Animal Spirits Podcast - Talk Your Book: Investing in High Yield Munis

Episode Date: June 16, 2025

On this episode of Animal Spirits: Talk Your Book, ⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠ are joined by Steve Hlavin, Portfolio Manager at Nuveen to discuss the muni market structure, the best states for muni bonds, risks around deficits and liquidity, and much more! Find complete show notes on our blogs... Ben Carlson’s ⁠⁠⁠⁠⁠⁠⁠A Wealth of Common Sense⁠⁠⁠⁠⁠⁠⁠ Michael Batnick’s ⁠⁠⁠⁠⁠⁠⁠The Irrelevant Investor⁠⁠⁠⁠⁠⁠⁠ Feel free to shoot us an email at ⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠ with any feedback, questions, recommendations, or ideas for future topics of conversation. Check out the latest in financial blogger fashion at The Compound shop: ⁠⁠⁠⁠⁠⁠⁠https://www.idontshop.com⁠⁠⁠⁠⁠⁠⁠ Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠⁠⁠⁠⁠ The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits Talk Your Book is brought to you by Nauveen. Go to Nuveen.com to learn more about the Nuveen Enhanced High Yield Municipal Bond Fund. That's ticker NMSSX. We'll talk on it on a show today. That's Nuveen.com to learn more. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast.

Welcome to Animal Spirits with Michael and Ben. Michael, one of the themes on our talk your book segments that I've come to realize is that there are more corners of the market, especially in the credit space, than I think most people realize. There's a lot of different ways to finance projects, businesses, investments than you realize. And this is one of those spaces. So Nauvin has this high-yield muni-bond fund. And it's an interval fund because these are relatively illiquid securities.

But it makes sense in that they're muni bonds that fund these projects. These projects are sort of uncertain. So that's what makes them. And they don't, these bonds don't trade very much. But there's just so many corners of the credit market that, like, I think a lot of people don't even realize exist. That's right, Ben. So this is one of those conversations where a lot of new things for Ben and I, a lot we

didn't know. So I hope you enjoy our conversation with Steve Lavin from Nivian. Steve, welcome to Animal Spirits. Thank you very much. It's a pleasure to be here. Okay. So you are a high-yield municipal bond manager. And I have a question just about municipalities in the hole, and then we can kind of drill down into the strategy.

But you obviously remember the Meredith Whitney prediction that all these municipalities were going to go bankrupt back in the 2010s, and it was a big story, and it got people all worried. My understanding is, because of all the fiscal support sent out during the pandemic, that a lot of municipalities are in much better shape than they were back then because of this. Is that a true reading of the situation? Yeah, it's true. And then there's more to the story. In hindsight, a lot of that stimulus was unnecessary because the expected massive contractions and tax revenue collections didn't occur. Actually, the contrary happened.

We had huge increases in sales tax revenues, while income revenues and property tax revenues continue to grow on top of that. The story in the market this year, and to a lesser extent to every year, but certainly this year, is the deficit. and its impact on treasury issuance and rates are moving higher with that. I'm curious to learn more about the municipal bond market. How are cities compared to the federal government? Like, are they funded?

Are they running severe deficits? What does that look like? Yeah, you know, the big difference between state and local governments versus the federal government is that they cannot, you know, deficit finance themselves, right? they have to balance their budgets. And so you don't see large surges of municipal bond issuance just because there are growing budget deficits. I mean, that just doesn't happen. I mean, they can run deficits, but then they have to balance that with rainy day funds

or increase revenues on the other side, eventually, right? They just cannot grow and grow and grow because they can't print their own money. And so while the municipal bond market is positively correlated to, to Treasury yields, there are a lot of other technical factors that impact municipal bond yields. Such as? Primarily, fund flows and issuance. So, for example, this year, we are seeing a continuation of record issuance. So therefore, in the first quarter of 2025, municipal bond market was the worst performing fixed income asset class, even over and above what was happening to the treasury yield pressure.

