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An ADR is a domestically traded security that represents a claim to shares of a foreign stock held in the vault of a U.S. commercial bank. An ADR entitles the shareholder to all dividends and capital gains. ADRs have the same voting rights as the ordinary shares they represent.
Foreign investments involve greater risk than U.S. investments including political developments and currency fluctuations. These risks may be magnified in emerging markets.
ADRs trade like U.S. issues and are quoted in American dollars. You can place ADR orders online for your Fidelity brokerage and brokerage retirement accounts (e.g., IRA, SEP-IRA, Keogh, etc.). Some ADRs are marginable.
Dividends are paid in American dollars but are still subject to foreign-tax withholding.
You may be able to avoid certain taxes involved in buying and selling securities in overseas markets. Consult a tax advisor for additional information.
Yes. To take physical possession of ADR certificates, contact a Fidelity representative at 800-544-6666.
An ADR may settle using a different price from the underlying foreign stock it represents, because: