XIRR (Extended Internal Rate of Return) is a method used to calculate the annualized return on investments that have irregular cash flows over time — such as SIPs, multiple lump sum transactions, or redemptions on different dates. Unlike CAGR, which assumes a single investment and withdrawal, XIRR considers both the timing and the amount of each cash flow. It is widely used in mutual funds, portfolios, and investment tools to reflect the true performance of an investment.
₹5,00,000
The sum of all invested amounts made at different times across the investment period.
₹7,50,000
The latest value of your investments based on current NAV or market price.
12.4% p.a.
The annualized return considering irregular investments and withdrawals over time.
Use XIRR when your investments have multiple cash flows (investments/redemptions) at irregular intervals. CAGR is suitable for one-time investments.
XIRR is computed by solving the rate that equates the present value of all cash flows (positive and negative) to zero. Excel and financial tools use iterative methods to derive it.
XIRR is an extended version of IRR that works with non-periodic cash flows and actual dates, unlike IRR which assumes equal intervals between transactions.
Yes. If your total redemption amount is less than your total investment over time, the XIRR return can be negative, indicating a loss.
They calculate XIRR by tracking each transaction (investment, switch, redemption) along with the date, and then compute the return that annualizes your net gains.
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