UBS global wealth report 2024pdf
UBS global wealth report 2024pdf
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  1. Global Wealth Report 2024Crafted wealth intelligenceFor UBS Marketing Purposes
  2. Contents03Welcome05This year’s report at a glance05Global key findings06The regional dimension07Global wealth levels08G lobal wealth in 2023 – a recovery?09What about inflation?10 The currency effect11 Has long-term growth lost steam?14The world since 200815W here individual wealth has risen the most 16W estern Europe: a mosaic of growth, not a unit17 The rise in wealth that went unnoticed20Wealth distribution21 Inequality since 2008 – an unequal picture22The world’s wealth23Who hosts the most millionaires?25Wealth mobility26Why wealth is far from static28What does the future hold in store?28The great horizontal wealth transfer29T he outlook for wealth30The next five years32Overview of our sample of markets33Notes on concepts and methods34About UBS34 Contributors2WelcomeGlobal wealth levelsThe world since 2008Wealth distributionWealth mobilityThe outlook for wealth
  3. WelcomeIqbal Khan (left)Co-President, UBS Global Wealth Management and President UBS Asia Pacific*Robert Karofsky (right)Co-President, UBS Global Wealth Management and President UBS AmericasPeople around the world are getting progressively wealthier – and that doesn’t just apply to those who already own great wealth. What does the future hold for global wealth? It’s a ques-tion which often comes up in the conversations we have with clients around the world. The answer is encouraging. Our analysis of over 50 key markets in this year’s Global Wealth Report shows the world is getting progressively richer across all wealth seg-ments. And the dip we saw in global wealth in 2022 appears to have been just a blip. Wealth’s already bounced back – in line with the long-term trend we’ve identified. Wealth is steadily growing throughout the world – albeit at different speeds – with very few exceptions. The proportion of people in the world with the lowest wealth (under USD 10,000) has nearly halved since 2000, while the proportion of people in every other wealth bracket has grown.Wealth needs careful stewardship. Managing it successfully is a craft that demands leading intelligence and insights to identify the best opportunities. As the world’s only truly global wealth manager, present in every global market, we’re uniquely positioned to draw on our knowledge and experience to help you do exactly that.Now in its fifteenth edition, our annual Global Wealth Report has become the reference point for thoseinterested in the trends shaping household wealth acrossthe world. Backed by 30 years of data, the report crafts a clear picture of how wealth is created, how its form and distribution vary across regions, and how wealth transforms and transfers between generations. Managing wealth successfully is a craft that demands leading intelligence and insights to identify the best opportunities. Wealth means something different to all of us. Whether you’ve just made your first million, are a successful entre-preneur looking to sell their business or a wealthy individual planning to pass on their wealth to the next generation, managing it properly needs time, dedication and passion. We hope this report masters the details and delivers the expertise you need to help you turn your financial vision into a reality. Please get in touch if we can help you. Managing wealth is our craft Find out more – scan the code or visit www.ubs.com/wm*As of 1 September 20243WelcomeGlobal wealth levelsThe world since 2008Wealth distributionWealth mobilityThe outlook for wealth
  4. WelcomeGlobal wealth levelsThe world since 2008Wealth distributionWealth mobilityThe outlook for wealthPaul DonovanChief EconomistUBS Global Wealth ManagementToday’s structural economic upheaval changes wealth ownership patterns and creates demand for investment, says our Chief Economist. Why does wealth matter to you as an economist?Wealth is what pays for investment – whether for-profit, impact investing, or philanthropy. Investment in people and equipment creates economic development. The global economy is the midst of a dramatic structural upheaval. That tends to change patterns of wealth ownership, but also requires investment to build the trans-formation. Economists need to know where the world’s wealth is to understand how investment will happen, and thus to plot the likely course for sustainable, fair economic growth.This year’s report looks