Episode 282: Discovering New Opportunities For Yield And Safety In The Municipal Bond Market

 

Stewart: Welcome to another edition of the InsuranceAUM.com podcast. My name's Stewart Foley, I'll be your host. Hey, welcome back and thanks for joining us. We've got a terrific podcast for you today, discovering new opportunities for yield and safety in the municipal bond market. And we're joined by Jim Kaniclides, who's the head of US Insurance. And Jeff Burger, CFA, senior portfolio manager, municipal bonds for Insight Investment. Gentlemen, welcome. Thanks for taking the time. I'm thrilled. I love this topic. I was a former municipal treasurer, and can't wait to learn more.

Jeffrey: Thanks for having us, Stewart.

James: Thank you.

Stewart: It is a pleasure. Absolutely. I want to start off the way we always do, a little bit of the ‘get to know you.’ And Jeff, I'd start with you. Can you tell us a little bit about where you grew up, and what was the first job? Not the fancy one.

Jeffrey: Happy to be here, and thank you. I grew up in the Washington DC area, suburban Virginia. Which, in a lot of ways formed and really crystallized my interest in this world of municipal finance simply because of the emphasis on government, et cetera, in the DC area where so much of the local population has some role in the government, either directly or through the private sector. However, to get to this path today, I appreciate the question about interesting jobs. There was a long and, I would say, meandering path to get there. One of the more interesting jobs I had, and there were several, one of them was I was the guy that you went to talk to at United Airlines when your bags were lost.

Stewart: Oh, goodness.

Jeffrey: That was not a fun job. I worked at Dulles Airport, and I think I lasted four weeks over summers, they were a college summer. And it's one of those jobs where no one is happy to talk to you, and so you got to take it with a grain of salt. I started at 12 years old as a dishwasher.

Stewart: Oh, you have an illustrious career, early. That parallels with me with grass cutting and McDonald's. And I was a pool maintenance man for a minute for a Teamsters union holiday camp for their members, which was equally not glamorous as well. How about you, Jim? Where did you grow up, and what was your first job? Not the fancy one.

James: Well, I had a lot more tenure in my first job than either of you, apparently. I grew up on a map dot in Ohio. I grew up on a family farm. My first job, which lasted about 8 or 9 years through middle school, high school, and most of college, through summers and weekends and evenings, I spent doing concrete construction work. And then when that day was done, went to the family farm and worked until dark. And those were the most exhausting days ever. And my parents told me it builds character. Now, I'm not sure I still completely understand what that means, but I use it with my kids now. So, I like it.

Stewart: I like it. It is a work ethic that is hard to equal. When you work, particularly construction. And concrete in particular, concrete is just brutal. I have some friends that were in that business, and that is an unforgiving profession, if you will. Jim, I want to start with you here. Insurance portfolios are facing a shifting fixed income landscape. What are some of the key asset allocation trends you're seeing among insurers, and how are they adapting to today's market environment?

James: Stewart, as you know, the biggest shift we've seen is the search for yield has pushed insurers into newer asset classes. The biggest one is private credit, obviously, in the search for yield. And there are some risks associated with that. The biggest one, liquidity risk. On the other end of the spectrum, in their core allocations we're seeing a lot of considerations for liquidity in those portfolios. Intentional liquidity either in buckets of liquidity or in shaping guidelines to plan for liquidity, but searching for ways to maintain yield in the core allocations while still maintaining liquidity. And the other is quality. To add privates on the one end of the spectrum and the core portfolio still need to be very intentional with a high quality allocation there. It seems like we're in a little bit of a barbell environment. We're pushing for yield in one respect, but in the core allocation where yield is still important, there are some other considerations that have come to the forefront.

