Home » BTp Returns Value February-March 2024: Last Chance?

BTp Returns Value February-March 2024: Last Chance?

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BTp Returns Value February-March 2024: Last Chance?

Co-founder of Affari Miei

February 22, 2024

They return on February 26th BTp Value with their third issue, which will also be the first of 2024. But what will they be? BTP yields Value?

When we talk about BTPs we see how this instrument always manages to enjoy great success among Italian savers and it is reasonable to ask ourselves if it is a unique and rare opportunity to be seized upon.

For this reason today we want to clarify a fundamental point: without yet knowing (but hypothesizing in a realistic way) i returnswhat are ours opinions? Is it really worth investing?

Let’s see it together!

This article talks about:

Exploring the return prospects for the new BTp Valore

The Ministry of Economy and Finance (MEF) continues its practice of gradually revealing the characteristics of the new Multi-Year Treasury Bonds (BTp) dedicated to retail investors.

It is already known that these BTp will have a duration of six years and will include a 0.7% loyalty bonus for those who keep them until expiration. Additionally, there is a step-up mechanism for the coupons, meaning that yields will increase over time.

However, the most awaited detail, the actual yieldwill only be revealed tomorrow, February 23rd.

Considering current data, i BTp for six years they offer a net return of around 3%, equivalent to a gross 3.3%-3.5%. Coupons are expected to start at more conservative values, then grow to potentially reach 4% gross in recent years, although they are unlikely to reach the 3.81% net of October 2023.

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The main question is: is it worth investing in BTp Valore?

If we compare this issue with the performance of the last two years, it may seem less attractive due to the supposed lower yields.

However, it is important to evaluate the current context. After the ECB increased interest rates in 2022 to combat inflation, we saw a general increase in the yields of government bonds, a category that includes BTp.

Investors who in the past neglected BTp have started to take an active interest in them starting from the new issues of 2022in a year that was not particularly positive for other markets such as the stock market.

Today, with expectations of falling interest rates in 2024 and slowing inflation, bond yields have fallen compared to six to eight months ago, and that trend, barring anything unforeseen, is expected to continue.

The BTp Valore, as it is structured, is only one of the many government bonds that can be subscribed to in this phase: it does not present any “better” characteristics compared to securities of the same maturity from the same issuer, as we will see shortly.

Usually, you take exposure to a single security to gain a specific advantage over what you already own, which, at the moment, does not seem evident for this BTp.

Here you will find an interesting video that delves deeper into the discussion.

On Affari Miei, we have often reiterated that the BTp emissions for retail they represent a smart move by the MEF which manages to create expectations on a product that presents nothing special compared to other opportunities that are practically always available.

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In simple terms, BTPs are purchasable every day on the MOT and, usually, the issues reserved for retail savers offer conditions similar to the returns of the instruments already available.

However, the MEF needs to sell new debt to gradually replace the old, but the offer itself does not seem to offer who knows what specific convenience for those who sign it when compared with the stock already available.

The same prediction of return that I was talking about just now is based on the returns guaranteed by the securities that can be purchased on the secondary market.

In light of these considerations, one might ask: why so much interest in BTp?

Often it is a impulse collective which, despite the predictions and analyses, involves us and therefore consequently pushes us to purchase this instrument.

Let’s remember that investing always involves risks and therefore my advice is always to think long and hard before making any decisions.

If you would like to learn more and better understand how to start your investment journey, I have made some available to you resources which I think you will find very interesting:

See you soon!

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