ROI vs. IRR vs. Cash Yield: What Each Number Really Tells You
The three return metrics every investor sees, what they actually mean, and how sponsors sometimes use them to mislead.
Three numbers, three questions
ROI answers: how much more did I get back than I put in? IRR answers: what was my annualised rate of return, accounting for the timing of cash flows? Cash yield answers: while I held this, how much did it pay me each year?
A deal with a high IRR and a low cash yield is a back-loaded bet on exit. A deal with a high cash yield and a modest IRR is an income story. Knowing which one you are buying is half the battle.
The global and tax angle
The principle in this article applies everywhere, but the numbers do not. Cross-border investors face an additional set of variables — source-country withholding tax, treaty access, capital-gains treatment by residency, reporting obligations under CRS and FATCA, and the impact of holding structures on net IRR. Two investors taking identical positions can end up with materially different post-tax outcomes purely because of where they are resident and how they hold the asset.
Before committing to any cross-border deal, map the tax stack: corporate tax already paid at the asset level, withholding tax on outbound distributions (and whether a treaty reduces it), and personal or corporate tax in your residency. On Aqmār, the SPV jurisdiction, operating-asset jurisdiction, and standard distribution mechanics are disclosed in the deal pack so your tax adviser can model the post-tax return rather than reconstructing it from emails after the fact.
Ready to invest with structure?
Browse vetted projects on Aqmār — every deal held in escrow until ownership and documentation are verified.