American Depositary Receipt (ADR)

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If you live in America and want to buy shares in a foreign-based corporation, for example, one based in the UK, then one way you can do so is by owning American Depositary Receipts. These receipts are actually issued by a bank and kept in the bank. A receipt can represent just one share or many shares. Owning ADRs gives you the same rights as if you owned the shares in the country where the corporation is based. Technically, a share within the ADR is known as an American Depositary Share (ADS). The shares of hundreds of foreign companies are available as ADRs in America. Other ways to invest in foreign securities include mutual funds or exchange traded funds that specialize in overseas investments.