N-CSRS

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.

ADAMS
DIVERSIFIED EQUITY
FUND

SEMI-ANNUAL REPORT

JUNE 30, 2020

GET THE LATEST NEWS AND INFORMATION

adamsfunds.com/sign-up

Letter to Shareholders

Dear Fellow Shareholders,

2020 is turning out to be quite a year. So far, we have experienced a global pandemic, government-imposed shelter-in-place and lockdown orders, a rise in unemployment to levels not seen since the Great Depression, and widespread civil unrest similar to the 1960s — and we are only halfway through 2020. This led the S&P 500 to fall 19.6% in the first quarter, before rallying 20.5% in the second, closing down just 3.1% for the first six months of 2020. We were pleased that our Fund, which declined 2.0%, outperformed the S&P for the period.

The U.S. economy entered a recession in April as real GDP for the first quarter fell 5.0%, over 20 million jobs were lost, and the unemployment rate spiked to

We were pleased that our Fund outperformed the S&P 500, driven primarily by strong stock selection across several sectors.

14.7%. In response, the Federal Reserve took unprecedented actions to stabilize the financial markets and Congress passed a massive $2.2 trillion stimulus package. As state economies began to open, hopes for a vaccine grew, and the Fed made it clear it had no plans to raise rates until 2022, the stock market rallied in the second quarter, The S&P generated its best quarterly return in 20 years. While we are encouraged by the reports of higher consumer spending and better-than-expected news on job losses, the economic recovery remains uncertain as both spending and jobs remain well below pre-pandemic levels.

For the first half of 2020, Consumer Discretionary, Financials, and Real Estate were the strongest contributors to our relative returns. Communication Services and Health Care detracted the most from our relative performance.

Our Consumer Discretionary investments increased 21.9% and were the largest contributor to our relative performance for the period, exceeding the sector's return of 7.2%. Strong stock selection allowed us to outperform in every industry group within the sector. Our investments in Amazon, Chipotle Mexican Grill, and Lowe’s were standouts, increasing 49.3%, 25.7%, and 14.0%, respectively. All three companies benefited from the stay-at-home orders.

The market sell-off provided an opportunity for us to add to our exposure in gaming and hotels. We added Las Vegas Sands and Hilton Hotels to our portfolio and reduced our retail investments by exiting Ross Stores and Williams-Sonoma. We like that Las Vegas Sands, a global casino operator, has a strong balance sheet and generates significant free cash flow. Hilton is a leading hotel company with a portfolio of 18 brands with strong growth potential and solid capital

1​

Letter to Shareholders (continued)

discipline. We view both companies as beneficiaries of easing travel restrictions and used the stock weakness to add them to our Fund.

Although Financials was the second worst performing sector in the S&P 500 year-to-date, declining 23.6%, our investments outperformed, falling only 21.0%. We benefited from our decision to underweight consumer finance companies, which were negatively impacted by job losses and the potential impact this could have on consumers’ abilities to repay loans. We focused our investments in areas that are less credit sensitive such as Intercontinental Exchange, an owner of exchanges for financial and commodity markets, and Blackstone Group, a global investment manager. Our investment in S&P Global, a leading credit rating agency, also contributed to our returns for the period, increasing 21.0%. The company has several growth drivers including debt refinancing, index ownership, and ESG (Environmental, Social, and Corporate Governance) investing, and we expect these secular trends to remain tailwinds going forward.

While banks were the worst performing group within Financials, we owned two of the highest quality banks, JPMorgan Chase and Bank of America. Although we had hoped that new management could fix Wells Fargo, we are now concerned that the bank is in a long-term secular decline and exited our position in the stock.

Real Estate makes up only 3.0% of our entire Fund, but the sector had an outsized impact on our overall returns due to good stock selection. Our investments declined only 1.7% compared to an 8.5% decline for the sector. During the second quarter we added Simon Property Group, the largest owner of high-quality shopping malls. The stock had come under pressure, falling 61.8%, due to the potential impact COVID-19 would have on malls. We like the company’s solid fundamentals and felt the significant valuation discount priced in a lot of bad news. The stock rose 19.3% after we purchased it in May.

