Investors have withdrawn 3 per cent of assets under management from equities in 2019, twice the level of withdrawals made during the financial crisis, according to data from JP Morgan.
At the height of the financial crisis, investors withdrew about 1.5 per cent.
James Thomson, who runs the £1.8bn Rathbones Global Opportunities fund said: “That data is striking because the negative feeling towards equities is worse than when we were in a crisis, despite the fact we are not in a financial crisis right now.
"The data, particularly in the US, shows the economy is fine, consumer confidence is high. The fund has its highest ever weighting to the US, and its lowest ever weighting to the UK.”
The latest Morningstar data, covering the month of August, shows investors pulled £1.7bn from equities in August, and turned instead to fixed income funds and cash.
Gary Potter, who jointly runs the multi-manager fund range at BMO Asset Management, is among those who is avoiding equities in the current climate.
He told FTAdviser: “I think things are going to get darker in the market and in economies, though that doesn’t mean it will be a prolonged downturn. The problem with equities is that valuations are certainly not cheap, and for that reason we are underweight.
"The equity funds we own include Man GLG Undervalued assets fund, run by Henry Dixon. But away from equities we are holding gold, and cash and alternatives.”
Peter Elston, chief investment officer at Seneca said: "The valuations at which equities trade right now, they are not pricing in a recession, and that's why our funds have very little exposure to equities right now."
The data from Morningstar showed BlackRock’s active funds attracted greater inflows than the company's passive products.
Several advisers took the view that active funds were more appropriate than passive products during periods of severe market stress.
Alistair Cunningham, financial planning director at Wingate Financial Planning in Surrey said: “It is my view that active funds are more likely to add value in volatile, especially declining, markets.”
Philip Milton, who runs PJ Milton and Co, an advice firm in Devon, said: “Passive funds have to subscribe the cash they manage without discretion. An active manager can tweak his portfolio which includes his short-term cash reserves. It doesn’t mean it works all the time (and it can backfire) but what value is there in the capacity to actually be able to do that at all.
"An active manager too can change the portfolio structure if necessary – perhaps selling one genre and buying another – defensive for growth for example as part of an overall mix according to the sentiment."