Strong asset flow is coming from Asia for the Vanguard Group, the No. 2 mutual fund firm in the U.S. It has gathered about $40 billion from the region. The influx is said to have come as institutions raise their exposure to low-cost indexed investments, according to a report from Reuters.

But Vanguard chief executive John Brennan said the Valley Forge, Penn.-based fund giant would steer clear of the high-cost retail market in most parts of Asia.

"The message we bring to the market place is around low-cost, long-term investing. And Asian investors, the institutions, are very sophisticated," Brennan said. He added, however, that "we don't pay for distribution and we don't pay for trailing commissions. And that frankly is an impediment to retail in most markets beyond the U.S."

That stands in contrast to its chief rival, Boston-based Fidelity Investments, which ahs entered the Asian retail market.

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