a bit different – what’s the thinking? In practical terms, everyone understands economics – our lives are spent constantly making economic decisions. But economists keep disguising perfectly simple ideas with equations and incomprehensible language. We should aim for clarity and simplicity – economics without jargon, in fact. I’ve been an economist at UBS for over three decades now, and over that time we have seen the nature of wealth evolve quite significantly.With that in mind, to mark the report’s fifteenth edition we have redesigned things. We want to report concisely about what matters most. We also want to present the best quality data available; the 56 markets that we cover represent 92% of the world’s wealth, with data we can have confidence in using. This year’s report covers the 15 years from the global financial crisis to after Covid. What are your key takeaways about wealth over this period? I’ve been an economist here at UBS for over three decades now, and over that time we have seen the nature of wealth evolve quite significantly.As this edition of the report shows, wealth increases most of the time, with only an occasional dip. Perhaps inevitably, wealth grows more quickly in less wealthy regions and more slowly where wealth has been long established. Who owns the wealth also evolves, with a surprisingly large group of people moving up out of the lowest wealth bracket over time.Global Wealth Report 20244
  5. This year’s report at a glance Global key findings The world has been getting progressively richer across all wealth segmentsLast year, global wealth rebounded from its 2022 slump. Wealth is steadily growing throughout the world – albeit at different speeds – with very few exceptions. The pro-portion of people in the world in the lowest wealth bracket has shrunk since 2008, while the proportion of people in every other wealth bracket has grown. The percentage of adults in that lowest wealth band, below USD 10,000, nearly halved between the year 2000 and 2023. Most of these people moved up into the considerably wider second band, situated between USD 10,000 and USD 100,000, which more than dou-bled. And people are now three times as likely to have wealth exceeding USD 1 million. Wealth mobility has been more likely to be upward than downward Our analysis of household wealth over the past 30 years shows that a substantial share of people in our sample markets move between wealth brackets in their lifetime. In every wealth band and over any time horizon, it’s consistently likelier for people to climb up the wealth ladder than slip down it. In fact, our analysis shows about one in three individuals moves into a higher wealth band within a decade. And, while extreme movements up and down the ladder are uncommon, they are not unheard of. Even leaps from the bottom to the top are a reality for a part of the population. The likelihood of getting richer tends to decrease over time, however. Our analysis shows the longer it takes adults to gain appreciably in wealth, the slower the increase tends to be in future years.A great horizontal wealth transfer is under way In many couples, one partner is younger than the other, and generally speaking, women outlive men by just over four years on average, irrespective of a given region’s average life expectancy. This means that intra-generational inheritance often comes before inter-generational wealthtransfer. As our analysis shows, the inheriting spouse can be expected to hold on to this wealth for four years on average before passing it on to the next generation. Our analysis also shows that USD 83.5 trillion of wealth will be transferred within the next 20–25 years. We estimate USD 9 trillion of this will be shifted horizon-tally between spouses, the majority in the Americas. Over 10% of the total USD 83.5 trillion is likely to be transferred to the next generation by women. The number of millionaires is on track to keep growingIn 2023, millionaires already accounted for 1.5% of the adult population we analyzed. The United States had the highest number, at nearly 22 million people (or 38% of the total). Mainland China was in second place with just over six million – roughly double the number of the United Kingdom, which came third. By 2028, the number of adults with wealth of over USD one million will have risen in 52 of the 56 markets in our sample, according to our estimates. In at least one market – Taiwan – this increase may reach 50%. Two notable exceptions are expected to be the United Kingdom and the Netherlands. Global Wealth Report 20245WelcomeGlobal wealth levelsThe world since 2008Wealth distributionWealth mobilityThe outlook for wealth
