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, 2022
Item 1. Reports to Stockholders.
DIVERSIFIED EQUITY FUND
The S&P 500 Index entered a bear market (down 20% from early January’s all-time high) in early June for the seventh time in the last 50 years. The Index finished the first half with a -20.0% return, its weakest performance over the first two quarters of the year since 1970. Our Fund slightly outperformed the benchmark, returning -19.7%.
Chief Executive Officer & President
July 21, 2022
(unaudited)
| | | Market Value | | | Percent of Net Assets | | ||||||
Microsoft Corporation | | | | $ | 158,746,623 | | | | | | 7.5% | | |
Apple Inc. | | | | | 134,491,464 | | | | | | 6.3 | | |
Alphabet Inc. Class A | | | | | 97,630,848 | | | | | | 4.6 | | |
Amazon.com, Inc. | | | | | 58,404,879 | | | | | | 2.8 | | |
UnitedHealth Group Incorporated | | | | | 51,003,459 | | | | | | 2.4 | | |
Adams Natural Resources Fund, Inc.* | | | | | 42,576,490 | | | | | | 2.0 | | |
Eli Lilly and Company | | | | | 41,566,286 | | | | | | 2.0 | | |
Mastercard Incorporated Class A | | | | | 37,699,860 | | | | | | 1.8 | | |
Thermo Fisher Scientific Inc. | | | | | 37,269,008 | | | | | | 1.8 | | |
Bank of America Corp. | | | | | 35,749,692 | | | | | | 1.7 | | |
| | | $ | 695,138,609 | | | | | | 32.9% | | |
(unaudited)
| Assets | | | | | | | | | | | | | |
| Investments at value*: | | | | | | | | | | | | | |
| Common stocks: | | | | | | | | | | | | | |
| Unaffiliated issuers (cost $1,418,373,218) | | | | $ | 2,062,213,208 | | | | | | | | |
| Non-controlled affiliate (cost $33,970,033) | | | | | 42,576,490 | | | | | | | | |
| Other investment in controlled affiliate (cost $150,000) | | | | | 466,000 | | | | | | | | |
| Short-term investments (cost $16,090,135) | | | | | 16,090,250 | | | | | $ | 2,121,345,948 | | |
| Cash | | | | | | | | | | | 246,372 | | |
| Investment securities sold | | | | | | | | | | | 34,422,625 | | |
| Dividends receivable | | | | | | | | | | | 888,645 | | |
| Prepaid expenses and other assets | | | | | | | | | | | 4,469,376 | | |
| Total Assets | | | | | | | | | | | 2,161,372,966 | | |
| | | | | | | | | | | | | ��� | |
| Liabilities | | | | | | | | | | | | | |
| Investment securities purchased | | | | | | | | | | | 35,625,557 | | |
| Due to officers and directors (note 8) | | | | | | | | | | | 2,367,492 | | |
| Accrued expenses and other liabilities | | | | | | | | | | | 4,750,539 | | |
| Total Liabilities | | | | | | | | | | | 42,743,588 | | |
| Net Assets | | | | | | | | | | $ | 2,118,629,378 | | |
| | | | | | | | | | | | | | |
| Net Assets | | | | | | | | | | | | | |
| Common Stock at par value $0.001 per share, authorized 150,000,000 shares; issued and outstanding 117,873,571 shares (includes 33,689 deferred stock units) (note 7) | | | | | | | | | | $ | 117,874 | | |
| Additional capital surplus | | | | | | | | | | | 1,400,250,196 | | |
| Total distributable earnings (loss) | | | | | | | | | | | 718,261,308 | | |
| Net Assets Applicable to Common Stock | | | | | | | | | | $ | 2,118,629,378 | | |
| Net Asset Value Per Share of Common Stock | | | | | | | | | | $ | 17.97 | | |
(unaudited)
| Investment Income | | | | | | ||
| Income: | | | | | | ||
| Dividends (includes $415,487 from affiliates) | | | | $ | 16,392,118 | ||
| Other income | | | | | 28,940 | ||
| Total Income | | | | | 16,421,058 | ||
| Expenses: | | | | | | ||
