THE PERFORMANCE OF AMERICAN DEPOSITARY RECEIPTS: AN INDUSTRY ANALYSIS

This paper analyzes the industry performance of ADRs over eleven years (1995-2005) and the results show that ADR returns vary by industry grouping A comparison of ADR returns to a matched sample of domestic equity portfolios reveals that although both portfolios have similar average monthly returns. the associated risk varies. Reward-to-risk ratios suggest that an investor should hold hath domestic equity and ADR-industry portfolios to maximize returns. A shorter time frame (2000-2005) is considered in order to include technology-related industries which become more prominent in the 2000s. The results suggest that an investor should hold a portfolio that includes the following domestic industries. senuconductors. electronics. insurance. media, banking. food, electric, beverages. and oil/gas, and ADRs from the software. telecommunications. Internet. automotive. pharmaceuticals. airlines. and mining industries