Holding Company Depository Receipt - HOLDR

DEFINITION of 'Holding Company Depository Receipt - HOLDR'

A financial product created by Merrill Lynch and traded daily on the American Stock Exchange that allows investors to buy and sell a basket of stocks in a particular sector, industry or other classification in a single transaction.

BREAKING DOWN 'Holding Company Depository Receipt - HOLDR'

There is a wide range of HOLDRs, covering various segments of the market such as biotech, internet and Europe 2001. Each HOLDR represents individual ownership in the stocks underlying the HOLDR. The value of the HOLDR fluctuates with the change in value of the underlying stocks.

The benefit of this instrument is that it enables an investor to gain exposure to a segment of the market and diversify within that sector. To gain the same level of diversification without this vehicle, the investor would need to purchase each company individually, thus increasing the amount of commissions.

RELATED TERMS
  1. Merrill Lynch & Co.

    One of the better known management and advisory companies. Merrill ...
  2. Industry

    A classification that refers to a group of companies that are ...
  3. Burst Basket

    A burst basket refers to a particular type of stock transaction ...
  4. Industry Bet

    A strategy whereby investors or portfolio managers increase or ...
  5. Basket

    A single unit of at least 15 stocks that are used in program ...
  6. Industry Group

    A classification method for individual stocks or companies, usually ...
Related Articles
  1. Economics

    Explaining Industry

    The term industry refers to a classification of companies that share similar business activities.
  2. Your Practice

    How Do Edward Jones and Merrill Lynch Compare?

    Merrill Lynch and Edward Jones have both been around for decades, but they approach business very differently. Here's the lowdown on how they compare.
  3. Investing Basics

    How The Stock Market Works

    When you buy a stock, you buy a piece of a company.
  4. Options & Futures

    Pick Stocks Like Peter Lynch

    Learn the basic tenets that helped this famous investor earn his fortune.
  5. Active Trading

    Peter Lynch On Playing The Market

    Everyone can appreciate great advice from a professional. Read on to benefit from the vast experience of Peter Lynch.
  6. Mutual Funds & ETFs

    Top-Down Analysis: Finding The Right Stocks And Sectors

    The top-down investment strategy depends on economy and market strength. Find out what you should know before jumping in.
  7. Investing

    What Are Stocks?

    Stocks are one of the most popular financial instruments in the world, but what does a stock actually represent? Find out how and why stocks are created, and what buying a stock means for investors. ...
  8. Investing

    Advising FAs: How To Explaining Stocks to a Client

    Without a doubt, common stocks are one of the greatest tools ever invented for building wealth.
  9. Entrepreneurship

    Charles Merrill

    We'll look at ten entrepreneurs who not only succeeded, but built vast business empires.
  10. Options & Futures

    Stock Safety: Top 3 Ways to Limit Your Losses

    First time stock investors may ask, is there any way to buy insurance on stocks to prevent losses?
RELATED FAQS
  1. Where did the term "tenbagger" originate?

    On February 15, 1989, Peter Lynch's investing book, "One Up On Wall Street", made its debut. At the core of the book was ... Read Answer >>
  2. What is the difference between an industry and a sector?

    The terms industry and sector are often used interchangeably to describe a group of companies that operate in the same segment ... Read Answer >>
  3. How does a depository bank benefit from issuing an ADR for a foreign company for ...

    For domestic investors the benefits of increasing the portion of their portfolio that they invest in foreign companies is ... Read Answer >>
  4. What is the difference between the equity market and the stock market?

    Discover the basic information about the equity, or stock, market and the two primary classifications of equities that are ... Read Answer >>
  5. How can I profit from a fall in stock prices of companies in the financial services ...

    Learn about the different methods successful investors use to profit by trading in the financial services sector, even when ... Read Answer >>
  6. Under the Investment Company Act of 1940, which of the following is not a formal ...

    The correct answer is d. A mutual fund is technically registered under the ’40 Act as an open-end management investment company. ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center