Hi, I'm Matt Brundage here at Bridgehouse, and I'm speaking with Steve Liberatore, who is the Head of ESG/Impact, Global Fixed Income at Nuveen and portfolio manager for the Nuveen Global Green Bond Fund. Now, Steve, you manage over $20 billion in Impact, ESG, fixed income with long-term market-beating results primarily in the U.S. where you're very well known. Can you walk us through how an emphasis on impact investing and considering ESG issues makes you a better fixed-income manager?
Sure. Thanks for having me, Matt. I think what's really been beneficial of incorporating environmental, social and governance characteristics into the portfolio construction process has been the opportunity to really factor in second and third level or derivative types of risk profiles. One of the most important things to remember about fixed income is it's an asymmetric payoff asset class. So how you generate outperformance over time isn't by picking winners, it's by avoiding losers.
So when we look at environmental, social and governance characteristics in an evaluation of a security, what we're hopefully doing is identifying issuers and issues that are going to have more stable free cash flow generation going forward. And that stability of free cash flow ties directly back to their ability to repay us as a lender, which directly ties back into our ability to generate outperformance over time. Steve, thanks for taking the time. Thanks, Matt.