ADR Sucks Customer Reviews and Feedback

From Everything.Sucks

An American depositary receipt (AD, and sometimes spelled depository) is a negotiable security that represents securities of a company that trades in the U.S. financial markets. Shares of many non-U.S. companies trade on U.S. stock exchanges through ADRs, which are denominated and pay dividends in U.S. dollars and may be traded like regular shares of stock. ADRs are also traded during U.S. trading hours, through U.S. broker-dealers. ADRs simplify investing in foreign securities by having the depositary bank "manage all custody, currency and local taxes issues".

The Balance mentioned the disadvantages of ADRs, " ADRs have some important limitations and drawbacks, including: Limited selection: Not all foreign companies are available as ADRs. Liquidity: Plenty of companies have ADR programs available, but some may be very thinly traded. Exchange rate risk: While ADRs are priced in dollars, for sake of convenience, your investment is still exposed to fluctuations in the value of foreign currencies. ADRs are like stocks: You need to buy enough of them to ensure adequate diversification. So if you don't have enough investment capital to spread around, say 25 to 30 ADRs (or more), you won't be able to create a truly diversified portfolio on your own. Higher fees: ADRs can carry higher fees than traditional stocks."


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