What is a Canadian Depositary Receipt (CDR)?
A new type of security that gives you exposure to shares of global companies but are traded in Canadian dollars on a Canadian stock exchange.
CIBC Capital Markets Aug. 6, 2021 5-minute read
CDRs, or Canadian Depositary Receipts, represent shares of global companies but are traded in Canadian dollars on a Canadian stock exchange – making it easy for you to get exposure to the world’s biggest companies.
CDRs are a lot like traditional stocks; they trade on an exchange, flow through dividends and have voting rights. What makes CDRs different is the built-in notional currency hedge which effectively eliminates the impact of foreign exchange fluctuations between the currency of the global security vs. the Canadian dollar. This means your returns depend on the performance of the underlying shares, effectively eliminating currency fluctuations.
New to Canada, CDRs are a Canadian take on American Depositary Receipts (ADRs), which were first introduced in 1927. Today, the global Depositary Receipts (DRs) market is now close to US$1 trillion in assets.1