''In the past six years, technology companies have shown earnings growth of about 30% per year,'' he points out. ''That's nearly four times the 8% earnings growth rate of the S&P 500 over the past 65 years and more than twice the 14% growth rate of that index in the past six years. We believe that this level of earnings growth can continue, which suggests that technology stocks are more fairly priced after the recent correction, creating value and opportunities. Where else should a growth fund invest if not in technology?'' 

  Considering these views, Ballen is surprisingly unbloodied this year. As of Morningstar's last report, after the first quarter of 2000, his MFS Emerging Growth Fund was almost 68% invested in technology stocks and another 19% in services, including many telecommunications companies (MCI Worldcom, for instance) that are tech's first cousins. Considering this extreme exposure and the beating technology took in the first five months of 2000, with the Nasdaq composite off more than 16%, Ballen's results were respectable, down less than 6%. 

  Unfazed by a bear market that many investors thought was long overdue, Ballen continues to back technology stocks. ''Every sizable company around the world is making major investments in technology,'' he says. ''This is a long evolution, a long game in which we're far from the last innings. Technology investing has become a secular story rather than a cyclical one. Not long ago, companies could cut back on technology spending when they had poor years. Now, they have to keep spending if they want to compete. It's the same for companies in Japan, in Europe, and all over the world. Japanese companies, for example, pay half as much for technology as U.S. companies do, and they're going to have to increase spending in order to catch up.'' 

  Ballen's record lends credence to his views. Although other names may come to mind, John Ballen, 40, is arguably the most influential person in transforming the Boston-based mutual fund company from a stodgy bond fund shop into a fund-raising leader now, especially in equity funds. The company was not always known for its stock answers. ''In the mid-1980s we were strong in fixed-income, but we didn't have a culture of success in equities,'' says Kevin Parke, MFS Investment Management's chief equity officer. 

  That image has changed, largely due to the record of Ballen, who joined the firm in 1984 as a research analyst. He was named portfolio manager of the startup Emerging Growth Fund in late 1986 and assumed the title of research director in 1988. It was "the best move I ever made,'' says Jeffrey Shames, chairman and CEO of MFS Investment Management. 

  The big breakthrough occurred in 1991, when Ballen's fund posted an 88% return, 57 percentage points better than the S&P 500 and 31 percentage points higher than the average return for small-cap growth funds (that's where Emerging Growth was back then), as calculated by Morningstar. The fund went on to string together excellent years through 1995, slumped a bit through 1998, then recovered to close the 1990s with a 49% return last year. For the decade, Emerging Growth returned almost 25% per year, nearly 7% ahead of the S&P 500 (which it beat seven years out of 10), to make it the fourth-best equity fund for the period. 

  From a relatively obscure $76 million fund at year-end 1990, Emerging Growth lived up to its name, burgeoning into a $20 billion juggernaut at the turn of the century. Ballen's secret, simple in hindsight, was to buy tech stocks and let his winners ride. "I bought Oracle back in 1990,'' he recalls, ''when the company was virtually penniless, near bankruptcy, and I bought Cisco Systems in 1994 and 1995, at 10 to 12 times earnings, before most people had heard of the Internet.'' Adding to his positions but not selling, he watched both stocks appreciate until they ranked among the top seven of all U.S. companies, by market value, in early 2000. By last spring, his fund had weightings of 22% and 14% in Oracle and Cisco, respectively. 

  (He also bought Microsoft in the late 1980s, riding the stock up but seeing it stumble recently. At nearly 4% of assets, Microsoft was the firm's fourth-largest holding, as of last report, behind Tyco International.) 

  Although Ballen prefers to let winners ride, he routinely reduces positions when they start to dominate the fund. ''We've been selling Oracle and Cisco lately,'' Ballen says. ''We still think these are outstanding companies, leaders in their industries, but we've decided to trim our outsized positions. Nevertheless, they continue to be our largest holdings. Oracle doesn't seem to be as threatened by Microsoft as it did a few years ago, and Cisco is extremely well-managed." 

