One reason investor might prefer purchasing ADRs rather than the actual foreign stock is because

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ADRs typically involve lower transaction costs than actually purchasing the foreign securities because they are traded on U.S. exchanges and are typically issued in bulk, which reduces the transaction costs compared to buying individual foreign stocks. While ADRs may offer some level of reduced risk compared to foreign stocks, it is not a universal reason why investors would prefer ADRs over foreign stocks. Additionally, it is not true that foreign firms do not have to conform to U.S. accounting standards to list their ADRs on U.S. exchanges, as they must comply with the requirements of the Securities and Exchange Commission (SEC) to issue ADRs. Finally, it is not accurate to say that foreign firms usually list their securities as ADRs rather than cross-listed stocks; some foreign firms choose to list their stocks directly on U.S. exchanges.

One Reason Investor Might Prefer Purchasing ADRs Rather Than the Actual