American depositary receipt (ADR) – Financial Terms

Shares of hundreds of major overseas-based companies, including well-known names such as British Petroleum, Gucci Group, Sony, and Toyota, are traded as ADRs on US stock markets in US dollars. ADRs are actually receipts issued by US banks that hold actual shares of the companyies’ stocks. ADRs let you diversify into international markets without having to purchase shares on overseas exchanges or through mutual funds.