ADR Basics: Conclusion
AAA
  1. ADR Basics: Introduction
  2. ADR Basics: What Is An ADR?
  3. ADR Basics: Determining Price
  4. ADR Basics: Risks
  5. ADR Basics: Conclusion

ADR Basics: Conclusion


With globalization dissolving borders, it only makes sense that we have the ability to invest in foreign entities. Many nations who are striving to become industrialized are undervalued compared to the levels they will eventually reach.

Many people, therefore, consider ADRs an undiscovered gem in the financial markets. Diversification does not stop at just investing in different types of stocks or bonds. By investing in different countries, you gain the potential to capitalize on emerging economies, which hopefully leads to more green in your pocket.

Let's recap:

  • ADR is an acronym for American depositary receipt.
  • ADRs trade just like stocks but represent shares of a foreign company trading on a foreign stock exchange.
  • ADR shares float on supply and demand, just like a regular stock.
  • There are three types of ADRs - Level 1, Level 2 and Level 3. Levels 1 and 2 are listings in the U.S., while Level 3 ADRs are public offerings to investors.
  • Remember that there are other risks associated with buying ADRs, including inflationary risk, political risk and exchange rate risk.

  1. ADR Basics: Introduction
  2. ADR Basics: What Is An ADR?
  3. ADR Basics: Determining Price
  4. ADR Basics: Risks
  5. ADR Basics: Conclusion
RELATED TERMS
  1. Welfare Capitalism

    Definition of welfare capitalism.
  2. Foreign remittance

  3. Bid Wanted

    An announcement by an investor who holds a security that he or ...
  4. Heckscher-Ohlin Model

    An economic theory that states that countries export what they ...
  5. Sponsored ADR

    An American depositary receipt (ADR) issued by a bank on behalf ...
  6. Depositary Receipt

    A negotiable financial instrument issued by a bank to represent ...
  1. Does cash-on-delivery aid produce better results than a loan?

    Learn of the arguments about the efficacy of cash on delivery, or COD, aid to poor areas, as set forth by its proponents ...
  2. What effect has globalization had on international investments?

    Learn how globalization impacts international investment and transforms economies around the world. Understand the implications ...
  3. Is globalization purely an economic phenomenon?

    Take a look at the complex scope of the term "globalization", and learn why the term applies in many contexts beyond the ...
  4. Which emerging markets should an investor consider for exposure to the metals and ...

    Discover the world's top emerging market countries for investing in the metals and mining sector and what mined resources ...

You May Also Like

Related Tutorials
  1. Bonds & Fixed Income

    Investing For Safety and Income Tutorial

  2. Investing Basics

    Stock Basics Tutorial

  3. Options & Futures

    Beginner's Guide To Trading Futures

  4. Trading Strategies

    Introduction To Order Types

  5. Options & Futures

    Options Pricing

Trading Center