Financial markets have a lot of moving parts. It can be hard to keep track of symbols, terms, figures, and the constant publishing of financial news in general. One thing to pay attention to, though, are American Depositary Receipts (ADRs).
ADRs are ownership interests in international securities that are issued by a U.S. depositary bank. They enable U.S. investors—everyone ranging from high net worth individuals to institutions—to globally diversify their portfolios in a seamless manner. ADRs are traded in U.S. dollars during U.S. trading hours and are handled by U.S. brokers.
ADRs reduce complexity for investors because the responsibility for managing custody, currency, and local tax issues rests on the depositary bank’s shoulders. This benefit aside, what else do ADRs have to offer?
ADRs:
• create more visibility, as information becomes more easily accessible to data providers and media outlets;
• establish clear information channels, which includes the providing of English versions of company disclosures;
• drive volume and liquidity, creating efficient U.S. prices;
• take the confusion out of investing in global companies.
Perhaps the biggest benefit of an ADR is how much opportunity opens up to investors simply by using one. Investors can follow companies with a primary listing in smaller markers where larger investment firms and brokerages may not be represented. The payoff is potentially good, too: dividends are paid and taxed in U.S. dollars with low cost and settling.
In the end, ADRs work, and they’re valuable for both companies and investors interested in them. For a helpful graphic on how ADRs work, visit http://web.otcmarkets.com/the-value-of-an-adr.
About MissionIR
MissionIR is committed to connecting the investment community with companies that have great potential and a strong dedication to building shareholder value. We know our reputation is based on the integrity of our clients and go to great lengths to ensure the companies represented adhere to sound business practices.
Sign up for “The Mission Report” at www.MissionIR.com
Please see disclaimer on the MissionIR website
http://www.missionir.com/disclaimer.html
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment