Independent Financial Advisor and Co-Founder of Affari Miei
April 17, 2024
With the next issue of BTP Value expected for May 2024, it’s time to evaluate whether this tool could be a viable addition to your investment portfolio. Valore BTPs have been the subject of interest for many private investors thanks to their favorable conditions and relatively attractive yields. As always it is essential to weigh every aspect before making a decision and in this article we will try to make some return forecasts which, to date, are not yet known.
This article talks about:
The New Issue of May 2024
From 6 to 10 May you will have the opportunity to invest in the new BTP Valore. These securities can be easily purchased through your home banking, at banks or post offices without additional commissions, which makes the investment accessible and with low costs limited only to the commissions expected for the purchase on the MOT.
The minimum investment required is 1,000 euros, making these BTPs accessible even to those who do not have large sums to allocate to the investment.
BTP Value Yield Forecast: what interest to expect?
At this time, specific yield details have not yet been disclosed and will be released on May 3. Based on the current returns of similar securities it is possible to anticipate that the total gross return, inclusive of loyalty reward which was increased from 0.7% to 0,8%could be somewhere between 3,7% and the 3,9% gross, i.e. between 3.23% and 3.41% net.
Since the step-up mechanism with increasing coupons is envisaged, it is possible that the remuneration for the last years of holding will approach 4%.
These returns, if confirmed, represent a good opportunity in a low-risk investment landscape.
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Tax Advantages and Purchase Methods
The BTP Valore offers significant tax advantages, with taxation reduced to 12.5% on coupons and loyalty bonuses, as well as being exempt from inheritance taxes and, starting from 2024, excluded from the calculation of the ISEE for sums of up to 50,000 euros.
These characteristics make BTP Valore particularly attractive from a tax perspective, offering a further incentive for investors.
Risks
Investing in BTP Valore is not without risks. Changes in interest rates can negatively influence the value of the security on the secondary market, especially in a context of economic instability. It is crucial to understand that you could face losses if you decide to sell the stock before it matures. Furthermore, changes in national economic and financial policy can have a direct impact on the performance of these instruments.
If you are scared by this type of risk on the BTPs you already have in your portfolio, I recommend you download our free report in which we delve deeper into the topic.
My Opinions
Personally, I believe that BTP Valore can be an interesting choice for those looking for a relatively safe investment with decent medium-term returns.
The investment in BTP Valore, in any case, should be considered as part of a strategy of diversified portfolioespecially for those who have a long-term investment horizon and can handle market fluctuations.
The mistake made by too many investors is to concentrate almost all their resources on Italian government bonds and this exposes them to country risk. If this concept is not clear to you, I recommend you watch the video here:
If you have subscribed to other BTPs in the past and are looking for insights into the risks, I invite you to consult this free guide in which we analyze them in detail in order to provide you with a clear and precise picture of the prospects of your investment.
If you would like to delve deeper into the general aspects related to asset management, I leave you with some free resources that will surely be useful to you:
Good continuation on Affari Miei.
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