CAGR To XIRR: How To Read Your Mutual Fund Returns?
Mutual Fund Returns: The internal or extended internal rate of return is a formula which takes into periodic transactions.
For personal finance enthusiasts, choosing the right parameter to calculate one's mutual fund returns becomes extremely critical to omit all biases when taking investment decisions. Before investing in an MF scheme, it is also vital to examine the past returns of that scheme and compare the same with similar schemes in the same category.
In the backdrop of MF returns, Prableen Bajpai, founder of FinFix Research & Analytics spoke to NDTV Profit in an exclusive interview and shed light on the various parameters by which one can choose to calculate MF returns. From XIRR to CAGR, Bajpai explained how each parameter is vital for specific methods of MF returns.
How to calculate MF returns via XIRR and CAGR?
XIRR: The internal or extended internal rate of return is a formula which takes into periodic transactions. It covers a journey of transactions and then gives the compounded return. It adjusts for timing and amount of each transaction. This method works for SIPs, SWPs, and withdrawals.
CAGR: The compound annual growth rate is a useful metric for calculating the smoothed return on a mutual fund investment over a specific period, assuming profits are reinvested. It provides a clearer picture of the investment's growth by averaging the returns over the years, unlike absolute returns which only show the total change.
June AMFI Data
Inflows into equity mutual funds were recorded at Rs 23,587 crore in June 2025, higher by 24%, compared to the inflow of Rs 19,013 crore recorded in May, as per the monthly data released by the Association of Mutual Funds in India. This is a snap in a five-month decline in flows into actively managed equity.
Inflows across the board saw its decline snap, compared to May. Net inflow of the mutual fund industry was at Rs 49,094 crore, compared to an inflow of Rs 29,108 lakh crore the previous month. The SIP contribution rose to Rs 27,269 crore in June, as compared to Rs 26,688 crore in May 2025. The SIP contribution saw a 5.2% uptick quarter-on-quarter. New SIP registrations in the month of May stood at 62 lakh while the closure of accounts are at 48 lakh.
