ADX - ADX: Take Some Chips Off The Table

2024-03-24 11:21:55 ET

Summary

• Adams Diversified Equity Fund (ADX) has performed well, returning over 27% since October. ADX paid a $1.15/share year-end special distribution, exceeding expectations.
• The analogy to 1999/2000 appears to be playing out in real time, suggesting we are in the midst of a blow-off top in equities.
• Due to its investment process, the ADX fund is heavily concentrated in high momentum growth stocks that could see a large drawdown should the bubble burst.
• I recommend investors start to trim their high growth stock holdings like the ADX fund.

In October, I re-iterated my buy rating on the Adams Diversified Equity Fund ( ADX ). In my opinion, ADX is one of the most impressive growth-oriented closed-end fund ("CEF") in the market, with a long track record of strong performance. ADX was also well positioned, with large weights in the 'Magnificent 7' stocks that were driving market performance. Since my update, the ADX fund has done extremely well, returning over 27% (Figure 1)....

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