* Global equity funds see $8 bln in inflows, most going toUS

HONG KONG, Sept 10 (Reuters) - Equity funds posted thebiggest weekly inflows in more than a month in early September,reflecting some comfort with the global economic outlook,though fresh cash allocations showed the limits of risk taking,EPFR Global data showed on Friday.

Stock funds tracked by the fund research firm absorbed anaggregate $8.43 billion, during the week to Sept. 8, the mostin six weeks. Bond funds also saw new money, taking in $4.13billion.

Despite the evidence of investors' money being put to work,money market funds, an equivalent of cash, saw inflows for thefifth time in the past seven weeks.

U.S. exports and manufacturing activity have hadsurprisingly positive readings, improving the confidence ofeconomies and companies in the supply chain. However, consumerspending and employment remain weak and appetite for riskierassets may remain suppressed until they also show somestrength.

EMERGING MARKET EQUITY FUNDS

Confidence in emerging markets has been a constant in thepost-financial crisis world.

This fund group in aggregate had $1.87 in inflows in thelatest week, with Global Emerging Market funds extending theirinflow streak to 15 weeks.

Latin America-focused funds did the best, attracting a25-week high of $190 million.

Asia ex-Japan and Europe, Middle East & Africa funds sawmodest inflows.

DEVELOPED MARKET EQUITY FUNDS

U.S. equity funds chalked up weekly inflows of $6 billion,accounting for three quarters of global equity inflows, drivenby buying of large cap ETFs, mid cap blended funds and valuefunds.

However, year-to-date, U.S. equity funds have had netredemptions of $30.3 billion.

Europe equity funds had inflows of more than $1 billion,though year-to-date outflows still total $11.6 billion.

Japan saw small outflows of $101 million.

SECTOR FUNDS

The picture was mixed at a sector level.

The cyclical energy sector took in $252 million, bringing2010 inflows to $1.6 billion, the third highest after commodityand consumer goods sector funds.

However, defensive sectors also did well. Flows intohealthcare funds were at a five-week high and utilities sectorfunds had inflows for the eighth time in the past nine weeks.

BOND FUNDS

Emerging market bond funds saw inflows but they were thelowest since early June. Inflows into emerging market localcurrency bond funds slipped to a 14-week low.

Tolerance for risk was evident in junk bonds. High yieldbond funds had $700 million in inflows for the week, bringingyear-to-date inflows up to $10.6 billion.

Global and U.S. bond funds pulled in $1.31 billion and$2.01 billion, respectively.

Flows into U.S. bond funds were influenced heavily bybuying of municipal debt as investors search for assets thatoffer reasonable yields and some protection from the taxincreases expected in 2011. (Reporting by Kevin Plumberg; Editing by Tomasz Janowski)