And that was because of a huge surge of supply. Why is there so much supply, given where rates are? Is that just because, I mean, obviously they would prefer to not issue new paper at these levels, but I'm guessing they have no choice in the matter? Yeah, there is somewhat of a no choice in the matter effect here, because a lot of this is project financing. And projects just cost more. If you just consider the cumulative run-up in inflation, since inflation started to increase,

coming out of COVID, it just costs more to build. And so, you know, you think about, you know, just the cumulative run-up in CPI is a little bit more than 25%. You know, a 25% increase in supply is not surprising under that context. But then there are other factors, policy factors. And so even the rhetoric or the rumors of possibly limiting or eliminating the tax exemption has pulled a lot of supply forward. And there's also fears that rates might continue. to rise further in the future from treasury pressure. And so a lot of dealers and bankers are encouraging their issuers to get to market sooner. So there's just this pull forward and a lot of

supply. Obviously, that will balance itself out as we get into the later stage of the year. But at this point, we are running at another record pace of issuance, even over and above last year, which was a record number of issuance. Michael is more of a gambler than me. So he likes to speak in odds a lot of times. So if you had to put that, that idea of they're going to do away with tax exempt status of municipalities, my thinking would be that's a very low probability event. You'd have to give me a plus 1,000 or something on that to make that worth the bet. Is that a pretty low probability outcome for you as well? Yeah, and the odds just felt considerably. I mean, the odds were already very, very low, and the odds fell considerably when the first draft of the

big, beautiful bill came forward. There is no mention of that. It was just, it was just, it was just the idea that in the past, when we're talking about covering large deficits in a new tax bill, oftentimes they do throw the muni exemption in there as a starting point. And then it's been taken out. But in this case, it wasn't even in there to start. So high yield municipal bonds. What are we looking at? What does that opportunity set look like? What sort of coverage ratios? Well, I guess I guess you said these are fully funded, but what makes something high yield. Is this like sketchy neighborhoods or what exactly? Yeah. I mean, that's right. That's, that's the misconception often held is that when you say high yield municipal, you think of a

sketchy, blown investment grade local government, right? But what we are really talking about are infrastructure project revenue bonds and what we really should be calling them are U.S. infrastructure bonds. That's a much better brand. You should do that. Right. Totally. We love that word. It's infrastructure, it's U.S., and the ironic thing here is that, you know, with all this talk about tariffs and repatriating manufacturing and industry, fundamentally speaking, high-yield municipalities, which funds the majority of our nation's infrastructure, should be a large beneficiary, but yet we're seeing that tariff volatility spill over into our market from a technical standpoint. So going back to like the main theme here, you know, high-yield municipal bonds are

project revenue bonds. They have some common features to them. One, they typically are financing the construction and then the operation of a new infrastructure project. And they vary across a lot of sectors, healthcare, education, utilities, transportation, land development, individual site project development. And then they should, you know, best underwriting practices, be secured by the underlying collateral, the physical. project itself, the land, the property, the building, etc. And then the bonds are secured by a dedicated revenue stream associated with that specific project. Now, sometimes these projects can have the backing of a state and local government kind of as a security backstop. But your

ultimate risk here is in the construction of the project. Will it be built on time? And as designed, no cost overruns. Will it be turned on? Right? So you have to be. to go through a ramp-up period. And then is it going to be used over the life of the bonds, right? So you have construction risk, ramp-up risk, and operational risk. But as you resolve those three phases of risks, then you can progress a high-yield below-investment-grade bond closer to that investment-grade category. And then the bonds are typically called. Most successful high-yield mini-bonds do not last until their stated maturities. Oftentimes, they are called because of the success of building it, turning it on, and,

operating it. So what is the feature that makes these high yield or below investment grade? Like, what is the reason for it? Is it just because of the nature of these projects that they're uncertain? Yeah, at start, they're speculative. So at the very beginning, oftentimes, what you're dealing with is a plot of dirt, right? So you issue the bonds to build the infrastructure piece. And so it is speculative. There is no certainty that the project can be built. There is no certainty that it will ramp up. And there's no certainty that there will be utilization to service the bonds. But as the project progresses in its life cycle, those risks, right, get either partially or fully resolved. I'm looking at your website and there's a lot of, I like what you're doing

here. I like what you're doing here. You've got the maturity breakdown. You've got top states and territories, sector allocation, credit quality, credit to you guys, very well done on the visuals here. Thank you. What stands out to me, and there's a few things, but I'll start with this. almost 84% of the portfolio as of the end of April 2025 are not rated. What does a not rated municipal bond look like? Why are they not rated? I don't know. This is a bit foreign to me.

Yeah. And it oftentimes appears that way to folks that aren't inside the baseball game. And the reality is that... Oh, I'm in the game. No, I'm just kidding. I'm not. Go on in. The water's warm.

Non-rated is the heart and soul of the high-old mini market. The reality is that the vast majority of the existing high-old mini market is non-rated. If you look at just the trailing last three years, over 80% of all new issuance has come non-rated. It's just inherently what the market is. And so why, right? Well, most high-old mini issuances are small to medium size. Obviously, there's the big blockbuster deals, the billion-dollar plus deals. There's several of them throughout the year.

