ADRs in Focus: Emerging markets' poor start to '08

The Bank of New York Emerging Markets ADR Index--which includes shares of companies based in China, Mexico, Brazil and more--lost about 6.7 percent of its value during the first two quarters of 2008. Many of its components faired far worse, with seven of the 19 countries on the index posting a gain.

Despite the dip, the broader ADR index faired better than the benchmark Standard & Poor's 500 index, which lost 13 percent during the same timeframe.

ADR stands for American Depositary Receipt, which is a security designed to allow U.S. investors to trade shares of companies based overseas.

China's ADR index was among the biggest sliders, as the Asian economic powerhouse faced crippling snowstorms, torrential floods and a catastrophic earthquake during the January through June period.

That, combined with anxiety surrounding Tibetan protests and the impending start of the Beijing Olympics, weighed on investors' minds during the first half of the year.

In all, the China ADR index is down more than 25 percent so far this year.

Mexico's economy--heavily grafted with that of the United States'--felt the effects of the debilitating subprime mess, as many American companies, including those in the construction sector, cut back on orders.

In April Cemex SAB de CV, one of the world's largest cement producers, said it expected cement demand in its U.S. housing sector to dip by 24 percent.

Yet the index was helped by companies such as Coca-Cola FEMSA SAB de CV, which distributes the iconic soft drink, and Telefonos de Mexico SAB de CV.