Q: What stocks are listed in this search engine
A: This site is made of primarily ADRs. There are nearly 1,500 securities in the entire database.
Q: Do you list Exchange Traded Funds (ETFs) and are these better than investing in individual stocks?
A: We do have nearly 200 international focused Exchange Traded Funds (ETFs) in the database. Before considering using ETFs as your exposure to foreign markets, be sure to do a full check-up on the fund. You'll want to know the fund's fee, its usual dividend, what sectors it is invested in, who manages the fund, what the current NAV is, and more. By far the best site to do this is Nuveen's ETF Connect.
Q: What is an ADR?
A: American Depositary Receipts (ADRs) represent shares of stock for non-US corporation investments. The shares of these always companies trade on another exchange, while the ADRs, trade on a US exchange. This helps US investors simply diversify their domestic portfolio with foreign corporations. ADRs are quoted and traded in U.S. dollars in the U.S. securities market. Also, the dividends are paid to investor in U.S. dollars. ADRs were first introduced in 1927.
Q: Do I have to buy a foreign ADR to get international exposure
A: No, some U.S. companies you already may have some international exposure in your investment portfolio. Of course, many of the factors that affect foreign corporations also impact the foreign business operations of US-based companies. Many conglomerates have significant international exposure.
Q: Isn't this a risky way to invest?
A: All investments pose some risk. Foreign companies are no different. You should do significant due diligence before increasing your exposure in a new area. The degree of risk may vary, depending on the type of investment and the market. For example, foreign-focused mutual funds may be less risky than direct investments, and investing in developed economies may avoid some of the risks of investing in emerging markets. Of course, changes in foreign currency exchange rates will affect all foreign investments - not to mention political and social events. Remember, foreign investments can often be extremely volatile, usually because of a lack of liquidity.
Q: What percentage of my portfolio should be in foreign stocks?
A: This really depends on who you ask and your own appetite for risk. Some advisors say as low as 5%, others say 35%. Personally, I am 20% in emerging markets and another 10% in more develop economics like that of old Europe. With emerging markets, especially, be careful not to chase past returns and evaluate equities on forward looking potential.