FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-00248
ADAMS DIVERSIFIED EQUITY FUND, INC.
(Exact name of registrant as specified in charter)
500 East Pratt Street, Suite 1300, Baltimore, Maryland 21202
(Address of principal executive offices)
Janis F. Kerns
Adams Diversified Equity Fund, Inc.
500 East Pratt Street, Suite 1300
Baltimore, Maryland 21202
(Name and address of agent for service)
Registrant’s telephone number, including area code: (410) 752-5900
Date of fiscal year end: December 31
Date of reporting period: June 30, 2020
Item 1. Reports to Stockholders.
![[MISSING IMAGE: lg_adamssemi.jpg]](https://capedge.com/proxy/N-CSRS/0001104659-20-085959/lg_adamssemi.jpg)
DIVERSIFIED EQUITY
FUND
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![[MISSING IMAGE: lg_adamsreportsidebar.jpg]](https://capedge.com/proxy/N-CSRS/0001104659-20-085959/lg_adamsreportsidebar.jpg)
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Chief Executive Officer & President
July 16, 2020
(unaudited)
| | | Market Value | | | Percent of Net Assets | | ||||||
Microsoft Corporation | | | | $ | 145,550,352 | | | | | | 7.7% | | |
Apple Inc. | | | | | 106,631,040 | | | | | | 5.6 | | |
Amazon.com, Inc. | | | | | 95,455,172 | | | | | | 5.0 | | |
Alphabet Inc. Class A & Class C | | | | | 74,110,046 | | | | | | 3.9 | | |
Visa Inc. Class A | | | | | 40,894,089 | | | | | | 2.2 | | |
UnitedHealth Group Incorporated | | | | | 40,673,605 | | | | | | 2.1 | | |
Thermo Fisher Scientific Inc. | | | | | 33,987,492 | | | | | | 1.8 | | |
JPMorgan Chase & Co. | | | | | 32,685,850 | | | | | | 1.7 | | |
Facebook, Inc. Class A | | | | | 32,221,233 | | | | | | 1.7 | | |
Bank of America Corp. | | | | | 30,454,625 | | | | | | 1.6 | | |
| | | $ | 632,663,504 | | | | | | 33.3% | | |
![[MISSING IMAGE: weighting.jpg]](https://capedge.com/proxy/N-CSRS/0001104659-20-085959/weighting.jpg)
(unaudited)
| Assets | | | | | | | | | | | | | |
| Investments at value*: | | | | | | | | | | | | | |
| Common stocks: | | | | | | | | | | | | | |
| Unaffiliated issuers (cost $1,234,140,937) | | | | $ | 1,863,345,931 | | | | | | | | |
| Non-controlled affiliate (cost $33,970,033) | | | | | 24,841,753 | | | | | | | | |
| Other investment in controlled affiliate (cost $150,000) | | | | | 466,000 | | | | | | | | |
| Short-term investments (cost $10,805,010) | | | | | 10,813,519 | | | | | $ | 1,899,467,203 | | |
| Cash | | | | | | | | | | | 250,269 | | |
| Dividends receivable | | | | | | | | | | | 1,482,076 | | |
| Net unrealized gain on open total return swap agreements | | | | | | | | | | | 155,534 | | |
| Prepaid expenses and other assets | | | | | | | | | | | 1,765,851 | | |
| Total Assets | | | | | | | | | | | 1,903,120,933 | | |
| | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | |
| Due to officers and directors (note 8) | | | | | | | | | | | 2,035,313 | | |
| Accrued expenses and other liabilities | | | | | | | | | | | 2,300,990 | | |
| Total Liabilities | | | | | | | | | | | 4,336,303 | | |
| Net Assets | | | | | | | | | | $ | 1,898,784,630 | | |
| | | | | | | | | | | | | | |
| Net Assets | | | | | | | | | | | | | |
| Common Stock at par value $0.001 per share, authorized 150,000,000 shares; issued and outstanding 108,731,058 shares (includes 47,686 deferred stock units) (note 7) | | | | | | | | | | $ | 108,731 | | |
| Additional capital surplus | | | | | | | | | | | 1,230,443,841 | | |
| Total distributable earnings (loss) | | | | | | | | | | | 668,232,058 | | |
| Net Assets Applicable to Common Stock | | | | | | | | | | $ | 1,898,784,630 | | |
| Net Asset Value Per Share of Common Stock | | | | | | | | | | $ | 17.46 | | |
(unaudited)
| Investment Income | | | | | | ||
| Income: | | | | | | ||
| Dividends (includes $371,752 from affiliates and net of $16,901 in foreign taxes) | | | | $ | 15,861,471 | ||
| Other income | | | | | 81,718 | ||
| Total Income | | | | | 15,943,189 | ||
| Expenses: | | | | | | ||
| Investment research compensation and benefits | | | | | 2,754,109 | ||
| Administration and operations compensation and benefits | | | | | 1,167,239 | ||
| Occupancy and other office expenses | | | | | 356,754 | ||
| Investment data services | | | | | 324,693 | ||
| Directors' compensation | | | | | 242,000 | ||
| Shareholder reports and communications | | | | | 184,954 | ||
| Transfer agent, custody, and listing fees | | | | | 176,386 | ||
| Accounting, recordkeeping, and other professional fees | | | | | 189,350 | ||
