After-market performance of industrial American Depository Receipts: Does level of issue and market timing affect returns?

Mark Schaub ()
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Mark Schaub: Northwestern State University, College of Business

Journal of Asset Management, 2007, vol. 8, issue 4, No 5, 259-266

Abstract: Abstract In this study, I examine New York Stock Exchange-listed American Depository Receipts (ADRs) from industrial firms to determine overall short- and long-term investment performance and whether the level of issue (emerging versus developed) or timing of issue (before or during the US bear market) affects ADR performance relative to the S&P 500. Early performance results suggest a slight underperformance by the industrial portfolio; however, emerging issues significantly underperform the market index while developed issues outperform the S&P 500 during the first month of trading. After three years of trading in the US markets, industrial ADRs return roughly the same as the S&P 500; however, emerging issues underperform developed issues and ADRs listed before 1/1/98 drastically underperform the market index while those listed after 1/1/98 substantially outperform the market. These results provide evidence that level of issue and timing of issue affect portfolio returns when investing in industrial ADRs.

Keywords: American Depository Receipts; emerging markets; stock market timing; international diversification (search for similar items in EconPapers)
Date: 2007
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DOI: 10.1057/palgrave.jam.2250080

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