The overall trend of increased global wealth continues despite the slowdown in the global economy, according to the 2008 World Wealth Report by Capgemini and Merrill Lynch. The wealth of the world’s richest citizens is up 9.4% to $40.7 trillion, with the average wealth of a high net worth individual surpassing $4 million for the first time.
The UHNW bracket – those defined as having at least $30 million in financial assets – experienced the strongest growth gaining 14.5% in accumulated wealth. Strong performance in the emerging economies helped to boost the global picture; HNWs in the BRIC economies (Brazil, Russia, India and China) saw their accumulated wealth grow by 25.1%.
The world’s wealthiest have, however, assumed a more defensive asset allocation as the slowdown, led by the US’s subprime crisis in the second half of 2007, gathered pace. In particular, investors fled to cash/deposits and fixed income securities, which saw an increase of 9%.
Alternative investment vehicles saw a slight downturn in popularity overall: commodities and green investments were up, hedge funds stayed the same, while real estate fell by up to 10% compared to 2006.
Investments of passion, which Families in Business is covering in-depth in the July/August issue, continued to see robust growth. Luxury collectibles (ie, private jets, cars and yachts) were the most popular followed by fine art and jewellery, gems and watches.
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