New Delhi, Feb. 18 -- Mutual funds are fast becoming the first port of call for Indian savers. What was once viewed as a sophisticated market product is now edging closer to a mainstream savings vehicle. But is that shift healthy? And how should investors navigate the explosion of categories and choices?

At the Mint Money Festival, held on 14 February in Mumbai, Madhu Nair, CEO of Union Mutual Fund, and Kailash Kulkarni, CEO of HSBC Mutual Fund, argued that the industry's rapid growth reflects a structural transformation in Indian savings behaviour rather than short-term market enthusiasm.

Nair described the mutual fund licence as "a very powerful licence" because it converts retail savings into market-linked returns within a transparen...