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Mutual funds
Also called: Extended internal rate of return
XIRR (extended internal rate of return) is the annualised return on a series of investments and withdrawals made on different dates. It is the standard way to measure a SIP's return, because each instalment was invested for a different length of time.
XIRR is the rate r for which Σ Cashflowᵢ ÷ (1 + r)^(daysᵢ ÷ 365) = 0, counting investments as negative and the final value as positive
₹10,000 invested every month for 12 months (₹1.2 lakh in total) is worth ₹1.28 lakh a month after the last instalment. The gain is 6.7% in absolute terms, but the XIRR is about 12.5% a year, because on average the money was invested for only about six and a half months.
XIRR (extended internal rate of return) is the annualised return on a series of investments and withdrawals made on different dates. It is the standard way to measure a SIP's return, because each instalment was invested for a different length of time.
XIRR is the rate r for which Σ Cashflowᵢ ÷ (1 + r)^(daysᵢ ÷ 365) = 0, counting investments as negative and the final value as positive. ₹10,000 invested every month for 12 months (₹1.2 lakh in total) is worth ₹1.28 lakh a month after the last instalment. The gain is 6.7% in absolute terms, but the XIRR is about 12.5% a year, because on average the money was invested for only about six and a half months.
No. XIRR describes a fund's costs, structure or past record. Mutual fund investments are subject to market risks, and past performance does not indicate future returns.