Emerging markets mark 14 weeks of net inflows-EPFR

By Daniel Bases

NEW YORK, June 12 (Reuters) - Emerging market equity funds pulled in a net $3.39 billion cash in the week to June 10, marking 14 straight weeks of inflows and helping cement a view that risk appetite remains intact, data from EPFR Global showed.

This is the best performing equity sector so far this year, bringing in a net $29.4 billion.

In a further sign of higher risk tolerance, money market mutual funds had net outflows of $11.3 billion, according to EPFR Global data released late Thursday.

"In light of money market funds' heavy U.S. Treasury holdings, this investor move off the sidelines and back into risk likely explains a large part of the U.S. Treasury retracement," David Spegel, global head of emerging markets strategy at ING, said in a note to clients.

Benchmark 10-year U.S. Treasury yields rose by 40 basis points between June 3 and June 10 US10YT=RR.

Money market funds serve as a holding area for investors who are unsure of where to put their money. So far this year they have pulled $104 billion out of these funds.

U.S. mutual funds took in a net $3.255 billion, whereas western Europe had net outflows of $868.1 million. During this period the benchmark American Standard & Poor's 500 stock index .SPX rose 0.79 percent while the FTSEurofirst 300 index of top European companies rose 1.37 percent.

"There is a pretty well established pattern here of three straight months of flows into emerging markets," said Cameron Brandt, global market analyst at EPFR Global in Boston.