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, 2019
Item 1. Reports to Stockholders.
| | |
Market Value
|
| |
Percent of
Net Assets |
| ||||||
Microsoft Corporation | | | | $ | 105,815,004 | | | | | | 5.6% | | |
Amazon.com, Inc. | | | | | 78,206,919 | | | | | | 4.2 | | |
Apple Inc. | | | | | 57,852,016 | | | | | | 3.1 | | |
Visa Inc. Class A | | | | | 52,307,970 | | | | | | 2.8 | | |
Alphabet Inc. Class A & Class C | | | | | 41,771,669 | | | | | | 2.2 | | |
Bank of America Corp. | | | | | 38,439,500 | | | | | | 2.1 | | |
Mastercard Incorporated Class A | | | | | 36,796,123 | | | | | | 2.0 | | |
Adams Natural Resources Fund, Inc.* | | | | | 36,169,242 | | | | | | 1.9 | | |
Honeywell International Inc. | | | | | 35,441,770 | | | | | | 1.9 | | |
Merck & Co., Inc. | | | | | 34,269,495 | | | | | | 1.8 | | |
| | | | $ | 517,069,708 | | | | | | 27.6% | | |
| Assets | | | | | | | | | | | | | |
| Investments* at value: | | | | | | | | | | | | | |
|
Common stocks:
|
| | | | | | | | | | | | |
|
Unaffiliated issuers (cost $1,185,365,007)
|
| | | $ | 1,831,251,007 | | | | | | | | |
|
Non-controlled affiliate (cost $33,970,033)
|
| | | | 36,169,242 | | | | | | | | |
|
Other investment in controlled affiliate (cost $150,000)
|
| | | | 466,000 | | | | | | | | |
|
Short-term investments (cost $6,562,399)
|
| | | | 6,563,279 | | | | | $ | 1,874,449,528 | | |
| Cash | | | | | | | | | | | 233,347 | | |
| Investment securities sold | | | | | | | | | | | 9,249,301 | | |
| Dividends receivable | | | | | | | | | | | 1,864,473 | | |
| Prepaid expenses and other assets | | | | | | | | | | | 1,792,572 | | |
|
Total Assets
|
| | | | | | | | | | 1,887,589,221 | | |
| | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | |
| Investment securities purchased | | | | | | | | | | | 9,309,508 | | |
| Fund shares purchased | | | | | | | | | | | 1,547 | | |
|
Net unrealized loss on open total return swap agreements
|
| | | | | | | | | | 254,084 | | |
| Due to officers and directors (note 8) | | | | | | | | | | | 1,341,262 | | |
| Accrued expenses and other liabilities | | | | | | | | | | | 1,992,602 | | |
|
Total Liabilities
|
| | | | | | | | | | 12,899,003 | | |
|
Net Assets
|
| | | | | | | | | $ | 1,874,690,218 | | |
| | | | | | | | | | | | | | |
| Net Assets | | | | | | | | | | | | | |
|
Common Stock at par value $0.001 per share, authorized 150,000,000 shares; issued and outstanding 105,711,570 shares (includes 56,677 deferred stock units) (note 7)
|
| | | | | | | | | $ | 105,712 | | |
| Additional capital surplus | | | | | | | | | | | 1,183,204,786 | | |
| Total distributable earnings (loss) | | | | | | | | | | | 691,379,720 | | |
|
Net Assets Applicable to Common Stock
|
| | | | | | | | | $ | 1,874,690,218 | | |
|
Net Asset Value Per Share of Common Stock
|
| | | | | | | | | $ | 17.73 | | |
| Investment Income | | | | | | ||
|
Income:
|
| | | | | ||
|
Dividends (includes $437,355 from affiliates and net of $23,684 in foreign taxes)
|
| | | $ | 15,465,913 | ||
|
Other income
|
| | | | 129,506 | ||
|
Total Income
|
| | | | 15,595,419 | ||
|
Expenses:
|
| | | | | ||
|
Investment research compensation and benefits
|
| | | | 2,979,361 | ||
|
Administration and operations compensation and benefits
|
| | | | 1,211,034 | ||
|
Occupancy and other office expenses
|
| | | | 350,905 | ||
|
Investment data services
|
| | | | 278,422 | ||
|
Directors' compensation
|
| | | | 242,000 | ||
|
Shareholder reports and communications
|
| | | | 161,698 | ||
|
Transfer agent, custody, and listing fees
|
| | | | 176,186 | ||
|
Accounting, recordkeeping, and other professional fees
|
| | | | 150,675 | ||
|
Insurance
|
| | | | 70,546 | ||
|
Audit and tax services
|
| | | | 58,680 | ||
|
Legal services
|
| | | | 20,703 | ||
|
Total Expenses
|
| | | | 5,700,210 | ||
|
Net Investment Income
|
| | | | 9,895,209 | ||
| | | | | | | ||
| Realized Gain (Loss) and Change in Unrealized Appreciation | | | | | | ||
|
Net realized gain (loss) on investments
|
| | | | 40,778,244 | ||
|
Net realized gain (loss) on total return swap agreements
|
| | | | 1,802,266 | ||
|
Change in unrealized appreciation on investments (includes $4,206,945 from affiliates)
