TURBULENT stock markets have lessened investors' appetite for risk and have triggered more defensive strategies, according to research by Lipper Analytical. While investors were seeking safer havens for their funds, there were no signs of the panic that characterised the bear markets of the late 1980s, the research revealed. Also, investors with long-term goals - such as those saving for retirement - were generally comfortable with their equity exposure. Investors with shorter time frames, or more anxiety about the downturn, were seeking shelter in money-market funds, bonds and trusts which usually out-performed in bear markets, such as those investing in utilities. Fewer investors were considering market dips in the blue-chip indexes, such as the Dow Jones Industrial Average or the Standard & Poor's 500, as buying opportunities. According to Lipper, the value of US equity funds plunged nearly 15 per cent during the third quarter - the worst performance in eight years. Returns in all 36 of Lipper's categories across equity and mixed equity-fixed income funds were down for the quarter. Thirteen of the 16 general-equity and sector-fund categories posted double-digit losses, while the mixed funds were down just over 7 per cent. Funds investing in the stocks of utilities were down about 5 per cent while gold funds, another usual bear-market shelter, dipped about 6 per cent for the quarter. Cautious investors redeemed more than US$2.8 billion in units from their general-equity funds. The biggest losers were the micro, small and mid-capitalisation stock funds, which between them accounted for most of the losses. Both small and mid-cap funds were down by 22 per cent during the quarter with specialist sectors, such as natural resources, real estate and financial services, all posting double-digit losses. Investors headed for funds holding the larger capitalisation Standard & Poor's 500 companies. Emerging-market funds were hardest hit during the quarter, with 13 of the worst 20 in Latin America. The worst performing was the Lexington Troika Russia fund, which lost more than 60 per cent of its value. The big winners for the quarter were money-market funds, which increased their assets under management by more than $26 billion. Investors were also increasing their exposure to a range of government and corporate fixed-income funds. According to Fidelity Investments, many investors had been seeking more conservative strategies for their holdings but there had been no sign of panic.