Why is my XIRR different from absolute percentage return shown in mutual fund statements?

XIRR Calculator

Calculate extended internal rate of return for irregular cash flows.

Cash Flows

Enter negative amounts for investments (outflows) and positive for redemptions (inflows).

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XIRR (Annual Return)

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Total Invested—

Total Redeemed—

Net Gain/Loss—

Investment Period—

The Finzorio XIRR Calculator calculates Extended Internal Rate of Return for complex investments involving multiple cash inflows, monthly SIPs, step-up investments, and partial withdrawals on non-standard dates.

Why XIRR is the Gold Standard for Portfolio Tracking

XIRR (Extended Internal Rate of Return) calculates the single internal rate of return that equates the net present value of all cash flows (both positive and negative) to zero. It accurately measures real-world SIP performance where investments occur on different calendar dates.

XIRR Present Value Equation

Sum of [ Cash Flow_i / (1 + Rate)^( (Date_i - Date_0) / 365 ) ] = 0

Cash Flow_i = Outflow (negative) or Inflow/Current Portfolio Value (positive)
Date_i = Transaction date of cash flow i
Rate = Annualized XIRR percentage

Worked Example: Multi-Cashflow Portfolio XIRR

Transactions: -₹50,000 (Jan 1, 2023), -₹50,000 (Jul 1, 2023), +₹20,000 redemption (Jan 1, 2024), Current Value +₹1,15,000 (Jan 1, 2026).

• Total Cash Invested = ₹1,00,000
• Total Value Realized = ₹1,35,000
• Calculated Annualized XIRR = 14.85% p.a.

Frequently Asked Questions

Absolute return ignores the time length and cash flow dates of your investments. XIRR annualizes your return based on the exact number of days each rupee remained invested.