Mutual funds may have been an American innovation. But asset managers will now go to China, Brazil, India or wherever returns can be found, according to Alan Reid, founder Forward Fund Management, at the Investment Company Institute's Mutual Funds and Investment Management Conference.

This movement will continue as U.S. regulators continue to put up "walls and cages, around the operation of mutual funds, he said. "There may be reasons to look outside of traditional mutual funds, which serve as the whipping boy of regulators."

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