NEW YORK (CNNfn) - To most mutual funds, April is just another month, and taxes are nothing compared to the rise and fall of the Nasdaq composite index. But to fund manager Don Peters, taxes are a factor in every trade he makes.
Peters, of T. Rowe Price Tax-Managed Balance Fund and Tax-Managed Growth Fund, is among a small but growing number of managers who make tax efficiency a priority.
 And as investors put the 1999 tax season behind them, Peters said it might be a good time to consider a tax-managed fund for money that isn't in a tax-deferred account like a 401(k) or an IRA.
"For all investors who wrote checks to Uncle Sam, they could think about investing differently for their taxable accounts," Peters said.
Also in this column: Outflows to mutual funds were lower than expected during the Nasdaq's record volatility last week; high-flying Amerindo Funds debut two new mutual funds; and Putnam Investments reopens three funds. Click here to check your fund returns, and click here to read other fund news on CNNfn.com.
The balanced fund, with $50 million in assets, was up 6.25 percent year to date as of March 31, putting it in the top 10 percent of its category, Peters said. The growth fund, with $80 million in assets, is up 6.82 percent in the same time.
"These returns are pretty strong evidence that tax-efficient investing does work," Peters said.
Of course, the two funds took a hit along with everybody else amid massive market volatility in April. The balanced fund is up 4.1 percent as of April 18, while the growth fund is up 3.5 percent.
Still, the vast majority of funds buy and sell stocks without a thought about the tax impact. Mutual funds by law have to distribute 90 percent of their capital gains and income each year, and that means investors have to pay taxes on the gains -- even if they get automatically reinvested, according to Morningstar.
Indeed, the amount of money investors are spending on taxes for their mutual funds has been rising at a steady clip, according to new figures.
Investors paid $39 billion in taxes on their 1998 IRS bill, a 15 percent increase over the previous year, according to Liberty Funds Group, which every year calculates investors' "tax pain."
Investors paid $30 billion in taxes in 1996; $19 billion in 1995, and just $7 billion in 1990, according to Liberty Funds.
There are about 30 tax-efficient mutual funds that use strategies such as balancing gains and losses to prevent a capital gains distribution to investors, and more fund companies are introducing new products.
The Securities and Exchange Commission last month proposed new rules requiring disclosure about the effect of taxes on returns.
Cost-conscious Vanguard Group last year became the first fund company to provide after-tax returns, pointing out that taxes can have a huge impact on what actually winds up in your pocket.
"As investors have gotten their 1099s and have seen large distributions every year, it's evolved that people are really starting to care about it now," Peters said.
Mutual funds got hammered in the week ended April 14 as a result of heavy volatility that left the Nasdaq and Dow with their biggest one-day point losses in history. But outflows to mutual funds on April 14 and 17 were smaller than expected, according to TrimTabs.com, a fund research that tracks flows.
Outflows totaled $2.3 billion on April 14 and 17, said Carl Wittnebert, director of research at TrimTabs.com. He had expected outflows to total $5 billion.
"People are not scared by the downturns," Wittnebert said. "Their biggest anxiety is missing out on the rally."
The bigger losses for mutual funds were the three days ending April 13, totaling $6.4 billion. The net asset values of funds tracked by TrimTabs.com were off about 7 percent as of April 12.
What's a little stock market volatility? Apparently not much to Amerindo Funds. The fund group, which delivered triple-digit returns in 1999 with its high-flying Amerindo Technology Fund, introduced two funds that will focus on biotechs and business-to-business stocks.
Amerindo Health & Biotechnology Fund and Amerindo Internet B2B Fund will tentatively debut May 30 at $10 a share.
"Amerindo is technology all the way," said Keith Brown, director of product development at the fund company. "We have a strong belief that it's always a good time to invest in technology."
Amerindo Technology Fund, managed by the flamboyant Alberto Vilar and co-manager Gary Tanaka, earned 249 percent in 1999 with heavy stakes in Yahoo! But the fund is down about 32.26 percent year to date as of April 18, Morningstar said. (Efforts to reach Vilar for comment were unsuccessful).
"We view the current market as a great buying opportunity," Brown said. "Five years down the road, nobody is going to care if we started the funds now or six months from now."
The new funds will follow the same strategy as Amerindo Technology Fund, focusing on younger, emerging technology companies. The business-to-business fund will invest in software, services and equipment stocks. The health fund will look for biotechs, pharmaceuticals and companies that through the Internet allow greater efficiency. Vilar and Tanaka will manage the two new offerings.
"They're branches off the original technology fund," Brown said. "In the next several years, we see accelerated opportunities in those two areas."
Putnam Investments reopened Putnam New Opportunities Fund, Putnam Capital Appreciation Fund and Putnam New Century Growth Fund effective Tuesday. The company cited "values available in the market."
"The recent declines have been sharp and fast, but Putnam continues to have confidence in the fundamental strength of company earnings and the world economy," said Tim Ferguson, head of investments at Putnam. 
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