fp0010262_nq.htm
 
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)
 
7 Dawson Street         Huntington Station, New York
11746
(Address of principal executive offices)
(Zip code)
 
Frank J. Maresca
 
AST Fund Solutions, LLC     7 Dawson Street 
Huntington Station, NY 11746
(Name and address of agent for service)
 
Registrant's telephone number, including area code:  (866) 668-6558   
 
Date of fiscal year end:      December 31          
 
Date of reporting period:    March 31, 2014       
 
 
 
 
 
Item 1.  Schedule of Investments.
 
CORNERSTONE PROGRESSIVE RETURN FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2014 (Unaudited)

Description
  
No. of
Shares
    
Value
  
EQUITY SECURITIES - 98.85%
  
CLOSED-END FUNDS - 86.14%
  
CONVERTIBLE SECURITIES - 0.54%
  
AllianzGI Equity & Convertible Income Fund
     46,716     $ 908,626  
                 
CORE - 3.54%
  
Adams Express Company (The)
     78,269       1,015,932  
Advent/Claymore Enhanced Growth & Income Fund
     44,037       448,297  
Cohen & Steers Dividend Majors Fund, Inc.
     32,205       497,245  
General American Investors Company, Inc.
     39,042       1,375,450  
Guggenheim Equal Weight Enhanced Equity Income Fund
     96,351       1,813,326  
Tri-Continental Corporation
     38,091       764,867  
              5,915,117  
CORPORATE DEBT INVESTMENT GRADE-RATED - 0.70%
  
Cutwater Select Income Fund
     1       26  
MFS Intermediate Income Trust
     193,045       999,973  
Morgan Stanley Income Securities Inc.
     2,448       42,938  
Transamerica Income Shares, Inc.
     5,705       118,327  
Western Asset/Claymore Inflation-Linked Securities & Income Fund
     1,000       11,680  
              1,172,944  
CORPORATE DEBT INVESTMENT GRADE-RATED (LEVERAGED) - 0.00%
  
John Hancock Income Securities Trust 
     355       5,148  
                 
DEVELOPED MARKET - 0.44%
  
Aberdeen Israel Fund, Inc.
     1,521       27,515  
Aberdeen Singapore Fund, Inc.
     26,484       330,229  
New Ireland Fund, Inc. (The)
     21,855       314,056  
Swiss Helvetia Fund, Inc. (The)
     4,535       65,213  
              737,013  
EMERGING MARKETS - 2.56%
  
First Trust/Aberdeen Emerging Opportunity Fund
     34,215       616,554  
ING Emerging Markets High Dividend Equity Fund
     156,470       1,869,816  
Morgan Stanley Eastern Europe Fund, Inc.
     1,825       32,850  
Morgan Stanley India Investment Fund, Inc. *
     77,869       1,520,003  
Templeton Russia and East European Fund, Inc.
     18,815       247,605  
              4,286,828  
EMERGING MARKETS DEBT - 1.53%
  
Global High Income Fund Inc.
     2,100       20,727  
Morgan Stanley Emerging Markets Debt Fund, Inc.
     2,871       28,423  
Stone Harbor Emerging Markets Income Fund
     53,264       985,384  
Western Asset Emerging Markets Debt Fund Inc.
     65,209       1,134,637  
Western Asset Emerging Markets Income Fund Inc.
     31,641       390,450  
              2,559,621  
FLEXIBLE INCOME - 0.65%
  
MFS Charter Income Trust
     118,539       1,082,261  
                 
ENERGY MLP - 5.13%
  
ClearBridge Energy MLP Fund Inc.
     68,720       1,830,014  
ClearBridge Energy MLP Opportunity Fund Inc.
     42,850       964,125  
ClearBridge Energy MLP Total Return Fund Inc.
     51,905       1,115,957  
First Trust MLP and Energy Income Fund
     29,606       585,903  
Nuveen Energy MLP Total Return Fund
     212,625       4,082,400  
              8,578,399  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE PROGRESSIVE RETURN FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2014 (Unaudited)
 
