XIRR

XIRR is an annualized return from buy, sell and dividend cashflows. Why deposit timing matters.

XIRR (extended internal rate of return) is an annualized return from timed cashflows: outflows on buys and fees, inflows on sells and dividends, plus the current value of open positions.

Unlike plain ROI, it accounts for when money moved. The same absolute profit looks different if capital turned over quickly versus being held for years.

Useful for a whole portfolio or a single asset with staggered buys. It is not the same as TWR, which compares a strategy to an index without deposit timing.