American Shares

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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.

INVESTOPEDIA EXPLAINS '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 parties are involved in the creation of an American depositary receipt?

    An American depositary receipt (ADR) is a legal certificate issued by a recognized U.S. bank that represents a specific number ... Read Full Answer >>
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    American depositary receipts (ADRs) are bought and sold on regular U.S. stock exchanges, either in the over-the-counter market ... Read Full Answer >>
  3. What are the differences between global depositary receipts (GDRs) and American depositary ...

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  5. What happens to the shares of stock purchased in a tender offer?

    The shares of stock purchased in a tender offer become the property of the purchaser. From that point forward, the purchaser, ... Read Full Answer >>
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