XIRR Calculations
Posted: September 9th, 2019, 8:40 am
I have an investment tracker on Excel which lists the holding, date bought, quantity of units and price paid; today's date and price and from this I can calculate XIRR.
However, I have some income units and whilst total return is the same as for accumulation units, the share price lags behind acc units. I am not able to automatically reinvest the dividends on my platform (a misstep on my part, I am swapping out to accumulation units bit by bit) but I would like to include the dividends received in my XIRR calculations.
So what I have done is to divide the dividends received by the quantity of units held and add the result to today's share price so as to calculate a more meaningful XIRR. I know that this does not take account for the compounding effect but the intention is to be "closer" to the true return even if I cannot be exact.
Would our more numerate members agree that this is a valid exercise or is it not?
However, I have some income units and whilst total return is the same as for accumulation units, the share price lags behind acc units. I am not able to automatically reinvest the dividends on my platform (a misstep on my part, I am swapping out to accumulation units bit by bit) but I would like to include the dividends received in my XIRR calculations.
So what I have done is to divide the dividends received by the quantity of units held and add the result to today's share price so as to calculate a more meaningful XIRR. I know that this does not take account for the compounding effect but the intention is to be "closer" to the true return even if I cannot be exact.
Would our more numerate members agree that this is a valid exercise or is it not?