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)
Kayadti Madison
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: September 30, 2007
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ITEM 1: SCHEDULE OF INVESTMENTS
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CORNERSTONE TOTAL RETURN FUND, INC.
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 2007 (UNAUDITED)
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NO. OF
DESCRIPTION SHARES VALUE
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EQUITY SECURITIES - 99.62%
CLOSED-END FUNDS - 8.28%
Adams Express Company 70,400 $ 1,052,480
Boulder Growth & Income Fund Inc. ^ 6,334 61,693
Boulder Total Return Fund, Inc. ^ 13,900 293,707
Central Europe and Russia Fund, Inc. (The) ^ 2,500 140,025
Cohen & Steers Select Utility Fund, Inc. ^ 6,000 156,480
Dreman/Claymore Dividend & Income Fund ^ 51,900 1,036,443
H&Q Healthcare Investors 5,100 88,230
H&Q Life Sciences Investors 6,000 81,180
Japan Equity Fund 13,000 103,870
Liberty All-Star Growth Fund, Inc. ^ 88,575 516,392
Neuberger Berman Real Estate Income Fund Inc. 8,500 191,165
Petroleum & Resources Corporation 3,000 121,140
Templeton Emerging Markets Fund ^ 3,000 71,370
Zweig Fund, Inc. ^ 33,000 171,930
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4,086,105
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CONSUMER DISCRETIONARY - 8.72%
Amazon.com, Inc. * 2,500 232,875
Bed Bath & Beyond Inc. ^ * 2,500 85,300
Citadel Broadcasting Corporation ^ 614 2,554
Coach, Inc. * 2,500 118,175
Comcast Corporation, Class A * 9,012 217,910
Comcast Corporation, Special Class A * 4,250 101,830
DIRECTV Group, Inc. (The) * 4,000 97,120
Ford Motor Company ^ 14,000 118,860
Goodyear Tire & Rubber Company (The) ^ * 2,500 76,025
Hilton Hotels Corporation 2,500 116,225
Home Depot, Inc. (The) ^ 9,000 291,960
J.C. Penney Company, Inc. ^ 2,500 158,425
Kohl's Corporation * 2,500 143,325
Lowe's Companies, Inc. 4,900 137,298
Marriott International, Inc., Class A 5,000 217,350
Mattel, Inc. ^ 4,500 105,570
McDonald's Corporation 5,100 277,797
McGraw-Hill Companies, Inc. (The) 2,500 127,275
News Corporation, Class B 2,500 58,475
NIKE, Inc., Class B 2,500 146,650
Nordstrom, Inc. ^ 2,500 117,225
Omnicom Group Inc. 3,000 144,270
Staples, Inc. 3,150 67,694
Starbucks Corporation * 2,500 65,500
Target Corporation ^ 4,600 292,422
Tata Motors Limited ^ ADR 2,500 47,850
Time Warner Inc. 17,000 312,120
TJX Companies, Inc. (The) ^ 2,500 72,675
Viacom Inc., Class B * 2,000 77,940
Walt Disney Company (The) 8,000 275,120
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4,303,815
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NO. OF
DESCRIPTION SHARES VALUE
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CONSUMER STAPLES - 8.75%
Altria Group, Inc. 7,700 535,381
Coca-Cola Company (The) 11,000 632,170
Colgate-Palmolive Company 2,500 178,300
ConAgra Foods, Inc. 2,500 65,325
CVS Corporation 4,175 165,455
H.J. Heinz Company ^ 2,700 124,740
Kraft Foods Inc, Class A ^ 5,328 183,869
Kroger Co. (The) 3,600 102,672
PepsiCo, Inc. 5,000 366,300
Procter & Gamble Company (The) ^ 11,472 806,940
Safeway Inc. 1,900 62,909
Sysco Corporation 2,500 88,975
Tyson Foods, Inc. 2,500 44,625
Walgreen Co. 5,600 264,544
Wal-Mart Stores, Inc. 16,000 698,400
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4,320,605
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ENERGY - 10.58%
Chevron Corporation ^ 10,068 942,163
Exxon Mobil Corporation ^ 32,000 2,961,922
Halliburton Company 2,500 96,000
Marathon Oil Corp. 2,500 142,550
NiSource Inc. 2,500 47,850
Peabody Energy Corporation 2,500 119,675
Schlumberger Limited 5,000 525,000
Spectra Energy Corporation 2,500 61,200
Weatherford International Ltd. * 2,500 167,950
XTO Energy, Inc. 2,500 154,600
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5,218,910
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FINANCIALS - 17.29%
AFLAC Incorporated 1,500 85,560
Allstate Corporation (The) 2,500 142,975
