cgaros:

You can achieve the same effect as a cash capital gains distribution by selling a portion of your position at any market close.

Aren't you assuming that the market will be up when you need it to be?  Otherwise you're selling shares when prices are low.

For the person holding VWELX or DODBX in a tax-def'd account, those CG's can increase  the number of shares -- the exact opposite of liquidating shares which you propose.  Those are shares you won't get back -- aside from purchasing more shares on your own.

Can you imagine having to liquidate shares of a TSM fund over the past few weeks?  How in the world is THAT better? 

Greg