₹ 1,000
₹ 10,00,000
BAJAJ ASSET MANAGEMENT LIMITED.
BAJAJ ASSET MANAGEMENT LIMITED.
Here's the Extended Internal Rate of Return (XIRR) for your investments
The XIRR full form is Extended Internal Rate of Return. XIRR measures the annualised return of an investment when money is invested or received on different dates. It considers both the amount and timing of each cash flow, so every contribution is measured for the period it was actually invested.
For an SIP, for example, every instalment has a different investment date and therefore a different holding period. XIRR combines these dated cash flows with the current or redemption value to express the investment’s performance as a single annualised rate.
Technically, XIRR is the rate at which the present values of all the dated cash flows add up to zero. XIRR itself is an annualised return, so it does not need to be converted into a separate annual return. It is particularly useful for irregular cash flows, where investments or withdrawals take place on different dates.
Source: Microsoft Support, XIRR function.
An XIRR calculator calculates the annualised return on an investment using the dates and amounts of its cash flows. This makes it useful for SIPs, multiple lumpsum investments, additional investments and portfolios where money has been invested at different points in time.
The Bajaj AMC online XIRR calculator lets you enter the investment dates and amounts, followed by the return date and return amount. It then helps you calculate XIRR online from those cash flows, without requiring you to work through the calculation manually.
The XIRR formula accounts for each cash flow separately because every investment or receipt may occur on a different date. XIRR is the value of r that satisfies:
i=0∑n(1+r)(di-d0)/365Ci=0
Where:
In formula-based calculations such as Excel, investments or other cash outflows are entered as negative values, while amounts received or the ending value are entered as positive values. The calculation considers the actual number of days between the cash-flow dates and uses a 365-day year.
Unlike CAGR, XIRR calculation cannot be reduced to a beginning value, ending value and time period when there are multiple cash flows. A calculator or spreadsheet function solves for the rate iteratively.
To calculate XIRR manually, you would need to test different rates until the discounted cash flows add up to approximately zero. This is why XIRR is generally calculated using Excel or an online calculator rather than by hand.
For example, suppose an investor invests ₹5,000 on the first day of every month for 12 months, taking the total investment to ₹60,000. If the investment is worth approximately ₹64,163 on 1 January of the following year, the XIRR based on those exact dates and cash flows is 13%. Each instalment has been invested for a different period, which is why the calculation considers every date separately.
The figures shown are for illustrative purpose only
Source: Microsoft Support, XIRR function.
You can calculate XIRR in Excel using the function:
=XIRR(values, dates, [guess])
Enter your cash flows in one column and their corresponding dates in another. For an investment return calculation, investment amounts are generally entered as negative cash flows, while redemption proceeds or the current value are entered as positive cash flows.
For example, if the values are in cells A2 to A6 and the corresponding dates are in B2 to B6, the formula would be:
=XIRR(A2:A6,B2:B6)
The guess argument is optional. Excel requires the values to contain at least one positive and one negative cash flow for XIRR to be calculated.
Source: Microsoft Support, XIRR function.
You can use the Bajaj AMC XIRR calculator for SIP and other investments with one or more dated cash flows. Here is a working example based on the calculator:
Suppose you invested ₹20,000 on 1 January 2026 and the investment is worth ₹22,600 on 1 January 2027.
This means the investment generated an annualised return of 13% over the period shown. For SIPs or investments involving multiple transactions, enter the actual date and amount of each investment so that the XIRR calculation reflects the timing of every cash flow accurately.
The figures shown are for illustrative purpose only
An XIRR calculator is useful when an investment involves multiple cash flows on different dates.
Common examples include SIP instalments, additional lumpsum investments, top-ups and a series of investments that you want to measure against their current or redemption value.
You can also use an XIRR calculator for a lumpsum investment. If there is only one investment and one ending value, however, CAGR is usually the more direct measure. XIRR becomes particularly useful once there are several dated cash flows.
XIRR does not separately calculate tax, charges or exit load. It calculates the return from the cash flows entered.
If the return amount you enter is after applicable tax, exit load or other deductions, the resulting XIRR will reflect that net cash flow. If you enter an amount before those deductions, they will not be separately accounted for by the calculation.
For mutual funds, expenses that are already incorporated into the scheme’s NAV are also reflected in a portfolio value calculated using that NAV. SEBI’s valuation framework requires accrued expenses and income to be incorporated into the computation of NAV.
Source: SEBI, Master Circular for Mutual Funds, 20 March 2026.
XIRR, CAGR and absolute return all measure investment performance, but they answer different questions. The appropriate measure depends largely on whether the investment involves a single cash flow or several transactions made on different dates.
| Factor | XIRR | CAGR | Absolute return |
| What it measures | Annualised return based on multiple dated cash flows | Annualised growth between a starting value and an ending value | Total percentage gain or loss over the investment period |
| Considers time | Yes | Yes | No |
| Multiple cash flows | Accounts for investments and withdrawals on different dates | Does not account for intermediate cash flows | Does not account for when individual cash flows occurred |
| SIPs | Suitable because each instalment has a different investment date | Not suitable for measuring the investor’s return across multiple SIP instalments | May show the total gain or loss but not the annualised return based on each instalment’s holding period |
| Lumpsum investments | Can be used | Usually suitable for measuring annualised growth | Useful for measuring the total gain or loss |
| Result | Annualised percentage | Annualised percentage | Total percentage return |
For an SIP, XIRR is useful because ₹10,000 invested today has been invested for longer than ₹10,000 contributed several months later. Absolute return can show how much the investment has gained or lost in total, but it does not account for how long each contribution remained invested. CAGR is generally more useful when there is one starting investment and one ending value.