Description
    
No. of
Shares
      
Value
  
GENERAL & INSURED LEVERAGED - 4.75%
  
BlackRock MuniHoldings Quality Fund II, Inc.
     69,501     $ 885,443  
Eaton Vance National Municipal Opportunities Trust
     7,056       136,816  
Eaton Vance Tax-Advantaged Bond and Option Strategies Fund
     16,836       233,347  
Invesco Advantage Municipal Income Trust II
     133,008       1,461,758  
Invesco Municipal Opportunity Trust
     50,199       612,428  
Invesco Municipal Trust
     31,550       381,755  
Invesco Trust for Investment Grade Municipals
     119,422       1,528,602  
Invesco Value Municipal Income Trust
     0       7  
Managed Duration Investment Grade Municipal Fund
     700       9,016  
MFS Investment Grade Municipal Trust
     28,806       258,102  
Nuveen Dividend Advantage Municipal Fund 3
     113,826       1,491,121  
Nuveen Dividend Advantage Municipal Income Fund
     33,515       446,755  
Nuveen Quality Municipal Fund, Inc.
     506       6,457  
Nuveen Select Quality Municipal Fund, Inc.
     37,570       497,427  
              7,949,034  
GENERAL BOND - 0.39%
  
Eaton Vance Limited Duration Income Fund
     3,309       50,462  
MFS Multimarket Income Trust
     91,553       597,841  
              648,303  
GLOBAL - 11.90%
  
Alpine Global Dynamic Dividend Fund
     205,305       2,055,103  
Alpine Global Total Dynamic Dividend Fund
     973,729       8,169,586  
Calamos Global Dynamic Income Fund
     127,331       1,144,706  
Clough Global Allocation Fund
     10,902       165,492  
Delaware Enhanced Global Dividend and Income Fund
     159,250       1,958,775  
Gabelli Global Utility & Income Trust (The)
     30,250       601,370  
ING Infrastructure, Industrials and Materials Fund
     11,301       198,672  
Nuveen Global Value Opportunities Fund
     127,175       1,665,993  
Virtus Total Return Fund
     240,019       1,060,884  
Wells Fargo Advantage Global Dividend Opportunity Fund
     366,859       2,887,180  
              19,907,761  
GLOBAL INCOME - 1.65%
  
Aberdeen Global Income Fund, Inc.
     13,811       150,264  
First Trust/Aberdeen Global Opportunity Income Fund
     13,647       190,376  
Legg Mason BW Global Income Opportunities Fund Inc.
     40,796       716,378  
Nuveen Global Income Opportunities Fund
     32,372       374,544  
Nuveen Multi-Currency Short-Term Government Income Fund
     125,855       1,320,219  
              2,751,781  
HIGH CURRENT YIELD (LEVERAGED) - 1.86%
  
BlackRock Corporate High Yield Fund VI, Inc.
     21,933       268,899  
BlackRock Debt Strategies Fund, Inc.
     5,972       24,485  
DWS High Income Opportunities Fund, Inc.
     71,016       1,037,544  
DWS High Income Trust
     62,785       589,551  
First Trust Strategic High Income Fund II
     15,432       245,832  
Franklin Universal Trust
     52,076       375,468  
Invesco High Income Trust II
     13,322       220,079  
MFS Intermediate High Income Fund
     38,669       114,074  
Neuberger Berman High Yield Strategies Fund Inc.
     17,142       233,474  
              3,109,406  
HIGH YIELD - 0.71%
  
 First Trust High Income Long/Short Fund
     50,939       903,148  
Western Asset High Income Opportunity Fund Inc.
     16,097       97,387  
Western Asset Managed High Income Fund Inc.
     31,664       181,435  
              1,181,970  
HIGH YIELD MUNICIPAL DEBT - 0.20%
  
MFS High Income Municipal Trust
     70,947       336,998  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE PROGRESSIVE RETURN FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2014 (Unaudited)
 
Description
    
No. of
Shares
      
Value
  
INCOME & PREFERRED STOCK - 4.79%
  
Calamos Strategic Total Return Fund
     377,477     $ 4,197,544  
Cohen & Steers Limited Duration Preferred and Income Fund, Inc.
     8,922       212,344  
John Hancock Preferred Income Fund II
     1,343       26,806  
John Hancock Premium Dividend Fund
     67,256       870,965  
LMP Capital and Income Fund Inc.
     88,642       1,427,136  
Nuveen Quality Preferred Income Fund
     26,525       213,526  
Nuveen Quality Preferred Income Fund 3
     92,642       775,413  
Nuveen Tax-Advantaged Dividend Growth Fund
     18,322       280,327  
              8,004,061  
LOAN PARTICIPATION - 2.79%
  
