Ask the Institute

Ask the Institute Archive

DATE: February 19, 2013

QUESTION:

Can you explain what American Depository Receipts are?

ANSWER:
American Depository Receipts, more commonly called ADRs, are securities which trade in the United States in US dollars that represent shares of stock in a non-US company. Since stocks of non-US companies normally trade on exchanges in their home countries and in their home currencies, ADRs allow investors in the US to invest in a foreign company without having to open an account in a foreign market or be required to make the necessary currency conversions. To learn more about ADRs, view this week's segment of "Ask the Institute."

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