The investment in BTP Italy, in addition to being as safe as any investment in our country's government bonds, it also allows you to protect savings from inflation. It detects it a new study by the Italian Public Accounts Observatory edited by Salvatore Liaci, according to which, being securities indexed to inflation (as they foresee the inflation-based revaluation of coupons and principal every six months), the Btp Italia limit the erosion of the real value of the investment caused by the increase in prices.
Btp Italia: positive return in the event of stable inflation
The analysis then gives an example starting from a hypothetical scenario. If inflation remains stable at current levels until next May, the BTP Italy expiring in 2025 (issued in 2020) would guarantee “in the first two years – continues the study – an annual yield in real terms of 1,05 per cent”.
For non-indexed BTPs, on the other hand, the yield is negative
The result is clearly better than that obtained with a BTP with the same maturity but not indexed to inflation, which in the same period and under the same conditions "would achieve a strongly negative real yield (-2,40 per cent, as an average of -0,16, 4,61 per cent in the first year and -XNUMX per cent in the second year).
But inflation protection is never complete
All this, however, does not mean that investments in Btp Italia ensure full protection against price increases: “Inflation indexation is delayed – continues the study – so the inflation hedge is imperfect".
Another example. If a security pays the coupon on April 10, as of this date Istat has not yet published the Foi index for the month (i.e. thenational index of consumer prices for families of workers and employees, with the exception of tobacco, the instrument used for the revaluation of Italy's BTPs), nor the official inflation index for March (which is released in the second half of April).
Consequently, “to calculate the index as at 10 April, the approximate price index as at 10 February is considered – concludes the Observatory – This means that the indexation takes place with a two-month delay. In the face of rising inflation, this reduces the real throughput compared to lag-free indexing. In fact, in the absence of delays, the average real yield in the first two years of the BTP Italia considered above would have been 1,40 per cent - i.e. the yield that would exist in the absence of inflation - against the 1,05 per cent of the BTP Italia actually in circulation".
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