The performance of NASDAQ-listed UK ADRs: a note

Abstract

The author examines NASDAQ-listed American Depository Receipts (ADRs) from the United Kingdom to determine overall investment performance for the first 21 days of trading and the first 3 years of trading. Long-term results also show the effects of market timing. In early trading, the 22 UK ADRs outperformed the NASDAQ by 8.81% for the first 21 days. Long-term results show the entire sample of UK ADRs outperformed the NASDAQ index by nearly 20% for the first 3 years of trading. Those ADRs trading during the bull market (listed before 1998) performed roughly equal to the NASDAQ index whereas those trading through the bear market (listed after 1 January 1998) outperformed the NASDAQ by nearly 39% during the first 36 months of trading. These results suggest that market timing affects long-term portfolio returns from UK ADRs.

Keywords:

• American Depository Receipts
• UK
• international diversification
• stock market efficiency
• stock market timing

JEL Classification:

• G11
• G12
• G15