| Investment research compensation and benefits | | | | | 3,775,274 | ||
| Administration and operations compensation and benefits | | | | | 1,490,274 | ||
| Occupancy and other office expenses | | | | | 399,892 | ||
| Investment data services | | | | | 408,684 | ||
| Directors’ compensation | | | | | 252,833 | ||
| Shareholder reports and communications | | | | | 195,555 | ||
| Transfer agent, custody, and listing fees | | | | | 198,639 | ||
| Accounting, recordkeeping, and other professional fees | | | | | 186,061 | ||
| Insurance | | | | | 92,397 | ||
| Audit and tax services | | | | | 64,303 | ||
| Total Expenses | | | | | 7,063,912 | ||
| Net Investment Income | | | | | 9,357,146 | ||
| | | | | | | ||
| Realized Gain (Loss) and Change in Unrealized Appreciation | | | | | | ||
| Net realized gain (loss) on investments | | | | | 70,575,262 | ||
| Net realized gain distributed by non-controlled affiliate | | | | | 21,868 | ||
| Change in unrealized appreciation on investments (includes $6,450,983 from affiliates) | | | | | (602,090,504) | | |
| Net Gain (Loss) | | | | | (531,493,374) | | |
| Change in Net Assets from Operations | | | | $ | (522,136,228) | | |
| | | (unaudited) Six Months Ended June 30, 2022 | | | Year Ended December 31, 2021 | | ||||||
From Operations: | | | | | | | | | | | | | |
Net investment income | | | | $ | 9,357,146 | | | | | $ | 19,062,427 | | |
Net realized gain (loss) | | | | | 70,597,130 | | | | | | 308,581,793 | | |
Change in unrealized appreciation | | | | | (602,090,504) | | | | | | 297,447,132 | | |
Change in Net Assets from Operations | | | | | (522,136,228) | | | | | | 625,091,352 | | |
| | | | | | | | | | | | | |
Distributions to Shareholders from: | | | | | | | | | | | | | |
Total distributable earnings | | | | | (11,787,283) | | | | | | (330,861,024) | | |
| | | | | | | | | | | | | |
From Capital Share Transactions: | | | | | | | | | | | | | |
Value of shares issued in payment of distributions (note 5) | | | | | 25,011 | | | | | | 131,024,412 | | |
Total Change in Net Assets | | | | | (533,898,500) | | | | | | 425,254,740 | | |
| | | | | | | | | | | | | |
Net Assets: | | | | | | | | | | | | | |
Beginning of period | | | | | 2,652,527,878 | | | | | | 2,227,273,138 | | |
End of period | | | | $ | 2,118,629,378 | | | | | $ | 2,652,527,878 | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
Assets: | | | | | | | | | | | | | | | | | | | | | | ||||
Common stocks | | | | $ | 2,104,789,698 | | | $ | — | | | | | $ | — | | | | | $ | 2,104,789,698 | ||||
Other investments | | | | | — | | | | — | | | | | | 466,000 | | | | | | 466,000 | ||||
Short-term investments | | | | | 16,090,250 | | | | — | | | | | | — | | | | | | 16,090,250 | ||||
Total investments | | | | $ | 2,120,879,948 | | | $ | — | | | | | $ | 466,000 | | | | | $ | 2,121,345,948 | ||||
| | | | | |||||||||||||||||||||
The following is a reconciliation of the change in the value of Level 3 investments: | | ||||||||||||||||||||||||
Balance at December 31, 2021 | | | | | | | | | | $ | 466,000 | ||||||||||||||
Purchases | | | | | | | | | | | — | ||||||||||||||
Change in unrealized appreciation on investments in the Statement of Operations | | | | | | | | | | | — | ||||||||||||||
Balance at June 30, 2022 | | | | | | | | | | $ | 466,000 |
| | | Shares | | | Amount | | ||||||||||||||||||
| | | Six months ended June 30, 2022 | | | Year ended December 31, 2021 | | | Six months ended June 30, 2022 | | | Year ended December 31, 2021 | | ||||||||||||