  If Emerging Growth plans to sell off some Oracle and Cisco, its stellar tax-efficiency may fall off. The fund has held turnover to 22% or lower each year since 1994 (the average for the large-cap growth category is 95%) and kept capital gains distributions to 41 cents per share or less in each of those years. Combined with a lack of income dividends, the fund has a 99.4% tax efficiency for the past five years, Morningstar reports, and a 98.4% tax efficiency for the trailing ten years, substantially ahead of category averages. 

  This long-term tax efficiency is no accident, judging by the way Ballen warms to the subject. ''Our tax efficiency may slip a little,'' he says, ''but we'll still be tax-efficient. When we trim our positions in our large holdings, we pick the lots that will bring investors the lowest possible tax bills and we harvest losses when we can. In fact, we have $1 billion in unrealized losses we can take in order to offset gains.'' 

  While Ballen obviously takes tax efficiency seriously, he's not impressed by the recent spate of "tax-efficient funds" to come onto the market. ''Some of these funds are being mis-sold,'' he says. ''If investors are going to realize gains, they're going to have to pay capital gains tax at some point.'' 

  While Ballen downplays the trend toward positioning funds as avowedly tax-efficient, his record shows the drawback of another trend adopted by many financial advisors: an aversion to ''style drift.'' 

  Any planner who discarded MFS Emerging Growth for its lack of style continuity likely lost out on some impressive returns. Buying and holding stocks such as Oracle and Cisco, true ''emerging growth'' companies, the fund moved into mid-cap territory in 1995 and became a large-cap 1999. ''This movement explains a couple of subpar years in the late 1990s, when mid-caps underperformed,'' says Sarah Bush, an analyst at Morningstar. That is, Ballen's fund gained a mere 14%, 20%, and 24% in 1996-1998, trailing the S&P 500 each year, during a period when investors seemed to want only the biggest of the big names. 

  Bush rates Ballen's record ''very impressive,'' saying that his fund has proven itself in different types of markets and has held up fairly well this year. ''Nevertheless, whenever a diversified fund holds 68% of its assets in technology stocks, it's extremely aggressive, and potentially risky for investors,'' she says. 

  Although Ballen's fund is now listed as a large-cap in the Morningstar style box, he denies positioning himself as a large-company stock picker. Lipper Inc. classifies the fund as multi-cap, while Morningstar's Bush calls it an all-cap entry. 

  According to its charter, the fund ''normally'' invests at least 80% in stocks of small- and medium-sized companies. Even though the fund's largest 10 holdings comprised over 62% of assets recently, the fund owns at total of more than 500 stocks. ''John Ballen likes to hold small positions in many companies that might grow into the next Oracle or Cisco,'' Bush says. 

  ''We pulled back from small-caps in the mid-1990s,'' says Ballen, ''which turned out to be the right move. Now, I think that small-company price-earnings ratios look better, compared to earnings growth rates, so we're becoming more interested in smaller companies. If you consider small- to medium-sized companies to be those that go up to $20 billion in market capitalization, it's possible for such companies to make a significant impact, even in a fund as large as ours.'' 

  When asked which companies he's buying now, with new funds as well as with the proceeds from cutting his holdings of Oracle and Microsoft, Ballen supplies a varied list, including Network Solutions, which rents Internet domain names; Office Depot, which has a dominant retail franchise; Bisys; and Global Crossing. He also is bullish on high-quality wireless stocks, such as Sprint PCS and Nextel, explaining that he prefers service companies to equipment suppliers in this area. ''It's a better business model,'' he says. The expected emergence of the wireless Internet could make participants Wall Street favorites. 

  Indeed, telecommunications is shaping up as a major trend in Ballen's eyes. ''Bandwidth is vital,'' he says. ''Instead of having a phone conversation, we should be able to see each other and display graphs to illustrate our points. We're limited now by the devices we have, but that will change soon.'' 

  As Ballen sees it, Oracle and Cisco are telecom companies now, or soon will be. ''Even Intel is positioning itself as a telecom company,'' he says. ''The leaders in this field are going to make a lot of money in the coming years, which may include some companies that are not formed yet." 