| Insurance | | | | | 81,298 | ||
| Audit and tax services | | | | | 58,895 | ||
| Legal services | | | | | 12,740 | ||
| Total Expenses | | | | | 5,548,418 | ||
| Net Investment Income | | | | | 10,394,771 | ||
| | | | | | | ||
| Realized Gain (Loss) and Change in Unrealized Appreciation | | | | | | ||
| Net realized gain (loss) on investments | | | | | 48,107,527 | ||
| Net realized gain (loss) on total return swap agreements | | | | | 724,310 | ||
| Net realized gain distributed by non-controlled affiliate | | | | | 65,603 | ||
| Change in unrealized appreciation on investments (includes $(11,152,547) from affiliates) | | | | | (99,819,773 | ) | |
| Change in unrealized appreciation on total return swap agreements | | | | | 155,534 | ||
| Net Gain (Loss) | | | | | (50,766,799 | ) | |
| Change in Net Assets from Operations | | | | $ | (40,372,028 | ) |
| | | (unaudited) Six Months Ended June 30, 2020 | | | Year Ended December 31, 2019 | | ||||||
From Operations: | | | | | | | | | | | | | |
Net investment income | | | | $ | 10,394,771 | | | | | $ | 21,600,915 | | |
Net realized gain (loss) | | | | | 48,897,440 | | | | | | 125,919,842 | | |
Change in unrealized appreciation | | | | | (99,664,239) | | | | | | 331,236,423 | | |
Change in Net Assets from Operations | | | | | (40,372,028) | | | | | | 478,757,180 | | |
| | | | | | | | | | | | | |
Distributions to Shareholders from: | | | | | | | | | | | | | |
Total distributable earnings | | | | | (10,879,793) | | | | | | (149,684,177) | | |
| | | | | | | | | | | | | |
From Capital Share Transactions: | | | | | | | | | | | | | |
Value of shares issued in payment of distributions (note 5) | | | | | 18,182 | | | | | | 54,469,476 | | |
Cost of shares purchased (note 5) | | | | | (1,573,374) | | | | | | (12,840,077) | | |
Change in Net Assets from Capital Share Transactions | | | | | (1,555,192) | | | | | | 41,629,399 | | |
Total Change in Net Assets | | | | | (52,807,013) | | | | | | 370,702,402 | | |
| | | | | | | | | | | | | |
Net Assets: | | | | | | | | | | | | | |
Beginning of period | | | | | 1,951,591,643 | | | | | | 1,580,889,241 | | |
End of period | | | | $ | 1,898,784,630 | | | | | $ | 1,951,591,643 | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
Assets: | | | | | | | | | | | | | | | | | | | | | | ||||
Common stocks | | | | $ | 1,888,187,684 | | | $ | — | | | | | $ | — | | | | | $ | 1,888,187,684 | ||||
Other investments | | | | | — | | | | — | | | | | | 466,000 | | | | | | 466,000 | ||||
Short-term investments | | | | | 10,813,519 | | | | — | | | | | | — | | | | | | 10,813,519 | ||||
Total investments | | | | $ | 1,899,001,203 | | | $ | — | | | | | $ | 466,000 | | | | | $ | 1,899,467,203 | ||||
Total return swap agreements* | | | | $ | — | | | $ | 155,534 | | | | | $ | — | | | | | $ | 155,534 | ||||
* Unrealized appreciation (depreciation) | | ||||||||||||||||||||||||
The following is a reconciliation of the change in the value of Level 3 investments: | | ||||||||||||||||||||||||
Balance at December 31, 2019 | | | | | | | | | | $ | 466,000 | ||||||||||||||
Purchases | | | | | | | | | | | — | ||||||||||||||
Change in unrealized appreciation on investments in the Statement of Operations | | | | | | | | | | | — | ||||||||||||||
Balance at June 30, 2020 | | | | | | | | | | $ | 466,000 |
| | | Shares | | | Amount | | ||||||||||||||||||
| | | Six months ended June 30, 2020 | | | Year ended December 31, 2019 | | | Six months ended June 30, 2020 | | | Year ended December 31, 2019 | | ||||||||||||
Shares issued in payment of distributions | | | | | 1,198 | | | | | | 3,511,907 | | | | | $ | 18,182 | | | | | $ | 54,469,476 | ||
Shares purchased (at a weighted average discount from net asset value of 15.1% and 13.0%, respectively) | | | | | (135,192) | | | | | | (852,488) | | | | | | (1,573,374) | | | | | | (12,840,077 | ) | |
Net change | | | | | (133,994) | | | | | | 2,659,419 | | | | | $ | (1,555,192) | | | | | $ | 41,629,399 |
Awards | | | Units | | | Weighted Average Grant-Date Fair Value | | ||||||
Balance at December 31, 2019 | | | | | 53,004 | | | | | $ | 12.53 | | |
Reinvested dividend equivalents | | | | | 1,198 | | | | | | 15.17 | | |
Issued | | | | | (6,516) | | | | | | 12.72 | | |
Balance at June 30, 2020 | | | | | 47,686 | | | | | $ | 12.77 | | |
| | | (unaudited) Six Months Ended | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||
| | | June 30, 2020 | | | June 30, 2019 | | | Year Ended December 31 | �� | |||||||||||||||||||||||||||||||||
| | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | |||||||||||||||||||||||||||
Per Share Operating Performance | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, beginning of period | | | | | $17.93 | | | | | | $14.89 | | | | | | $14.89 | | | | | | $17.55 | | | | | | $15.22 | | | | | | $15.04 | | | | | | $15.87 | | |
Net investment income | | | | | 0.10 | | | | | | 0.09 | | | | | | 0.20 | | | | | | 0.20 | | | | | | 0.22 | | | | | | 0.19 | | | | | | 0.13 | | |
Net realized gain (loss) and change in unrealized appreciation | | | | | (0.47) | | | | | | 2.84 | | | | | | 4.31 | | | | | | (0.87) | | | | | | 3.55 | | | | | | 1.03 | | | | | | — | | |
Change in accumulated other comprehensive income | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 0.02 | | |
Total from operations | | | | | (0.37) | | | | | | 2.93 | | | | | | 4.51 | | | | | | (0.67) | | | | | | 3.77 | | | | | | 1.22 | | | | | | 0.15 | | |
Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | | | (0.07) | | | | | | (0.08) | | | | | | (0.22) | | | | | | (0.21) | | | | | | (0.22) | | | | | | (0.18) | | | | | | (0.14) | | |
Net realized gain | | | | | (0.03) | | | | | | (0.02) | | | | | | (1.20) | | | | | | (1.79) | | | | | | (1.16) | | | | | | (0.81) | | | | | | (0.79) | | |
Total distributions | | | | | (0.10) | | | | | | (0.10) | | | | | | (1.42) | | | | | | (2.00) | | | | | | (1.38) | | | | | | (0.99) | | | | | | (0.93) | | |
Capital share repurchases (note 5) | | | | | — | | | | | | 0.01 | | | | | | 0.02 | | | | | | 0.03 | | | | | | 0.03 | | | | | | 0.02 | | | | | | 0.02 | | |
Reinvestment of distributions | | | | | — | | | | | | — | | | | | | (0.07) | | | | | | (0.02) | | | | | | (0.09) | | | | | | (0.07) | | | | | | (0.07) | | |
Total capital share transactions | | | | | 0.00 | | | | | | 0.01 | | | | | | (0.05) | | | | | | 0.01 | | | | | | (0.06) | | | | | | (0.05) | | | | | | (0.05) | | |
Net asset value, end of period | | | | | $17.46 | | | | | | $17.73 | | | | | | $17.93 | | | | | | $14.89 | | | | | | $17.55 | | | | | | $15.22 | | | | | | $15.04 | | |
Market price, end of period | | | | | $14.91 | | | | | | $15.45 | | | | | | $15.77 | | | | | | $12.62 | | | | | | $15.03 | | | | | | $12.71 | | | | | | $12.83 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Investment Return (a) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Based on market price | | | | | -4.8% | | | | | | 23.3% | | | | | | 36.6% | | | | | | -3.6% | | | | | | 29.4% | | | | | | 6.9% | | | | | | 0.7% | | |
Based on net asset value | | | | | -2.0% | | | | | | 19.9% | | | | | | 31.6% | | | | | | -2.6% | | | | | | 26.2% | | | | | | 9.2% | | | | | | 1.8% | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data (b) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (in millions) | | | | | $1,899 | | | | | | $1,875 | | | | | | $1,952 | | | | | | $1,581 | | | | | | $1,786 | | | | | | $1,513 | | | | | | $1,472 | | |
Ratio of expenses to average net assets | | | | | 0.61% | | | | | | 0.61% | | | | | | 0.65% | | | | | | 0.56% | | | | | | 0.56% | | | | | | 0.64% | | | | | | 0.96% (c) | | |
Ratio of net investment income to average net assets | | | | | 1.14% | | | | | | 1.17% | | | | | | 1.18% | | | | | | 1.14% | | | | | | 1.30% | | | | | | 1.29% | | | | | | 0.79% (c) | | |
Portfolio turnover | | | | | 70.1% | | | | | | 53.7% | | | | | | 61.6% | | | | | | 58.4% | | | | | | 39.2% | | | | | | 32.0% | | | | | | 22.0% | | |
Number of shares outstanding at end of period (in 000’s) | | | | | 108,731 | | | | | | 105,712 | | | | | | 108,865 | | | | | | 106,206 | | | | | | 101,736 | | | | | | 99,437 | | | | | | 97,914 | | |
(unaudited)
| | | Shares | | | Value (a) | | ||||||
Common Stocks — 99.4% | | ||||||||||||
Communication Services — 9.6% | | ||||||||||||
Alphabet Inc. Class A (b) | | | | | 41,100 | | | | | $ | 58,281,855 | | |
Alphabet Inc. Class C (b) | | | | | 11,197 | | | | | | 15,828,191 | | |
AT&T Inc. | | | | | 590,982 | | | | | | 17,865,386 | | |
Comcast Corporation Class A | | | | | 668,200 | | | | | | 26,046,436 | | |
Facebook, Inc. Class A (b) | | | | | 141,900 | | | | | | 32,221,233 | | |
Netflix, Inc. (b) | | | | | 15,000 | | | | | | 6,825,600 | | |
Twenty-First Century Fox, Inc. Class A | | | | | 194,800 | | | | | | 5,224,536 | | |
Verizon Communications Inc. | | | | | 86,800 | | | | | | 4,785,284 | | |
Walt Disney Company | | | | | 132,200 | | | | | | 14,741,622 | | |