Stewart: I think that's a really interesting observation. As insurers take on more illiquidity risk, it makes sense to me that with the other portion of their portfolio they are concerned about quality and liquidity both. Jeff, the municipal bond market, and I mentioned at the top of the show I was the treasurer of the City of Columbia, Missouri. The home of the University of Missouri, my undergraduate alma mater. And that was such an interesting job. They owned all the utilities in town with the exception of the gas company. We had revenue bonds, we had general obligation bonds, we had all kinds of things outstanding, all kinds of things going on. It was an extraordinary experience for me in my career. But municipalities, it's deeply tied to the American form of government, where states and localities rely on municipal bonds for infrastructure financing. How has the market evolved over time, and what makes it unique within fixed income?

Jeffrey: Wow. The entire market is unique when you really pull back the curtain here and look at the roots of this market. One of the points that I find fascinating, and I'm particularly passionate about, is how this market literally is tied to the history of this country and the American form of government. As you mentioned, Stewart. If you roll back the clock in terms of where we originated from into where we've evolved to, and where we're likely to continue to grow, I think you have to at least spend a couple seconds looking at why this market exists and what makes it unique. When we broke away from the Brits in 1776, this notion of no taxation without representation, and local control, et cetera, was literally codified into the American DNA. And what evolved from that actually was the 10th amendment to the Constitution that effectively says that all powers not left to the federal government are left to state and locals.

And that's a portion of pride for Americans. Nowhere in the constitution does it address infrastructure. The federal government isn't required to fund infrastructure. They can choose to. And we all know about some bills that have been passed from time to time to address infrastructure. And the current president's talking about infrastructure in terms of AI, and Biden passed an infrastructure bill, et cetera. But that is somewhat unique. Because if you look at its core, most infrastructure in the public realm is funded at the state and local level. In 1812, which is 117 years prior to the issuance of the first Treasury bond, the first municipal bond that we're aware of was issued in the United States. It was issued by the city of New York to build a canal.

Stewart: That is so cool. I had no idea that's the case. That is big news for the cocktail hour of any fixed income group. That is such an interesting point, Jeff. I'm sorry to interrupt you. Go ahead.

Jeffrey: Not at all.

Stewart: I'm just excited. That's an interesting-

Jeffrey: Not at all.

Stewart: I'm so sorry.

Jeffrey: And I share that, it shouldn't surprise me given your background in our crazy niche world of municipal finance. This is all I've done for 27 years, and I just find it just so interesting. From that time the city of New York issued that bond in 1812 to where we sit here today, this market has grown through $4 trillion. Let me repeat that, $4 trillion with over 56,000 issuers. And one of the reasons I think that there's some opportunity in this market is because it is so diverse and fragmented across the United States. And someone might say, "Well, why do we have so many different issuers? And why is this so large?" Because that's a little bit inconsistent with this notion that Americans really want limited and local government. Well, that's not inconsistent when you think about it a little bit. The reason that there are so many governments across the United States is actually for the following reason.

If we were to stereotype Americans want a limited federal government, but actually enjoy local control. Local control, let it up to those states and the local communities to express their values and needs for infrastructure the way they see fit. And because of that, you have 56,000 issuers of municipal bonds spread across the United States. Each one of these governments is a separate credit. Each one of these issues debt in general for infrastructure.

Stewart, you mentioned earlier, you reside outside of Austin, Texas. What your community needs and wants and desires may be very different than where I am up in Boston. And so, the local finance regimes, what is needed for infrastructure really is predicated on that local control. Now, what we have in common, however, is yield and safety. In general, municipal bonds because they're funding hard infrastructure generally are natural monopolies that don't default. That's where the market is today. And a large part of it has evolved to so-called taxable municipal bonds that enjoy a really high yield. And where this market is going is really, really exciting. It's opening itself up to insurers across the globe, not only in the United States, but in global audience. They're recognizing this really under researched asset class that provides yield and safety.