But your typical high-y-old-bony bond issuance is going to fall into that like $500 to $200 million range. It's going to be, as I said, speculative nature. So it's not, doesn't have a chance to get an investment grade anyway. And you're selling to institutions. You're not selling high-old muni bonds to retail that need the public coverage. They need the public rating. They need someone to do research for them. Institutions should be doing their own independent research.

And so why pay for a rating? Why? And so a lot of issuers just don't choose to go out and say, oh, well, I'm going to pay a fixed amount of cost. It's going to drive up my borrowing costs and I'm going to get a B-minus rating anyway. Is there a size component where it's over a certain dollar amount or I guess under a certain dollar amount that just doesn't make sense going to be prohibitively expensive? Yeah. I mean, it's obviously the discretion of the issuer, but there's a fixed amount cost to getting a rating. Usually it's several hundred thousand dollars. And so, you know, why pay? that when all it's going to do is, you know, lower your, the economies, right, and your project. You know, even large issuers oftentimes do come non-rated because they're too complicated. That's the other part of the reason why there are non-rated bonds is that you got to fit inside a box for a public rating agency.

You have to fit inside a methodology. And I'll use World Trade Center for an example because everyone knows that project, right? Municipal bonds financed the construction and the lease-up period of World Trade Center number three. And it did not get a rating from the regaining agencies because at that time, the bonds were issued, there was construction risk and lease-up risk. And the rating agencies had a model for either or not both. They didn't have a hybrid model. And so therefore, it was non-rated. And so oftentimes these structures are just too complicated, and they don't fit inside the established methodologies.

So what kind of spread are we looking at here in high yields, like, or what type of spread are you looking for? for in your portfolio over other, you know, higher-rated munis or the tenure, I guess. Yeah, I mean, the average high-yield muni spreads are just inside 200 basis points right now. And to someone who has more experience in the high-old corporate market, you're like, oh, that's really tight. Well, high-old means- Yeah, I was just said, that doesn't seem like a lot of juice. Yeah, right? It's not compared to the high-old corporate market.

And the reason, there's a lot of reasons why, but the basic explanation is that there's not as much risk. If you just look at default risk historically, high-old munis, substantially less than high-yield corporates. I mean, Moody's has the longest historical default study out there. They look at everything they've rated going back to 1970. And if you just kind of take the midpoint, right, that double B category of high-yield, high-yield municipalities have an average 10-year cumulative default rate that's about 20% of the same

rated high-old corporates. And then on top of that, the recovery values are substantially higher within that category. So there's just less risk. And there's better collateral involved. So at 200 basis points, that's kind of around like the historical midpoint. Now, you can get higher. Like when you look at, you know, COVID, for example, or if you look at the summer of 2013, you know, both of these periods when you have a lot big outflows and cause spreads to blow out,

you can get 300, 350 basis points. It's usually where it starts, it caps off, is in that mid-300. basis points, because at that level, you're starting to talk about tax equivalent yields that are now going to start competing with high-old corporates, right? So that's that other piece of it is that that tax exemption kind of keeps a ceiling on how high spreads can get in our space. It can get a lot tighter, right? So the historical tights, if you go back to like the early 2000s, you go to the credit bonanza

of 2007, or even if you get into like the summer of 2016 when things were really tight, you can get around plus 100 basis points on average. So we're kind of in that midpoint right now. And I would argue that spread should be a lot tighter, just given the strength of high yield muni credit currently. I'm looking at the top states and territories. And Colorado is number one as of the end of April 2025. It was 18%.

What's going on there? Weed farm infrastructure. Yeah. Well, look, I mean, the top states, right, Colorado, Florida, Texas, right, are right up there. And Wisconsin. And so Wisconsin, let's put that aside for a second. Okay. We'll hold Wisconsin aside. That's very misleading. But we'll explain it. But the three states to pick on right now are Colorado, Texas, and Florida. So what three, what do those three states have in common, right? Population growth. Demand for infrastructure. And so that explains. explains that. We're not, we don't have a top-down view. We say, oh, let's go buy a bunch of projects in the states. Those overweights are a byproduct of cumulative credit selection opportunities because we're finding more infrastructure demand and more infrastructure development in those particular states. And so what are they, right? Well, it's land and community

development. It's education primarily charter schools. Charter schools are very necessary when you have strong population growth, strong home formation because it puts a lot of pressure on the public school system and charter schools play very important release valve, right, in those dynamics. And then also transportation and health care. So when you take those types of those four sectors, that explains the vast majority of those overweights. So because a lot of these bonds are not rated, does that make it, is that one of these things where it's an overlooked sector? Maybe this is a softball question for you? But it seems like a lot of, I'm guessing a lot of family offices or certain investors, maybe have guidelines where they can't own non-rated bonds.

