Why Did My XIRR Drop Suddenly?
"I didn't sell anything, but my XIRR went from 22% to 15% overnight!" — Here's why this happens.
📉 The Panic
You open your portfolio app and your XIRR has dropped significantly — but you haven't sold anything. What happened?
XIRR is a dynamic metric. It changes daily based on multiple factors. Here are the 6 most common reasons for sudden drops.
6 Reasons Your XIRR Dropped
1️⃣ Market Correction
The simplest reason: stock prices fell.
XIRR uses your current portfolio value. If Nifty drops 2% today, your XIRR will drop too — even if you did nothing.
💡 Action: Check if the market broadly fell. This is temporary unless you sell.
2️⃣ One Stock Crashed
A single holding can move your XIRR significantly.
If you have 20% of your portfolio in one stock and it drops 15%, your overall XIRR takes a major hit.
💡 Action: Check which stock moved the most. TrueXIRR shows stock-level impact.
3️⃣ Time Effect (Early Portfolio Stage)
In the first 1-2 years, XIRR is extremely volatile.
Small price changes look massive when annualized. A 5% drop in 3 months = roughly 20% annualized drop in XIRR.
💡 Action: Don't panic in year 1-2. XIRR stabilizes over 3+ years.
4️⃣ Recent Large Investment
Adding money during a downturn temporarily hurts XIRR.
If you invested ₹1 lakh yesterday and markets fell 2% today, that fresh investment shows a steep annualized loss.
💡 Good news: If you invest at lows, your future XIRR will be higher!
5️⃣ Withdrawal Effect
Partial exits change the XIRR math.
When you withdraw money, the remaining portfolio's performance is recalculated. See our detailed article: How Withdrawals Affect XIRR.
6️⃣ Data/App Issue
Sometimes it's just a glitch.
- NAV not updated
- Missing transactions
- Duplicate entries
- Wrong date formats
💡 Action: Verify by calculating independently with TrueXIRR.
Should You Worry?
✅ Don't Worry If:
- Market broadly fell today
- You're in early stages (< 2 years)
- You just added fresh capital
- Your total returns (₹) are still positive
⚠️ Investigate If:
- XIRR dropped but market was flat/up
- Numbers don't match your calculations
- You see transactions you don't recognize
- Different apps show wildly different XIRR
🎯 The Takeaway
XIRR fluctuating is normal. It's a real-time measure of your portfolio's performance. The key is understanding why it moved — that's where TrueXIRR helps.
Understand Why Your XIRR Changed
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