Adams Natural Resources Fund Announces 2023 Performance

Rhea-AI Summary

Adams Natural Resources Fund, Inc. (PEO) announced its investment returns for 2023, with a total return on the Fund’s net asset value of 2.5%, outperforming its benchmark. The Fund paid $1.35 per share in income dividends and realized capital gain distributions, exceeding its annual 6% minimum distribution rate commitment. However, the comparable figures for the S&P 500 Energy Sector and the S&P 500 Materials Sector were -1.3% and 12.6% respectively, indicating mixed performance in comparison.

Insights

Financial Analyst

The Adams Natural Resources Fund's report of a 2.5% total return on net asset value, despite a challenging year for the energy market, is a notable achievement. This performance is particularly significant given the S&P 500 Energy Sector's negative return of -1.3%. It is indicative of the fund's effective stock selection and strategic allocation to the materials sector, which surged by 12.6%. The fund's ability to outperform its benchmark, which returned 1.0%, demonstrates a well-executed investment strategy that may appeal to investors seeking resilience amidst market volatility.

Moreover, the fund's annual distribution rate of 6.2% surpasses its 6% commitment, which could be an attractive factor for income-focused shareholders. This distribution rate, especially when compared to the lower yields in other sectors, may position the fund as a desirable option for those looking to supplement their income through dividends and capital gains distributions.

Market Research Analyst

Analyzing the broader implications, the fund's performance in a sector-specific context provides insights into the health of the energy and materials sectors. The fund's success in the materials sector may reflect broader industry trends, such as increased demand for raw materials in various industries or potential supply constraints. Conversely, the underperformance of the energy sector could be attributed to a variety of factors, including regulatory changes, shifts in oil prices, or advancements in alternative energy sources.

Investors and stakeholders can glean from this performance review that the fund's management is adept at navigating sector-specific risks and opportunities. This capability is crucial for maintaining investor confidence and attracting potential investors looking for sector-focused funds that can deliver consistent returns.

Economist

The fund's performance relative to its benchmark and the broader market offers a microcosmic view of the economic forces at play. The divergence between the energy and materials sectors' returns may signal underlying economic shifts, such as a transition towards a more materials-intensive economy, possibly influenced by infrastructure development or technological innovation requiring new materials. The fund's strategic positioning in these sectors suggests a forward-looking approach that takes into account macroeconomic trends and commodity cycles.

From an economic perspective, the fund's distribution rate exceeding the targeted minimum is noteworthy, as it reflects not just stock performance but also the fund's operational efficiency and capital management strategies. This aspect of the fund's operation may be of interest to investors who are assessing the sustainability of dividend payouts in the context of the overall economic environment.

BALTIMORE, Jan. 18, 2024 (GLOBE NEWSWIRE) -- Adams Natural Resources Fund, Inc. (NYSE: PEO) announces the Fund’s investment returns for 2023. “In a difficult year for the Energy market, our Fund’s exposure to the Materials sector offset some of the weakness. Good stock selection enabled the Fund to outperform its benchmark,” said Jim Haynie, CEO of Adams Funds.

The total return on the Fund’s net asset value for 2023 was 2.5%, with dividends and capital gains reinvested. The comparable figures for the S&P 500 Energy Sector and the S&P 500 Materials Sector were -1.3% and 12.6%, respectively. Our benchmark, which is comprised of the S&P 500 Energy Sector (83%) and the S&P 500 Materials Sector (17%), returned 1.0%. The total return on the Fund’s market price for the same period was 1.0%.

The Fund paid $1.35 per share in income dividends and realized capital gain distributions to shareholders in 2023, producing an annual distribution rate of 6.2%, exceeding the Fund’s annual 6% minimum distribution rate commitment. Details regarding the annual 6% minimum distribution rate commitment can be found at adamsfunds.com.

The 2023 Annual Report is expected to be released on or about February 15, 2024.

ANNUALIZED ONE, THREE, AND FIVE-YEAR COMPARATIVE RETURNS (12/31/23)

	1 Year	3 Year	5 Year
Adams Natural Resources Fund (NAV)	2.5%	29.9%	14.2%
Adams Natural Resources Fund (market price)	1.0%	30.2%	14.4%
S&P 500 Energy Sector	-1.3%	36.2%	13.4%
S&P 500 Materials Sector	12.6%	7.9%	13.6%

NET ASSET VALUE ANNOUNCED

The Fund’s net asset value at the end of 2023, compared with the year earlier, was:

	12/31/23	12/31/22
Net assets	$633,446,941	$651,336,441
Shares outstanding	25,514,441	25,193,556
Net asset value per share	$24.83	$25.85

TEN LARGEST EQUITY PORTFOLIO HOLDINGS (12/31/23)

	% of Net Assets
Exxon Mobil Corporation	18.5%
Chevron Corporation	12.4%
ConocoPhillips	7.5%
Linde plc	4.6%
Marathon Petroleum Corporation	3.9%
EOG Resources, Inc.	3.6%
Pioneer Natural Resources Company	3.6%
Schlumberger N.V.	3.5%
Phillips 66	3.2%
Hess Corporation	2.9%
Total	63.7%

INDUSTRY WEIGHTINGS (12/31/23)

	% of Net Assets
Energy
Integrated Oil & Gas	31.5%
Exploration & Production	25.3%
Refining & Marketing	8.9%
Equipment & Services	7.6%
Storage & Transportation	6.2%
Materials
Chemicals	14.7%
Metals & Mining	2.9%
Construction Materials	1.6%
Containers & Packaging	0.9%

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 85 years across many market cycles. The Funds are committed to paying an annual distribution rate of 6% or more, providing reliable income to long-term investors. 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 were the investment returns for Adams Natural Resources Fund, Inc. in 2023?

The total return on the Fund’s net asset value for 2023 was 2.5%, with dividends and capital gains reinvested.

How did the Fund perform compared to its benchmark?

The Fund outperformed its benchmark, with good stock selection and exposure to the Materials sector offsetting some of the weakness in the Energy market.

What was the annual distribution rate for the Fund in 2023?

The Fund produced an annual distribution rate of 6.2%, exceeding its annual 6% minimum distribution rate commitment.

Where can details regarding the annual 6% minimum distribution rate commitment be found?

Details regarding the annual 6% minimum distribution rate commitment can be found at adamsfunds.com.