(Reuters) - U.S. equity funds attracted significant inflows in the seven days to Aug. 21, bolstered by bets of a Federal Reserve rate cut in September and easing worries about a potential downturn in economic growth.

According to LSEG data, investors racked up a net $5.97 billion worth of U.S. equity funds during the week, marking their largest weekly net purchase since July 17.

A benign inflation report last week and the Fed meeting minutes on Wednesday, indicating a potential rate cut in September, boosted investor appetite for risk assets.

Meanwhile, strong U.S. retail sales data and upbeat consumer sentiment numbers last week alleviated earlier fears of a sharp slowdown, and propped up stock markets.

Investors scooped up a robust $5.19 billion worth of U.S. large-cap funds in their largest weekly net purchase since July 24. They also acquired $1.77 billion worth of small-cap funds, but sold mid-cap and multi-cap funds to the tune of $1.29 billion and $807 million, respectively.

Among sectoral funds, consumer staples, financials, consumer discretionary, and tech attracted significant inflows, worth $768 million, $589 million, $309 million and $257 million respectively.

Investors, meanwhile, withdrew about $620 million from utilities, snapping a five-week buying trend.

Demand for U.S. bond funds continued for a 12th successive week as investors allocated about $4.43 billion to these funds on a net basis.

U.S. government bond funds secured a hefty $2.26 billion, the fourth straight weekly inflow. High yield and general domestic taxable fixed income funds also observed a notable $1.83 billion and $865 million worth of net purchases, respectively.

Meanwhile, money market funds remained popular for a third week as investors poured about $19.19 billion into these funds.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by David Holmes)