|
| | | | 259,417,516 | ||
|
Change in unrealized appreciation on total return swap agreements
|
| | | | (254,084 | ) | |
|
Net Gain (Loss)
|
| | |
|
301,743,942
|
||
| Change in Net Assets from Operations | | | |
$
|
311,639,151
|
| | |
(unaudited)
Six Months Ended June 30, 2019 |
| |
Year Ended
December 31, 2018 |
| ||||||
From Operations: | | | | | | | | | | | | | |
Net investment income
|
| | | $ | 9,895,209 | | | | | $ | 20,641,002 | | |
Net realized gain (loss)
|
| | | | 42,580,510 | | | | | | 182,122,332 | | |
Change in unrealized appreciation
|
| | | | 259,163,432 | | | | | | (264,433,237) | | |
Change in Net Assets from Operations
|
| | |
|
311,639,151
|
| | | |
|
(61,669,903)
|
| |
| | | | | | | | | | | | | |
Distributions to Shareholders from: | | | | | | | | | | | | | |
Total distributable earnings
|
| | | | (10,604,201) | | | | | | (201,625,291) | | |
| | | | | | | | | | | | | |
From Capital Share Transactions: | | | | | | | | | | | | | |
Value of shares issued in payment of distributions (note 5)
|
| | | | 4,370 | | | | | | 74,393,795 | | |
Cost of shares purchased (note 5)
|
| | | | (7,238,343) | | | | | | (15,775,036) | | |
Deferred compensation (notes 5, 7)
|
| | | | — | | | | | | (206,214) | | |
Change in Net Assets from Capital Share Transactions
|
| | | | (7,233,973) | | | | | | 58,412,545 | | |
Total Change in Net Assets
|
| | | | 293,800,977 | | | | | | (204,882,649) | | |
| | | | | | | | | | | | | |
Net Assets: | | | | | | | | | | | | | |
Beginning of period
|
| | | | 1,580,889,241 | | | | | | 1,785,771,890 | | |
End of period
|
| | | $ | 1,874,690,218 | | | | | $ | 1,580,889,241 | | |
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Assets: | | | | | | | | | | | | | | | | | | | | | | | | ||
Common stocks | | | | $ | 1,867,420,249 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,867,420,249 | ||
Other investments
|
| | | | — | | | | | | — | | | | | | 466,000 | | | | | | 466,000 | ||
Short-term investments
|
| | | | 6,563,279 | | | | | | — | | | | | | — | | | | | | 6,563,279 | ||
Total investments | | | | $ | 1,873,983,528 | | | | | $ | — | | | | | $ | 466,000 | | | | | $ | 1,874,449,528 | ||
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | ||
Total return swap agreements*
|
| | | $ | — | | | | | $ | (254,084) | | | | | $ | — | | | | | $ | (254,084 | ) | |
* Unrealized appreciation (depreciation) | | ||||||||||||||||||||||||
The following is a reconciliation of the change in the value of Level 3 investments: | | ||||||||||||||||||||||||
Balance at December 31, 2018 | | | | | | | | | | $ | 567,000 | ||||||||||||||
Purchases | | | | | | | | | | | — | ||||||||||||||
Change in unrealized appreciation on investments | | | | | | | | | | | (101,000 | ) | |||||||||||||
Balance at June 30, 2019 | | | | | | | | | | $ | 466,000 |
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||
| | |
Six months
ended June 30, 2019 |
| |
Year ended
December 31, 2018 |
| |
Six months
ended June 30, 2019 |
| |
Year ended
December 31, 2018 |
| ||||||||||||
Shares issued in payment of distributions
|
| | | | 302 | | | | | | 5,502,265 | | | | | $ | 4,370 | | | | | $ | 74,393,795 | ||
Shares purchased (at a
weighted average discount from net asset value of 13.7% and 14.2%, respectively) |
| | | | (494,365) | | | | | | (1,018,156) | | | | | | (7,238,343) | | | | | | (15,775,036 | ) | |
Net activity under the 2005 Equity Incentive Compensation Plan
|
| | | | — | | | | | | (14,133) | | | | | | — | | | | | | (206,214 | ) | |
Net change | | | | | (494,063) | | | | | | 4,469,976 | | | | | $ | (7,233,973) | | | | | $ | 58,412,545 |
Awards
|
| |
Shares/Units
|
| |
Weighted Average
Grant-Date Fair Value |
| ||||||
Balance at December 31, 2018 | | | | | 56,375 | | | | | $ | 12.46 | | |
Reinvested dividend equivalents | | | | | 302 | | | | | | 14.43 | | |
Issued | | | | | — | | | | | | — | | |
Balance at June 30, 2019 | | | | | 56,677 | | | | | $ | 12.47 | | |
| Remainder of 2019 | | | | $ | 158,722 | | |
| 2020 | | | | | 386,551 | | |
| 2021 | | | | | 390,651 | | |
| 2022 | | | | | 389,755 | | |
| 2023 | | | | | 398,805 | | |
| Thereafter | | | | | 934,534 | | |
