The only thing worse than losing nearly one third of your investment in less than a year is having to pay taxes for the privilege. That's what shareholders in Robertson Stephens

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Contrarian fund will have to do this year.

Despite a negative 34.2% return so far this year, the beleaguered fund will make a long-term capital gains distribution before year end. Distributions for the Robertson Stephens' other funds took place on Dec. 11. But the firm's Web site says the announcement of Contrarian's distribution is being delayed "in the best interests of our shareholders."

"We are hoping to effect a distribution in a manner that is more tax beneficial to shareholders," says spokeswoman Stephanie Linkous. She wouldn't offer an estimate on the size of the distribution.

Assets in the fund have shrunk from more than $1 billion in mid-1997 to $150 million at the end of November 1998, an indication the fund may have had to sell stock to meet redemptions.

Robertson Stephens promised in an October quarterly update that most future gains for new investors will go untaxed due to "realized and unrealized tax losses of over $200 million." But that doesn't promise relief for existing shareholders.

The impending Contrarian distribution is a "spillover" from 1997, says Linkous.

A spillover can occur for a number of reasons, according to Mari Ferris, an accountant in New York. "At a minimum, it is gains realized in November and December 1997 that occurred after the firm's November 1997 distributions," says Ferris.

Only those shareholders in the fund on the date of record will be impacted by the distribution. "That date has yet to be announced," she says. "But it will happen before the end of the year, and we could have that information any day."

The extended bull market has not been kind to Contrarian's style of buying out-of-favor issues and shorting stocks. Manager Paul Stephens' concentrated bets in the downtrodden natural resources sector proved a drag on performance over the last year. The fund has averaged a negative 6.7% annual return over the last five years, according to Lipper Inc.

In an effort to turn the fund's performance around last fall, Robertson Stephens moved from a single portfolio manager to a team of three mangers and five analysts headed by Stephens. So far, the new approach has failed to dazzle -- the fund is down 1.5% over the last 13 weeks.