Welcome to our #74 weekly newsletter.
“For women taking control of their financial future”
-Jana Hlistova
From The Purse
In this week’s newsletter, we highlight a report on gender diversity in the FTSE All-Share which reveals a gender pay gap and bonus gap.
We know that senior women tend to hire more women. And at the minimum threshold (33%), senior women significantly impact decision-making, increase performance and profitability, and build more female-friendly workplaces.
Gender balance is critical for women in the workplace.
You can review the news in brief so you stay on top of global financial, economic and investing trends.
And we explain cryptocurrency exchange-traded products (ETPs).
The pandemic has been fertile ground for the crypto market, as investors seek alternative, non-correlated assets which hedge against inflation. And many believe that crypto exchange traded products (ETPs) have gained a foothold in the investment mainstream.
And don’t forget to listen to The Purse Podcast interview with Victoria Pynchon, co-founder for SheNegotiates, about how to negotiate.
Stay safe everyone & look after yourselves.
I hope you enjoy this week’s newsletter.
Until next week,
Jana
Report: gender diversity in the FTSE All-Share
The gender pay gap, the bonus gap and how to negotiate
The UK government suspended gender pay gap reporting last year because of Covid.
But a new report by Women on Boards on diversity in the FTSE All-Share (excluding the FTSE 350) found a lack of gender diversity (at the board and executive level) and a gender pay gap above the UK average.
The report findings for gender diversity (FTSE All-Share, excluding FTSE 350)
The FTSE All-Share (in the report) comprises the FTSE 100, FTSE 250 and FTSE Small Cap. The findings for gender diversity are:
31% of board members are women
48% (less than half) of companies have met the target of 33% female board directors
7% of chief executives are women
16% of chairs are women
54% of companies have all-male leadership teams
(3% of board members are ‘directors of colour’ (male or female)).
Although FTSE 350 companies achieved a set target of 33% representation of women on the board (before the end of 2020), more than 100 companies had failed to meet the diversity target. And 41% companies had still not reached 33% female board-level representation.
Why is this important?
Based on research, we know that senior women tend to hire more women. And at the minimum threshold (33%), senior women significantly impact decision-making, increase performance and profitability, and build more female-friendly workplaces.
The gender pay gap persists
The report highlighted that the gender pay gap for 2020 was 20.2% (for FTSE 350 companies required to report) and 17.3% for the remainder of the FTSE All-Share.
This is compared to the UK national average of 13.7%, according to Spktral.
According to new research reported by City AM, senior men get paid up to 23% more than women (at the associate level it is 9%).
The bonus gap
However, data showed that half of this gap comes from bonuses.
Men at the associate level (typically 2-5 years’ experience) receive 50% higher bonuses than women, on average £14k vs. £9k for women.
At the FTSE 350, the average bonus gap is 44.6% vs 36% at the FTSE All-Share.
In male dominated industries such as financial services and technology, the bonus gap can be as high as 50%-70% (if not more).
The more senior the position, the higher the bonus gap.
Although this can, in part be explained by the number of men who hold more senior positions (relative to women), the pay differentials do exist.
The cost to women
Added up over a woman’s lifetime, it is estimated that women lose out between £250K-£1m+. This figure is made up of lost earnings and a loss of investment returns, compounded, over time. And this starts for most women right out of university.
How to negotiate… to close the gender pay & bonus gap
Negotiation is a powerful tool for women.
According to Victoria Pynchon, a commercial litigator (US) with 25 years experience and a co-founder of SheNegotiates, women are outstanding negotiators.
Victoria defines negotiation as a peacemaking process which leads to an agreement (based on interests).
Here are some of Victoria’s tips for negotiating a job offer:
Research your market value (online, talk to recruiters).
Talk to your male colleagues about how much they earn. Why? Men are paid 20%-30%+ more.
Have a plan and prepare.
List your concessions, including your ‘deal-breaker’ (when do you walk away?).
Set the standard: always make the opening offer.
And more.
Listen to The Purse Podcast interview with Victoria Pynchon about how to negotiate.
News in Brief
Financial news
The US Federal Reserve warned that there could be two interest rate hikes in 2023, due to rising inflation. They also confirmed that they would not taper back bond purchases (for now) but will soon begin talking about it.
Global shares: worst week in a month whilst the US dollar trades near a 2 month high. The FTSE 100 had its biggest fall in over a month and the pound slips against the dollar.
UK inflation rises to 2.1% which is above the Bank of England target. Lockdown reopening has driven up prices in clothing, fuel and meals faster than expected.
UK unemployment falls as payrolls rise. The number of payrolled employees has increased for the sixth consecutive month, up by 197,000 in May 2021 to 28.5m.
UK retail sales drop in May (1.9%), as people eat out. In April, retail sales increased 9.2%.
UK Chancellor, Rishi Sunak, rejects calls by businesses to extend furlough extension.