| Total | | | | $ | 2,659,018 | | |
| | |
(unaudited)
Six Months Ended |
| | | | | | | | | | | | | | | |||||||||||||||||||||||||
| | |
June 30,
2019 |
| |
June 30,
2018 |
| |
Year Ended December 31,
|
| |||||||||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |||||||||||||||||||||||||||
Per Share Operating Performance
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, beginning of period
|
| | | | $14.89 | | | | | | $17.55 | | | | | | $17.55 | | | | | | $15.22 | | | | | | $15.04 | | | | | | $15.87 | | | | | | $15.09 | | |
Net investment income
|
| | | | 0.09 | | | | | | 0.09 | | | | | | 0.20 | | | | | | 0.22 | | | | | | 0.19 | | | | | | 0.13 | | | | | | 0.20 | | |
Net realized gain (loss) and change in unrealized appreciation
|
| | | | 2.84 | | | | | | 0.35 | | | | | | (0.87) | | | | | | 3.55 | | | | | | 1.03 | | | | | | — | | | | | | 1.83 | | |
Change in accumulated other
comprehensive income |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 0.02 | | | | | | (0.01) | | |
Total from operations | | | | | 2.93 | | | | | | 0.44 | | | | | | (0.67) | | | | | | 3.77 | | | | | | 1.22 | | | | | | 0.15 | | | | | | 2.02 | | |
Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income
|
| | | | (0.08) | | | | | | (0.09) | | | | | | (0.21) | | | | | | (0.22) | | | | | | (0.18) | | | | | | (0.14) | | | | | | (0.20) | | |
Net realized gain
|
| | | | (0.02) | | | | | | (0.01) | | | | | | (1.79) | | | | | | (1.16) | | | | | | (0.81) | | | | | | (0.79) | | | | | | (0.98) | | |
Total distributions | | | | | (0.10) | | | | | | (0.10) | | | | | | (2.00) | | | | | | (1.38) | | | | | | (0.99) | | | | | | (0.93) | | | | | | (1.18) | | |
Capital share repurchases (note 5)
|
| | | | 0.01 | | | | | | 0.02 | | | | | | 0.03 | | | | | | 0.03 | | | | | | 0.02 | | | | | | 0.02 | | | | | | 0.02 | | |
Reinvestment of distributions
|
| | | | — | | | | | | — | | | | | | (0.02) | | | | | | (0.09) | | | | | | (0.07) | | | | | | (0.07) | | | | | | (0.08) | | |
Total capital share transactions | | | | | 0.01 | | | | | | 0.02 | | | | | | 0.01 | | | | | | (0.06) | | | | | | (0.05) | | | | | | (0.05) | | | | | | (0.06) | | |
Net asset value, end of period
|
| | | | $17.73 | | | | | | $17.91 | | | | | | $14.89 | | | | | | $17.55 | | | | | | $15.22 | | | | | | $15.04 | | | | | | $15.87 | | |
Market price, end of period | | | | | $15.45 | | | | | | $15.42 | | | | | | $12.62 | | | | | | $15.03 | | | | | | $12.71 | | | | | | $12.83 | | | | | | $13.68 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Investment Return (a) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Based on market price
|
| | | | 23.3% | | | | | | 3.3% | | | | | | -3.6% | | | | | | 29.4% | | | | | | 6.9% | | | | | | 0.7% | | | | | | 13.7% | | |
Based on net asset value
|
| | | | 19.9% | | | | | | 2.7% | | | | | | -2.6% | | | | | | 26.2% | | | | | | 9.2% | | | | | | 1.8% | | | | | | 14.3% | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data (b) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (in millions)
|
| | | | $1,875 | | | | | | $1,811 | | | | | | $1,581 | | | | | | $1,786 | | | | | | $1,513 | | | | | | $1,472 | | | | | | $1,528 | | |
Ratio of expenses to average
net assets |
| | | | 0.61% | | | | | | 0.60% | | | | | | 0.56% | | | | | | 0.56% | | | | | | 0.64% | | | | | | 0.96% (c) | | | | | | 0.58% | | |
Ratio of net investment income to average net assets
|
| | | | 1.17% | | | | | | 1.07% | | | | | | 1.14% | | | | | | 1.30% | | | | | | 1.29% | | | | | | 0.79% (c) | | | | | | 1.29% | | |
Portfolio turnover
|
| | | | 53.7% | | | | | | 65.3% | | | | | | 58.4% | | | | | | 39.2% | | | | | | 32.0% | | | | | | 22.0% | | | | | | 26.6% | | |
Number of shares outstanding
at end of period (in 000’s) |
| | | | 105,712 | | | | | | 101,105 | | | | | | 106,206 | | | | | | 101,736 | | | | | | 99,437 | | | | | | 97,914 | | | | | | 96,287 | | |
| | |
Shares
|
| |
Value (a)
|
| ||||||
Common Stocks — 99.6% | | ||||||||||||
Communication Services — 8.0%
|
| ||||||||||||
Alphabet Inc. Class A (b)
|
| | | | 27,400 | | | | | $ | 29,668,720 | | |
Alphabet Inc. Class C (b)
|
| | | | 11,197 | | | | | | 12,102,949 | | |
AT&T Inc.
