Nearly £400m was withdrawn from funds last month, following on from a £440m outflow in January, according to figures from the Investment Association.

Funds invested in UK shares and UK commercial property took a hit, as did strategic bond funds.

Notably, £230m was withdrawn from funds held in ISAs in February, the sixth month in a row fund-based ISAs have experienced outflows.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said the ongoing fund exodus comes as a surprise as there was a bounce in stock prices in mid-February, as some confidence returned to the market. But he said the EU referendum in June could be contributing to outflows.

He said: “One possible reason behind the poor numbers is repatriation of funds by international investors ahead of the Brexit vote, which could explain the exceptional levels of outflows seen in the last two months. Indeed earlier this month Prudential noted that M&G, its investment arm, had seen substantial fund withdrawals from European investors.”

Jason Hollands, managing director of advisory frim Tilney Bestinvest, said weak ISA sales were “unsurprising given the diet of unremittingly gloomy news flow”.

Slowing global growth, volatile markets, dividend cuts, terrorism and Brexit are all reasons why people are not investing, Hollands said.

He also believes a focus on pensions over ISAs this year has played a role.

“Many high earners have rightly been maximising pension contributions ahead of the tapering down of allowances which kick in at the start of the new tax year,” he said.

UK funds with a focus on generating income bucked the trend. UK Equity Income was the second best-selling sector in February, pulling in £214m of investor money.

Passive funds also did well, with inflows of £91m.

Khalaf said: “Passive funds continue to go from strength to strength and increased their market shares, which now stands at £1 in every £8 invested. We expect this trend to continue as investors desert the middle ground inhabited by closet trackers [actively manged funds that closely mimic their benchmark] and plump for low cost passive funds on the one hand, or high calibre active funds on the other.”

Absolute Return funds were February’s best sellers with net retail sales of £243m.