BlackRock Floating Rate Income Strategies Fund, Inc
     12,400       180,668  
BlackRock Floating Rate Income Trust
     8,434       120,100  
Eaton Vance Floating-Rate Income Trust
     84,847       1,332,098  
First Trust Senior Floating Rate Income Fund II
     43,356       626,494  
ING Prime Rate Trust
     57,295       332,311  
Nuveen Credit Strategies Income Fund
     181,439       1,725,485  
Nuveen Senior Income Fund
     48,244       345,427  
              4,662,583  
NATURAL RESOURCES - 9.38%
  
BlackRock Energy and Resources Trust
     79,431       1,918,259  
BlackRock Real Asset Equity Trust
     597,924       5,321,524  
BlackRock Resources & Commodities Strategy Trust
     457,446       5,260,629  
ING Risk Managed Natural Resources Fund
     111,278       1,175,096  
Petroleum & Resources Corporation
     71,977       2,009,598  
              15,685,106  
OPTION ARBITRAGE/OPTIONS STRATEGIES - 5.29%
  
BlackRock Enhanced Equity Dividend Trust
     10,900       86,546  
BlackRock Global Opportunities Equity Trust
     250,786       3,668,999  
BlackRock International Growth and Income Trust
     445,042       3,587,038  
ING Asia Pacific High Dividend Equity Income Fund
     56,960       725,101  
ING Global Advantage and Premium Opportunity Fund
     64,489       771,288  
              8,838,972  
PACIFIC EX JAPAN - 2.34%
  
Aberdeen Greater China Fund, Inc.
     100,460       971,448  
China Fund, Inc. (The)
     129,290       2,574,164  
Taiwan Fund, Inc. *
     19,452       366,670  
              3,912,282  
REAL ESTATE - 15.91%
  
Alpine Global Premier Properties Fund
     305,154       2,151,336  
CBRE Clarion Global Real Estate Income Fund
     638,869       5,334,556  
Cohen & Steers Preferred Securities and Income Fund, Inc.
     459,844       7,817,348  
Cohen & Steers Quality Income Realty Fund, Inc.
     542,870       5,716,421  
Cohen & Steers Total Return Realty Fund, Inc.
     27,829       356,489  
LMP Real Estate Income Fund Inc.
     128,601       1,394,035  
Neuberger Berman Real Estate Securities Income Fund Inc.
     361,756       1,707,488  
Nuveen Diversified Dividend and Income Fund
     105,519       1,234,572  
Nuveen Real Estate Income Fund
     4,600       49,266  
RMR Asia Pacific Real Estate Fund
     45,838       850,752  
              26,612,263  
SECTOR EQUITY - 1.13%
  
First Trust Specialty Finance and Financial Opportunities Fund
     4,900       37,730  
GAMCO Natural Resources, Gold & Income Trust by Gabelli
     133,934       1,387,556  
John Hancock Financial Opportunities Fund 
     19,207       462,312  
              1,887,598  
U.S. MORTGAGE - 0.53%
  
First Trust Mortgage Income Fund
     37,099       583,938  
Nuveen Mortgage Opportunity Term Fund
     3,000       70,410  
Nuveen Mortgage Opportunity Term Fund 2
     9,618       224,580  
              878,928  
UTILITY - 7.43%
  
BlackRock EcoSolutions Investment Trust
     133,019       1,070,803  
BlackRock Utility and Infrastructure Trust
     133,645       2,533,909  
Brookfield Global Listed Infrastructure Income Fund Inc.
     93,767       2,001,925  
Cohen & Steers Infrastructure Fund, Inc.
     55,885       1,233,941  
Duff & Phelps Global Utility Income Fund Inc.
     91,745       1,815,634  
Reaves Utility Income Fund
     136,085       3,776,359  
              12,432,571  
                 
TOTAL CLOSED-END FUNDS
             144,045,574  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE PROGRESSIVE RETURN FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2014 (Unaudited)
 