|
| | | | 853,282 | | | | | | 28,593,480 | | |
Comcast Corporation Class A
|
| | | | 668,200 | | | | | | 28,251,496 | | |
Facebook, Inc. Class A (b)
|
| | | | 91,100 | | | | | | 17,582,300 | | |
Netflix, Inc. (b)
|
| | | | 50,300 | | | | | | 18,476,196 | | |
Verizon Communications Inc.
|
| | | | 86,800 | | | | | | 4,958,884 | | |
Walt Disney Company
|
| | | | 68,800 | | | | | | 9,607,232 | | |
| | | | | 149,241,257 | | | ||||||
Consumer Discretionary — 10.4%
|
| ||||||||||||
Advance Auto Parts, Inc.
|
| | | | 70,000 | | | | | | 10,789,800 | | |
Amazon.com, Inc. (b)
|
| | | | 41,300 | | | | | | 78,206,919 | | |
Chipotle Mexican Grill, Inc. (b)
|
| | | | 21,600 | | | | | | 15,830,208 | | |
Dollar General Corporation
|
| | | | 137,237 | | | | | | 18,548,953 | | |
Lowe's Companies, Inc.
|
| | | | 152,800 | | | | | | 15,419,048 | | |
NIKE, Inc. Class B
|
| | | | 273,300 | | | | | | 22,943,535 | | |
Tractor Supply Company
|
| | | | 159,000 | | | | | | 17,299,200 | | |
Ulta Beauty, Inc. (b)
|
| | | | 46,400 | | | | | | 16,095,696 | | |
| | | | | 195,133,359 | | | ||||||
Consumer Staples — 7.2%
|
| ||||||||||||
Coca-Cola Company
|
| | | | 533,200 | | | | | | 27,150,544 | | |
Costco Wholesale Corporation
|
| | | | 70,300 | | | | | | 18,577,478 | | |
Mondelez International, Inc. Class A
|
| | | | 244,500 | | | | | | 13,178,550 | | |
PepsiCo, Inc. (g)
|
| | | | 118,700 | | | | | | 15,565,131 | | |
Philip Morris International Inc.
|
| | | | 197,000 | | | | | | 15,470,410 | | |
Procter & Gamble Company
|
| | | | 115,350 | | | | | | 12,648,127 | | |
Unilever plc Sponsored ADR
|
| | | | 193,400 | | | | | | 11,984,998 | | |
Walmart Inc.
|
| | | | 188,400 | | | | | | 20,816,316 | | |
| | | | | 135,391,554 | | | ||||||
Energy — 5.5%
|
| ||||||||||||
Adams Natural Resources Fund, Inc. (c)
|
| | | | 2,186,774 | | | | | | 36,169,242 | | |
BP plc Sponsored ADR
|
| | | | 80,800 | | | | | | 3,369,360 | | |
Cheniere Energy, Inc. (b)
|
| | | | 134,300 | | | | | | 9,192,835 | | |
Chevron Corporation
|
| | | | 61,400 | | | | | | 7,640,616 | | |
Diamondback Energy, Inc.
|
| | | | 74,200 | | | | | | 8,085,574 | | |
EOG Resources, Inc.
|
| | | | 87,200 | | | | | | 8,123,552 | | |
Exxon Mobil Corporation (g)
|
| | | | 168,400 | | | | | | 12,904,492 | | |
Royal Dutch Shell plc Class B Sponsored ADR
|
| | | | 54,900 | | | | | | 3,609,126 | | |
Total S.A. Sponsored ADR
|
| | | | 60,800 | | | | | | 3,392,032 | | |
Valero Energy Corporation
|
| | | | 111,900 | | | | | | 9,579,759 | | |
| | | | | 102,066,588 | | |
| | |
Shares
|
| |
Value (a)
|
| ||||||
Financials — 13.1%
|
| ||||||||||||
Aflac Incorporated
|
| | | | 278,400 | | | | | $ | 15,259,104 | | |
American Express Company
|
| | | | 198,100 | | | | | | 24,453,464 | | |
Bank of America Corp.
|
| | | | 1,325,500 | | | | | | 38,439,500 | | |
Berkshire Hathaway Inc. Class B (b)
|
| | | | 60,900 | | | | | | 12,982,053 | | |
Fifth Third Bancorp
|
| | | | 606,100 | | | | | | 16,910,190 | | |
Intercontinental Exchange, Inc.
|
| | | | 279,000 | | | | | | 23,977,260 | | |
JPMorgan Chase & Co.
