That's the summary of Capgemini's 2021 World Wealth Report, the Victoria's Secret catalogue for private bankers and wealth managers. To reiterate what we already know, "despite the pandemic, investor bullishness boosted global [millionaire] population wealth growth." According to the report, the number of High Net Worth Individuals ("HNWI") grew by 6.3% in 2020, faster than the 6.1% CAGR between 2013-2019. The number of millionaires grew fastest in North America (not surprisingly), followed by the Middle East (somewhat surprising, given how oil performed, but I guess the region is much more diversified than I knew). Click charts to enlarge.
Overall, there are now over 20.5 million HNWIs (millionaires) in the world--seems like a lot, but that's just 0.26% of the world's population.
So, where are the rich investing their money? The usual places: equities (30%), cash (24%, higher than I would have expected with the risk-free rate at ~0%, but we were just in a pandemic), fixed income (18%), real estate (15%) and alternatives (14%). Looking back about twenty years, you see a big shift away from low-yielding fixed income (30% to 18%) and increasing embrace of higher returning alternatives (broadly speaking, private equity and hedge funds).
What's interesting, but in no way surprising, is the changes to the sources of wealth, particularly in the U.S., over the past quarter century. In 1993, inherited wealth was the biggest source of affluence among the 400 richest individuals in the U.S. Today, it's almost all self-made and mostly from Technology and Finance. So, that's good...even if inequality is much higher now than 25 years ago.
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