American Depositary Share – ADS

American Depositary Shares are an instrument in which investors in America can invest in certain foreign companies.

A bank buys a certain amount of shares of a foreign company and issues a corresponding amount of stock on an American exchange, acting as an intermediary. The bank holds the shares and the ADS reflect ownership in the shares the banks hold, thereby giving American investors easy access to foreign companies. However, the risks of investing overseas still exist.

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