INVESTORS in Asian funds might have to wait more than two years to see the value of their holdings approach previous highs, according to research by Lipper Analytical Services. An analysis of previous downturns reveals that as a general rule it took about 27 months for United States-authorised funds that invest in the Asia-Pacific region to recoup losses suffered in a bear market. Although past performance is not an accurate guide to the future, it does provide a benchmark. Investor loyalty to US markets also is likely to be tested in the next few months as volatility increases. Lipper's seven top US indexes - which provide sectoral benchmarks for monitored funds - have fallen by 8 per cent to 11 per cent since the markets began to slide in early July. 'We have entered another down phase. In 1987, the recovery time ranged from 16 to 20 months. The more-modest declines suffered in the present decade led to recovery periods from four to eight months,' chairman Michael Lipper said. 'Many fund investors have been trained to expect shallow declines and quicker rebounds than those that occurred in the generation from World War II to the end of the Vietnam conflict. 'Only time will tell as to the size of the decline and its recovery.' Since 1990, a sustained bull run has created enormous wealth for many US investors. For example, US$1,000 invested in Fidelity Investments' flagship Magellan Fund in October 1990 would now be worth more than $4,600. According to a nationwide poll conducted last week, it would take an 'unprecedented market drop' in the Dow Jones Industrial Average of about 1,000 points in a single day to shake the confidence of small investors. Staying loyal to the US markets and shrugging off periodic downturns has been a successful strategy. However, battered and bruised investors in the Asian markets know that even seemingly invincible markets can be humbled - and quickly. The Dow has fallen by about 8.5 per cent since its peak of 9,338 points. The Lipper Growth Fund Index has declined by more than 10 per cent, and its mid-cap and micro-cap indexes are both down by 12.6 per cent. A repetition of the 1987 market crash would slash 25-34 per cent off the indexes. According to Lipper's 'worst three months' index, the average US fund has taken about six months to recover from bear-market lows. To create the index, the company analysed how long it has taken funds to recover from their three consecutive worst-performing months. The biggest falls and slowest recoveries were posted by gold funds which, on losing more than one-third of their value, have taken more than six years to recover. Equity income funds have been among the most resilient, falling by about 23 per cent but taking only 14 months to recover.