Inflows into equity funds hit a one-year high for the second week running as investors continued pulling cash out of money market funds and putting it back to work, according to EPFR Global, which tracks more than $10 trillion in funds worldwide. In doing so, the data provider says investors showed an increased appetite for diversified exposure and for exposure to developed rather than emerging markets.

Net inflows to equity funds worldwide reached $9.56 billion in the week ending August 5, according to EPFR Global data. The majority, or around $8 billion, went to funds that invest in developed markets.

Asia ex-Japan equity funds remained the biggest money magnets among the four major emerging market equity fund groups tracked by EPFR Global, with the diversified global emerging markets (GEM) equity funds absorbing $424 million, Latin America equity funds $203 million, and Europe, Middle East and Africa (EMEA) equity funds $105 million.

While flows into Brazil, India, India and Russia (Bric) markets remained solid, China's role was not as pronounced in early August, with China equity funds taking in a net $18 million compared to $45 million for Russia equity funds, $89 million for Brazil equity funds and $125 million for India equity funds. The inflow streak for dedicated Bric equity funds, meanwhile, now stands at 20 weeks and $2.43 billion.

Japan equity funds posted their sixth straight week of inflows as they extended their best run since the second quarter of 2008 as key leading indicators moved higher and economists predicted 3% to 4% quarter-on-quarter growth for the three months ending June 30.