purchasing an american depository receipt (adr) listing of a company purchasing a foreign stock directly on its home stock exchange etfs the first option. Buying an etf. Can provide exposure to a wide variety of international stocks. There are etfs which can provide a number of different portfolio aims and exposures. Examples would include international etfs devot to growth or value stocks. Dividend stocks. Large-cap or small-cap stocks and various others. There are also international etfs bas around geographic regions such as europe. Asia. Emerging markets. And so on. Many etfs focus on investments in individual foreign countries. Such as the ishares msci poland capp etf (epol). a building block in many people’s holdings because they offer a tactical approach to portfolio construction.
International etfs have become
Investors that want more exposure to. Let’s say. Japan. International asia email list small-caps. Adrs the second option is to buy an adr. An american depository receipt is similar to an individual american stock. With the difference being in the underlying financial plumbing. For an adr. with an american financial institution to package a number of its shares together and list them on an american stock exchange. An investor buys the adr and owns shares in the foreign business. For some companies an adr ratio applies. Particularly if their home market has a weaker currency. Suppose a japanese company has a share price of 140 japanese yen. This would result in a stock price of just usd $1. The company could use an adr ratio of 10:1.
A foreign company works
Meaning that each adr would contain Marketing List ten shares of the underlying japanese company. In this way. The japanese adr would have a more normal $10 stock price instead of appearing as a penny stock on the american market. Direct foreign ownership finally. There is the option to buy a company directly on its home exchange. This us to be expensive and difficult. But has become much more common in recent years. Nowadays. With an american brokerage account. It’s possible to trade in markets as diverse as germany. Hong kong. And mexico directly. Suppose that an investor wants to buy stock in a french winemaker that is too small to bother with sponsoring a u.S. Adr program.