CBI predicts UK’s economic recovery will accelerate into autumn. The economy will expand by 8.2% this year and by 6.1% next year, despite staff shortages and risks of inflation. Wages growth is now running at 3%.
‘Big Short’ investor Michael Burry (US) is warning of the biggest market bubble in history. Earlier this year he said that the stock market was ‘dancing on a knife's edge.’
Crypto: bitcoin, ethereum & DeFi
On Monday, MicroStrategy raised $500m in bonds due 2028, more than its $400m target announced last week, to acquire more of Bitcoin. The firm reportedly received more than $1.5bn in orders for the offering. As on Monday, MicroStrategy own 92,079 tokens, worth nearly $3.8bn.
On Monday, the Bitcoin price moved above $40,000 after Elon Musk, tweeted that transactions made in digital currency will resume once crypto mining is greener. Bitcoin’s price is currently approximately $36,000.
Goldman Sachs is exploring ether options. The bank is planning on launching an ether futures and options trading platform for clients in the near future. Ether is currently trading at approximately $2,200+
Billionaire hedge fund, Paul Tudor Jones, said he would ‘go all in on the inflation trades’ if the Federal Reserve is nonchalant this week regarding rising consumer prices. He would buy would probably ‘buy commodities, buy crypto, buy gold’.
Explainer: cryptocurrency exchange-traded products (ETPs)
What is a crypto ETP?
The pandemic has been fertile ground for the crypto market, as investors seek alternative, non-correlated assets which hedge against inflation.
Coupled with growing institutional interest, many believe that crypto exchange traded products (ETPs) have gained a foothold in the investment mainstream.
What is a crypto ETP?
Exchange traded products (ETPs) are types of securities that track underlying securities, an index, or digital assets such as bitcoin, ethereum or polkadot.
These are products listed on an exchange.
ETPs are traded like shares (meaning their prices can fluctuate) and they are designed to replicate the return of an underlying benchmark or assets.
Why buy a crypto ETP?
ETPs are usually a low-cost alternative to actively-managed funds, otherwise referred to as a passive investment.
This is what Diana Biggs, CEO of Valour had to say on The Purse Podcast:
“The idea is to remove the complication out of gaining exposure to something like digital assets for investors who want to work through their broker, (who) want to trade their funds on regulated exchanges and who want to have the freedom… And for doing that through liquid assets, and who might not be comfortable with necessarily opening up an exchange at a crypto currency platform.
We know that there's been quite a few risks with some of them over the years who might not want to hold their own cryptocurrency.
Taking custody of a digital asset of a cryptocurrency can be quite complicated (because).. digital assets are decentralised. That means that if something goes wrong, there's no customer service helpline that you can get hold of.
If you send Bitcoin to the wrong address, there's no way for you to ever get it back”
Here is a summary of the key benefits:
Buy through a bank/ a broker
Trade funds on regulated exchanges
No technical know-how needed
Third party custody of your digital assets
Risks and government regulation
Attempts to list crypto-backed funds and products on UK exchanges have been hampered by the cautious attitude of regulators towards the digital assets.
In the UK, the Financial Conduct Authority (FCA) banned the sale of crypto derivatives and exchange-traded notes to retail investors from Jan. 9, 2021.
Arguably, the risks in the crypto derivatives market are comparable to the risks of the foreign exchange markets, which are also highly leveraged (ie ‘investors could lose all their money’).
However, in these foreign exchange markets, governments and regulators enforce maximum leverage limits for investors, instead of a blanket ban.
Bitcoin ETP: the first to launch on a London exchange
Digital asset securities provider ETC Group’s BTCE Bitcoin ETP began trading on a London exchange, Aquis Exchange on June 7.
Aimed at professional investors, the ETP is the first time a crypto-connected asset is trading on any UK market. All transactions (in sterling, Swiss francs, Euros and US dollars) will be cleared in Switzerland where crypto exchanges are legal and regulated.
Aquis said the listing of the Bitcoin ETP will allow the product to reach ‘a wider group of investors’. This follows the ETPs listing on Deutsche Börse’s XETRA platform in June last year as well as the Swiss Exchange in January.
Learn more:
Watch this interview about the bitcoin ETP launched on Aquis Exchange.
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NB: Please note that this article is for educational purposes only. We do not recommend products, services nor do we provide investment advice.
The Purse Podcast
How to negotiate: a job offer, with a male partner and as a female founder.
We cover the following topics on our conversation:
What is negotiation?
What is the cost of women not negotiating?
Why is negotiation more challenging for women (or is it)?
How can women negotiate:
a job offer
with their male partner regarding money
as a female founder
How do women overcome systemic bias in a negotiation?
What books or blogs about negotiation do you recommend?
Listen on all podcasting channels including iTunes, Spotify and Anchor.
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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.
The Purse provides content for informational purposes only, we do not provide product or service recommendations or investment advice. Please do your own research or speak to a financial advisor.
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