Shares issued in payment of distributions | | | | | 1,393 | | | | | | 6,845,613 | | | | | $ | 25,011 | | | | | $ | 131,024,412 | ||
Shares canceled | | | | | — | | | | | | (895) | | | | | | — | | | | | | — | ||
Net change | | | | | 1,393 | | | | | | 6,844,718 | | | | | $ | 25,011 | | | | | $ | 131,024,412 |
Awards | | | Units | | | Weighted Average Grant-Date Fair Value | | ||||||
Balance at December 31, 2021 | | | | | 47,108 | | | | | $ | 13.29 | | |
Reinvested dividend equivalents | | | | | 1,393 | | | | | | 17.91 | | |
Issued | | | | | (14,812) | | | | | | 14.45 | | |
Balance at June 30, 2022 | | | | | 33,689 | | | | | $ | 12.97 | | |
| | | (unaudited) Six Months Ended | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||
| | | June 30, 2022 | | | June 30, 2021 | | | Year Ended December 31 | | |||||||||||||||||||||||||||||||||
| | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | | |||||||||||||||||||||||||||
Per Share Operating Performance | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, beginning of period | | | | | $22.50 | | | | | | $20.06 | | | | | | $20.06 | | | | | | $17.93 | | | | | | $14.89 | | | | | | $17.55 | | | | | | $15.22 | | |
Net investment income | | | | | 0.08 | | | | | | 0.07 | | | | | | 0.17 | | | | | | 0.20 | | | | | | 0.20 | | | | | | 0.20 | | | | | | 0.22 | | |
Net realized gain (loss) and change in unrealized appreciation | | | | | (4.51) | | | | | | 2.93 | | | | | | 5.42 | | | | | | 3.01 | | | | | | 4.31 | | | | | | (0.87) | | | | | | 3.55 | | |
Total from operations | | | | | (4.43) | | | | | | 3.00 | | | | | | 5.59 | | | | | | 3.21 | | | | | | 4.51 | | | | | | (0.67) | | | | | | 3.77 | | |
Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | | | (0.07) | | | | | | (0.08) | | | | | | (0.20) | | | | | | (0.19) | | | | | | (0.22) | | | | | | (0.21) | | | | | | (0.22) | | |
Net realized gain | | | | | (0.03) | | | | | | (0.02) | | | | | | (2.78) | | | | | | (0.84) | | | | | | (1.20) | | | | | | (1.79) | | | | | | (1.16) | | |
Total distributions | | | | | (0.10) | | | | | | (0.10) | | | | | | (2.98) | | | | | | (1.03) | | | | | | (1.42) | | | | | | (2.00) | | | | | | (1.38) | | |
Capital share repurchases (note 5) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 0.02 | | | | | | 0.03 | | | | | | 0.03 | | |
Reinvestment of distributions | | | | | — | | | | | | — | | | | | | (0.17) | | | | | | (0.05) | | | | | | (0.07) | | | | | | (0.02) | | | | | | (0.09) | | |
Total capital share transactions | | | | | — | | | | | | — | | | | | | (0.17) | | | | | | (0.05) | | | | | | (0.05) | | | | | | 0.01 | | | | | | (0.06) | | |
Net asset value, end of period | | | | | $17.97 | | | | | | $22.96 | | | | | | $22.50 | | | | | | $20.06 | | | | | | $17.93 | | | | | | $14.89 | | | | | | $17.55 | | |
Market price, end of period | | | | | $15.34 | | | | | | $19.77 | | | | | | $19.41 | | | | | | $17.29 | | | | | | $15.77 | | | | | | $12.62 | | | | | | $15.03 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Investment Return (a) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Based on market price | | | | | -20.5% | | | | | | 15.0% | | | | | | 29.9% | | | | | | 16.4% | | | | | | 36.6% | | | | | | -3.6% | | | | | | 29.4% | | |
