What is XIRR and why is it better than CAGR for SIPs?
XIRR (Extended Internal Rate of Return) calculates your annualized return accounting for the exact dates and amounts of every cash flow. Unlike simple CAGR which assumes a single lump sum investment, XIRR handles the irregular cash flows of SIPs, additional purchases, and partial redemptions — giving you a true picture of your investment performance.
How is XIRR calculated?
XIRR finds the discount rate r that makes the Net Present Value (NPV) of all cash flows equal to zero:
NPV = Σ [ Ci / (1 + r)(di - d0) / 365 ] = 0
This calculator uses Newton-Raphson iteration to converge on the rate, the same method Excel's XIRR function uses internally.
What is a good XIRR for mutual funds in India?
- Large-cap funds: 10–13% XIRR over 5+ years
- Mid-cap funds: 13–18% XIRR over 5+ years
- Small-cap funds: 15–22% XIRR (higher volatility)
- Debt funds: 6–8% XIRR
Want automatic XIRR calculation on your actual portfolio? Try Arthavi's portfolio tracker — import your CAS statement and get per-fund and portfolio-level XIRR instantly.
Can I calculate XIRR for multiple SIPs in different funds?
Yes. Enter all cash flows across all funds along with the combined current value. For per-fund XIRR, use Arthavi's portfolio tracker which automatically calculates fund-level and portfolio-level XIRR from your CAS statement.
Frequently Asked Questions
What is XIRR and why is it better than CAGR for SIPs?
XIRR accounts for the exact dates and amounts of every cash flow, making it accurate for SIPs. CAGR only works for single lump sum investments.
How is XIRR calculated?
XIRR is calculated by finding the discount rate that makes the NPV of all cash flows equal to zero, using Newton-Raphson iteration.
What is a good XIRR for mutual funds in India?
For equity mutual funds, 12–15% XIRR over 5+ years is considered good. Large-cap funds typically return 10–13%, mid-cap 13–18%.