Evaluating mutual fund SIP portfolios, dividend receipts, and phased redemptions requires accounting for multiple cash flows occurring on different dates. This XIRR Calculator computes the exact annualized internal rate of return using actual transaction dates.
📈 XIRR (Extended Internal Rate of Return) Calculator
Calculate compound returns on irregular dates and transaction cash flows using a Newton-Raphson solver.
XIRR Calculator: Extended Internal Rate of Return for SIPs & Portfolios
📋 What, Why, and Who Should Use It?
🔍 What is this Calculator?
An institutional cash flow performance calculator that computes annualized returns for a series of irregular or periodic investments and redemptions.
⚡ Why is it Useful?
The recognized industry standard metric used by AMFI, mutual fund houses, and wealth managers to evaluate SIP performance and personal portfolio yields.
👥 Who Should Use It?
Mutual fund SIP investors, portfolio managers, angel investors, and financial analysts.
⚙️ How It Works & Calculation Formula
XIRR solves for the internal rate of return (r) that sets the Net Present Value (NPV) of all dated cash flows (investments as negative, current value/redemptions as positive) equal to zero using the Newton-Raphson iteration algorithm.
💡 Assumptions & Real-World Example
Cash outflows (investments/purchases) are entered as negative numbers, and current portfolio value or cash inflows (dividends/redemptions) are entered as positive numbers with exact transaction dates.
📌 FAQs
1. What is XIRR? ▼
XIRR stands for Extended Internal Rate of Return. It is an annualized rate of return calculated for a series of cash flows occurring at irregular or non-periodic calendar dates.
2. Why is XIRR used for SIPs instead of CAGR? ▼
CAGR only works for a single initial investment. In an SIP, money is invested in multiple installments on different dates. XIRR accurately calculates the annualized return for each installment based on its exact holding period.
3. How are cash flows signed in XIRR? ▼
Cash outflows (money invested or deducted from your bank) are entered as negative values (-). Cash inflows (dividends, redemptions, or current portfolio market value) are entered as positive values (+).
4. What is the difference between IRR and XIRR? ▼
IRR assumes that all cash flows occur at uniform time intervals (e.g. exactly every 30 days or every year). XIRR allows cash flows to occur on any arbitrary calendar dates, reflecting real-world investing.
5. Why is my 1-year SIP XIRR higher than the absolute return? ▼
In an SIP, your entire capital is not invested on day one; your average holding period across the 12 installments is only about 6 months. Therefore, a 10% absolute gain over a 6-month average tenure equates to ~19-20% XIRR.
6. Can XIRR be calculated for dividend-paying stocks? ▼
Yes. Enter your purchase dates and amounts as negative numbers, dividend receipts and dates as positive numbers, and current market value on today’s date as a positive number.
7. What happens if XIRR calculation fails to converge? ▼
XIRR uses iterative numerical solving (Newton-Raphson method). If cash flows have extreme anomalies or multiple rate changes, iterations may occasionally require adjusted seed guesses.
8. Where can I find my mutual fund portfolio XIRR? ▼
Your Consolidated Account Statement (CAS) from CAMS/KFintech or your mutual fund investment app displays your overall portfolio XIRR automatically.
9. Is XIRR pre-tax or post-tax? ▼
Standard mutual fund statements report pre-tax XIRR. To calculate post-tax XIRR, subtract applicable capital gains taxes from the final current valuation.
10. Can XIRR be negative? ▼
Yes. If your current portfolio valuation plus redemptions is less than your total invested capital, the calculated XIRR is negative.
