Retail investors felt great uncertainty in April. (Photo: AP)

The U.S. stock market was up 12.6% in the first quarter of 2012, yet investors pulled a net $5 billion out of equity funds during the same period, according to the wealth management firm Dignitas.

“The discrepancy between a better performing U.S. stock market and continued uncertainty amongst retail investors demonstrates a continued lack of confidence in the market,” the Chicago-based firm reported Monday, citing the Investment Company Institute (ICI) and J.P. Morgan Asset Management.

What’s more, stock fund outflows for the month of April were the largest since at least 1996, according to EPFR Global, a Boston-based research firm which pointed to continued concerns over Europe as the likely cause.  

Equity funds had net redemptions of $18.6 billion through April 25, with intermediate-term bond funds and high-yield bond funds seeing some of the highest inflows.

The news follows a similar pattern that occurred in March.

“It appears it appears that investors are saying they’d rather settle for a low but knowable return than risk greater losses in stock funds,” Christine Benz, Morningstar’s director of personal finance said at the time.

Indeed, in that month, stock funds posted an outflow of $9.62 billion, compared with an inflow of $1.38 billion in February, according to ICI. Bond funds had an inflow of $31.84 billion in March, compared with an inflow of $34.71 billion in February.

Despite the news, results of a Schwab survey of advisors released Thursday found that 45% are currently bullish on the market, up from 37% in the same study six months ago. More than two-thirds (67%) of advisors believe the S&P 500 will increase, up from 58% in the previous study but still below the 77% high reached a year ago.

And independent advisors plan to invest more in equities the next six months. Schwab found 41% of advisors plan to invest more in domestic large cap, versus 32% six months ago, representing an all-time high for the study. Interest in domestic small cap is also up significantly, almost doubling over the past six months from 12% to 23% in the current study.