My mutual fund showed 14.2% CAGR. I was happy. Then I calculated the XIRR — it was 11.8%. I had been overestimating my returns by 2.4% for three years.
Why CAGR lies for SIP investors
CAGR (Compound Annual Growth Rate) assumes you invested the entire amount on Day 1. But SIP investors invest monthly. Each installment has a different holding period. The January 2023 installment has earned returns for 3+ years. The March 2026 installment has earned returns for 1 month.
XIRR (Extended Internal Rate of Return) accounts for the timing of every cash flow. It gives you the true annualized return considering when each SIP installment was deployed.
How White Stallion AI calculates it
Add your SIP in the Mutual Funds tab: fund name, monthly amount, start date, and current value. The app automatically calculates XIRR based on the cash flow schedule. No manual date entry needed for each installment.
Know your real returns. It changes how you think about fund selection, asset allocation, and whether to continue or stop a SIP.
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