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XIRR: the return figure that counts when you invest in parts
Why XIRR is fairer than simple return for SIPs and staggered buying.
When you invest a lump sum, "how much did it grow?" is easy to answer. When you invest a little every month, the simple answer is misleading, because each instalment has been invested for a different length of time. XIRR solves this.
An example
You invest ₹10,000 on the 5th of every month from April 2025 to March 2026: twelve instalments, ₹1,20,000 in all. On 5 April 2026 the investment is worth ₹1,32,000.
| Measure | Result |
|---|---|
| Simple return: gain ÷ amount invested | 10.0% |
| XIRR | 19.0% a year |
The simple figure treats all ₹1,20,000 as if it had been invested for the whole year. In fact, the last instalment was invested for only a month, and on average the money was invested for about half a year. XIRR takes the date of every payment into account and gives the yearly rate that matches what actually happened.
When to use which
- XIRR for SIPs, staggered buying, partial sales, dividends received, or comparing your portfolio with a fixed deposit rate.
- Simple return for a single purchase held for less than a year, where it is easier to read.
In Wealth Plus
XIRR is shown for each holding, each family member and the whole family. Every purchase, sale and dividend is used with its own date, and today's value is treated as if you sold today. Open Reports > XIRR to see it for any period.