How to calculate mutual fund XIRR (with a worked SIP example)
XIRR (Extended Internal Rate of Return) is the annualised rate of return that accounts for every cash flow and when it happened. For a SIP — where you invest different amounts on different dates — it’s the only return figure that’s actually fair. A single ₹1,000 instalment from five years ago has been compounding far longer than one from last month, and XIRR weights each by its time in the market.
Absolute return vs XIRR — why they differ
Say you run a ₹10,000 monthly SIP for 12 months and it’s now worth ₹1,30,000 against ₹1,20,000 invested.
| Figure | What it says | Value |
|---|---|---|
| Absolute return | Total gain ÷ total invested | 8.3% |
| XIRR | Annualised, date-weighted | ~15% |
The absolute figure (8.3%) looks modest — but most of that money was invested only a few months ago. XIRR annualises it correctly and shows the real pace: roughly 15% a year. Absolute return understates a growing SIP because it ignores that your later instalments haven’t had time to grow.
A worked example
Three cash flows — money out is negative, the current value is a positive inflow on today’s date:
| Date | Cash flow |
|---|---|
| 1 Jan 2025 | −₹50,000 |
| 1 Jul 2025 | −₹50,000 |
| 1 Jan 2026 (value today) | +₹1,08,000 |
XIRR finds the single annual rate that discounts those two outflows back to today’s value. Here it solves to roughly 11.6% per annum — the rate at which −50,000 (held 1 year) and −50,000 (held 6 months) grow to ₹1,08,000. There’s no clean formula; it’s solved by iteration.
Doing it yourself
- Spreadsheet: list every SIP date as a negative amount, add today’s date with the current value as a positive amount, and call
=XIRR(values, dates)in Excel or Google Sheets. - Watch the signs: money leaving your pocket is negative, the final value is positive. One flipped sign and the answer is nonsense.
- Include everything: every instalment, every lump-sum top-up, and any redemptions. Miss one and the rate is wrong.
Why this is tedious by hand
Multiply this by five funds, three family members and a few years of instalments and the spreadsheet becomes its own maintenance job — you re-enter dates every time you want an honest number. Hundo computes XIRR per fund and across the whole portfolio automatically, marking each holding to the latest AMFI/Kite NAV, so the date-weighted return is just there — not something you rebuild by hand each quarter.
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