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- [00:00]
Michael Batnik
Today's Animal Spirits Talk. Your book is brought to you by nuveen. Go to nuveen.com to learn more about the Nuveen Enhanced High Yield Municipal Bond fund. That's ticker NMSSX. We'll talk about that on the 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 Carlson 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 Ritholtz Wealth Management. This podcast is for information purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz 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.
- [01:01]
Ben Carlson
Great.
- [01:01]
Michael Batnik
There's a lot of different ways to finance projects, businesses, investments than you realize. And this is one of those spaces. So Nuveen has this high yield muni bond fund and it's an interval fund because these are relatively illiquid securities, but it's, it makes sense. And they're muni bonds that fund these projects. These projects are sort of uncertain, so that's what makes them. They, they don't. These bonds, bonds don't trade very much, but there's just so many corners of the credit market that I think a lot of people don't even realize exist.
- [01:35]
Steve Lavin
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 Nuveen.
- [01:48]
Michael Batnik
Steve, welcome to Animal Spirits.
- [01:50]
Ben Carlson
Thank you very much. It's a pleasure to be here.
- [01:52]
Michael Batnik
Okay, so you are a high yield municipal bond manager, and I have a question just about municipalities in the whole. 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?
- [02:20]
Ben Carlson
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 in 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 continued to grow on top of that. So when the dust settled, state and local governments were in the strongest position. They had been really in recorded municipal bond history.
- [02:57]
Steve Lavin
The story in the market this year, and to a lesser extent 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?
- [03:23]
Ben Carlson
Yeah, the big difference between state and local governments versus the federal government is that they cannot 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. 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 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.
- [04:33]
Steve Lavin
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.
- [04:43]
Ben Carlson
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 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 the, 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.
- [05:58]
Michael Batnik
Michael's more of a gambler than me, so he likes to speak in odds a lot of times. So if you had to put that idea of they're going to do away with tax exempt status of municipals, my thinking would be that's a very low probability event. You'd have to give me a plus 1000 or something on that to make that worth the bet. Is that a pretty low probability outcome for you as well?
- [06:17]
Ben Carlson
Yeah, and the odds just fell 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 of that. It was just, it was just the idea that in the past when we're talking about covering large, 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.
- [06:46]
Steve Lavin
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 you said these are fully funded, but what makes something high yield? Is this like sketchy neighborhoods or what? Exactly.
- [07:05]
Ben Carlson
Yeah, I mean, that's right. 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 US infrastructure bonds.
- [07:25]
Steve Lavin
That's a much better brand. You should do that.
- [07:27]
Ben Carlson
Right, Totally. We love that word. It's infrastructure, it's us. And the ironic thing here is that with all this talk about tariffs and repatriating manufacturing and industry, fundamentally speaking, high yield municipals, 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, under best underwriting practices, be secured by the underlying collateral, the physical project itself, the land, the property, the building, et cetera. 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, as, as designed, no cost overruns, Will it be turned on? Right, so you have 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.
- [09:29]
Michael Batnik
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?
- [09:37]
Ben Carlson
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.
- [10:08]
Steve Lavin
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, on the visuals here.
- [10:23]
Ben Carlson
Thank you.
- [10:23]
Steve Lavin
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.
- [10:40]
Ben Carlson
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.
- [10:51]
Steve Lavin
No, I'm just kidding. I'm not.
- [10:53]
Ben Carlson
Come on in, the water's warm. Non rated is the heart and soul of the high yield mini market. The reality is that the vast majority of the existing high yield 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, it's just inherently what the market is. And so why. Right. Well most high yield 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 yield muni bond issuance is going to fall into that like 500 to $200 million range. It's going to be as I said, speculative at 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 yield muni bonds to that need the public coverage. They need the public rating. They need, 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 don't, just don't choose to go out and say oh well, I'm going to pay a fixed amount of costs, it's going to drive up my borrowing costs and I'm going to get a B minus rating anyway.
- [12:05]
Steve Lavin
Is there a size component where it's over a certain dollar amount or I guess under a certain dollar amount? It just doesn't make sense because it would be prohibitively expensive.
