For each relevant cashflow, enter transaction amount and corresponding date.
Inflow amounts should have minus sign (-)
Outflow amounts should have minus sign (-)
If the portfolio is not completed sold, add current portfolio value as an outflow
What is XIRR?
XIRR is a financial metric used to calculate growth of a portfolio (could be an investment or a liability) that involve uneven cashflow. It gives you a clearer picture of how your money is working for you over time.
Why is that important?
Because there is time value of money. A hundred dollars invested today is worth more than a hundred dollars invested a year from now. XIRR takes this "time value of money" into account, giving you a more accurate annualized return rate. This lets you compare different investment strategies – Lumpsum vs SIP.
Absolute Return vs CAGR vs XIRR
In short,
Absolute returns does not consider time
CAGR calculates annualized returns, but considers that all the investments were done at the start of the duration and all withdrawals were at the end. It works best when there are only two transaction entry - one investment, one withdrawal.
IRR takes time into account, but works when all the portfolio transaction are periodic. Eg. a SIP investment, or a loan
XIRR considers timing for all individual transactions in a portfolio, including irregular timing
To understand the differences and calculations with example, continue reading.
Why use our XIRR calculator?
It's a simple & free calculator that computes XIRR in your browser, with no data is sent to the server.