Stewart: Yeah. It's funny, when I worked at the City of Columbia, we built a parking structure that was funded with municipal bonds. We built a sewer treatment plant that was funded by municipal bonds. And I always say to people, I'm like, the city of Dallas is not going to lever up and take over Fort Worth. And not only that, when you issue these things, they go to a vote. The financial projections are poured over by everybody and their relatives. And so, I take your point. Someone said to me years ago that Mississippi paid even during the Civil War. It's an incredibly durable asset class, in my opinion, in my experiences has been it's your financing projects that really matter to the local community.

Jim, when we... And Jeff touched on a little bit. But the way that I've always viewed these bonds is through a tax-exempt lens. That's changed. And so, can you talk a little bit about how municipals fit into insurance company portfolios, particularly in the current rate environment? And are there places on the curve where municipals have a competitive advantage over other places on the curve?

James: Municipal bonds have always been a big part of insurers allocation, Stewart. If we look back over the last 30 years, looking at the peak of the allocations according to the NEIC data, it was about 15% of all insurer as bond allocations in 2008. That percentage, though, has been steadily declining. And as you can imagine, the tax cuts and Jobs Act in 2017 accelerated that decline for tax-exempt bonds. The drop in the corporate tax rate made the tax benefit less valuable to insurers. And then, I'd say over the last couple of years the operating environment that particular PNC companies have experienced has also really diminished the desire for tax-exempt bonds.

Now, that's not to say though that municipal bonds don't have a place. When looking at the overall municipal bond market, the tax-exempt part of that market is obviously the largest part of that market. But the taxable part of that market, although much smaller, is an interesting place for insurers. Because you get a lot of the same benefits of owning municipal obligors, but you also get a more attractive yield because these are fully taxable municipal bonds. The reasons that municipal bonds are attractive for insurers today, even though the tax benefit is much less, make taxable bonds an interesting place to look for insurers to maintain an allocation to municipal bonds.

Stewart: Does it matter? Are they in a particular area of the yield curve? Is it a good source of duration, for example? Is that a fair statement?

James: Historically, the tax-exempt municipal bond yield curve has been much deeper than the treasury curve. When we have put municipal bond allocations into insurance portfolios, we did so in a more active way. It wasn't separate allocation to municipal bonds and a separate allocation to taxable bonds, and they're managed individually. We managed those in a much more active way. And because of the different shapes of the yield curve, we would always focus further out the curve for the municipal allocations, and then balance that with taxable allocations that may be shorter on the curve to manage the overall objectives in the portfolio. But that's the way historically we did that.

And I'll mention that the decline in the tax benefit attractiveness to these companies, and also the decline in the relative yields of tax-exempt municipal bonds have really made that what I'll call that crossover management of tax-exempt and taxable bonds a lot less attractive and something that we're doing a lot less for clients.

If we look at the relative yields, which I didn't mention earlier. But if we look at the relative yields of tax-exempt bonds to taxable bonds, and one of the ways we do that is to look at the ratio of AAA tax-exempt bonds to Treasury bonds. That's been declining pretty steadily over the last 10 years. That ratio for a 10-year maturity in 2015 was 101%. You could actually get more yield from a AAA tax-exempt municipal bond than you could for a Treasury bond. And today, over the last year, that ratio has averaged about 65%. It's been in steady decline. This search for yield has been one of the reasons why we've seen this interest shift from the tax-exempt into the taxable.

Jeffrey: I think it might be worth just explaining to your audience, real quickly, the differences other than the tax treatment for a taxable versus tax-exempt. As some might be left saying, well, what am I getting? What am I giving up if I'm going from taxable tax-exempt? As Jim so eloquently said, tax exempts by definition are tax-frees, and so you're going to have a lower yield by definition because they don't pay taxes on the interest. Taxables are fully taxable income. And so, depending on the tax status of the investor and insurance company, et cetera, there may be a lot of benefit of owning something that's taxable given their P&L or their tax situation at the end of the year.