Our investment in American Tower, which owns and operates wireless and broadcast communications infrastructure, also contributed to our Real Estate returns, increasing 13.3%. We view the cell tower and data center groups as the best positioned in this sector for the current environment. Both groups should benefit from the growing demand for data, which leads to higher demand for their services. We increased our exposure in this area by adding Equinix to the Fund. Equinix is the largest data center operator and owns properties that connect all the major network providers, users, and operators together. The stock rose 44.3% since we added it to the Fund.

Our investments in Communications Services were disappointing, down 3.3% compared to a 0.3% decline for the sector. The lack of professional sports negatively impacted media companies such as Comcast, which rely on the advertising revenue from games. The stay-at-home orders drove shares of

2

Letter to Shareholders (continued)

streaming services operator Netflix higher, which we did not own enough of during the first half of the year, negatively impacting our performance. Our position in Walt Disney also detracted from our Fund due to the closure of its theme parks, which make up over 40% of the company’s revenue.

For the six months ended June 30, 2020, the total return on the Fund’s net asset value (“NAV”) per share (with dividends and capital gains reinvested) was -2.0%. This compares to a -3.1% total return for the S&P 500 and a -4.4% total return for the Lipper Large-Cap Core Funds Average over the same time period. The total return on the market price of the Fund’s shares for the period was -4.8%.

For the twelve months ended June 30, 2020, the Fund’s total return on NAV was 7.6%. Comparable figures for the S&P 500 and Lipper Large-Cap Core Funds Average were 7.5% and 5.3%, respectively. The Fund’s total return on market price was 5.5%.

During the first half of this year, the Fund paid distributions to shareholders in the amount of $10.9 million, or $.10 per share, consisting of  $.01 net investment income and $.03 long-term capital gain, realized in 2019, and $.06 of net investment income realized in 2020, all taxable in 2020. On July 16, 2020, an additional net investment income dividend of  $.05 per share was declared for payment on September 1, 2020. These constitute the first three payments toward our annual 6% minimum distribution rate commitment. Additionally, the Fund repurchased 135,192 shares of its Common Stock during the past six months. The shares were repurchased at an average price of $11.64 and a weighted average discount to NAV of 15.1%.

Looking ahead, we expect the COVID-19 pandemic will continue to impact the country for the remainder of the year. The economic recovery is likely to be choppy due to fears of a second wave of COVID-19 and uncertainty surrounding what happens when the first round of fiscal stimulus runs out. We also anticipate more volatility as the U.S. presidential election heats up.

Although the path forward is “extraordinarily uncertain”, to quote Fed Chairman Jerome Powell, we are confident in our ability to navigate through it. We appreciate your trust in us and do not take it for granted.

By order of the Board of Directors,

Mark E. Stoeckle
Chief Executive Officer & President
July 16, 2020

3​

Portfolio Highlights

June 30, 2020
(unaudited)

Ten Largest Equity Portfolio Holdings

​	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%

Sector Weightings

4

Statement of Assets and Liabilities

June 30, 2020
(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

*

See Schedule of Investments beginning on page 16.

The accompanying notes are an integral part of the financial statements.

5​

Statement of Operations

Six Months Ended June 30, 2020
(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	)

The accompanying notes are an integral part of the financial statements.

6

Statements of Changes in Net Assets

​	(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

The accompanying notes are an integral part of the financial statements.

7​

Notes to Financial Statements (unaudited)

Adams Diversified Equity Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940 (“1940 Act”) as a diversified investment company. The Fund is an internally managed closed-end fund whose investment objectives are preservation of capital, the attainment of reasonable income from investments, and an opportunity for capital appreciation.

1. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation — The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for investment companies, which require the use of estimates by Fund management. Management believes that estimates and valuations are appropriate; however, actual results may differ from those estimates and the valuations reflected in the financial statements may differ from the value the Fund ultimately realizes. Additionally, unpredictable events such as natural disasters, war, terrorism, global pandemics and similar public health threats may significantly affect the economy, markets, and companies in which the Fund invests. During the six months ended June 30, 2020, a novel strain of coronavirus (COVID-19) has resulted in disruptions to global business activity and caused significant volatility in financial markets. The Fund could be negatively impacted if the value of portfolio holdings are harmed by such events.

