I don't see where it is any better (talking about LTCG distributions).. taxed the same and NAV goes down by the distribution so I don't understand where the advantage is.
really depends on the exact situation. I had a fund last year that distributed 20%, but my gain was much less. I would have paid more tax. Fortunately this was in an IRA. Back in 2007 I also has really large distributions from MF also. After a big run up they will sell some big winners and move $ into other stocks that are hopefully on the way up. But this creates a distributible gain.
I now use ETF and individual stocks in taxable accounts. So far these have not had the large distributions that accompany the market cycles with stock mutual funds. OK... fixed indexed funds may not have as much of a distribution.
Really large distributions and change your tax bracket in one year, but not make up for it in the next.