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 811-02363
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Cornerstone Total Return Fund, Inc.
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(Exact name of registrant as specified in charter)
383 Madison Avenue, New York, NY 10179
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(Address of principal executive offices) (Zip code)
Jodi Levine
Cornerstone Total Return Fund, Inc., 383 Madison Avenue, New York, NY 10179
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(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 272-3550
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Date of fiscal year end: December 31, 2007
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Date of reporting period: March 31, 2007
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ITEM 1: SCHEDULE OF INVESTMENTS
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CORNERSTONE TOTAL RETURN FUND, INC.
SCHEDULE OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED)
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NO. OF
DESCRIPTION SHARES VALUE
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EQUITY SECURITIES - 99.77%
UNITED STATES - 99.44%
CLOSED-END FUNDS - 8.04%
Adams Express Company 70,400 $ 987,008
Boulder Total Return Fund, Inc. 13,900 301,769
Central Europe and Russia Fund, Inc. (The) ^ 2,500 125,875
Cohen & Steers Select Utility Fund, Inc. ^ 6,000 157,140
Dreman/Claymore Dividend & Income Fund ^ 49,500 1,072,665
H&Q Healthcare Investors 5,100 87,363
H&Q Life Sciences Investors ^ 6,000 83,400
Japan Equity Fund ^ 13,000 110,760
Liberty All-Star Growth Fund, Inc. 140,800 771,584
Neuberger Berman Real Estate Income Fund Inc. 8,500 228,650
Petroleum & Resources Corporation 3,000 103,890
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4,030,104
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CONSUMER DISCRETIONARY - 9.72%
Bed Bath & Beyond Inc. * 2,500 100,425
Best Buy Co., Inc. 3,750 182,700
Coach, Inc. * 2,500 125,125
Comcast Corporation, Class A * 9,012 233,861
Comcast Corporation, Special Class A * 6,750 171,922
DIRECTV Group, Inc. (The) * 4,000 92,280
Ford Motor Company 14,000 110,460
Fortune Brands, Inc. 2,500 197,050
Goodyear Tire & Rubber Company (The) * 2,500 77,975
Harley-Davidson, Inc. 2,500 146,875
Hilton Hotels Corporation 2,500 89,900
Home Depot, Inc. (The) 9,000 330,660
J.C. Penney Company, Inc. ^ 2,500 205,400
Kohl's Corporation * 2,500 191,525
Lowe's Companies, Inc. ^ 4,900 154,301
Marriott International, Inc., Class A ^ 5,000 244,800
Mattel, Inc. 4,500 124,065
McDonald's Corporation 8,100 364,905
McGraw-Hill Companies, Inc. (The) 2,500 157,200
Nordstrom, Inc. 2,500 132,350
Office Depot, Inc. * 2,500 87,850
Omnicom Group Inc. 1,500 153,570
Staples, Inc. 3,150 81,396
Starbucks Corporation * 2,500 78,400
Target Corporation 4,600 272,596
Time Warner Inc. 17,000 335,240
TJX Companies, Inc. (The) 2,500 67,400
Viacom Inc., Class B * 2,000 82,220
Walt Disney Company (The) 8,000 275,440
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4,867,891
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CONSUMER STAPLES - 9.10%
Altria Group, Inc. 7,700 676,137
Archer-Daniels-Midland Company 3,000 110,100
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NO. OF
DESCRIPTION SHARES VALUE
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Campbell Soup Company ^ 3,200 124,640
Coca-Cola Company (The) 11,000 528,000
Colgate-Palmolive Company 2,500 166,975
ConAgra Foods, Inc. 2,500 62,275
CVS Corporation 4,175 142,534
General Mills, Inc. 2,500 145,550
H.J. Heinz Company 2,700 127,224
Kroger Co. (The) ^ 3,600 101,700
PepsiCo, Inc. 5,000 317,800
Procter & Gamble Company (The) 11,472 724,572
Safeway Inc. ^ 4,900 179,536
Walgreen Co. 5,600 256,984
Wal-Mart Stores, Inc. 19,000 892,050
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4,556,077
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ENERGY - 9.30%
Chevron Corporation ^ 10,068 744,629
Devon Energy Corporation 2,500 173,050
El Paso Corporation. 3,000 43,410
Exxon Mobil Corporation 32,000 2,414,402
Halliburton Company 5,000 158,700
Marathon Oil Corp. 2,500 247,075
Norsk Hydro ADR 2,500 82,050
Occidental Petroleum Corporation 2,500 123,275
Peabody Energy Corporation ^ 2,500 100,600
Schlumberger Limited 5,000 345,500
Spectra Energy Corporation 3,300 86,691
XTO Energy, Inc. 2,500 137,025
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4,656,407
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FINANCIALS - 19.14%
AFLAC Incorporated 1,500 70,590
Allstate Corporation (The) 2,500 150,150
American Express Company 3,500 197,400
American International Group, Inc. 12,331 828,890
Ameriprise Financial, Inc. 1,220 69,711
Aon Corporation 2,500 94,900
Bank of America Corporation 17,021 868,411
BB&T Corporation 4,500 184,590
CB Richard Ellis Group, Inc.- Class A * 2,500 85,450
Charles Schwab Corporation (The) 8,200 149,978
Chubb Corporation (The) 5,000 258,350
Citigroup Inc. 25,600 1,314,304
Fannie Mae 3,200 174,656
Fifth Third Bancorp 2,500 96,725
Franklin Resources, Inc. 2,500 302,075
Freddie Mac 3,300 196,317
Goldman Sachs Group, Inc. (The) 3,000 619,890
Hartford Financial Services Group, Inc. (The) 1,600 152,928
JPMorgan Chase & Co. 12,700 614,426
KeyCorp 2,500 93,675
Lehman Brothers Holdings Inc. 2,500 175,175
Marsh & McLennan Companies, Inc. ^ 2,500 73,225
Mellon Financial Corporation ^ 2,300 99,222
Merrill Lynch & Co., Inc. 1,100 89,837
Metlife, Inc. 3,000 189,450
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NO. OF
DESCRIPTION SHARES VALUE
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Moody's Corporation 2,000 124,120
Morgan Stanley 3,700 291,412
National City Corporation 2,500 93,125
Prudential Financial, Inc. 2,500 225,650
Regions Financial Corporation 1,993 70,492
SLM Corporation 2,500 102,250
State Street Corporation ^ 1,600 103,600
Synovus Corporation 2,500 80,850
Travelers Companies, Inc. (The) 5,092 263,613
UnumProvident Corporation 2,500 57,575
Wachovia Corporation 5,600 308,280
Wells Fargo & Company 18,000 619,740
Western Union Company 4,325 94,934
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9,585,966
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HEALTHCARE - 10.64%
Aetna Inc. 4,000 175,160
Amgen Inc. * 8,300 463,804
Biomet, Inc. 2,500 106,225
Eli Lilly and Company 4,100 220,211
Forest Laboratories, Inc. * 2,500 128,600
Gilead Sciences, Inc. * 2,500 191,250
Johnson & Johnson ^ 15,500 934,030
Laboratory Corporation of America Holdings * 2,500 181,575
McKesson Corporation 2,500 146,350
Medco Health Solutions, Inc. * 1,531 111,043
Medtronic, Inc. ^ 4,500 220,770
Merck & Co. Inc. 8,700 384,279
Pfizer Inc. ^ 24,960 630,490
Schering-Plough Corporation ^ 8,400 214,284
St. Jude Medical, Inc. * 2,500 94,025
Stryker Corporation 2,000 132,640
UnitedHealth Group Incorporated ^ 10,000 529,700
Wyeth 5,000 250,150
Zimmer Holdings, Inc. * 2,500 213,525
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5,328,111
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INDUSTRIALS - 9.73%
3M Co. 2,500 191,075
Boeing Company (The) 1,400 124,474
Caterpillar Inc. 2,500 167,575
CSX Corporation 5,000 200,250
Danaher Corporation ^ 2,500 178,625
Dover Corporation 1,000 48,810
FedEx Corp. 2,500 268,575
General Dynamics Corporation ^ 2,500 191,000
General Electric Company 49,000 1,732,640
Honeywell International Inc. 3,300 151,998
Illinois Tool Works Inc. 2,500 129,000
Lockheed Martin Corporation 2,500 242,550
Norfolk Southern Corporation 2,500 126,500
Raytheon Company 2,500 131,150
Rockwell Automation, Inc. ^ 2,500 149,675
Southwest Airlines Co. 3,000 44,100
United Parcel Service, Inc., Class B 4,000 280,400
United Technologies Corporation 4,400 286,000
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NO. OF
DESCRIPTION SHARES VALUE
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Waste Management, Inc. 2,500 86,025