  6. The regional dimension The wealth bounce-back is powered by Europe, Middle East and AfricaThis rebound was led most strongly by growth in Europe, the Middle East and Africa (EMEA). Notably, while the global downturn in wealth in 2022 was mostly caused by the strength of the US dollar, last year wealth bounced back above 2021 levels, even when measured in local currencies. Since 2008, wealth has grown fastest in Asia-Pacific – apparently fueled by debt Wealth in Asia-Pacific has grown the most – by nearly 177% – since we published our first Global Wealth Report fifteen years ago. The Americas come in second, at nearly 146%, while EMEA lags far behind at just under 44%.Asia-Pacific’s exceptional growth in both financial and non-financial wealth has, notably, been accompanied by a significant spike in debt. Total debt in this region has grown by over 192% since 2008 – more than twenty times than in EMEA and more than four times than in the Americas. US wealth continues to be buoyant The USA is one of very few markets in our sample where wealth growth has accelerated since 2010 compared with the decade before. In the US, as in the United Kingdom, wealth has grown evenly across all wealth brackets. Our analysis shows inequality in wealth has fallen slightly in the US since 2008; in 2023 it was home to the highest number of USD millionaires.LatAm growth is strong, but inequality is ever presentBrazil’s average wealth per adult has grown by over 375% since the financial crisis of 2008, when measured in local currency. This is more than double Mexico’s growth of just over 150% and more than Mainland China’s 366%. However Brazil has the third-highest rate of wealth inequality in our sample of 56 countries, behind Russia and South Africa.Adults in EMEA are the wealthiest on average, but their wealth is growing the slowest EMEA enjoys the highest wealth per adult in US dollar terms, at just over USD 166,000, followed by APAC, with slightly over USD 156,000, and the Americas, with USD 146,000. Growth in average wealth per adult since 2008, expressed in USD, shows a different picture: EMEA comes bottom with 41%, compared with 110% in the Americas and 122% in APAC. Global Wealth Report 20246WelcomeGlobal wealth levelsThe world since 2008Wealth distributionWealth mobilityThe outlook for wealth
  7. 7Chapter 1 Global wealthlevelsWelcomeGlobal wealth levelsThe world since 2008Wealth distributionWealth mobilityThe outlook for wealth
  8. Wealth growth across the world has recovered from its slump in 2022, regardless of whether we measure it in USD or in local currencies. Wealth in Asia-Pacific has grown rapidly, but debt has spiraled upwards as well, while a few major markets saw their wealth contract, bucking the global trend. Global wealth growth recovers from its slump in 2022In the fifteen years of the Global Wealth Report’s exis-tence, only three times has total global wealth been reported to have fallen in USD terms from the year before: during the financial crisis of 2008, in 2015 and once again in 2022, when both equities and bonds dropped across all major markets, thereby wiping out the benefits of asset class diversification in investment portfolios. Looking back a bit further, since the beginning of the millennium there has been just one further instance in which total global wealth shrank, namely during the financial downturn linked to the dotcom bubble of the years 2000 and 2001. Last year, global wealth growth bounced back: after hav-ing plunged by 3% in 2022, it rose by 4.2% in USD terms, more than offsetting the previous year’s loss. Moreover, while the downturn in wealth of 2022 was due for the most part to an appreciation of the US dollar against other currencies, last year’s rebound stands on its own feet, regardless of whether it’s expressed in USD or in local cur-rencies. Only a handful of markets have had their wealth growth figures improved by exchange rate movements this time around, as described in more detail below, without a material impact on aggregate global figures. The main driver of this recovery was Europe, the Middle East and Africa (EMEA), which saw wealth grow by 4.8%, ahead of Asia-Pacific’s growth of 4.4%. The Americas trailed behind with just over 3.5%. Last year’s rebound stands on its own feet, regardless of whether it’s expressed in USD or in local currencies.Global Wealth Report 202484.8%EMEA4.4%APAC3.6%AmericasGrowth in wealth per region in 2023(in USD)2022−3%20234.2%Growth in global wealth(in USD)WelcomeGlobal wealth levelsThe world since 2008Wealth distributionWealth mobilityThe outlook for wealth