Affiliates — The 1940 Act defines “affiliated companies” as those companies in which the Fund owns 5% or more of the outstanding voting securities. Additionally, those companies in which the Fund owns more than 25% of the outstanding voting securities are considered to be “controlled” by the Fund. The Fund and its affiliates, Adams Natural Resources Fund, Inc. (“PEO”) and Adams Funds Advisers, LLC (“AFA”), have a shared management team.

PEO — The Fund owns 2,186,774 shares of PEO, a non-diversified, closed-end investment company, representing 7.3% of its outstanding shares. The Fund accounts for PEO as a portfolio investment that meets the definition of a non-controlled affiliate. During the six months ended June 30, 2020, the Fund received dividends and capital gain distributions of  $371,752 and $65,603, respectively, from its investment in PEO and recognized a change in unrealized appreciation on its investment in PEO of $(11,152,547). Directors of the Fund are also directors of PEO.

AFA — In April 2015, Fund shareholders authorized the Fund to provide investment advisory services to external parties, and the Securities and Exchange Commission granted no-action relief under section 12(d)(3) of the 1940 Act to allow the Fund to create a separate, wholly-owned entity for this purpose. The Fund provided the initial capital for the start-up costs of AFA, a Maryland limited liability company, and the Fund is the sole member and General Manager, as provided by the Operating Agreement between AFA and the Fund. This structure mitigates the risk of potential liabilities for the Fund associated with any claims that may arise against AFA during the ordinary course of conducting its business. Given that AFA is an operating company that provides no services to the Fund, the Fund accounts for AFA as a portfolio investment that meets the definition of a controlled affiliate.

AFA’s profit is dependent on it having assets under management. At June 30, 2020, AFA had no assets under management. Failure to develop new relationships will impact AFA’s ability to generate revenue, and accordingly, the Fund's valuation of its investment in AFA. While unlikely, to the extent that AFA’s operating costs exceed its assets held, the Fund

8

Notes to Financial Statements (continued)

may be required to provide additional capital to AFA to sustain its operations. For tax purposes, AFA’s operating income (or loss) is consolidated with that of the Fund. During the six months ended June 30, 2020, the Fund recognized no change in unrealized appreciation on its investment in AFA.

Expenses — The Fund and its affiliates share personnel, systems, and other infrastructure items and are charged a portion of the shared expenses. To protect the Fund from potential conflicts of interest, policies and procedures are in place covering the sharing of expenses among the entities. Expenses solely attributable to an entity are charged to that entity. Expenses that are not solely attributable to one entity are allocated in accordance with the Fund’s expense sharing policy. The Fund's policy dictates that expenses, other than those related to personnel, are attributed to AFA based on the average estimated amount of time spent by all personnel on AFA-related activities relative to overall job functions; the remaining portion is attributed to the Fund and PEO based on relative net assets. Personnel-related expenses are attributed to AFA based on the individual's time spent on AFA-related activities; the remaining portion is attributed to the Fund and PEO based on relative time spent for portfolio managers, relative market values of portfolio securities covered for research staff, and relative net assets for all others. Expense allocations are updated quarterly. With AFA having no assets under management, only those expenses directly attributable to AFA are charged to AFA.

For the six months ended June 30, 2020, shared expenses totaled $11,766,790, of which $3,480,683 was charged to PEO, in accordance with the Fund’s expense sharing policy. There were no amounts due to, or due from, its affiliates at June 30, 2020.

Investment Transactions, Investment Income, and Distributions — The Fund's investment decisions are made by the portfolio management team with recommendations from the research staff. Policies and procedures are in place covering the allocation of investment opportunities among the Fund and its affiliates to protect the Fund from potential conflicts of interest. Investment transactions are accounted for on trade date. Realized gains and losses on sales of investments are recorded on the basis of specific identification. Dividend income and distributions to shareholders are recognized on the ex-dividend date.

Valuation — The Fund’s financial instruments are reported at fair value, which is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund has a Valuation Committee (“Committee”) so that financial instruments are appropriately priced at fair value in accordance with GAAP and the 1940 Act. Subject to oversight and approval by the Board of Directors, the Committee establishes methodologies and procedures to value securities for which market quotations are not readily available.