Does that make it easier for you as an investor to pick through the winners and losers? Yeah, a lot of independents do have those restrictions. I mean, for example, we have some institutional accounts where there are restrictions just like that, right? They want to see and have transparency in what they own. So therefore, the non-rated space is naturally inefficient. right everyone's going to have a difference in opinion on what a credit rating should be and why and therefore there should be differences in an opinion on what that bond is worth what the spread should be worth what the yield should be worth what you know price obviously um and so to operate

effectively uh in this space you have to be able to do your own research independent research is is critical um we have 25 dedicated municipal bond research analysts the average years of experience is 20 years of experience is 20 years. They're all a sector specialists. They will follow these issuers for their entire career. They get to know them better than the operators. For example, we have some hospital analysts that have followed credits and they have seen, you know, CFOs come and go over and over and over, and they just know the hospital better than they do, right? It's all about independent research. And even within the peer group, you see huge variations in terms of the size and the dedication and the experience of research staff, even within the high yield

meaning fund manager space. How long do these projects take to complete? Because I'm looking at the maturity breakdown, and it's a lot of years. Yeah, it is. It is a lot of years. These are long-dated assets, and so it's long-dated debt, right? So you just think about the asset liability matching that's required, right? These are long-dated assets.

The bonds are designed to be paid by the, you know, the bonds. these revenue streams that can be stretched out of the useful life of the project. But as I said earlier, the reality is that bonds don't usually last until their stated maturity. Most high-old-mini bonds have features like sinking funds, mandatory turbo redemptions, and call options. So does the duration of your fund end up being a lot lower than the maturity profile then? Yes. Yes. So if you look at a high-y-bony bond, it's pretty typical. If they have like an average maturity of 20 years, the duration is going to be closer to like 10, 12, right? So there's just a lot of optionality. So option adjusted statistics are very important, right? It's, you know, you think

about high yield meaning, you think credit, there's a lot of quant that goes into high yield meaning bonds. There's just so many structural features and high yield many bonds that make valuation opportunities even more prevalent in our space. So it's not just about credit. Sorry, it's hard to cut you off. And these municipalities obviously want to pay them off earlier. Yes. So they want to pay them off earlier. Yes. So they want to the optionality, right? Because if they can build it and they can ramp it up and they can show that, hey, look, everyone's coming to our project. We're using it. We're getting debt service coverages of, you know, two plus times. Then you can go to rating agency and plead your case and

say, give me an investment grade rating. Then you get your investment grade rating. You come to market, call your bonds, and you refund. There's a lot of refunding opportunities in high million market. So there's a lot of negotiation that should go on. Not everyone has that type of pricing power, but when you do, you want to use it and make sure that not all the optionalities in the favor of the issuer. You want to wrestle some of that back and engineer some of your own positive convexity. So when we look at a high-yield money bond, we want to buy it at a discount on new issue, and we want to make sure that the call features take us out at a premium. And so you typically buy something kind of in the mid-to-high 90s, and you're typically taken out,

somewhere in the low to, you know, mid-tenths, right? So like 103-105 call is pretty common for the high-lemeny bonds that we buy. Why would the bond trade it a discount when it's offered? It's part of the negotiation. It's what bondholders. Just to attract investors? Yeah, exactly. It's part of that negotiated deal process.

Ben, if you look, you don't know the power of being bald. If you look like Steve and you come with a big pile of cash, you've got favorable terms. That's right. There's a lot of pricing power that you've got to throw around. And it's not just about size. It's about expertise. So having a research analyst is very important because they're not just looking at the deals

as printed. They are talking to the bankers and the issuers weeks, if not month before they come to market, kind of impressing upon them our best underwriting practices and saying, look, if you have these security features and this bond structure and this type of collateral package, these are the best practices for this particular sector, you're going to increase the likelihood you're going to have a successful deal and your underwriting risk goes down, right? The risk of the underwriters, they do it themselves. They come to market and no one shows up and they promise their issue or, hey, we're going to get

this deal done. Well, I'm going to take down all these bonds and now I've got to go sell them in the secondary market, right? So they want to know that they're going to have a successful deal. So there's negotiations for deal structure is really, really important in this space. How much, I assume that these bonds that you're buying are being held to maturity, obviously some of them are being called away. So what does a turnover end up looking like in this fund?

