The FTSE 100 index bounced around in the period, hitting a low of 5,536 on February 11 before rebounding back past 6,100 by the end of March.

Meanwhile, as commodity prices started to improve at the end of the quarter, emerging markets have also seen an unexpected rally, making many investors unsure of the best opportunities.

It is therefore not surprising that the Investment Association (IA) reported the IA Targeted Absolute Return sector was the bestselling sector in February for the second time in six months, with £243m of net retail sales.

These funds are not only seeing more take-up by investors but also more supply from providers, with the launch of a number of new vehicles in 2015, including the Goldman Sachs Global Absolute Return, the Old Mutual Absolute Return Government Bond and the Hermes Absolute Return Credit funds.

The popularity of targeted absolute return funds in February highlights many investors had taken on more risk than they possibly liked Adrian Lowcock, Axa Wealth

BlackRock has already signalled its intention to move into a similar space occupied by the behemoth SLI Global Absolute Return Strategies vehicle and Invesco Perpetual’s similar Global Targeted Returns product.

Meanwhile, Axa Investment Managers announced the appointment of Pierre-Emmanuel Juillard as managing director of a new investment team focusing on liquid absolute return strategies.

He noted on his appointment: “Clients are looking for sources of return without wanting to compromise on liquidity.”

Similarly, M&G hired Ashburton asset allocation head Tristan Hanson for its own absolute return push.

Fraser Lundie, co-head of credit at Hermes, notes: “With equity markets and fixed income yields at or near record highs and lows respectively, investors are rightly looking to gain access to alternative sources of return.

“The reason for absolute return’s attractiveness is its ability to reduce overall portfolio volatility while still meeting return targets.

“Moreover, given the potential breakdown of the negative correlation between interest rates and risk assets, participation in fixed income markets – without being dominated by a benchmark or by the direction of interest rates – is very attractive, especially considering the structural challenge of poor trading liquidity.”

This diversity can be seen as a strength, but also a potential weakness, since for every £1bn product there are plenty more smaller niche offerings struggling to deliver or to gain investor traction.

So are absolute return funds the best option in an uncertain market environment?

Adrian Lowcock, head of investing at Axa Wealth, points out: “The big sell-offs in January and subsequent market uncertainty led to investors taking a more cautious approach in February.

“The popularity of targeted absolute return funds in February highlights that many investors had taken on more risk than they possibly liked. The effects of the financial crisis continue to linger as investors quickly became risk averse.

“Although the volatility seen in January has gone and markets are more settled, there is still a lot to remain cautious about. Having some protection in a portfolio is a sensible course of action as it will help to reduce volatility and protect capital.”

Nyree Stewart is features editor at Investment Adviser