US, Japan, Germany, China have world’s two-third millionaires

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The number of millionaires in the world rose by nearly 8 percent last year. A report by global consultancy firm Capgemini said that an all-time high numbers of 16.5 million people owned record total wealth of $63.5 trillion.

millionaires

The wealth of high net worth individuals (HNWI) rose 8.2 percent in 2016 and was on course to surpass $100 trillion by 2025. Capgemini defines HNWI as those with investable assets of $1 million or more, excluding the primary residence, collectibles and consumables.

Approximately, 1.15 million people became millionaires last year, the report said. The United States, Japan, Germany and China boast the highest numbers of millionaires in their countries and together make up for almost two-thirds of the total, reported Reuters.

The ranks of HNWIs rose to 4.8 million from 4.46 million, in the US while the number of millionaires in China rose to 1.13 million from just over 1 million.

The Asia-Pacific, Europe and North America contributed significantly and equally to the rise in wealth, while Russia, Brazil and Canada reversed course from declines a year ago, the report showed.

Russia saw both the number of its millionaires and their wealth grow by about 20 percent as a result of rebound in its stock market. France overtook Britain in the top five countries in terms of the number of millionaires, as the former witnessed a good recovery in real estate.

Surveys on the millionaires’ financial asset holdings show they held 31.1 percent in equities in the second quarter of 2017, compared with 24.8 percent in 2016. Fixed income held steady at 18 percent, while cash grew to 27.3 percent from 23.5 percent.

Alternative investments, such as hedge funds, derivatives, foreign currency, commodities and private equity, fell to 9.7 percent from 15.7 percent. The report, however, did not dive into the reasons for the reallocation, but stronger global growth, coupled with hefty liquidity after years of unprecedented stimulus by global central banks, have pushed stock markets around the world to record highs.

On the other hand, investors are watchful and wary of geopolitical risks, with tensions rising between the United States and North Korea. There is uncertainty about the consequences about the U.S. Federal Reserve’s exit from unconventional stimulus.

Millionaires also saw a 24.3 percent return on average on investment portfolios overseen by wealth managers.

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