Figures from the Investment Association show Asian equity funds saw net retail outflows of £70m in May, while Japanese equity funds did not fare much better, with net retail outflows of £41m in the month.

There are a number of reasons UK investors are abandoning the region, but the main worry is China’s slowing economic growth. Falling commodity prices also contributed to the exodus from Asian funds.

Eric Moffett, portfolio manager of the T Rowe Price Asian Opportunities Equity fund, calls China the “beating heart” of Asia.

He points to a sharp increase in the country’s debt pile in the first quarter of this year and cautions there is a risk China could suffer from Japan-style stagnation, although he is quick to add the Chinese government recognises this.

Kunjal Gala, senior investment analyst on the Hermes Global Emerging Markets fund, says: “Fears are escalating over a ‘Japanification’ of China, as deflationary pressures rise and reforms are considered too gradual. The failure to implement decisive reform has exacerbated problems in the debt-laden engines of China’s economy, infrastructure and real estate. China needs to move away from deploying mass stimulus projects and embrace painful, but necessary, supply-side changes to remove overcapacity issues.

“The slow pace of reform has been a perennial failing of Chinese policymakers.”

He believes president Xi Jinping “is firmly in the camp believing supply-side reforms are critical” but questions how the reforms will be implemented.

There is more to Asia than China, though, and investors may need to look beyond the Chinese economy to find other sources of return. Mr Moffett observes dividend yields in Asia are higher than most other regions. He highlights Taiwan, which he says has a large investable universe and offers yields between 5 and 7 per cent.

David Jane, manager of Miton’s multi-asset fund range, explains one of the key themes in Asia is that of the emerging consumer. He is playing this in his own portfolios “with a focus on domestic companies set to benefit from rising incomes rather than global trade and commodities, in order to play this theme more directly now that the headwind had been greatly reduced, with a more settled commodity outlook”.

While commodity prices have recovered, there is the fallout from the UK’s majority vote to leave the EU to contend with. It promises to add to the global uncertainty but will Asian markets be affected?

Aidan Yao, senior emerging Asia economist at Axa Investment Managers, says: “We do see Brexit having a negative impact on Asia but, if our baseline case of an ‘orderly muddle-through’ materialises, the direct economic effect should be modest. Negative contagion via the financial market could be more worrisome, but central banks in the region are standing by to offer liquidity to keep systemic risks at bay.

“We think the uncertain external environment has increased the chances of a policy easing in Asia, which could provide a buffer for the economies and financial markets.”

As John Yakas, Asian Financials fund manager at Polar Capital, observes: “Although there are worries in Asia, they pale in comparison to some of the fears found in other parts of the world and we would not be surprised if it continues to outperform other regions.”

Ellie Duncan is deputy features editor at Investment Adviser