CAGR, IRR or XIRR: choose the return measure that matches your cash flows

A portfolio can grow because investments performed well, because you added more money, or both. A return measure needs to separate those effects using the timing of the money. Choosing the wrong calculation can make a perfectly correct formula answer the wrong question.

Use CAGR for two comparable endpoints

For one investment with no money added or removed, the CAGR calculator connects starting and ending values across a holding period. It expresses a smooth equivalent annual rate; it does not show the year-to-year path. Monthly mutual-fund contributions do not all share the same start date, so dividing final value by total deposits is not an appropriate CAGR measurement of investor return.

IRR needs equal intervals

The IRR calculator treats the first row as period zero and every later row as one period later. Keep a zero entry for a month with no transaction. Removing that row pulls later proceeds forward. A monthly IRR is a rate per month; the annual equivalent compounds twelve monthly growth factors rather than multiplying the percentage by twelve.

XIRR uses actual dates

The XIRR calculator uses elapsed days with a 365-day year, following the convention described in Microsoft's XIRR documentation. A 10% gain from 1 January 2025 to 1 January 2026 has a 10% XIRR. The same endpoint gain from 1 January 2024 to 1 January 2025 spans 366 days and gives a slightly lower annualized rate.

Close an unsold portfolio with its valuation

Enter money invested as negative. Enter actual proceeds as positive. If units remain unsold, add the value of those units on the valuation date as one final positive entry. Do not count that same value again as a sale. If distributions were reinvested and already contribute to the final holding value, avoid adding them a second time as cash received.

Our tool sorts dates and combines transactions that share a date. For an illustrative SIP, several negative contributions followed by a positive closing value form a supported pattern. The SIP calculator answers a different question: what a contribution schedule might become under an assumed future return.

Understand a rejected pattern

Alternating investments and withdrawals can create more than one net sign change. Such a pattern can have multiple internal rates or no suitable root. This version flags it instead of presenting one selected rate as definitive. Do not remove real transactions to obtain a nicer result; examine an NPV profile or a specialist cash-flow model instead.

Read the amount and horizon too

A high annualized return over a short interval is not the same as having earned that return for a full year. Keep the dates, cash invested, proceeds and net gain alongside the percentage when comparing or sharing results. Neither IRR nor XIRR measures investment risk or predicts future performance.