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, 2005
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Date of reporting period: July 1, 2005 through September 30, 2005
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ITEM 1: SCHEDULE OF INVESTMENTS
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Cornerstone Total Return Fund, Inc.
Schedule of Investments - September 30, 2005 (unaudited)
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NO. OF
DESCRIPTION SHARES VALUE
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EQUITY SECURITIES - 99.98%
UNITED STATES - 99.26%
CLOSED-END DOMESTIC FUNDS - 8.07%
Adams Express Co. 52,300 $ 686,176
Boulder Total Return Fund, Inc. 18,900 326,970
Dreman/Claymore Dividend & Income Fund 15,000 277,050
First Trust Value Line Dividend Fund (a) 15,000 223,350
General American Investors Company, Inc. (a) 2,500 87,175
Tri-Continental Corp. 109,000 1,990,340
Zweig Fund, Inc. (The) (a) 165,900 882,588
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4,473,649
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CONSUMER DISCRETIONARY - 9.93%
Acco Brands Corporation + 587 16,565
Bed Bath & Beyond Inc. + (a) 2,500 100,450
Best Buy Co., Inc. (a) 3,750 163,238
Carnival Corp. (a) 2,800 139,944
Clear Channel Communications, Inc. 2,700 88,803
Coach, Inc. + 2,500 78,400
Comcast Corp., Class A + 8,508 249,965
Comcast Corp., Special Class A + 4,500 129,510
Dana Corporation. (a) 2,500 23,525
Eastman Kodak Co. 2,500 60,825
Ford Motor Company 15,200 149,872
Fortune Brands, Inc. 2,500 203,325
Gap, Inc. (The) (a) 6,900 120,267
General Motors Corp. (a) 2,500 76,525
Goodyear Tire & Rubber Company (The) + 2,500 38,975
Harley-Davidson, Inc. (a) 2,500 121,100
Hilton Hotels Corp. 2,500 55,800
Home Depot, Inc. (The) 12,300 469,122
J.C. Penney Company, Inc. 2,500 118,550
Kohl's Corp. + (a) 2,500 125,450
Lowe's Companies, Inc. 3,700 238,280
Mattel, Inc. (a) 4,500 75,060
McDonald's Corp. 8,100 271,269
McGraw-Hill Companies, Inc. (The) (a) 5,000 240,200
Monsanto Co. 1,773 111,256
Office Depot, Inc. + 2,500 74,250
Omnicom Group Inc. 1,500 125,445
Rockwell Automation, Inc. 2,500 132,250
Staples, Inc. 3,150 67,158
Starbucks Corp. + 2,500 125,250
Target Corporation 4,600 238,878
Time Warner Inc. + 25,500 461,805
TJX Companies, Inc. (The) 4,000 81,920
Tribune Company 2,500 84,725
Univision Communications Inc., Class A + (a) 2,500 66,325
Viacom Inc., non-voting Class B 9,000 297,090
Walt Disney Co. (The) 11,700 282,321
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5,503,693
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CONSUMER STAPLES - 9.28%
Albertson's, Inc. (a) 2,500 64,125
Altria Group, Inc. 10,700 788,697
Anheuser-Busch Companies, Inc. 3,700 159,248
Avon Products, Inc. 2,500 67,500
Campbell Soup Company 5,700 169,575
Coca-Cola Co. (The) 13,500 583,065
Coca-Cola Enterprises Inc. 2,500 48,750
General Mills, Inc. 2,500 120,500
Gillette Company (The) 5,100 296,820
H.J. Heinz Co. 2,700 98,658
Kimberly-Clark Corporation (a) 2,500 148,825
Kroger Co. (The) + 3,600 74,124
PepsiCo, Inc. 7,500 425,325
Procter & Gamble Co. (The) 15,000 891,900
Safeway Inc. + (a) 4,900 125,440
Sara Lee Corp. 2,600 49,270
Sysco Corp. 3,500 109,795
Walgreen Co. (a) 5,600 243,320
Wal-Mart Stores, Inc. 15,500 679,210
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5,144,147
