Diversification Benefits of Investing in NYSE-Listed Developed Market ADRs: Evidence from 1990 through 2009

Abstract

Investing in developed market ADRs listed on the NYSE provided US investors with diversification benefits based on how the ADR portfolios performed relative to the S&P 500. Developed ADRs listed in the 2000s during the weak US stock market outperformed those listed in the 1990s during the booming US stock market by over 29 percent relative to the S&P 500 index. These benefits existed even after breaking the sample down into IPOs and SEOs.