N-30B-2 1 tm2225595-1_n30b2.htm N-30B-2 out - none - 66.076s
​
 
[MISSING IMAGE: lg_adamssemi.jpg]
 
ADAMS
DIVERSIFIED EQUITY
FUND
 
​
THIRD QUARTER REPORT
SEPTEMBER 30, 2022
[MISSING IMAGE: ig_adamsreportsignup.gif]
GET THE LATEST NEWS AND INFORMATION
adamsfunds.com/sign-up​
​
Letter to Shareholders
​
Dear Fellow Shareholders,
Persistent inflation, rising interest rates and quantitative tightening from the U.S. Federal Reserve (Fed), the U.S. dollar’s surge, and cloudy economic data stoked fears of a recession and high levels of volatility during the third quarter. Investors wrestled with a lot of questions with few answers readily evident. Are we in a recession? On the verge of one? How deep and how long will it be? How far will the Fed go in terms of tightening? Has inflation peaked, or will it soon? How high will the dollar go and how will that impact the global economy? Meanwhile, geopolitical questions lurked in the background. What’s the end game in Ukraine, where there appears to be no end in sight and Russia has threatened the use of nuclear weapons? How much and for how long will China’s economy slow, given the government’s COVID-zero policy? What’s the future of Taiwan?
[MISSING IMAGE: lg_adamsreportsidebar.jpg]
“Our Fund held up reasonably well in a difficult environment, outperforming the Index.”
​
No one knows the answers. We do know that rising interest rates hurt as does inflation, and even if inflation has peaked, the winter heating season is going to be difficult in the U.S., and potentially devastating to Europe. It’s all real, and we recognize that. There is a lot of uncertainty out there, and plenty of storm clouds overhead. Given that backdrop, the S&P 500 Index declined 4.9% during the quarter, despite a July-to-mid-August rally fueled by visions of a dovish pivot by the Fed, which now seems quite naïve. The Index closed September with a -23.9% year-to-date return. Our Fund held up reasonably well in a difficult environment, outperforming the Index with a -4.4% return for the quarter and a -23.2% year-to-date return.
During the third quarter, Financials, Energy and Consumer Discretionary were the largest contributors to relative performance. The Industrials sector was a notable relative detractor, followed by Communication Services and Utilities.
Financials stocks in the S&P 500 declined but performed better than the Index. Our holdings outperformed the sector by 3.2%. Our overweight in wealth management firm Charles Schwab, the best performing stock in the sector during the third quarter, was a key relative contributor. Schwab reported record quarterly profits in July, as trading volumes remained high and new brokerage account growth continued to be strong. The company has also benefited from higher short-term interest rates. Stock selection in banking stocks also bolstered relative returns, led by an overweight in Wells Fargo.
Energy was one of only two sectors in the Index to advance for the quarter, rising 2.4%. Our stock selection within the sector provided relative strength. Overweight positions in oil and gas refiner Marathon Petroleum and diversified exploration
1​
​
Letter to Shareholders (continued)
​
and production company ConocoPhillips were the largest individual contributors. Marathon’s second-quarter earnings were strong, backed by strong cash flow generation, and the company continues to reward shareholders with a rising dividend and a large, ongoing share-buyback program. ConocoPhillips continues to focus on generating free cash flow while holding production growth steady. We believe that Conoco has the long-lived asset base and management acumen to continue to successfully execute its strategy.
Consumer Discretionary was the best performing sector in the Index, rising 4.4% in the quarter. Our holdings bettered the Index’s return, with a 5.9% advance, supported by strong performance from our holdings in the retailing industry group. O’Reilly Automotive rose 11.2% and made the largest impact on relative performance. O’Reilly continues to post consistent sales growth and aggressive share buybacks, supported by an aging passenger vehicle fleet. In August, we initiated a new position in home improvement and agricultural retailer Tractor Supply Company. We believe that Tractor Supply has one of the most likeable growth profiles in the group and capitalized on some interim weakness to initiate a position.
