fp0001101_nq.htm
 
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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 
(Exact name of registrant as specified in charter)
 
 
260 Madison Avenue, 8th Floor                          New York, New York
10016 
(Address of principal executive offices)
(Zip code)
 
 
Frank J. Maresca
 
 
  Ultimus Fund Solutions, LLC    260 Madison Avenue, 8th Floor    New York, NY 10016  
(Name and address of agent for service)
 
 
Registrant's telephone number, including area code:  (212) 652-6155   
 
Date of fiscal year end:         December 31, 2009   
 
Date of reporting period:       September 30, 2009   
 
Form N-Q is to be used by management investment companies other than small business investment companies registered on Form N-5 (§§ 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. § 3507.
 
 
Item 1.  Schedule of Investments.
 
CORNERSTONE PROGRESSIVE RETURN FUND
  
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2009 (UNAUDITED)
  
   
Description
  
No. of Shares
    
Value
  
EQUITY SECURITIES - 99.22%
  
CLOSED-END FUNDS - 81.60%
  
Adams Express Company (The) (a)
     130,206     $ 1,272,113  
Advent Claymore Convertible Securities and Income Fund ^
     87,900       1,294,767  
BlackRock Defined Opportunity Credit Trust ^
     33,100       387,270  
BlackRock High Yield Trust ^
     2,500       15,200  
BlackRock Income Trust, Inc. ^
     91,674       607,799  
BlackRock Preferred Opportunity Trust ^
     4,100       41,861  
BlackRock Strategic Dividend Achievers Trust ^
     19,406       170,385  
BlockRock Health Sciences Trust ^
     1,700       39,780  
Blue Chip Value Fund
     242,850       743,121  
Clough Global Allocation Fund
     51,578       756,133  
Clough Global Equity Fund
     73,175       1,014,205  
Clough Global Opportunities Fund
     85,510       1,084,267  
Cohen & Steers Dividend Majors Fund, Inc.
     2,700       26,352  
DCW Total Return Fund
     30,652       126,899  
DWS RREEF World Real Estate & Tactical Strategies Fund, Inc.
     3,950       59,487  
Eaton Vance Floating-Rate Income Trust ^
     22,000       280,500  
Eaton Vance Senior Income Trust ^
     100,800       560,448  
European Equity Fund (The)
     6,900       47,886  
Evergreen International Balanced Income Fund ^
     6,330       89,000  
First Trust/FIDAC Mortgage Income Fund
     20,731       369,012  
First Trust/Four Corners Senior Floating Rate Income Fund II ^
     34,717       384,664  
First Trust Strategic High Income Fund ^
     71,316       193,979  
Franklin Universal Trust
     82,600       451,822  
Gabelli Convertible & Income Securities Fund
     13,900       79,091  
Gabelli Dividend & Income Trust ^
     194,050       2,404,279  
Gabelli Global Gold Natural Resources & Income Trust ^
     102,000       1,578,960  
Gabelli Healthcare & Wellness Rx Trust (The)
     25,900       153,587  
General American Investors Company, Inc.
     41,485       987,343  
Global Income & Currency Fund, Inc. ^
     24,757       349,569  
Greater China Fund, Inc.
     17,200       210,872  
H&Q Healthcare Investors
     157,489       1,781,201  
H&Q Life Sciences Investors
     112,590       1,039,206  
John Hancock Bank and Thrift Opportunity Fund ^
     95,120       1,344,046  
John Hancock Income Securities Trust
     8,000       104,000  
Latin America Equity Fund, Inc.
     300       10,542  
 
See accompanying notes to schedule of investments.
 
 
CORNERSTONE PROGRESSIVE RETURN FUND
  
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2009 (UNAUDITED) (Continued)
  
   
CLOSED-END FUNDS (Continued)
  
