Adams Diversified Equity Fund Announces 2024 Performance

Rhea-AI Summary

Adams Diversified Equity Fund (NYSE: ADX) reported strong performance for 2024, achieving a 23.6% total return on net asset value, slightly below the S&P 500's 25.0% but outperforming the Morningstar U.S. Large Blend Category's 22.7%. The fund's market price return was notably higher at 28.1%.

The Fund distributed $2.50 per share in dividends and capital gains, representing a 10.9% distribution rate on NAV, exceeding their new 8% NAV distribution commitment. Net assets increased to $2.66 billion by year-end, with a NAV per share of $22.64.

The portfolio maintains significant exposure to technology sector (32.4%), with top holdings including Apple (8.0%), Microsoft (7.1%), and NVIDIA (6.9%). Other major sectors include Financials (13.4%) and Consumer Discretionary (11.4%).

Positive

• Outperformed Morningstar U.S. Large Blend Category (23.6% vs 22.7%)
• Strong market price return of 28.1%
• High distribution rate of 10.9%, exceeding 8% commitment
• Net assets increased to $2.66 billion from $2.55 billion
• NAV per share increased to $22.64 from $20.56

Negative

• Underperformed S&P 500 benchmark (23.6% vs 25.0%)
• High concentration risk with 41.6% of assets in top 10 holdings
• Significant tech sector exposure (32.4%) could increase volatility

Insights

Financial Analyst

The 2024 performance report reveals several critical insights. ADX delivered a 23.6% NAV return and an impressive 28.1% market price return, demonstrating strong execution in a volatile election year. The $2.50 per share distribution yielded a 10.9% rate, significantly exceeding their new 8% NAV distribution commitment.

Portfolio composition shows heavy tech concentration with 32.4% in Information Technology, led by mega-caps Apple (8.0%) and Microsoft (7.1%). The Magnificent Seven stocks dominate the top holdings, accounting for over 35% of assets. This concentration helped performance but also represents concentration risk.

The fund's long-term track record is solid, outperforming the Morningstar Large Blend category across all measured periods. The 1.9% premium to NAV at year-end (comparing market price return to NAV return) suggests strong investor demand, though this premium could compress if market sentiment shifts.

Market Research Analyst

The fund's strategic positioning in 2024 reflects broader market trends. The overweight in technology and communication services (41.7% combined) versus defensive sectors like utilities (2.2%) and real estate (2.0%) indicates a growth-oriented approach that paid off in 2024's AI-driven rally.

Notable is the relatively modest 9.9% healthcare allocation, suggesting potential missed opportunities in biotech and medical technology. The 13.4% financial sector weighting provided diversification benefits while capturing the higher interest rate environment's advantages.

The fund's ability to outperform peers while maintaining an elevated distribution rate positions it favorably for income-focused investors in 2025, particularly given the uncertain interest rate environment and election-year dynamics.

BALTIMORE, Jan. 16, 2025 (GLOBE NEWSWIRE) -- Adams Diversified Equity Fund, Inc. (NYSE: ADX) announces the Fund’s investment returns for 2024. The total return on the Fund’s net asset value for 2024 was 23.6%, with dividends and capital gains reinvested. The comparable figures for the S&P 500 Index and Morningstar U.S. Large Blend Category were 25.0% and 22.7%, respectively. The total return on the Fund’s market price for the period was 28.1%.

The Fund paid $2.50 per share in income dividends and realized capital gain distributions to shareholders in 2024, producing an annual distribution rate of 10.9% on net asset value.

“In a year of increased volatility related to the presidential election, we were pleased to outperform our peers in 2024 and distribute 10.9% of NAV to shareholders, significantly more than our new commitment adopted mid-year to annually distribute 8% of NAV,” said Jim Haynie, CEO of Adams Funds.

The 2024 Annual Report is expected to be released on or about February 19, 2025.

ANNUALIZED ONE, THREE, FIVE, AND TEN-YEAR COMPARATIVE RETURNS (12/31/24)
	1 Year		3 Year		5 Year		10 Year
Adams Diversified Equity Fund  (NAV)	23.6	%	9.2	%	15.0	%	13.7	%
Adams Diversified Equity Fund (market price)	28.1	%	10.5	%	15.3	%	14.1	%
Morningstar U.S. Large Blend Category	22.7	%	7.8	%	13.3	%	11.8	%
S&P 500	25.0	%	8.9	%	14.5	%	13.1	%

NET ASSET VALUE ANNOUNCED

The Fund’s net asset value at the end of 2024, compared with the year earlier, was:

	12/31/24		12/31/23
Net assets	$	2,662,523,552	$	2,550,393,350
Shares outstanding	117,585,976		124,051,639
Net asset value per share	$	22.64	$	20.56

TEN LARGEST EQUITY PORTFOLIO HOLDINGS (12/31/24)
	% of Net Assets
Apple Inc.	8.0	%
Microsoft Corporation.	7.1	%
NVIDIA Corporation	6.9	%
Amazon.com, Inc.	4.8	%
Alphabet Inc. Class A	3.9	%
Meta Platforms, Inc. Class A	2.8	%
Broadcom Inc.	2.5	%
Adams Natural Resources Fund, Inc.*	1.9	%
JP Morgan Chase & Co.	1.9	%
Tesla, Inc.	1.8	%
Total	41.6	%
* Non-controlled affiliated closed-end fund.

SECTOR WEIGHTINGS (12/31/24)
	% of Net Assets
Information Technology	32.4	%
Financials	13.4	%
Consumer Discretionary	11.4	%
Health Care	9.9	%
Communication Services	9.3	%
Industrials	7.8	%
Consumer Staples	5.7	%
Energy	3.5	%
Utilities	2.2	%
Real Estate	2.0	%
Materials	1.7	%

About Adams Funds

Since 1929, Adams Funds has consistently helped generations of investors reach their investment goals. Adams Funds is comprised of two closed-end funds, Adams Diversified Equity Fund, Inc. (NYSE: ADX) and Adams Natural Resources Fund, Inc. (NYSE: PEO). The Funds are actively managed by an experienced team with a disciplined approach and have paid dividends for more than 90 years across many market cycles. The Funds are committed to paying a minimum annual distribution rate of 8% of NAV paid evenly each quarter throughout the year, providing reliability for long-term shareholders. A portion of any distribution may be treated as paid from sources other than net income, including but not limited to short-term capital gain, long-term capital gain, and return of capital. The final determination of the source of all distributions for tax reporting purposes in a calendar year, including the percentage of qualified dividend income, will be made after year-end. Shares can be purchased through our transfer agent or through a broker. For more information about Adams Funds, please visit: adamsfunds.com.

For further information please contact: adamsfunds.com/about/contact │800.638.2479

FAQ

What was ADX's total return on NAV for 2024?

Adams Diversified Equity Fund (ADX) achieved a 23.6% total return on net asset value for 2024.

How much did ADX distribute to shareholders in 2024?

ADX distributed $2.50 per share in income dividends and realized capital gains in 2024, representing a 10.9% distribution rate on NAV.

What are ADX's largest portfolio holdings as of December 31, 2024?

ADX's largest holdings were Apple (8.0%), Microsoft (7.1%), NVIDIA (6.9%), Amazon (4.8%), and Alphabet Class A (3.9%).

How did ADX perform compared to the S&P 500 in 2024?

ADX's NAV return of 23.6% slightly underperformed the S&P 500's return of 25.0% in 2024.

What is ADX's sector allocation as of December 31, 2024?

ADX's largest sector allocations were Information Technology (32.4%), Financials (13.4%), and Consumer Discretionary (11.4%).