I read somewhere that AF are planning to come out with F shares without the 12B fee in January. We'll see. I would be interested in investing in these shares of Income Fund of America and/or Capital Income Builder since I am near retirement, and would like to develop an income stream. The ERs are pretty low for being actively managed. I already own a good chunk of Wellesley, and am looking at other funds for income.

Over the past 4 weeks FAIRX is up nearly 29%! Morningstar rates FAIRX a one star for every time period (could be some kind of record for a fund that's been around more than 10 years).
Looks like FAAFX has made it YTD gains in the past 4 weeks also.

Dear friends,
The season of darkness and light is upon us, which is a pretty good signal that the December issue of the Mutual Fund Observer has launched. You can find it at http://www.mutualfundobserver.com/issue/december-2016/
If you prefer the long scrolling read, that's available at http://www.mutualfundobserver.com/2016/12/
Highlights of our December issue include:
Snowball’s reflections on how to react to the fact that five major U.S. equity indices reached all-time highs at the end of November (short version: the last such occurrence was 12/31/1999, which implies a degree of circumspection is in order) and to the fact that Donald Trump is president-elect (short version: don’t).
Leigh Walzer, president of Trapezoid LLC, starts with the premise that investment risks are now tilted strongly toward inflation but that traditional inflation hedges (e.g. TIPs) are unattractively value. As he models superior alternatives, he offers up the surprising possibility that modest doses of small cap funds might well make a major difference.
Ed Studzinski has far more extensive investment experience than the rest of us and often pursues matters into the thickets. This month he looks at not-quite criminal misstatements of qualifications in a case surrounding a royalty trust to raise the prospect that we need to be a bit less credulous when our managers are introduced to us, then recommends James Cloonan’s new Investing at Level 3 for its cautions on conflicts faced by mutual fund directors. He ends by encouraging folks to learn from Yale’s David Swensen’s advice, don’t hire managers who seem bewildered by their own portfolios.
Many of us have portfolios that have sprouted funds like a garden sprouts weeds; Charles Boccadoro offers another tutorial on how to systematically assess and simplify a portfolio, using a friend’s USAA collection as a guide.
One of the great virtues of scholarly writing is that it’s valued for its care and precision, not for its ability to generate clicks or get the author invited onto some Fox Business show. That sometimes masks the fact that really important insights are available, if only you’ll look for them. This month Snowball highlight’s three of the most interesting bits of research from 2016: (1) the largest sample of funds ever assembled offers evidence that small funds consistently outperform large ones, (2) a study of over 3000 fund management teams finds that intellectual diversity on the team is a major predictor of performance and (3) an examination of the behavior of 7000 German individual investors shows that introducing ETFs into a portfolio drives performance down. We offer summaries of what each scholar did and found, and how it might affect you plus there’s a link directly back to the original.
Mark Wilson, the Cap Gains Valet, offers a short Thanksgiving reflection on the cap gains season: less pain, more time with family.
Snowball profiles the best small cap fund you’ve never heard of. Really. 20 year record. Same manager. Asymmetrical risk-return profile over the last 3 years. And the last 5. And 10. And 20. It’s never made it to the top of the hot, hot, hot list but continues offering what you need: reasonable gain, minimal pain. (And it’s from Nebraska.)
Like Leigh Walzer, T. Rowe Price is worried about instability in the world economy and in the fixed-income market, which led them to launch a new fund at the beginning of November. We offer a first look in our Launch Alert for T. Rowe Price Total Return.
One development that’s not important to you yet, but might soon be, is the decision of former Wasatch manager Laura Geritz to launch her own advisory firm in partnership with her former Wasatch colleagues who launched Grandeur Peak. We spoke with Eric Huefner of Grandeur Peak to give you a clue of where that partnership is going.
But wait, there’s more! We detail 36 fund liquidations that make sense, and three or four that don’t. Chip tracked down 50 manager changes, one of which might be portentous. We found only a few funds (and one really irksome ETF) in registration. And, well, stuff. There’s other stuff, too.
We hope you enjoy it all in the December Mutual Fund Observer at www.mutualfundobserver.com!

@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

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

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.

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

@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?

Are you sure about not paying cap gains tax? As far as I know, if you have divies or cap gains, you pay tax.

