Why might it be easier for an investor wishing to diversify his portfolio internationally to purchase depository receipts instead of the actual shares of the company?
A depository receipt can be purchased on the investor's domestic exchange. It revel a package of the underlying foreign security which is priced in the investor's local currency & in trading range which is distinctive for the investor's marketplace. The investor can buy a depository receipt directly from his domestic broker, instead of having to deal with an overseas broker and the necessity of obtaining foreign funds to make the foreign stock purchase. In addition, dividends are received in the local currency instead of in foreign funds which would need to be converted into the local currency.