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. Industry

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

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

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

    A single unit of at least 15 stocks that are used in program ...
  5. Equity Market

    The market in which shares are issued and traded, either through ...
  6. Free Right Of Exchange

    An investor's right to transfer an asset to another party without ...
Related Articles
  1. Stock Analysis

    ETFs vs. ETNs: How They Differ

    Key differences between exchange traded funds (ETFs) and exchange traded notes (ETNs) can significantly impact overall returns, meaning one could be a better choice than the other for certain ...
  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. Economics

    Explaining Industry

    The term industry refers to a classification of companies that share similar business activities.
  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. Investing

    Peter Lynch's Eyeballing: When Is It Relevant? (FMAGX, DNKN)

    Find out the key principles espoused by stock-picking legend Peter Lynch and whether they are as relevant today as they were in the 1990s.
  7. 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.
  8. 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. ...
  9. Mutual Funds & ETFs

    Introduction To Exchange-Traded Funds

    Get into ETFs and enjoy the benefits of a mutual fund with the flexibility of a stock.
  10. 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.
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. Why would a person choose a mutual fund over an individual stock?

    There are a number of reasons why an individual may choose to buy mutual funds instead of individual stocks. The most common ... Read Answer >>
Hot Definitions
  1. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  2. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  3. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  4. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  5. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  6. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
Trading Center