Published 2 June 2011
The Business Times
By Michelle Quah
15.5% of households have at least US$1m in assets under management: report
Think you know which country has the highest proportion of millionaires in the world? You might want to guess again.
Instead, the honour belongs yet again (yes, again) to Singapore – with one in six, or 15.5 per cent, of all households having at least US$1 million in assets under management (AuM) in 2010.
Translated into absolute numbers, that’s about 170,000 households here with more than US$1 million in AuM (including cash deposits, money market funds, listed securities, onshore and offshore assets). The number represents an almost one-third growth from the year before, which makes Singapore also the country with the fastest-growing number of millionaire households.
Switzerland is next in line with the second highest concentration of millionaire households – and also the highest in Europe – with 9.9 per cent, and about 330,000 households in total.
Cutting the numbers another way, the US had the largest number of what BCG terms the ‘ultra high net worth’ (UHNW) households – those with more than US$100 million in AuM – at almost 2,700 households; Saudi Arabia had the highest concentration of UHNW households at 18 per 100,000 households, followed by Switzerland, Hong Kong, Kuwait and Austria.
The global management consulting firm unveiled the numbers in its eleventh annual Global Wealth report titled Shaping a New Tomorrow: How to Capitalize on the Momentum of Change, a copy of which was sent to The Business Times.
In that report, BCG said global wealth climbed by 8.0 per cent in 2010 to US$121.8 trillion, or about US$20 trillion above where it stood during the depths of the financial crisis.
North America had the largest absolute gain of any regional wealth market in AuM, at US$3.6 trillion, and the second-highest growth rate, at 10.2 per cent. Its US$38.2 trillion in AuM made it the world’s richest region, with nearly one-third of global wealth.
In Europe, wealth grew at a below-average rate of 4.8 per cent, but the region still had a gain of US$1.7 trillion in AuM.
And wealth grew fastest in the Asia-Pacific (excluding Japan), at a 17.1 per cent rate. In Japan, wealth declined by 0.2 per cent to US$16.8 trillion – a marked change from hallowed days before when, even as recently as 2008, the country accounted for more than half of all the wealth in the Asia-Pacific. In 2010, Japan accounted for about 44 per cent.
In terms of individual countries, the nations showing the largest absolute gains in wealth were the US, China, the United Kingdom and India.
As for millionaire households, the total number of them represented just 0.9 per cent of the world’s households – but they owned 39 per cent of global wealth, up from 37 per cent in 2009. The number of millionaire households increased by 12.2 per cent in 2010 to about 12.5 million.
The US had by far the most millionaire households with 5.2 million, followed by Japan, China, the UK and Germany.
Perhaps not surprisingly, three of the six densest millionaire populations were in the Middle East – in Qatar, Kuwait and the United Arab Emirates.
And, in line with the rate of growth of wealth, the proportion of wealth owned by millionaire households increased the most in Asia-Pacific – at 2.9 percentage points – followed by North America, at 1.3 percentage points.
Tjun Tang, a BCG partner who worked on the report, said the firm expects global wealth to grow at a compound annual rate of 5.9 per cent from year-end 2010 through 2015 – to about US$162 trillion – driven by the performance of the capital markets and the growth of GDP in countries around the world.
Wealth is expected to grow fastest in emerging markets; in India and China, for example, it is expected to increase at a compound annual rate of 18 per cent and 14 per cent, respectively. As a result, the Asia-Pacific region’s share of global wealth (ex-Japan) is projected to rise from 18 per cent in 2010 to 23 per cent in 2015.
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