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Mutual Fund performance measurement with XIRR
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Why I raised this query is that some of my Mutual fund has been doubled in past few years. However, return rate is around 12% only, whereas some other funds gave 25 to 70% over the past 2 - 3 years.
XIRR is a better method of computing returns for ad-hoc investments. i.e when investments are made at different time periods.
It is often used to compute mutual fund returns for investments made in SIP mode.
A simple way of doing the XIRR calculation is by using Excel XIRR function.
XIRR(values, dates)
Example: XIRR(B1:B5,C1:C5) where
B1:B5 are the cells containg numerical values (such as SIP investment amount) and
C1:C5 are cells containing date data (such as SIP Dates)
For detailed example, refer: http://www.excelfunctions.net/Excel-Xirr-Function.html
Related Topics
- Understanding Mutual Fund Factsheet
- Evaluating of Mutual Fund Schemes
- Comparing Mutual Fund Schemes
- Mutual Fund performance measurement with CAGR
- Mutual Fund performance measurement with Standard Deviation
- Mutual Fund performance measurement with Sharpe Ratio
- Mutual Fund performance measurement with Beta
- Mutual Fund performance measurement with XIRR