|
| | | | 298,200 | | | | | | 33,338,760 | | |
Raymond James Financial, Inc.
|
| | | | 153,600 | | | | | | 12,986,880 | | |
T. Rowe Price Group
|
| | | | 167,400 | | | | | | 18,365,454 | | |
Travelers Companies, Inc.
|
| | | | 134,400 | | | | | | 20,095,488 | | |
U.S. Bancorp
|
| | | | 483,000 | | | | | | 25,309,200 | | |
Wells Fargo & Company
|
| | | | 55,300 | | | | | | 2,616,796 | | |
| | | | | 244,734,149 | | | ||||||
Health Care — 13.8%
|
| ||||||||||||
Abbott Laboratories
|
| | | | 342,800 | | | | | | 28,829,480 | | |
Agilent Technologies, Inc.
|
| | | | 178,200 | | | | | | 13,306,194 | | |
Alexion Pharmaceuticals, Inc. (b)
|
| | | | 146,700 | | | | | | 19,214,766 | | |
Edwards Lifesciences Corporation (b)
|
| | | | 122,900 | | | | | | 22,704,546 | | |
Health Care Select Sector SPDR Fund
|
| | | | 145,400 | | | | | | 13,469,856 | | |
Johnson & Johnson
|
| | | | 204,900 | | | | | | 28,538,472 | | |
Medtronic plc
|
| | | | 222,700 | | | | | | 21,688,753 | | |
Merck & Co., Inc.
|
| | | | 408,700 | | | | | | 34,269,495 | | |
Pfizer Inc.
|
| | | | 211,940 | | | | | | 9,181,241 | | |
Thermo Fisher Scientific Inc.
|
| | | | 87,700 | | | | | | 25,755,736 | | |
UnitedHealth Group Incorporated
|
| | | | 108,800 | | | | | | 26,548,288 | | |
Zoetis Inc. Class A
|
| | | | 139,600 | | | | | | 15,843,204 | | |
| | | | | 259,350,031 | | | ||||||
Industrials — 9.4%
|
| ||||||||||||
Boeing Company
|
| | | | 52,200 | | | | | | 19,001,322 | | |
Cintas Corporation
|
| | | | 48,400 | | | | | | 11,484,836 | | |
Delta Air Lines, Inc.
|
| | | | 216,200 | | | | | | 12,269,350 | | |
General Electric Company
|
| | | | 246,500 | | | | | | 2,588,250 | | |
Honeywell International Inc.
|
| | | | 203,000 | | | | | | 35,441,770 | | |
Kansas City Southern
|
| | | | 109,400 | | | | | | 13,327,108 | | |
Parker-Hannifin Corporation
|
| | | | 101,300 | | | | | | 17,222,013 | | |
Republic Services, Inc.
|
| | | | 203,500 | | | | | | 17,631,240 | | |
Union Pacific Corporation
|
| | | | 148,300 | | | | | | 25,079,013 | | |
United Technologies Corporation
|
| | | | 169,300 | | | | | | 22,042,860 | | |
| | | | | 176,087,762 | | |
| | |
Shares
|
| |
Value (a)
|
| ||||||
Information Technology — 23.6%
|
| ||||||||||||
Accenture plc Class A
|
| | | | 126,600 | | | | | $ | 23,391,882 | | |
Adobe Inc. (b)
|
| | | | 110,100 | | | | | | 32,440,965 | | |
Apple Inc. (g)
|
| | | | 292,300 | | | | | | 57,852,016 | | |
Broadcom Inc.
|
| | | | 61,600 | | | | | | 17,732,176 | | |
Cisco Systems, Inc.
|
| | | | 523,400 | | | | | | 28,645,682 | | |
Fidelity National Information Services, Inc.
|
| | | | 144,600 | | | | | | 17,739,528 | | |
Lam Research Corporation
|
| | | | 49,800 | | | | | | 9,354,432 | | |
Mastercard Incorporated Class A
|
| | | | 139,100 | | | | | | 36,796,123 | | |
Microsoft Corporation
|
| | | | 789,900 | | | | | | 105,815,004 | | |
Oracle Corporation
|
| | | | 122,200 | | | | | | 6,961,734 | | |
Palo Alto Networks, Inc. (b)
|
| | | | 71,400 | | | | | | 14,548,464 | | |
salesforce.com, inc. (b)
|
| | | | 139,800 | | | | | | 21,211,854 | | |
Texas Instruments Incorporated
|
| | | | 156,100 | | | | | | 17,914,036 | | |
Visa Inc. Class A
|
| | | | 301,400 | | | | | | 52,307,970 | | |
| | | | | 442,711,866 | | | ||||||
Materials — 2.2%
|
| ||||||||||||
Air Products and Chemicals, Inc.
|
| | | | 58,100 | | | | | | 13,152,097 | | |
Ball Corporation
|
| | | | 103,000 | | | | | | 7,208,970 | | |
Corteva Inc
|
| | | | 57,400 | | | | | | 1,697,318 | | |
Dow, Inc.
