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CAGR is calculated by taking the nth root of the total return and subtracting 1, where n is the number of years in the investment period. XIRR, on the other hand, is calculated by using a formula that solves for the rate of return that makes the net present value of all cash flows equal to zero.
Jul 26, 2021 · XIRR vs CAGR – which one should you choose? Your choice between XIRR and CAGR should be dictated by your investment. If you are investing in a lump sum, the CAGR would give you the return earned from your portfolio.
May 22, 2024 · Extended Internal Rate of Return (XIRR) takes this into account. In XIRR, the CAGR of each installment is calculated, and then they are added together to give you the overall Compounded Annual Growth Rate. To understand this better, let’s take our previous example of Mr. Vedant who invests in Axis Bluechip fund.
XIRR vs CAGR: Learning the difference between compounded annual growth rate (CAGR) & internal rate of return (XIRR) helps you plan your mutual fund investments better. Click here to know more!
Oct 25, 2024 · 25 Oct 2024. Understating and evaluating the performance of any investment is necessary to make more informed decisions. XIRR and CAGR are the two most popular metrics for evaluating the return on your mutual fund investments. While both offer valuable insights, they serve different purposes and are suited to different types of investments.
May 22, 2024 · CAGR = ( Ending Value/Beginning Value)^1/n - 1. (15000/10000)^⅓ - 1 = 0.145 or 14.5%. - XIRR Example: If you invest ₹10,000 initially, add ₹5,000 after 6 months, and the total value grows to ₹18,000 after 1 year, XIRR would consider the exact dates of these investments to calculate the annualized return.
