The internal rate of return (IRR), also known as IZF, shows you how your actual return has developed over time – i.e., taking into account all deposits and withdrawals. This makes it more meaningful than a simple percentage performance, because it takes into account the timing of your investments.
To display the internal rate of return, you need app version 2.199.0 or higher.
On the web, the feature will be available automatically starting with this update.
In the mobile apps (iOS and Android), the update will be released as a phased release via the App Store and the Google Play Store.
If you are using an older version of the app, the IZF will not be visible in your portfolio.
Therefore, make sure you have the latest version installed in order to use this feature.
Where to find the IRR
You can find the IRR directly in your portfolio under Total return.
It is calculated automatically and updated regularly as soon as there are changes to your holdings or deposits.
Who can see the IRR
The internal rate of return display is only available for Premium and Wealth customers. If you do not see the IRR in your portfolio, it is likely because you do not have a Premium or Wealth subscription.
What exactly does the IRR mean?
The internal rate of return shows you the average annual return on your portfolio, taking into account all cash flows (deposits, withdrawals, dividends, etc.). This allows you to see how efficiently your invested capital has actually performed, regardless of when you invested.
Simple return vs. internal rate of return (IRR)
Situation:
You invest €1,000 in January.
In July, you add another €1,000.
At the end of the year, your account balance is €2,200.
Simple (relative) return:
Total profit = $2,200 − ($1,000 + $1,000) = $200
Relative return = $200 / $2,000 = +10%
However, this calculation does not take into account that the second deposit was not made until July and therefore only had half a year to "work."
Internal rate of return (IRR):
The IRR takes into account the timing of the second deposit and calculates a realistic, time-weighted return.
In this example, the IRR is approximately +13% per year because the capital invested earlier generated returns for a longer period of time.
Conclusion:
The simple return only shows the ratio of profit to the amount invested.
The IRR, on the other hand, shows how much your capital has actually grown over the entire period – and is therefore much more meaningful.