how to exploit the ECB’s pause (also with bonds from other EU countries) – WWN

Bot, Btp Futura, Cct. But also German and French and EIB bonds. To put other issuers in the portfolio with a higher reliability report than that of Italy. Here are some ideas for investing after the ECB session which did not raise rates, although there are no guarantees that the upward monetary policy will be definitively shelved. Almost all financial analysts predicted that the European Central Bank would avoid a new increase in the reference rate at its meeting last Thursday 26th. In fact, other Central Banks have also partially modified monetary policy, conforming to less aggressiveness. Last week’s decision, in any case, certainly does not represent a farewell to possible further increases in the cost of financing if, as is happening across the Atlantic, consumption and gross domestic product continue to increase. The erosion of the purchasing power of families, on the one hand, and the rise in the cost of public financing and business investments, on the other, represent two negative aspects of the fundamental points of reference of modern economies. But, as has already happened several times in the past, the cost of the excessive differences in life systems and available wealth that characterizes the history and present of the Planet.

The analysis

Differences which, due to financial events, such as the one we are going through, should tend to gradually reduce. This hypothesis, which, naturally, still has a long way to go. If the increase in the price of many essential goods, such as oil, gas and others, occurs continuously, albeit at very different times, the same happens, fortunately for savers-investors, for the profitability of the offers to the aforementioned savers-investors by public and private broadcasters. The most interesting aspect emerges from reading the table the value of the Bots’ returnif compared with what other types of financial instruments with short maturities offer, but far superior to those that characterize the aforementioned very short-term securities of the Italian Treasury Department. Furthermore, even the profitability of competing issuers is anything but despicable, taking into account that their duration is longer than that which characterizes Bots and which, consequently, will produce the investor a greater return in percentage terms. Last, but no less interesting, the Futura BTPs which, thanks to significantly decreased prices, are able to offer investors certainly significant income returns.

How to divide your portfolio

Similar reasoning for CCTs, the variable coupon securities that the Italian Treasury has been offering to domestic and international savers since the end of the last century. Their profitability is currently linked to the upward trend of the six-monthly Euribor rate. The same type of indexation which, when its value had fallen to negative levels in recent years, produced effects that were anything but favorable to the profitability of this type of issue. There is no doubt that, in light of the income proposal of the BOTs, a portion of savings can be invested in them, just as, at the same time, a percentage can be reserved for the Futura BTPs. Overall, the two options could absorb, for investors with medium risk appetite, a percentage of approximately 40% of available liquidity. An interesting portion, also divided between the two CCT maturities, could be placed in the portfolio, with a total weight of approximately 25 percent of the aforementioned liquidity, to benefit from a good coupon return in future months. The issues of the EIB, Germany, Spain and France refer to government and supranational issues, which are attributed a degree of reliability that is placed in the upper part of the ranking. The share to be assigned to them could be 30%, in order to keep five percent of liquidity available to invest in consumption.

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