Based on net asset value | | | | | -19.7% | | | | | | 15.1% | | | | | | 29.8% | | | | | | 18.8% | | | | | | 31.6% | | | | | | -2.6% | | | | | | 26.2% | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data (b) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (in millions) | | | | | $2,119 | | | | | | $2,549 | | | | | | $2,653 | | | | | | $2,227 | | | | | | $1,952 | | | | | | $1,581 | | | | | | $1,786 | | |
Ratio of expenses to average net assets | | | | | 0.58% | | | | | | 0.61% | | | | | | 0.56% | | | | | | 0.60% | | | | | | 0.65% | | | | | | 0.56% | | | | | | 0.56% | | |
Ratio of net investment income to average net assets | | | | | 0.79% | | | | | | 0.70% | | | | | | 0.77% | | | | | | 1.12% | | | | | | 1.18% | | | | | | 1.14% | | | | | | 1.30% | | |
Portfolio turnover | | | | | 77.6% | | | | | | 78.6% | | | | | | 64.4% | | | | | | 58.7% | | | | | | 61.6% | | | | | | 58.4% | | | | | | 39.2% | | |
Number of shares outstanding at end of period (in 000’s) | | | | | 117,874 | | | | | | 111,027 | | | | | | 117,872 | | | | | | 111,027 | | | | | | 108,865 | | | | | | 106,206 | | | | | | 101,736 | | |
(unaudited)
| | | Shares | | | Value (a) | | ||||||
Common Stocks — 99.3% | | ||||||||||||
Communication Services — 8.9% | | ||||||||||||
Alphabet Inc. Class A (b) | | | | | 44,800 | | | | | $ | 97,630,848 | | |
AT&T Inc. | | | | | 614,600 | | | | | | 12,882,016 | | |
Electronic Arts Inc. | | | | | 93,700 | | | | | | 11,398,605 | | |
Fox Corporation Class A | | | | | 452,300 | | | | | | 14,545,968 | | |
Meta Platforms, Inc. Class A (b) | | | | | 202,300 | | | | | | 32,620,875 | | |
T-Mobile US, Inc. (b) | | | | | 63,500 | | | | | | 8,543,290 | | |
Verizon Communications Inc. | | | | | 215,300 | | | | | | 10,926,475 | | |
| | | | | 188,548,077 | | | ||||||
Consumer Discretionary — 10.5% | | ||||||||||||
Amazon.com, Inc. (b) | | | | | 549,900 | | | | | | 58,404,879 | | |
Booking Holdings Inc. (b) | | | | | 10,600 | | | | | | 18,539,294 | | |
Capri Holdings Limited (b) | | | | | 298,900 | | | | | | 12,257,889 | | |
Home Depot, Inc. | | | | | 23,900 | | | | | | 6,555,053 | | |
Las Vegas Sands Corp. (b) | | | | | 195,000 | | | | | | 6,550,050 | | |
Lowe’s Companies, Inc. | | | | | 48,700 | | | | | | 8,506,429 | | |
Marriott International, Inc. Class A | | | | | 94,800 | | | | | | 12,893,748 | | |
O’Reilly Automotive, Inc. (b) | | | | | 37,100 | | | | | | 23,438,296 | | |
Target Corporation | | | | | 79,900 | | | | | | 11,284,277 | | |
Tesla, Inc. (b) | | | | | 42,700 | | | | | | 28,755,034 | | |
Ulta Beauty, Inc. (b) | | | | | 57,500 | | | | | | 22,165,100 | | |
YUM! Brands, Inc. | | | | | 121,200 | | | | | | 13,757,412 | | |
| | | | | 223,107,461 | | | ||||||
Consumer Staples — 6.7% | | ||||||||||||
Coca-Cola Company | | | | | 165,700 | | | | | | 10,424,187 | | |
Constellation Brands, Inc. Class A | | | | | 51,900 | | | | | | 12,095,814 | | |
Costco Wholesale Corporation | | | | | 50,000 | | | | | | 23,964,000 | | |
Molson Coors Beverage Company Class B | | | | | 328,800 | | | | | | 17,922,888 | | |
PepsiCo, Inc. | | | | | 78,800 | | | | | | 13,132,808 | | |
Philip Morris International Inc. | | | | | 199,400 | | | | | | 19,688,756 | | |
Procter & Gamble Company | | | | | 158,250 | | | | | | 22,754,767 | | |
Tyson Foods, Inc. Class A | | | | | 157,100 | | | | | | 13,520,026 | | |
Walmart Inc. | | | | | 70,300 | | | | | | 8,547,074 | | |
| | | | | 142,050,320 | | | ||||||
Energy — 4.6% | | ||||||||||||
Adams Natural Resources Fund, Inc. (c)(f) | | | | | 2,186,774 | | | | | | 42,576,490 | | |
