XIRR vs CAGR — when should I use which?

CAGR assumes a single lumpsum invested at the start and a single value at the end — so it works only when there are exactly two cashflows. XIRR handles every real-world case where you add or withdraw money on different dates: SIPs, lumpsum top-ups, partial redemptions, dividend payouts. For a single lumpsum held to maturity, CAGR and XIRR give the same number. For SIPs or any pattern with multiple cashflows, only XIRR is correct.

Why does my mutual fund show XIRR instead of absolute return?

Absolute return only tells you how much your portfolio grew in total. It does not adjust for how long each rupee was invested. If you ran a SIP for 5 years and ended with 50% more than you put in, your absolute return is 50% — but your XIRR is closer to 16% per annum because only the earliest contributions were invested for the full 5 years. Every CAS (Consolidated Account Statement), Groww, Zerodha, Kuvera, and INDmoney dashboard shows portfolio XIRR for this reason.

Can XIRR be negative?

Yes. If the total amount you received is less than the total you invested over the holding period, XIRR is negative — meaning your annualised return was a loss. A −10% XIRR means your portfolio shrunk at a rate equivalent to 10% per year, compounded annually. This is common in short-horizon equity funds that hit a market downturn, or in any portfolio that was sold near the bottom of a correction.

What is a good XIRR for an equity mutual fund?

Over a long horizon of 10+ years, a diversified equity mutual fund has historically delivered an XIRR of around 12 to 15 percent per annum. Top-quartile funds occasionally cross 15-18%, but those numbers fluctuate with market cycles. For shorter horizons (1-3 years), XIRR can swing wildly — even quality funds can show single-digit or negative XIRR in a bad market window. Always compare XIRR against the benchmark index (Nifty 50 TRI, Nifty Midcap 150 TRI, etc.) over the same period, not against an absolute number.

XIRR Calculator — Returns on Irregular Cashflows (India)

XIRR

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XIRR Calculator

Calculate the Extended Internal Rate of Return (XIRR) for any series of irregular cashflows — SIP installments, lumpsum top-ups, partial withdrawals, and final redemption. Shows the true annualized return for non-uniform investment patterns.

Reviewed by the CalculatorKosh Editorial TeamUpdated June 2026Free · No sign-up

Cashflows

Negative for money invested, positive for money received

Date	Amount (₹)
	₹ ₹0₹1000 Cr Min 0 — will clamp on blur
	₹ ₹0₹1000 Cr Min 0 — will clamp on blur
	₹ ₹0₹1000 Cr Min 0 — will clamp on blur
	₹ ₹0₹1000 Cr Min 0 — will clamp on blur
	₹ ₹0₹1000 Cr Min 0 — will clamp on blur
	₹ ₹0₹1000 Cr Min 0 — will clamp on blur
	₹ ₹0₹1000 Cr

XIRR (annualised)

(over 1 year, 7 cashflows)

Total invested: ₹60,000 · Total returned: ₹63,000 · Absolute gain: ₹3,000

Total Invested

₹60,000

Total Returned

₹63,000

Absolute Gain

₹3,000

Investment Horizon

1 year

How XIRR is different from CAGR

CAGR assumes a single investment at the start. XIRR handles real-world investments — SIPs, lumpsum top-ups, partial withdrawals — each at a different date. That's why your mutual fund's CAS shows XIRR, not CAGR.

Cashflows over time

Money out (investment)Money in (redemption)

How It Works

XIRR (Extended Internal Rate of Return) is the annualised return on a series of irregular cashflows at arbitrary dates. It is the standard portfolio-return metric used in every mutual-fund CAS (Consolidated Account Statement) and in dashboards on Groww, Zerodha Coin, Kuvera, and INDmoney. Use it whenever your cashflows are not a clean lumpsum-and-redeem pattern — SIP installments, lumpsum top-ups, partial withdrawals, and dividend payouts all count.

The XIRR formula

XIRR is the rate r that makes the net present value of every cashflow equal to zero when each is discounted from its actual date to the first date:

Σ cf_i / (1 + r)^{(d_i − d₀) / 365} = 0

Where cf_i is the i-th cashflow (negative for money invested, positive for money received), d_i is its date, and d₀ is the first date. There is no closed-form solution — we iterate with Newton-Raphson from an initial guess of 10%, and fall back to bisection on the interval [−99.9%, 10000%] if Newton-Raphson does not converge.

Sign convention

Investments (money OUT of your pocket) are entered as negative. Redemptions, dividends, and the final NAV (if you are still invested) are entered as positive. If you skip the sign convention, the solver cannot converge — NPV will never cross zero.

Frequently Asked Questions

XIRR (Extended Internal Rate of Return) is the annualised return on a series of irregular cashflows at arbitrary dates. It is the rate r that makes the net present value of every cashflow equal to zero when each cashflow is discounted from its actual date to the first date. Because there is no closed-form solution, calculators solve it iteratively with Newton-Raphson — the same algorithm used by Excel's XIRR() and Google Sheets' XIRR() functions.