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

Hello!
What on earth does this MEAN?
"Based on current estimates, all or a significant portion of dividends paid in 2016 may be reclassified from income to return of capital or long-term capital gain. The tax character of dividends will be determined at year end and will be reported in January on your Form 1099-DIV."
OK, I found THIS: "With mutual funds, Return Of Capital is usually done because their underlying investments have not generated the annual income necessary to make the expected dividend payments to investors in a year. This essentially forces the manager to dip into the fund/trust/partnership's principal to come up with the money."
...That can't be good. Does this change the nature, the character, of this investment for me? I've been in PREMX since July, 2010.

I don't think this article helps too much, but here's a 2013 article describing Capital Group's reorganization into multiple groups:
http://www.fa-mag.com/news/capital-group-will-restructure-based-on-investment-objectives-13699.html
Ignoring for the moment that little of the verbiage in the article or prospectus is particularly clear, what I would have guessed is: many mutual fund companies have multiple equity teams where each team manages multiple funds. Those teams tend to be theme based, e.g. large cap, small cap, international, etc. While the names of Capital's equity groups don't suggest that, it is at least consistent with the FA article, that talks about organizing these groups around particular investing objectives.
Regarding AF having "now" introduced no-load shares. They've had no-load shares for many years. What changed is that you're now finding a way to purchase them. But no-load R4 and R5 shares for retirement plans have been around for what seems like forever, with R6 and R5E being added more recently. The F share class (renamed F-1 in 2008) has been around for a couple of decades.
You can get F-2, and sometimes even cheaper R5 or R6 shares through HSA accounts. For example, the HSA Authority offers RERFX.

We've had substantial fund investments with American for over thirty years, and have generally been quite satisfied. I knew that Capital Research and Management was their advisory arm, but didn't realize that CR&M had multiple "subadvisors". Like you, I haven't gotten very far finding any detail on that, but "International", "Global", and "World" sure seems a little redundant, to say the least. Maybe they should have "Universal" and "Intergalactic" too.
Why not try a question directly to American Funds and ask them? If nothing else that will give you an idea of how they communicate with customers. While I do all of the account management myself directly using their website, the few times that I've needed to communicate with them I did it through our sales rep. If you get any more info, please let us know.

update:
https://www.sec.gov/Archives/edgar/data/890540/000113542816001881/frost-497.txt
497
1
frost-497.txt
THE ADVISORS' INNER CIRCLE FUND II (THE "TRUST")
FROST KEMPNER TREASURY AND INCOME FUND (THE "FUND")
SUPPLEMENT DATED NOVEMBER 29, 2016
TO THE INSTITUTIONAL CLASS SHARES PROSPECTUS AND THE INVESTOR CLASS SHARES
PROSPECTUS, EACH DATED NOVEMBER 28, 2016 (THE "PROSPECTUSES") AND THE STATEMENT
OF ADDITIONAL INFORMATION, DATED NOVEMBER 28, 2016 (THE "SAI")
THIS SUPPLEMENT PROVIDES NEW AND ADDITIONAL INFORMATION BEYOND THAT CONTAINED
IN THE PROSPECTUSES AND SAI, AND SHOULD BE READ IN CONJUNCTION WITH THE
PROSPECTUSES AND SAI.
The Board of Trustees of the Trust, at the recommendation of Frost Investment
Advisors, LLC (the "Adviser"), the investment adviser of the Fund, has approved
a plan of liquidation providing for the liquidation of the Fund's assets and the
distribution of the net proceeds PRO RATA to the Fund's shareholders. In
connection therewith, the Fund is closed to new investments. The Fund is
expected to cease operations and liquidate on or about December 30, 2016 (the
"Liquidation Date").
Prior to the Liquidation Date, shareholders may redeem (sell) their shares in
the manner described in the "How to Redeem Fund Shares" section of the
Prospectuses. For those Fund shareholders that do not redeem (sell) their shares
prior to the Liquidation Date, the Fund will distribute to each such
shareholder, on or promptly after the Liquidation Date, a liquidating cash
distribution equal in value to the shareholder's interest in the net assets of
the Fund as of the Liquidation Date.
The liquidation distribution amount will include any accrued income and capital
gains, will be treated as a payment in exchange for shares and will generally be
a taxable event. You should consult your personal tax advisor concerning your
particular tax situation. Shareholders remaining in the Fund on the Liquidation
Date will not be charged any transaction fees by the Fund. However, the net
asset value of the Fund on the Liquidation Date will reflect the costs of
liquidating the Fund.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
FIA-SK-040-0100

