Welcome to our #61 weekly newsletter.
Every week we curate key content and apply a female lens so you can stay informed and inspired about money and investing.
Stay in the know.
Keep on top of global economic, financial and investing news and trends. And read about what this means for you and your money in 2021 during Covid-19 and beyond.
If you’re short on time, listen to the audio for a brief overview.
“For women taking control of their financial future”
-Jana Hlistova
From The Purse
Editorial from the Founder
Global stocks have lost $500bn in market cap this week; global stocks are now worth $108tn (equal to 123% of global GDP).
The US Federal Reserve has signalled interest rates will remain unchanged through 2023. The Fed expects that an increase in inflation this year will be short-lived. And they also upgraded forecasts for economic growth: GDP is due to expand 6.5% (versus the 4.2% projection).
The US 10 year Treasury yield rose above 1.7% this week. This is despite reassurance from the Federal Reserve that it had no plans to increase interest rates anytime soon. Bond investors fear the central bank will let inflation increase more than normal, eroding the value in bonds.
Meanwhile, the Bank of England (BoE) has said that they will keep the official interest rate at a record low (0.1%) and has also upgraded the outlook for the UK economy.
UK borrowing continues to surge: public sector net debt has risen to £2.1trn, or 97.5% of GDP, in the first 11 months of the tax year – levels not seen since the early 1960s.
Bitcoin fell after (last) weekend’s rally, post the new all-time high where the price of bitcoin reached $61,742 (last Saturday).
Morgan Stanley has become the first big US bank to offer its wealthy clients access to bitcoin funds. Digital currency group, Grayscale has launched five new cryptocurrency investment trusts. And JP Morgan is eyeing bitcoin and crypto clearinghouse options.
In the Future Focus section, read about why UK value stocks may be the trade of the decade. And ESG funds have attracted 84% of global equity inflows since 2019.
Why has Volkswagen recently become Germany’s most valuable company?
And in the Have You Seen This section, we highlight a report about UK female investors losing out on approximately £15,000 by 2030 because of the gender pay gap.
We’re tracking a UK startup called Stepladder: an award winning fintech company committed to solving a huge societal and generational problem - buying your first home. They are crowdfunding on the Seedrs platform (but please do your own research).
And don’t forget to listen to The Purse Podcast interview with Katica Roy, the Founder & CEO of Pipeline:
Stay safe, look after yourselves and your loved ones.
I hope you enjoy this week’s newsletter.
Until next week,
Jana
The Big Picture
Global markets and economy news, trends and indicators
Global stocks have lost $500bn in market cap this week
Global stocks are now worth $108tn (equal to 123% of global GDP)
We are moving further and further into ‘bubble territory’.
The US Federal Reserve signals zero rate changes through 2023
The Fed expects that an increase in inflation this year will be short-lived.
They also upgraded forecasts for economic growth: GDP expanding 6.5% this year, up from a prior projection of 4.2%.
US 10 year Treasury yield rises above 1.7% for 14month high
This is despite reassurance from the Federal Reserve that it had no plans to increase interest rates anytime soon.
Bond investors fear this means the central bank will let inflation increase more than normal, eroding the value in bonds.
Once spare economic capacity is eliminated and 2% target inflation is achieved, the BoE will revisit their position on interest rates.
The government borrowed £19.1bn last month, the highest February borrowing since monthly records began in 1993.
Public sector net debt has risen to £2.1trn, or 97.5% of GDP, in the first 11 months of the tax year – levels not seen since the early 1960s.
Bitcoin & cryptocurrencies
Global news, trends and insights
Bitcoin fell after (last) weekend rally, post new all-time high
Last Monday, the largest cryptocurrency slumped by as much as 9.2% before trading at $56,131 as of 1:04 p.m. in New York, after topping out at $61,742 on (last) Saturday.
Morgan Stanley becomes the first big US bank to offer its wealthy clients access to bitcoin funds
Morgan Stanley is launching three funds that enable ownership of bitcoin.
Two of the funds on offer are from Galaxy Digital, while the third is a joint effort from asset manager FS Investments and bitcoin company NYDIG.
Clients with ‘an aggressive risk tolerance’, who have at least $2m in assets held by the firm, will have access to these funds.