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ENERGY - 8.83%
Anadarko Petroleum Corp. (a) 2,500 239,375
Baker Hughes Inc. 2,500 149,200
Burlington Resources, Inc. 2,500 203,300
CenterPoint Energy, Inc. 5,700 84,759
ChevronTexaco Corp. 9,068 586,972
ConocoPhillips 3,338 233,360
Devon Energy Corporation 2,500 171,600
El Paso Corporation 3,000 41,700
EOG Resources Inc. 2,500 187,250
Exxon Mobil Corp. 36,000 2,287,440
Halliburton Co. 2,500 171,300
Occidental Petroleum Corp. 2,500 213,575
Schlumberger Ltd. 2,500 210,950
XTO Energy Inc. (a) 2,500 113,300
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4,894,081
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FINANCIALS - 18.43%
Aetna Inc. 2,000 172,280
AFLAC Inc. 4,000 181,200
Allstate Corp. (The) 5,200 287,508
American Express Company 6,100 350,384
American International Group, Inc. 12,331 764,029
AmSouth Bancorporation 2,500 63,150
Bank of America Corp. 15,740 662,654
Bank of New York Co., Inc. (The) 5,900 173,519
BB&T Corporation 4,500 175,725
Charles Schwab Corporation (The) 8,200 118,326
Cincinnati Financial Corporation 2,500 104,725
Citigroup Inc. 28,600 1,301,872
Countrywide Financial Corporation 3,500 115,430
Fannie Mae 5,700 255,474
Fifth Third Bancorp 2,500 91,825
Fiserv, Inc. + 2,500 114,675
Freddie Mac 3,300 186,318
Goldman Sachs Group, Inc. (The) 3,000 364,740
Hartford Financial Services Group, Inc. (The) 1,600 123,472
JPMorgan Chase & Co. 12,700 430,911
KeyCorp 2,500 80,625
Lehman Brothers Holding Inc. 2,500 291,200
M&T Bank Corporation 2,500 264,275
Marsh & McLennan Companies, Inc. 4,600 139,794
MBNA Corp. (a) 7,550 186,032
Mellon Financial Corporation 2,300 73,531
Merrill Lynch & Co., Inc. 1,100 67,485
MetLife, Inc. 6,000 298,980
Moody's Corporation 2,000 102,160
Morgan Stanley 6,200 334,428
North Fork Bancorporation, Inc. 2,500 63,750
Northern Trust Corp. (a) 1,100 55,605
PNC Financial Services Group, Inc. 1,400 81,228
Progressive Corporaton (The) 2,500 261,925
Providian Financial Corporation. + 2,500 44,200
Prudential Financial, Inc. 2,500 168,900
SLM Corporation 2,500 134,100
St. Paul Travelers Companies, Inc. (The) 2,292 102,842
State Street Corp. 1,600 78,272
Synovus Financial Corp. 2,500 69,300
U.S. Bancorp (a) 7,200 202,176
Wachovia Corp. 8,100 385,479
Washington Mutual, Inc. 4,250 166,685
Wells Fargo & Co. 9,000 527,130
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10,218,319
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HEALTHCARE - 11.37%
Amgen Inc. + 8,300 661,261
Becton, Dickinson & Co.(a) 2,500 131,075
Biomet, Inc. 2,500 86,775
Boston Scientific Corp. + 5,000 116,850
Bristol-Myers Squibb Co. 9,600 230,976
Caremark Rx, Inc. + 2,500 124,825
Eli Lilly & Co. 4,100 219,432
Genzyme Corporation + 1,500 107,460
Health Management Associates, Inc., Class A 2,500 58,675
Johnson & Johnson 18,200 1,151,696
Laboratory Corporation of America Holdings + 2,500 121,775
McKesson Corp. 2,500 118,625
Medco Health Solutions, Inc. + 1,531 83,945
Medtronic, Inc. (a) 7,100 380,702
Merck & Co. Inc. 8,700 236,727
Pfizer Inc. (a) 42,460 1,060,226
Schering-Plough Corp. (a) 8,400 176,820
Stryker Corporation 2,000 98,860
Tenet Healthcare Corp. + 5,000 56,150
United Health Group Inc. 10,000 562,000
Wyeth 7,500 347,025
Zimmer Holdings, Inc. + 2,500 172,225
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6,304,105
