Going Global

The US market really is a gateway to the rest of the world. Not only is the US a centre of trade and commerce, but a centre of capital. The most promising companies from across the continents head to Wall St to finance their latest expansions and projects.

You’ll be aware that names like Alibaba and Nio have listings on Stake despite being Chinese stocks. The same goes for companies like AstraZeneca (British-Swedish) or Nokia (Finnish). How? American Depository Receipts (ADRs).

ADRs trade just like any stock, represent the same as any stock and pay dividends like any stock but they’re bank-backed certificates instead. Typically, a big bank will buy the shares in their local market. They will then deposit. Take Westpac, the Australian bank for example. The bank issuing the ADR buys a load of $WBC on the ASX and holds those shares in an American bank account. If $WBC issues dividends in AUD, they are immediately converted to USD and paid out to holders. Issuers typically charge US$0.01-0.03 per share but this is embedded in the cost.

It’s more than just having access to foreign shares in the one brokerage account. The US banks require foreign stocks to comply with local reporting requirements. This increases the information available to investors; more informed decisions can be made.

How big is the ADR market? A portion of your portfolio is probably dedicated to them and you don’t realise. Some of the most popular on Stake include Nio (NIO), Taiwan Semiconductor Manufacturing (TSM) and Jumia (JMIA) but there are hundreds more like Didi (DIDI), Unilever (UL) and Oatly (OTLY).

Sign up to Stake

Want more?

You know what to do

Insights, trends and company deep dives delivered straight to your inbox.

Stake logo
Over 7,000 5-star reviews
App Store logoGoogle Play logo

Subscribe to our free newsletters

By subscribing, you agree to our Privacy Policy.

Stakeshop Pty Ltd is registered as an overseas company in New Zealand (NZBN: 9429047452152), and is registered as a Financial Service Provider under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (No. FSP774414). We hold a full licence issued by the Financial Markets Authority to provide a financial advice service under the Financial Markets Conduct Act 2013. However, the content on this website has not been prepared to take into account any of your individual objectives, financial situation or needs. To the extent you require further information about the relevant New Zealand legislation that may apply, or require specific advice, please contact your legal and/or financial adviser (as appropriate). The information on our website or our mobile application is not intended to be an inducement, offer or solicitation to anyone in any jurisdiction in which Stake is not regulated or able to market its services. At Stake, we’re focused on giving you a better investing experience but we don’t take into account your personal objectives, circumstances or financial needs. Any advice is of a general nature only. As investments carry risk, before making any investment decision, please consider if it’s right for you and seek appropriate taxation and legal advice. Please view our Terms & Conditions, Privacy Policy, Financial Advice Disclosure and Disclaimers before deciding to use or invest on Stake. By using the Stake website or service in any way, you agree to our Privacy Policy and Terms & Conditions All financial products involve risk and you should ensure you understand the risks involved as certain financial products may not be suitable to everyone. Past performance of any product described on this website is not a reliable indication of future performance. Stake is a registered trademark under class 36 (New Zealand).

Copyright © 2024 Stake. All rights reserved.