| | | | | 181,820,143 | | | ||||||
Consumer Discretionary — 11.2% | | ||||||||||||
Amazon.com, Inc. (b) | | | | | 34,600 | | | | | | 95,455,172 | | |
Chipotle Mexican Grill, Inc. (b) | | | | | 15,100 | | | | | | 15,890,636 | | |
General Motors Company | | | | | 196,300 | | | | | | 4,966,390 | | |
Hilton Worldwide Holdings, Inc. | | | | | 114,400 | | | | | | 8,402,680 | | |
Home Depot, Inc. | | | | | 53,600 | | | | | | 13,427,336 | | |
Las Vegas Sands Corp. | | | | | 180,700 | | | | | | 8,229,078 | | |
Lowe's Companies, Inc. | | | | | 123,900 | | | | | | 16,741,368 | | |
Magna International Inc. | | | | | 129,400 | | | | | | 5,762,182 | | |
NIKE, Inc. Class B | | | | | 238,000 | | | | | | 23,335,900 | | |
Target Corporation | | | | | 169,700 | | | | | | 20,352,121 | | |
| | | | | 212,562,863 | | | ||||||
Consumer Staples — 6.8% | | ||||||||||||
Church & Dwight Co., Inc. | | | | | 68,500 | | | | | | 5,295,050 | | |
Coca-Cola Company | | | | | 600,400 | | | | | | 26,825,872 | | |
Costco Wholesale Corporation | | | | | 63,600 | | | | | | 19,284,156 | | |
Mondelez International, Inc. Class A | | | | | 348,100 | | | | | | 17,798,353 | | |
PepsiCo, Inc. | | | | | 118,700 | | | | | | 15,699,262 | | |
Philip Morris International Inc. | | | | | 263,500 | | | | | | 18,460,810 | | |
Procter & Gamble Company | | | | | 115,350 | | | | | | 13,792,400 | | |
Walmart Inc. | | | | | 101,000 | | | | | | 12,097,780 | | |
| | | | | 129,253,683 | | | ||||||
Energy — 2.9% | | ||||||||||||
Adams Natural Resources Fund, Inc. (c) | | | | | 2,186,774 | | | | | | 24,841,753 | | |
Chevron Corporation | | | | | 106,000 | | | | | | 9,458,380 | | |
ConocoPhillips | | | | | 159,500 | | | | | | 6,702,190 | | |
EOG Resources, Inc. | | | | | 107,800 | | | | | | 5,461,148 | | |
Exxon Mobil Corporation | | | | | 86,700 | | | | | | 3,877,224 | | |
Valero Energy Corporation | | | | | 69,000 | | | | | | 4,058,580 | | |
| | | | 54,399,275 | | |
(unaudited)
| | | Shares | | | Value (a) | | ||||||
Financials — 10.5% | | ||||||||||||
Allstate Corporation | | | | | 90,900 | | | | | $ | 8,816,391 | | |
Bank of America Corp. | | | | | 1,282,300 | | | | | | 30,454,625 | | |
Berkshire Hathaway Inc. Class B (b) | | | | | 82,400 | | | | | | 14,709,224 | | |
Blackstone Group Inc. Class A | | | | | 203,600 | | | | | | 11,535,976 | | |
Hartford Financial Services Group, Inc. | | | | | 152,900 | | | | | | 5,894,295 | | |
Intercontinental Exchange, Inc. | | | | | 175,900 | | | | | | 16,112,440 | | |
JPMorgan Chase & Co. | | | | | 347,500 | | | | | | 32,685,850 | | |
MetLife, Inc. | | | | | 420,300 | | | | | | 15,349,356 | | |
Morgan Stanley | | | | | 317,500 | | | | | | 15,335,250 | | |
PNC Financial Services Group, Inc. | | | | | 115,800 | | | | | | 12,183,318 | | |
S&P Global, Inc. | | | | | 66,000 | | | | | | 21,745,680 | | |
T. Rowe Price Group | | | | | 120,900 | | | | | | 14,931,150 | | |
| | | | | 199,753,555 | | | ||||||
Health Care — 14.5% | | ||||||||||||
Abbott Laboratories | | | | | 225,000 | | | | | | 20,571,750 | | |
AbbVie, Inc. | | | | | 215,500 | | | | | | 21,157,790 | | |
Alexion Pharmaceuticals, Inc. (b) | | | | | 91,200 | | | | | | 10,236,288 | | |
AmerisourceBergen Corporation | | | | | 93,100 | | | | | | 9,381,687 | | |
Bristol-Myers Squibb Company | | | | | 395,000 | | | | | | 23,226,000 | | |
Centene Corporation (b) | | | | | 231,500 | | | | | | 14,711,825 | | |
CVS Health Corporation | | | | | 296,900 | | | | | | 19,289,593 | | |
Edwards Lifesciences Corporation (b) | | | | | 186,300 | | | | | | 12,875,193 | | |
Eli Lilly and Company | | | | | 63,700 | | | | | | 10,458,266 | | |
Incyte Corporation (b) | | | | | 73,900 | | | | | | 7,683,383 | | |
Johnson & Johnson | | | | | 200,500 | | | | | | 28,196,315 | | |
Medtronic plc | | | | | 93,400 | | | | | | 8,564,780 | | |
Merck & Co., Inc. | | | | | 182,400 | | | | | | 14,104,992 | | |
Thermo Fisher Scientific Inc. | | | | | 93,800 | | | | | | 33,987,492 | | |
UnitedHealth Group Incorporated | | | | | 137,900 | | | | | | 40,673,605 | | |
| | | | 275,118,959 | | | |||||||
Industrials — 8.0% | | ||||||||||||
Caterpillar Inc. | | | | | 94,100 | | | | | | 11,903,650 | | |
Cintas Corporation | | | | | 23,800 | | | | | | 6,339,368 | | |
General Electric Company | | | | | 1,410,022 | | | | | | 9,630,450 | | |
Honeywell International Inc. | | | | | 149,800 | | | | | | 21,659,582 | | |
Kansas City Southern | | | | | 105,100 | | | | | | 15,690,379 | | |
