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Updated 2mo ago.
Updated 2mo ago.
The adjusted close is the closing price of a security modified to account for past dividends, distributions, and stock splits. It allows prices and total returns to be compared consistently over long periods, incorporating all distributed income.
VEQT.TO closed at $35.00 on March 15, 2023. The next day, it pays a $0.50 per unit distribution. The raw price (close) opens at $34.50 (mechanical drop from the distribution), but the adjusted close remains at $35.00 because it incorporates the $0.50 distributed. Using the raw price to calculate returns would systematically understate the true total return.
Using the unadjusted price to calculate returns for a dividend-distributing ETF produces incorrect results and systematically undervalues actual performance. Over 10-20 years with annual distributions of 1-3%, the error becomes very significant. That's why investirenbourse.ca exclusively uses the adjusted close for all its return calculations.