The "stalwarts" funds appear to be more for mid- and large-cap stocks (> $1.5 billion). I suppose that's the reason they figure they have adequate capacity for new funds and can't afford to remove the hard close on the others.

I couldn't help but notice the title of the column: Fidelity vs. Vanguard, not actively managed vs. passively managed. So why did Merriman do the latter comparison? Fidelity has a series of target date funds that invest in index funds, and have exactly the same underlying ER as Vanguard; 0.16%.
(To John's point - sometimes Fidelity does not charge more for the same product; they generally match Vanguard in the index arena.)
There are still a couple of differences though, that Hank alluded to: the glide path of Fidelity funds (whether these index ones, or the ones Merriman chose to use as straw men) continue changing until 15 years past their target date (i.e. you still need growth past age 65). Vanguard's settle into a sleepy 30/70 (stock/bond) split just five years after retirement.
Then there is the breadth of assets employed. Even these "boring" Fidelity index target funds use TIPs and commodities. (The actively managed Fidelity target funds go further) And still they do this with the same ER. (To be fair, Vanguard adds international bonds, albeit hedged.)

A few questions for Mr. Andrew Foster:
Where do you plan to go for your next Field Notes trip?
Would you consider adding a retail+ share class with a min of $50k and an e.r. in between your retail and institutional?
At the start of the fund, there was a monthly commentary. Lately, this hasn't been the case (zero market commentaries in 2013 and one in 2014). What's the plan going forward? Will the quarterly portfolio review replace this?
Could you please provide some context for the holdings that are showing a negative EPS growth for this year? Looks like some financials, REITs, and a healthcare stock.

FYI: These closed-end funds were unstoppable in early 2015; plus, did the first IPO of 2015 usher in a new era for CEF shareholders?
Regards,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=692850&part=1

Well, then there is only one thing left to be done. Isn't it obvious? Go benchmark shopping! Find one that is "a more accurate reflection of our investment methodology," or whatever. Apply to recent results and--- voila!--- retrospectively, the 3- and 5-yr ave. annual returns "just happen" to beat their (new) benchmark as well. What a coincidence! History redone. Fund is now an awesome benchmark beater.

Grandeur Peak Global Stalwarts Fund
Grandeur Peak International Stalwarts Fund
Grandeur Peak Global Micro Cap Fund
http://www.sec.gov/Archives/edgar/data/915802/000139834415002529/fp0014041_485apos.htm

FYI: Active fund managers don't seem to be getting a break now, especially since their performance hasn't measured up for more than a decade. This article continues to clarify this indefensibly calamitous position they are in. We shed new light on how one can mathematically verify how weak these investment managers are, by also using more conservative statistics measures and more closely considering the selection of solid benchmarks themselves.
Regards,
Ted
http://statisticalideas.blogspot.com/2015/04/the-indomitable-benchmarks.html

http://www.marketwatch.com/story/best-target-date-funds-fidelity-vs-vanguard-2015-04-15
"That means shareholders pay Fidelity $500 million a year to manage $84 billion. Vanguard shareholders, on the other hand, pay the company only $138 million to manage $82 billion in funds with similar asset allocations and levels of risk."
"An obvious question: Do Fidelity shareholders get extra value for the extra money they pay. The obvious answer is no; in fact, it's just the opposite."

Probably can't be on the call but will catch the replay/summary. Have always invested with Mr. Foster since reading about him at Mathews. Mr. Foster's answers to the following, should you ask him, will not affect my allocation with him. 1.) Morningstar lists 35 stock positions or holdings currently for Seafarer. Is this the approximate number of positions he will be targeting going forward ? 2.)If not, what are the factors that has him at 35 now? 3.) Does Mr. Foster spend his resources researching "frontier" markets or should we look to other funds for exposure to this market? Thanks for all that you, your " team", special commentary writers Charles and Edward, and the contributors to the discussion board do for all of us. Quite the successful endeavor be MFO.

