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Contributor: Interactive Brokers

Level: Beginner

If you are interested in investing in non-US companies, this course explains how to gain exposure through American Depositary Receipts. We explain what an American Depositary Receipt is; why an investor would use them; where and when ADRs are traded and how investing in ADRs differs from investing directly in the stock of a foreign company. This course also covers the history of ADRs and potential benefits and risks.

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Lesson: #1 What is an American Depositary Receipt?

In the introductory lesson, we explain the basics of American Depositary Receipts, starting with what ADRs are. We explore how investing in ADRs differs from investing directly in the stock of a foreign company and why an investor might use them. In this lesson, we also delve into the potential benefits and drawbacks of this type of investment, including tax implications and other financial considerations. We discuss ADR fees and cover where and when ADRs trade. In this lesson you will also learn a bit about the history of this investment product and about the number of ADRs available today.

Lesson: #2 Sponsored and Unsponsored ADRs

Lesson 2 covers the different types of ADRs and explains what Sponsored and Unsponsored ADRs are. In this lesson, we also explain the differences between Level 1, 2 and 3 ADRs and why companies might choose one type of ADR over another.

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