AMFI March 2026 data: SIP assets cross Rs 15 lakh crore as equity inflows extend record 61-month streak

India's mutual fund industry closed March 2026 with a paradox that every investor should study before their next instalment goes out. Domestic MF assets under management fell to Rs 73.73 lakh crore, down 10.1% on the month from Rs 82.03 lakh crore in February 2026, yet still up 12.2% on the year, according to the AMFI Monthly Note for March 2026 (source: AMFI, Crisil Intelligence). The monthly slide was almost entirely mark-to-market: the Nifty 50 lost 11.3% and the Sensex 11.5% over the month, dragging fund values down even as investors kept buying. Equity schemes logged net positive inflows for the 61st consecutive month at Rs 40,450 crore, and the industry added 33.63 lakh net folios to reach a record 27.39 crore folios.

The single most quoted figure from the note is that systematic investment plan (SIP) assets crossed Rs 15.11 lakh crore, now roughly 20.5% of all mutual fund money in the country. That milestone reframes the oldest question in Indian equity investing: for a long-horizon wealth goal, should you route your monthly SIP into an actively managed flexi-cap fund, or into a low-cost passive index ETF? Flexi-cap funds led all equity categories for the eighth straight month in March 2026 with Rs 10,054 crore of inflows, while passive funds swelled to Rs 14.12 lakh crore in assets, with ETFs alone drawing Rs 19,802 crore. Both camps are winning money; they are not winning it the same way. This pulse breaks down the two products side by side, the tax you pay on each, and which investor profile each suits.

Side-by-Side Comparison

An actively managed flexi-cap fund and a passive index ETF are both equity-oriented schemes holding at least 65% in domestic equities, which is why the March 2026 AMFI note groups their taxation identically. The difference is what happens inside the wrapper. A flexi-cap manager can move freely across large, mid and small cap stocks with no minimum allocation to any bucket, a flexibility that helped the category attract Rs 10,054 crore in March 2026. An index ETF simply mirrors a benchmark such as the Nifty 50 and trades on the exchange at a live price through the day.

The clearest structural gap is cost. Under SEBI (Mutual Funds) Regulations, 1996, Regulation 52, the total expense ratio (TER) for index funds and exchange-traded funds is capped at 1.00%, whereas an actively managed open-ended equity scheme can charge up to 2.25% on the first Rs 500 crore of assets, tapering as AUM grows. Over a multi-decade horizon that recurring cost difference compounds directly against your return. You can model the drag yourself using Oquilia's SIP calculator for the monthly route and the lumpsum calculator for one-time deployment.

The passive surge is not a fad. Passive assets reached Rs 14.12 lakh crore by March 2026, and ETFs pulled in Rs 19,802 crore in the month alone. The trade-off is that an index ETF, by design, will never beat its benchmark; after its expense ratio and tracking error, it will slightly lag. A flexi-cap fund holds out the possibility of outperformance, but also the risk of underperformance, and you pay more for the attempt. Neither product is universally superior; the right answer depends on cost sensitivity, the account you hold it in, and your own behaviour during months like March 2026 when the Nifty fell 11.3%.

Tax Treatment

Here is the reassuring part: because both an equity flexi-cap fund and an equity index ETF hold at least 65% in domestic equities, the Income Tax Act treats their capital gains identically. There is no tax arbitrage between the two products, so your choice should turn on cost and strategy, not on tax.

Under the rules effective 23 July 2024 (Budget 2024), long-term capital gains (LTCG) on equity-oriented funds held for more than 12 months are taxed at 12.5% on gains above a Rs 1.25 lakh annual exemption, per Section 112A of the Income Tax Act. Short-term capital gains (STCG) on units held 12 months or less are taxed at a flat 20% under Section 111A. These rates apply whether you hold the flexi-cap fund or the index ETF, and indexation is not available on equity schemes. Use Oquilia's ELSS and equity calculator to see how the Rs 1.25 lakh exemption changes your effective rate.

Two practical points follow from the March 2026 data. First, the 61-month equity inflow streak means many investors now hold units bought at very different prices; when you redeem, first-in-first-out ordering applies, so your oldest units carry the largest embedded gains. Second, the Rs 1.25 lakh LTCG exemption is per financial year, so staggering redemptions across 1 April boundaries can keep more of your gain untaxed. Neither the flexi-cap fund nor the ETF changes these mechanics. Always confirm the current provisions at incometax.gov.in before filing, as thresholds are revised in the annual Finance Act.

Who Should Pick Which

The right product is the one that matches your cost sensitivity, your conviction in active management, and your behaviour under stress. The March 2026 drawdown, when the Sensex fell 11.5% in a single month, is exactly the environment that separates disciplined investors from reactive ones.

