XIRR Calculator

XIRR — The Only Return Metric That Handles Real Investment Patterns

XIRR (Extended Internal Rate of Return) is the annualized return measure for investments with irregular or multiple cash flows at different dates. It's what you should use when evaluating your actual mutual fund portfolio, a real estate deal with phased payments, or any investment where money went in and came out on uneven dates.

CAGR (Compound Annual Growth Rate) works perfectly for a single lump-sum investment. ₹1 lakh invested today, worth ₹2 lakh in 6 years — CAGR is straightforward. But in a SIP where ₹10,000 goes in on the 5th of every month for 5 years, each installment has been invested for a different duration. CAGR can't handle this. XIRR can.

Most mutual fund account statements and platforms like MF Central, Kuvera, Groww, and Zerodha Coin show XIRR as your portfolio return. If you see a return percentage on your mutual fund app, it's almost certainly XIRR.

XIRR vs CAGR — What Actually Separates Them

CAGR assumes a single entry point and a single exit point. XIRR handles multiple entry and exit points at arbitrary dates — which is exactly how most people actually invest.

How XIRR is Calculated — Newton-Raphson Simplified

XIRR finds the discount rate that makes the Net Present Value (NPV) of all cash flows equal to zero. You have a series of outflows (investments) and inflows (redemptions or current value) at specific dates. XIRR finds the annualized rate 'r' such that when each cash flow is discounted back to day zero at rate 'r', they sum to zero.

The calculation is iterative — computers do it in milliseconds, but there's no closed-form formula. Excel's XIRR function handles this natively. In mutual fund apps, it's calculated automatically. You don't need to compute it by hand, but understanding what it represents matters for interpreting your portfolio performance accurately.

Where Cₜ = cash flow at time t (negative for investments, positive for redemptions/current value), dₜ = days from reference date.

Reading Your Mutual Fund XIRR Correctly

A common source of confusion: your current portfolio XIRR is the return if you were to exit today. It changes daily as NAVs change. A falling market reduces your XIRR, even if your actual investing discipline is intact.

Compare XIRR across funds only when the investment period is similar. An XIRR of 14% on a fund you've held for 3 years is not directly comparable to 12% on a fund held for 10 years — the longer-duration XIRR is more reliable because it averages across more market cycles.

For financial planning, what matters is whether your XIRR exceeds your required growth rate — typically your target return assumption used when calculating retirement corpus. If you assumed 12% and your portfolio XIRR is 9%, you need to either increase contributions, reduce the target, or extend the timeline.