Our Industrials holdings declined 7.0% during the quarter, trailing the benchmark’s return by 2.3%. The portfolio was impacted by an overweight position in FedEx Corporation. We bought FedEx earlier this year based on our belief that a new management team could improve the profitability of the company and narrow the stock’s valuation discount. The company provided disappointing forward guidance in September, suggesting that the hoped-for operational improvements remain aspirational. An overweight to Raytheon Technologies also weighed on relative results.
The Communication Services sector was also a slight relative detractor. This weakness was largely caused by our overweight positions in Alphabet and Meta Platforms, which posted double-digit declines. Lack of exposure to media companies Netflix and Walt Disney Co. also weighed on relative performance.
For the nine months ended September 30, 2022, the total return on the Fund’s net asset value (“NAV”) per share (with dividends and capital gains reinvested) was -23.2%. This compares to a -23.9% total return for the S&P 500 and a -24.0% total return for the Morningstar U.S. Large Blend category over the same time period. The total return on the market price of the Fund’s shares for the period was -24.3%.
For the twelve months ended September 30, 2022, the Fund’s total return on NAV was -13.2%. Comparable figures for the S&P 500 and the Morningstar U.S. Large Blend category were -15.5% and -16.0%, respectively. The Fund’s total return on market price for the period was -14.8%.
During the first nine months of this year, the Fund paid distributions to shareholders in the amount of $17.7 million, or $.15 per share, consisting of  $.01
2​
​
Letter to Shareholders (continued)
​
short-term capital gain and $.02 long-term capital gain, realized in 2021, and $.12 of net investment income realized in 2022, all taxable in 2022. These constitute the first three payments toward our annual 6% minimum distribution rate commitment.
As we look ahead, we do believe we’re closer to the end of the market turmoil than we are to the beginning. We do not make predictions about the direction of the market or macroeconomic trends. We do, however, recognize that investors may be feeling uneasy about the markets, because times like these are stressful. We feel that stress, too. We firmly believe that over time, stock prices follow earnings. There can be a lot of detours along the way, including the kind of uncertainties and drawdowns we’re seeing today. Remember, we have been through this before, whether it’s high interest rates, periods of surging inflation, or uncertain geopolitical events. In this environment, we’re thankful for our disciplined investment process, which has served us very well for decades, across a variety of markets. It allows us to focus on the opportunities that exist within the market while the uncertainty runs its course. We also thank you for placing your trust in us during this challenging period, and the opportunity to help you achieve your financial goals.
By order of the Board of Directors,
[MISSING IMAGE: sg_annmarkestoeckle.jpg]
Mark E. Stoeckle
Chief Executive Officer & President
October 20, 2022
 
 
​
​
Disclaimers​
This report contains “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. By their nature, all forward-looking statements involve risks and uncertainties, and actual results could differ materially from those contemplated by the forward-looking statements. Several factors that could materially affect the Fund’s actual results are the performance of the portfolio of stocks held by the Fund, the conditions in the U.S. and international financial markets, the price at which shares of the Fund will trade in the public markets, and other factors discussed in the Fund’s periodic filings with the Securities and Exchange Commission.​
This report is transmitted to the shareholders of the Fund for their information. It is not a prospectus, circular or representation intended for use in the purchase or sale of shares of the Fund or of any securities mentioned in the report. The rates of return will vary and the principal value of an investment will fluctuate. Shares, if sold, may be worth more or less than their original cost. Past performance is no guarantee of future investment results.