Grayscale launches five new cryptocurrency investment trusts
The new trusts are: Grayscale Basic Attention Token Trust; Grayscale Chainlink Trust; Grayscale Decentraland Trust; Grayscale Filecoin Trust; and Grayscale Livepeer Trust. (The total number of investment products are 14).
Grayscale's investment products are available to institutional and individual accredited investors through their respective periodic and ongoing private placements.
JP Morgan is eyeing bitcoin and crypto clearinghouse options
JPMorgan is exploring bitcoin and cryptocurrency clearinghouse options, looking for a middleman to sit between OTC desks and traders to guarantee the enforcement of a trade and create liquidity in the market.
Future Focus
Keeping an eye on key predictions, innovations and what’s going to impact the future
Why UK value stocks may be the trade of the decade (opinion)
Brexit drove UK stocks to valuation levels that were the cheapest compared with other developed world markets.
Then Covid fears drove value stocks globally to near-record lows relative to growth stocks.
Forecast: for global developed equities is that they would deliver an annualised total return of 4% over the next 10 years. That means investment growth of just over 25% in 6 years.
In contrast, a 12% return for UK value stocks would double an investor’s money in just 6 years.
ESG funds attract 84% of global equity inflows since 2019
According to Calastone’s global investor report, net sales of ESG funds on the transaction network rose sevenfold over the period to reach $15.1bn (£10.9bn) out of a total of $18.1bn.
The last four months of 2020 saw greater ESG inflows than the rest of 2020 and all of 2019 combined.
The report found that active equity funds globally lost $5.4bn in cumulative outflows over the two years, as passive and index funds drew in $24.5bn.
UK investors added $17.3bn to passive products, as active funds lost $0.4bn. However, the total assets under management of UK passive equity funds remain only around a third of that of their active counterparts.
Companies: winners & losers
Companies to watch and share price movements
VW becomes Germany’s most valuable company (on electric enthusiasm)
CEO Herbert Diess this week made back-to-back announcements on how he plans to turn VW into the leading electric-car company (to rival Tesla in electric vehicles).
VW’s common shares have soared more than 80% this year while the more liquid preference shares are up more than 50%.
The outsize gain in the common stock is partly driven by U.S. retail investor buying and high short interest.
Have You Seen This?
Female-focused news, reports, research, campaigns
Female investors on average £15,000 worse off than men by 2030 due to the gender pay gap
According to research carried out by Freetrade: if both men and women started investing in 2020, men would make a £1,147 greater return on their investments:
British men, who take home an average of £31,445 per year, are expected to make £3,299 this year if they start investing. British women, on the other hand, will only make £2,152 because their average annual salary is much lower at £20,515.
By 2030, with men able to invest much more than women due to their higher annual returns, the difference becomes substantial.
The research estimates male investors will have made £44,123 by the turn of the next decade. For women, however, this figure is just £28,786.
Overall, this means there is a £15,337 discrepancy.
Know this: the gender pay gap is a pervasive problem but also multi-faceted. Whilst women, on average, get paid less than men, they often feel ‘put off’ by the financial services industry. The implications on women and their purse is significant. Women must engage much more around their money and crucially, we must invest money for growth. Make a commitment this week to research a new way to invest (even if this is a small amount).
What We’re Tracking
Female and diversity-focused products or services, start-ups and businesses led by women/diverse founders, investment, research & crowdfunding campaigns.
Stepladder: (UK)-StepLadder is an award winning fintech company committed to solving a huge societal and generational problem - buying your first home.
They are tackling the housing crisis head-on with our innovative and powerful ‘StepLadder Circles’ to help first-time buyers raise their property deposits and supporting them through a process which is usually lonely, stressful and opaque.
Stepladder is crowdfunding on Seedrs. Here are the key business highlights:
90% of Members get their deposit faster than saving alone
Huge market - 350,000+ UK first-time buyers annually
40%+ quarterly growth | ~£900,000 in member funds | 75+ Circles
Multi-award winning | 5-star reviews | Backed by BBVA Anthemis
Disclaimer: this is not investment advice. Please do your own research.
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We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.
The Purse Ltd. Copyright 2021 & All Rights Reserved.
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