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Describe three ways in which a small U.S investor may take a position on international equities,...

Describe three ways in which a small U.S investor may take a position on international equities, other than by direct investment in overseas markets

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Below are three ways in which small investors can invest in International equities (W/O direct investment in oversea mkt) –

American Depository Receipt (ADR) or Global Depository Receipts (GDR): This is a convenient way to buy foreign stocks W/O any FX risk. ADR are basically depository receipts issued by foreign companies in America whereas GDR are shared issued by foreign company in International markets.

Exchange Traded Funds: Convenient way to buy foreign stocks by buying a basket of securities in the ETF. Some of the larger ETF providers include Vanguard, Charles Schwab, etc.

Global Mutual Funds: Like ETF but with an added advantage of active reallocation of securities based on market conditions. Most mutual fund houses have foreign diversified mutual funds schemes.

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