3
​
Summary Financial Information
​
(unaudited)
​ ​ ​
2022
​ ​
2021
​
At September 30: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net asset value per share ​ ​ ​ $ 17.13 ​ ​ ​ ​ $ 22.86 ​ ​
Market price per share ​ ​ ​ $ 14.57 ​ ​ ​ ​ $ 19.80 ​ ​
Shares outstanding ​ ​ ​ ​ 117,873,650 ​ ​ ​ ​ ​ 111,027,198 ​ ​
Total net assets ​ ​ ​ $ 2,018,853,995 ​ ​ ​ ​ $ 2,538,318,809 ​ ​
Average net assets ​ ​ ​ $ 2,344,762,738 ​ ​ ​ ​ $ 2,437,869,174 ​ ​
Unrealized appreciation on investments ​ ​ ​ $ 542,170,305 ​ ​ ​ ​ $ 983,971,859 ​ ​
​ ​
For the nine months ended September 30: ​
Net investment income ​ ​ ​ $ 15,848,908 ​ ​ ​ ​ $ 13,163,004 ​ ​
Net realized gain (loss) ​ ​ ​ $ 80,814,648 ​ ​ ​ ​ $ 287,959,279 ​ ​
Total return (based on market price) ​ ​ ​ ​ -24.3% ​ ​ ​ ​ ​ 15.4% ​ ​
Total return (based on net asset value) ​ ​ ​ ​ -23.2% ​ ​ ​ ​ ​ 14.9% ​ ​
​ ​
Key ratios: ​
Expenses to average net assets* ​ ​ ​ ​ 0.54% ​ ​ ​ ​ ​ 0.59% ​ ​
Net investment income to average net assets* ​ ​ ​ ​ 0.91% ​ ​ ​ ​ ​ 0.72% ​ ​
Portfolio turnover* ​ ​ ​ ​ 69.5% ​ ​ ​ ​ ​ 74.1% ​ ​
Net cash & short-term investments to net assets ​ ​ ​ ​ 0.7% ​ ​ ​ ​ ​ 0.3% ​ ​
​
*
Annualized
​
Ten Largest Equity Portfolio Holdings
​
September 30, 2022
(unaudited)
​ ​ ​
Market Value
​ ​
Percent
of Net Assets
​
Microsoft Corporation ​ ​ ​ $ 143,955,490 ​ ​ ​ ​ ​ 7.1% ​ ​
Apple Inc. ​ ​ ​ ​ 135,947,340 ​ ​ ​ ​ ​ 6.7 ​ ​
Alphabet Inc. Class A ​ ​ ​ ​ 79,800,795 ​ ​ ​ ​ ​ 4.0 ​ ​
Amazon.com, Inc. ​ ​ ​ ​ 62,138,700 ​ ​ ​ ​ ​ 3.1 ​ ​
UnitedHealth Group Incorporated ​ ​ ​ ​ 50,150,472 ​ ​ ​ ​ ​ 2.5 ​ ​
Adams Natural Resources Fund, Inc.* ​ ​ ​ ​ 42,554,622 ​ ​ ​ ​ ​ 2.1 ​ ​
Thermo Fisher Scientific Inc. ​ ​ ​ ​ 38,850,754 ​ ​ ​ ​ ​ 1.9 ​ ​
Tesla, Inc. ​ ​ ​ ​ 37,930,750 ​ ​ ​ ​ ​ 1.9 ​ ​
CVS Health Corporation ​ ​ ​ ​ 36,717,450 ​ ​ ​ ​ ​ 1.8 ​ ​
Mastercard Incorporated Class A ​ ​ ​ ​ 34,945,386 ​ ​ ​ ​ ​ 1.7 ​ ​
​ ​ ​ ​ $ 662,991,759 ​ ​ ​ ​ ​ 32.8% ​ ​
​
*
Non-controlled affiliated closed-end fund​
​
4​
​
Schedule of Investments
​
September 30, 2022
(unaudited)
​ ​ ​
Shares
 ​ ​
Value (a)
 ​
Common Stocks — 99.3% ​
Communication Services — 8.1%
 ​
Alphabet Inc. Class A (b)
 ​ ​ ​ ​ 834,300 ​ ​ ​ ​ $ 79,800,795 ​ ​
AT&T Inc.
 ​ ​ ​ ​ 805,700 ​ ​ ​ ​ ​ 12,359,438 ​ ​
Electronic Arts Inc.