ConocoPhillips | | | | | 215,000 | | | | | | 19,309,150 | | |
Marathon Petroleum Corporation | | | | | 216,700 | | | | | | 17,814,907 | | |
Pioneer Natural Resources Company | | | | | 77,300 | | | | | | 17,244,084 | | |
| | | | | 96,944,631 | | |
(unaudited)
| | | Shares | | | Value (a) | | ||||||
Financials — 10.4% | | ||||||||||||
American International Group, Inc. | | | | | 530,400 | | | | | $ | 27,119,352 | | |
Bank of America Corp. | | | | | 1,148,400 | | | | | | 35,749,692 | | |
Berkshire Hathaway Inc. Class B (b) | | | | | 96,600 | | | | | | 26,373,732 | | |
Charles Schwab Corp. | | | | | 366,200 | | | | | | 23,136,516 | | |
Financial Select Sector SPDR Fund | | | | | 367,600 | | | | | | 11,561,020 | | |
JPMorgan Chase & Co. | | | | | 124,700 | | | | | | 14,042,467 | | |
MetLife, Inc. | | | | | 422,600 | | | | | | 26,535,054 | | |
Morgan Stanley | | | | | 214,800 | | | | | | 16,337,688 | | |
Truist Financial Corporation | | | | | 276,400 | | | | | | 13,109,652 | | |
Wells Fargo & Company | | | | | 711,900 | | | | | | 27,885,123 | | |
| | | | | 221,850,296 | | | ||||||
Health Care — 15.5% | | ||||||||||||
Abbott Laboratories | | | | | 269,400 | | | | | | 29,270,310 | | |
AbbVie, Inc. | | | | | 117,800 | | | | | | 18,042,248 | | |
Centene Corporation (b) | | | | | 294,500 | | | | | | 24,917,645 | | |
CVS Health Corporation | | | | | 385,000 | | | | | | 35,674,100 | | |
Eli Lilly and Company | | | | | 128,200 | | | | | | 41,566,286 | | |
Health Care Select Sector SPDR Fund | | | | | 140,600 | | | | | | 18,030,544 | | |
Incyte Corporation (b) | | | | | 167,800 | | | | | | 12,747,766 | | |
Johnson & Johnson | | | | | 121,800 | | | | | | 21,620,718 | | |
Pfizer Inc. | | | | | 373,700 | | | | | | 19,593,091 | | |
Regeneron Pharmaceuticals, Inc. (b) | | | | | 30,600 | | | | | | 18,088,578 | | |
Thermo Fisher Scientific Inc. | | | | | 68,600 | | | | | | 37,269,008 | | |
UnitedHealth Group Incorporated | | | | | 99,300 | | | | | | 51,003,459 | | |
| | | | 327,823,753 | | | |||||||
Industrials — 8.3% | | ||||||||||||
Caterpillar Inc. | | | | | 115,100 | | | | | | 20,575,276 | | |
General Dynamics Corporation | | | | | 109,800 | | | | | | 24,293,250 | | |
Parker-Hannifin Corporation | | | | | 82,400 | | | | | | 20,274,520 | | |
Quanta Services, Inc. | | | | | 204,300 | | | | | | 25,606,962 | | |
Raytheon Technologies Corporation | | | | | 258,900 | | | | | | 24,882,879 | | |
TransDigm Group Incorporated (b) | | | | | 35,800 | | | | | | 19,212,786 | | |
Union Pacific Corporation | | | | | 118,900 | | | | | | 25,358,992 | | |
Waste Connections, Inc. | | | | | 134,300 | | | | | | 16,647,828 | | |
| | | | | 176,852,493 | | |
(unaudited)
| | | Shares | | | Value (a) | | ||||||
Information Technology — 26.4% | | ||||||||||||
Apple Inc. | | | | | 983,700 | | | | | $ | 134,491,464 | | |
Arista Networks, Inc. (b) | | | | | 149,200 | | | | | | 13,986,008 | | |
Automatic Data Processing, Inc. | | | | | 102,600 | | | | | | 21,550,104 | | |
Cisco Systems, Inc. | | | | | 271,900 | | | | | | 11,593,816 | | |
Fidelity National Information Services, Inc. | | | | | 200,300 | | | | | | 18,361,501 | | |
Intuit Inc. | | | | | 47,600 | | | | | | 18,346,944 | | |
Lam Research Corporation | | | | | 42,600 | | | | | | 18,153,990 | | |
Mastercard Incorporated Class A | | | | | 119,500 | | | | | | 37,699,860 | | |