L3Harris Technologies Inc. | | | | | 88,800 | | | | | | 15,066,696 | | |
Lincoln Electric Holdings, Inc. | | | | | 111,800 | | | | | | 9,418,032 | | |
Parker-Hannifin Corporation | | | | | 89,200 | | | | | | 16,347,684 | | |
Raytheon Technologies | | | | | 299,300 | | | | | | 18,442,866 | | |
Union Pacific Corporation | | | | | 142,400 | | | | | | 24,075,568 | | |
United Rentals, Inc. (b) | | | | | 24,500 | | | | | | 3,651,480 | | |
| | | | | 152,225,755 | | |
(unaudited)
| | | Shares | | | Value (a) | | ||||||
Information Technology — 27.5% | | ||||||||||||
Accenture plc Class A | | | | | 39,500 | | | | | $ | 8,481,440 | | |
Adobe Inc. (b) | | | | | 66,300 | | | | | | 28,861,053 | | |
Amphenol Corporation Class A | | | | | 39,300 | | | | | | 3,765,333 | | |
Apple Inc. | | | | | 292,300 | | | | | | 106,631,040 | | |
Applied Materials, Inc. | | | | | 222,500 | | | | | | 13,450,125 | | |
CDW Corp. | | | | | 66,900 | | | | | | 7,772,442 | | |
Cisco Systems, Inc. | | | | | 292,800 | | | | | | 13,656,192 | | |
Fidelity National Information Services, Inc. | | | | | 123,700 | | | | | | 16,586,933 | | |
Intel Corporation | | | | | 329,400 | | | | | | 19,708,002 | | |
Lam Research Corporation | | | | | 55,100 | | | | | | 17,822,646 | | |
Mastercard Incorporated Class A | | | | | 96,400 | | | | | | 28,505,480 | | |
Microsoft Corporation | | | | | 715,200 | | | | | | 145,550,352 | | |
Motorola Solutions, Inc. | | | | | 52,900 | | | | | | 7,412,877 | | |
NVIDIA Corporation | | | | | 15,200 | | | | | | 5,774,632 | | |
Oracle Corporation | | | | | 122,200 | | | | | | 6,753,994 | | |
salesforce.com, inc. (b) | | | | | 41,000 | | | | | | 7,680,530 | | |
Skyworks Solutions, Inc. | | | | | 82,500 | | | | | | 10,548,450 | | |
Texas Instruments Incorporated | | | | | 164,100 | | | | | | 20,835,777 | | |
VeriSign, Inc. (b) | | | | | 58,400 | | | | | | 12,078,872 | | |
Visa Inc. Class A | | | | | 211,700 | | | | | | 40,894,089 | | |
| | | | | 522,770,259 | | | ||||||
Materials — 1.8% | | ||||||||||||
Linde plc | | | | | 87,000 | | | | | | 18,453,570 | | |
LyondellBasell Industries N.V. | | | | | 71,800 | | | | | | 4,718,696 | | |
Sherwin-Williams Company | | | | | 20,200 | | | | | | 11,672,570 | | |
| | | | | 34,844,836 | | | ||||||
Real Estate — 2.8% | | ||||||||||||
American Tower Corporation | | | | | 69,400 | | | | | | 17,942,676 | | |
CBRE Group, Inc. Class A (b) | | | | | 141,300 | | | | | | 6,389,586 | | |
Equinix, Inc. | | | | | 9,800 | | | | | | 6,882,540 | | |
Prologis, Inc. | | | | | 168,100 | | | | | | 15,688,773 | | |
Simon Property Group, Inc. | | | | | 93,800 | | | | | | 6,414,044 | | |
| | | | | 53,317,619 | | | ||||||
S&P 500 Index — 0.4% | | ||||||||||||
SPDR S&P 500 ETF Trust | | | | | 27,100 | | | | | | 8,356,556 | | |
| |||||||||||||
Utilities — 3.4% | | ||||||||||||
Duke Energy Corporation | | | | | 176,500 | | | | | | 14,100,585 | | |
FirstEnergy Corp. | | | | | 261,600 | | | | | | 10,144,848 | | |
NextEra Energy, Inc. | | | | | 81,300 | | | | | | 19,525,821 | | |
Utilities Select Sector SPDR Fund | | | | | 126,900 | | | | | | 7,160,967 | | |
WEC Energy Group Inc. | | | | | 146,400 | | | | | | 12,831,960 | | |
| | | | | 63,764,181 | | | ||||||
|
(unaudited)
| | | Shares | | | Value (a) | | ||||||
Total Common Stocks | | ||||||||||||
(Cost $1,268,110,970) | | | | | | | | | | $ | 1,888,187,684 | ||
Other Investments — 0.0% | | ||||||||||||
Financials — 0.0% | | ||||||||||||
Adams Funds Advisers, LLC (b)(d) | | | | | | | | | | | | ||
(Cost $150,000) | | | | | | | | | | | 466,000 | ||
Short-Term Investments — 0.6% | | ||||||||||||
Money Market Funds — 0.6% | | ||||||||||||
Morgan Stanley Institutional Liquidity Funds Prime Portfolio, 0.41% (e) | | | | | 9,208,745 | | | | | | 9,211,508 | ||
Northern Institutional Treasury Portfolio, 0.15% (e) | | | | | 1,602,011 | | | | | | 1,602,011 | ||
Total Short-Term Investments | | ||||||||||||
(Cost $10,805,010) | | | | | | | | | | | 10,813,519 | ||
Total — 100.0% | | ||||||||||||
(Cost $1,279,065,980) | | | | | | | | | | | 1,899,467,203 | ||
Other Assets Less Liabilities — 0.0% | | | | | | | | | | | (682,573 | ) | |
Net Assets — 100.0% | | | | | | | | | | $ | 1,898,784,630 | ||
|
Description | | | | | | | | | | Value and Unrealized Appreciation (Assets) | | | Value and Unrealized Depreciation (Liabilities) | | ||||||||||||||
Terms | | | Contract Type | | | Reference Security | | | Termination Date | | | Notional Amount | | |||||||||||||||
