American Depository Receipts (ADRs)

American Depositary Receipts (ADRs) are financial instruments that allow investors in the U.S. to buy shares of foreign companies without dealing with foreign stock markets. Essentially, a U.S. bank buys shares of a foreign company and then issues ADRs representing those shares. These ADRs are traded on American stock exchanges like regular stocks, giving U.S. investors easier access, liquidity, and familiarity. They provide a convenient way to invest internationally, offering exposure to foreign markets while avoiding some complexities of directly purchasing foreign stocks.