Description
    
No. of
Shares
      
Value
  
COMMODITY POOL - 0.07%
                
Nuveen Diversified Commodity Fund
     7,729     $ 122,736  
                 
CONSUMER DISCRETIONARY - 1.82%
                
Comcast Corporation - Class A
     24,358       1,218,387  
DIRECTV *
     4,000       305,680  
Johnson Controls, Inc.
     7,000       331,240  
Macy's, Inc.
     2,000       118,580  
Time Warner Cable Inc.
     2,000       274,360  
Walt Disney Company (The)
     10,000       800,700  
              3,048,947  
CONSUMER STAPLES - 0.67%
                
Archer-Daniels-Midland Company
     4,000       173,560  
Kroger Co. (The)
     4,000       174,600  
Wal-Mart Stores, Inc.
     10,000       764,300  
              1,112,460  
ENERGY - 1.20%
                
ConocoPhillips
     8,000       562,800  
Devon Energy Corporation
     3,000       200,790  
EOG Resources, Inc.
     2,000       392,340  
Marathon Oil Corporation
     2,000       71,040  
Schlumberger Limited
     8,000       780,000  
              2,006,970  
FINANCIALS - 2.31%
                
Allstate Corporation (The)
     3,000       169,740  
American International Group, Inc.
     8,000       400,080  
Bank of America Corporation
     30,000       516,000  
Bank of New York Mellon Corporation (The)
     6,000       211,740  
BB&T Corporation
     5,000       200,850  
Capital One Financial Corporation
     3,000       231,480  
JPMorgan Chase & Co.
     20,000       1,214,200  
Marsh & McLennan Companies, Inc.
     4,000       197,200  
MetLife, Inc.
     9,000       475,200  
Prudential Financial, Inc.
     3,000       253,950  
              3,870,440  
HEALTH CARE - 1.75%
                
Abbott Laboratories
     13,000       500,630  
AbbVie Inc.
     3,000       154,200  
Allergan, Inc.
     2,500       310,250  
Amgen Inc.
     4,000       493,360  
Boston Scientific Corporation *
     2,000       27,040  
Cardinal Health, Inc.
     6,000       419,880  
Medtronic, Inc.
     6,000       369,240  
St. Jude Medical, Inc.
     3,000       196,170  
Wellpoint, Inc.
     4,500       447,975  
              2,918,745  
INDUSTRIALS - 2.04%
                
Deere & Company
     3,000       272,400  
General Dynamics Corporation
     3,000       326,760  
General Electric Company
     90,000       2,330,100  
Lockheed Martin Corporation
     3,000       489,720  
              3,418,980  
 
See accompanying notes to schedule of investments.
 
 
 
 
 
CORNERSTONE PROGRESSIVE RETURN FUND
SCHEDULE OF INVESTMENTS - MARCH 31, 2014 (Unaudited)
 
Description
    
No. of
Shares
      
Value
  
INFORMATION TECHNOLOGY - 2.40%
                
Corning, Inc.
     9,000     $ 187,380  
Hewlett-Packard Company
     12,400       401,264  
Intel Corporation
     20,000       516,200  
Microsoft Corporation
     22,000       901,780  
Oracle Corporation
     15,000       613,650  
QUALCOMM Incorporated
     14,500       1,143,470  
Yahoo! Inc. *
     7,000       251,300  
              4,015,044  
MATERIALS - 0.31%
                
Dow Chemical Company (The)
     10,500       510,195  
                 
UTILITIES - 0.14%
                
Exelon Corporation
     7,000       234,920  
                 
TOTAL EQUITY SECURITIES (cost - $156,789,573)
             165,305,011  
                 
SHORT-TERM INVESTMENTS - 1.65%
                
MONEY MARKET FUNDS - 1.65%
                
Fidelity Institutional Money Market Government Portfolio - Class I, 0.01%^ (cost - $2,763,340)
     2,763,340       2,763,340  
                 
TOTAL INVESTMENTS - 100.51% (cost - $159,552,913)
             168,068,351  
                 
LIABILITIES IN EXCESS OF OTHER ASSETS - (0.51)%
             (846,071 )
                 
NET ASSETS - 100.00%
           $ 167,222,280  
 
*
Non-income producing security.
^
The rate shown is the 7-day effective yield as of March 31, 2014.

