SUMMARY
We rate Cornerstone Strategic Value Fund at D-. The fund invests approximately 99% of its assets in stocks and may be considered for investors seeking an Equity Income strategy.
POSITIVES AND RISKS
Total return ranks above peers over the last three years. The Cornerstone Strategic Value Fund has returned an annual rate of 5.43% since inception. More recently, the fund has generated a total return of 10.28% in the last five years, 3.75% in the last three years, and 6.72% in the last year. How does that compare to other equity funds? In the last five years, it has outperformed 80% of them. It has also outpaced 58% of its competitors on a three year basis and 59% of them over the last year for the period ending 11/30/2023. On a year to date basis, CLM has returned 20.05%.
Downside risk has been above average. CLM has a draw down risk of -52.55%, which is the largest price decline experienced over the last three years. This fund has a three year standard deviation of 33.4%. This fund has experienced excessive volatility in its monthly performance over the last 36 months. As of 11/30/2023, the fund was trading at a price of $7.29, which is 1.9% below its 52-week high of $7.43 and 6.6% above its 52-week low of $6.84.
High expense ratio hinders performance. On total assets of $1.58 billion, CLM maintains a high expense ratio compared to its Equity Income peers of 1.10% to cover all operating costs. Brokerage costs for the fund to buy and sell shares are not included in the expense ratio. As CLM is a closed end fund, it has no front end or back end load.
Manager tenure is a net positive but performance record lags managerial peers. Substandard fund managers tend to be replaced, so a long tenure is usually a good sign that a fund is achieving its objectives. The Cornerstone Strategic Value Fund has been managed by Ralph W. Bradshaw for the last 23 years. Over that period, the manager was able to capture more actual gains in excess of the expected return than just 20% of other fund managers.
