XIRR vs CAGR: The Difference
CAGR (Compound Annual Growth Rate) works well for a fixed deposit where you invest once. But for Mutual Fund SIPs, where you invest money every month at different NAVs, CAGR fails.
XIRR (Extended Internal Rate of Return) is the only accurate way to calculate returns for SIPs. It takes into account the timing of every single cash flow.
Why is XIRR Hard to Calculate?
To calculate XIRR manually in Excel, you need the exact date and amount of every SIP installment you ever made. For a 5-year SIP, that's 60+ entries.
Arthavi Automates This:
- We parse your CAS PDF Statement.
- We extract every transaction date and amount.
- We apply standard XIRR financial algorithms to give you your portfolio's true performance instanty.