With more than $9 billion in sales during 2000, (FDGRX) - Get Report Fidelity Growth Company was the year's best-selling fund in the U.S. Fund manager Steven Wymer's healthy appetite for tech and biotech stocks had made for a 65% return in 1999, the kind of performance that just reeled the money in.

Now the fund is just plain reeling. As of Friday it was off 37% from where it started year 2000, and off 55% from where it stood last March 10, when the

Nasdaq peaked. The math isn't all that hard to do: Anyone who put money into Growth Company last year who hasn't pulled it out is seriously underwater.

With the average large-cap growth fund down 34.5% over the past 12 months, the big worry now is that investors are going to start pulling money from Growth Company and funds of its ilk. Worries about such redemptions are a regular feature of the market, but as

tax day approaches they've become more

heated.

In 2000, funds paid out an estimated $345 billion in capital gains distributions, according to the

Investment Company Institute

, and the fear is that some investors may need to redeem funds between now and April 16 to meet capital gains tax liabilities.

"I've been warned about this from the managers of funds themselves," says

Banc of America Securities

equity portfolio strategist Tom McManus. Many fund managers had expected higher redemption rates when they paid out distributions in the fall and were surprised how strong the reinvestment rate was. Investors may have been reckoning that stocks were near bottom.

"Perhaps some felt that they would reinvest the distribution and be able to settle the tax consequences with the appreciated shares," guesses McManus. "Unfortunately, the shares have depreciated instead." Which, of course, means that investors would have to sell even more to meet their tax liability.

There is evidence that redemptions have heated up. Liquidity tracker

TrimTabs.com

reports that in the week ended Thursday, stock funds saw net redemptions of $11.9 billion. (For more on this, check out Ian McDonald's

story on the TrimTabs numbers.) But it is less what has happened then what

may

happen that is worrying Wall Street. The idea of buying into a stock only to see it get hammered down later by fund selling isn't on many investors' lists of fun things to do.

"Everybody knows who the biggest holder of

Nokia

(NOK) - Get Report

is," according to one hedge fund manager.

For the uninitiated, the Nokia holder is

Janus

, the Denver-based fund shop that was king of the growth heap on the way up. For many portfolio managers, the idea of owning anything that Janus owns in a big way has been anathema, because of fears that its funds could get hammered by redemptions.

It could be that the threat of redemptions will hurt the market more than redemptions themselves. In an environment where there already is a lot of nervousness, worry that investors will cash in mutual funds to pay taxes is shackling would-be buyers.

April 16 is 28 days away, and if the market is not given any fresh incentives -- if it gets a half-point cut by the

Federal Open Market Committee tomorrow instead of the three-quarter point cut it wants, for example -- it could be a long four weeks.