Rich get richer
Wednesday, 25 Jun 2008 13:33
Rich getting richer
Despite the credit crunch, the rich are getting richer, according to a report on wealth.
Emerging markets helped gains for the world's high-net-worth individuals (HNWI), whose wealth increased 9.4 per cent to $40.7 trillion (£20.3 trillion) in 2007, a report from Merrill Lynch and Capgemini has found.
Although world economic growth slowed last year to 5.1 per cent from 5.3 per cent in 2006, the average assets held by HNWIs exceeded $4 million (£2 million).
The largest regional growth of the HNWI population occurred in the Middle East, Eastern Europe and Latin America, with increases of 15.6 percent, 14.3 percent and 12.2 percent, respectively.
"This year's report found that the number of high-net-worth individuals, and the amount of wealth they control, continued to increase in 2007, with the greatest wealth being created in the emerging markets of India, China and Brazil," said Robert McCann, president of global wealth management at Merrill Lynch.
India led the world in HNWI population growth at 22.7 percent, while China followed with 20.3 per cent.
Looking at investment trends, the report found HNWIs were putting their cash in risky investments then shifting their wealth as the credit crisis unfolded.
'Green' investments have also risen in popularity, the report found, with half of investors pointing to lucrative returns in these ventures as their prime reason for putting up their cash.
Given 2007 performances and taking into consideration recent developments in world markets, the report suggests that global HNWI wealth will grow to $59.1 trillion by 2012, advancing at a rate of 7.7 per cent per year.
This far outpaces the International Monetary Fund's forecast of global economic growth of 3.7 per cent for this year.