FUND - ADX: 6-8% Income Good Discount And Solid Past Performance

2024-05-27 09:00:00 ET

Summary

• Adams Diversified Equity Fund is a closed-end fund that invests in a diversified pool of equities of large-cap U.S. listed stocks.
• ADX uses near-zero leverage, which can be beneficial in a down market and high-interest environment.
• ADX's past performance is solid, especially in the last 15 years. In some ways, this is a proxy for the S&P 500 in terms of capital appreciation, with the benefit of 6% plus income.

Introduction:

Adams Diversified Equity Fund (ADX) is a closed-end fund that was incepted in Oct. 1929. So, this fund has a very long history and has survived the great depression and many more recessions. The fund's main objectives are reasonable income on an annual basis, preservation of capital, and seeking long-term capital appreciation. The fund is principally committed to providing 6% income, mostly distributed at the end of the year. This commitment is reflected in its history of providing high income to its shareholders for the past 87 years. However, there is a catch. The fund pays nearly 90% of its distribution at the year's end, while it pays a small amount in quarterly distributions. That may be a problem for some folks who would rather have evenly distributed income quarterly or, better yet, on a monthly basis. If you are one such income investor, then this fund is not for you....

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