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INDUSTRIALS - 10.34%
3M Co. 2,500 183,400
Apollo Group, Inc., Class A + (a) 1,000 66,390
Boeing Company (The) 3,900 265,005
Burlington Northern Sante Fe Corporation 2,000 119,600
Caterpillar Inc. 5,000 293,750
Cendant Corp. 4,000 82,560
CSX Corp. 2,500 116,200
Danaher Corp. (a) 2,500 134,575
Dover Corporation 1,000 40,790
D.R. Horton Inc. 2,500 90,550
Emerson Electric Co. 2,000 143,600
FedEx Corp. (a) 2,500 217,825
General Dynamics Corp. (a) 2,500 298,875
General Electric Co. 52,000 1,750,840
Honeywell International Inc. 3,300 123,750
Illinois Tool Works Inc. 2,500 205,825
Lockheed Martin Corp. 2,500 152,600
Norfolk Southern Corporation 2,500 101,400
Paychex, Inc. (a) 2,500 92,700
Raytheon Company 2,500 95,050
Southwest Airlines Co. 6,100 90,585
Transocean Inc. + 2,500 153,275
Tyco International Ltd. 9,100 253,435
United Parcel Service, Inc., Class B 4,000 276,520
United Technologies Corp. 4,400 228,096
Waste Management, Inc. 5,300 151,633
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5,728,829
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INFORMATION TECHNOLOGY - 14.28%
Adobe Systems Inc. + 2,500 74,625
Agilent Technologies, Inc. + 5,000 163,750
Apple Computer, Inc. + 5,000 268,050
Applied Materials, Inc. 8,000 135,680
Autodesk, Inc. 2,500 116,100
Cisco Systems, Inc. + 35,000 627,550
Corning Inc. + 7,500 144,975
Dell Inc. + 13,700 468,540
eBay, Inc. + 7,000 288,400
Electronic Data Systems Corp. 7,500 168,300
EMC Corp. + (a) 8,000 103,520
First Data Corporation (a) 4,325 173,000
Freescale Semiconductor Inc., Class B + 1,777 41,901
Hewlett-Packard Co. 13,342 389,586
Intel Corp. (a) 32,000 788,800
International Business Machines Corp. 5,700 457,254
Lucent Technologies Inc. + (a) 15,000 48,750
Maxim Integrated Products, Inc. 2,500 106,625
Micron Technology, Inc. + (a) 5,500 73,150
Microsoft Corp. (a) 48,000 1,235,040
Motorola, Inc. 16,100 355,649
Network Appliance, Inc. + 2,500 59,350
Oracle Corp. + 33,600 416,304
PerkinElmer, Inc. 1,500 30,555
QUALCOMM Inc. 4,300 192,425
Solectron Corp. + (a) 5,700 22,287
Symantec Corp. + 5,000 113,300
Texas Instruments Inc. 13,500 457,650
Waters Corporation + 2,500 104,000
Yahoo! Inc. + (a) 8,500 287,640
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7,912,756
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MATERIALS - 2.63%
Air Products & Chemicals, Inc. 2,500 137,850
Alcoa Inc. 4,300 105,006
Dow Chemical Co. (The) 4,700 195,849
E.I. du Pont de Nemours & Co. (a) 5,800 227,186
International Paper Co. 4,800 143,040
Newmont Mining Corporation 2,500 117,925
Nucor Corp. 2,500 147,475
Peabody Energy Corp. 2,500 210,875
Rohm & Haas Co. (a) 2,500 102,825
Weyerhaeuser Co. 1,000 68,750
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1,456,781
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REAL ESTATE INVESTMENT TRUSTS - 0.33%
Simon Property Group, Inc. 2,500 185,300
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TELECOMMUNICATION SERVICES - 2.52%
AT&T Corp. 5,260 104,148
BellSouth Corporation 5,200 136,760
SBC Communications Inc. 20,600 493,782
Sprint Corp. 7,437 176,852
Verizon Communications Inc. 14,900 487,081
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1,398,623
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UTILITIES - 3.25%
American Electric Power Co., Inc. 5,500 218,350
