ADR

ADR

See: American Depositary Receipt

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ADR

See American Depositary Receipt.

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American depositary receipt (ADR). Shares of hundreds of major overseas-based companies, including names such as British Petroleum, Sony, and Toyota, are traded as ADRs on US stock markets in US dollars.

ADRs are actually receipts issued by US banks that hold actual shares of the companies' stocks. They let you diversify into international markets without having to purchase shares on overseas exchanges or through mutual funds.

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ADR

See asset depreciation range.

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American Depositary Receipt (ADR)

What Does American Depositary Receipt (ADR) Mean?

A negotiable certificate issued by a U.S. bank representing a specified number of shares in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADRs help reduce administrative and duty costs that otherwise would be levied on each transaction.

Investopedia explains American Depositary Receipt (ADR)

ADRs are an excellent way to buy shares in a foreign company and realize any dividends and capital gains in U.S. dollars. However, ADRs do not eliminate the currency and economic risks for the underlying shares in another country. For example, dividend payments in a foreign currency would be converted to U.S. dollars, net of any conversion expenses and foreign taxes. ADRs are listed on the NYSE, AMEX, or Nasdaq.

Related Terms:
• Derivative
• Global Depositary Receipt—GDR
• MSCI—Emerging Markets Index
• Security
• Spiders—SPDRs