- [12:13]
Ben Carlson
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 why pay that when all it's going to do is lower the economies and your project. 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, I'll use World Trade center for an example because everyone knows that project, right? Municipal bonds finance the construction and the lease up period of World Trade center number three. And it did not get a rating from the rating 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, these structures are just too complicated and they don't fit inside the established methodologies.
- [13:19]
Michael Batnik
So what kind of spread are we looking at here in high yields? Like, or what type of spread are you looking for in your portfolio over other, you know, higher rated munis or the ten year. I guess.
- [13:27]
Ben Carlson
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 yield corporate market, you're like, oh, that's really tight. Well, high yield, yeah, I was going.
- [13:39]
Steve Lavin
To say that doesn't seem like a lot of juice.
- [13:41]
Ben Carlson
Yeah, right. It's not compared to the high yield 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 yield munis default 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 municipals have an average 10 year cumulative default rate, that's about 20% of the same rated high yield 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, 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. That'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 yield corporates. Right, that's that other piece of it is that that tax exemption kind of keeps a full or 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 Munich credit.
- [15:33]
Steve Lavin
Currently I'm looking at the top states and 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.
- [15:47]
Ben Carlson
Yeah, well, look, I mean the top states, right, Colorado, Florida, Texas. Right. Are right up there. And so Wisconsin. And so Wisconsin. Let's put that aside for a second.
- [15:57]
Steve Lavin
Okay, we'll hold the ball.
- [15:58]
Ben Carlson
That's very, that's very misleading. But we'll explain it. But, but the three, the three states to pick on right now are Colorado, Texas and Florida. So what, three, what, what do those three states have in common? Right? Population growth, demand for infrastructure. And so that explains that we don't have a top down view or 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 in those dynamics. And then also transportation and healthcare. So when you take those types of those four sectors, that explains the vast majority of those overweights.
- [17:02]
Michael Batnik
So because a lot of these bonds are not rated, does, 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?
- [17:23]
Ben Carlson
Yeah, a lot of independents do have those restrictions. I mean, for example, I mean we have some institutional accounts where there are restrictions just like that, right? They want to, they want to see and have transparency in what they own. So therefore the non rated space is naturally inefficient. 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 opinion on what that bond is worth, what the spread should be worth, what the yield should be worth, price, obviously. And so to operate effectively in this space, you have to be able to do your own research. Independent research is critical. We have 25 dedicated municipal bond research analysts. The Average years of experience is 20 years. They're all 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, it's, 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 Munich fund manager space.
- [18:47]
Steve Lavin
How long do these projects take to complete? Because I'm looking at the maturity breakdown and it's a lot of years.
- [18:54]
Ben Carlson
Yeah, 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 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 they're stated maturity. Most high yield munds have features like sinking funds, mandatory turbo redemptions and call options.
- [19:29]
Michael Batnik
So does the duration of your fund end up being a lot lower than the maturity profile then?
- [19:33]
Ben Carlson
Yes. Yes. So if you look at a high yield muni 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. There's just a lot of optionality. So option adjusted statistics are very important. Right. It's, you know, you think about high yield munion, you think credit, there's a lot of quant that goes into high yield muni bonds. There's just so many structural features in high yield muni bonds that make, make valuation opportunities even more prevalent in our space. So it's not just about these credit.
- [20:04]
Michael Batnik
Sorry, sorry to cut you off. And these municipalities obviously want to pay them off earlier.
- [20:08]
Ben Carlson
Yes. So they want the optionality. Right. Because if they can, 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, two plus times. Then you can go to a 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 yield meeting markets. So 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 optionality is in the favor of the issuer. Right. You want to wrestle some of that back and engineer some of your own positive convexity. So when we look at a high yield muni 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, mid tens. Right. So like 103, 105 call is pretty common for the high yield, meaning bonds that we buy.
- [21:12]
Michael Batnik
Why would a bond trade at a discount when it's offered?
- [21:16]
Ben Carlson
It's part of the negotiation. It's what bondholders.
