Does holding Nestlé ADRs eliminate my exposure to foreign exchange fluctuations between the US dollar and the Swiss Franc?
No, ADR share prices carry foreign currency risk depending on the movement of the US dollar against the Swiss franc. Most of the ADRs trade in line with the underlying security. The spread is in general very small, reflecting the cost of foreign exchange conversion and other execution costs. If the currency of the underlying stock rises against the US dollar, the ADR price is expected to rise (and vice versa).
