Ask the Institute

DATE: February 19, 2013


Can you explain what American Depository Receipts are?

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."