SINGAPORE investors turned away from equities toward bonds in the first quarter of 2012 amid a late resurgence of macroeconomic concerns, according to a study by Lipper.

But markets in general turned in positive performances, and allocating retirement funds to the CPF Investment Scheme (CPFIS) paid off for Singapore residents in the first three months of the year, according to a related Lipper report.

Unit trusts registered for sale in Singapore saw net inflow of $43.3 million in the January to March period, compared to a net outflow of $545.4 million in the fourth quarter of 2011.

Bond funds accounted for 44.3 per cent of the overall capital inflow into unit trusts, with first-quarter net inflow of $169.41 million reversing the net outflow of $210.97 in the fourth quarter.

Money market funds also turned the tide, drawing net subscription of $69.2 million in the quarter, from net redemption of $86.5 million in the previous three months.

Mixed-asset funds remained in vogue, with net inflow of $259.2 million in the first quarter, more than double the net inflow in the previous quarter.

Equity funds, however, saw net outflow grow. Investors took out $446.4 million of capital from the asset class in the first quarter, up from $349.7 million in the last three months of 2011.

Overall liquidity improved, with both the volumes of inflows and outflows increasing quarter-on-quarter.

The European Central Bank's Longer Term Refinancing Operation (LTRO), better-than-expected public debt auctions in the peripheral European countries and better news out of Greece, the United States and China helped to free up capital flows in Singapore.

The bulk of the net inflow into Singapore-sold unit trusts came from funds that are not included in the CPFIS. In fact, CPFIS funds saw a net outflow of $45 million over the quarter.

Unit trusts and investment-linked insurance products included under the CPFIS returned 7.51 per cent over the first three months of 2012, largely tracking broad market benchmarks as equities staged a rally.

By comparison, investors who left their eligible CPF money in their CPF savings accounts earned an annual interest rate of just 2.5 per cent on their Ordinary account, 4 per cent on their Special and Medisave accounts and an additional one per cent for the first $60,000 for their combined balances.

CPFIS unit trusts were up 8.13 per cent during the quarter, while insurance-linked products returned 7.04 per cent.

The CPFIS investment products mostly tracked their broad market indices.

Equity products yielded 9.71 per cent over the quarter, matching the 8.33 per cent growth in the MSCI World Index equity benchmark.

CPFIS bond products were almost flat, returning 0.76 per cent, reflecting a 3.52 per cent decline in the Citigroup World Government Bond index.

Despite the strong quarter, CPFIS products have lost 3.18 per cent on average over the past year to March 31, 2012. Unit trust products were down 3.34 per cent, while insurance-linked products were down 3.06 per cent.

Looking over the past year, therefore, CPF investors could have made more by leaving their money in their Ordinary or Special accounts and collecting the interest than by putting it in a CPFIS product.

"We had an impressive first-quarter performance, but fears over the eurozone debt crisis are resurging," Mike Seng, associate director of the Investment Management Association of Singapore, said in a statement.

"Without over-reacting to short-term volatility, investors should continue to diversify and rebalance their target portfolios while keeping a longer-term perspective to investing."