 ​ ​ ​ ​ 129,800 ​ ​ ​ ​ ​ 15,019,158 ​ ​
Fox Corporation Class A
 ​ ​ ​ ​ 452,300 ​ ​ ​ ​ ​ 13,876,564 ​ ​
Meta Platforms, Inc. Class A (b)
 ​ ​ ​ ​ 202,300 ​ ​ ​ ​ ​ 27,448,064 ​ ​
T-Mobile US, Inc. (b)
 ​ ​ ​ ​ 78,600 ​ ​ ​ ​ ​ 10,545,762 ​ ​
Verizon Communications Inc.
 ​ ​ ​ ​ 108,400 ​ ​ ​ ​ ​ 4,115,948 ​ ​
​ ​ ​ ​ ​ 163,165,729 ​ ​
Consumer Discretionary — 11.9%
 ​
Amazon.com, Inc. (b)
 ​ ​ ​ ​ 549,900 ​ ​ ​ ​ ​ 62,138,700 ​ ​
Booking Holdings Inc. (b)
 ​ ​ ​ ​ 10,000 ​ ​ ​ ​ ​ 16,432,100 ​ ​
Capri Holdings Limited (b)
 ​ ​ ​ ​ 298,900 ​ ​ ​ ​ ​ 11,489,716 ​ ​
Home Depot, Inc.
 ​ ​ ​ ​ 58,000 ​ ​ ​ ​ ​ 16,004,520 ​ ​
Las Vegas Sands Corp. (b)
 ​ ​ ​ ​ 195,000 ​ ​ ​ ​ ​ 7,316,400 ​ ​
Marriott International, Inc. Class A
 ​ ​ ​ ​ 94,800 ​ ​ ​ ​ ​ 13,285,272 ​ ​
O’Reilly Automotive, Inc. (b)
 ​ ​ ​ ​ 27,100 ​ ​ ​ ​ ​ 19,060,785 ​ ​
Tesla, Inc. (b)
 ​ ​ ​ ​ 143,000 ​ ​ ​ ​ ​ 37,930,750 ​ ​
Tractor Supply Company
 ​ ​ ​ ​ 119,000 ​ ​ ​ ​ ​ 22,119,720 ​ ​
Ulta Beauty, Inc. (b)
 ​ ​ ​ ​ 51,600 ​ ​ ​ ​ ​ 20,701,404 ​ ​
YUM! Brands, Inc.
 ​ ​ ​ ​ 121,200 ​ ​ ​ ​ ​ 12,888,408 ​ ​
​ ​ ​ ​ ​ 239,367,775 ​ ​
Consumer Staples — 6.5%
 ​
Archer-Daniels-Midland Company
 ​ ​ ​ ​ 133,900 ​ ​ ​ ​ ​ 10,772,255 ​ ​
Coca-Cola Company
 ​ ​ ​ ​ 165,700 ​ ​ ​ ​ ​ 9,282,514 ​ ​
Constellation Brands, Inc. Class A
 ​ ​ ​ ​ 74,200 ​ ​ ​ ​ ​ 17,042,256 ​ ​
Costco Wholesale Corporation
 ​ ​ ​ ​ 43,700 ​ ​ ​ ​ ​ 20,638,199 ​ ​
Molson Coors Beverage Company Class B
 ​ ​ ​ ​ 308,700 ​ ​ ​ ​ ​ 14,814,513 ​ ​
PepsiCo, Inc.
 ​ ​ ​ ​ 78,800 ​ ​ ​ ​ ​ 12,864,888 ​ ​
Philip Morris International Inc.
