It stands for expected internal rate of return; in relation to a fund/ a portfolio (also, private equity investments), it is the discount rate that makes the net present value of all the cash flows expected, including initial investment and subsequent cash flows over its life, equal to zero. XIRR is a measure used to evaluate the performance of a fund/ a portfolio/ an investment over time. It takes into consideration the investment made at the time of formation as well as subsequent cash flows, such as regular income or capital gains.

XIRR is calculated by dividing the present value of all cash flows by the initial investment. XIRR is the internal rate of return (IRR) that is used for cases where the periodicity between cash flows is not equal.