Micron Technology, Inc. | | | | | 212,600 | | | | | | 11,752,528 | | |
Microsoft Corporation | | | | | 618,100 | | | | | | 158,746,623 | | |
NVIDIA Corporation | | | | | 208,600 | | | | | | 31,621,674 | | |
Oracle Corporation | | | | | 122,200 | | | | | | 8,538,114 | | |
Palo Alto Networks, Inc. (b) | | | | | 31,000 | | | | | | 15,312,140 | | |
QUALCOMM Incorporated | | | | | 157,500 | | | | | | 20,119,050 | | |
Technology Select Sector SPDR Fund | | | | | 41,400 | | | | | | 5,262,768 | | |
Visa Inc. Class A | | | | | 171,700 | | | | | | 33,806,013 | | |
| | | | | 559,342,597 | | | ||||||
Materials — 2.3% | | ||||||||||||
Linde plc | | | | | 54,000 | | | | | | 15,526,620 | | |
LyondellBasell Industries N.V. | | | | | 122,900 | | | | | | 10,748,834 | | |
Sherwin-Williams Company | | | | | 50,900 | | | | | | 11,397,019 | | |
Steel Dynamics, Inc. | | | | | 165,100 | | | | | | 10,921,365 | | |
| | | | | 48,593,838 | | | ||||||
Real Estate — 2.6% | | ||||||||||||
Equinix, Inc. | | | | | 24,000 | | | | | | 15,768,480 | | |
Invitation Homes Inc. | | | | | 302,200 | | | | | | 10,752,276 | | |
Prologis, Inc. | | | | | 140,300 | | | | | | 16,506,295 | | |
SBA Communications Corp. Class A | | | | | 37,400 | | | | | | 11,969,870 | | |
| | | | | 54,996,921 | | | ||||||
Utilities — 3.1% | | ||||||||||||
American Electric Power Company, Inc. | | | | | 141,600 | | | | | | 13,585,104 | | |
CenterPoint Energy, Inc. | | | | | 490,300 | | | | | | 14,503,074 | | |
CMS Energy Corporation | | | | | 203,300 | | | | | | 13,722,750 | | |
FirstEnergy Corp. | | | | | 323,900 | | | | | | 12,434,521 | | |
NextEra Energy, Inc. | | | | | 134,700 | | | | | | 10,433,862 | | |
| | | | 64,679,311 | | | |||||||
Total Common Stocks | | ||||||||||||
(Cost $1,452,343,251) | | | | | | | | | | | 2,104,789,698 | | |
|
(unaudited)
| | | Shares | | | Value (a) | | ||||||
Other Investments — 0.0% | | ||||||||||||
Financials — 0.0% | | ||||||||||||
Adams Funds Advisers, LLC (b)(d)(f) | | | | | | | | | | | | ||
(Cost $150,000) | | | | | | | | | | $ | 466,000 | ||
Short-Term Investments — 0.8% | | ||||||||||||
Money Market Funds — 0.8% | | ||||||||||||
Morgan Stanley Institutional Liquidity Funds Prime Portfolio, 1.51% (e) | | | | | 14,713,216 | | | | | | 14,710,273 | ||
Northern Institutional Treasury Portfolio, 1.21% (e) | | | | | 1,379,977 | | | | | | 1,379,977 | ||
Total Short-Term Investments | | ||||||||||||
(Cost $16,090,135) | | | | | | | | | | | 16,090,250 | ||
Total — 100.1% | | ||||||||||||
(Cost $1,468,583,386) | | | | | | | | | | | 2,121,345,948 | ||
Other Assets Less Liabilities — (0.1)% | | | | | | | | | | | (2,716,570) | | |
Net Assets — 100.0% | | | | | | | | | | $ | 2,118,629,378 | ||
|
| Affiliate | | | Shares held | | | Net realized gain (loss) and long-term capital gain distributions | | | Dividend income and short-term capital gain distributions | | | Change in unrealized appreciation | | | Value | | |||||||||||||||
| Adams Funds Advisers, LLC (controlled) | | | | | n/a | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 466,000 | | |
| Adams Natural Resources Funds, Inc. (non-controlled) | | | | | 2,186,774 | | | | | | 21,868 | | | | | | 415,487 | | | | | | 6,450,983 | | | | | | 42,576,490 | | |
| Total | | | | | | | | | | $ | 21,868 | | | | | $ | 415,487 | | | | | $ | 6,450,983 | | | | | $ | 43,042,490 | | |
(unaudited)
| | | Dollar Amount Traded in the Period | | | Percent of Net Assets Held at Period-End | | ||||||