 ​ ​ ​ ​ 173,800 ​ ​ ​ ​ ​ 14,427,138 ​ ​
Procter & Gamble Company
 ​ ​ ​ ​ 115,650 ​ ​ ​ ​ ​ 14,600,812 ​ ​
Sysco Corporation
 ​ ​ ​ ​ 233,900 ​ ​ ​ ​ ​ 16,539,069 ​ ​
​ ​ ​ ​ 130,981,644 ​ ​
5
​
Schedule of Investments (continued)
​
September 30, 2022
(unaudited)
​ ​ ​
Shares
 ​ ​
Value (a)
 ​
Energy — 5.0%
 ​
Adams Natural Resources Fund, Inc. (c)(g)
 ​ ​ ​ ​ 2,186,774 ​ ​ ​ ​ $ 42,554,622 ​ ​
ConocoPhillips
 ​ ​ ​ ​ 215,000 ​ ​ ​ ​ ​ 22,003,100 ​ ​
Marathon Petroleum Corporation
 ​ ​ ​ ​ 196,100 ​ ​ ​ ​ ​ 19,478,613 ​ ​
Pioneer Natural Resources Company
 ​ ​ ​ ​ 77,300 ​ ​ ​ ​ ​ 16,737,769 ​ ​
​ ​ ​ ​ 100,774,104 ​ ​
Financials — 10.9%
 ​
American International Group, Inc.
 ​ ​ ​ ​ 530,400 ​ ​ ​ ​ ​ 25,183,392 ​ ​
Bank of America Corp.
 ​ ​ ​ ​ 1,148,400 ​ ​ ​ ​ ​ 34,681,680 ​ ​
Berkshire Hathaway Inc. Class B (b)
 ​ ​ ​ ​ 96,600 ​ ​ ​ ​ ​ 25,794,132 ​ ​
Charles Schwab Corp.
 ​ ​ ​ ​ 366,200 ​ ​ ​ ​ ​ 26,318,794 ​ ​
JPMorgan Chase & Co.
 ​ ​ ​ ​ 124,700 ​ ​ ​ ​ ​ 13,031,150 ​ ​
MetLife, Inc.
 ​ ​ ​ ​ 422,600 ​ ​ ​ ​ ​ 25,685,628 ​ ​
Morgan Stanley
 ​ ​ ​ ​ 323,300 ​ ​ ​ ​ ​ 25,543,933 ​ ​
Wells Fargo & Company
 ​ ​ ​ ​ 814,700 ​ ​ ​ ​ ​ 32,767,234 ​ ​
Willis Towers Watson plc
 ​ ​ ​ ​ 58,500 ​ ​ ​ ​ ​ 11,754,990 ​ ​
​ ​ ​ ​ ​ 220,760,933 ​ ​
Health Care — 15.3%
 ​
AbbVie, Inc.
 ​ ​ ​ ​ 83,800 ​ ​ ​ ​ ​ 11,246,798 ​ ​
AmerisourceBergen Corporation
 ​ ​ ​ ​ 156,900 ​ ​ ​ ​ ​ 21,233,277 ​ ​
Centene Corporation (b)
 ​ ​ ​ ​ 294,500 ​ ​ ​ ​ ​ 22,915,045 ​ ​
CVS Health Corporation
 ​ ​ ​ ​ 385,000 ​ ​ ​ ​ ​ 36,717,450 ​ ​
Eli Lilly and Company
 ​ ​ ​ ​ 53,200 ​ ​ ​ ​ ​ 17,202,220 ​ ​
Health Care Select Sector SPDR Fund
 ​ ​ ​ ​ 275,400 ​ ​ ​ ​ ​ 33,353,694 ​ ​
Incyte Corporation (b)
 ​ ​ ​ ​ 304,300 ​ ​ ​ ​ ​ 20,278,552 ​ ​
Johnson & Johnson
 ​ ​ ​ ​ 121,800 ​ ​ ​ ​ ​ 19,897,248 ​ ​
Pfizer Inc.
 ​ ​ ​ ​ 373,700 ​ ​ ​ ​ ​ 16,353,112 ​ ​
Regeneron Pharmaceuticals, Inc. (b)
 ​ ​ ​ ​ 30,600 ​ ​ ​ ​ ​ 21,079,422 ​ ​
Thermo Fisher Scientific Inc.
 ​ ​ ​ ​ 76,600 ​ ​ ​ ​ ​ 38,850,754 ​ ​
UnitedHealth Group Incorporated
 ​ ​ ​ ​ 99,300 ​ ​ ​ ​ ​ 50,150,472 ​ ​
​ ​ ​ ​ ​ 309,278,044 ​ ​
​
6​
​
Schedule of Investments (continued)
​
September 30, 2022
(unaudited)
​ ​ ​
Shares
 ​ ​
Value (a)
 ​
Industrials — 7.8%
 ​
Boeing Company (b)
 ​ ​ ​ ​ 37,400 ​ ​ ​ ​ $ 4,528,392 ​ ​
FedEx Corporation
 ​ ​ ​ ​ 52,400 ​ ​ ​ ​ ​ 7,779,828 ​ ​
General Dynamics Corporation
 ​ ​ ​ ​ 109,800 ​ ​ ​ ​ ​ 23,296,266 ​ ​
Industrial Select Sector SPDR Fund
 ​ ​ ​ ​ 72,900 ​ ​ ​ ​ ​ 6,039,036 ​ ​
Parker-Hannifin Corporation
 ​ ​ ​ ​ 82,400 ​ ​ ​ ​ ​ 19,966,344 ​ ​
Quanta Services, Inc.
 ​ ​ ​ ​ 153,300 ​ ​ ​ ​ ​ 19,528,887 ​ ​
Raytheon Technologies Corporation
 ​ ​ ​ ​ 192,300 ​ ​ ​ ​ ​ 15,741,678 ​ ​
TransDigm Group Incorporated
 ​ ​ ​ ​ 35,800 ​ ​ ​ ​ ​ 18,788,556 ​ ​
Union Pacific Corporation
 ​ ​ ​ ​ 118,900 ​ ​ ​ ​ ​ 23,164,098 ​ ​
Waste Connections, Inc.
 ​ ​ ​ ​ 134,300 ​ ​ ​ ​ ​ 18,147,959 ​ ​
​ ​ ​ ​ ​ 156,981,044 ​ ​
Information Technology — 26.0%
 ​
Advanced Micro Devices, Inc. (b)
 ​ ​ ​ ​ 106,300 ​ ​ ​ ​ ​ 6,735,168 ​ ​
Apple Inc.
 ​ ​ ​ ​ 983,700 ​ ​ ​ ​ ​ 135,947,340 ​ ​
Arista Networks, Inc. (b)
 ​ ​ ​ ​ 149,200 ​ ​ ​ ​ ​ 16,843,188 ​ ​
Automatic Data Processing, Inc.
 ​ ​ ​ ​ 108,100 ​ ​ ​ ​ ​ 24,451,139 ​ ​
Cisco Systems, Inc.
 ​ ​ ​ ​ 271,900 ​ ​ ​ ​ ​ 10,876,000 ​ ​
Fidelity National Information Services, Inc.
 ​ ​ ​ ​ 200,300 ​ ​ ​ ​ ​ 15,136,671 ​ ​
Intuit Inc.
