@Alban
The only time I have used American Funds in the last 30 years is with a broker, but I understood then that they were expensive. I NEVER did any better than I would have done in an index fund.
To combat the "passive revolution" they are making a huge push to convince the public that splitting the funds into sleeves will enable them to be nimble and risk conscious.
You have to ask yourself, "why wouldn't I be better off in an Index Fund?" It is almost impossible for any manger running billions ( AWSHX has 84 Billion to move) to beat an index, over a significant period of time. How can you move even 5 billion dollars around in a couple of weeks? So why try?
I have a broker friend who desperately wants me to give him my money to put into American funds.. in the next breath he crows about how much money he has with them and all the bennies that he gets because of this. Where does this money for his free trips etc come from? you and me!
Look at AWSHX over ten years... VFNIX beats it by 5% . VFNIX lost 4% more in 2008 but you are still ahead because of the fees. M* lists AWSHX is a great choice for "risk adverse" investors. Why? Because it lost 33% vs 37% in 2008?
If you want to watch good mangers at work, do some digging into some small funds here at MFO and put some money with someone whose previous results and focus fits with yours... or even better, choose a fund that is totally opposite what you would do because those funds will diversify your investments.
even 0.58% adds up over the years

Oppenheimer does this all the time. Don't know if this clause exists in all their Prospectuses, but it's certainly in many. The following excerpt is from the Prospectus for their Flexible Strategies fund. The same setup (Cayman Islands Subsiderary) was used with my Commodities Total Return fund (QRAAX) before it crashed and burned last spring. Hmm ... I haven't seen anything like this from my other fund houses. I supposed in the past that with Oppenheimer it was either (1) a tax-dodge or (2) some way of their limiting liability from disappointed investors (of which they've had many). Just a guess.
(Excerpt) "ABOUT THE FUND’S WHOLLY-OWNED SUBSIDIARY. The Subsidiary is an exempted company incorporated with limited liability under the laws of the Cayman Islands and is overseen by its own board of directors. The Fund is the sole shareholder of the Subsidiary and it is currently expected that shares of the Subsidiary will not be sold or offered to other investors. If, at any time in the future, the Subsidiary proposes to offer or sell its shares to any investor other than the Fund, shareholders will receive 60 days’ prior notice of such offer or sale and this prospectus will be revised accordingly."
https://www.transamericaannuities.com/media/PDF/MerrillLynch/Prospectus/IRA_Annuity/Oppenheimer-Flexible-Strategies-Fund.pdf
PS: Oppenheimer's operations in many respects offer a stark contrast with those of T. Rowe Price. I've owned a few class A shares there for near 20 years. I'm planning on dumping them in a few more years. I converted to a Roth in early '15 and prefer to leave that money with them until the 5-year holding period is met (just my intent - not a requirement).

A big advantage of commission free ETFs for advisors is that you can split up your trade into many smaller pieces so you have less market impact. Let's say an advisor wants to buy 10,000 shares. Instead of entering one order for 10,000 shares which will move the market, he can enter 50 trades of 200 shares each, spacing them out over time. Even for a larger account, saving 50 commissions is a sizable amount.

@Alban - I don't know why AF created fully owned subsidiaries. Maybe it gives them more legal protection? What I can offer is their 2012 SEC filing where they requested exemption from some rules so that they could run their funds this way:
https://www.sec.gov/rules/ic/2012/ic-30150.pdf
In that filing, they say (item #6) that from the investor perspective, "the roles of the Adviser and Wholly Owned Sub-Adviser(s) with respect to the Fund will be substantially equivalent to the roles of an investment adviser and its portfolio-manager employees under a more traditional structure". Exactly what you described. So from the perspective of running the funds, I don't think this structure has any effect whatsoever.
However, one of the exemptions they sought was to avoid reporting how much these subadvisors were paid (under the rationale that, hey, it's all one big Capital Group business, and investors don't care about the internal workings); that's in #5.
Likewise, they don't need to get shareholder approval if a fund switches from one internal subadvisor to another. That's #4.
Finally, here's the SEC response, approving these exemptions:
https://www.sec.gov/rules/ic/2012/ic-30173.pdf