GAAP establishes the following hierarchy that categorizes the inputs used to measure fair value:

•

Level 1 — fair value is determined based on market data obtained from independent sources; for example, quoted prices in active markets for identical investments;

•

Level 2 — fair value is determined using other assumptions obtained from independent sources; for example, quoted prices for similar investments;

•

Level 3 — fair value is determined using the Fund’s own assumptions, developed based on the best information available under the circumstances.

Investments in securities traded on national exchanges are valued at the last reported sale price as of the close of regular trading on the relevant exchange on the day of

9​

Notes to Financial Statements (continued)

valuation. Over-the-counter and listed equity securities for which a sale price is not available are valued at the last quoted bid price. Money market funds are valued at net asset value. These securities are generally categorized as Level 1 in the hierarchy.

Total return swap agreements are valued using independent, observable inputs, including underlying security prices, dividends, and interest rates. These securities are generally categorized as Level 2 in the hierarchy.

The Fund’s investment in its controlled affiliate, AFA, is valued by methods deemed reasonable in good faith by the Committee. With AFA not currently having operations, the Committee uses AFA's total assets, comprised solely of cash, to approximate fair value. There was no uncertainty surrounding this input at the reporting date. Fair value determinations are reviewed on a regular basis and updated as needed. Given the absence of market quotations or observable inputs, the Fund’s investment in AFA is categorized as Level 3 in the hierarchy.

At June 30, 2020, the Fund’s financial instruments were classified as follows:

​

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

2. FEDERAL INCOME TAXES

No federal income tax provision is required since the Fund’s policy is to qualify as a regulated investment company under the Internal Revenue Code and to distribute substantially all of its taxable income and gains to its shareholders. Additionally, management has analyzed the tax positions included in federal income tax returns from the previous three years that remain subject to examination, and concluded no provision was required. Any income tax-related interest or penalties would be recognized as income tax expense. At June 30, 2020, the identified cost of securities for federal income tax purposes was $1,279,983,168 and net unrealized appreciation aggregated $619,639,569, consisting of gross unrealized appreciation of $683,284,894 and gross unrealized depreciation of $63,645,325.

Distributions are determined in accordance with the Fund’s annual 6% minimum distribution rate commitment, based on the Fund’s average market price, and income tax regulations, which may differ from GAAP. Such differences are primarily related to the Fund’s retirement plans, equity-based compensation, wash sales, tax straddles for total return swaps, and investment in AFA. Differences that are permanent, while not material

10

Notes to Financial Statements (continued)

for the six months ended June 30, 2020, are reclassified in the capital accounts of the Fund’s financial statements and have no impact on net assets.

3. INVESTMENT TRANSACTIONS

Purchases and sales of portfolio investments, other than short-term investments, securities lending collateral, and derivative transactions, during the six months ended June 30, 2020 were $638,707,834 and $640,163,350, respectively.

4. DERIVATIVES

During the six months ended June 30, 2020, the Fund invested in derivative instruments. The Fund uses derivatives for a variety of purposes, including, but not limited to, the ability to gain or limit exposure to particular market sectors or securities, to provide additional capital gains, to limit equity price risk in the normal course of pursuing its investment objectives, and/or to obtain leverage.

Total Return Swap Agreements — The Fund utilizes total return swap agreements in carrying out a paired trade strategy, where it enters into a long contract for a single stock and a short contract for a sector exchange-traded fund in comparable notional amounts. Total return swap agreements involve commitments based on a notional amount to pay interest in exchange for a market-linked return of a reference security. Upon closing a long contract, the Fund will receive a payment to the extent the total return of the reference security is positive for the contract period and exceeds the offsetting interest rate obligation or will make a payment if the total return is negative for the contract period. Upon closing a short contract, the Fund will receive a payment to the extent the total return of the reference security is negative for the contract period and exceeds the offsetting interest rate obligation or will make a payment if the total return is positive for the contract period. The fair value of each total return swap agreement is determined daily and the change in value is recorded as a change in unrealized appreciation on total return swap agreements in the Statement of Operations. Payments received or made upon termination during the period are recorded as a realized gain or loss on total return swap agreements in the Statement of Operations.

