ADR vs. GDR: What's the Difference?
Edited by Aimie Carlson || By Janet White || Published on March 16, 2024
ADR (American Depositary Receipt) represents shares of non-U.S. companies traded on U.S. exchanges, while GDR (Global Depositary Receipt) allows a company's shares to be traded globally.
Key Differences
ADRs are financial instruments that allow U.S. investors to invest in foreign companies' stocks on American exchanges. GDRs, on the other hand, are used to trade shares of a company in multiple international markets, not limited to the U.S.
ADRs are primarily focused on the U.S. market and are designed for American investors. GDRs cater to a global investor base, allowing international investors to invest in foreign companies more easily.
ADRs are subject to U.S. securities laws and regulations, making them a preferred choice for U.S. investors seeking international exposure. GDRs are subject to the regulations of the countries where they are traded, which can vary widely.
ADRs are listed on U.S. stock exchanges like the NYSE or NASDAQ. GDRs are often listed on European stock exchanges like the London Stock Exchange and can also be listed on exchanges in other regions.
ADRs are popular among U.S. investors who want to invest in foreign companies without dealing with the complexities of foreign markets. GDRs are used by companies seeking to attract a diverse group of international investors.
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Comparison Chart
Primary Market
U.S. stock exchanges
Multiple international stock exchanges
Investor Focus
American investors
Global investor base
Regulatory Compliance
Subject to U.S. securities laws
Subject to regulations of multiple countries
Listing Locations
Listed on NYSE, NASDAQ, etc.
Listed on London Stock Exchange, others
Purpose for Investors
Facilitates U.S. investment in foreign stocks
Facilitates global investment in foreign stocks
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ADR and GDR Definitions
ADR
They simplify investing in foreign stocks for U.S. investors by handling tax and currency issues.
An American investor used an ADR to invest in Alibaba without dealing with Chinese currency.
GDR
GDRs allow a company's shares to be traded on stock exchanges worldwide.
A GDR issued by Gazprom is traded in London and Frankfurt, offering global exposure.
ADR
ADRs are priced in U.S. dollars and pay dividends in U.S. currency.
The ADR of British Petroleum trades in USD and pays dividends to U.S. investors in the same currency.
GDR
GDRs are denominated in various currencies, depending on the market they are traded in.
A GDR of a Chinese company traded in London may be denominated in British pounds.
ADR
ADRs are a way for foreign companies to access U.S. capital markets.
Spotify issued an ADR to attract American investors on the U.S. stock market.
GDR
They provide global investors easier access to foreign equity markets.
An investor in Germany purchased a GDR of an Indian company, diversifying their portfolio internationally.
ADR
ADRs represent shares of non-U.S. companies traded on U.S. stock exchanges.
Toyota's ADR allows U.S. investors to buy shares of the Japanese automaker on the NYSE.
GDR
GDRs are a tool for global capital mobilization by multinational corporations.
A Brazilian company issued a GDR to raise capital from European and Asian markets.
ADR
ADRs enable American investors to invest in foreign equities without currency conversion.
An investor purchased an ADR of Samsung, gaining exposure to the South Korean market.
GDR
GDRs are used by non-U.S. companies to attract investors from multiple countries.
Infosys used GDRs to attract investors from Europe and Asia.
FAQs
Who are the typical investors for GDRs?
GDRs attract a global investor base.
What is a GDR?
A GDR allows a company's shares to be traded on multiple international stock exchanges.
What is an ADR?
An ADR represents shares of a non-U.S. company traded on U.S. stock exchanges.
Where are ADRs listed?
ADRs are listed on U.S. stock exchanges like the NYSE or NASDAQ.
What regulations apply to GDRs?
GDRs are subject to the regulations of the countries where they are traded.
Who typically invests in ADRs?
ADRs are primarily used by American investors.
Are dividends from GDRs paid in multiple currencies?
Yes, GDR dividends can be paid in various currencies, depending on the market.
Why do companies issue ADRs?
Companies issue ADRs to access U.S. capital markets and attract American investors.
Why do companies issue GDRs?
Companies issue GDRs to raise capital globally and reach international investors.
Do GDRs facilitate international investment?
Yes, GDRs make it easier for global investors to invest in foreign companies.
Are ADRs subject to U.S. regulations?
Yes, ADRs must comply with U.S. securities laws.
How does an investor buy GDRs?
Investors can buy GDRs on the international stock exchanges where they are listed.
Where can GDRs be listed?
GDRs can be listed on various international exchanges, including the London Stock Exchange.
Can ADRs pay dividends?
Yes, ADRs can pay dividends in U.S. dollars.
Can an individual investor buy ADRs?
Yes, individual investors can purchase ADRs on U.S. stock exchanges.
Do ADRs help in currency conversion for U.S. investors?
Yes, ADRs simplify investing in foreign stocks without dealing with currency exchange.
Can GDRs be traded in multiple countries?
Yes, GDRs are designed to be traded in various countries.
Do ADRs simplify tax issues for U.S. investors?
Yes, ADRs handle foreign tax issues, simplifying the process for U.S. investors.
Are ADRs only for U.S. investors?
Primarily, though non-U.S. investors can also trade ADRs on U.S. exchanges.
Are GDRs a good way for companies to expand their investor base?
Yes, GDRs enable companies to reach a diverse group of investors worldwide.
About Author
Written by
Janet WhiteJanet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
Edited by
Aimie CarlsonAimie Carlson, holding a master's degree in English literature, is a fervent English language enthusiast. She lends her writing talents to Difference Wiki, a prominent website that specializes in comparisons, offering readers insightful analyses that both captivate and inform.
