They can be a tax nightmare. But investments must be held for one year to qualify. Many investors learned, to their dismay, that fund managers are trading actively, handing them big capital gains even though they are holding the fund long-term. To make matters worse, if the outflow of funds continues, managers will be forced to sell some of their holdings to pay off those wanting out. That leaves those who remain with the fund paying capital gains taxes on sales the manager didn't even want to make.
Many fund managers seem to have lost their way.
The times they are a'changin', particularly in telecommunications and technology. Some managers still are using outdated tools to analyze stocks and their performance shows it. Fund companies have grown fat and arrogant. I remember talking to a fund company executive who was explaining to me the two types of funds the company offered. You paid nothing additional when you bought the fund.