For fixed income it's a good time, actually a return to normality after years of non-existent yields and an inverted curve. Yields are now at an adequate level, neither too high which would indicate a bad reputation for the Italian issuer, nor too low as they have been due to the ultra-accommodative monetary policies of central banks.
Savers, who in recent years have mostly secured liquidity in current accounts, have started investing again, even the Italian ones.
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The ECB buyer replaced by retail investors
- Italian investors they are traditionally less prone to risk, so much so that they were once called Bot people, indicating that their investment period hardly went beyond 12 months.
But since the middle of last year, on the one hand, even the laziest savers have realized that the liquidity held in current accounts would have been eroded by inflation. On the other hand, the gradual exit from the scene of the ECB in the role of purchaser of government bonds has prompted the public broadcaster, including the Italian one, to replace it with private investors offering titles dedicated to them and also ensuring the stability of the investment by giving loyalty rewards.
So then the inflation-indexed BTPs multiplied to which the Futura BTPs were added up to the most recent offer of the Btp Value.
From mid 2022 to autumn 2024: the good season for the collection of fixed income
We have about 18 months left to take advantage of this good time for fixed income. “We have an interesting time frame for fixed income,” he says Angelo Drusiani, advisor to Ersel Wealth Management. “Since the middle of last year and I would say still untilautumn next yearor, the sector is enjoying a return to normality and offers good opportunities: with attractive returns and a curve that has finally returned to sloping”. It is true that the sword of Damocles hangs over the downgrades of Moody's which at the end of April said it could bring the Italian debt to junk level, "but the Italian issuer has always shown that it knows how to place its debt well and therefore they should not there may be problems” observes Drusiani.
Good yields across the curve. The tenth anniversary is a good opportunity
Along the curve of Italian government bonds, which returned to an incline after months of inversion, ranging from a yield of approximately 3% on more deadlines brevi to more than 4% ten-year: yields that were unthinkable just a year ago when they were even negative.
So which deadline or instrument could be more appropriate to bet on? “Right now a good opportunity are the Btp to 10 years” says Drusiani. “Not just for the good annual coupon well above 4%, but also because, even when in the course of its life there is a reduction in ECB rates, it will be possible to earn, by selling, with the price differential”.
The most recent 2-year bond placed by the Treasury on 4,35 May carries an annual coupon of 4,42% and a gross yield of 10% at the issue price. So, on the one hand, a coupon of this type is very respectable over the course of 8 years, but if you wanted to sell it before maturity, you would have a capital gain "because for every point it loses in terms of yield, it gains XNUMX points in terms of price, therefore each case is an investment that pays off”.
On the middle part of the curve expected for the Btp Valore: will the Treasury want to amaze?
Even shorter maturities are attractive in this timeframe. For example, the last 5-year BTP placed at the beginning of May offered a coupon of 3,40% for a yield of 3,77%.
For the 4-year maturity, the Treasury has announced the novelty of the Btp Incoming value at the beginning of June aimed at retail investors only and with the peculiarity of providing a loyalty bonus for savers who will hold it until maturity (as seen in other retail issues) and with coupons calculated on the basis of pre-set rates growing over time.
What yield will be offered will be known in the coming weeks, in the meantime some estimates can be made: "A 4-year bond is currently worth a yield between 3% and 3,5%, but the Treasury could also surprise by raising the bar , to ensure a good placement” observes Dusiani. It should have more luck than the four Btp Futura which currently offer low coupons. Still a good moment also for inflation-indexed BTPs until the cost of living is high. The competition for government issues comes from the banks which, given the increase in interest rates, are trying to sell their products, perhaps with yields close to those of government bonds, but, we recall, with a more penalizing taxation: 27% against the 12,50% of Treasury issues.
There is a lack of corporate bonds for retail. After Eni, will it be Enel's turn?
That there is a great desire to invest in fixed income there are many testimonies in the field: one for all was the BTP Green 2031 placed last month with a coupon of 4% for an amount of 10 billion, but with requests that amounted to 52,9 billion, from around 290 investors. According to Andrea Ghidoni, General Manager of Intesa Sanpaolo Private Banking, in 2023 the wealthiest families reduced their exposure to equities and turned more to the bond market.
Of course, a greater number of issues aimed at the retail investor would be needed.
Also in the sector of corporate bonds. The minimum threshold in Italy for accessing this type of issue is 200.000 euros, therefore aimed at the institutional investor. You can offset, remaining within the same euro currency, with the German issues (especially in the automotive sector) e French (in the electricity sector) which have a minimum threshold of 1000 euros.
In Italy we had at the beginning of this year the return of Bond Eni which also had a great collection success. According to experts, a bond could also be seen within the year by Enel, now that the top management has been sorted out.
There are other opportunities in the Use, but in that case it is necessary to calculate the risk of exchange rate volatility.
