Emerging markets were in high demand in mid July, with bond fund inflows at a record, as investors chose dynamic developing economies over lagging advanced markets, EPFR Global said on Tuesday.

Emerging market equity funds tracked by EPFR posted combined inflows of more than $3 billion for the week ended July 14, while emerging market bond funds took in $745 million, bringing their year-to-date inflows to an all-time high of $18.5 billion.

While fears about the euro zone sovereign debt crisis have abated somewhat in the run up to the release of bank stress test results on Friday, a flurry of weak U.S. economic data and the impact of China's measures to cool its economy have sapped willingness to take risks for higher returns.

However, quarterly earnings reports have been positive enough for investors to dive back into emerging markets stocks and bonds across the world.

EMERGING MARKET EQUITIES:

Desire to own the fund group was indiscriminate. Global emerging market equity funds absorbed the highest inflows since the third week of October.

Asia ex-Japan, Latin America and Europe, Middle East & Africa fund groups all posted inflows.

India equity funds alone took in $114 million, a 13-week high.

DEVELOPED MARKET EQUITIES:

Flows into developed market stock funds were not heavy.

The majority of the $1.86 billion that poured into U.S. equity funds went to a handful of large-cap blend ETFs, masking the outflow from other sub-fund groups.

Japan-focused funds suffered $171 million in outflows.

Europe-funds also had outflows despite interest in UK, German and France equity funds.

SECTOR FUNDS:

Commodity sector funds were the biggest recipients of inflows, and energy sector funds were the only other fund group to take in over $250 million during the week. Interest in exposure to gold has been a boon to the commodity sector.

By contrast, consumer goods sector funds saw the biggest outflows.

FIXED INCOME FUNDS:

Flows into emerging market bond funds on a year-to-date basis have sought local currency fixed income more than hard currency. Domestic currency bond funds have had inflows of $9.9 billion compared with $4 billion of inflows to hard currency paper.

In the week to July 14, U.S. bond funds took in $2.97 billion, the biggest weekly gain since February 24. (Reporting by Kevin Plumberg; Editing by Kim Coghill)