BTp, that's why they like them more and more also abroad

BTp bonds are very popular. In the three-year period up to the end of 2024, investors' liking is due both to a significant rise in yields and to the increased interest of small savers in issues dedicated to them (BTp Futura, BTp Italia and BTp Valore, often with bonuses if held to maturity). From January 2025, on the other hand, Italy's sovereign bonds will also appeal to international investors, who no longer 'trust' US Treasuries as much. In short, the Bank of Italy's snapshot of the value of Italians' financial assets leaves room for further investigation into the investment in bonds, which should be made, as with all purchases of financial products, assessing risks and opportunities.

According to Bankitalia data, from January 2022 to December 2024, net bond purchases amounted to EUR 262 billion, of which EUR 196 billion went to Italian government bonds. The total stock of Italian government bonds, on the other hand, amounted to EUR 310 billion at the end of 2024, taking into account the aforementioned net purchases.

Since the beginning of the year, then, Italian government bonds have performed very well with a reduction in the spread over the 10-year by around 30 basis points, accelerating since mid-April. "The recent performance of BTp," Giorgio Moretti, portfolio manager at Symphonia Sgr, elaborates, "is, however, part of a longer trend (autumn 2022), sustained by the gradual return of investor confidence after the fears linked to the possible economic-fiscal policy approach of the new government. As Bankitalia's data show, Italian private investors continue to show considerable appreciation for domestic government bonds, which in the recent past has offset lower foreign and institutional flows. Today, opportunities arise precisely from the fact that we are witnessing a return of flows from these categories of investors for both exogenous and specific reasons'.

Last week's auctions showed a predominant allocation abroad (80%) and to asset managers (45%). "The return of confidence," continued Moretti, "represents recognition of the efforts made in the area of account stability in a complex context, of the progress made in debt management (reduction in cost and increase in duration), and of the improvement in the solidity of the domestic financial system supported by excellent results in terms of profitability, asset quality, and with further margins for progress linked to the new M&A season. These positive factors were certified by the recent improvement in ratings by S&P and Moody's'.

The Bank of Italy's data therefore show a massive return of retail investors on BTp. "While recognising the value of government bonds as a defensive link in the portfolio," emphasises Vincenzo Cagnetta, an analyst and independent financial advisor at Studio Enca, "it is essential to calibrate exposure to the macro-financial context. Italy's high public debt, uncertainty over future inflation and the volatility of European rates require a weighted allocation, oriented towards differentiated maturities and a constant review of the risk/return ratio. For an investor with a medium-long horizon, allocating between 10% and 20% in Italian government bonds (also indexed to inflation), supplemented with issues from other countries, represents a reasonable choice in a balanced portfolio".