Lazard Global Total Return & Income Fund, Inc. ^
     4,000     $ 56,680  
Lazard World Dividend & Income Fund, Inc. ^
     28,049       295,636  
Liberty All-Star Equity Fund
     673,799       2,850,170  
Liberty All-Star Growth Fund
     237,600       750,816  
LMP Capital & Income Fund, Inc.
     186,762       1,792,915  
LMP Corporate Loan Fund, Inc. ^
     13,105       127,381  
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund
     11,463       134,576  
Macquarie Global Infrastructure Total Return Fund, Inc. ^
     18,634       280,069  
Madison/Claymore Covered Call & Equity Strategy Fund ^
     80,761       671,124  
Madison Strategic Sector Premium Fund ^
     17,843       212,688  
Malaysia Fund, Inc.
     27,400       198,376  
Montgomery Street Income Securities, Inc.
     4,600       69,046  
Morgan Stanley China A Share Fund, Inc. ^
     11,500       370,185  
NFJ Dividend, Interest & Premium Strategy Fund
     650,900       8,722,060  
Nuveen Core Equity Alpha Fund
     39,747       439,602  
Nuveen Floating Rate Income Fund ^
     37,238       352,271  
Nuveen Floating Rate Income Opportunity Fund
     15,400       146,300  
Preferred Income Strategies Fund
     75,541       680,624  
RMR Asia Pacific Real Estate Fund
     17,953       310,406  
Royce Focus Trust, Inc. ^
     53,014       314,903  
Royce Micro-Cap Trust, Inc. ^
     146,356       1,068,399  
Royce Value Trust, Inc.
     351,402       3,626,469  
Source Capital, Inc.
     19,100       792,841  
Spain Fund, Inc. (The)
     6,660       47,619  
SunAmerica Focused Alpha Growth Fund, Inc.
     111,635       1,347,434  
SunAmerica Focused Alpha Large-Cap Fund, Inc.
     49,400       599,716  
Thai Fund, Inc. (The) ^
     61,120       557,414  
Tri-Continental Corporation
     138,534       1,526,645  
TS&W/Claymore Tax-Advantaged Balanced Fund ^
     14,573       141,650  
Zweig Fund, Inc. (The)
     291,682       936,299  
              49,479,960  
CONSUMER DISCRETIONARY - 1.53%
  
Amazon.com, Inc. ^ *
     1,000       93,360  
Best Buy Company, Inc.
     2,000       75,040  
Comcast Corporation - Class A
     3,358       56,717  
Ford Motor Company *
     8,000       57,680  
GameStop Corporation - Class A ^ *
     2,500       66,175  
 
See accompanying notes to schedule of investments.
 
 
CORNERSTONE PROGRESSIVE RETURN FUND
  
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2009 (UNAUDITED) (Continued)
  
   
CONSUMER DISCRETIONARY (Continued)
  
Home Depot, Inc. (The) ^
     2,000     $ 53,280  
McDonald's Corporation ^
     4,000       228,280  
NIKE, Inc. - Class B
     2,000       129,400  
Time Warner, Inc.
     2,000       57,560  
Walt Disney Company (The) ^
     4,000       109,840  
              927,332  
CONSUMER STAPLES - 1.67%
  
Coca-Cola Company (The)
     3,000       161,100  
CVS Caremark Corporation ^
     2,746       98,142  
H.J. Heinz Company
     2,000       79,500  
Kraft Foods, Inc. - Class A
     5,000       131,350  
Kroger Company (The) ^
     3,000       61,920  
PepsiCo, Inc.
     3,000       175,980  
Procter & Gamble Company (The)
     5,233       303,095  
              1,011,087  
ENERGY - 2.29%
  
Devon Energy Corporation ^
     2,000       134,660  
Exxon Mobil Corporation
     13,475       924,520  
Schlumberger Ltd.
     4,598       274,041  
Williams Companies, Inc.
     3,000       53,610  
              1,386,831  
FINANCIALS - 2.80%
  
American Express Company
     3,252       110,243  
Aon Corporation ^
     3,000       122,070  
BB&T Corporation
     6,000       163,440  
Charles Schwab Corporation (The) ^
     2,000       38,300  
Chubb Corporation (The)
     1,000       50,410  
Goldman Sachs Group, Inc. (The)
     1,000       184,350  
Hudson City Bancorp, Inc.
     5,000       65,750  
JPMorgan Chase & Company
     3,998       175,192  
Loews Corporation ^
     2,000       68,500  
Public Storage ^
     2,500       188,100  
T. Rowe Price Group, Inc. ^
     2,000       91,400  
Travelers Companies, Inc. (The)
     2,000       98,460  
Wells Fargo & Company
     12,206       343,965  
              1,700,180  
HEALTH CARE - 2.44%
  
Abbott Laboratories
     3,229       159,739  
Amgen, Inc. *
     3,119       187,858  
Becton, Dickinson and Company
     3,000       209,250  
Bristol-Myers Squibb Company
     4,418       99,493  
 
See accompanying notes to schedule of investments.
 
 
CORNERSTONE PROGRESSIVE RETURN FUND
  
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2009 (UNAUDITED) (Continued)
  
   
HEALTH CARE (Continued)
  
Eli Lilly & Company ^
     3,000     $ 99,090  
Johnson & Johnson
     8,000       487,120  
Medtronic, Inc.
     3,000       110,400  
UnitedHealth Group, Inc. ^
     5,179       129,682  
              1,482,632  
INDUSTRIALS - 2.02%
  
3M Company
     1,567       115,645  
Danaher Corporation ^
     2,000       134,640  
Emerson Electric Company
     2,000       80,160  
General Electric Company
     16,918       277,793  
Lockheed Martin Corporation
     3,000       234,240  
United Parcel Service, Inc. - Class B
     3,191       180,196  
United Technologies Corporation
     2,108       128,440  
Waste Management, Inc.
     2,500       74,550  
              1,225,664  
INFORMATION TECHNOLOGY - 2.80%
  
