Money-weighted return calculator (XIRR)
A simple percentage gain treats money you added as if it were profit. This does not.
Every deposit and withdrawal, then what the account is worth today. Dividends that stayed in the account are not entries — they are already inside the closing value, and adding them counts them twice.
The trap this avoids is counting deposits as returns. If a portfolio goes from €5,000 to €9,000 while you paid in another €2,500, the naive arithmetic reports an 80 percent gain on a portfolio that actually earned far less than that.
A money-weighted return solves for the single annual rate that makes every dated flow reconcile with the closing value, which is what a spreadsheet’s XIRR() does. Because it is annualised, very short periods produce enormous numbers and are refused rather than reported.
The longer explanation is in real return when you keep adding money.
General information about how this calculation works, not financial or tax advice. See our terms.