David Swenson might not be as well known among the investing public as, say, Legg Mason iron man Bill Miller or former Fidelity Investments star Peter Lynch, but as chief investment officer for Yale University he's built quite a name for himself within the hulking institutional investing circle.

So when Swenson, whose oversight of Yale's $15 billion endowment fund has beat a host of benchmarks by returning an average of 16% annually over the last 20 years, says mutual funds aren't a great investment, it's cause for all sorts of chatter among executives within the money management industry.

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