Confirming your statement about AF that they're marketing experts. Didn't matter whether the F shares did anything new, they were sold as "new and improved".
I took a quick look at EuroPacific Growth. The first prospectus in which class F shares appear (3/15/2001) shows expenses of 0.46% (management) + 0.25% (12b-1) + 0.21% (other) for a total of 0.92%.
The prospectus from ten years ago (6/1/2006) shows expenses of 0.43% + 0.25% + 0.16% for a total of 0.84%.
The current prospectus (6/1/2016) has class F-1 figures of 0.42% + 0.25% + 0.19% for a total of 0.86%.
It is true that the F (now called F-1) shares tend to run a few basis points higher than class A shares. The difference is entirely in "other expenses", and I've always guessed that's because the share classes hit slightly different target audiences and the servicing costs are slightly different, though not enough to complain about. Maybe expenses have gone up in the past ten years for some other AF funds. Maybe even most of them. But not for my limited sample of 1.

FYI: Financial markets could reverse the solid momentum in equities at the latest by U.S. President-elect Donald Trump’s Jan. 20, 2017, inauguration, Jeffrey Gundlach, chief executive of DoubleLine Capital, said on Thursday.
Regards,
Ted
http://www.reuters.com/article/us-funds-doubleline-gundlach-idUSKBN13Q5FL

VF: It's only about half equities now, and in the past that's been even lower, plus BB seems to be migrating toward natural resources now (and has long been heavy in retail via Sears) and certainly owns giant companies, so I don't think those comparisons are any better than M*'s category of Allocation -- 50-70% equity. No comparison really works for it, but by any, it's been a dog as measured since inception. But it is an interesting point: +20% YTD would beat the average for financials but only be about average for small value.

It appears that this fund didn't pay cap gains last year either.
https://fundresearch.fidelity.com/mutual-funds/fees-and-prices/77956H872
I didn't know this fund was so exposed to South America. Venezuela's troubles may have something to do with this.

FYI: Are U.S. stocks cheap, expensive, or fairly valued? Here are our 5 discussion points:
Regards,
Ted
http://ritholtz.com/2016/12/u-s-stocks-cheap-expensive-fairly-valued/

Crash: I stand corrected. What I saw , paid in 2015 adjusted 2016. short-term cap. gains to qualified dividends. Sorry I couldn't help.
Derf

The OER did rise, from 2015 to 2016 (3 bps).

PREMX. The fund is still up quite a bit in 2016, though bonds got hammered after the election. There's a good yield on it. What confuses me is: why would a fund continue to pay such a good monthly dividend ALL YEAR LONG, then decide after most of the year is behind us that some contingency measure must be resorted to? (Footnote 5 from est. year-end pay-out page at TRP.)

In light of the fact that OERs for all Oakmark funds increased from 2015 to 2016, while AUM dropped, one can understand the rationale underlying this change.

@JohnChisum: Yes, the 10% and 15% bracket don't pay cap gains tax. And this is in a Trad. IRA, anyhow. My question, though, is about the "why." and whether this is a danger signal, a red flag, with regard to PREMX?

http://www.investinganswers.com/financial-dictionary/investing/return-capital-roc-914
PREMX pays monthly, anyhow. And in my tax bracket, I don't pay tax on div or cap gains. But the footnoted notation at the TRP year-end estimated pay-out page (footnote number 5 for PREMX) leaves me wondering.
https://individual.troweprice.com/public/Retail/Planning-&-Research/Tax-Planning/Dividend-Distributions/2016-Preliminary-Year-End-Distributions

40 years can't be correct!
I'm certain MJG's been touting passive investing right here for 50 years - err seems like it. :)
Let's not put Bogle up on a pedestal. No Saint. None of them are.
Don't know if he owns any vineyards ... but modestly priced Bogle Cabernet Sauvignon I find quite agreeable.

