Investment returns
XIRR and Irregular Cash Flows Explained
XIRR is a money-weighted annualized return for cash flows that occur on irregular dates.
Reviewed 1 September 2026Why dates matter
A contribution invested for three years should influence annualized return differently from a contribution made one month before valuation. XIRR discounts every dated cash flow to find a rate at which their net present value is zero.
Cash-flow signs
Investments are normally entered with one sign and withdrawals or ending value with the opposite sign. At least one positive and one negative cash flow are needed for a meaningful solution.
Two cash flows versus full XIRR
With only one starting value and one ending value, an exact-date annualized-growth formula can be used directly. A portfolio with SIP contributions, withdrawals or dividends requires a multi-cash-flow numerical XIRR calculation.
Limitations
XIRR can have no solution or more than one mathematical solution for unusual cash-flow patterns. It also reflects the size and timing of investor cash flows, so it should not automatically be treated as manager skill.
Primary and authoritative sources
Sources support factual context. Share Market Open remains responsible for its explanations and calculator assumptions.