I have a question concerning ADR's and SMA accounts... I recently was listening to a conference call by AllianceBernstein and they were telling the following: In their international pooled portfolio, they make stock picks and build a portfolio with stocks on the different world exchanges. When they get to their equivalent SMA, they try to replicate the same portfolio using only ADR's. If an ADR is not available on any given stock, instead of going to buy the stock in Europe or Asia or whatever (like they would do in the pooled), they try to come up with an equivalent stock that has an ADR. I was told this was because of costs but I don't buy it because then they would also do it in the pooled fund... Does anyone know if there is a legal reason?