http://www.investmentnews.com/article/20161128/FREE/161129955/jack-bogle-looks-back-on-the-40th-anniversary-of-the-index-fund&ct=ga&cd=CAEYFSoUMTQzNzE0Mjc0NzAzMDc5Mzg5NDIyGmMyMzg1NDkwM2MxMDlmMjY6Y29tOmVuOlVT&usg=AFQjCNEyGZzb2gaiFnAKxOfVgY526uF21A
Vanguard's founder weighs in on the future of index funds, his critics, robo-advisers, Donald Trump and the fiduciary rule

https://www.sec.gov/Archives/edgar/data/1602508/000089418916013244/fundx-ftrf_497e.htm
497 1 fundx-ftrf_497e.htm SUPPLEMENTARY MATERIALS
FUNDX FLEXIBLE TOTAL RETURN FUND
Supplement dated November 30, 2016, to
Statutory Prospectus and Summary Prospectus
dated January 30, 2016
FundX Investment Group, LLC (the “Advisor”) to the FundX Flexible Total Return Fund (the “Fund”), has recommended, and the Board of Trustees has approved, the liquidation and termination of the Fund. The Advisor’s recommendation was primarily based on its review of its entire fund lineup, the unfavorable economies of operating the Fund at its current size and the unlikelihood that the Fund would experience any meaningful growth in the near future based on the current investment climate. The liquidation is expected to occur after the close of business on January 6, 2017. Pending liquidation of the Fund, investors will continue to be able to reinvest dividends received in the Fund.
Effective November 30, 2016, the Fund will no longer accept purchases of new shares. In addition, after December 29, 2016, the Fund’s Advisor will no longer be actively investing the Fund’s assets in accordance with the Fund’s investment objective and policies and the Fund’s assets will be converted into cash and cash equivalents. Shareholders of the Fund may redeem their investments as described in the Fund’s Prospectus. Accounts not redeemed by January 6, 2017 will automatically be closed and liquidating distributions, less any required tax withholdings, will be sent to the address of record.
If you hold your shares in an IRA account directly with U.S. Bank, you have 60 days from the date you receive your proceeds to reinvest your proceeds into another IRA account and maintain their tax-deferred status. You must notify the Fund or your financial advisor prior to January 6, 2017 of your intent to reinvest your IRA account to avoid withholding deductions from your proceeds.
Please contact the Fund at (866) 455-FUND [3863] or your financial advisor if you have questions or need assistance.
Please retain this Supplement with the Statutory Prospectus and Summary Prospectus.

I haven't followed this stick of dynamite (PRLAX) since I took a 30% quick profit April 15.
Nice run-up early in year.
Those kinds of opportunities don't come along often. I couldn't recommend the fund for the average investor. Can double one year and loose 70% the next.
That said, these Latin American funds are very highly cyclical and the up/down cycles tend to persist for a number of years. Today's 7-8% jump in crude is certain to push them up near-term.
EM has been hammered by a number of factors lately - especially strong dollar and speculation that DT will impose trade barriers making it harder for the EMs to export. I think that's a reasonable short term outlook. But I agree with M Möbius that EMs will do relatively well over the next several years. However, I wouldn't invest in a single region.

"Their introduction of F-class shares came about 10 years ago when they realized they were being shut out of many fee-only accounts established by RIAs."
Most load funds enable brokers to sell their funds without loads so long as the brokers collect fees in some other way. Often, funds will simply waive their loads for fee-based (aka "wrap") accounts. This has been going on since the last century, not just the past decade.
American Funds did this until 2002. Read an older prospectus. It says "Investments made by investors in certain qualified fee-based programs ... may also be made with no sales charge and are not subject to a CDSC".
Read a current prospectus: "You may generally open an account and purchase Class F
shares only through fee-based programs of investment dealers .... These intermediaries typically charge ongoing fees for services they provide. Intermediary fees are not paid by the fund and normally range from .75% to 1.50% of assets annually, depending on the services offered."
Pre-2002, post-2002, same intermediaries, same charges by American Funds. Only the letter attached to the shares changed - from A to F.
So it doesn't look introducing F shares changed anything substantial.
I do agree that, to use a word now in vogue, the "optics" changed. American Funds seems to like the unix philosophy of KISS as much as unix zealots. By that I mean they take it to the extreme. (See, e.g. Rob Pike's "Cat -v Considered Harmful", advocating simple separate programs rather than multiple options on a given program.)
American Funds seems to have taken this approach to heart - instead of having class A shares with different load options (beyond breakpoint pricing), it separated out a no load option into a new share class. Instead of having different options for different uses (retirement plans, 529 plans, retail purchases), it has different groups of shares (R shares, 529 shares, letter shares).
Timing suggests that the introduction of the F shares was a response to the Merrill Lynch Rule (1999-2007) facilitating wrap accounts without holding their reps to a fiduciary standard, but that's purely circumstantial and I can't show a direct link.