The 2 most bought BTPs on the stock exchange: that’s why everyone wants them
Dozens of government bonds can be found on the MOT market of Borsa Italiana. They are BOT, CCT and BTP issued in the past by the Italian state and which are now bought and sold on the market like any other financial security. Among these, the most popular are BTPs. And two in particular are the most desired: the BTP Italia expiring in May 2025 and the BTP expiring in March 2036. They are the ones that record the highest purchase volumes.
The BTP May 2025 is the famous BTP Italia (Isin: IT0005410912), which went on subscription from 18 to 20 May and which has been listed on the stock exchange on the MOT since 29 May. The characteristics for those who do not know them are these: coupon at 1.4% and redemption at par, or 100 cents, in May 2025. The other is the BTP expiring in March 2036 and which offers a fixed annual coupon of ‘1.45%. Also in this case the refund is at par, that is 100 cents.
Why are they the most purchased? Because BTP Italia enjoys the notoriety of its issuance. While the BTP 2036 is among the few with a price below par, in fact it shares below 100 cents.
They are bonds that can be bought by all those who have at least 1000 euros to invest (one thousand euros nominal are the minimum quantity). Here’s how to do it.
The two multi-year treasury bonds have the same coupon but do not have the same yield. The BTP Italia at current prices of 100.9 cents makes 1.2% gross at maturity. It means that if you buy at the price of 100.9 cents (1009 euros), upon reimbursement, by collecting the coupons, you will have a 1.1% gross annual return on investment.
More attractive yield instead for the BTP expiring in 2036. Obviously the duration higher makes it more risky and therefore also more interesting as a return. By purchasing it at the current values, equal to 94.30 cents, collecting all the coupons at maturity, you will have a return on capital of 1.85% gross per year.
When choosing, take into account the duration of the second greater than 11 years compared to the first. But also the fact that BTP Italia has the inflation-linked coupon. In the event of price increases in the coming years, the coupon of BTP Italia will become richer