Yeah, there isn't a lot of turnover from our perspective, right? We are, you know, first and foremost, long-term fundamental investors, right? But that doesn't mean we hold everything to maturity. There's still a lot of relative value opportunity in the secondary market. So the turnover is typically driven by two things. Relative value swapping, right, when, you know, swapping the inefficiencies in the market selling something that we view too rich, buying something we see too cheap, right? I'm obviously oversimplified it, but that's basically it.

And then there's, and then there's a lot of tax efficiency management. So turnover can also be driven by what we call yield harvesting, where you're harvesting tax losses and rebooking at higher embedded yields for the portfolio that then can support the number one goal in a high-earned uni product, which is to maximize the level of tax-exempt income. I'm not going to lie. We've had clients in the past where it's hard to get them

because it's essentially phantom income, right? That the tax savings are phantom income. So sometimes we have to show them the actual tax equivalent yield to make it make sense, right? Right, and we love to do that. It's eye-popping when you're in an environment like today. Right?

The average yield of the Barclays-Bloon index right now is around a 580, right? Obviously, active managers should be doing a lot more. Products like an interval fund can do that because they're better set up to take advantage of yield opportunities. But yes, you're pushing high single digits in terms of the taxable equivalent yield, and that's going to beat anything in the high-yield corporate market that's talking about a performing bond.

And that's before you would even risk-adjust it. Again, let's go back to our comments about the lower defaults and the higher recoveries. And with active management, you can really minimize that. Steve, for people that want to learn more about the fund, what type of structure is it? So it is an – it's called an interval fund. We did not invent the machine we borrowed it, right? Interval funds have been out there for a while. But the whole concept of an interval fund is to provide interval liquidity.

You can buy into it with daily subscriptions. It trades with a ticker, right? It has a daily NAV strike. It pays a monthly dividend. So from that standpoint, it looks and talks just like a mutual fund. But you don't have access to daily liquidity. And this really gets down to like the whole philosophical concept of the product, taking advantage of the expanding illiquidity premium in our market.

And so it's not for everyone. You know, interval funds do not offer daily liquidity. And so the investor has to consider that tradeoff, right? I don't want or need all of my high yield immunity exposure to be daily liquid. So why am I using a daily liquid product where that liquidity, profile, the need to offer daily liquidity is a constraint. So you give more of that illiquidity premium to us to deploy. That's the whole point. So the tradeoff is that I will forego daily liquidity for quarterly liquidity. That's what you get in an annual fund. And with that,

I should demand higher income, higher total returns. I am deploying more of that liquidity risk or illiquidity premium into the market. So is just, is the reason for that just because these bonds are relatively illiquid? They don't trade all that often? Liquidity risk is really important on our market. I mean, even investment-grade munis, right? If you just look at the exact Q-Sips, there's a very small fraction of muni bonds that trade on a daily basis. And that's even more so for high-old muni. Liquidity is a finite thing. It is a discriminatory thing in our market. And liquidity has to be engineered. It has to be produced. And so when you're trying to manage a product that needs daily liquidity, you have to

actively produce that as a manager. And we'll fully admit that that is a constraint, right? It is an imposing mandate of maximizing income and return. And so managing a daily liquid mutual fund is ultimately an optimization exercise, right? I've got these two mandates, maximize income and return, offer daily liquidity. If you can lessen that liquidity constraint, you can do more with the other mandate of maximizing income and return. I think there is a common misconception that high-yield munis are ill-liquid. They're just, they're oftentimes just less liquid. They're liquid, but they're just less liquid.

They have, you know, that liquidity has to be produced. There are areas of the high-led muni market that are highly liquid, though. There are some non-rated high-yield monies bonds that are as liquid as some investment-grade paper. You'll look at like the high-beta areas of the, the high-yield mini market like tobacco securitization bonds or the restructured Puerto Rico bonds, right? Not the defunct defaulted ones, but the new ones like the government bonds and the sales tax bonds, those are highly liquid. And so the high beta areas of the market, you can trade vast sums in them. Now, they can be really volatile from a spread standpoint, but they're still

highly liquid. And there's a lot of non-rated bonds that are still liquid for us because there's enough comparisons out there. Observable comps is what you're looking for. And so say within like the charter school sector, you could have a charter school in Colorado that hasn't traded in a while, but there might have been several others in Colorado that were issued around the same time in the same area that offer comps to other market participants that helps make that other charter school that hasn't traded more liquid. So Steve, one of the things about this product that people need to understand is, I know we mentioned it briefly, but maybe just further clarification on the lack of liquidity.

