An Easier Way to Buy Foreign Stocks
Want to own international companies? ADRs may be just the ticket.
Investors looking through the list of companies on U.S. stock exchanges will likely notice three letters next to some of the names. Two-hundred twenty-eight businesses on the New York Stock Exchange, 108 on the NASDAQ and numerous more on the over-the-counter market have the letters "ADR" next to their listings.
Many investors know ADR stands for American depository receipt, and that issuing ADRs is a way foreign companies can get their shares listed on U.S. exchanges. But investors may not know much more about ADRs beyond that. Yet ADRs are an important part of the U.S. market and provide smaller investors access to companies that they may not otherwise get.
Bryan Borzykowski does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.