The sector was the biggest selling during March, with net retail sales of £366m, according to the Investment Management Association (IMA).
Connolly, head of communications at AWD Chase de Vere, says investors are extremely cautious about the direction of equity markets currently.
He says: “Investors are looking at strategic bond funds as a safer option [in current markets]. There is more of a concern for capital preservation than capital growth.”
Connolly says the funds can hold a mix of investments, but investors should be wary of risks taken by managers.
According to Connolly, the trend against equity funds was “concerning”. He adds: “History tends to suggest that the best time to buy equities is when nobody else is buying them.”