Comparison guide
CAGR vs XIRR — When to Use Which Return Metric
CAGR assumes a single beginning and ending value. XIRR handles multiple cash flows on different dates — the right metric for any SIP, STP or SWP.
// cagr — for clean lump-sums
CAGR = (End / Start) ^ (1 / years) − 1. Works only when you have one inflow at the start and one outflow at the end.
// xirr — for irregular flows
XIRR finds the single annualised rate that makes the NPV of all your dated cashflows equal to zero. SIPs, STPs, partial withdrawals, additional purchases — all handled correctly.
// why this matters
A SIP showing '11% CAGR' on a fund factsheet often delivers a personal XIRR of 9–10% because your money compounded for varying periods. Use XIRR to evaluate your actual investor return.
// frequently asked questions
Yes — `=XIRR(values, dates)` where values is the cashflow column (purchases negative, redemptions positive, final NAV positive) and dates is the date column.