|
| | | | 57,400 | | | | | | 2,830,394 | | |
DuPont de Nemours, Inc.
|
| | | | 57,400 | | | | | | 4,309,018 | | |
Sherwin-Williams Company
|
| | | | 24,900 | | | | | | 11,411,421 | | |
| | | | | 40,609,218 | | | ||||||
Real Estate — 2.9%
|
| ||||||||||||
American Tower Corporation
|
| | | | 95,300 | | | | | | 19,484,085 | | |
AvalonBay Communities, Inc.
|
| | | | 79,200 | | | | | | 16,091,856 | | |
Prologis, Inc.
|
| | | | 242,500 | | | | | | 19,424,250 | | |
| | | | | 55,000,191 | | | ||||||
S&P 500 Index — 0.4%
|
| ||||||||||||
SPDR S&P 500 ETF Trust
|
| | | | 28,600 | | | | | | 8,379,800 | | |
| |||||||||||||
Utilities — 3.1%
|
| ||||||||||||
Exelon Corporation
|
| | | | 299,300 | | | | | | 14,348,442 | | |
NextEra Energy, Inc.
|
| | | | 99,000 | | | | | | 20,281,140 | | |
Public Service Enterprise Group Incorporated
|
| | | | 173,900 | | | | | | 10,228,798 | | |
WEC Energy Group Inc.
|
| | | | 166,200 | | | | | | 13,856,094 | | |
| | | | | 58,714,474 | | | ||||||
Total Common Stocks | | ||||||||||||
(Cost $1,219,335,040)
|
| | | | | | | | | | 1,867,420,249 | | |
|
| | |
Shares
|
| |
Value (a)
|
| ||||||
Other Investments — 0.0% | | ||||||||||||
Financials — 0.0%
|
| ||||||||||||
Adams Funds Advisers, LLC (b)(d)
|
| | | | | | | | | | | | |
(Cost $150,000)
|
| | | | | | | | | $ | 466,000 | | |
Short-Term Investments — 0.4% | | ||||||||||||
Money Market Funds — 0.4%
|
| ||||||||||||
Fidelity Investments Money Market Funds - Prime Money Market Portfolio (Institutional Class), 2.39% (e)
|
| | | | 4,399,320 | | | | | | 4,401,079 | | |
Northern Institutional Treasury Portfolio, 2.25% (e)
|
| | | | 2,162,200 | | | | | | 2,162,200 | | |
Total Short-Term Investments | | ||||||||||||
(Cost $6,562,399)
|
| | | | | | | | | | 6,563,279 | | |
Total — 100.0% | | ||||||||||||
(Cost $1,226,047,439)
|
| | | | | | | | | | 1,874,449,528 | | |
Other Assets Less Liabilities — 0.0% | | | | | | | | | | | 240,690 | | |
Net Assets — 100.0% | | | | | | | | | |
$
|
1,874,690,218
|
| |
|
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
|
| | Intel Corporation (199,200 shares) | | |
6/17/2020
|
| | | $ | 9,101,269 | | | | | $ | 400,352 | | | | | $ | — | | |
Pay total return on underlying security and receive financing amount based on notional amount and daily U.S. Federal Funds rate less 0.45%.
|
| |
Short
|
| | Technology Select Sector SPDR Fund (120,500 shares) |
| |
6/17/2020
|
| | | | (9,076,831) | | | | | | — | | | | | | (338,135) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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
|
| | Palo Alto Networks, Inc. (47,000 shares) | | |
7/22/2020
|
| | | | 9,832,630 | | | | | | — | | | | | | (264,704) | | |
Pay total return on underlying security and receive financing amount based on notional amount and daily U.S. Federal Funds rate less 0.45%.
|
| |
Short
|
| | Technology Select Sector SPDR Fund (126,900 shares) |
| |
7/22/2020
|
| | | | (9,881,170) | | | | | | — | | | | | | (51,597) | | |
Gross unrealized gain (loss) on open total return swap agreements | | | | $ | 400,352 | | | | | $ | (654,436) | | | |||||||||||||||
Net unrealized loss on open total return swap agreements (f) | | | | $ | (254,084) | | | | | | | | |
| | |
Purchases
(Cost) |
| |
Sales
(Proceeds) |
| |
Market Value Held
at June 30, 2019 |
| |||||||||
Agilent Technologies, Inc. | | | | $ | 14,051,593 | | | | | | | | | | | $ | 13,306,194 | | |
American Express Company | | | | | 21,860,402 | | | | | | | | | | | | 24,453,464 | | |
Amgen Inc. | | | | | 13,928,762 | | | | | $ | 13,006,626 | | | | | | — | | |
AvalonBay Communities, Inc. | | | | | 15,677,233 | | | | | | | | | | | | 16,091,856 | | |
Boeing Company | | | | | 7,551,275 | | | | | | 24,262,601 | | | | | | 19,001,322 | | |
Broadcom Inc. | | | | | 17,105,543 | | | | | | | | | | | | 17,732,176 | | |
Cheniere Energy, Inc. | | | | | 9,036,214 | | | | | | | | | | | | 9,192,835 | | |
Chevron Corporation | | | | | 7,371,580 | | | | | | | | | | | | 7,640,616 | | |
Coca-Cola Company | | | | | 18,386,306 | | | | | | | | | | | | 27,150,544 | | |
Comcast Corporation Class A | | | | | 14,275,908 | | | | | | | | | | | | 28,251,496 | | |
Fidelity National Information Services, Inc.