Total return swap agreements entail risks associated with counterparty credit, liquidity, and equity price risk. Such risks include that the Fund or the counterparty may default on its obligation, that there is no liquid market for these agreements, and that there may be unfavorable changes in the price of the reference security. To mitigate the Fund’s counterparty credit risk, the Fund enters into master netting and collateral arrangements with the counterparty. A master netting agreement allows either party to terminate the agreement prior to termination date and provides the ability to offset amounts the Fund owes the counterparty against the amounts the counterparty owes the Fund for a single net settlement. The Fund’s policy is to net all derivative instruments subject to a netting agreement and offsets the value of derivative liabilities against the value of derivative assets. The net cumulative unrealized gain (asset) on open total return swap agreements or the net cumulative unrealized loss (liability) on open total return swap agreements are presented in the Statement of Assets and Liabilities. The fair value of each open total return swap agreement is presented on the Schedule of Investments. During the six months ended June 30, 2020, the average daily notional amounts of open long and short total return swap agreements, an indicator of the volume of activity, were $1,687,558 and $(1,672,681), respectively.

A collateral arrangement requires each party to provide collateral with a value, adjusted daily and subject to a minimum transfer amount, equal to the net amount owed to the

11​

Notes to Financial Statements (continued)

other party under the agreement. The counterparty provides cash collateral to the Fund and the Fund provides collateral by segregating portfolio securities, subject to a valuation allowance, into a tri-party account at its custodian. At June 30, 2020, there were no securities pledged as collateral and no cash collateral was held by the Fund.

5. CAPITAL STOCK

The Fund has 10,000,000 authorized and unissued preferred shares, $0.001 par value.

During the six months ended June 30, 2020, the Fund issued 1,198 shares of its Common Stock at a weighted average price of $15.17 per share as dividend equivalents to holders of restricted stock units under the 2005 Equity Incentive Compensation Plan.

On December 26, 2019, the Fund issued 3,507,483 shares of its Common Stock at a price of $15.51 per share (the average market price on December 11, 2019) to shareholders of record on November 25, 2019, who elected to take stock in payment of the year-end distribution. During the year ended December 31, 2019, the Fund issued 4,424 shares of its Common Stock at a weighted average price of $15.46 per share as dividend equivalents to holders of deferred stock units and restricted stock units under the 2005 Equity Incentive Compensation Plan.

The Fund may purchase shares of its Common Stock from time to time, in accordance with parameters set by the Board of Directors, at such prices and amounts as the portfolio management team deems appropriate. Transactions in its Common Stock for 2020 and 2019 were as follows:

​	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

6. RETIREMENT PLANS

The Fund sponsors a qualified defined contribution plan for all employees with at least six months of service and a nonqualified defined contribution plan for eligible employees to supplement the qualified plan. The Fund matches employee contributions made to the plans and, subject to Board approval, may also make a discretionary contribution to the plans. During the six months ended June 30, 2020, the Fund recorded matching contributions of  $320,025 and a liability, representing the 2020 discretionary contribution, of  $148,993.

7. EQUITY-BASED COMPENSATION

The Fund’s 2005 Equity Incentive Compensation Plan, adopted at the 2005 Annual Meeting and reapproved at the 2010 Annual Meeting, expired on April 27, 2015. Restricted stock units granted to nonemployee directors that are 100% vested, but payment of which has been deferred at the election of the director, remain outstanding at June 30, 2020.

12

Notes to Financial Statements (continued)

Outstanding awards were granted at fair market value on grant date (determined by the average of the high and low price on that date) and earn an amount equal to the Fund’s per share distribution, payable in reinvested shares, which are paid concurrently with the payment of the original share grant. A summary of the activity during the six months ended June 30, 2020 is as follows:

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

At June 30, 2020, the Fund had no unrecognized compensation cost. The total fair value of awards issued during the six months ended June 30, 2020 was $102,920.

8. OFFICER AND DIRECTOR COMPENSATION

The aggregate remuneration paid by the Fund during the six months ended June 30, 2020 to officers and directors amounted to $5,140,875, of which $344,920 was paid to independent directors. These amounts represent the taxable income, including $102,920 in deferred director compensation from previous years, to the Fund’s officers and directors and, therefore, may differ from the amounts reported in the accompanying Statement of Operations that are recorded and expensed in accordance with GAAP. At June 30, 2020, $2,035,313 was due to officers and directors, representing amounts related to estimated cash compensation and estimated retirement plan discretionary contributions payable to officers, and reinvested dividend payments on restricted stock awards payable to directors.