 ​ ​ ​ ​ 47,600 ​ ​ ​ ​ ​ 18,436,432 ​ ​
Lam Research Corporation
 ​ ​ ​ ​ 48,900 ​ ​ ​ ​ ​ 17,897,400 ​ ​
Mastercard Incorporated Class A
 ​ ​ ​ ​ 122,900 ​ ​ ​ ​ ​ 34,945,386 ​ ​
Microsoft Corporation
 ​ ​ ​ ​ 618,100 ​ ​ ​ ​ ​ 143,955,490 ​ ​
NVIDIA Corporation
 ​ ​ ​ ​ 166,400 ​ ​ ​ ​ ​ 20,199,296 ​ ​
Oracle Corporation
 ​ ​ ​ ​ 122,200 ​ ​ ​ ​ ​ 7,462,754 ​ ​
Palo Alto Networks, Inc. (b)
 ​ ​ ​ ​ 93,000 ​ ​ ​ ​ ​ 15,232,470 ​ ​
QUALCOMM Incorporated
 ​ ​ ​ ​ 183,100 ​ ​ ​ ​ ​ 20,686,638 ​ ​
Technology Select Sector SPDR Fund
 ​ ​ ​ ​ 41,400 ​ ​ ​ ​ ​ 4,917,492 ​ ​
Visa Inc. Class A
 ​ ​ ​ ​ 177,300 ​ ​ ​ ​ ​ 31,497,345 ​ ​
​ ​ ​ ​ ​ 525,220,209 ​ ​
Materials — 2.3%
 ​
Air Products and Chemicals, Inc.
 ​ ​ ​ ​ 15,100 ​ ​ ​ ​ ​ 3,514,223 ​ ​
FMC Corporation
 ​ ​ ​ ​ 60,000 ​ ​ ​ ​ ​ 6,342,000 ​ ​
Linde plc
 ​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ 13,479,500 ​ ​
LyondellBasell Industries N.V.
 ​ ​ ​ ​ 41,900 ​ ​ ​ ​ ​ 3,154,232 ​ ​
Sherwin-Williams Company
 ​ ​ ​ ​ 46,000 ​ ​ ​ ​ ​ 9,418,500 ​ ​
Steel Dynamics, Inc.
 ​ ​ ​ ​ 146,200 ​ ​ ​ ​ ​ 10,372,890 ​ ​
​ ​ ​ ​ ​ 46,281,345 ​ ​
​
7
​
Schedule of Investments (continued)
​
September 30, 2022
(unaudited)
​ ​ ​
Shares
 ​ ​
Value (a)
 ​
Real Estate — 2.6%
 ​
Invitation Homes, Inc.
 ​ ​ ​ ​ 302,200 ​ ​ ​ ​ $ 10,205,294
Prologis, Inc.
 ​ ​ ​ ​ 174,800 ​ ​ ​ ​ ​ 17,759,680
Realty Income Corporation
 ​ ​ ​ ​ 190,900 ​ ​ ​ ​ ​ 11,110,380
SBA Communications Corp. Class A
 ​ ​ ​ ​ 45,200 ​ ​ ​ ​ ​ 12,866,180
​ ​ ​ ​ 51,941,534
Utilities — 2.9%
 ​
American Electric Power Company, Inc.
 ​ ​ ​ ​ 184,100 ​ ​ ​ ​ ​ 15,915,445
CenterPoint Energy, Inc.
 ​ ​ ​ ​ 490,300 ​ ​ ​ ​ ​ 13,816,654
CMS Energy Corporation
 ​ ​ ​ ​ 242,800 ​ ​ ​ ​ ​ 14,140,672
WEC Energy Group, Inc.
 ​ ​ ​ ​ 170,500 ​ ​ ​ ​ ​ 15,247,815
​ ​ ​ ​ ​ 59,120,586
Total Common Stocks ​
(Cost $1,462,237,272)
 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,003,872,947
Other Investments — 0.0% ​
Financials — 0.0%
 ​
Adams Funds Advisers, LLC (b)(d)(g)
 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
(Cost $150,000)
 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 466,000
Short-Term Investments — 0.8% ​
Money Market Funds — 0.8%
 ​
Morgan Stanley Institutional Liquidity Funds Prime Portfolio, 3.03% (e)
 ​ ​ ​ ​ 15,713,616 ​ ​ ​ ​ ​ 15,713,616
Northern Institutional Treasury Portfolio, 2.43% (e)
 ​ ​ ​ ​ 1,072,179 ​ ​ ​ ​ ​ 1,072,179
Total Short-Term Investments ​
(Cost $16,783,023)
 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 16,785,795
Total — 100.1% ​
(Cost $1,479,170,295)
 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,021,124,742
Other Assets Less Liabilities — (0.1)% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (2,270,747) ​ ​
Net Assets — 100.0%
 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 2,018,853,995
​
8​
​
Schedule of Investments (continued)
​
September 30, 2022
(unaudited)
Total Return Swap Agreements — 0.0%
Description
 ​ ​
​ ​ ​ ​ ​ ​
Value and
Unrealized
Appreciation
(Assets)
​ ​
Value and
Unrealized
Depreciation
(Liabilities)
 ​
Terms
 ​ ​
Contract
Type
 ​ ​
Underlying
Security
 ​ ​
Termination
Date
​ ​
Notional
Amount
​
Receive total return on underlying
security and pay financing
amount based on notional
amount and daily U.S. Federal
Funds rate plus 0.55%.