Waters Corporation * 2,500 145,000
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4,875,422
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INFORMATION TECHNOLOGY - 13.74%
Agilent Technologies Inc. * 2,500 84,225
Altera Corporation 2,500 49,975
Apple Computer, Inc. * 5,000 464,550
Applied Materials, Inc. 8,000 146,560
Broadcom Corporation - Class A * 2,500 80,175
Cisco Systems, Inc. * 22,000 561,660
Corning Incorporated * 3,500 79,590
Dell Inc. * 5,700 132,297
eBay Inc. ^ * 4,000 132,600
EMC Corporation * 8,000 110,800
First Data Corporation 4,325 116,342
Fiserv, Inc. ^ * 2,500 132,650
Google Inc. * 1,000 458,160
Hewlett-Packard Company 10,000 401,400
Intel Corporation 17,000 325,210
International Business Machines Corporation 5,700 537,282
Intuit Inc. ^ * 2,500 68,400
Microsoft Corporation 37,500 1,045,125
Motorola, Inc. 8,600 151,962
Network Appliance, Inc. * 2,500 91,300
NVIDIA Corporation * 2,500 71,950
Oracle Corporation ^ * 33,600 609,168
Paychex, Inc. 2,500 94,675
QUALCOMM Inc. 6,800 290,088
Texas Instruments Incorporated 11,000 331,100
Xerox Corporation * 3,000 50,670
Yahoo! Inc. * 8,500 265,965
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6,883,879
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MATERIALS - 2.60%
Air Products & Chemicals, Inc. 2,500 184,900
Alcoa Inc. 3,000 101,700
Dow Chemical Company (The) 3,500 160,510
E. I. du Pont de Nemours and Company 5,800 286,694
International Paper Company 2,300 83,720
Monsanto Company ^ 3,546 194,888
Nucor Corporation ^ 2,500 162,825
Rohm and Hass Company ^ 2,500 129,300
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1,304,537
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REAL ESTATE INVESTMENT TRUST - 0.56%
Simon Property Group, Inc. 2,500 278,125
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278,125
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TELECOMMUNICATION SERVICES - 3.82%
AT&T Inc. 31,589 1,245,554
Nokia ADR 2,500 57,300
Qwest Communications International Inc. * 10,000 89,900
Sprint Nextel Corporation 7,437 141,006
Verizon Communications Inc. 10,000 379,200
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1,912,960
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NO. OF
DESCRIPTION SHARES VALUE
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UTILITIES - 3.05%
AES Corporation (The) ^ * 3,000 64,560
Alleghany Energy Inc. * 2,500 122,850
American Electric Power Company, Inc. 5,500 268,125
Duke Energy Corporation 6,600 133,914
FirstEnergy Corp. 2,500 165,600
Southern Company (The) 2,500 91,625
TXU Corp. 7,400 474,340
Williams Companies, Inc. (The) 2,500 71,150
Xcel Energy, Inc. 5,500 135,795
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1,527,959
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TOTAL UNITED STATES
(cost - $42,143,650) 49,807,438
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CZECH REPUBLIC - 0.33%
CONSUMER DISCRETIONARY - 0.33%
Bonton a.s. * # 137,180 3,828
Bonton Book a.s. * # 68,590 32,578
Bonton Film Entertainment a.s. * # 68,590 81,446
Bonton Music a.s. * # 68,590 45,039
Bonton Pictures a.s. * # 68,590 2,443
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TOTAL CZECH REPUBLIC
(cost - $894,864) 165,334
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TOTAL EQUITY SECURITIES
(cost - $43,038,514) 49,972,772
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PRINCIPAL
AMOUNT 000's
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SHORT-TERM INVESTMENTS - 4.02%
REPURCHASE AGREEMENTS - 4.02%
Bear, Stearns & Co. Inc. + ++
(Agreements dated 3/30/2007 to be
repurchased at $1,335,817, 2.7187%,
4/2/2007, collateralized by $1,371,191
in United States Treasury Notes) $ 1,336 $1,335,514
Bear, Stearns & Co. Inc. + ++
(Agreements dated 3/30/2007 to be
repurchased at $525,317, 5.4375%, 4/2/2007,
collateralized by $537,452 in
United States Treasury Notes) 525 525,079
Bear, Stearns & Co. Inc.