Receive total return on reference security and pay financing amount based on notional amount and daily U.S. Federal Funds rate plus 0.55%. | | | Long | | | Procter & Gamble (160,300 shares) | | | 7/26/2021 | | | | $ | 18,870,468 | | | | | $ | 295,609 | | | | | $ | — | | |
Pay total return on reference security and receive financing amount based on notional amount and daily U.S. Federal Funds rate less 0.45%. | | | Short | | | Consumer Staples Select Sector SPDR Fund (323,200 shares) | | | 7/26/2021 | | | | | (18,812,923) | | | | | | — | | | | | | (140,075) | | |
Gross unrealized gain (loss) on open total return swap agreements | | | | $ | 295,609 | | | | | $ | (140,075) | | | |||||||||||||||
Net unrealized gain on open total return swap agreements (f) | | | | $ | 155,534 | | | | | | | | |
(unaudited)
| | | Purchases (Cost) | | | Sales (Proceeds) | | | Market Value Held at June 30, 2020 | | |||||||||
Alexion Pharmaceuticals, Inc. | | | | $ | 10,321,688 | | | | | | | | | | | $ | 10,236,288 | | |
Allstate Corporation | | | | | 12,916,142 | | | | | $ | 1,535,265 | | | | | | 8,816,391 | | |
Amazon.com, Inc. | | | | | 6,098,751 | | | | | | 10,388,987 | | | | | | 95,455,172 | | |
AmerisourceBergen Corporation | | | | | 8,130,693 | | | | | | | | | | | | 9,381,687 | | |
Applied Materials, Inc. | | | | | 14,315,227 | | | | | | | | | | | | 13,450,125 | | |
AvalonBay Communities, Inc. | | | | | 1,910,692 | | | | | | 10,695,368 | | | | | | — | | |
Bank of America Corp. | | | | | 3,579,689 | | | | | | 9,369,648 | | | | | | 30,454,625 | | |
Blackstone Group Inc. Class A | | | | | 10,927,314 | | | | | | | | | | | | 11,535,976 | | |
Bristol-Myers Squibb Company | | | | | 22,320,006 | | | | | | | | | | | | 23,226,000 | | |
Centene Corporation | | | | | 15,547,934 | | | | | | | | | | | | 14,711,825 | | |
Chevron Corporation | | | | | 7,836,099 | | | | | | 11,084,235 | | | | | | 9,458,380 | | |
Consumer Discretionary Select Sector SPDR Fund | | | | | 6,688,234 | | | | | | 15,654,763 | | | | | | — | | |
CVS Health Corporation | | | | | 13,055,077 | | | | | | | | | | | | 19,289,593 | | |
Duke Energy Corporation | | | | | 15,433,425 | | | | | | | | | | | | 14,100,585 | | |
Eli Lilly and Company | | | | | 9,078,944 | | | | | | | | | | | | 10,458,266 | | |
Exxon Mobil Corporation | | | | | 6,060,259 | | | | | | 11,586,828 | | | | | | 3,877,224 | | |
General Electric Company | | | | | 13,721,994 | | | | | | | | | | | | 9,630,450 | | |
Health Care Select Sector SPDR Fund | | | | | 18,035,103 | | | | | | 30,524,178 | | | | | | — | | |
Hilton Worldwide Holdings, Inc. | | | | | 9,865,833 | | | | | | | | | | | | 8,402,680 | | |
Home Depot, Inc. | | | | | 12,931,011 | | | | | | | | | | | | 13,427,336 | | |
Host Hotels & Resorts, Inc. | | | | | 13,792,820 | | | | | | 12,064,600 | | | | | | — | | |
Industrial Select Sector SPDR Fund | | | | | 15,395,009 | | | | | | 13,546,734 | | | | | | — | | |
Intel Corporation | | | | | 9,328,214 | | | | | | | | | | | | 19,708,002 | | |
Las Vegas Sands Corp. | | | | | 7,870,404 | | | | | | | | | | | | 8,229,078 | | |
Mondelez International, Inc. Class A | | | | | 10,279,091 | | | | | | | | | | | | 17,798,353 | | |
Morgan Stanley | | | | | 12,209,399 | | | | | | | | | | | | 15,335,250 | | |
PNC Financial Services Group, Inc. | | | | | 12,516,043 | | | | | | | | | | | | 12,183,318 | | |
Raytheon Technologies | | | | | 19,546,627 | | | | | | | | | | | | 18,442,866 | | |
Ross Stores, Inc. | | | | | 8,286,597 | | | | | | 10,359,330 | | | | | | — | | |
S&P Global, Inc. | | | | | 9,772,048 | | | | | | 1,814,816 | | | | | | 21,745,680 | | |
salesforce.com, inc. | | | | | 12,989,660 | | | | | | 16,851,046 | | | | | | 7,680,530 | | |
Skyworks Solutions, Inc. | | | | | 8,793,147 | | | | | | | | | | | | 10,548,450 | | |
SPDR S&P 500 ETF Trust | | | | | 37,578,105 | | | | | | 30,486,965 | | | | | | 8,356,556 | | |
Target Corporation | | | | | 19,859,250 | | | | | | | | | | | | 20,352,121 | | |
Technology Select Sector SPDR Fund | | | | | 18,285,500 | | | | | | 18,488,189 | | | | | | — | | |
Travelers Companies, Inc. | | | | | 15,783,763 | | | | | | 11,495,327 | | | | | | — | | |
UnitedHealth Group Incorporated | | | | | 10,085,315 | | | | | | | | | | | | 40,673,605 | | |
(unaudited)
| | | Purchases (Cost) | | | Sales (Proceeds) | | | Market Value Held at June 30, 2020 | | |||||||||
Valero Energy Corporation | | | | $ | 9,901,712 | | | | | $ | 9,853,459 | | | | | $ | 4,058,580 | | |
