Millionaires Hold Half of Global Wealth Despite Slower Growth

New York Stock Exchange in Wall Street, New York, United States. Plummeting equity market caused the growth of global personal wealth to slow down in 2018. Manuel Romano/NurPhoto/Getty Images
Text size

Millionaires’ wealth reached approximately US$103 trillion in 2018, accounting for half of global personal financial assets, according to a report released Thursday.

The number of millionaires grew 2.1% year-over-year to 22.1 million last year, and their combined assets remained flat from a year ago, representing the slowest growth rate in five years. The compound annual growth rate of millionaires’ wealth was 6%, from 2013 to 2017, according to the Global Wealth Report 2019 by Boston Consulting Group (BCG).

The significant slowdown in wealth growth is mainly due to poor performing equity markets. “The global stock markets logged the worst year since 2008,” says Anna Zakrzewski, head of BCG global wealth management and one of the authors of the report.

On average, the global equity market retracted 9% in 2018, with major market indexes plummeting by as much as 20%.

The world’s millionaires, about two-thirds of whom reside in the United States, tend to invest heavily in high-risk equity markets, Zakrzewski says.

Currency exchange also plays an important role, as the wealth of millionaires is calculated on the dollar value. The U.S. dollar gained 4.3% against a basket of other major currencies in 2018.

Overall, global personal financial wealth grew only 1.6% to US$206 trillion in 2018, sharply lower than the 7.5% recorded in 2017, and well below the compound annual growth rate of 6.2% generated in the prior five years.

The 19th edition of BCG’s annual report reviews data from 97 countries that collectively account for 98% of the world’s gross domestic product, and incorporates surveys with 140 wealth managers worldwide. All wealth-related figures are converted into U.S. dollars using the 2018 year-end exchange rate.

Other key findings in the report include:

North Americaheld US$90 trillion, or 44%, of global wealth; followed by Western Europe (US$40 trillion or 21%), Asia (US$37 billion or 18% excluding Japan), and Japan (US$16 trillion or 8%)

The wealthiest countries in 2018 were the U.S. (US$85 trillion), China (US$21 trillion), and Japan (US$16 trillion)

The top five countries by number of millionaires were U.S. (14.7 million), China (1.3 million), Japan (1.1 million), Switzerland (500,000), and the U.K. (400,000)

The top five countries by number of ultra-high-net-worth individuals(with assets of more than US$100 million) were the U.S. (14,900), China (4,300), Germany (2,300), France (2,000), and Italy (1,700)

Global personal wealth is projected to grow to US$272 trillion, with a compound annual growth rate of 5.7% for the next five years

The region likely to experience the fastest millionaire population growth from 2018-23 is Asia (excluding Japan) at 10.1%, followed by Africa at 9.8%, and Latin America at 9.1%. Japan is forecast to have the slowest growth rate of 1%