Long-Run Performance of Emerging Market ADRs: Evidence From Issues Listed on the New York Stock Exchange From 1990 Through 2009

Abstract

This article examines the three-year monthly aftermarket returns of emerging market firm equities traded on the New York Stock Exchange as American Depository Receipts (ADRs). Excess return results are broken down by the type of issue (IPO versus SEO) and the date of issue (those issued in the 1990s versus the 2000s). The total emerging market sample of 193 ADRs significantly outperformed the S&P 500 index by 8.5 percent for the three-year holding period; however, those issued before 2000 underperformed the index by nearly 18 percent while those listed after January 1, 2000 outperformed the index by nearly 41 percent. SEOs outperformed the market index by 32 percent while IPOs underperformed by 2 percent. Both portfolios (IPOs and SEOs) significantly outperformed the market for issues that were listed in the 2000s.

Keywords

International investing American Depository Receipts emerging markets

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