However, it still has not adequately explained the difference other than these taxes between the taxable and tax-exempt. And again, putting my history cap back on, let's look at this market and how it's evolved once again. From that time, that 1812 when the New York City issued the bond for the canal, all the way up till 1986 from the time the United States issued or levied an income tax, all municipals were tax-free. Well, what happened in 1986? 1986, Reagan and Congress passed massive tax reform, reduced tax rates. And to offset those tax rates, the federal government said, "We can no longer afford to qualify all municipals as tax-frees. We'll have to perform a test at the time of issuance on eligibility, whether one bond is qualified as a tax-free or one is taxable."

And it simply has to do with what? The use of proceeds. What are the bonds being issued for? I'm going to overly simplify this, but if a bond is being issued to build local elementary schools, that will likely qualify as a tax-free investment. If Harvard University is going into a joint venture with a pharmaceutical company to develop a new pharmaceutical where they stand to make some money, if this is profitable, the proceeds of that issuance would be taxable. That would be a taxable issuance. That's it.

Stewart: Yeah, it's the public use, right? It's basically whether the bond benefits the community at large or if it's designed to benefit fewer than that. And that's the litmus test in general terms, yeah?

Jeffrey: In general terms, that's absolutely right. There's actually a cottage industry of attorneys who make this determination at the time of issuance. But notice, Stewart, the one thing we didn't mention is there's no required difference in credit. The same security that is supporting a tax-free is the same security that can be supporting the taxable. And so, you're not diluting credit quality by going from one to the other, you're picking up higher yield. And further to the point about the yield curve, one of the fascinating things about taxable issuance is it tends to be long-dated out the yield curve. It really makes sense for insurance companies that are so-called buy/maintain, or book yield focused and really just want to collect a really nice yield with very little probability of credit default, credit disruption, or volatility. That's where we're seeing interest.

Stewart: You've led me to my next question, which is for you as well, Jeff. There's a common belief that municipals are structurally underrated compared to corporates. And we can get into that, but one of the things that's always challenging is that a single A corporate and a single A muni, and a single A structured security, you can't compare those across food groups. There's differences. Can you explain why that is and how investors should be thinking about the credit quality of municipal issuers in general?

Jeffrey: Absolutely. And I feel like I should probably read a disclaimer here to say that it's just my opinion on the matter. Having started my career at a rating agency, I have a particular perspective on this one, and it's based on certain facts. And the facts are that if you look at the default probability of a municipal bond, it is a fraction of the historical default occurrence of a corporate. Let me repeat that, it is a fraction. The probability of a BBB-rated municipal bond defaulting is lower than one of the few AA corporates that remain. And that suggests one of two things. And we're looking at Moody's data going all the way back to 1970. It suggests one of two things. Either the muni, the municipal bond market is systematically underrated, or the corporate bond market is overrated. Both cannot be true. You can't have a default occurrence of a municipal is a fraction of what it is for corporates and say that the ratings across the board are the same.

Why is this the case? Well, effectively you have an oligopoly of three rating agencies that really manage the rating business. You have Moody's, S&P, and Fitch. If you look at the structure of the ratings business, you have some interesting incentives to rate things the way you do. And again, this is my opinion. The fact is that there's a phenomena in finance called prisoner's dilemma, because what can happen is the following. If the rating agencies truly were to normalize the rating scales between munis and corporates, either munis would have to be upgraded, where 90%, 95% are either AA or AAA, or corporates that have to be downgraded. Neither is in the economic interest of the three rating agencies. And this brings into the prisoner's dilemma scenario. Let me explain this real quickly.

If one of the three rating agencies were to, let's say, "You know what, Jeff, you're right. We got to upgrade all these municipal ratings." That probably is not good for their business. Why? Because this is a market, an industry where the issuer pays for the rating. And the issuer will say, "What the heck am I paying for if all of you guys are rating these bonds AA or AAA?" And if you're one of the two or the three rating agencies that decides not to do this, all of a sudden you're going to run yourself out of business. Because no one's going to want to buy your rating if you're under rating it. It also reduces the barrier to entry. Jim, Stewart, and I can all open our rating agency business tomorrow if all we're doing is rubber-stamping AAAs on many bonds, so that's not really good for my business. You commoditized it, you reduced the barrier to entry, and you've lowered cost.

