Seeking Alpha
Value, special situations, debt
Profile| Send Message|
( followers)  

Adams Express (ADX) is a closed end fund that can be used a good substitute for an S&P 500 Index fund. It seems very attractive at $12 or less. Here are some good features of ADX:

  1. Low expense ratio: The annual expense ratio of 0.44% is one of the lowest for a closed end fund.
  2. Low turnover: The ADX management does very little trading (low turnover ratio) which means that the "hidden" trading costs are also very low.
  3. Good long term performance: Since inception in 1979, the fund has averaged about 12% per year.
  4. High discount to NAV: ADX has been trading at a 14% discount to NAV which is at the higher end of its discount range. About 8% of the ADX portfolio is invested in PEO, which is another low expense closed end fund that trades at a discount of 12%. So on the PEO holding you actually get to buy it at a "double discount".
  5. Solid portfolio holdings: Its top stock holdings are: Schlumberger (SLB), General Electric (GE), Microsoft (MSFT), Conoco Phillips (COP) and Oracle (ORCL).

Full Disclosure: I am long shares of ADX.

Source: Adams Express: A Cheap Closed-End Fund