Profitability calculations are not intended to serve as a guarantee for future returns and are not representative of the projected performance of any investment. Individual portfolios can be affected, amongst others by portfolio diversification and macroeconomic conditions.

How do you calculate the investment return over a certain period, when you have several investments occurring on different days?

The XIRR function is known as the extended internal rate of return (also found in excel) and is used to calculate profitability based on multiple investments made over a period of time.

This indicator, commonly used by P2P platforms, is calculated for each individual user on the basis of: the amount invested (account top-ups and their respective dates), what withdrawals he had from the platform, the interest collected and the current value of the account.

This is a calculation for the profitability of the investment account, visible on the personal dashboard of each investor, under the XIRR section.

Some suggestions for a better XIRR:

  • Diversify the loans you invest in (different degrees of risk, different purposes, different amounts, etc.);

  • Limit the amounts invested in a single loan (Fagura limits the maximum amount accepted as an investment in an application to 100 Euros per investor);

  • Analyze requests individually or set stricter rules when you choose "Auto Invest";

  • Increase the total amount invested, so that the percentage of potentially impaired loans is way below the one paid off on time.

A good calculation example and the applied formula for XIRR can be found HERE.

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