XIRR and NAV returns are same when there are no cashflows between beginning and ending period. If there are cashflows between beginning and ending periods, XIRR and NAV methods will give you different returns.
NAV method gives you time weighted returns (TWR) or return to strategy. XIRR gives you money weighted return (MWR) or return to investor. Difference comes from timing and size of cashflows. NAV based returns are independent of cashflows. i.e. NAV returns does not change even if there large or small cashflows in the portfolio. This is the correct way for mutual funds to calculate their returns as they do not control when investors buy or sell MF units.
MWR returns take into account timing of cashflows. If MWR returns are less than TWR returns for the same period then investors market timing skills are not good as it indicate investor is generally buying after a positive return and liquidating after a negative return. Similarly if MWR returns are higher than TWR returns for the same period then investor has superior market timing skills as it indicates investor is adding cash to portfolio after a negative return and taking cash out after a positive return.
long term TWR is generally considered as return to strategy as it is the return you are likely to get if you continue to apply the same strategy in the long term. MWR return are the actual returns investor earn as it takes into consideration timing and size of cashflows.
Quiet often mutual fund earn a good return (TWR) but investors in mutual fund earn a lower return (MWR) as they are generally bad at timing the market.