The group said IMA Mixed Investment 20-60% Shares topped the list of best-selling sectors for August, with IMA Global Equity Income the second most popular.
AWD Chase De Vere’s Patrick Connolly believes that the current market uncertainty will always push investors to lower-risk assets and says Cofunds’ data reflects the current mood among his clients.
"I don’t see this as a surprising trend. Investors have been nervous recently and still are very nervous about risk in the market," he commented.
"There is currently a reluctance on the part of investors to hold equities. They are staying with perceived safe asset classes or trying to gain limited exposure to equity risk."
Data from FE Analytics shows that the FTSE 100 has risen 12.41 per cent since June, but Cofunds data shows investors remain wary of the obvious volatility.
Performance of index in 2010
Source: FE Analytics
Michelle Woodburn, head of fund group relations at Cofunds, pointed out that this volatility has led to large outflows in other sectors too.
"The volatile markets in August had a significant bearing on the month’s sales trends. It was positive to see so many sectors doing well, most notably Mixed Investment 20-60% Shares. However, the figures show there were also large outflows in a number of sectors."
IMA All Companies experienced outflows worth 161 per cent of net fund sales in August, compared with 141 per cent from the IMA Specialist sector.
IMA Mixed Investment 20-60% Shares saw inflows worth 321 per cent of net sales, while investors were also keen on the IMA Global Equity Income sector, which had 183 per cent of net sales, and IMA Strategic Bond, with 146 per cent.
Newton Global Higher Income topped the list of the most popular funds.
The £2.9bn fund has a five crown-rating from FE and is run by FE Alpha Manager James Harries.
The fund has outperformed its sector and FTSE World index benchmark over one, three and five years. Over three years it has returned 38.05 per cent, which compares favourably with 28.24 per cent from the IMA Global Equity Income sector and 25.26 per cent from the FTSE World Index.
Funds with highest net inflows in August
Source: Cofunds
Connolly believes that Newton Global Higher Income is a good choice for investors looking to make steady growth with low levels of volatility.
"Newton Global Higher Income is a fund we use in our client portfolios in order to draw in income stocks. If there are investors already in the Global Equity Income sector who are looking to diversify, then it is a very good holding."
However, Connolly suggests that investors approach the sector with a degree of caution.
"The risk now involved with equity income stocks is that they are becoming more and more expensive due to the huge increase in popularity."