## The IRR Formula: Key to Evaluating Bonds and Real Investment Returns
### Why is IRR crucial for fixed income investors?
When faced with bond investment decisions, the first instinct is to look at the offered coupon. But here’s the detail: that coupon percentage does not always reflect the true yield we will get at maturity. That’s precisely where the **Internal Rate of Return or IRR** comes into play, a metric that allows us to objectively compare different investment options beyond what nominal numbers suggest.
IRR shows us the real return considering not only periodic coupon payments but