Women: 87% choose cash accounts over investments

A study highlights how women think about investing. And more education will encourage women to invest.

Jana Hlistova

May 28, 2023

Welcome to our #181 weekly newsletter.

“For women taking control of their financial future”

-Jana Hlistova

From The Purse

In this week’s newsletter, we spotlight a study by investment service Wealthify which highlights how women think about their money and investing.

And don’t forget to listen to The Purse Podcast interview with Angela Atherton, who rejoins us to provide an update on gender lens investing since we last spoke at the end of December 2021. Angela Atherton (CFA, FRM) is the Co-founder and Principal of Parallelle Finance.

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You can review the news in brief so you stay on top of global financial, economic and investing trends.

I hope you enjoy this week’s newsletter.

Until next week,

Jana

Women: 87% choose cash accounts over investments

A study highlights how women think about investing. And more education will encourage women to invest.

Research by investment service, Wealthify highlights that women who have £5000+ to invest prefer to hold the money in a savings account.

Nearly 87% of women are opting not to invest, whilst a staggering 74% of women have not invested because the thought of it makes them nervous, compared to 58% of men.

In the study, Wealthify presented respondents with a chart which demonstrated the rate of return on an investment in the FTSE 100 versus their investment being held in a savings account over a 10 year period.

As a result of seeing this chart, 52% of women agreed that they would be more confident in investing their money.

Andy Russell, CEO at Wealthify has said:

“…So, if the interest rate on your cash savings is below the level of inflation – which is extremely likely – over time, your money will lose value, as you’ll be able to buy less with it. That leaves us with the question, what’s the real risk – investing your money for the long term, or leaving it in a cash account to be eaten away over time?
“It’s generally advised that once you have your emergency savings in place – which is the equivalent of at least three months’ outgoings – any money you don’t need in the immediate future is invested for the long term. And by ‘long term’, we mean around 5+ years.”

The study has identified the main barriers to investing…

Preference to put their money in a cash savings account
- 87% women vs 82% men
Fear of losing money
- 86% women vs 84% men
Fear of scams
- 75% women vs 67%
The thought of it makes them nervous
- 74% women vs 58% men
Lack of knowledge
- 73% women vs 67% men
Lack of trust where their money would be going
- 72% women vs 67% men
Worry that they won’t be able to access their money
- 71% women vs 66% men
The process seems too complicated
- 66% women vs 54% men
Doubt that investments would benefit them financially
- 51% women vs 53% men
The risks outweigh the benefits
- 48% women vs 52% men

Moreover, the study found that a lack of dedicated financial education at school may be causing a lack of confidence.

However based on more general industry research, we know that the financial services industry has historically not targeted women as a customer base and ‘often struggle to appeal to the female consumer’ which has alienated or disengaged women.

How can more women invest?

90% of women have said they would like to invest if they had more information. And another 89% say that if they had a clear plan, they are much more likely to invest.

Moreover, we know that women are more goal-oriented in how they think about their money. And they are more interested in aligning their values to their investing.

Over 73% of women have said that they would be more willing to invest if they felt the funds or investment vehicle were supporting good causes.

And despite a common misperception, you don’t need a lot of money to start investing. Investment platforms or mobile apps allow you to invest as little as £1.

What next? (Re) listen to The Purse Podcast:

News in Brief

Financial news

US debt ceiling: a tentative deal reached to avert a US default that threatened to send tremors through global economy. Speaker Kevin McCarthy said deal included “historic reductions in spending” and that he planned to have it ready for a vote on Wed.
The value of global bonds drop another $547bn this week – the 4th weekly loss in a row – and thus no relief for the balance sheets of private banks.
Fed terminal rate creeps higher to 5.25% as Fed minutes slightly hawkish with Fed officials split on support for more rate hikes. Policymakers stress data dependency, saying rate cuts unlikely, despite the market is betting on lower rates.
ECB balance sheet keeps rising for a second week. Total assets rose by €1.6bn to €7,730.1bn, equal to 58% of Eurozone GDP vs Fed's 32%, SNB's 113% and BOJ's 130%.
UK ‘will fall into recession’, City investor warns Britain will fall into recession by the end of 2023 or early in 2024, a top City investor warned this morning.
Bank forecast to raise rates above 5% as UK inflation falls by less than expected. Rate drops to 8.7% but food price rises remain close to 45-year high (ie at 19%).
UK homeowners and first-time buyers warned to brace for 5%-plus mortgage rates. Lenders forced to raise fixed-term deals after latest inflation figure pushed swap rates upwards.
On the way to the Trillion Dollar Club. Nvidia's market cap skyrockets by $190bn to $945bn. So far, only Apple and Amazon have managed a daily increase of $190bn.

Crypto: bitcoin, ethereum, DeFi & NFTs

It was the fourth consecutive week of flat prices. However as a tentative deal was agreed on the US debt ceiling, Bitcoin and Ethereum moved upwards. BTC is currently trading at $27,231 and ETH is trading at $1,847.
Altcoin Tron rallied 8% to $0.076778. Tron’s rally this week appears to have been driven by the climbing market capitalisation of the U.S. dollar-pegged stablecoin Tether (USTD).
Active NFT traders drops to lowest point since 2021 as FOMO wanes. Last week, the number of active traders buying and selling Ethereum NFTs slid to about 49,000, its lowest level since 2021.
Arthur Hayes predicts volatile 2023 followed by strong bitcoin rally. He sets out a positive outlook for bitcoin from 2024 onward.
Beijing releases white paper for web3 innovation and development. The timing of the release is interesting, according to the CEO of Binance, who noted Hong Kong’s crypto rules come into effect next week.

The Purse Podcast

We cover the following in our conversation:

What is gender lens investing?
What has changed in the gender lens market since 2021?
Japan: $1.4trn investment into the Gender Diversity Index
The launch of the US Women in Technology Index
The performance of gender lens funds
Market sentiment towards gender lens investing
And more+

Please enjoy! Listen on Apple Podcasts and Spotify+

Coffee Break? Read This

We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and janicka.

The Purse provides content for informational purposes only, we do not provide investment advice. Please do your own research or speak to a financial adviser.