Apple, Inc. *
     1,068       197,975  
Automatic Data Processing, Inc.
     5,000       196,500  
Cisco Systems, Inc. *
     18,470       434,784  
Google, Inc. - Class A *
     532       263,792  
Intel Corporation
     16,599       324,842  
Microsoft Corporation
     10,913       282,538  
              1,700,431  
MATERIALS - 0.65%
  
Freeport-McMoRan Copper & Gold, Inc. ^*
     1,119       76,775  
Monsanto Company
     2,500       193,500  
Praxair, Inc. ^
     1,500       122,535  
              392,810  
TELECOMMUNICATION SERVICES - 0.61%
  
AT&T, Inc.
     8,636       233,258  
Verizon Communications, Inc.
     4,500       136,215  
              369,473  
UTILITIES - 0.81%
  
Dominion Resources, Inc. ^
     3,000       103,500  
FPL Group, Inc. ^
     7,000       386,610  
              490,110  
                 
TOTAL EQUITY SECURITIES (cost - $57,147,504)
     $ 60,166,510  
 
See accompanying notes to schedule of investments.
 
 
CORNERSTONE PROGRESSIVE RETURN FUND
  
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2009 (UNAUDITED) (Continued)
  
   
SHORT-TERM INVESTMENTS - 3.30%
            
MONEY MARKET SECURITY - 0.95%
            
JPMorgan U.S. Government Money Market Fund
     575,617     $ 575,617  
                 
   
Principal
Amount (000's)
          
REPURCHASE AGREEMENTS - 2.35%
                
J.P. Morgan Securities, Inc.†‡
                
(Agreement dated 9/30/2009 to be repurchased at $397,851, 0.05%, 10/1/2009, collateralized by $413,190 in United States Treasury Bonds)
   $ 398       397,851  
J.P. Morgan Securities, Inc.†‡
                
(Agreement dated 9/30/2009 to be repurchased at $1,028,000, .01%, 10/1/2009, collateralized by $1,060,157 in United States Treasury Bonds)
     1,028       1,028,000  
                 
              1,425,851  
                 
TOTAL SHORT-TERM INVESTMENTS (cost - $2,001,468)
       2,001,468  
                 
TOTAL INVESTMENTS - 102.52% (cost - $59,148,972)
       62,167,978  
                 
LIABILITIES IN EXCESS OF OTHER ASSETS - (2.52)%
       (1,530,749 )
                 
NET ASSETS - 100.00%
     $ 60,637,229  
   
 
(a) Affiliated investment.  The Fund holds 2.10% (based on net assets) of Adams Express Company.  A trustee of the Fund also serves as a director to such company.  During the quarter ended September 30, 2009 the fund purchased 88,003 shares of this security and sold 2,018 shares.
^ Security or a portion thereof is out on loan.
* Non-income producing security.
† Represents investment purchased with collateral received for securities on loan.
‡ Stated interest rate, before rebate earned by borrower of securities on loan.

See accompanying notes to schedule of investments.
 
 
CORNERSTONE PROGRESSIVE RETURN FUND, INC.
NOTES TO SCHEDULES OF INVESTMENTS
September 30, 2009 (UNAUDITED)
 
Federal Income Tax Cost: At September 30, 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 appreciation from investments were $59,148,972, $6,880,483, $(3,861,477) and $3,019,006 respectively.
 
Fair Value Measurements 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.  Fair Value Measurements 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.
 
·  
Level 1 – quoted prices in active markets for identical investments
·  
Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risks, etc.)
·  
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 September 30, 2009 in valuing the Fund’s investments carried at value:
 
Valuation Inputs
  
INVESTMENTS IN SECURITIES
    
OTHER FINANCIAL INSTRUMENTS*
  
             
Level 1 – Quoted Prices
   $ 62,167,978     $ -  
Level 2 – Other Significant Observable Inputs
     -       -  
Level 3 – Significant Unobservable Inputs
     -       -  
Total
   $ 62,167,978     $ -  
 
* 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 September 30, 2009.
 
The Fund is exposed to financial market risks, including the valuations of its investment portfolio.  For the period ended September 30, 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 semi-annual report previously filed with the Securities and Exchange Commission on the Form N-CSR on September 4, 2009 with a file number 811-22066.
 
Other information regarding the Fund is available in the Fund’s most recent semi-annual report filed with the Securities and Exchange Commission on the Form N-CSR on September 4, 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 – http://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      
 
 
By (Signature and Title)*
/s/ Ralph W. Bradshaw                                 
 
Ralph W. Bradshaw, President and Chairman
 
(Principal Executive Officer)
 
Date          November 23, 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          November 23, 2009      
 
 
By (Signature and Title)*
/s/ Frank J. Maresca                                     
 
Frank J. Maresca, Treasurer
(Principal Financial Officer)
 
Date          November 23, 2009      
 
 
* Print the name and title of each signing officer under his or her signature.