XIRR Calculator
Calculate the exact annualized return (XIRR) on your mutual fund SIPs, irregular stock transactions, real estate flips, or venture investments with irregular transaction dates.
Cash Flow Transactions
Investments must be negative (-), Current value / redemptions positive (+).
₹2,00,000
₹5,30,000
The Definitive Guide to XIRR for Indian Mutual Funds & Equities
How Net Present Value (NPV) and the Newton-Raphson method calculate accurate annualized returns for irregular cash flows.
1. Why XIRR is the Industry Standard for SIPs
When you invest in a Mutual Fund SIP, each monthly installment enters at a different Net Asset Value (NAV) on a different calendar date. An installment invested in January 2021 has compounded for over 4 years, while an installment invested last month has compounded for only 30 days.
A single CAGR number cannot account for these staggered entry dates. XIRR solves this by finding the exact discount rate r that makes the Net Present Value (NPV) of all cash outflows and the final portfolio value equal to zero:
NPV = Σ [ C_i / (1 + r)^((d_i - d_0) / 365) ] = 0
Where: C_i = Cash flow amount, d_i = Date of cash flow, d_0 = Date of first cash flow, r = XIRR rate
2. Sign Convention Rules
- Negative Amount (-): Represents investments, purchases, or SIP debits from your bank account.
- Positive Amount (+): Represents dividends, redemptions, or the current market value of your holding as of today.
- Minimum Requirement: You must provide at least one negative flow (money invested) and at least one positive flow (current value or payout).
3. Example Scenario: 3-Tranche SIP with Final Valuation
| Date | Transaction Type | Cash Flow (₹) | Days from Start |
|---|---|---|---|
| 2022-01-01 | Initial Lumpsum | -₹1,00,000 | 0 |
| 2022-07-01 | Top-up Purchase | -₹50,000 | 181 |
| 2023-01-01 | Additional SIP | -₹50,000 | 365 |
| 2024-01-01 | Current Value (Sale) | +₹2,65,000 | 730 |
*Illustrative calculation: Total invested ₹2,00,000 across 3 staggered dates. Ending valuation: ₹2,65,000 on 2024-01-01. Solved Newton-Raphson XIRR = 18.71% p.a. (Annualized money-weighted return matching our calculation engine).*
Frequently Asked Questions on XIRR
Master the math behind money-weighted returns and irregular cash flow analysis.
What is XIRR (Extended Internal Rate of Return)?
How does XIRR differ from CAGR?
Why must investment amounts be negative in XIRR calculations?
Can XIRR be negative?
Why does short-term XIRR sometimes show extreme numbers like 150% or -80%?
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