Let's look at the other side of it. Let's say the rating agencies decide, "You know what, Jeff, you're right. We got to downgrade all these corporates." Well, you better hope that the other two rating agencies do the exact same thing. This is the prisoner's dilemma phenomena. Because if they don't, you run yourself out of business. Why in God's name would an issuer want to hire my rating agency if I'm systematically reducing or lowering, or putting low ratings on all the corporates while the other two are not? And you're going to have a lot of angry issuers if that were the case.

So you have, in my opinion, a market that has almost an arbitrage opportunity here because of a rating mismatch. In fact, if you look at yields today, and this is explained by scarcity value, AA corporate bonds actually yield less than AA taxable municipals by about 20 to 30 basis points. You're picking up far superior credit quality for the taxable muni, but you're getting higher yield. Why is that? Because there's such scarcity of AA rated corporates that investors are willing to pay too much for that name just because there's not a lot of them out there. That doesn't make sense, in my opinion. One of the reasons that I think investors really would be benefited by paying attention to this market.

Stewart: Yeah, it's a great point, Jim, just continue on that theme, compared to corporate bonds, municipals offer diversification benefits and lower volatility. It would be helpful if you could walk us through how insurers should be thinking about relative value between these two asset classes. And part of it is that the risk you're exposed to is fundamentally different in municipals versus corporates. I think that would be an interesting thing to walk through for our audience.

James: Yeah. Stewart, I think that's a really important point. Insurers are very focused on fundamental credit in their portfolios. And the fact that municipals offer diversification, fundamental credit diversification, the issuers just have different objectives, different incentives. You don't see corporate actions and corporate restructurings and M&A activity. The municipal bond market protects you from a lot of, let's say, event risk. Not only fundamentally different diversifier with respect to the issuers, but just reduced risk overall to the municipals.

The ratings that we've been talking about, the rating differentials is also interesting. Because as you both know, there's not many AA corporate issuers left in the investment grade corporate universe. To get exposure to AA credit, which we talked at the start of this that insurers are very keen to maintain a high credit quality in their core portfolios because of what they're doing pushing out for yield and other allocations. To get AA quality into portfolios and get attractive yields there, I think the taxable municipal market is really attractive from that perspective as well. I think it fits into a portfolio that has a little bit of a vacuum in that AA sector.

Unless you're going into AA structured or something, which I would offer is very different risk than a AA municipal bond. So whether it's looking for more yield from a treasury allocation and moving some of that down into say, AAA or maybe even AA munis. Or just looking to fill from the rest of the allocation, just looking to fill something in that AA bucket to keep a higher quality portfolio, but yet to still get yield and to maintain that diversification. I think the taxable muni market is a really interesting way to do that.

Stewart: It's super interesting, Jim. Those points that both of you are making make a ton of sense. I think one of the underappreciated aspects of municipals is its direct connection to US infrastructure. We talked a little bit about that. Can you talk about the halo effect, if you will, of investing in municipals and how it plays into broader ESG and impact investing themes?

Jeffrey: Absolutely. This market really lends itself to express the values of the investor. Obviously, there's a very strong diversification of opinion when it comes to those type of aspects, but one area of that is absolutely common is the market funds infrastructure. What infrastructure might need for a certain community may be very different to another. But what is in common is the use of proceeds fund infrastructure, and you can make an impact on your local community. For example, you may be in a community that is very keen to support and promote charter schools. Those charter schools issue municipal bonds. You can literally go to the underwriting bank and say, "I want to support that issuance. I want to buy that bond that is supporting X project." You could be in another part of the country that is issuing debt to support clean water. That's something I value. I want to support my local community's issuance, I will go out there and support the debt.

