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ADR

If you see the letters ADR after a company name, this means the security is an American Depository Receipt. ADRs represent shares of foreign companies traded in U.S. dollars on U.S. exchanges. They can be treated just like shares of domestic stock--you can buy or sell them through a broker, for example. However, ADRs aren't actually shares of stock, they are tradable receipts for actual shares on deposit at a bank. The purpose of the ADR is to make investing abroad both simpler and less costly for the average individual, who has neither the expertise of a foreign-stock mutual fund manager nor the buying power to trade in the volumes necessary to reduce the cost of foreign-stock transactions.

 

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