  Aside from technology and selected services, Ballen sees few other sectors for growth funds to pile into. For example, there's not much health care in his Emerging Growth Fund, at least for now. ''The election year is a wild card,'' he says. ''Health care is sure to be an issue, and there's no knowing how the rhetoric will affect those stocks. I think you can wait to buy good companies in this area.'' 

  According to Ballen, ideas on which companies to buy and when to buy them are produced regularly by MFS' research department, which, as a biased observer, he terms a key to the success of all MFS funds, including his own. ''We have a policy of promoting research analysts to portfolio managers, which helps to hold down turnover among researchers,'' he says. ''If we brought in someone from outside to run a fund, our analysts would leave.'' 

  Several MFS funds are run by the firm's analysts, who pick their favorite stocks in the industries they follow. ''Research has high status here, largely thanks to John,'' says Parke. ''We don't trust Wall Street's reports. Instead, we have 42 analysts who follow industries intensively. These analysts get respect at MFS: The portfolio managers listen to them. While other fund companies may focus on quarterly ups and down, our analysts take the long-term view, which is a result of John's influence. We're buying stocks that will perform well over four to five years.'' 

  Parke cites the case of CVS, a major drug chain. ''All the retail drug stocks were hurt last year when Rite Aid lost almost all of its market value,'' he says. ''In addition, there were fears that the Internet would hurt drugstores. Granny would buy her pills online. John insisted that this wasn't an issue, so we took a close look at CVS and found a good company that's getting better.'' 

  So to keep up with the research department's current thinking, Ballen reads analysts' reports each morning and weighs their recommendations heavily when making stock selections. ''You can't say no all the time or people will stop coming up with ideas,'' he says. ''Ultimately, though, the decisions as to what goes into Emerging Growth are about 80% mine.'' 

  The sell decisions are his, too. ''I have four criteria for buying a stock,'' Ballen says, ''and they must all remain in place for me to hold onto it. The company must be dominant in its market, and it must participate in an industry where the growth engine is still powerful. I insist upon strong fundamentals: a solid balance sheet and increasing cash flow. Finally, I want to see a management team that remains intact. If those elements are all in place and the company shows the promise of staying a leader 10 years from now, I'll buy more shares on price weakness. But if one of those elements is missing, I'll sell the stock.'' 

  In February, Emerging Growth added a co-manager, Dale Dutile, who will be handling a small portion of the fund, according to Ballen. Shames downplays the importance of the move: ''John has had co-managers in the past,'' he says. ''Several of our funds have two or more managers, providing complementary investment styles.'' 

  In addition, working with Ballen may help a newcomer gain the benefit of the former's experience. When asked what lessons he has learned over the years, Ballen says he has discovered not to believe in the ''greater fool'' theory. ''Some managers justify paying any price for a stock. They think the company will announce a great Christmas or a new product and the price will go up; it's a form of momentum investing. At some prices, though, it's hard to find fools.'' 

  Ballen also has learned to favor sustainable business models over the various ''new metrics'' that appear from time to time and eventually disappear. ''Some Internet stocks have been sold on the basis of eyeball count,'' he says, ''but I prefer to see companies that actually show signs of producing revenues and earnings. In general, we pay more attention to fundamentals such as earnings and cash flow than many other emerging-growth funds. If you don't try to set valuations based on fundamentals, there's no limits to a stock's upside, and that's not realistic.'' 

  Such trees-grow-to-the-sky-and-beyond thinking seemed to dominate Wall Street during much of 1998 and 1999. But now, says Ballen, ''The bubble has burst. Stocks that sold for $200 are selling at $20, while stocks that sold at $20 now trade at $2. It's unlikely we'll see those ridiculous valuations again any time soon.'' 

  Consequently, Ballen continues to see reasonably priced growth stocks for his Emerging Growth Fund while exerting his influence throughout MFS. As Shames tells it, Ballen constantly generates creative ideas, many of which have led to new MFS products, including the Strategic Growth, Equity Income and Research International funds. ''Most recently,'' Shames says, ''John came up with the idea of a long-short hedge fund, using our research capabilities. We're offering this fund to foreign and institutional investors and it may become a domestic offering in the future.''