Did you know the DIFFERENCE between CAGR and XIRR?
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Confused between XIRR, CAGR, IRR on different platforms in the name of returns?
Don’t worry, here’s a simple explanation. If you are investing in a mutual fund or a smallcase only once, check your CAGR but if you are doing an SIP check its XIRR.
Wondering what’s the difference between the two? While both give you an annualized return, CAGR only considers the initial investment & the maturity amount to calculate the returns. Whereas XIRR takes into account all the irregular cash flows that happen between the initial investment and maturity.
It provides a better picture of your investments considering the investments you do every month.
So, the next time when you invest in a mutual fund or smallcase, remember to calculate the correct returns
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