Special Issue May 2022
As the Global Supply Chain hit the market all over the world, investors are looking to keep their investments safe according to the nature of their financial assets. The world is getting fluid and investments avenues are also changing. The benefit of portfolio received when there is low correlation among different financial asset returns as the risk gets diversified. The paper is an attempt to create a portfolio with Indian stocks, American Depository Receipts (ADRs) and Crypto currencies. Many traditional functions in finance are at threat due to rise in Crypto currencies. The role of middleman viz. financial institution may be eliminated with peer-to-peer mechanism embraced by Crypto currencies. However, the returns given by crypto are high as compared to stocks but the risk equally high. Here comes the role of ADRs. Recent studies show that ADRs give premium over underlying stocks. Investors also tap international equity market to raise capital and show their global presence. Similarly, to enhance risk adjusted return through geographic diversification of portfolios, foreign investors are crossing their borders. Depository Receipts are instruments that fulfil the needs of both participants in the capital market and are a key driver for success. The paper aims at studying the risk adjusted returns of Crypto currencies and ADRs vis-à-vis stocks in Indian market. It is interesting to compare that the premium generated by stock versus crypto and ADR versus crypto
ADR, Cryptocurrency, Portfolio, ADR Premium
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