If you have started spotting a new performance metric in a few fund factsheets or on app screens, you are not alone. SIP Returns – Does this metric ring any bells? It isn’t everywhere yet, but it is definitely making rounds.
Think of SIP Returns as an emerging way to read performance through the lens of how many of us actually invest now; through small and regular instalments. As our love for SIP grows, this metric is only going to be marketed more. So today, we help you breakdown the concept behind the SIP Returns metric, and actually show how you can find it on your own.
Quick Summary
- SIP Returns is an emerging, SIP-friendly way to read performance. It’s simply XIRR applied to your monthly cash flows – no new formula, just a time-aware annualised return.
- Why it matters: As SIP adoption rises, this metric is appearing more often in factsheets and apps because it mirrors how most investors actually invest regularly, not in one lump sum.
- Different from CAGR & rolling returns: CAGR suits one-time investments; rolling returns test a fund’s consistency across many start dates. SIP Returns reflect your cash-flow experience.
- How to calculate SIP Returns: list each SIP debit (-), add the current/exit value (+), and run XIRR in Excel or Google Sheets to get the annualised rate.
- Who should use it: Regular SIP investors with multi-year horizons. Use caution for very short periods or irregular top-ups/withdrawals.
- How to interpret: Compare like-for-like periods, check against a benchmark SIP, and pair with rolling returns for a fuller picture.
Indians and their love for SIPs
If you aren’t already aware, Indians and their love for SIPs is not slowing down. In July 2025, investors contributed a record ₹28,464 Crores via SIPs with 9.11 Crore active SIP accounts. That is not just the headline; it is a clear trend and hence funds as well as other partners are adapting to it providing them with the metrics that actually matter to the investors. But what actually is SIP Returns?
SIP Returns
SIP Returns tell you that annualized returns that you earned when you invest similar amounts at regular intervals (typically monthly). Technically, SIP Returns are nothing but a rebranded version of XIRR (Extended Internal Rate of Return). It factors in the dates of your SIP outflows and the current valuation as on date or redemption amount on redemption date to arrive at the annualised returns of your SIP based investment.
How SIP Returns differ from other Return or Performance Measures
SIP Returns or XIRR are not the same than the return or performance measures that you see currently.
CAGR / Annualised Returns
CAGR measures the annualised returns between two points of investment – Investment Amount and Redemption Amount. It is most suitable for ones investing via the lump sum mode.
Absolute Returns
This is just a simple return measurement that do not even annualise the returns. Just raw gain or loss and the amount invested. Most suitable for investors who had invested for period less than one year.
Rolling Returns
Considered a better alternative to the CAGR or the Annualised Returns. Measures the consistency of the performance of fund by calculating performance across overlapping periods. For example, 3 Year Annualised Returns computed for every day across the data of 10 Years. The Average return or the Median return is then calculated to understand how the fund has fared.
SIP Returns or XIRR
Think of XIRR Returns as your customized performance tracker. The amount and the date of your SIP may not be the same for every investor. Hence the return earned by each investor will also be different as well as the annualised return.
SIP Returns tries to generalise this. It picks out a certain SIP date (say 5th of each month) and a certain SIP amount (say ₹10,000) and then calculates the return earned on such investment. In case, there is a trading holiday on 5th, the next trading day is considered as the investment date.
SIP Returns helps an investor gauge the performance of the fund in a better way as the returns measured offer a closer comparable metric to the SIP Investor. If you want, you can measure the XIRR or the SIP Returns yourselves.
How to Calculate SIP Returns (XIRR) yourself
Calculating the XIRR for your investments is a simple task even if it seems otherwise. Here’s how:
On your Excel or Google Sheets,
1. List all of your SIP Transactions for your particular fund in two columns
Date of Investments, and the amount of the investment. Make sure you note down the investment amount in negative amount as it is an actual debit.
On the last column, add the redemption date or the valuation date along with the redemption or valuation amount (in positive number)
2. Apply the XIRR formula
In your Excel or Sheets, apply the XIRR formula, and select the amounts in all the rows, and then select all the dates. And then press enter to arrive at your annualised SIP Return.
Make sure you have at least one negative and one positive amount to calculate XIRR. In case if the returns don’t seem true, make sure you have applied the formula correctly.
Bonus:- You can also calculate XIRR for your whole portfolio. You do not need to list down all the transactions separately fund wise. You just need to list down all the outflows, and all the inflows (redemptions) and the current values of assets (in case of no redemptions) and their respective dates.
XIRR formula works like an efficient tool to arrive at your consolidated portfolio regardless of your transactions or number of investments.
Usability of SIP Returns
SIP Returns are a great tool for:
- Investors investing via Monthly SIPs who want to understand their personal, money-weighted returns.
- Investors wanting to understand their overall portfolio return including all of their investments.
Avoid XIRR Returns for:
- Investments which were invested for less than a year.
What an XIRR returns tell you
XIRR Returns help you compare your actual investment return across benchmarks (personal or fund benchmarks) as it offers an inclusive measurement. It is money weighted and as a result customised to the investor’s own transactions.
The returns will help you map your investments better to your personal financial goals, offering a clear roadmap for your investments and financial future.
Closing Notes
XIRR is not a new concept for performance measurement. It was an underrated metric. With SIP becoming a common mode of investments, XIRR as a concept has been rebranded as SIP Returns to offer investors a performance metric that mirrors how they actually invest.
So, the next time you see this metric, you now know how to interpret it!
Disclaimer: The data in this presentation are meant for general reading purpose only and are not meant to serve as a professional guide/investment advice for the readers. This presentation has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been suggested or offered based upon the information provided herein, due care has been taken to endeavor that the facts are accurate and reasonable as on date. The information placed on the presentation is for informational purposes only and does not constitute as an offer to sell or buy a security. The Company reserves the right to make modifications and alterations to the content available on the presentation. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investment. The EduFund platform & the website is owned, operated and maintained by Helena Edtech Private Limited, a company incorporated under the laws of India. An affiliate of the Company, i.e. Edubillions Tech Private Limited is registered with AMFI as mutual fund distributor bearing the registration number ARN258733. Investment in securities market are subject to market risks, read all the related documents carefully before investing. The valuation of securities may increase or decrease depending on the factors affecting the securities market.
About the author
Niraj Satnalika
Head Of Research,EduFund
Dr. Niraj is a finance professional with 12+ years of experience and is part of the founding team at EduFund. He’s worked with Goldman Sachs, CRISIL and Sakal Media in roles spanning investment management, research and leadership. With a PhD in Finance from IIT Bombay, he brings deep expertise in valuation, governance and education planning. When he’s not teaching or writing, you’ll find him cooking or going on long drives.
