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Global wealth continues to rise as the US & China pull away from the pack

Credit Suisse Research Institute publishes ninth edition of the Global Wealth Report

Aggregate global wealth rose by $14.0 trillion (4.6%) to $317 trillion during the twelve months to mid-2018, outpacing population growth, according to Credit Suisse Research Institute’s 2018 Global Wealth Report. Wealth per adult grew by 3.2%, raising global mean wealth to a record high $63,100 per adult.

Key findings: 

  • The US contributed most to global wealth, adding $6.3 trillion, taking its total to $98 trillion and continuing its unbroken run of growth in total wealth and wealth per adult every year since 2008
  • China is now clearly established in second place in the world’s wealth hierarchy, adding $2.3 trillion to take its total to $52 trillion; a projected addition of a further $23 trillion in the next five years would take its share of global wealth from 16% in 2018 to just above 19% in 2023
  • Non-financial assets have continued their accelerated growth over the past 12 months, providing the main impetus for overall growth in all regions except North America, accounting for 75% of the rise in wealth in China and Europe, and all of the rise in India
  • Other winners were Germany, France and the UK, which all recorded increases of nearly $1 trillion, and Italy and Japan, with c.$500 billion each
  • Switzerland ($530,240) and Australia ($411,060) again topped the league table of mean wealth per adult
  • France, Germany, the UK and Italy all saw double-digit growth in the number of millionaires, though the US led the way with a total of 17,350,000 (an increase of 5.3% on last year) 

Key themes addressed in the Global Wealth Report include: 

  • Women and Wealth
    Women now account for an estimated 40% of global wealth overall, their share of wealth having grown considerably during the 20th century, but potentially having stalled since 2000. The Report explores how this varies globally, along with differences in portfolio composition, risk aversion and the impact on female Millennials 
  • The Global Wealth Pyramid
    The top two tiers of the global wealth pyramid (>$100,000) cover 9.5% of the global population, who collectively own 84.1% of global wealth – down from 86% last year. The bottom two tiers cover 90.5% of the global population, who collectively own 15.8% of global wealth, corresponding to $50.4 trillion – a considerable uplift on last year’s $40 trillion, and evidence of a trend towards a narrowing of the global wealth gap 
  • Wealth Outlook
    Global wealth is projected to rise by nearly 26% over the next five years, reaching $399 trillion by 2023. Emerging markets are responsible for 32% of the growth, despite accounting for just 21% of current wealth. The number of millionaires will grow markedly over the next five years, reaching a new all-time high of 55 million

Nannette Hechler-Fayd’herbe, Global Head of Investment Strategy & Research, said: 

“This year we’re pleased to have delved into the global wealth outlook of women in particular. Although there remains a wealth gap between men and women globally, in some places much more marked than others, that gap has narrowed significantly over the years and is expected to continue doing so as more women access education and participate in the labor market. There are also signs that more self-made women are succeeding in business and entering the highest wealth ranks. However, even in the countries where progress is the strongest, challenges remain. More needs to be done to ensure that women have an equal opportunity to build up, inherit and share in wealth.” 

Michael O’Sullivan, Regional Chief Investment Officer EMEA, International Wealth Management, said: 

“This year’s report explores some fascinating developments. The United States and China are the obvious outperformers and drivers of wealth growth, despite rising trade tensions. Much of the year-on-year variation in wealth levels can be traced to changes in asset prices and exchange rates and had the heaviest impact in Latin America and parts of Asia Pacific. 

“Europe continues to have a large global share of wealth and is home to a third of the world’s highest wealth band individuals (those with net worth above USD 100,000) and 30% of the world’s high net worth individuals. Political uncertainty and exchange rate changes played a part in Europe’s steady, if unspectacular, performance over the last year, with events such as Brexit having an impact on a difficult year for the UK. 

“Aside from the UHNW individuals who occupy the top of the wealth pyramid, we think it’s important to look more widely at the wealth spectrum including the middle and base sections of the pyramid. These segments not only represent significant population size and political power but also boast a combined wealth of over $50 trillion, yielding huge potential opportunities to serve them.” 

Anthony Shorrocks, Economist and report author, said: 

“The global distribution of wealth remains largely skewed to North America and Europe, accounting for 60% of total household wealth but containing only 17% of the world adult population. However, emerging economies are expected to recover from their recent doldrums and to continue to catch up with developed economies over the next five years by contributing 32% of wealth growth despite accounting for just 21% of current wealth. 

“The last two years have also seen a relative flattening out of the share of the top 1% and 10% of wealth holders following a decade of steady growth after the financial crisis. Since the global financial crisis, wealth inequality has trended upward, propelled in part by the rising share of financial assets, and a strengthening US dollar. These underlying factors appear to be waning, so it seems more likely that wealth inequality will fall in future rather than rise.”

For a copy of the Global Wealth Report 2018, please visit: www.credit-suisse.com/gwr
Full information on sources and methodology is also provided in the Global Wealth Databook 2018.

About the CSRI Global Wealth Report
The ninth edition of the Global Wealth Report published by the Credit Suisse Research Institute provides the most comprehensive and up-to-date source of information available on global household wealth. Despite the significance of global household wealth for economic activity, data regarding both the level and the distribution of global household wealth is surprisingly incomplete. This report aims to bridge that gap by assembling a unique database that combines published information and the best available estimates where data does not exist. The Global Wealth Report is compiled from data on the wealth holdings of 5.0 billion adults across approximately 200 countries – from billionaires in the top echelon to the middle and bottom sections of the wealth pyramid, which other studies often overlook. The robust methodology, established over many years of analysis, provides transparent information on the Global Wealth Report’s underlying sources and their quality. 

About the Credit Suisse Research Institute
The Credit Suisse Research Institute is Credit Suisse's in-house think tank. The Institute was established in the aftermath of the 2008 financial crisis with the objective of studying long-term economic developments, which have – or promise to have – a global impact within and beyond the financial services. Further information about the Credit Suisse Research Institute can be found at www.credit-suisse.com/researchinstitute.