American Express Company 3,500 207,795
American International Group, Inc. 12,331 834,192
Ameriprise Financial, Inc. 1,220 76,994
Aon Corporation 2,500 112,025
Bank of America Corporation 14,521 729,971
Bank of New York Mellon Corporation 2,300 101,522
BB&T Corporation ^ 2,000 80,780
Charles Schwab Corporation (The) ^ 8,200 177,120
Chubb Corporation (The) ^ 2,000 107,280
Citigroup Inc. 25,600 1,194,752
Discover Financial Services 1,850 38,480
Fannie Mae 3,200 194,592
Fifth Third Bancorp ^ 2,500 84,700
Franklin Resources, Inc. ^ 2,500 318,750
Freddie Mac ^ 3,300 194,733
Goldman Sachs Group, Inc. (The) ^ 3,000 650,220
JPMorgan Chase & Co. 10,200 467,364
KeyCorp 2,500 80,825
Lehman Brothers Holdings Inc. ^ 2,500 154,325
Merrill Lynch & Co., Inc. ^ 1,100 78,408
Metlife, Inc. ^ 3,000 209,190
Moody's Corporation 2,000 100,800
Morgan Stanley 3,700 233,100
NO. OF
DESCRIPTION SHARES VALUE
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Prudential Financial, Inc. 2,500 243,950
SLM Corporation 2,500 124,175
State Street Corporation ^ 1,600 109,056
Synovus Corporation 2,500 70,125
Travelers Companies, Inc. (The) 5,092 256,331
UnumProvident Corporation 2,500 61,175
Wachovia Corporation 5,600 280,840
Wells Fargo & Company 18,000 641,160
Western Union Company 4,325 90,695
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8,533,960
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HEALTHCARE - 10.08%
Aetna Inc. 4,000 217,080
Amgen Inc. * 5,000 282,850
Celgene Corporation * 2,500 178,275
Eli Lilly and Company 4,100 233,413
Forest Laboratories, Inc. ^ * 2,500 93,225
Gilead Sciences, Inc. * 5,000 204,350
Johnson & Johnson 15,500 1,018,350
Laboratory Corporation of America Holdings * 2,500 195,575
McKesson Corporation ^ 2,500 146,975
Medco Health Solutions, Inc. * 1,531 138,387
Medtronic, Inc. ^ 4,500 253,845
Merck & Co. Inc. 13,700 708,153
Schering-Plough Corporation 8,400 265,692
St. Jude Medical, Inc. * 2,500 110,175
Stryker Corporation 2,000 137,520
UnitedHealth Group Incorporated ^ 7,500 363,225
Wyeth 5,000 222,750
Zimmer Holdings, Inc. * 2,500 202,475
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4,972,315
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INDUSTRIALS - 11.05%
3M Co. 2,500 233,950
Allied Waste Industries, Inc. ^ * 2,500 31,875
AMR Corporation ^ 2,500 55,725
Boeing Company (The) 1,400 146,986
Caterpillar Inc. 2,500 196,075
CSX Corporation 5,000 213,650
Danaher Corporation ^ 2,500 206,775
FedEx Corp. 2,500 261,875
General Dynamics Corporation 2,500 211,175
General Electric Company 49,000 2,028,600
Honeywell International Inc. 3,300 196,251
Illinois Tool Works Inc. 2,500 149,100
Lockheed Martin Corporation ^ 2,500 271,225
Raytheon Company ^ 2,500 159,550
Rockwell Automation, Inc. ^ 2,500 173,775
United Parcel Service, Inc., Class B 4,000 300,400
United Technologies Corporation 4,400 354,112
Waste Management, Inc. 2,500 94,350
Waters Corporation * 2,500 167,300
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5,452,749
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INFORMATION TECHNOLOGY - 15.24%
Agilent Technologies Inc. * 2,500 92,200
Altera Corporation 2,500 60,200
Apple Computer, Inc. * 5,000 767,700
Applied Materials, Inc. 8,000 165,600
NO. OF
DESCRIPTION SHARES VALUE
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Automatic Data Processing, Inc. 2,500 114,825
Cisco Systems, Inc. * 22,000 728,420
Corning Incorporated * 6,000 147,900
eBay Inc. * 4,000 156,080
EMC Corporation ^ * 8,000 166,400
Google Inc. * 1,000 567,270
Hewlett-Packard Company 10,000 497,900
Intel Corporation 13,000 336,180
International Business Machines Corporation 5,700 671,460
Intuit Inc. * 2,500 75,750
Microsoft Corporation 37,500 1,104,750
Motorola, Inc. 3,600 66,708
NVIDIA Corporation * 3,750 135,900
Oracle Corporation * 28,600 619,190
Paychex, Inc. 2,500 102,500
QUALCOMM Inc. 6,800 287,368
Texas Instruments Incorporated 11,000 402,490
Xerox Corporation * 3,000 52,020
Xilinx, Inc. 2,500 65,350
