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| Scheme Name | 1-Year Return | Invest Now | Fund Category | Expense Ratio |
|---|---|---|---|---|
| Axis Nifty 50 Index Fund | +32.80% | Invest Now | Equity: Large Cap | 0.12% |
| Axis Nifty 100 Index Fund | +38.59% | Invest Now | Equity: Large Cap | 0.21% |
| Axis Nifty Next 50 Index Fund | +71.83% | Invest Now | Equity: Large Cap | 0.25% |
| Axis Nifty 500 Index Fund | — | Invest Now | Equity: Flexi Cap | 0.10% |
| Axis Nifty Midcap 50 Index Fund | +46.03% | Invest Now | Equity: Mid Cap | 0.28% |
XIRR is an annualized return calculation method that accounts for cash flows occurring at irregular intervals. Unlike Compounded Annual Growth Rate (CAGR), which assumes a single investment over a fixed holding period, XIRR factors in multiple investments and redemptions at different times.
For example, if you invest ₹10,000 every month in a mutual fund for a year, XIRR helps determine the exact annualized return, considering the timing of each investment.
How XIRR Works:
- Tracks Multiple Cash Flows – Considers all inflows (investments) and outflows (redemptions) on different dates.
- Calculates the Annualized Return – Unlike a simple percentage, XIRR provides a true annual rate of return.
- Accounts for the Time Value of Money – Investments made earlier carry more weight than recent ones.
Why XIRR is Important for Mutual Fund Investors
| Feature | Benefit |
|---|---|
| Best for SIP Investors | Since SIPs involve multiple investments over time, XIRR is the most accurate way to measure returns. |
| Works for Lumpsum + SIP Investments | If an investor has both lump sum and SIP contributions, XIRR provides a consolidated return. |
| Helps Compare Different Investments | Investors can compare XIRR across different funds to make better investment decisions. |
Example of XIRR Calculation
| Date | Investment (₹) |
|---|---|
| Jan 1, 2023 | 10,000 |
| Mar 1, 2023 | 10,000 |
| Jun 1, 2023 | 10,000 |
| Dec 1, 2023 | 10,000 |
On Jan 1, 2024, the total investment grows to ₹45,000. Using Excel’s XIRR function with these cash flows and dates, the calculated return may be around 12-14%, depending on market performance.
Also read: Over half of equity MFs beat benchmarks in Feb: Here’s a category-wise performance breakdown
XIRR vs. CAGR: What’s the Difference?
| Feature | XIRR | CAGR |
|---|---|---|
| Investment Type | Multiple Transactions | Single Lumpsum |
| Considers Timing of Cash Flows | Yes | No |
| Best for SIPs | Yes | No |
| Annualized Return | Yes | Yes |
XIRR is an essential metric for mutual fund investors, particularly those investing through SIPs or making multiple transactions over time. It provides a more realistic measure of returns than CAGR, helping investors make informed decisions.
If you’re tracking your mutual fund portfolio, using XIRR will give you a clearer picture of your actual earnings rather than just relying on NAV-based returns.
(Edited by : Sheersh Kapoor)
