Worlds Wealth Is Growing
It has been reported recently that the investable assets of the world’s wealthy grew by 10 per cent to reach a record $46.2 trillion last year. In 2011, individual wealth had declined by 1.7 per cent, according to the World Wealth Report 2013 released by Capgemini and RBC Wealth Management.
More than one million people joined the population of what the wealth management industry terms high-net-worth individuals. There are now 12 million people who have investable assets of US$1 million or more, not including their primary residence.
North America reclaimed its position as the largest market for wealthy individuals from Asia with $12.7 trillion in assets from 3.73 million people. Wealth in Asia-Pacific, which overtook North America in 2011, reached $12 trillion.
Latin America led growth in 2011, but faltered in 2012 amid slowing gross domestic product growth and challenging equity markets.
The group of ultra high-net-worth individuals, people with more than $30 million in investable assets, showed the strongest wealth increases, expanding by 11 per cent in both assets and number of millionaires.
The wealthy maintained a cautious investment approach last year, a survey of 4,400 millionaires worldwide showed. The High Net Worth Insights survey revealed that despite recent market improvements, one third of respondents are more focused on wealth preservation, compared to 26 per cent who placed an emphasis on growth.
This trend was underlined by the choice of asset allocation, as almost 30 per cent of assets were held in cash and deposits.
Equities made up the largest share of North American asset portfolios (37 per cent), whereas millionaires in Latin America and Asia-Pacific, excluding Japan, preferred real estate with 30 and 25 per cent of portfolios, respectively.
The report predicts 6.5 per cent annual growth of individual wealth during the next three years based on an ongoing economic recovery and improving investor confidence. This is in contrast to the sluggish 2.6 per cent growth since the financial crisis in 2008.
The Asia-Pacific region is expected to lead global growth and projected to grow at 9.8 per cent, one and a half times the global average.
