By Claire Milhench

LONDON (Reuters) - Equity funds attracted $5.1 billion of net inflows this week, building on last week's $6.5 billion of inflows as investors continued to pile into U.S. and emerging market stocks, Bank of America Merrill Lynch (BAML) said on Friday.

The combined $11.6 billion is the largest two-week inflow in the year to date, BAML said. In the week to Wednesday, EM equity funds pulled in $5.1 billion and U.S. equity funds $1.9 billion, partly offset by outflows from European and Japanese equity funds.

Emerging market stocks funds are in their seventh straight week of inflows, totaling $14.6 billion - their best inflow period since September 2014.

The benchmark emerging equity index <.MSCIEF> is up over 14 percent so far this year as investors have chased the rebound after three years of losses.

The risk-on move chimed with the findings of BAML's latest fund manager survey, published on Tuesday, which showed investors cutting cash positions and taking a more optimistic view of the global economy.

"Investors (are) significantly less bearish but not yet euphoric," BAML's global strategy team, led by Michael Hartnett in New York, said in a note to clients.

EM debt funds continued to pull in money, with $2 billion of inflows in the week to Wednesday, the bank, which also uses data from Boston-based EPFR Global, said. Total inflows over the past seven weeks stand at $20.2 billion, the largest on record.

Investment grade bond funds attracted $3.8 billion and high yield bond funds attracted $1.9 billion, as investors frustrated with the zero or negative interest rates on offer in developed government bond markets hunted for yield.

BAML said next week's Jackson Hole, Wyoming meeting of central bankers had the potential to generate volatility given that investor positioning was tied to "zero-rate" expectations. U.S. Fed officials have in recent days sent mixed messages about whether a rate rise is on the cards, possibly as soon as next month.

European equity funds suffered $2.8 billion of outflows, and are in their 28th week of redemptions, their longest losing streak on record. European shares <.FTEU3> were poised to post their biggest weekly loss in two months on Friday.

EPFR Global said fallout from Britain's Brexit referendum, weakening growth in France and Italy, and Italy's impending constitutional referendum were contributing factors.

(editing by John Stonestreet)