(Agreements dated 3/30/2007 to be
repurchased at $152,148, 5.1000%, 4/2/2007,
collateralized by $158,479 in
United States Treasury Notes) 152 152,083
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2,012,676
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TOTAL SHORT-TERM INVESTMENTS
(cost - $2,012,676) 2,012,676
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TOTAL INVESTMENTS - 103.79%
(cost - $45,051,190) 51,985,448
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LIABILITIES IN EXCESS OF OTHER ASSETS - (3.79)% (1,900,024)
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NET ASSETS - 100.00% $50,085,424
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ADR American Depositary Receipt
* 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.
^ Security or a portion thereof is out on loan.
# Securities are fair valued in accordance with procedures established by the
Board of Directors.
At March 31, 2007, the Fund held 0.33% of its net assets in securities valued in
good faith by the Board of Directors with an aggregate cost of $894,864 and a
fair value of $165,334.
Federal Income Tax Cost: At March 31, 2007, 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 appreciation from investments were
$45,102,819, $10,319,840, ($3,437,211), $6,882,629, respectively.
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 9, 2007
with a file number 811-02363.
Securities and assets for which market quotations are not readily available are
valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Board. Fair valuation
methodologies and procedures may include, but are not limited to: analysis and
review of financial and non-financial information about the company; comparisons
to the valuation and changes in valuation of similar securities, including
reference to special reports prepared by analysts and or reports published in
the financial press, the financial conditions and prospects of the issuer
available, including considering any recent management or capital structure
changes or other recent events that may impact the price of the security; and
evaluation of any other information that could be indicative of the value of the
security.
Other information regarding the Fund is available in the Fund's most recent
annual report filed with the Securities and Exchange Commission on Form N-CSR on
March 9, 2007, file number 811-02363. This information is also available to
registered shareholders by calling (800) 937-5449. For general inquiries, please
call (212) 272-3550. This information is also available on the website of the
Securities and Exchange Commission - http://www.sec.gov.
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ITEM 2: CONTROLS AND PROCEDURES
(a) As of a date within 90 days from the filing date of this report, the
principal executive officer and principal financial officer concluded that the
registrant's disclosure controls and procedures (as defined in Rule 30a-3(c)
under the Investment Company Act of 1940 (the "Act")), were effective based on
their evaluation of the disclosure controls and procedures required by Rule
30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities and
Exchange Act of 1934.
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act) 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
1. The certifications of the registrant as required by Rule 30a-2(a) under
the Act are exhibits to this report.
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.
Cornerstone Total Return Fund, Inc.
/s/ Ralph W. Bradshaw
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Name: Ralph W. Bradshaw
Title: Principal Executive Officer
Date: May 25, 2007
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.
/s/ Ralph W. Bradshaw
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Name: Ralph W. Bradshaw
Title: Principal Executive Officer
Date: May 25, 2007
/s/ Jodi B. Levine
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Name: Jodi B. Levine
Title: Principal Financial Officer
Date: May 25, 2007
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