Mutual Funds

SIP Calculator and XIRR — Why Your Mutual Fund Returns Are Not What You Think

4 min read · April 2026 · White Stallion AI

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.

Rule of thumb: For SIPs in rising markets, XIRR is usually lower than CAGR (because later installments bought at higher prices had less time to grow). In falling markets, XIRR can be higher than CAGR (later installments bought cheaper, averaged down your cost).

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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