ucodegen – good point on tax treatment of Mutual funds. Depends on the trades the fund makes and ultimately the type and timing of distributions.
These distributions happen typically in December.
Something to definitely be aware of, since you can pay taxes on a capital gain distribution that the fund makes even if you don’t have any gain personally. It’s a non-event for tax-deferred accounts, but in taxable accounts it sucks.

I generally prefer ETFs, so that I can control the tax consequences more directly.