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The mutual fund schemes in India saw an average asset under management (AAUM) growth of 2.97 per cent in the month of September, Association of Mutual Funds in India (AMFI) data showed on Thursday.  

Moreover, the mutual fund industry’s net assets under management (AUM) marginally increased by 0.58 per cent to Rs 67,09,259 crore at the end of September, as against Rs 66,70,305.14 crore in August. 

Sectoral funds got a major inflow to the tune of Rs 22,244 crore. The total folios count of 21.05 crore is at an all-time high in September.

According to industry experts, the domestic investment story is very encouraging. 

Hitesh Thakkar, Acting CEO, ITI Mutual Fund, said that investors are now able to understand that short-term volatility in the market is part of a long-term wealth creation journey. "That is the reason the share of financial assets has been increasing rapidly and within financial assets, MF share is increasing gradually," Thakkar said. 

The mutual fund schemes saw an average AUM growth of 2.97 per cent for September, primarily attributed to the market movement. 

"We have seen a 10 per cent drop in overall net inflows into the equity mutual fund schemes from Rs 38,239 crore to Rs 34,302 crore," said Deepak Ramaraju of Shriram AMC. 

On the prima facie, it looks like investors are concerned about the valuation, increasing geo-political uncertainty and moderation in earnings and hence, there is redemption from funds, experts said. However, it's too early to pinpoint that liquidity in the system is slowing down and it can’t be concluded that based on these concerns, we are seeing a drop in inflows, the experts added. 

The SIP flows continue to back the Indian growth story. Contributions crossed the Rs 24,000 crore mark for the first time.

"We will have to wait for how the global events play out – like the Chinese stimulus, the Fed Decision and the RBI’s MPC policy stance. In the long term as the interest rates ease, we may see more FII flows and the mutual funds flows may be expected to come back," said Ramaraju. 

According to Sanjay Agarwal of CareEdge Ratings, equity inflows over the last five months have been upwards of 0.34 lakh crore and driven by investor interest in thematic funds. 

"Thematic fund inflows accounted for 39 per cent of the monthly equity inflows. During September, 27 open-ended NFOs were floated which collectively mobilised Rs 0.15 lakh crore with sectoral/thematic funds accounting for 54 per cent share. All categories witnessed inflows barring ELSS funds and focused funds segments," he said.