Investors have pulled more than £10bn from Standard Life Global Absolute Return Strategy (Gars) in 2017.
The exodus of cash from the fund was described as "not surprising" given the performance of the fund, according to Ben Yearsley, a director at Shore Financial Planning.
He said: "I'm not surprised (about the outflows). Over three years the fund has lost 2 per cent whereas the sector has risen 5 per cent.
"Over five years the fund trails the sector. The concept of Gars is fine, bringing together 30 or so uncorrelated ideas that each have the ability to deliver positive returns for investors, however you are still dependent on the managers getting those ideas right and it hasn't done a particularly good job of that over the last few years."
Outflows from the fund were £10.7bn in 2017, more than double the £4.3bn of cash withdrawn in 2016.
The fund size is now £20.7bn.
Adam Ross, investment director at Canaccord Genuity Wealth Management, said the Gars fund may be an example of a fund that has grown to large to be able to allocate the capital at its disposal effectively.
Mr Yearsley noted that the managers of the Gars fund have changed over the past five years, with many joining rival firms.
But he thinks the problems with the fund, and the absolute return sector as a whole, may be more profound.
He said: "I am not convinced about the ability of absolute return funds to deliver their targeted performance.
"Many are opaque in structure and simply don't provide investors with much, if any, of a return.
"Managers wheel out excuses as to why they haven't performed, but those excuses are getting a bit lame.
"I am struggling to see the purpose of the sector anymore."
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "Performance has been disappointing in the last few years.
"Flows have also suffered because the fund has spawned a host of imitators, not least at Invesco and Aviva, who are also now competing for the same pool of assets.
An obsession with low volatility is also leading to advisers failing their clients and investing in poor performing absolute return funds, according to Robin Geffen, founder of Neptune Investment Management.
Mr Geffen said investors with decades of work ahead of them should have almost their entire portfolio in equities, but advisers won't recommend this.
He said: "Advisers won't tolerate volatility, but these are long-term savers.”
He said advisers determination to avoid short-term volatility saw them move into absolute return funds instead of bonds, as bond yields fell.
But he said with absolute return funds and similar products you don't get the necessary upside from the market.
Simon Fraser, chairman of the Foreign & Colonial investment trust, said: "If someone is in their 20s and they are putting money away every month, that is money they won't need to take out in the short-term.