Source: Microsoft Support, XIRR function and calculate a compound annual growth rate (CAGR) in Excel.
A negative XIRR means that the dated cash flows produce an annualised rate of return below zero.
For an investment with contributions followed by one current or redemption value, this can occur when the value received is not sufficient to offset the amounts invested after accounting for when each investment was made. With more complex cash flows, the full pattern of investments and receipts needs to be considered rather than comparing only the total invested with the ending value.
A negative XIRR reflects the return over the period being measured. It does not indicate what the investment may do in the future.
An XIRR calculator can be useful in several ways:
XIRR is an annualised return based on the cash flows and dates entered, not the return earned in every individual year. Annualised figures over short periods can also appear unusually high or low, so the length of the measurement period matters.
For an accurate calculation, include all relevant cash flows, such as investments, additional contributions, withdrawals and redemptions, along with their actual transaction dates. Leaving out a transaction or entering an incorrect date can change the XIRR.
When comparing XIRRs, consider investments with a similar asset class, risk profile and measurement period. For mutual funds, a relevant benchmark and the performance of comparable schemes can provide additional context. Two investors in the same mutual fund may also have different XIRRs because their investment amounts and transaction dates can differ.
Past performance may or may not be sustained in future
XIRR in mutual funds is the annualised return calculated by considering both the amount and date of each investment and withdrawal. A mutual fund XIRR calculator uses these dated cash flows and the current or redemption value to calculate a single annualised return. It is commonly used for SIPs because every instalment is invested on a different date and remains invested for a different period.
A good XIRR cannot be defined by one fixed percentage. It should be assessed against an appropriate benchmark while considering the investment’s asset class, risk and holding period. A higher XIRR may indicate stronger historical performance, but the figure should not be viewed in isolation.
To calculate XIRR in mutual funds, enter each SIP or additional investment as a negative cash flow with its transaction date. Enter the redemption amount or current investment value as a positive cash flow with its corresponding date. You can then use an XIRR calculator online or the XIRR function in Excel to calculate the annualised return.
An XIRR of 12% means the dated cash flows generated an annualised return of 12% over the period being measured. It does not mean the investment earned exactly 12% every year. Whether this represents strong or weak performance depends on the investment type, risk, benchmark and investment period.
Yes, XIRR can be negative. A negative XIRR means the investment’s dated cash flows resulted in an annualised return below zero over the period being measured.
The main difference between XIRR and IRR is how they treat the timing of cash flows. IRR assumes cash flows occur at regular intervals, while XIRR uses the actual date of each cash flow. XIRR is therefore more suitable for investments where contributions or withdrawals occur on different dates.
XIRR in SIP is the annualised return calculated after considering the amount and date of every SIP instalment. Since each instalment has a different investment date and holding period, XIRR treats them as separate cash flows and combines them into one annualised return. CAGR is generally more suitable for an investment with one starting value and one ending value.
Call, chat or write to us if you
need investment help
Toll-free number
Write to us at
Investor WhatsApp channel
Share your details and our experts will guide you.
The calculator alone is not sufficient and shouldn’t be used for the development or implementation of an investment strategy. This tool is created to explain basic financial / investment related concepts to investors. The tool is created for helping the investor take an informed investment decision and is not an investment process in itself. Bajaj AMC has tied up with AdvisorKhoj for integrating the calculator to the website. Mutual Fund does not provide guaranteed returns. Also, there is no assurance about the accuracy of the calculator. Past performance may or may not be sustained in future, and the same may not provide a basis for comparison with other investments. Investors are advised to seek professional advice from financial, tax and legal advisor before investing in mutual funds.
Need help planning your investments?
Our Investment Philosophy reflects what we, as an organisation, believe will generate a good return on equity investment for our investors in the long term. It dictates our goals and guides decision making.
Alpha (a) is a term used in investing to describe an investment strategy’s ability to beat the market.
Alpha is thus also often referred to as excess return or the abnormal rate of return in relation to a benchmark, when adjusted for risk. Essentially, it means doing better than the crowd without taking disproportionate risk.
Collecting superior information
Analysts and portfolio managers strive to collect superior information about the business and the management of the company. They try to generate superior earnings forecast and the balance strength of the company and the industry, thereby trying to 'beat the market' on information edge. This is an important source of alpha for an investor. However, over the years, retaining the information edge has become more difficult and expensive. With a whole lot of investors trying to collect superior information, how can an investor be sure to continuously have accurate and material information about the companies, ahead of others, all the time?
Processing information better
Even if you don't have material information earlier than the crowd, you can still generate better outcomes if you are able to process this information better. Investors develop models and algorithms with enhanced predictive powers to forecast the next move. Fund managers who invest based on some pure formal analytical models are quantitative managers. Here, the goal is to try and beat other investors based on the sophistication of procedures or analytics. The analytical edge can be quite useful until it gets copied by many, and then it may stop generating superior returns.
Exploiting behavioural biases
As the name suggests, this edge is achieved by superior behaviour in reacting to the inputs available to maximise alpha. Modern finance assumes people behave with extreme rationality. However, researchers in behavioural finance have shown that this is not true. Moreover, these deviations from rationality are often systematic. Behavioural managers try to exploit situations where securities are mispriced by the market because of behavioural factors. At Bajaj AMC, we endeavour to combine the best of these edges.