|
| | | | 16,431,534 | | | | | | | | | | | | 17,739,528 | | |
Fifth Third Bancorp | | | | | 16,793,734 | | | | | | | | | | | | 16,910,190 | | |
HD Supply Holdings, Inc. | | | | | 13,491,215 | | | | | | 12,763,251 | | | | | | — | | |
Health Care Select Sector SPDR Fund
|
| | | | 12,954,006 | | | | | | | | | | | | 13,469,856 | | |
Johnson & Johnson | | | | | 9,309,508 | | | | | | | | | | | | 28,538,472 | | |
Kansas City Southern | | | | | 12,926,567 | | | | | | | | | | | | 13,327,108 | | |
Lam Research Corporation | | | | | 8,956,904 | | | | | | | | | | | | 9,354,432 | | |
MGM Resorts International | | | | | 8,495,911 | | | | | | 7,401,828 | | | | | | — | | |
Mondelez International, Inc. Class A
|
| | | | 2,265,182 | | | | | | 10,521,417 | | | | | | 13,178,550 | | |
Parker-Hannifin Corporation | | | | | 15,856,418 | | | | | | | | | | | | 17,222,013 | | |
Philip Morris International Inc. | | | | | 11,503,136 | | | | | | | | | | | | 15,470,410 | | |
Republic Services, Inc. | | | | | 16,120,608 | | | | | | | | | | | | 17,631,240 | | |
SPDR S&P 500 ETF Trust | | | | | 49,959,474 | | | | | | 42,494,372 | | | | | | 8,379,800 | | |
T. Rowe Price Group | | | | | 17,212,590 | | | | | | | | | | | | 18,365,454 | | |
Texas Instruments Incorporated | | | | | 16,313,465 | | | | | | | | | | | | 17,914,036 | | |
Ulta Beauty, Inc. | | | | | 13,114,051 | | | | | | | | | | | | 16,095,696 | | |
Unilever plc Sponsored ADR | | | | | 10,505,043 | | | | | | | | | | | | 11,984,998 | | |
United Technologies Corporation | | | | | 7,198,254 | | | | | | 5,791,563 | | | | | | 22,042,860 | | |
Valero Energy Corporation | | | | | 9,209,864 | | | | | | | | | | | | 9,579,759 | | |
Walmart Inc. | | | | | 2,222,111 | | | | | | 7,421,511 | | | | | | 20,816,316 | | |
Zoetis Inc. Class A | | | | | 14,031,914 | | | | | | 1,007,004 | | | | | | 15,843,204 | | |
Abbott Laboratories | | | | | | | | | | | 6,432,584 | | | | | | 28,829,480 | | |
Advance Auto Parts, Inc. | | | | | | | | | | | 6,086,280 | | | | | | 10,789,800 | | |
Alaska Air Group, Inc. | | | | | | | | | | | 7,841,854 | | | | | | — | | |
Alphabet Inc. Class C | | | | | | | | | | | 14,156,047 | | | | | | 12,102,949 | | |
Altria Group Inc | | | | | | | | | | | 10,635,944 | | | | | | — | | |
Berkshire Hathaway Inc. Class B | | | | | | | | | | | 26,865,397 | | | | | | 12,982,053 | | |
Biogen Inc. | | | | | | | | | | | 15,376,865 | | | | | | — | | |
Broadridge Financial Solutions, Inc.