Yahoo! Inc. * 5,000 134,200
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7,518,361
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MATERIALS - 2.74%
Air Products & Chemicals, Inc. ^ 2,500 244,400
Alcoa Inc. 3,000 117,360
Allegheny Technologies, Inc. 1,500 164,925
Dow Chemical Company (The) 3,500 150,710
E. I. du Pont de Nemours and Company 5,800 287,448
International Paper Company 2,300 82,501
Monsanto Company ^ 3,546 304,034
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1,351,378
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REAL ESTATE INVESTMENT TRUST - 0.51%
Simon Property Group, Inc. 2,500 250,000
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TELECOMMUNICATION SERVICES - 3.73%
AT&T Inc. 28,589 1,209,601
Nokia ADR 2,500 94,825
Qwest Communications International Inc. * 7,000 64,120
Sprint Nextel Corporation 7,437 141,303
Verizon Communications Inc. 7,500 332,100
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1,841,949
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UTILITIES - 2.65%
Alleghany Energy Inc. ^ * 2,500 130,650
American Electric Power Company, Inc. 5,500 253,440
Duke Energy Corporation 6,600 123,354
Dynegy Inc. 5,000 46,200
FirstEnergy Corp. 2,500 158,350
Southern Company (The) 2,500 90,700
TXU Corp. ^ 4,400 301,268
Williams Companies, Inc. (The) 2,500 85,150
Xcel Energy, Inc. 5,500 118,470
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1,307,582
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TOTAL EQUITY SECURITIES
(cost - $38,320,390) 49,157,729
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PRINCIPAL
AMOUNT
(000'S)
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SHORT-TERM INVESTMENTS - 4.35%
REPURCHASE AGREEMENTS - 4.35%
Bear, Stearns & Co. Inc. + ++
(Agreements dated 9/28/2007 to be
repurchased at $1,007,713, 5.2500%,
10/1/2007, collateralized by $1,037,204
in United States Treasury Bonds) $ 1,007 1,007,272
Bear, Stearns & Co. Inc. + ++
(Agreements dated 9/28/2007 to be
repurchased at $925,770, 2.6250%,
10/1/2007, collateralized by $952,838
in United States Treasury Bonds) 926 925,567
Bear, Stearns & Co. Inc.
(Agreements dated 9/28/2007 to be
repurchased at $216,344, 3.9500%,
10/1/2007, collateralized by $223,322 in
United States Treasury Bonds) 216 216,273
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TOTAL SHORT-TERM INVESTMENTS
(cost - $2,149,112) 2,149,112
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TOTAL INVESTMENTS - 103.97%
(cost - $40,469,502) 51,306,841
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LIABILITIES IN EXCESS OF OTHER ASSETS - (3.97)% (1,960,213)
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NET ASSETS - 100.00% $ 49,346,628
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^ Security or a portion thereof is out on loan.
* Non-income producing security.
ADR American Depositary Receipt
+ Stated interest rate, before rebate earned by borrower of securities on
loan.
++ Represents investment purchased with collateral received for securities on
loan.
Federal Income Tax Cost: At September 30, 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
$40,469,502, $12,193,165, ($1,355,826), $10,837,339, respectively.
Securities valuation policies and other investment related disclosures are
hereby incorporated by reference to the Fund's semi-annual report previously
filed with the Securities and Exchange Commission on the Form N-CSR on August
31, 2007 with a file number 811-02363.
Other information regarding the Fund is available in the Fund's most recent
semi-annual report filed with the Securities and Exchange Commission on Form
N-CSR on August 31, 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.
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: November 26, 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: November 26, 2007
/s/ Kayadti Madison
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Name: Kayadti Madison
Title: Principal Financial Officer
Date: November 26, 2007