Dominion Resources, Inc. (a) 2,000 172,280
Duke Energy Corp. 6,600 192,522
Exelon Corp. 2,500 133,600
FirstEnergy Corp. 2,500 130,300
Scottish Power plc, ADR 4,000 160,960
Sempra Energy 2,500 117,650
Southern Co. (The) 2,500 89,400
TXU Corp. 3,700 417,656
Williams Companies, Inc. (The) 2,500 62,625
Xcel Energy, Inc. 5,500 107,855
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1,803,198
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TOTAL UNITED STATES
(cost - $54,629,937) 55,023,481
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CZECH REPUBLIC - 0.72%
CONSUMER DISCRETIONARY - 0.72%
Bonton a.s + # ^ 137,180 7,839
Bonton Book a.s + # 68,590 63,047
Bonton Film Entertainment a.s. + # 68,590 230,515
Bonton Music a.s. + # 68,590 60,288
Bonton Pictures a.s. + # 68,590 39,404
TOTAL CZECH REPUBLIC ------------
(cost - $894,865) 401,093
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TOTAL EQUITY SECURITIES
(cost - $55,524,802) 55,424,574
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PRINCIPAL
AMOUNT
(000'S)
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SHORT-TERM INVESTMENTS - 2.05%
REPURCHASE AGREEMENTS - 2.05%
Bear, Stearns & Co. Inc.
(Agreement dated 09/30/05 to be repurchased
at $526,095), 3.88%*, 10/03/05, collateralized
by $543,256 in U.S. Treasury STRIPS** $ 526 $ 525,925
Bear, Stearns & Co. Inc.
(Agreement dated 09/30/05 to be repurchased
at $513,362), 1.94%*, 10/03/05, collateralized
by $528,705 in U.S. Treasury STRIPS** 513 513,279
Bear, Stearns & Co. Inc.
(Agreement dated 09/30/05 to be repurchased
at $98,413), 3.25%, 10/03/05, collateralized
by $101,861 in U.S. Treasury STRIPS 98 98,386
TOTAL SHORT-TERM INVESTMENTS
(cost - $1,137,590) 1,137,590
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TOTAL INVESTMENTS - 102.03%
(cost - $56,662,392) 56,562,164
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LIABILITIES IN EXCESS OF OTHER ASSETS - (2.03)% (1,128,542)
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NET ASSETS - 100.00% $ 55,433,622
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+ Non-income producing security.
# Securities are fair valued in accordance with procedures established
by the Board of Directors.
(a) Security or a portion there-of is out on loan.
* Stated interest rate, before rebate earned by borrower of securities
on loan.
** Represents investment purchased with cash collateral received for
securities on loan.
ADR American Depositary Receipts.
^ In July, 2005, 68,590 shares of Bonton Discs a.s. were exchanged to
Bonton a.s.
At September 30, 2005, the Fund held 0.72% of its net assets in securities
valued in good faith by the Board of Directors with an aggregate cost of
$894,865 and a fair value of $401,093.
Federal Income Tax Cost - At September 30, 2005, 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 $56,714,021, $8,479,867, $(8,631,724) and $(151,857),
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.
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 informaiton
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. 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 29, 2005
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 29 , 2005
/s/ Jodi B. Levine
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Name: Jodi B. Levine
Title: Principal Financial Officer (Treasurer)
Date: November 29, 2005