Btp Italia rewards investors, the coupon jumps to 7.25% (with inflation) – Corriere.it

In times of high inflation (equal to 11.8% in November), the Btp Italia rewards investors with a six-monthly gross yield of 7.25%. The security, designed specifically to protect savings from rising cost of living, experienced a boom in requests in June, with over 9.4 billion euros placed (but the Btp Italia of May 2020, in the midst of the pandemic, collected 22.3 billion). The formula for calculating interest provides for dividing the real annual coupon rate (1.6%) by 2 (the semesters) and multiplying it by the nominal capital subscribed and by the indexation coefficient. The latter is obtained by dividing the reference index number of inflation (which excludes the share of tobacco and is communicated by the MEF) by the issue number (109.2). Therefore for 10 thousand euros invested at the end of June, the coupon of approximately 725 euros (the sum of the interest plus the capital appreciation).

The analysis

The primary task of the BTP Italia is to return to the investor not the entire part of the increase in the cost of living accrued in the six months that separate the two coupons, but a substantial portion. The Ministry of the Treasury calculates and publishes the daily variation of inflation in the course of formation on the internet. Now, as in past months, the credits of the half-yearly coupons were particularly high.

The question is: how much longer will the value of the half-yearly coupons remain at current levels? The monetary policy that the European Central Bank is implementing has the objective of bringing the cost of living back to growth of 2% per year. The goal is still a long way off, but it can be reached in not very long times, but not even close together. It follows that future coupons will probably be characterized by values ​​that are still interesting, but gradually descending. Holding BTP Italia in the portfolio will make it possible to collect substantially good interest flows. At the same time, one might be inclined to sell them, to forfeit a good capital gain. Giving up, at the same time, to still collect good interest flows. At this stage, it is better to wait for the coupon flows that will accrue in the coming months.