9. PORTFOLIO SECURITIES LOANED

The Fund makes loans of securities to approved brokers to earn additional income. The loans are collateralized by cash and/or U.S. Treasury and government agency obligations valued at 102% of the value of the securities on loan. The market value of the loaned securities is calculated based upon the most recent closing prices and any additional required collateral is delivered to the Fund on the next business day. On loans collateralized by cash, the cash collateral is invested in a registered money market fund. The Fund accounts for securities lending transactions as secured financing and retains a portion of the income from lending fees and interest on the investment of cash collateral. The Fund also continues to receive dividends on the securities loaned. Gain or loss in the fair value of securities loaned that may occur during the term of the loan will be for the account of the Fund. At June 30, 2020, the Fund had no securities on loan. The Fund is indemnified by the custodian, serving as lending agent, for the loss of loaned securities and has the right under the lending agreement to recover the securities from the borrower on demand.

13​

Notes to Financial Statements (continued)

10. LEASES

The Fund and its affiliates jointly lease office space and equipment under non-cancelable lease agreements expiring at various dates through 2026. Payments are made in aggregate pursuant to these agreements but are deemed variable for each entity, as the allocable portion to each entity fluctuates when applying the expense sharing policy among all affiliates at each payment date. Variable payments of this nature do not require recognition of an asset or an offsetting liability in the Statement of Assets and Liabilities and are recognized as rental expense on a straight-line basis over the lease term within occupancy and other office expenses in the Statement of Operations. During the six months ended June 30, 2020, the Fund recognized rental expense of  $187,248.

14

Financial Highlights

​

(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

(a)

Total investment return assumes reinvestment of all distributions at the price received in the Fund’s dividend reinvestment plan.

(b)

Ratios and portfolio turnover presented on an annualized basis.

(c)

Ratio of expenses to average net assets was 0.67% after adjusting for non-recurring pension-related settlement charges. The adjusted ratio of net investment income to average net assets was 1.08%.

15​

Schedule of Investments

June 30, 2020
(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

16

Schedule of Investments (continued)

June 30, 2020
(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

17​

Schedule of Investments (continued)

June 30, 2020
(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

18

Schedule of Investments (continued)

June 30, 2020
(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

Total Return Swap Agreements — 0.0%

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

​

​

​

(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. See note 1 to financial statements.

(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.

19​

Principal Changes in Portfolio Securities

During the Six Months Ended June 30, 2020
(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

20

Principal Changes in Portfolio Securities (continued)

During the Six Months Ended June 30, 2020
(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	​	​	—

The transactions presented above are those purchases or sales during the period that exceeded .40% of period-end net assets.

21​

Historical Financial Statistics

(unaudited)

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**

​

—

*

The annual distribution rate is the total dividends and distributions per share divided by the Fund’s average month-end stock price. For years prior to 2011, the average month-end stock price is determined for the calendar year. For 2011 and later, the average month-end stock price is determined for the twelve months ended October 31, which is consistent with the calculation used for the annual 6% minimum distribution rate commitment adopted in September 2011.

**

Includes amounts declared but not yet paid.

22

Annual Meeting of Stockholders

The Annual Meeting of Stockholders was held on April 9, 2020. The following votes were cast for directors:

​	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

A proposal to approve and ratify the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the Fund for 2020 was approved with 82,112,277 votes for, 2,464,717 votes against, and 682,472 shares abstaining.

 

 

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.

23​

Other Information

Distribution Payment Schedule

The Fund presently pays distributions four times a year, as follows: (a) three interim distributions on or about March 1, June 1, and September 1, and (b) a “year-end” distribution, payable in late December, consisting of the estimated balance of the net investment income for the year, the net realized capital gains earned through October 31 and, if applicable, a return of capital. Shareholders may elect to receive the year-end distribution in stock or cash. In connection with this distribution, all shareholders of record are sent a distribution announcement notice and an election card in mid-November. Shareholders holding shares in “street” or brokerage accounts make their election by notifying their brokerage house representative.