Yes. The illiquidity premium and the muni market has been expanding since the financial crisis. If you just simply just look at the growing expansion of mutual fund assets under management, it has just been growing, growing, growing. At the same time, that ownership of municipal bonds by banks and dealers has been declining. And so what that has done is it has created a larger supply demand and balance. And so the market is balanced as long as mutual funds are liquid and getting inflows. But what happens when mutual funds started getting sizable outflows?

The liquidity scale tips very quickly. And there's not a big enough buyer to go meet the size of liquidity demands that are now being produced by mutual funds. And so the muni market can easily get dislocated from technical pressures outflow. It does. We've seen it. Yes, we just saw it on April 9th, right? The Ennable Fund, to me, is a really interesting, like, vigilant response of the market, right? The market is, like, you know, challenging us to produce some type of solution, even a partial solution.

And I think the interval fund does that. You know, if you just think about if all mutual funds in the muni market were integral funds, we wouldn't have weeks like April 9th, right? but because we do, let's produce products that can take advantage of those things to make sure that they are just always cash flow positive and have ample time to produce liquidity when they need to. Right, because this fund structure forces you to be a long-term investor. So that's the mindset going in.

Absolutely. I think it's a better marriage of the investor and the investment. We are investing in long-term projects. They have long-term bonds. And so using a bond that is tied to a long-term project that takes several years to build, to ramp up, right, to start operating, you know, if you force liquidity on that thing when you're in the middle of those risk phases, you're going to be forced to take some illiquidity premium. You're going to have to, right, because you're forcing uncertainty to be priced. And so it is just, it is. It is a better marriage of the investor and what we're actually investing.

All right, Steve, for people who want to learn more about this fund, where should we send them? Go to our website, nubene.com. The tickers, NM-S-S-S-X. Again, that's one of the benefits of an annual fund is it has a publicly traded ticker. It has daily transparency. And on the website, you can find the fact sheets. You can find the daily statistics. And you can also follow it, you know, on any Bloomberg tournament. Perfect. Thanks a lot, Steve. Thank you. All right. Thanks. Thanks. Steve, again, go to Nuveen.com, learn more about this fund, and email us, Animal Spirits at

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and may change without notice at any time based on numerous factors such as market or other conditions, legal and regulatory developments, additional risks, and uncertainties, and may not come to pass. This material may contain forward-looking information that is not purely historical in nature. Neither Neveen nor any of its affiliates or their employees provide legal or tax advice. Please consult with your personal legal or tax advisor regarding your personal circumstances. Tax rates and IRS regulations are subject to change at any time, which could materially affect the information provided herein. Important information on risk. Past performance is no guarantee of future results. All investments carry a certain degree of risk, including

the possible loss of principle, and there is no assurance that an investment will provide positive performance over any period of time. Debt or fixed income securities are subject to market risk, credit risk, interest rate risk, call risk, tax risk, political and economic risk, and income risk. As interest rates rise, bond prices fall. Credit risk refers to an issuer's ability to make interest in principal payments when due. Investing in non-investment grade in unrated bonds, as well as special situations, municipal securities, with long maturities and durations carry heightened credit risk, liquidity risk, and potential for default. In addition, strategies that utilize a significant amount of leverage assume a high level of risk in pursuit of its objectives.

Leverage involves a risk that the strategy could lose more than its original investment and also increases the strategy's exposure to volatility, interest rate risk, and credit risk. An Interable Fund is a non-diversified closed-end management investment company that continuously offers its common shares. An Interable Fund is not intended to be a complete investment program, and due to the uncertainty inherent in all investments, there can be no assurance that the fund will achieve its investment objectives. In Interable Fund's performance and the value of its investments will vary in response to

changes in interest rates, inflation, the financial condition of securities issuer, ratings on a security, perceptions of the issuer, and other market factors. Common shares at any point in time may be worth less than your original investment, even after taking into account the reinvestment of the fund dividends and distributions. These and other risk considerations are described in more detail on the funds webpage at newbeen.com slash h-y-if. Before investing, carefully consider the fund investment objectives, risks, charges, and expenses, For this and other information that should be read carefully, please request a prospectus or summary prospectus from your financial professional or Nouveen at 800-257-87-87-N-Vine LLC provides investment solutions through its investment specialists. 454-359.