If we equate investing levels with schooling, the article appears to be directed at about grade level 3. Most here have long been aware that we pay fund fees and that in most cases they are hidden from view but are reflected in a fund's total return. No surprise to most here. However, among the general public, unfortunately, I've found ignorance and confusion about these fees. So it's a pretty good article, assuming it's directed more at those less sophisticated investors.
The writer is on target when he compares our reaction to these hidden fees compared to how we react to more obvious ones. If I get hit with a $20 transaction fee or account maintenance fee I'm on the phone next day to ask why. But I pay hundreds or thousands of dollars a year in the hidden ones without a whimper. I think that's human nature.
TB is correct in that one of the nicer things about the M* analyzer is its ability to calculate your average ER on all your holdings. I'm typically in the .70% area, which M* thinks is pretty good.
It's an argument probably as old as fund investing. Some say fees don't matter much. Others attach great importance. I suspect that if you trade often (and successfully) they don't matter much to you. If you turn a quick 15-20% profit on an investment you only held for 3-6 months and than move on to another "conquest", what's an extra 2 or 3% in fees? But, if you're the buy and hold type, they matter more. I'd expect that the longer you hold a given investment, the more compelling the case would be for keeping fees low.

@Old_Joe - I dug up M*'s grouping of funds for the purpose of rating expenses (average, high, low, etc.). As I recall, David had commented in the past that M* uses a different system than for its star ratings, and that's correct:
http://news.morningstar.com/articlenet/article.aspx?id=371758
Since M* is already acknowledging that funds need to be sliced and diced differently when comparing fees (e.g. separating front load from institutional from retail), I felt it was fair to comment on this particular classification system.
But it is the star rating categories (different classification system) that some people (as you note) tend to complain about. Also as you suggest, if one tries to slice things too finely, the groups are too small to be meaningful. That's not true when grouping index funds - in any category these days, there seem to be a plethora of them.
@Old_Skeet - I looked into the class breakdown. According to the latest annual report, about $1.5B of the $2.1B total is invested in institutional (no load) shares. About 95% of the remainder is invested in the class A shares MSXAX.

Still a lot of uninformed folks who are paying loads for the benefit of having an advisor run the investments for them, eh?
I know of three married couples who are using full service advisors. I have asked and they don't know much about their investments, but that they are paying a 1.5% fee, plus buying the the front loaded funds.
I have talked with these folks over the years and none of them had any interest in learning even the most basic functions of investing in funds. In both cases, available time was not a factor.
Another, oh well moment. At the least, they are providing an income for another, who in turn spends the income back into the economy.

For those who like to get on M*'s case, here's a good fund to use. M* rates its ER as "low" (compared with peers, which in this case I believe is large cap blend funds sold with a load).
One part of that does make some sense (IMHO) - load funds tend to carry 12b-1 fees, so its 12b-1 fee is in line with that of its fellow load funds. But evaluating the ER of an index fund along with those of actively managed funds is more questionable.
For S&P 500 index funds (but only for those index funds), Lipper has a separate classification. Among those funds, Lipper rates the ER of this fund 2 (higher than average expense). Thus raising the curiosity question - you mean there are more expensive S&P 500 index funds out there?
The answer is yes! Surprisingly, one is even given in the linked blog: MYSPX, the Investor share class of the same fund. Lots of other families, including Rydex (RYSOX), with an even higher load (4.75%), and a whopping 1.57% ER. But don't worry, you can buy the fund without the load as a class H fund (RYSPX), albeit with a nearly identical ER. And M* does call those ERs "high".
If for some reason you should want MSXAX, you can purchase it load-waived as well through Vanguard. Vanguard's page also reports that the ER of this fund is low, amounting to just 60% that of its category average. Again, the problem is the category in which the fund is placed.

FYI: Consider a S&P 500 Index Fund with $2B in assets that charges a 60bps management fee and a 3% front-end sales charge.
Think this is impossible? Think again…this exists in the real-world!!!
Regards,
Ted
http://blog.alphaarchitect.com/2015/04/14/the-impossible-sale-an-sp-500-index-funds-at-60bps-with-a-3-sales-load/
M* Snaphot MSXAX: http://quotes.morningstar.com/fund/f?t=MSXAX&region=usa&culture=en-US

A look at the risk/return metrics since launch...

