Global wealth rose 10.6% last year to reach a record high of US$530 trillion in 2021 and is set to continue rising in all regions despite inflationary pressures and Russia’s invasion of Ukraine.
Strong equity markets and a surge in demand for real assets such as property, wine and art drove the increase, according to a report by Boston Consulting Group. About US$80 trillion of new wealth is likely to be created over the next five years.
“Wealth development is resoundingly resilient, and even against the backdrop of geopolitical turmoil the growth rate will remain positive,” said Anna Zakrzewski, global leader of BCG’s wealth management arm.
Asia-Pacific is expected to maintain the fastest rate of wealth growth, with asset values poised to increase by a compound annual growth rate of 8.4% through 2026. If that rate holds, the region could then host nearly one-quarter of the world’s wealth.
That could see Hong Kong overtake Switzerland next year as the jurisdiction managing the “largest amount of private cross-border wealth,” the report said.
North American wealth growth will slow to 4.7% through 2026, compared to a five-year average of 9.1%, the researchers estimated. In Western Europe, wealth growth is likely to slow from 4.5% to less than 4%.
The report also noted that sustainable investing is growing three to five times as fast as traditional investments, and by 2026 this asset class could account for as much as 17% of privately invested wealth.