AbbVie, Inc. | | | | | | | | | | | 8,130,501 | | | | | | 21,157,790 | | |
Accenture plc Class A | | | | | | | | | | | 14,238,184 | | | | | | 8,481,440 | | |
Agilent Technologies, Inc. | | | | | | | | | | | 14,174,365 | | | | | | — | | |
Ameren Corporation | | | | | | | | | | | 12,075,907 | | | | | | — | | |
American Express Company | | | | | | | | | | | 20,861,320 | | | | | | — | | |
Broadcom Inc. | | | | | | | | | | | 18,772,128 | | | | | | — | | |
Dollar General Corporation | | | | | | | | | | | 16,446,239 | | | | | | — | | |
Masco Corporation | | | | | | | | | | | 15,377,842 | | | | | | — | | |
Medtronic plc | | | | | | | | | | | 11,686,027 | | | | | | 8,564,780 | | |
Merck & Co., Inc. | | | | | | | | | | | 18,995,364 | | | | | | 14,104,992 | | |
Pfizer Inc. | | | | | | | | | | | 8,077,070 | | | | | | — | | |
Republic Services, Inc. | | | | | | | | | | | 10,585,373 | | | | | | — | | |
Starbucks Corporation | | | | | | | | | | | 16,470,933 | | | | | | — | | |
Tractor Supply Company | | | | | | | | | | | 15,058,442 | | | | | | — | | |
U.S. Bancorp | | | | | | | | | | | 24,603,806 | | | | | | — | | |
Visa Inc. Class A | | | | | | | | | | | 12,783,161 | | | | | | 40,894,089 | | |
Walmart Inc. | | | | | | | | | | | 10,272,944 | | | | | | 12,097,780 | | |
Wells Fargo & Company | | | | | | | | | | | 19,992,271 | | | | | | — | | |
Year | | | (000’s) Value Of Net Assets | | | (000’s) Shares Outstanding | | | Net Asset Value Per Share | | | Market Value Per Share | | | Income Dividends Per Share | | | Capital Gains Distributions Per Share | | | Return of Capital Per Share | | | Total Dividends and Distributions Per Share | | | Annual Distribution Rate* | | |||||||||||||||||||||||||||
2010 | | | | $ | 1,124,672 | | | | 88,885 | | | | | $ | 12.65 | | | | | $ | 10.72 | | | | | $ | .14 | | | | | $ | .37 | | | | | $ | — | | | | | $ | .51 | | | | | | 5.1% | | | ||
2011 | | | | | 1,050,734 | | | | 91,074 | | | | | | 11.54 | | | | | | 9.64 | | | | | | .15 | | | | | | .50 | | | | | | — | | | | | | .65 | | | | | | 6.1 | | | ||
2012 | | | | | 1,155,997 | | | | 93,030 | | | | | | 12.43 | | | | | | 10.59 | | | | | | .18 | | | | | | .49 | | | | | | — | | | | | | .67 | | | | | | 6.3 | | | ||
2013 | | | | | 1,421,551 | | | | 94,224 | | | | | | 15.09 | | | | | | 13.07 | | | | | | .22 | | | | | | .62 | | | | | | — | | | | | | .84 | | | | | | 7.1 | | | ||
2014 | | | | | 1,527,773 | | | | 96,287 | | | | | | 15.87 | | | | | | 13.68 | | | | | | .20 | | | | | | .98 | | | | | | — | | | | | | 1.18 | | | | | | 8.8 | | | ||
2015 | | | | | 1,472,144 | | | | 97,914 | | | | | | 15.04 | | | | | | 12.83 | | | | | | .14 | | | | | | .79 | | | | | | — | | | | | | .93 | | | | | | 6.8 | | | ||
2016 | | | | | 1,513,498 | | | | 99,437 | | | | | | 15.22 | | | | | | 12.71 | | | | | | .18 | | | | | | .81 | | | | | | — | | | | | | .99 | | | | | | 7.8 | | | ||
2017 | | | | | 1,785,772 | | | | 101,736 | | | | | | 17.55 | | | | | | 15.03 | | | | | | .22 | | | | | | 1.16 | | | | | | — | | | | | | 1.38 | | | | | | 9.8 | | | ||
2018 | | | | | 1,580,889 | | | | 106,206 | | | | | | 14.89 | | | | | | 12.62 | | | | | | .21 | | | | | | 1.79 | | | | | | — | | | | | | 2.00 | | | | | | 12.9 | | | ||
2019 | | | | | 1,951,592 | | | | 108,865 | | | | | | 17.93 | | | | | | 15.77 | | | | | | .22 | | | | | | 1.20 | | | | | | — | | | | | | 1.42 | | | | | | 9.6 | | | ||
June 30, 2020 | | | | | 1,898,785 | | | | 108,731 | | | | | | 17.46 | | | | | | 14.91 | | | | | | .12** | | | | | | .03 | | | | | | — | | | | | | .15** | | | | | | — | | |
| | | Votes For | | | Votes Withheld | | ||||||
Enrique R. Arzac | | | | | 80,624,543 | | | | | | 4,634,923 | | |
Kenneth J. Dale | | | | | 80,976,125 | | | | | | 4,283,341 | | |
Frederic A. Escherich | | | | | 80,800,818 | | | | | | 4,458,648 | | |
Roger W. Gale | | | | | 80,632,869 | | | | | | 4,626,597 | | |
Lauriann C. Kloppenburg | | | | | 83,053,667 | | | | | | 2,205,799 | | |
Kathleen T. McGahran | | | | | 81,138,964 | | | | | | 4,120,502 | | |
Craig R. Smith | | | | | 80,707,572 | | | | | | 4,551,894 | | |
Mark E. Stoeckle | | | | | 81,103,338 | | | | | | 4,156,128 | | |
| Enrique R. Arzac (3), (4) | | | Roger W. Gale (2), (3) | | | Craig R. Smith (3), (4) | |
| Kenneth J. Dale (1), (2), (4) | | | Lauriann C. Kloppenburg (1), (2), (3) | | | Mark E. Stoeckle (1) | |
| Frederic A. Escherich (1), (2), (4) | | | Kathleen T. McGahran (1), (5) | | | | |
