US Equity funds were the only major equity fund group tracked by data provider EPFR Global to post inflows last week as investors again opted to cash in some of the strong gains they has generated from emerging markets year-to-date and park the proceeds in money market funds.

Fund flows into US portfolios were also shaped by the prospect of another US rate cut and the weakening of the dollar.

Japan and Europe equity funds again suffered as investors projected the impact of an even weaker US currency on their export-driven growth stories while financial sector Funds attracted over $1 billion in fresh money, EPFR says.

ôDespite the angst over the real scope of the global credit crisis, recent flow data suggests that investors are still as focused on returns as they are on risk,ö says Cameron Brandt, Massachusetts-based EPFR Global Analyst. ôThere still isnÆt that much appetite for fixed income exposure other than the Money Market funds, one of the usual refuges in times of financial stress. And, when there is a sell-off, weÆre seeing money jump right back in to take advantage of perceived bargains.ö

US equity funds absorbed a net $7 billion during the last week of November with all small-, mid-, large-capitilasations attracting fresh money as expectations of another cut in US interest rates in this month hardened following US Federal Reserve Chair Ben BernankeÆs latest speech. Once again, growth-oriented funds outperformed their value counterparts, in both flows and performance terms, across all capitalisations.

The prospect of another US rate cut had the opposite effect on Japan and Europe equity funds. An even weaker dollar is expected to pose additional problems for exporters, the key drivers of economic growth, at a time when the Japanese and Eurozone economies are coping with rising energy prices, hawkish central banks and the fallout from the US sub-prime debt crisis. Redemptions from Europe equity funds hit their second highest weekly total of the year ahead of the European Central BankÆs meeting during the first week of December when accelerating inflation û the annual rate has climbed to 3% -- could trigger another rate hike and push the dollar/euro exchange rate through the $1.50 mark.

Japan equity funds saw another net $557 pulled out as they posted their 35th consecutive week of net outflows. Year-to-date, investors have removed over $16.7 billion from these funds, an amount representing a quarter of their assets under management at the beginning of the year.

ôConfidence among Japanese investors and consumers in their economy remains surprisingly weak given the steady growth it has delivered against a backdrop of rock bottom interest rates and very loose fiscal policy,ö says Brandt. ôSome fund managers are pointing to the creeping re-regulation of several sectors, most notably construction, as a major reason for this malaise.ö

At the country level elsewhere, investors again pulled back from China, whose equity markets are viewed by many as the worldÆs biggest asset bubble, and reduced their exposure to emerging markets such as Korea and India that have big oil import bills. EPFR says. Among funds geared to developed markets it was Germany country funds that were hit hardest with net outflows more than double those of the second worst week year-to-date.

Investors parked another net $7.62 billion in money market funds, the eighth time in the past nine weeks this fund group has absorbed fresh money. Since early August net inflows have totaled over $115 billion.

Outflows from emerging markets were broadly based as investors reacted to the poor performance they posted the previous week, according to EFPR data.

Asia ex-Japan equity funds, which shed 5.49% the previous week in terms of performance, posted a net outflow of $2.47 billion while the diversified global emerging markets funds saw $1.02 billion pulled out. Year-to-date, however, these fund groups are still sitting on portfolio gains of 47.4% and 37.1%, respectively.

EMEA Equity Funds had the worst week when measured in terms of outflows as a percentage of assets under management as investors continue to pencil in the higher costs facing countries with large current account deficits run by South Africa, Turkey, Hungary and Egypt in a less forgiving credit climate.

Investors pulled $81 million out of Brazil, Russia, India and China (BRIC) equity funds but treated the two countries with exportable oil reserves û Russia and Brazil û much more kindly at the individual level. Russia Country Funds posted modest inflows while flows into their Brazil counterparts were essentially neutral. But funds geared to China and India, both big oil importers, posted outflows of $688 million and $208 million respectively as oil prices continue to test the $100 a barrel mark.