The ABC of investing in the U.S.: what are bonds, ETFs, REITs, ADRs, Treasuries, and more?

We’ve put together a glossary with the key terms every investor with an international portfolio should know

Investing in the United States—the largest financial market in the world—is now accessible to all types of investors, whether you’re conservative or just getting started with smaller amounts. Some financial professionals believe that international diversification may offer portfolio benefits for certain investors. Some investors choose to hold part of their portfolio in U.S. dollar-denominated assets as part of a diversification strategy. While this may help mitigate certain currency-related risks, it also introduces other risks, including exchange-rate fluctuations and market risk.

Investing involves risk, including the possible loss of principal. Diversification and international investing do not guarantee a profit or protect against loss. Investors should consider their investment objectives, risks, charges, and expenses before investing.

Like anything else, information is the best place to start. Based on insights originally compiled by Valor Investe, Inter specialists have put together a glossary of essential terms for anyone investing in U.S. markets.

Having part of your wealth invested abroad is key for long-term investors according to Mauricio Garret, Head of International Desk at Inter. The benefits come from three main areas:

• Wealth protection: Some investors may use U.S. dollar-denominated assets as part of a broader diversification strategy. While this may help mitigate certain currency-related risks, U.S. dollar exposure also involves exchange-rate fluctuations and market risk.
• Real diversification: Global markets offer access to companies, sectors, and opportunities not available locally—especially in technology, AI, and energy.
• Broader investment options: From Time Deposits to global funds, there are solutions for every profile and goal.

Above all, consistency matters. Many investors use a disciplined, long-term investment approach that includes investing regularly over time.

Markets, exchanges, and indices

NYSE (New York Stock Exchange):

NYSE (New York Stock Exchange): Founded in 1792 in New York, it is the oldest and most traditional stock exchange in the world. It lists companies across sectors such as finance, industrials, healthcare, and energy. Today, the NYSE is the largest stock exchange globally, with a market capitalization of approximately $31 trillion and average daily trading volume exceeding $200 billion.

NYMEX (New York Mercantile Exchange): The world’s largest physical market for trading futures and options on commodities, specializing in energy products such as crude oil (WTI) and natural gas. Based in Manhattan, it is part of the CME Group and plays a key role in global price discovery for energy resources.

NASDAQ: Founded in 1971, it was the world’s first fully electronic stock exchange. It is home to many of the largest technology companies. With a market capitalization of around $38 trillion, Nasdaq has become a key barometer of global innovation.

Intercontinental Exchange Europe (ICE Futures Europe): Based in London, it is one of the largest derivatives exchanges in the world. It is where Brent crude oil futures are traded, serving as a global pricing benchmark for more than half of the world’s oil.

S&P 500: Widely seen as a benchmark for the overall market, this index tracks the 500 largest companies in the U.S. When the S&P 500 performs well, it often signals strength in the broader economy.

Dow Jones: One of the oldest stock indices, created by Charles Dow and Edward Jones, founders of The Wall Street Journal. It tracks 30 large, established U.S. companies and reflects the performance of the country’s more traditional sectors.

Nasdaq Composite: An index that includes all companies listed on Nasdaq, representing the “new economy,” particularly technology-driven companies.

Investment products

Stocks: Shares representing ownership in a company. When you buy a stock, you’re buying a piece of a company.

ETF (Exchange Traded Fund): A basket of assets traded on an exchange like a stock. Instead of choosing a single asset, you invest in a diversified group that can track an index (like the S&P 500), a sector (technology, healthcare), or an asset class (fixed income, gold, real estate).

REITs (Real Estate Investment Trusts): Companies that own and manage income-generating real estate such as malls, warehouses, and hotels. Many REITs distribute income regularly, although distributions are not guaranteed and may vary.

ADR (American Depositary Receipt): Certificates representing shares of non-U.S. companies (like Petrobras or Vale) that are traded on U.S. exchanges.

Treasuries (U.S. Treasury Bonds): Fixed-income securities issued by the U.S. government, generally considered to have lower credit risk because they are backed by the U.S. government, although their market value can fluctuate. They pay interest in USD and come in different maturities: T-Bills (short-term), T-Notes (medium-term), and T-Bonds (long-term).

Corporate Bonds: Debt issued by private companies. Investors lend money in exchange for periodic interest payments in USD. They typically offer higher returns than government bonds but carry higher risk.

Time Deposits: Fixed-term deposits offered by financial institutions. Investors lend money to a bank for a set period and receive interest in USD at maturity. They are generally considered a lower-risk savings or investment option, although risks vary by issuer and product structure.

Mutual Funds: Professionally managed investment funds that pool money from multiple investors into diversified portfolios. Unlike ETFs, they are usually traded once per day at market close.

Commodities: Raw materials traded globally, such as oil, gold, coffee, and agricultural products.

BDR (Brazilian Depositary Receipt): Certificates representing foreign stocks traded on Brazil’s stock exchange (B3).

Key terms

Dividend Yield (DY): The percentage of a company’s earnings paid to shareholders. If a stock costs $100 and pays $5 in dividends per year, its yield is 5%.

Bull Market: A period of rising prices and investor optimism.

Bear Market: A decline of 20% or more in the market, typically driven by pessimism.

P/E (Price-to-Earnings Ratio): Measures how much the market is willing to pay for each $1 of a company’s earnings. A P/E of 20 means investors are willing to pay $20 for every $1 in earnings. Generally, a higher P/E suggests a more expensive stock and may indicate expectations of future growth.

Blue Chips: Stocks of large, well-established, and financially stable companies such as Apple, Microsoft, and Johnson & Johnson. The name comes from poker, where blue chips have the highest value. They are known for stability and reliability in a portfolio.

Portfolio: The collection of all your investments. A well-balanced portfolio is diversified across assets like stocks, fixed income, REITs, and ETFs, which may help reduce the impact of an underperforming investment but does not eliminate investment risk.

Volatility: A measure of how much an asset’s price moves up and down. Highly volatile assets can rise or fall sharply in a short period. Higher volatility means higher risk—but also greater potential opportunity.

Hedge: A strategy used to protect your portfolio. It works like insurance—helping offset potential losses by investing in assets that may perform well when others decline.

Growth: Companies focused on expansion and future value (e.g., Tesla). They typically reinvest profits instead of paying dividends.

Value: More established companies that are often stable, lower-risk, and known for paying consistent dividends.

Costs

Spread: The difference between the market exchange rate and the rate applied when converting your money. It represents the provider’s margin on the transaction.

Brokerage fee: A fee charged by your broker each time you buy or sell an asset.

Expense ratio: A fee charged by funds (such as ETFs and Mutual Funds). It’s not shown as a separate charge—instead, it’s deducted directly from the fund’s returns.

IOF (Tax on Financial Operations): A Brazilian tax applied when sending money abroad. For investments, it’s typically around 1.1%.

W-8BEN: A form you complete with your broker to confirm your non-U.S. residency, helping you avoid being taxed twice in the U.S. and your country of residence.

Withholding tax: Tax withheld at the source. In the U.S., up to 30% of dividends may be withheld before they are paid to your account.

Tax information in this article is provided for educational purposes only and should not be considered tax advice. Tax treatment varies based on an investor’s individual circumstances and country of residence.

This material is provided for educational and informational purposes only and should not be considered investment, legal, or tax advice, or a recommendation to buy or sell any security.