Extended Internal Rate of Return (XIRR)
The annualised return when money is invested at multiple different dates.
Definition
XIRR (Extended Internal Rate of Return) calculates the annualised return of an investment that has multiple cash flows on different dates — such as a SIP or staggered lump sums. It accounts for the exact timing of every inflow and outflow.
Example
For a monthly SIP over several years, XIRR is the true annualised return, because each instalment is invested for a different length of time.
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