Barring some sudden and totally unexpected turn in the trend, you will soon be reading that assets in mutual funds have surpassed $5 trillion.

This is happening less than a year after the total in the funds' coffers broke $4 trillion and only about eight years after it first hit $1 trillion.To look at the picture another way, it took the fund industry about 70 years to reach $2.5 trillion in assets, in 1994. It has taken less than four years to add the second $2.5 trillion.

We can say without hyperventilating that this is one of the most dramatic success stories in the history of finance. It is also more than a little scary to anyone who knows the time-honored Wall Street axiom that no tree grows to the sky.

Nothing brings wealth faster than an investment whose value climbs exponentially. On a chart, this phenomenon is depicted by a graph that climbs gradually at first, then steepens its ascent until it starts to look very much like a vertical line.

At the same time, nothing frightens veteran Wall Street chart-readers more than this sort of pattern. In the past, it has often marked the prelude to a nasty letdown.

But the fund industry has done what almost everybody agrees is a diligent job of trying to manage this growth and prevent any serious crackups when the express train inevitably slows or even stops.

In addition, a closer look at the industry's progress yields a perspective that isn't quite so dizzying as the raw numbers initially appear.

First of all, not all of the growth is coming from the roaring bull market in stocks. In fact, only a little more than half the money in mutual funds is invested in the stock market at all.

Money-market funds, which invest in short-term interest-bearing securities like Treasury bills, by themselves hold more than $1.125 trillion, having just topped $1 trillion last summer. Then there are taxable bond funds, municipal bond funds, and so forth.

Secondly, investors aren't throwing money at stock funds with all the abandon that is sometimes supposed. A big part of the increase in stock fund assets, which are about five times larger than they were in 1992, stems not from new money invested but from the awesome increase in the values of the stocks they own.

Consider the statistics on fund flows for last year, as tracked by researchers at the Investment Company Institute, a fund trade group in Washington. "Net new cash flows to equity funds totaled a record $231 billion, topping the 1996 record of $222 billion," they reported. "As a percentage of assets, however, the net inflow in 1997 was at the lowest level since 1990."

The funds' success, by all responsible accounts, goes way beyond any bubble swollen by spec-u-la-tive demand for a hot product. They serve a valid purpose with a solid vehicle that meets a demonstrated need.

Nonetheless, the runaway pace at which they have expanded, and keep expanding, demands a large measure of eyes-wide-open caution from all its constituencies - specifically its millions of satisfied customers.

Many experts, including most fund-industry officials, have been worried for some time that unrealistically high expectations for investment returns were setting a dangerous trap for the funds and their shareholders.

"The industry has to be willing to be contrarian in the quest to educate," says William Brennan, chairman of the Vanguard Group, which manages the second biggest of all the fund families behind Fidelity Investments.

"It's easy to say the market went up 30 percent last year," Brennan observes in comments published at Vanguard's site on the World Wide Web ( "But investment companies ought to say, `look, the market went up 30 percent last year, but you could see something remarkably different next year.' "

For several years now, many fund leaders have taken pains to issue such warnings. The problem is, they have been repeatedly drowned out by a bull market that keeps roaring ahead.

Why is that a problem? Because the further the fund boom and the bull market go, the more important it becomes to pay attention to the voices of caution.