There's evidence aplenty that investing in overseas markets is a very good way to improve the returns from a portfolio while actually reducing overall risk. What's more, evidence indicates that individual stock selection can outperform mutual funds and exchange traded funds (ETFs). It stands to reason, then, that investing in individual foreign equities could be a great way to boost returns and lower overall portfolio risk. If only it were that easy.
While there are indeed many good reasons to invest overseas, it is not nearly so easy as it sounds. In fact, investors face rather limited choices unless they are willing to take on larger risks and a longer investment timeframe. Let us consider, then, some of the least-accessible markets to U.S. investors.
Starting from Scratch
In terms of nominal GDP, Poland and the Czech Republic are the 20th and 45th largest economies, respectively, and both have been tapped many times in the past as attractive emerging markets within Europe. Yet, American investors have exactly zero choice when it comes to listed ADRs. That's right. There are zero listed ADRs hailing from Poland or the Czech Republic on U.S. exchanges. (For background on ADRs, see What Are Depositary Receipts?)
To read the full column, please click the link below:
http://financialedge.investopedia.com/financial-edge/0411/The-Least-Accessible-Markets-To-Investors.aspx
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