Net retail investor sales shot up to £379m last month as punters rushed into fixed income, mixed asset and targeted absolute return funds.
Cautious investors backed out of equity funds, however, with an outflow of £459m, according to the the Investment Association's monthly statistics release.
Investors are still nervous after worldwide share issues slumped to a seven-year low in the first quarter of the year.
The value of total share sales, including secondary issues as well as flotations, more than halved to $106.6bn, the lowest since the immediate aftermath of the global financial crisis at the beginning of 2009, according to Reuters data.
Volatility has dropped though, with the Chicago Board Options Exchange Vix index, a measure of implied option volatility cost on the US S&P 500, down to lows for 2016 after wild market swings earlier in the year sent the index soaring.
The CBOE Oil Vix hit 79 on 12 February, shortly after oil hit its low for the year. The price has now rebounded to over $40 per barrel and the Oil Vix has settled to around 46m, on an average of 37.5 over the past 10 years.
Tracker funds, which aim to mimic the performance of a particular market or index, were popular though with net retail sales of £393m as investors appetite for risk evaporated.
Many investors were also thought to be looking to make the most of their pension contribution and ISA allowances ahead of the end of the tax year.
Guy Sears, interim chief executive of the Investment Association, said:
Retail investors remained cautious and reduced their holdings in equity funds, looking instead to multi-asset, absolute return and fixed income products. It is a sign of the times, with changing pension regulation and uncertainty in the global economic outlook, that multi-asset and absolute return products have been popular with retail investors. These sectors have grown in recent years as our members have reviewed existing products and introduced new funds to meet investors’ changing needs.
During the 2015 to 2016 tax year, funds in ISAs provided by fund companies and platforms Cofunds; Fidelity; Hargreaves Lansdown; Old Mutual Wealth, and Transact, saw a net inflow of £1.5bn, down £1.1bn from the previous tax year.
The top three best-selling sectors for ISAs based on the five fund platforms in March 2016 were UK equity income with £86m in net sales, Asia Pacific excluding Japan brining in £49m net sales, and mixed investment 40-85 per cent shares at £29m net sales.
Tracker funds saw funds under management of £109.7bn as at the end of March 2016, from £100.8bn last year. Their overall share of industry funds under management was 12.6 per cent, compared with 11.4 per cent in March 2015.
Tracker funds also remained popular with retail investors, and now make up nearly 13% of industry funds under management. Active and passive investment strategies can both play a part in helping people meet their investment goals.