Btp Italia, how much does it really make? Examples and data

The most recurring question is: can it even reach 20% over the five-year period?

The BTP Italia indexed to inflation is back with the issue from 6 to 9 March. The most recurring question among investors obviously concerns the possible return: can it even reach 20% over the five-year period? As explained by, the characteristic of the BTP Italia indexed to inflation lies in the fact that every six months the coupon received is increased with the recovery of the loss of purchasing power calculated in the reference period. In essence, you hedge your return against inflation.

The reference inflation is the Foi index, which considers consumer prices for workers and employees net of tobacco. Every 6 months, the change in the price index over the same period of time is calculated and if it has increased, that change is added to both the coupon payment and the nominal capital invested.

The Btp Italia we are talking about will detach the first coupon in September 2023. If the price index registers a +10% during the period, the saver will be paid a higher coupon by the same amount and an amount equal to 10% of the capital subscribed nominal.

Let’s consider that the consumer price index for blue-collar and white-collar households, net of tobacco, for 2023 could settle at around 5%. This means that the yield over the year, on an annual basis, could be between 7 and 8%. But can you get 20%? The possibility exists, if we analyze the previous trends. The Btp Italia of April 2015 and expiring in April 2023 which has a gross yield of over 20%: if a saver has invested 1,000 euros at the time of subscription, in April he will be able to obtain 210 euros more gross.

For a higher yield, it is advisable to keep the security subscribed until maturity, so as to receive the loyalty bonus of 0.8% of the invested capital. And then, a lot will depend on the volatility of inflation, calculating that there may also be periods of disinflation.