission - https://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 Progressive Return Fund
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By (Signature and Title)* /s/ Ralph W. Bradshaw
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Ralph W. Bradshaw, President and Chairman
(Principal Executive Officer)
Date May 21, 2009
------------------------
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 21, 2009
------------------------
By (Signature and Title)* /s/ Frank J. Maresca
--------------------------------------------------
Frank J. Maresca, Treasurer
(Principal Financial Officer)
Date May 21, 2009
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* Print the name and title of each signing officer under his or her signature.