Folks,
I am exploring the possibility of investing in American Funds now that they have introduced no-load shares. As am I trying to do my due diligence, I came across the following statement from the website of Capital Group "The Capital Group companies manage equity assets through three investment groups. These groups make investment and proxy voting decisions independently...."
After doing some digging in the fund prospectuses, I found out that the name of the adviser company is Capital Research and Management and the names of the three investment groups are 1) Capital World Investors, 2) Capital Research Global Investors, and 3) Capital International Investors. I think that these three investment groups are separate legal entities, but I am not sure. There does not appear much information on them, other than that they appear to file 13F reports separately.
My question is: why is the adviser structured into three equity investment groups? And why are these groups structured to make independent decisions? I have not seen a structure like this before, but could be wrong. Perhaps other mutual fund companies are using similar structures.
I would appreciate any insights that any of you might have. I find this very confusing.
Thanks,
Alban

I agree that it's percentages that matter, not absolute numbers.
It looks like the fund has taken in almost no money in the past six months (thus failing to broaden the base receiving those early realized gains).
AUM at the end of April was $30.735M @$10.38/sh; currently it is $32.5M (5.7% increase) @ $10.90 (5.0%), showing that virtually all the increase in AUM came from appreciation, not inflows.
(Current data as of 11/28/16 from M*; April 30 data from annual report.)
Two things that strike me as curious, since Derf is pointing out oddities:
- 1/3 of distribution coming from income; I thought microcaps don't often generate dividends;
- Despite having no inflows and just modest appreciation, the fund will have a hard close at the end of this year (prospectus)

I don't think it matters whether they have a lot of AUM or a little, the percent of AUM is more relevant. One-third of the distribution is income and they apparently took net gains equal to roughly 1% of AUM this year for a total distribution of roughly 1.5%. I don't think that's particularly surprising, especially considering they were still getting original cash invested at the end of last year, probably took advantage of some of the low prices early in the year and must have taken some of those gains.

I came across estimate last week, here at MFO, & thought someone else would ask this question ,but to no avail.
So I'll lay it out & see if I can get any answers. Why would this fund with so little aum, $28 million (?) be giving distribution of $.1625 from a micro cap fund. I believe most of their other funds distribution were (0) or less than $.1625 by quite a lot.
I realize these are estimates only.
Happy investing,
Derf

(MFO's What's Your Best 10)
FYI: The only certain thing about 2017 is that it will be challenging for investors. And that is exactly why we’re here to help investors out … by lighting the path to the 10 best mutual funds to buy for the coming year.
The Top 10 Mutual Funds to Buy for 2017The backdrop right now is a difficult one: rising interest rates, a maturing business cycle, a new president. Investors have good reason to feel cautious, if not downright nervous.
But now is not the time to hit the sidelines and move completely into risk-off mode.
In any market, bull or bear, you’ll have your share of underperformers and outperformers, so if there’s any money to be made, you need to find the latter. And more broadly, there are plenty of plays designed to capture gains while protecting against the next correction.
We’ve selected our top 10 list of the best mutual funds for 2017, then, with both eyes on the difficult market and economic conditions in mind. This list represents a diverse roster that should help you navigate the challenging year ah
Regards,
Ted
http://investorplace.com/2016/11/10-best-mutual-funds-to-buy-2017/view-all/#.WDrJ3n0SVOZ

Hi expatsp. Philosophical? Probably not that deep. Just a matter of individual preference and/or comfort. Re-balancing index type funds or ETFs has a lot of followers and detractors as does using 'risk adjusted' return managed funds like FPACX (which fwiw I don't own now but did a few years ago). I also question as you do that many managers can consistently utilize and adjust there cash levels to beat index funds, but I do not question my ability to do so. I know I can't.
A few funds I own for the purpose of the manager or management team making asset allocation, buying within a companies capital structure or making cash holding decisions are SFGIX, FMIJX, SGENX, ICMBX, PRWCX. I think the managers of these funds can obtain good "risk adjusted" returns.