Capital Gains distributions are probably a good thing in UP years, it may represent the manager taking profits and putting that money into better valued stocks. I see nothing good about realizing Capital Gains in DOWN years. I think that almost always means the manager is dealing with meeting redemptions, and there is nothing worse than seeing your account balances shrink and still having to pay Capital Gains taxes. Even in a tax deferred account, I don't really see any positives.
-dale
