The S&P; ADR Index is up 14.19% on a total return basis as of June 4,2009.
Definition of the Index:
“S&P; ADR Index is designed to track the S&P; 700 which is the non-U.S. component of the S&P; Global 1200. Ideal for U.S. based investors looking for international exposure, this index only includes securities that can be traded and settled in the U.S. It is made up of those companies from the S&P; 700 that offer either Level II or Level III American Depository Receipts (ADRs), global shares, or ordinary shares in the case of Canadian equities.”
There are eleven industrials components in this index. The following is a brief overview of them:
1.ABB Ltd ADR (ABB)
Switzerland
2. Canadian Nlt Railway (CNI)
Canada
3.Canadian Pacific Railway Ltd (CP)
Canada
4.Empresa Brasileira de Aeronau(ERJ)
Brazil
5. Koninklijke Philips Electronics (PHG)
The Netherlands
6.Kubota Corp ADR (KUB)
Japan
7.Lan Airlines SA(LAN)
Chile
8.Mitsui & Co ADR(MITSY)
Japan
9.Ryanair Hldgs ADR (RYAAY)
Ireland
10.Siemens AG ADR (SI)
Germany
11.Tomkins ADR (TKS)
Great Britain
The two Canadian railroads CNI and CP are heavily dependent on US trade. Hence they will not have growth until the US economy improves. US consumes significant amount of commodities and other goods from Canada and these railroads help move those to the US markets.
Phillips (PHG) has a great brand name in emerging markets and the company is highly innovative. The company makes products that are highly in demand in poorer countries. Also the company is a leader in medical electronics competing against GE and other big players.
Ryan Air and LAN Chile will not rebound until the airline industry improves. With the economy still in doldrums in many countries and air travel reduced, these airlines will have earnings pressure for the rest of the year.
Siemens and ABB are market leaders in their respective fields. However they are impacted by the sluggish demand for their products in the infrastructure industry. The billions of bailout funds to be invested in the US have not yet kicked in and hence these companies haven’t seen their business boom yet. However both are long-term growth plays.