 ​ ​
Long
​ ​ Altria Group Inc.
(255,400 shares) 		​ ​
9/27/2023
 ​ ​ ​ $ 11,628,821 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ (1,114,617) ​ ​
Pay total return on underlying security and receive financing amount based on notional amount and daily U.S. Federal Funds rate less 1.33%.
 ​ ​
Short
​ ​ Consumer Staples Select
Sector SPDR Fund
(152,900 shares)
 ​ ​
9/27/2023
 ​ ​ ​ ​ (11,589,331) ​ ​ ​ ​ ​ 1,330,475 ​ ​ ​ ​ ​ — ​ ​
Gross unrealized gain (loss) on open total return swap agreements ​ ​ ​ $ 1,330,475 ​ ​ ​ ​ $ (1,114,617) ​ ​
Net unrealized gain on open total return swap agreements (f) ​ ​ ​ $ 215,858 ​ ​ ​ ​ ​ ​ ​ ​
​
(a)
Common stocks are listed on the New York Stock Exchange or NASDAQ and are valued at the last reported sale price on the day of valuation.​
​
(b)
Presently non-dividend paying.
​
(c)
Non-controlled affiliate, a closed-end sector fund, registered as an investment company under the Investment Company Act of 1940.
​
(d)
Controlled affiliate valued using fair value procedures.
​
(e)
Rate presented is as of period-end and represents the annualized yield earned over the previous seven days.
​
(f)
Counterparty for all open total return swap agreements is Morgan Stanley. At September 30, 2022, $240,000 in cash collateral was held by the Fund.
​
(g)
During the nine months ended September 30, 2022, investments in affiliates were as follows:
​
​ ​ ​ ​ ​ ​ ​ ​ ​
​
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 ​ ​ ​ ​ ​ 634,164 ​ ​ ​ ​ ​ 6,429,116 ​ ​ ​ ​ ​ 42,554,622 ​ ​
​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 21,868 ​ ​ ​ ​ $ 634,164 ​ ​ ​ ​ $ 6,429,116 ​ ​ ​ ​ $ 43,020,622 ​ ​
Information regarding transactions in equity securities during the quarter can be found on our website at: www.adamsfunds.com.
9
Adams Diversified Equity Fund, Inc.
​
Board of Directors
​ 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) ​ ​ ​ ​
​
(1)
Member of Executive Committee
​
(2)
Member of Audit Committee
​
(3)
Member of Compensation Committee
​
(4)
Member of Nominating and Governance Committee
​
(5)
Chair of the Board
​
Officers
​
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 ​
​
500 East Pratt Street, Suite 1300, Baltimore, MD 21202
410.752.5900   800.638.2479
Website: www.adamsfunds.com
Tickers: ADX (NYSE), XADEX (NASDAQ)
Independent Registered Public Accounting Firm: PricewaterhouseCoopers LLP
Custodian of Securities: The Northern Trust Company
Transfer Agent & Registrar: American Stock Transfer & Trust Company, LLC
Stockholder Relations Department
6201 15th Avenue
Brooklyn, NY 11219
(877) 260-8188
Website: www.astfinancial.com
Email: info@astfinancial.com