Additions | | | | | | | | | | | | | |
Abbott Laboratories | | | | $ | 33,343,324 | | | | | | 1.4% | | |
Booking Holdings Inc. | | | | | 25,729,499 | | | | | | 0.9 | | |
Charles Schwab Corp. | | | | | 25,658,698 | | | | | | 1.1 | | |
TransDigm Group Incorporated | | | | | 24,220,308 | | | | | | 0.9 | | |
Automatic Data Processing, Inc. | | | | | 22,160,772 | | | | | | 1.0 | | |
Pfizer Inc. | | | | | 19,879,958 | | | | | | 0.9 | | |
Fidelity National Information Services, Inc. | | | | | 19,147,218 | | | | | | 0.9 | | |
Truist Financial Corporation | | | | | 18,803,729 | | | | | | 0.6 | | |
Pioneer Natural Resources Company | | | | | 18,454,246 | | | | | | 0.8 | | |
Molson Coors Beverage Company Class B | | | | | 17,419,072 | | | | | | 0.8 | | |
Linde plc | | | | | 17,379,235 | | | | | | 0.7 | | |
Fox Corporation Class A | | | | | 17,068,308 | | | | | | 0.7 | | |
Marriott International, Inc. Class A | | | | | 16,437,935 | | | | | | 0.6 | | |
Waste Connections, Inc. | | | | | 15,440,484 | | | | | | 0.8 | | |
Constellation Brands, Inc. Class A | | | | | 14,266,806 | | | | | | 0.6 | | |
Tyson Foods, Inc. Class A | | | | | 14,127,534 | | | | | | 0.6 | | |
CMS Energy Corporation | | | | | 13,823,922 | | | | | | 0.6 | | |
FirstEnergy Corp. | | | | | 13,669,131 | | | | | | 0.6 | | |
YUM! Brands, Inc. | | | | | 13,423,821 | | | | | | 0.6 | | |
American Electric Power Company, Inc. | | | | | 12,867,999 | | | | | | 0.6 | | |
Verizon Communications Inc. | | | | | 12,809,692 | | | | | | 0.5 | | |
Incyte Corporation | | | | | 12,797,770 | | | | | | 0.6 | | |
Electronic Arts Inc. | | | | | 12,547,665 | | | | | | 0.5 | | |
SBA Communications Corp. Class A | | | | | 12,448,657 | | | | | | 0.6 | | |
Invitation Homes Inc. | | | | | 10,741,155 | | | | | | 0.5 | | |
| | | | | | | | | | | | | |
Reductions | | | | | | | | | | | | | |
AbbVie, Inc. | | | | | 29,916,998 | | | | | | 0.9 | | |
Adobe Inc. | | | | | 26,834,725 | | | | | | — | | |
Carrier Global Corporation | | | | | 25,070,049 | | | | | | — | | |
AmerisourceBergen Corporation | | | | | 24,322,281 | | | | | | — | | |
Moody’s Corporation | | | | | 23,400,040 | | | | | | — | | |
Comcast Corporation Class A | | | | | 20,486,992 | | | | | | — | | |
Honeywell International Inc. | | | | | 19,190,738 | | | | | | — | | |
EOG Resources, Inc. | | | | | 18,429,376 | | | | | | — | | |
Analog Devices, Inc. | | | | | 17,438,368 | | | | | | — | | |
Coca-Cola Company | | | | | 17,326,733 | | | | | | 0.5 | | |
Hilton Worldwide Holdings, Inc. | | | | | 17,319,259 | | | | | | — | | |
Estee Lauder Companies Inc. Class A | | | | | 17,306,313 | | | | | | — | | |
(unaudited)
| | | Dollar Amount Traded in the Period | | | Percent of Net Assets Held at Period-End | | ||||||
UnitedHealth Group Incorporated | | | | $ | 17,286,754 | | | | | | 2.4% | | |
Berkshire Hathaway Inc. Class B | | | | | 17,235,931 | | | | | | 1.2 | | |
Netflix, Inc. | | | | | 16,226,848 | | | | | | — | | |
Morgan Stanley | | | | | 15,951,414 | | | | | | 0.8 | | |
IQVIA Holdings Inc. | | | | | 15,699,560 | | | | | | — | | |
Air Products and Chemicals, Inc. | | | | | 14,907,478 | | | | | | — | | |
Charter Communications, Inc. Class A | | | | | 14,689,351 | | | | | | — | | |
CDW Corp. | | | | | 14,420,340 | | | | | | — | | |
Evergy, Inc. | | | | | 13,722,656 | | | | | | — | | |
Exelon Corporation | | | | | 13,505,303 | | | | | | — | | |
