American Shares

DEFINITION of 'American Shares'

A term used outside of the United States to describe the stock of publicly held companies that are based in the United States. Investing in American shares can be especially appealing to residents of small countries who seek broader market exposure than they could achieve by investing only in the stocks of locally based countries. Also, listing on an American exchange gives a company more exposure. The NYSE and Nasdaq represent a large percentage of total world stock market capitalization, even compared to the major exchanges of Tokyo, London, Paris, Germany and Australia.

BREAKING DOWN 'American Shares'

U.S. residents who wish to invest in foreign securities can purchase shares of mutual funds or exchange-traded funds that are country-specific or that have international exposure. They can also purchase shares of specific foreign companies via American depositary receipts. All of these vehicles simplify the process of investing overseas, a process that can be complicated because of differences in regulations and tax laws, and fluctuations in currency values.



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RELATED FAQS
  1. What is a country ETF?

    Learn about the operational basics of exchange-traded funds (ETFs) and the foreign investment opportunities and advantages ... Read Answer >>
  2. What is foreign exchange?

    Foreign exchange, or Forex, is the conversion of one country's currency into that of another. In a free economy, a country's ... Read Answer >>
  3. What are the differences between global depositary receipts (GDRs) and American depositary ...

    Discover some of the similarities and differences between global depositary receipts and American depositary receipts, and ... Read Answer >>
  4. Can stocks be traded on more than one exchange, such as, for example, on both the ...

    A stock can trade on any exchange on which it is listed. And to be listed it must meet all of the exchange's listing requirements ... Read Answer >>
  5. Why would an investor want to hold an American Depository Receipt rather than the ...

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  6. Which of the following best describes American Depository Receipts (ADRs) ...

    The correct answer is b): ADRs are used to trade foreign securities in the United States. Instead of buying shares of foreign ... Read Answer >>
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