“Exploring the Different Types of Italian Government Bonds: Btp Value, Btp Italy, Btp Futura, Indexed BTPs, Btp Green, Short-term BTPs, and BTP at 10 Years”

I Italian public debt securities, known as Btp, have become an object of interest for savers. This is not only due to the return of attractive interest after the end of the era of zero or negative interest rates, but also thanks to the flexibility of the instruments offered by the Treasury, adapted to the different needs of savers. Let’s take stock:

• Btp Value

• Btp Italy

• Btp Futura

• Indexed BTPs

• Btp Green

• Short-term BTPs

• BTP at 10 years

Btp Value

The Ministry of Economy has announced the introduction of a new family of government bonds called Btp Value, intended for the retail market, or for individual savers and the like. The first Btp Valore will be issued from Monday 5 June to Friday 9, unless the subscription is closed early. This title will have a duration of four years and will offer a loyalty bonus of 0.5% of invested capital for those who keep it in portfolio until maturity. The coupons will be periodic and calculated on the basis of fixed and increasing rates, as indicated on the website of the Ministry of the Treasury. The minimum investment required will be one thousand euros. Further details on the terms of the offer for this new instrument are awaited.

Btp Italy

They are currently listed on Borsa Italiana’s Telematic Government Securities Market (MTS). nine Btp Italy which offer a return linked to Italian inflation, with revaluation of the coupon and capital. A tenth issue, still in circulation, will be redeemed on May 22nd. Considering the double-digit increase in inflation, which reached 8.3% in April despite a slight decline in recent months, it is not surprising that the annual coupon yield of Italian BTPs is around 8%. The Btp Italia play an important role in portfolio protection and, according to analysts, should constitute 10% to 20% of the total bond portfolio.

Btp Futura

The four issues of Btp Futura they have not achieved the success of deposits and yields experienced by the Btp Italia. Currently, the net yields of the four Btp Futura issues vary from 3.78% of the five-year bond maturing in November 2028 to 4.39% of the Btp Futura repayable in April 2037. This instrument is mainly suited to those who want bet on the growth of the Italian economy. Btp Futuras can be useful for those wishing to buy securities at a discount in anticipation of a quote recoveryalthough such a scenario might not happen.

Indexed BTPs

A variant of the Btp Italia are the BTPs indexed to the euro area inflation rate, calculated by Eurostat. This group of securities comprises approximately 12 issues with maturities ranging from September 2023 to May 2051 and has a yield of approximately 8%. European inflation is likely to return to the 2% annual level faster than Italian inflation. As a result, the indexed coupon of these bonds could decline faster than that of Italian inflation-indexed bonds. BTPs indexed to the European inflation rate benefit from same advantages as Btp Italia: portfolio protection against inflationary fluctuations.

Btp Green

I Btp Green are a new category of Italian government bonds, introduced for the first time in March 2021. These bonds, the last of which has an 8-year maturity in 2031, are designed to finance public expenditure aimed at protecting the environment and to the fight against climate change. The BTP Green 2031 was placed at a price of 99.888, with an annual gross yield on issue of 4.056%. The yields of green issues are in line with those of traditional BTPs of the same maturity. These titles are indicated for younger savers and for those who wish to actively contribute to the protection of the environment through eco-sustainable projects.

Short-term BTPs

Despite the Short-term BTPs, included in the range of 3-5 years, do not constitute a category of distinct securities, have characteristics that differentiate them from long-term securities. The yield on these securities is between 3% and 3.5%. These returns are below the inflation rate, thus not guaranteeing the maintenance of the real value of the capital. The real yield, net of inflation, is negatively around 5%, a remarkably high value. The advantage of these issues lies in the greater stability of their prices.

BTP at 10 years

The emissions of Medium-long or long-term BTPs they offer better capital protection against the erosion caused by inflation. There is the prospect of a real gain if the inflation rate over the next 24-36 months approaches the 2-3% pa ​​target. The quotations of these securities are extremely sensitive to changes in interest rates, both upwards and downwards. L’stock price fluctuation on the secondary market it becomes higher as the residual duration of the bond increases. An analysis of the market prices of these securities highlights the extent of these fluctuations, which largely depend on the level of the coupon. These bonds are suitable for savers looking for a decent return and believe that inflation will fall below 3% over the next 24 months.