The prospect of economic recovery and the low level of government bond yields are essential factors in deciding the type of investment to be made with the arrival of autumn. Assuming a gradual recovery in yields, which will most likely occur by the end of 2013, the weights within the securities portfolio vary. If the investor's appetite for risk is low, the ratio between long bonds (more than 5 years) and short bonds (less than 5 years) is 1:7; therefore, for each long BTP there must be 7 short ones in the portfolio. The ratio drops to 6,5 if the propensity is moderate and to 3,25 for average risk-averse investors, while it is completely null in the case of high risk propensity. Since the majority of investors are characterized by a moderate inclination to risk, 86,5% of the bond segment should be allocated to short-term issues, 13,5% to long ones. This is what Angelo Drusiani, bond manager of Banca Albertini Syz advises on the columns of the Risparmio section of the Corriere della Sera
The prevalence of short-term securities tends to reassure investors but offers limited profitability. For this reason, according to numerous analysts, in a portfolio characterized by a moderate propensity for risk, 55% of the assets must be allocated to the equity component.
Finally, approximately 15-20% of available assets can be assigned to Italian government bonds. The objective is to invest in instruments that give a good level of risk/return ratio.
