Reading Portfolio Performance: From Good-Looking to Truthful

20.12.25 07:19 PM - By Surabhi Kalia

How to Read Portfolio Performance the Right Way


Most investors don’t suffer from poor returns. They suffer from poor interpretation of returns. Numbers are everywhere. Truth is rare.

Most dashboards focus on one simple idea: How much did my money grow?


That’s comforting — but incomplete. Returns without context hide the key elements of investing:

  • Outcomes (Absolute returns)

  • Efficiency (XIRR)

  • Skill (Cash Adjusted returns)

Why absolute returns alone can fool you

For a Lumpsum investor this is key metric, over a full market cycle if your Absolute returns don't beat the benchmarks there are no excuses or explanations. But absolute returns tell you where you reached, not how you got there.

Two people make ₹1 lakh profit.

  • One did it in 6 months

  • One did it in 2 years

Same profit. Very different performance. XIRR exposes that difference immediately.


XIRR: How It Happened

XIRR answers a better question: Given every cash inflow and outflow, what was my actual annual return? It captures:

  • SIPs and staggered investing

  • Timing of deployment

  • Partial exits and re-entries

For a SIP investor this is the key metric to evaluate performance. Is your XIRR beating the benchmark CAGR ?


Cash-Adjusted Benchmarking: The Reality Check

Benchmarks assume your money was fully invested all the time. Real portfolios never are. Cash-adjusted benchmarking answers one fair question:

When my money was actually invested, did it perform well?

It helps you see:

  • Whether returns came from skill or just rising markets

  • Whether holding cash was a sensible choice or a missed opportunity

  • Whether underperformance reflects strategy or lack of conviction

For any investor this is the key metric to evaluate Strategy.  A better cash adjusted return than the benchmark tells you the strategy is working. Beware, this does not provide any guidance on whether you are outperforming the benchmark.


The Wish Philosophy

We don’t simplify performance to look good. We measure it to be true.

Absolute returns show outcomes.

XIRR explains the efficiency of outcomes.
Cash-adjusted benchmarking tells the truth about skills.

If you have questions about your returns or how to read them, please reach out to us. Clarity is the first step to better investing.


Because wealth doesn’t grow by guessing, it grows when you understand the Math.


Get Started Now

Surabhi Kalia

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