XIRR (Extended Internal Rate of Return)
✓ Last verified 14 Sep 2026
The short version
XIRR calculates an annualized return for investments made at irregular times and amounts - like a SIP - which a simple CAGR calculation can't handle since CAGR assumes one lump investment on one date.
CAGR assumes a single investment made on a single date - it can't properly account for a SIP, where different amounts go in on different dates each month. XIRR solves this by accounting for the exact date and size of every individual cash flow (each SIP instalment, plus the final value), producing a single annualized return figure that's actually meaningful for irregular investing patterns. This is exactly why SIP returns are quoted as XIRR, not CAGR, in fund statements and portfolio trackers - it's the correct tool for the job when money went in at different times.
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