I am puzzling why everybody talked about getting burned by Chinese ADR. If you were not speculating, you should have very good experience with them since investing in Baidu, Tencent, Alibaba, Weibo, Sina and Momo, even Ctrip, Vishop, Tal Education and EDU (New Oriental). These are all companies listed in US and follow strict SEC requirement. Well, did they drop periodically? yes, sometimes 20% to 30% a day, but over a few years, they are in a group which far outpaced S&P 500. I hope I have chance to pick up Sina and Netease below $1 in early 2000. From percentage standpoint, the success rate of Chinese ADR is much higher than picking a US companies. Will there be risk? there is always for any asset class. Political risk is major one for these companies, but again, I don’t see that too daunting now as many ruling class members are investors and they wont’ rule against themselves. And their share price already reflects huge discount, for companies like Alibaba which is so dominant and a integral part of 1.4B people’s life.
There is no wonder IBD constantly has a large group of Chinese ADR in their IBD50 list or Global Leader list. Still, I respect people not willing to take risk, just to say we should all be open minded wrt to emerging market investing.