Global private financial wealth grew by 14.6 per cent in 2013 to reach a total of $152 trillion, with the spike in stock prices helping to power the expansion, according to a study from Boston Consulting Group.
Wealth is growing most quickly in the Asia-Pacific area, excluding Japan, where it expanded by 30.5 per cent in the year.
The Asia-Pacific region is expected to overtake Western Europe in 2014 to become the second-wealthiest region and to beat out North America to become the wealthiest part of the world by 2018, the report said.
The Boston Consulting Group has done an annual study of private wealth for the past 14 years, estimating the cumulative amount of cash and deposits, money market funds, and listed securities around the world.
The study is meant to help pinpoint trends for the wealth management industry, including the increasing amount of wealth (28 per cent) invested in stock markets and the fact that the growth of private wealth was driven primarily by returns on existing assets.
Wealth grows faster than economy
The IMF estimates that the world’s economic growth in 2013 was 2.9 per cent and will rise to 3.6 per cent in 2014. By contrast, the wealth in private hands grew by 14.6 per cent last year, a reflection of the performance of equity markets and the creation of new wealth in rapidly developing economies.
In Canada, private wealth grew by just 8.4 per cent owing to weaker stock-market returns and a lower share of directly held equities.
The report measures the growth of assets across households of every level of income, but also shines a light on the number of very rich people emerging in developing economies.
The total number of millionaire households reached 16.3 million in 2013, up strongly from 13.7 million in 2012 and representing 1.1 per cent of all households globally.
The U.S. had 7.1 million millionaire households, the highest number in the world. But the number of Chinese millionaires is growing quickly, from 1.5 million in 2012 to 2.4 million in 2013. The report said 2.9 per cent of Canadian households are millionaires.
Handful of ultra-rich
The U.S. also had the most ultra-high net worth investors (4,754), followed by the U.K. (1,007) and China (983). Canada has 465. Ultra-high net worth individuals are defined as those with at least $100 million US in private financial wealth.
Growth in private wealth around the world:
- Asia-Pacific (excluding Japan): 30.5%
- Eastern Europe: 17.2%
- North America: 15.6%
- Middle East and Africa: 11.6%
- Latin America: 11.1%
- Western Europe: 5.2%
- Japan: 4.8%