Electronic Delivery of Shareholder Reports

The Fund offers shareholders the benefits and convenience of viewing Quarterly and Annual Reports and other shareholder materials online. With your consent, paper copies of these documents will cease with the next mailing and will be provided via e-mail. Reduce paper mailed to your home and help lower the Fund’s printing and mailing costs. To enroll, please visit the following websites:

Registered shareholders with the Fund's transfer agent, American Stock Transfer & Trust Company ("AST"): www.astfinancial.com

Shareholders using brokerage accounts: http://enroll.icsdelivery.com/ADX

Proxy Voting Policies and Record

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities owned by the Fund and the Fund’s proxy voting record for the 12-month period ended June 30, 2020 are available (i) without charge, upon request, by calling the Fund’s toll free number at (800) 638-2479; (ii) on the Fund’s website: www.adamsfunds.com under the headings “Funds” and then “Reports & Literature”; and (iii) on the Securities and Exchange Commission’s website: www.sec.gov.

Statement on Quarterly Filing of Complete Portfolio Schedule

In addition to publishing its complete schedule of portfolio holdings in the First and Third Quarter Reports to Shareholders, the Fund also files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q (prior to 2019) and on Part F of Form N-PORT (beginning in 2019). Both Forms N-Q and N-PORT are available on the Commission’s website: www.sec.gov.. The Fund also posts a link to its filings on its website: www.adamsfunds.com under the headings "Funds" and then "Reports & Literature".

Website Information

Investors can find the Fund’s daily NAV per share, the market price, the discount/ premium to NAV per share, and quarterly changes in portfolio securities on our website at www.adamsfunds.com. Also available there are a history of the Fund, historical financial information, links for electronic delivery of shareholder reports, and other useful content.

24

Adams Diversified Equity Fund, Inc.

Board of Directors

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)	​

(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	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

Email: investorrelations@adamsfunds.com

Tickers: ADX (NYSE), XADEX (NASDAQ)

Counsel: Norton Rose Fulbright US LLP

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

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

EX-99.CERT

Exhibit 99.CERT

CERTIFICATIONS

I, Mark E. Stoeckle, certify that:
1.	I have reviewed this report on Form N-CSR of Adams Diversified Equity Fund, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our  supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by  others within those entities, particularly during the period in which this report is being prepared;

b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our  supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for  external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the  effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such  evaluation; and
d.	Disclosed in this report any change in the registrant's internal control over financial reporting 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; and

5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are  reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal  control over financial reporting.

Date: July 23, 2020	/s/ Mark E. Stoeckle
	Mark E. Stoeckle
	Chief Executive Officer & President (Principal Executive Officer)

I, Brian S. Hook, certify that:
1.	I have reviewed this report on Form N-CSR of Adams Diversified Equity Fund, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our  supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by  others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our  supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for  external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the  effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such  evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting 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; and

5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are  reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal  control over financial reporting.

Date: July 23, 2020	/s/ Brian S. Hook
	Brian S. Hook
	Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)

EX-99.906 CERT

Exhibit 99.906CERT

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

In connection with the Certified Shareholder Report of Adams Diversified Equity Fund, Inc. (the Fund) on Form N-CSR for the period ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Mark E. Stoeckle, Chief Executive Officer and President of the Fund, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund.

BY:	/s/ Mark E. Stoeckle
	Mark E. Stoeckle
	Chief Executive Officer & President (Principal Executive Officer)
DATE:	July 23, 2020

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form with the electronic version of this written statement required by Section 906, has been provided to the Fund and will be retained by the Fund and furnished to the Securities and Exchange Commission or its staff upon request.

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

In connection with the Certified Shareholder Report of Adams Diversified Equity Fund, Inc. (the Fund) on Form N-CSR for the period ended June30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Brian S. Hook, Vice President, Chief Financial Officer and Treasurer of the Fund, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund.

BY:	/s/ Brian S. Hook
	Brian S. Hook
	Vice President, Chief Financial Officer & Treasurer (Principal Financial Officer)
DATE:	July 23, 2020

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form with the electronic version of this written statement required by Section 906, has been provided to the Fund and will be retained by the Fund and furnished to the Securities and Exchange Commission or its staff upon request.