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- Canadian Depositary Receipts
Canadian Depositary Receipts
INVESTMENTS
Get exposure to global companies without worrying about exchange rate fluctuations with Canadian Depositary Receipts (CDRs).
Why buy U.S. stocks in Canadian dollars?
Global investing with added convenience
CDRs represent shares of global companies, but are traded on a Canadian stock exchange, in Canadian dollars — making it easy for investors to get direct exposure to the world’s biggest companies.
Minimize foreign currency risk
CDRs have a built-in currency hedge. This means your returns depend on the performance of the underlying shares — regardless of currency fluctuations, providing greater diversification while mitigating the additional risks associated with global investing.
Fractional ownership with easier diversification
The initial price per CDR will be approximately $20. In comparison, shares of many of the largest companies in the world trade at prices significantly higher with some trading even above $3,000 US. This means CDRs make investing in these companies more accessible to the average retail investor.
Own the company, not the currency
Each CDR is equivalent to owning a variable number of the company’s underlying shares. This is represented by a CDR ratio. The CDR ratio is adjusted daily to provide a notional currency hedge. As the ratio increases or decreases, the number of underlying shares represented by 1 CDR increases or decreases.
If the Canadian dollar strengthens, the CDR will represent a larger number of underlying shares. If the Canadian dollar weakens, the CDR will represent a smaller number of underlying shares.
To learn more about the available companies, visit the CDR Directory Opens in a new window.
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