Hi Tampabay,
Thank you for reading, reflecting, and responding to my submittal.
Although I've been investing since the mid-1950s, I still am in the learning mode. Presently, I use a multi-criteria list to sort candidate fund options. Based on a tidal wave of industry and academic studies, cost considerations are always one item on that list. Many believe it belongs at the top of that list.
You suggested that a "Primary focus" is mandatory. It must be extremely significant in your selection process since you capitalized "Primary".
Please tell us if you can what is Primary in your approach.
I'm forever receptive to learning how I can improve my investment procedures. Please expand your comment; in its present form, it does not really inform.
I'm sure, all MFO members will appreciate and possibly deploy your Primary insight.
Best Wishes.

Hi, Hank.
We have no demographic data on you folks. On adamant principle, we've disabled the tracking functions of Google Analytics. We know aggregate onsite behavior (for example, how long the average visit is and how many folks are on-site) and some tech stuff (how many folks access us via smartphone, which operating systems and browsers folks use, and what city the router's in). And what we do have can't distinguish folks participating on the discussion board from casual readers or browsers.
Hmmm... readership has drifted down a tad (23,700 in the past month), we're seeing vigorous traffic from Akershus, Norway (Hilsener! to our 94 Akershusian friends), time-on-site remains high at 5:21, 61.6% of visitors are using Windows, 0.33% of you visit using the Silk browser while only 0.07% use SeaMonkey, the most frequent outbound click was on Charles's table on funds ranked by Bear Market Deviation ... but ages? Nada.
One of my retired colleagues spent an awful lot of time on campus during retirement. When I asked him why, he said it was simple: "I want to be somewhere that people talk about something other than their health."
David

Junkster said "... All the more reasons why some of us old timers need to start spending and enjoying what we have accumulated over the years. Life is short!".
AMEN.
-
Assuming the age of a great many here to be 65 or over, I'm a little puzzled there isn't greater discussion about withdrawing money and putting proceeds to good use. How often are we as investors faced with a crucial investment decision? Rarely I'd say. By contrast, we make decisions about spending nearly every day of the week. Yet, nary a mention.
I have some possible explanations. First, the average age of participants may be much lower than envisioned (I'd love to see whatever demographic data David has). If the average age is closer to 35 or 45, than it makes sense so much of the discussion revolves around buying/selling mutual funds, stocks, bonds or other investments. Another possibility is that many older folks who come here may fear they haven't saved enough to meet anticipated retirement needs - and are struggling to play catch-up at a late stage. The third (most likely) explanation is that it just isn't considered appropriate to mention spending on a forum devoted to investing.
I'd never argue that one should stop investing - not at any age. Even late in retirement folks should be seeking to outperform the measly returns cash and many bonds now offer. And since retirement may well last 30 years or longer, younger retirees still need to be acute to growing the nest-egg. Also, some older investors are focused primarily on growing their assets for the benefit of posterity.
Thanks Junkster and heezsafe for pointing this out in your recent posts. Just some rambling over coffee this morning.

Sort of a curiously written article. If you go to Goldman's own site, here's their take on their research:

Investors see growing overvaluations in both bonds and equities and have signaled concern about a valuation bubble forming, according to the BofA Merrill Lynch Fund Manager Survey for April.
The proportion of global investors saying equity markets are overvalued has reached its highest level since 2000. A net 25 percent of respondents to the global survey say that global equities are currently overvalued, up from a net 23 percent in March and a net 8 percent in February. This is still, however, short of the record-high level of a net 42 percent in 1999.
At the same time, the proportion of respondents saying that bond markets are overvalued has reached a new high in the survey’s history.

Only 25% of investment managers think the market is (even a little?) overvalued? But even at the 1999 peak of the internet bubble (I guess bubbles don't actually have "peaks" but I was having trouble getting a better phrase), only a minority of managers thought it was?
I wonder if a better headline would be: "Majority of investment managers institutionally blinded to evidence of unsustainable valuations"?
David

The 15-year number does not mean much to me. Cycles occur, as when U.S. stocks under-performed international from 2001-2007, and the reverse happened in 2008-2014. Most of these funds have had multiple manager changes in 15 years. I would be much more interested in looking at true diversified international (not global, not EM) with current manager track records or records including their previous intl fund stints. When I do that, I get a very different picture and group of funds.