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Investors are loving the stock market these days as net sales into equity mutual funds had their best month ever in February. But, just because the money is coming in doesn't mean shareholders are guaranteed last year-like returns.

Look at the numbers and you'd think everybody and their brother had stock fund fever. In February alone, net sales into equity funds hit $39.1 billion, according to Financial Research Corporation, a financial services consulting firm in Boston. Most of that money went into the very popular technology, mid-cap and growth fund categories.

Some of the larger fund families picking up lots of new loot include Janus, INVESCO and PBHG. Smaller families seeing heavy cash inflows include Firsthand Funds, RS Investment Management and Munder.

While money coming in is typically sweet news for fund families, be careful not to get caught into a herd mentality and think that the only way total returns for stock--particularly tech---funds can go is up. Yes, last year more than 30 funds had total returns of over 100 percent but never forget:Trees don't grow to the sky.

"Whatever happens in a given year is anybody's guess, " says Scott Cooley, senior analyst at Morningstar. "But with the Fed hiking rates and (stock) evaluations near all time highs, people ought to expect less rather than more in terms of future returns."

Cooley thinks shareholders should not expect triple digit gains from the funds. He said that after the great run that stocks prices and stock funds have had the time comes when performances return to the norn. According to Ibbotson Associates, a Chicago-based research firm, 11. 35 percent is the average annual return of S & P 500 stocks from 1926 through 1999.

Speaking of performance, Eaton Vance wants to be the fund family you think of if after-tax performance is on your mind.

The Boston-based Eaton Vance family of funds says that they are the only fund family for which tax-managed funds account for more than half of their equity fund assets.

Because performance is the name of the mutual fund game, most equity funds portfolio managers are more concerned with achieving competitive total returns on their funds rather than managing them to keep their dividend and capital gains low. The goal for those that are managed with an eye towards after-tax returns do their best to make sure fund shareholders aren't hit with high dividend and capital gains distributions each year.

But tax-managed funds aren't for everyone. If your mutual fund investments are held in a qualified retirement account such as an IRA, SEP-IRA, 401 (k), or Keogh account, tax-managed won't mean much to you. Ideally, tax-managed funds are best suited for long-term investors whose mutual fund accounts are held in their personal portfolios and are subject to tax consequences each year.

The idea behind tax-managed accounts is a reduce-and-defer one. The folks at Eaton Vance say that portfolio holdings in these funds can reduce tax consequences "by shifting the mix of returns toward distributions of long-term gains and away from income and short-term gains distributions, and deferring taxes by holding most successful investment well beyond the one-year holding period necessary for long-term gains treatment".

So, tax-managed funds often invest their assets into low-yielding growth stocks, purchased for the long-haul and have portfolios with low turnovers.

How much difference can a fund managed for after-tax returns mean performance wise? In research prepared for Eaton Vance by KPMG, hypothetical examples show that over a 20-year holding period on an initial investment of $10,000 for an investor in the highest federal income tax bracket, investors could receive 25 percent more when liquidating the investment. That breaks down to an annual after-tax rate of return that's 1.2 percent higher per year than a fund not managed for after-tax returns.

To learn more about Eaton Vance's after-tax funds call800-225-6265.

To read more articles, please visit the column archive.

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