The economy will improve during the third quarter and get even better during the fourth quarter of this year according to David Norris, head of U.S. credit and portfolio manager at TwentyFour Asset Management, a fixed-income boutique affiliate of Vontobel Asset Management that has $23 billion in assets under management.

The improving economic picture gives rise to opportunities in fixed-income investments. TwentyFour is focusing on high-yield and investment-grade, long-only, credit, said Norris.

TwentyFour is optimistic about the improving economic situation in the United States partly because the Federal Reserve Board is lending its support to the economy. “We have confidence the Fed is providing a strong backup for the U.S.,” Norris added.

“Since the last week of March and the beginning of April, there has been ample opportunity in the fixed-income market, and we are expanding our exposure to credit,” he said. “In particular, we are looking at banking sectors globally. Banks are well capitalized right now, and that gives us confidence.

“During the current market volatility, financials and banks are a part of the solution, not the problem,” and provide opportunities for investments, he said.

TwentyFour is maintaining an international bias. “As pockets of the global economy react differently to the impact of the pandemic, TwentyFour diversifies its investments globally and, unlike other portfolios, is not biased toward U.S. fixed income,” Norris said. More than half of TwentyFour’s assets under management are invested in the United Kingdom and Europe.

In particular, TwentyFour is concentrating on consumer-related sectors, but avoiding the obvious pitfalls such as the leisure industry and other sectors that have been hurt by Covid-19.

“The future of the markets and the economy revolves around the trajectory of the virus,” Norris said.