How to compute XIRR for your mutual fund portfolio
XIRR (Extended Internal Rate of Return) is the correct return measure for portfolios with irregular cash flows (SIPs, lump-sums, redemptions across different dates). Simple CAGR assumes a single investment; XIRR handles multi-cash-flow scenarios.
Conflict-of-interest disclosure. This guide is published by WebNotes Editorial Team for informational purposes. WebNotes has no commercial relationship with any AMC or platform. No affiliate commission is earned.
Step-by-step procedure
See the procedure infobox above.
XIRR vs CAGR vs Absolute Return
| Metric | Formula | Use case |
|---|---|---|
| Absolute return | (Current value - Invested) / Invested | Quick gain percentage |
| CAGR | (Final / Initial)^(1/years) - 1 | Single-period investment |
| XIRR | Spreadsheet function | Multi-cash-flow (SIPs, lump-sums, redemptions) |
For typical retail investors with monthly SIPs over years, XIRR is the right number. CAGR overstates returns (treats all investments as if they were made at start); absolute return ignores time.
Excel / Google Sheets setup
| Row | Column A (Date) | Column B (Amount) |
|---|---|---|
| 1 | 1-Apr-2020 | -5,000 (first SIP) |
| 2 | 1-May-2020 | -5,000 |
| 3 | 1-Jun-2020 | -5,000 |
| … | … | … |
| 60 | 1-Mar-2025 | -5,000 (last SIP) |
| 61 | 1-May-2026 (today) | 4,75,000 (current value) |
Formula: =XIRR(B1:B61, A1:A61) returns annualised XIRR.
Worked example
Investor: Rs 5,000 SIP monthly for 5 years.
- Total invested: Rs 3 lakh (60 × Rs 5,000).
- Current value: Rs 4.75 lakh.
- Absolute return: 58%.
- CAGR (assuming Rs 3 lakh upfront 5 years ago): ~9.6%.
- XIRR (correctly weighting cash flows): ~12.5%.
CAGR understates return because investments staggered over 5 years average ~2.5 years.
Portfolio vs scheme XIRR
| Level | Insight |
|---|---|
| Per scheme | Identifies winners / losers |
| Per AMC | Compare across AMCs |
| Total portfolio | Overall return |
| Goal-aligned | Per goal (retirement, education, etc.) |
Per-scheme XIRR helps decide which underperformers to switch out.
Platform-computed XIRR
Most platforms (Coin, Groww, Kuvera, ET Money, MF Central) auto-compute XIRR. Spreadsheet computation as a backup or sanity check.
Differences between platform XIRR and your spreadsheet computation usually arise from:
- Different “as-of” dates.
- IDCW handling (reinvested vs paid).
- Cost-basis attribution (FIFO interpretation).
See also
- How to track SIP history (MF)
- How to review MF portfolio annually
- How to rebalance MF portfolio
- How to track MF vs benchmark
- How to generate CAS (MF)
- How to read CAS
- How to reconcile CAS with folios
- How to compare MF factsheets
- How to verify your first investment was successful
- How to set SIP amount from your goals
- How to exit MF tax-efficiently
- How to place an MF redemption
- XIRR
- CAGR
- Internal rate of return (IRR)
- SIP
- NAV (Net Asset Value)
- Statement of Account (MF)
- Consolidated Account Statement
- Fund factsheet
- Benchmark (MF)
- Mutual funds in India
- AMFI
- SEBI
External references
References
- SEBI (Mutual Funds) Regulations, 1996.
- AMFI Best Practice Guidelines on return reporting.
- Excel / Google Sheets XIRR documentation.