According to the monthly survey by Lloyds Private Bank, this is the third consecutive month of falling sentiment and the mood among investors is now at its lowest level since records began in March 2013.

When looking at the actual market performance of ten asset classes, it is easy to see why sentiment continues to drop.

March saw declining performance across seven of the ten asset classes. Unsurprisingly, gold and UK government bonds bucked this trend, with UK equities seeing a slight month-on-month increase.

The overall fall in sentiment was driven by a huge shift in feeling towards UK equities which, for the first time since the survey began, has become negative (now at -2% in March compared with 36% a year ago).

Historically, UK shares have been one of the most highly regarded of the ten asset classes as far as investors are concerned, Lloyds said.

This fall contrasts slightly with the actual market performance of UK equities, which nudged up by 0.3% month-on-month, but the survey has shown sentiment tends to take a while to recover from bad news.

Perception of commodities improved in March, the first month-on-month increase since November, rebounding by 6.8%. This has taken overall sentiment towards commodities higher than sentiment towards UK equities for the first time since April 2013. This reflects the huge year-on-year sentiment drop towards UK equities, but also shows an improving picture for commodities, perhaps suggesting the bottom of this market may be drawing closer.

Markus Stadlmann, chief investment officer at Lloyds Bank Private Banking, said: “The first ever move to negative sentiment towards UK equities is potentially significant. Investors tend to focus most of their efforts on domestic markets, so a negative view of the UK equity market suggests an increasingly dour view overall, which is reinforced by the Index dropping to its lowest ever level.

“At the same time, we are seeing some glimmers of a recovery in the performance of some asset classes, suggesting that broad sentiment may lag the markets in some areas. Positive sentiment towards gold is increasing sharply as performance recovers well, but investors should always be wary about becoming too euphoric about certain markets based on short-term returns.

“Interestingly, commodities are seeing some recovery in positive sentiment and this may reflect the notion that this asset class may be reaching recovery mode in the short term. We certainly see commodities stabilising and have a more positive view as a result. As the EU referendum edges closer, talk of increased market volatility may have an impact on overall investor sentiment over the coming months.”