Investors looking for opportunities are approaching the United States with caution because Europe and Asia are recovering more quickly from Covid-19, according to a panel of Nuveen investment analysts and managers who talked about alternative sources of income in a pandemic-dominated world.

Investment opportunities exist but they are being countered by strong headwinds that are holding back returns in many cases, the panelists said during a webinar Tuesday.

“We are in the early stages [of trying to] gauge the success of reopening around the world,” said Brian Nick, Nuveen’s chief investment strategist. In the United States, he added, August is going to be a tough month but September should be better, especially if there is another round of the federal monetary stimulus package.

But overall, he said, the data “points to a frustratingly slow recovery. Our focus at Nuveen is on the balance of the decade, not just the balance of the year.”

Growth investments are in a defensive position because of the high jobless rate, added Nick, who works with the firm’s investment management team to identify investment trends with a long-term view.

On the fixed-income side, investment opportunities are going to be scarce because interest rates are going to be near zero for years to come, according to Tony Rodriguez, Nuveen’s head of fixed-income strategy, a global fixed income platform with more than $420 billion in assets under management.

“Never before have global central banks been so dominant in setting policy," Rodriguez said as he discussed the fixed-income outlook. "We foresee very low volatility from an interest rate perspective. To find investment opportunities, investors are going to have to cast a wider net, going from the high quality liquid market to a mid-quality product.

“The municipal bond market has some attractive products, and ESG [environmental, social and governance] debt can give a reasonable income in a difficult market,” he said. “But investors are going to have to do detailed research to find opportunities.”

In the private credit market, there is a bifurcation between companies that can do well in this particular market and those that are being hurt badly by the shutdown, said Randy Schwimmer, head of origination and capital markets and senior lending for Churchill Asset Management, an investment specialist of Nuveen.

Private credit “entered panic mode in March and April, but we have moved beyond that now.” Schwimmer said. “We are seeing week-to-week improvement as businesses are coming out of the shutdown. The best strategy for investors is to stick to private equity owned businesses that are noncyclical and not affected by Covid-19.”

Despite the move to working at home and reports that people are moving away from urban areas, real estate still offers opportunities for investing, according to Carly Tripp, chief investment officer for the Americas for Nuveen Real Estate.

“The office is not dead,” Tripp said. “We still need interaction” with co-workers. However, she noted, investors should expect unprecedented headwinds for some real estate sectors and a slow fragmented recovery. There is going to be a divide between those cities that rebound and those that don’t.

“The demand for real estate investments, from the investor standpoint, is still strong,” Tripp said.

Nathan Shetty, Nuveen’s head of multi-asset portfolio management, added that because of the recent massive intervention by the government and the Federal Reserve Board in the economy, there is a risk of policy missteps being made that, over the long-term, could have serious implications.

“Nuveen has been leaning toward U.S. investments, but that is starting to shift,” he said. “We see value in Europe, Japan and emerging markets. We see the dollar weakness continuing. There is some additional downside for the dollar to come.”

The upcoming presidential election is adding uncertainty to the economy and the markets, the panelists agreed.

Shetty noted that a Democratic sweep of the election could mean tax decreases and de-regulation would be reversed.

On the other hand, a Democratic sweep could result in increased spending on infrastructure, giving the economy a boost, Schwimmer said.

“There could be a prolonged period of uncertainty after the election that has not been priced into the market as yet,” Nick added.