XIRR: How to calculate returns on your portfolio?

XIRR - investment return

It was a lazy Sunday morning. While I was sitting on the window ledge, sipping my morning cuppa tea, the door bell rang. I took the last sip and opened the door.

“Good Morning”, I saw Shekhar standing out wearing a broad smile.

“Good Morning Shekhar, long time!” I was seeing him after several days though he lived just next doors. We were good friends.

“Yes Vipin. Long time! And as always I have come to trouble you a bit.”

“Sure, tell me.”

“You know, I have invested in mutual funds. It’s been a few years now. But I have never been able to understand what is my return on these investments.

This time I happened to open my account statement. And that also doesn’t seem to show it. Can you tell me what’s the best way to calculate it?”

“Sure, why not?”

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