I think earlier in the conversation, Stewart, you mentioned that most of these bonds, at least in the general obligation space, and there's really two when it comes to security, general obligation and revenue. Most general obligation bonds are voter approved. And so, the local community is very well aware or has at least the opportunity to be aware of and approve the financing of their local project. It gives an opportunity in terms of "halo effect" for the local government to gain engagement with the local community, get support for particular projects that express the values, the morals, the real social fabric of what that community wants to support. And that's generally a very good thing from two perspectives. One, it helps support the deal, the financing. And two, it clearly brings a lot of the government and how we should be looking at this market as really a hybrid between government and finance together in a way that really engages the local population.

Stewart: That's super helpful. I'm going to go out on a limb here and define a couple of things that you said, and then you guys tell me if I've got it right or wrong. But general obligation municipals and are backed by the full taxing authority of the issuing entity, right? And revenue bonds are backed by the revenues of a particular project. And that's spelled out in the bond docs as to what backs those two things up. But have I got those definitions about right?

Jeffrey: Absolutely. If you look at it from the highest level, that's exactly right. Now, it gets a little bit more complex, and it's one of the reasons at Insight we have 10 credit analysts solely dedicated to looking at municipal bonds. And it's not a matter necessarily of default/not default. Because most municipal bonds, the vast majority will never default, but it's relative value. Where can we identify credits that we think are perhaps more misrated? If you accept my premise earlier that almost all municipal bonds are underrated, but let's say one is more so than the other. Maybe we buy that because we think it's got to upgrade potential and we're getting compensated for that risk. Or the other way around, that's why our 10 credit analysts looking at revenue bonds, general obligation bonds can help identify those opportunities.

Stewart: Super helpful. We've gotten a great education from you both. Thank you so much. I've just got a couple of things here. Could you each give me or give our audience one takeaway that you want them to leave this podcast with? And then I've got a couple of fun ones for you in the way out the door.

James: Yeah. From an overall asset allocation perspective, as we've discussed, the tax benefit has really caused municipal allocations to decline in insurers portfolios. But the taxable market we think provides a unique opportunity to maintain all of those benefits that municipal bonds offer, and they fit well into the asset allocation of a core mandate given the quality and the yield of those. While it's the tax-exempt allocations have been dwindling, we think municipals still offer a really attractive component of a diversified asset allocation for insurers.

Stewart: Jeff?

Jeffrey: And for me it's three words, yield and safety. Yield and safety. And investors, regardless of the use case, and in this case we're talking about insurance companies. Whether as a complement or a substitute to corporate exposure, there's a strong case at the very least to consider municipal bonds. Many investors, they don't necessarily outright substitute their entire treasury exposure, but they do complement it sometimes with taxable municipal bonds. It's a way to effectively get duration matching assets to your liabilities with excess yield to treasuries. You're certainly seeing that evolve not only in the United States, but a lot of our foreign insurance companies are doing the exact same thing at this point.

Stewart: Super helpful. I've got a quick question for you both and then I've got a fun one. What qualities do you look for when you're hiring somebody on your team? Are there certain things that it's hard... Hey, I was a president of Glee Club, whatever it is. I think students today have way more service-oriented exposures or experiences than I had back when the earth was cooling. But is there something that you see in certain candidates that has been, over the course of your careers, you've seen it be a winner more often than not?

James: Stewart, we've certainly seen applicants with much more diverse backgrounds and experiences. And as you said, when we were growing up a lot of these opportunities didn't exist. And it's great to see the young kids taking advantage of that. I've got some college age kids myself and have encouraged them to do the same. In general, we're looking at candidates, we see a lot of that. What I try to look for though is a curiosity. And it's certainly, yeah, we need candidates that understand the basics of investments and have an interest in it. But for insurance asset management, I love to see candidates that want to understand the why of things. Why is it different? Why do insurers do what they do? And that curiosity, just to learn more and to do more, it's not something you see on a resume. It's something that you get to know by getting to know the candidate. And that, to me, is someone who just has an insatiable desire to learn and to contribute. That's what the most important thing that I look for when I'm looking for people for the insurance group.

