Savings: diversification goal

"Saving Beyond the Crisis." This is the title chosen by Assogestioni, the national asset management trade association, for the next edition of the most important Italian event dedicated to the world of finance and investment, to be held in Milan (at the MiCo Congress Center), May 16-18. We are talking about the Salone del Risparmio, which, as every year, will attract tens of thousands of visitors to the MiCo pavilions, including private investors and insiders from an increasingly important sector for the Italian economy. This is, of course, the domestic asset management industry, whose growth is evidenced by a few significant numbers.

In 2012, the total savings invested by Italians in funds and asset management (i.e., in the financial products that make up the varied universe of asset management) were worth a total of 1,195 billion euros. After a decade, that is, by the end of 2022, assets invested in funds and asset management had almost doubled to a value of 2,212 billion (+85 percent). The growth was due to the revaluation of assets in the financial markets, but to a large extent also to the inflows made in the market by asset management companies. In ten years, new flows invested in funds and management by Italian savers amounted to as much as 572 billion.

In short, asset management products now occupy a very significant space in the portfolios of Italian families, who were once used to investing mainly by do-it-yourself, that is, leaving money in current accounts or directly buying government bonds such as BOTs, Ccts and Btp. The era of Bot people seems to be a distant memory and today (according to an estimate made by the banking union Fabi) government bonds have a marginal weight in the portfolio of households (less than 3 percent). In contrast, the share of savings invested in mutual funds in Italy rose between 2011 and 2021 from 6.6 to about 15 percent. What is the reason behind this growth? There are many reasons, including falling interest rates that have made direct bond purchases less attractive. Of all the reasons, however, one stands out above the rest: it is the increased awareness among savers (and the advisors who manage their portfolios) of the qualities that distinguish asset management instruments.

Indeed, funds and asset management make it possible to build a well-diversified portfolio consisting of different securities and different financial instruments, thus avoiding excessive exposure to risk without sacrificing opportunities for gains. It should not be forgotten that the last decade has been marked by several events that no one would have predicted in the past. In 2012-2013, the European Monetary Union was in serious danger of falling apart, an Old Continent nation like Greece effectively ended up in default and had to cut the value of its public debt. More recently, in 2020 came the Covid-19 pandemic that crippled the world economy for a few months, and in 2022, unfortunately, Russia attacked Ukraine bringing war back to the doorstep of Europe and the West. All these events wreaked havoc on the markets. However, those who had a well-diversified, medium- and long-term-oriented portfolio, that is, invested in funds and asset management, managed over time to absorb the losses.

In addition to the need for diversification, the alternation of unforeseen events in the markets and the economy has also brought out the need for professional savings management, that is, having a portfolio entrusted to professionals, i.e., financial advisors who guide the client's choices but also active managers who know how to deal with the unexpected and adapt to changes in the scenario. For this reason, too, the organizers of the Savings Show chose to title the event "Savings Beyond the Crisis," adding a subtitle: "Accompanying the Saver in Making Conscious Choices." When there is turbulence in the markets (and there has been a lot of it in the past 15 years), opportunities do indeed open up, and the asset management industry has precisely the task of identifying them, in order to enhance the value of clients' assets.

These issues will also be discussed by Assogestioni President Carlo Trabattoni, who will open the show's opening conference on May 16 at 9:45 a.m. and introduce the other guests: Giancarlo Giorgetti, minister of economy and finance; Giuseppe De Rita, president of Censis; Massimo Doris, president of Assoreti; Andrea Ragaini, president of Aipb and deputy general manager of Banca Generali; and Luigi Conte, president of Anasf. For three days, the Salone will discuss funds, asset management, markets, retirement planning, financial education, digital innovation, sustainability and social responsibility, but also how asset management can support the country's real economy, not only by investing in securities traded on regulated markets but also in the so-called private markets, from infrastructure to real estate, from private equity to private debt to finance even unlisted companies, especially small and medium-sized enterprises.