A word used outside of the United States to explain the stock of publicly held companies that are originated and based in the United States. Investing in American shares can be particularly appealing to residents of small countries who seek wider market exposure than they could attain by investing only in the stocks of domestic based countries. Also, registering on an American exchange provides a company more exposure. The NYSE and Nasdaq present a great percentage of total world stock market capitalization, even when compared to the major exchanges of Tokyo, Paris, London, Germany and Australia.
U.S. residents who want to invest in foreign securities can buy shares of mutual funds or exchange-traded funds that have international exposure or that are country-specific. They can also buy shares of specific foreign companies through American depositary receipts. All of these vehicles simplify the procedure of investing overseas, a procedure that can be complicated due to differences in rules and regulations and tax laws, and variations in currency values.