See accompanying notes to schedule of investments.
 
 
 
 

CORNERSTONE PROGRESSIVE RETURN FUND
NOTES TO SCHEDULE OF INVESTMENTS
MARCH 31, 2014 (UNAUDITED)
 
Federal Income Tax Cost: The following information is computed on a tax basis for each item as of March 31, 2014:

Cost of portfolio investments
   $ 159,590,893  
Gross unrealized appreciation
   $ 10,145,032  
Gross unrealized depreciation
     (1,667,574 )
Net unrealized appreciation
   $ 8,477,458  

The difference between the federal income tax cost of portfolio investments and the Schedule of Investments cost for the Fund is due to certain timing differences in the recognition of capital gains or losses under income tax regulations and generally accepted accounting principles.   These "book/tax" differences are temporary in nature and are due to the tax deferral of losses on wash sales.

As required by the Fair Value Measurement and Disclosures Topic of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification, the Fund has performed an analysis of all assets and liabilities measured at fair value to determine the significance and character of all inputs to their fair value determination.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into the following three broad categories.

·
Level 1 - quoted unadjusted prices for identical instruments in active markets to which the Fund has access at the date of measurement.

·
Level 2 - quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.

·
Level 3 - model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Fund's own assumptions that market participants would use to price the asset or liability based on the best available information.

 
 
 

The following is a summary of the inputs used as of March 31, 2014 in valuing the Fund's investments carried at value:

 
 
VALUATION INPUTS
  
INVESTMENTS
IN
SECURITIES
    
OTHER FINANCIAL INSTRUMENTS*
  
             
Level 1 – Quoted Prices
            
  Equity Investments
   $ 165,305,011     $ -  
  Short-Term Investments
     2,763,340       -  
Level 2 – Other Significant Observable Inputs
     -       -  
Level 3 – Significant Unobservable Inputs
     -       -  
Total
   $ 168,068,351     $ -  

*
Other financial instruments include futures, forwards and swap contracts, if any.

The  breakdown  of  the  Fund's   investments  into  major  categories  is  disclosed  in  its  Schedule  of Investments.

As of March 31, 2014, the Fund did not have any transfers in and out of any Level.

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, 2014.

The disclosures for the Fund's fiscal year beginning January 1, 2014 relate to presenting separately any Level 3 purchases, sales, issuances and settlements on a gross basis instead of one net amount. Management has evaluated the impact of ASU No. 2010-6 for the required disclosures.
 
In June 2013, FASB issued Accounting Standards Update 2013-08 Financial Services – Investment Companies (Topic 946) – Amendments to the Scope, Measurement and Disclosure Requirements (“ASU 2013-08”) which is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2013.  ASU 2013-08 sets forth a methodology for determining whether an entity should be characterized as an investment company and prescribes fair value accounting for an investment company’s non-controlling ownership interest in another investment company.  FASB has determined that a fund registered under the Investment Company Act of 1940 automatically meets ASU 2013-08’s criteria for an investment company.  Although still evaluating the potential impacts of ASU 2013-08 to the Fund, the Investment Manager does not expect the adoption of the ASU to have an effect on the Fund.
 
The   Fund   is   exposed   to   financial   market   risks,   including   the   valuations   of   its   investment portfolio. During the three months ended March 31, 2014, the Fund did not engage in derivative instruments and other hedging activities.

The Fund has evaluated the need for additional disclosures and/or adjustments resulting through the date its financial statements were issued.  Based on this evaluation, no additional disclosures or adjustments were required to such Schedule of Investments.

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 4, 2014 with a file number 811-22066.

Other information regarding the Fund is available in the Fund’s most recent annual report. This information is also available on the Fund’s website at www.cornerstoneprogressivereturnfund.com; or on the website of the Securities and Exchange Commission at 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
May 16, 2014
    
       
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 16, 2014
    
       
By (Signature and Title)*
/s/ Frank J. Maresca
  
   
Frank J. Maresca, Treasurer (Principal Financial Officer)
       
Date
May 16, 2014
    
 
* Print the name and title of each signing officer under his or her signature.