Some funds that have enjoyed 100 percent-plus, even 200-percent returns, are letting shareholders believe that their good fortune could continue indefinitely. The portfolio and marketing managers of these funds expect the sizeable returns to continue and are not making any effort to rein in shareholder expectations.

Other funds with outstanding returns, however, are telling investors it is time for a reality check. Triple-digit returns are an aberration, not a birthright, and should not prompt shareholders to redeem their shares if and when a slowdown occurs, these companies are saying.

Eighty-nine funds are up 100 percent or more for the year as of Dec. 2, according to Lipper of Summit, N.J. Leading the pack is the Global Technology Fund of Nicholas-Applegate Mutual Funds of San Francisco, up 378.6 percent as of Dec. 6. "Trailing" 123 points behind is the Emerging Growth Fund of Van Wagoner Funds of San Francisco, up 255 percent.

For Internet investors, the rewards are expected to continue, according to a spokesperson for the Amerindo Funds of New York, whose Amerindo Technology Fund was up 220.1 percent as of Dec. 6.

Alberto Vilar, the portfolio manager of the fund, expects the current $400 million to $500 million market capitalizations of Internet companies to grow to $8 trillion by 2002, the fund's spokesperson said.

"We still have a long, long way to go," the spokesperson said. "So, Amerindo is a firm believer that the Internet sector will continue to grow and investors have a lot more opportunity in this space."

That is not to say that this sector will not continue to fluctuate, the spokesperson said. Amerindo is telling investors how volatile Internet investments are. But the company is still welcoming new investments and advertising the fund as "an amazing, once-in-a-lifetime opportunity," the spokesperson said.

Garrett Van Wagoner, the president of the Van Wagoner Funds - three of whose funds are up over 200 percent, the other two in the low 100's - recently sent a letter to shareholders telling them he remains optimistic about the market, particularly Internet and software stocks. But, he said he is "tempering his optimism with caution" because of the Fed's recent raising of interest rates.

"We talk about [shareholder expectations] constantly here, whether we have been positive or negative in the market," said Peter Kris, managing director of the Van Wagoner Funds. "When times have been particularly sensational, we obviously talk about it more, and times like now are one of them. We believe that education is the best thing we can do for people over the long term, and so we are doing a series of special mailings about this very topic right now."

Shareholders in funds up 100 percent or more may be naive since only five of the 89 funds with these returns have a previous five-year history. Van Wagoner Funds, which is a four-year-old boutique, is aware of this dynamic and so is particularly keen on educating investors about keeping with the market for the long term, Kris said.

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