Despite volatility in global markets, investors have added international equity holdings to their portfolios, with Depository Receipts (DR) attracting capital. BNY Mellon says that over 297 billion DR shares, valued at over $8 tn, were traded in 2021.

In a recently published whitepaper, the US-based investment bank talks about the benefits of Depository Receipts for investors and issuers alike, and said that the total international investment figure for DRs stands at $20 tn.

In 2021, issuers raised $38.18 bn through IPOs and additional listings. The New York Stock Exchange saw the most activity, followed by NASDAQ, over the counter (OTC) trades, and lastly the London Stock Exchange.

The BNY Mellon whitepaper lists top depository receipt programs. By volume NIO ADR was at the top, followed by Nokia, New Oriental Education and Itau Unibanco, among others. By value, the top DRs were Alibaba Group Holdings, Nio, Baidu, and TSMC, among others.

Research by BNY Mellon shows that DRs are primarily utilized by active investors (86%). On the ownership front, large asset management firms with equity asset under management of over $20 bn held the highest DR assets at 75.48%. Medium-sized asset management firms having equity assets under management of between $20 bn and $5 bn held 12.37% of total DR AUM, while small asset management firms having equity assets under management of less than $5 bn held the rest 12.15%.

The whitepaper discusses the regional bifurcation of depository receipt holdings, with majority being concentrated in North America. Sector-wise, technology, healthcare and consumer services DR were the most popular, accounting for 64% of total DR ownership by value.

BNY Mellon goes on to talk about the past trends for Depository Receipts and advises investors on how to gain international diversification.

Download the full whitepaper here.