Surprise in Italians' portfolios. Not only BTp, equity risk at 77%.
The Pimco study highlights the role of family business holdings and warns: 'they are like private equity' and need to be considered in the overall risk assessment.
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Key points
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Not just 'BTp people'. Italians actually turn out to be far less prudent in the use of their savings and more exposed to equity risk than is commonly thought, albeit indirectly and often not entirely consciously. Reversing the traditional view of an investor loyal to government bonds and wary of the stock market at the same time is research conducted by Pimco's Client Solutions and Analytics team, which shows that as much as 77% of the financial risk in Italian households' portfolios derives in practice from equity-type components.
In this respect, only 10% of the volatility of medium- to long-term returns to which all investments are subjected is attributable to the bond factor, with the remaining 13% attributable to illiquidity. This does not mean, however, that the analysis, conducted on the basis of data from the Bank of Italy's Financial Accounts, necessarily sanctions the end of a historical love affair with fixed income.
The weight of the family business
.Indeed, Pimco points to an element that is generally underestimated when referring to Italian households and their wealth. Financial assets are in fact composed not only of traditional asset classes and diversified financial products - mutual funds, bonds, listed shares, insurance and pension products, liquid assets - but also, and in many cases above all, of the family business.
The latter, according to the management company's calculations, represents a quarter of the market value of the financial portfolio itself, a share that rises to 37% for the wealthiest households in our country and is in fact to be considered in the same way as a real equity exposure. In other words, the real 'equity heart' of Italian assets would not be Piazza Affari, but the workshop under the house.
While recognising that this is a 'valuable asset from an economic, social and cultural point of view', Pimco warns that from an investment point of view, this kind of asset presents a risk similar to that of private equity 'because typical Italian family businesses are private and small or medium-sized, like those in which funds usually invest'. And in support of this assertion, the analysts recall that 'during the global financial crisis of 2008, the market value of these companies fell by around 50 per cent, a decline that took almost 15 years to recover'.