Pick a passive index ETF if you are highly cost-conscious and want the SEBI-capped 1.00% TER working in your favour every year, you already hold a demat account and are comfortable buying on the exchange, and you accept benchmark-matching returns rather than chasing outperformance. The Rs 19,802 crore of ETF inflows in March 2026 suggests a growing cohort of investors who value predictability and low cost over the hope of alpha. An index ETF is also a clean core holding for a portfolio you check rarely.

Pick an active flexi-cap fund if you want a single diversified equity holding that a manager can steer across large, mid and small caps as valuations shift, you prefer the automation of a SIP over placing exchange orders, and you have the conviction to stay invested when a fund underperforms its benchmark for a stretch. Flexi-cap's Rs 10,054 crore of March 2026 inflows and its eighth straight month of category leadership show that many investors still prize this flexibility, especially for a long-horizon goal where a skilled manager's cap-allocation calls can matter.

Consider holding both if your corpus is large enough to separate a low-cost passive core from an active satellite. A common structure is an index ETF for the bulk of your equity allocation, paired with one or two active flexi-cap funds for the outperformance attempt. This is not a hedge against tax, since both are taxed at 12.5% LTCG, but a hedge against manager risk. Whatever you choose, the 61-month equity inflow streak carries a quiet lesson: the investors who compounded through it kept buying in months like March 2026 rather than pausing their SIPs.

For readers building the retirement leg of this decision, our recent explainer on SEBI's scheme categorisation and rationalisation rules sets out exactly what a flexi-cap fund can and cannot hold, and the AMFI January 2026 category flows map shows where the money already sits across equity, debt and hybrid.

FAQ

What exactly crossed Rs 15 lakh crore in the AMFI March 2026 data?

SIP assets under management reached Rs 15.11 lakh crore in March 2026, now about 20.5% of the industry's total mutual fund assets, per the AMFI Monthly Note for March 2026 (source: AMFI, Crisil Intelligence). This is the pool of money invested through systematic instalments, distinct from the Rs 73.73 lakh crore total industry AUM.

Why did total MF assets fall if inflows were positive?

The 10.1% month-on-month drop from Rs 82.03 lakh crore in February 2026 to Rs 73.73 lakh crore in March 2026 was driven by mark-to-market losses, not redemptions. The Nifty 50 fell 11.3% and the Sensex 11.5% over the month, cutting the value of existing holdings even as equity funds took in Rs 40,450 crore of fresh money, the 61st straight month of positive equity inflows.

Is a flexi-cap fund taxed differently from an index ETF?

No. Both are equity-oriented schemes holding at least 65% in domestic equities, so both attract 12.5% LTCG above the Rs 1.25 lakh annual exemption after 12 months, and 20% STCG within 12 months, under Sections 112A and 111A of the Income Tax Act as amended on 23 July 2024. Your choice should hinge on cost and strategy, not tax.

How much cheaper is an index ETF than an active fund?

Under SEBI (Mutual Funds) Regulations, 1996, Regulation 52, index funds and ETFs are capped at a 1.00% total expense ratio, while an actively managed open-ended equity scheme can charge up to 2.25% on its first Rs 500 crore of assets. The exact gap depends on the specific schemes, but the regulatory ceilings show why passive assets reached Rs 14.12 lakh crore by March 2026.

Should I stop my SIP after a month like March 2026?

The data argues against it. Equity inflows stayed positive for the 61st consecutive month in March 2026 despite the Nifty's 11.3% fall, and SIP assets still grew to Rs 15.11 lakh crore. Pausing during a drawdown means buying fewer units at lower prices, the opposite of what rupee-cost averaging is designed to exploit. You can model the effect using Oquilia's SIP calculator.

What is tracking error and why does it matter for ETFs?

Tracking error measures how closely an ETF's return follows its benchmark index. Because an index ETF aims only to match, say, the Nifty 50, it will slightly lag the index after its 1.00%-capped expense ratio and any tracking error. A flexi-cap fund has no tracking-error concept, since it is not pinned to an index, but it carries manager risk instead.

Are passive funds overtaking active funds in India?

Not yet, but the gap is narrowing. Passive assets stood at Rs 14.12 lakh crore in March 2026 against a total industry AUM of Rs 73.73 lakh crore, so passive is roughly a fifth of the market. ETF inflows of Rs 19,802 crore in March 2026 outpaced flexi-cap's Rs 10,054 crore, but active equity as a whole still drew Rs 40,450 crore, showing both models are growing simultaneously.