Stewart: That's super helpful.

Jeffrey: And along those lines, absolutely the same. And there's three things in particular. Demonstrated passion, demonstrated collaboration, and as Jim said, demonstrated ability to learn. To me, if you have all three of those attributes, you're 90% ahead of everybody else. And I think the learning aspect and the collaboration and the passion really encompass all of those.

And let me give you an example. I'd rather come in, if it's a new hire, someone fresh out of grad school or undergrad. To me, as much as anything, it's not necessarily the academic major. It's really about, do you know how to learn? The learn to learn. Because we'll teach you, don't worry about that. But have you shown a passion for growing? It's a growth mindset, growth mentality. It's a diversification of interest and demonstrated success in collaboration. In general, I love folks who have either been in musical ensembles or in team sports, and I differentiate between individual versus team. The best people I've ever seen are offensive linemen. When you talk about team sports, you talk about a spot on the team where you have to work with other folks and you don't get a lot of glory, it's offensive linemen.

Stewart: Yeah, it's true.

Jeffrey: And so, it's that type of thing.

Stewart: I'll give a shout-out to one of my former students. I was a prof for a while and had a lot of athletes and a lot of football players, a lot of hockey players. Loved the hockey players, loved the football players, love all my athletes. It was amazing. But there's one guy in particular named Anthony Dermenullian who was an O lineman, and who was also brilliant. And it's really true. Here's a fun one for you. Lunch or dinner for four, the two of you. And you each get to invite one guest alive or dead. Jim, who do you invite? And then Jeff, you're next.

James: Great question. It's depending on where we're having lunch and what we're doing for lunch. But I would say keeping it on the more serious side, and given recent events, probably President Carter. And it's not a political thing, and it's as we've all learned he was probably more appreciated post-presidency. But in reading about and learning about his involvement with some of the charitable work that he did. And just his life, how it was after the presidency was, I'll say as normal as it could have been, modest. But the service dedication he had is just incredible. And how he balanced that all with being so successful and still humble enough to find time and the passion to do that. Keeping it on that serious note, I would say in retrospect, would definitely love to spend some time with him.

Stewart: Jeff, you've got Jim, you've got Jimmy Carter, who's the fourth.

Jeffrey: It's funny, I actually was also going to go with a politician not knowing Jim was as well, and mine's Winston Churchill.

Stewart: Oh, wow.

Jeffrey: I find that guy just fascinating. The wartime leader, he was the right person at the right time. He's got a very interesting history in areas of his life that he was not particularly successful in, but he was obviously extremely successful in accomplishing what needed to be done during World War II. He also was his own person. He was a character. He was somebody who owned who he was and demonstrated such a unique brand of leadership that I think he would just be fascinating to really get to know and see what worked for him and what didn't work. And just, I really appreciate authenticity. And he came across, from what I've read, as one of the most authentic leaders you could find.

Stewart: That's fantastic. We've gotten a great education today on munis and lots of other stuff. I want to thank you both for being on. We've been joined today by Jim Kaniclides, head of US Insurance. And Jeff Burger, CFA, senior portfolio manager of municipal bonds at Insight Investment. Gentlemen, thanks for being on. Thanks for taking the time today.

Jeffrey: Thank you, Stewart.

James: Thank you so much.

Stewart: Thanks for joining us. If you have ideas for a podcast, please shoot me a note at Stewart@InsuranceAUM.com. Please rate us, like us, and review us on Apple, Spotify, Amazon, or wherever you listen to your favorite shows. We'll see you again next time on the InsuranceAUM.com Podcast.