ADAMS NATURAL RESOURCES FUND

The fund is governed by a policy requiring it to invest at least 80% of its total assets in securities of companies principally engaged in the energy and natural resources industries. This includes businesses involved in exploration, production, transportation, refining, distribution, and equipment and services across oil, gas, mining, and related sectors. The policy allows limited holdings outside the sector, but the portfolio is overwhelmingly concentrated in energy and materials names, making it a pure-play vehicle for allocators seeking targeted sector exposure.

Adams Natural Resources Fund employs a systematic covered-call writing program against S&P 500 index positions as a core component of its income strategy. By selling call options on the index, the fund captures option premium that supplements the dividend income generated by its underlying energy equity holdings. This income is aggregated into a managed distribution policy targeting an annual distribution rate of at least 6% of the fund's market price, paid quarterly. The fund does not rely on structural leverage to support distributions.

No, the fund has historically operated without structural leverage, which distinguishes it from many closed-end energy and income funds that employ borrowing or preferred stock issuance to amplify returns. It maintains fully paid equity positions and uses the covered-call index option program as its primary return-overlay mechanism. The absence of leverage reduces interest-expense drag and margin-call risk during commodity downturns.

The fund is externally managed by Adams Funds Advisers, LLC, with Mark E. Stoeckle serving as Chief Executive Officer. The investment team operates from the firm's Baltimore headquarters and manages a portfolio of 50 to 70 energy and natural resource equities alongside the index options strategy. The fund does not disclose individual lead portfolio managers but operates under a centralized team structure within the adviser.

Adams Natural Resources Fund maintains a discretionary share repurchase program that authorizes management to buy back shares in the open market when the stock trades at a discount to its net asset value. This practice is designed to narrow the persistent NAV discounts common in closed-end fund structures and return capital to shareholders accretively. Repurchases are executed opportunistically and funded from available cash or portfolio realizations.

Both funds share a common organizational lineage dating to 1929 and are managed by the same external adviser, Adams Funds Advisers, LLC. Adams Natural Resources Fund was originally incorporated as Petroleum & Resources Corporation, while Adams Diversified Equity Fund was originally the Adams Express Company. The two funds share administrative infrastructure and board oversight but maintain separate investment mandates, separate tickers (PEO and ADX), and distinct portfolios.

The fund typically compares its total-return performance to the S&P 500 Energy Sector Index, given its concentrated energy and natural resources mandate. However, because the fund also writes covered calls against the broader S&P 500 index, its return profile can diverge meaningfully from a pure energy benchmark — the option premiums can buffer downside during energy selloffs but cap upside participation during rapid sector rallies (per the firm's official communications and public filings).