What is XIRR
What is meant by Extended Internal Rate of Return (XIRR), and how do I know if my XIRR is good or bad? Is there any average that is considered good? I am clueless about it; please assist.
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XIRR or Extended Internal Rate of Return is an indicator using which you can calculate your return on mutual fund investment. With this tool, you can analyse how your mutual funds are performing. XIRR consists of various cash inflows and outflows. It analyses the average return of each instalment and with that value, it adjusts the average annual rate on all mutual funds investments. XIRR is useful to estimate your returns on regular mutual fund schemes like the SIP or systematic investment plan. Your XIRR can be good if the mutual funds are higher than the inflation rate. Estimate your mutual fund's returns against other benchmarks and see if XIRR is the best option.
