IRR/XIRR – Excel – Limitations of Calculating Complex Cash Flow Returns

Excel’s IRR and XIRR functions are often used to calculate the rate of investment returns. In this post, let us discuss the limitations of XIRR and IRR functions.

Credit:  This discussion is inspired by financial planner Mr. Hari who posted a video describing the limitations of IRR and XIRR on my XIRR calculator page. The video (a must watch for finance professionals) is linked below.

A couple of weeks ago, when the Chit fund returns calculator was published, I had mentioned that, for any investment, if the amount invested is less than the amount received, it might not be possible to calculate the rate of return. read more

Weekend Roundup Sep. 14th 2013

1. Hemant Beniwal’s new article: What Should Be Your Ideal Revenue Per Client? + Download Revenue Calculator

This is written for financial planners. However it is equally interesting for individuals.

Would you pay Rs. 30,000 f0r a financial plan plus annual review fee?

If you won’t, the only option is to do it yourself.

Financial planners will immediately say, ‘it is dangerous for investors to try and do their financial planning’. read more

Generating Mutual Fund SIP Account Statements and Calculating Returns With NAV History

Use this excel tool to generate an account statement and calculate returns for your mutual fund SIP investments using NAV history.

First, a few thoughts about calculating SIP returns.

There are many ways to calculate returns from a SIP investment using Excel. Many prefer to use a function known as XIRR to estimate returns.

Yes, estimate not determine. While returns from a lump sum investment can be determined, returns from a SIP can only be estimated! read more

Do It Yourself Mutual Fund Analysis: HDFC Top 200 Fund

Analyzing the performance of a mutual fund is not rocket science.  Anybody can do it, just as anybody can select a mutual fund following a few simple rules.

I would like to prove my point with a do it yourself mutual fund analysis using HDFC Top 200 fund – one of the most popular mutual funds in India. Recently many investors have become disillusioned with the fund: “I thought Top 200 was the best fundand Prashant Jain was the best fund manager.  I am disappointed with its recent performance. My portfolio is in the red for months together” read more