World Wealth Report

The 2008 edition of the Cap Gemini Merrill Lynch World Wealth Report has been released. As usual the report made interesting, although slightly predictable, reading.

Among the highlights:

1. The number of HNWIs passed the 10 million mark for the first time (up 6% to 10.1 million).

2. Global HNWI wealth increased 9.4% to $40.7 trillion.

3. The average wealth of HNWIs reached $4 million for the first time.

4. India, China and Brazil had the fastest growing populations of HNWIs. Emerging markets continued to show higher rates of growth in HNWI populations than developed markets.

5. The US still has the highest number of HNWIs (3.3 million).

6. The population of UHNWIs increased to 103,300.

7. HNWIs asset allocation showed a material shift to more conservative investments with cash, deposits and fixed income making up 44% of assets (from 35% in 2006) with substantial reductions in real estate and alternative investments. Equities remained the largest asset class (33%) There was also a rotation away from investments in North America.

The section on "passion investments" made interesting reading and supports the thesis of Robert Frank's Richistan .

Definitions:

High Net Worth Individuals (HNWIs) hold at least US$1 million in financial assets, excluding collectibles, consumables, consumer durables and primary residences.

Utra-High Net Worth Individuals (Ultra-HNWIs) hold at least US$30 million in financial assets, excluding collectibles, consumables, consumer durables and primary residences.