- [21:20]
Michael Batnik
To attract investors.
- [21:21]
Ben Carlson
Yeah, exactly. It's part of that negotiated deal process.
- [21:27]
Steve Lavin
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 got favorable terms.
- [21:34]
Ben Carlson
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 months 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. The risk of the underwriters, they do it themselves. They come to market, no one shows up and they promise their issuer, hey, we're going to get this deal done. Well, I'm going to take down all these bonds and now I got to go sell them in the secondary market. So they want to know that they're going to have a successful deal. So there's negotiations for deal structures. Really, really important in this space.
- [22:33]
Steve Lavin
How much? I, 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, what does the turnover end up looking like in, in this fund?
- [22:42]
Ben Carlson
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, there's still a lot of relative value opportunity in the secondary market. So there's a, 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 yield unity product, which is to maximize the level of tax exempt income.
- [23:32]
Michael Batnik
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.
- [23:47]
Ben Carlson
And we, we love to do that. It's eye popping when you're in an environment like, like today. Right. The, you know, the average yield of the Barclays Bloomberg High Yield Meeting 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 be 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.
- [24:28]
Steve Lavin
Steve, for people that want to learn more about the fund, what type of structure is it?
- [24:34]
Ben Carlson
So it is an, it's called an interval fund. We did not invent the, 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 trade off. Right. I don't want or need all of my high yield muni 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 trade off is that I will forego daily liquidity for quarterly liquidity. That's what you get in an interval 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.
- [25:56]
Michael Batnik
So is the reason for that just because these bonds are relatively illiquid, they don't trade all that often?
- [26:01]
Ben Carlson
Liquidity risk is really important in our market. I mean, even investment grade munis, if you just look at the exact cusips, there's a very small fraction of muni bonds that trade on a daily basis. And that's even more so for high yield 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. Right? And we'll fully admit that that is a constraint. Right? It is an imposing mandate of maximizing the 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 illiquid. 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 yield muni market that are highly liquid though. There are some non rated high yield muni bonds that are as liquid as some investment grade paper you look at like the high beta areas of the high yield meaning 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 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, that helps make that other charter school that hasn't traded more liquid.
- [28:20]
Steve Lavin
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.
- [28:31]
Ben Carlson
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 imbalance. 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, from technical pressures out.
- [29:21]
Steve Lavin
It does. We've seen it.
- [29:22]
Ben Carlson
Yes, we just saw it on April 9th. Right. The, the annual 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 interval 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.
- [30:04]
Michael Batnik
Right. Because this fund structure forces you to be a long term investor.
- [30:07]
Ben Carlson
So.
- [30:07]
Michael Batnik
You bet. Like that's the mindset going in.
- [30:09]
Ben Carlson
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 and start operating. 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, 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.
- [30:48]
Michael Batnik
All right, Steve, for people who want to learn more about this fund, where should we send them?
- [30:52]
Ben Carlson
Go to our website, Nuveen.com the ticker is NMSSX. Again, that's one of the benefits of an interval 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 on any Bloomberg tournament.
- [31:13]
Michael Batnik
Perfect. Thanks a lot, Steve.
- [31:14]
Ben Carlson
Thank you.
- [31:17]
Michael Batnik
All right, thanks to Steve. Again. Go to Nuveen.com to learn more about this fund and email us animalspiritscompoundnews.com this material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy, sell or hold a security or an investment strategy, and is not provided in a fishery capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor or suggest any specific course of action. Investment decisions should be made based on an investor's objectives and circumstances and in consultation with his or her advisors. The views and opinions expressed are for informational, educational purposes only as of the date of production writing 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 Nuveen 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 past performance is no guarantee of future results. All investments carry a certain degree of risk, including the possible loss of principal, 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 and principal payments when due investing in non investment grade and 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 the 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 interval fund is a non diversified closed end management investment company that continuously offers its common shares. An interval 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. An interval 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 Fund's webpage@nuveen.com HYIF 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 Nuveen at 800-257-8787. Nuveen LLC provides investment solutions through its investment specialist, 454-3559.