|
| | | | | | | | | | 12,617,851 | | | | | | — | | |
| | |
Purchases
(Cost) |
| |
Sales
(Proceeds) |
| |
Market Value Held
at June 30, 2019 |
| ||||||
Centene Corporation | | | | | | | $ | 6,977,387 | | | | | $ | — | | |
Cigna Corporation | | | | | | | | 8,857,314 | | | | | | — | | |
Constellation Brands, Inc. Class A | | | | | | | | 6,104,456 | | | | | | — | | |
Emerson Electric Co. | | | | | | | | 15,880,737 | | | | | | — | | |
Facebook, Inc. Class A | | | | | | | | 9,039,635 | | | | | | 17,582,300 | | |
Marathon Petroleum Corporation | | | | | | | | 10,965,395 | | | | | | — | | |
Netflix, Inc. | | | | | | | | 5,774,335 | | | | | | 18,476,196 | | |
NVIDIA Corporation | | | | | | | | 9,706,022 | | | | | | — | | |
Occidental Petroleum Corporation | | | | | | | | 10,759,647 | | | | | | — | | |
Pfizer Inc. | | | | | | | | 14,005,462 | | | | | | 9,181,241 | | |
Public Storage | | | | | | | | 13,434,833 | | | | | | — | | |
Raymond James Financial, Inc. | | | | | | | | 6,879,419 | | | | | | 12,986,880 | | |
Simon Property Group, Inc. | | | | | | | | 15,142,751 | | | | | | — | | |
Southwest Airlines Co. | | | | | | | | 7,221,609 | | | | | | — | | |
SunTrust Banks, Inc. | | | | | | | | 9,485,074 | | | | | | — | | |
Thermo Fisher Scientific Inc. | | | | | | | | 11,997,050 | | | | | | 25,755,736 | | |
UnitedHealth Group Incorporated | | | | | | | | 8,355,606 | | | | | | 26,548,288 | | |
VanEck Vectors Semiconductor ETF
|
| | | | | | | 18,257,195 | | | | | | — | | |
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* |
| |||||||||||||||||||||||||||
2009 | | | | $ | 1,045,027 | | | | 87,415 | | | | | $ | 11.95 | | | | | $ | 10.10 | | | | | $ | .15 | | | | | $ | .30 | | | | | $ | — | | | | | $ | .45 | | | | | | 5.2% | | | ||
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 | | | ||
June 30, 2019
|
| | | | 1,874,690 | | | | 105,712 | | | | | | 17.73 | | | | | | 15.45 | | | | | | .13** | | | | | | .02 | | | | | | — | | | | | | .15** | | | | | | — | | |
| | |
Votes For
|
| |
Votes Withheld
|
| ||||||
Enrique R. Arzac | | | | | 83,242,344 | | | | | | 7,777,263 | | |
Kenneth J. Dale | | | | | 83,638,860 | | | | | | 7,380,747 | | |
Frederic A. Escherich | | | | | 83,642,514 | | | | | | 7,377,093 | | |
Roger W. Gale | | | | | 83,470,871 | | | | | | 7,548,736 | | |
Lauriann C. Kloppenburg | | | | | 83,753,398 | | | | | | 7,266,209 | | |
Kathleen T. McGahran | | | | | 83,509,423 | | | | | | 7,510,184 | | |
Craig R. Smith | | | | | 83,309,353 | | | | | | 7,710,254 | | |
Mark E. Stoeckle | | | | | 83,730,621 | | | | | | 7,288,986 | | |
|
Enrique R. Arzac (2), (3)
|
| | Roger W. Gale (1), (2), (4) | | |
Craig R. Smith (3), (4)
|
|
|
Kenneth J. Dale (1), (3), (4)
|
| |
Lauriann C. Kloppenburg (2), (3)
|
| |
Mark E. Stoeckle (1)
|
|
|
Frederic A. Escherich (1), (2), (4)
|
| | Kathleen T. McGahran (1), (5) | | | | |
|
Mark E. Stoeckle
|
| | Chief Executive Officer and President | |
| James P. Haynie, CFA | | |
Executive Vice President
|
|
|
D. Cotton Swindell, CFA
|
| | Executive Vice President | |
|
Brian S. Hook, CFA, CPA
|
| | Vice President, Chief Financial Officer and Treasurer | |
| Janis F. Kerns | | |
General Counsel, Secretary and Chief Compliance Officer
|
|
| Gregory W. Buckley | | |
Vice President—Research
|
|
| Xuying Chang, CFA | | |
Vice President—Research
|
|
| Steven R. Crain, CFA | | |
Vice President—Research
|
|
| Michael A. Kijesky, CFA | | |
Vice President—Research
|
|
| Michael E. Rega, CFA | | |
Vice President—Research
|
|
| David R. Schiminger, CFA | | |
Vice President—Research
|
|
| Jeffrey R. Schollaert, CFA | | |
Vice President—Research
|
|
|
Christine M. Sloan, CPA
|
| | Assistant Treasurer and Director of Human Resources | |
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 | |||||||||||||
1/1/19 - 1/31/19 | — | — | — | 5,908,932 | ||||||||||||
2/1/19 - 2/28/19 | 85,097 | $ | 14.09 | 85,097 | 5,823,835 | |||||||||||
3/1/19 - 3/31/19 | 109,666 | $ | 14.26 | 109,666 | 5,714,169 | |||||||||||
4/1/19 - 4/30/19 | 53,747 | $ | 14.75 | 53,747 | 5,660,422 | |||||||||||
5/1/19 - 5/31/19 | 160,587 | $ | 14.87 | 160,587 | 5,499,835 | |||||||||||
6/1/19 - 6/30/19 | 85,268 | $ | 15.19 | 85,268 | 5,414,567 | |||||||||||
Total | 494,365 | $ | 14.64 | 494,365 |
(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. In December 2018, 5,314,566 additional shares were approved.
(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 has been no significant change 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 29, 2019 |
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 29, 2019 | |
By: | /s/ Brian S. Hook | |
Brian S. Hook | ||
Vice President, Chief Financial Officer & Treasurer | ||
(Principal Financial Officer) | ||
Date: | July 29, 2019 |