| Mark E. Stoeckle | | | Chief Executive Officer and President | |
| James P. Haynie, CFA | | | Executive Vice President | |
| D. Cotton Swindell, CFA | | | Executive Vice President | |
| Brian S. Hook, CFA, CPA | | | Vice President, Chief Financial Officer and Treasurer | |
| Janis F. Kerns | | | General Counsel, Secretary and Chief Compliance Officer | |
| Gregory W. Buckley | | | Vice President—Research | |
| Xuying Chang, CFA | | | Vice President—Research | |
| Steven R. Crain, CFA | | | Vice President—Research | |
| Michael A. Kijesky, CFA | | | Vice President—Research | |
| Michael E. Rega, CFA | | | Vice President—Research | |
| David R. Schiminger, CFA | | | Vice President—Research | |
| Jeffrey R. Schollaert, CFA | | | Vice President—Research | |
| Christine M. Sloan, CPA | | | Assistant Treasurer and Director of Human Resources | |
6201 15th Avenue
Brooklyn, NY 11219
(877) 260-8188
Website: www.astfinancial.com
Email: info@astfinancial.com
Item 2. Code of Ethics.
Item not applicable to semi-annual report.
Item 3. Audit Committee Financial Expert.
Item not applicable to semi-annual report.
Item 4. Principal Accountant Fees and Services.
Item not applicable to semi-annual report.
Item 5. Audit Committee of Listed Registrants.
Item not applicable to semi-annual report.
Item 6. Investments.
(a) This schedule is included as part of the Report to Stockholders filed under Item 1 of this form.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Item not applicable to semi-annual report.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Item not applicable to semi-annual report.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Total Number of Shares (or Units) Purchased | Average Price Paid per Share (or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | ||||||||||||||
1/1/ 20-1/31/20 | 0 | -- | 0 | 5,056,444 | |||||||||||||
2/1/20-2/29/20 | 0 | -- | 0 | 5,056,444 | |||||||||||||
3/1/20-3/31/20 | 114,792 | $ | 11.57 | 114,792 | 4,941,652 | ||||||||||||
4/1/20-4/30/20 | 20,400 | $ | 12.02 | 20,400 | 4,921,252 | ||||||||||||
5/1/20-5/31/20 | 0 | -- | 0 | 4,921,252 | |||||||||||||
6/1/20-6/30/20 | 0 | -- | 0 | 4,921,252 | |||||||||||||
Total | 135,192 | $ | 11.64 | 135,192 |
(1) There were no shares purchased other than through a publicly announced plan or program.
(2a) The Plan was announced on December 11, 2014, with an additional authorization announced on December 18, 2018.
(2b) The share amount approved in 2014 was 5% of outstanding shares, or 4,667,000 shares, and 5,314,566 additional shares were approved in 2018.
(2c) The Plan has no expiration date.
(2d) None.
(2e) None.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may recommend nominees to the registrant's Board of Directors made or implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (as required by Item 22(b)(15) of Schedule 14A), or this Item.
Item 11. Controls and Procedures.
(a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of the disclosure controls and procedures as of a date within 90 days of the filing date of this report.
(b) There have been no significant 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 period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
Item 12. Disclosures of Securities Lending Activities for Closed-End Management Investment Companies.
Item not applicable to semi-annual report.
Item 13. Exhibits.
(a) | (1) | Not applicable; see registrant's response to Item 2 above. |
(2) | Separate certifications by the registrant's principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached. | |
(3) | Written solicitation to purchase securities: not applicable. | |
(4) | Change in independent public accountant: not applicable. | |
(b) A certification by the registrant's principal executive officer and principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940, is attached. |
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.
Adams Diversified Equity Fund, Inc. | ||
By: | /s/ Mark E. Stoeckle | |
Mark E. Stoeckle | ||
Chief Executive Officer & President (Principal Executive Officer) | ||
Date: | July 23, 2020 |
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: | /s/ Mark E. Stoeckle | |
Mark E. Stoeckle | ||
Chief Executive Officer & President | ||
(Principal Executive Officer) | ||
Date: | July 23, 2020 | |
By: | /s/ Brian S. Hook | |
Brian S. Hook | ||
Vice President, Chief Financial Officer & Treasurer | ||
(Principal Financial Officer) | ||
Date: | July 23, 2020 |