Flows are rotating into ESI while EMB weakens

🇺🇸 A clear flow shift is underway, signaling a pivot from broad bond exposure toward equities, but caution is warranted as the move remains concentrated in select themes. The data shows inflows into $ESI (Element Solutions Inc.), leading with +$32M, while EMB, the previous dominant theme, exits with a hefty −$44M. This divergence highlights a potential rotation away from emerging market bonds, despite overall balanced flow counts - 135 outflows versus 138 inflows. The focus on ESI and similar equity themes suggests traders are positioning for a risk-on tilt, but the heavy outflow from EMB underscores underlying caution. Next, watch whether inflows in ESI hold and expand, confirming a more sustained shift away from bonds. A sustained bid in ESI could signal a broader equity flow, but the concentrated nature of the move keeps the risk of abrupt reversals high.