Darden Restaurants, Inc. | | | | | 13,461,039 | | | | | | — | | |
Laboratory Corporation of America Holdings | | | | | 12,926,731 | | | | | | — | | |
Walt Disney Company | | | | | 12,654,762 | | | | | | — | | |
TJX Companies, Inc. | | | | | 11,809,606 | | | | | | — | | |
NIKE, Inc. Class B | | | | | 11,723,807 | | | | | | — | | |
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 Distributions Per Share | | | Total Dividends and Distributions Per Share | | | Annual Distribution Rate* | | |||||||||||||||||||||||||||
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 | | | ||
2020 | | | | | 2,227,273 | | | | 111,027 | | | | | | 20.06 | | | | | | 17.29 | | | | | | .19 | | | | | | .84 | | | | | | — | | | | | | 1.03 | | | | | | 6.8 | | | ||
2021 | | | | | 2,652,528 | | | | 117,872 | | | | | | 22.50 | | | | | | 19.41 | | | | | | .20 | | | | | | 2.78 | | | | | | — | | | | | | 2.98 | | | | | | 15.7 | | | ||
June 30, 2022 | | | | | 2,118,629 | | | | 117,874 | | | | | | 17.97 | | | | | | 15.34 | | | | | | .12** | | | | | | .03 | | | | | | — | | | | | | .15** | | | | | | — | | |
| | | Votes For | | | Votes Withheld | | ||||||
Kenneth J. Dale | | | | | 85,435,380 | | | | | | 4,841,545 | | |
Frederic A. Escherich | | | | | 85,436,876 | | | | | | 4,840,049 | | |
Mary Chris Jammet | | | | | 86,459,558 | | | | | | 3,817,367 | | |
Lauriann C. Kloppenburg | | | | | 86,480,059 | | | | | | 3,796,866 | | |
Kathleen T. McGahran | | | | | 85,448,950 | | | | | | 4,827,975 | | |
Jane Musser Nelson | | | | | 87,458,031 | | | | | | 2,818,894 | | |
Mark E. Stoeckle | | | | | 85,531,181 | | | | | | 4,745,744 | | |
| Kenneth J. Dale (1) (5) | | | Lauriann C. Kloppenburg(1)(3) (4) | | | Mark E. Stoeckle (1) | |
| Frederic A. Escherich (1) (3) (4) | | | Kathleen T. McGahran (1) (2) (3) | | | | |
| Mary Chris Jammet (2) (4) | | | Jane Musser Nelson (2) (3) | | | | |
| 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 | | | Vice President, 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
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/ 22-1/31/22 | 0 | $ | -- | 0 | 4,921,252 | |||||||||||
2/1/22-2/28/22 | 0 | -- | 0 | 4,921,252 | ||||||||||||
3/1/22-3/31/22 | 0 | -- | 0 | 4,921,252 | ||||||||||||
4/1/22-4/30/22 | 0 | -- | 0 | 4,921,252 | ||||||||||||
5/1/22-5/31/22 | 0 | -- | 0 | 4,921,252 | ||||||||||||
6/1/22-6/30/22 | 0 | -- | 0 | 4,921,252 | ||||||||||||
Total | 0 | $ | -- | 0 |
(1) There were no shares purchased other than through a publicly announced plan or program.
(2a) The share repurchase plan was announced on December 11, 2014, with an additional authorization announced on December 18, 2018. On September 22, 2020, the Fund announced an enhanced discount management and liquidity program whereby purchases will occur when the discount exceeds 15% of net asset value for at least 30 consecutive trading days.
(2b) The share amount approved in 2014 was 5% of then-outstanding shares, or 4,667,000 shares, and 5,314,566 additional shares were approved in 2018.
(2c) The share repurchase 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. |
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: | August 1, 2022 | |
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: | August 1, 2022 | |
By: | /s/ Brian S. Hook | |
Brian S. Hook | ||
Vice President, Chief Financial Officer & Treasurer | ||
(Principal Financial Officer) | ||
Date: | August 1, 2022 |