  9. What about inflation?Inflation eats away at wealth year in, year out. Indeed, since 2008, real wealth has grown by half a percentage point less per annum than nominal figures suggest, namely by nearly 4.7% vs. just over 5.2%. However, last year inflation fell back from the peak reached in 2022. As a consequence, real growth exceeded nominal growth. In other words, not only does last year’s recovery in global wealth growth stand on its own feet in local currencies, it even doubles in real terms: inflation-adjusted real global wealth growth reached nearly 8.4%. This does not mean that inflation disappeared last year, far from it. But the reduction from the year before was enough to push up real wealth growth relative to 2022. Stark differences in average wealth between markets on the downside...These aggregate numbers mask stark differences in indi-vidual markets. Indeed, even in this positive year, a few markets saw their wealth decline. The strongest con-traction in average wealth per adult among the 56 markets in our sample was registered in Cyprus, where average wealth per population shrank by more than 30%, followed by Mexico with a slump near 20% and Kazakhstan with over 17%. Among Western European economies, Switzerland with almost −6% and Italy with nearly −4% fared the worst. ...and on the upsideOn the upside, Türkiye stands out with a staggering growth of over 157% in wealth per adult between 2022 and 2023, leaving all other nations far behind. The closest are Qatar and Russia with an increase close to 20%, followed by South Africa with just over 16% and Israel with 14%. In the United States, average wealth per adult grew by nearly 2.5%, approximately one-third of the growth in wealth in Mainland China and on a par with Norway. The United Kingdom is the only European market to come close to the 10% mark, far ahead of the continen-tal runner-up Denmark, which saw its wealth increase by almost 6%, slightly ahead of Hong Kong SAR. Average growth in wealth per adult from 2022 to 2023, in local currency0%–30%80%JapanAustraliaKoreaMainland ChinaChileDenmarkIndonesiaHong Kong SARSwedenUnited StatesNorwaySingaporeGreeceFranceCyprusMexicoKazakhstanPolandHungaryColombiaSwitzerlandBrazilItalySpainNetherlandsIrelandSaudi ArabiaIndiaCanadaPortugalGermany30%LuxembourgUnited Arab EmiratesTürkiyeRussiaQatarSouth AfricaIsraelTaiwanUnited Kingdom157.78%Global Wealth Report 20249WelcomeGlobal wealth levelsThe world since 2008Wealth distributionWealth mobilityThe outlook for wealth
  10. The currency effect – where it changes wealth growth the mostAll figures shown in the previous chart are in local currency terms, which occasionally differ significantly from USD numbers. Among the major economies, the most notable deviations are to be found in Japan, where paltry growth in average wealth per adult in USD terms of nearly 2% turns into more than 9% growth in local currency; in the UK, where growth in excess of 16% shrinks to less than 10% in GBP; in Germany, where growth of nearly 3.4% turns into a slightly nega-tive figure in EUR and in Switzerland, where a respect-able 3.6% growth in USD collapses to negative growth of almost −6% once it is expressed in CHF. Türkiye’s already exceptional growth of over 63% in USD, on the other hand, more than doubles to nearly 158% in Turkish lira, while in Brazil a positive figure of just over 3.4% turns into negative growth of slightly under −4% in local currency. Differences in average wealth growth in 2023 due to currency effects, selected markets20%0%USDJapanUnited KingdomGermanySwitzerlandTürkiye BrazilRussiaItalylocal currency10%–20%–10%Mexico63.20%157.78%SouthAfricaGlobal Wealth Report 202410WelcomeGlobal wealth levelsThe world since 2008Wealth distributionWealth mobilityThe outlook for wealth
  11. Wealth growth has lost steam almost everywhereWhile from one year to another the aggregate growth in wealth tends to fluctuate wildly, the long-term trend points to a gradual slowdown when measured in US dollars. Overall, global wealth growth has cooled: it has fallen from an annual average of 7% between 2000 and 2010 to barely over 4.5% between 2010 and 2023. In other words, one-third has been chopped off. In the first decade of the millennium, over half of the markets in our sample saw their wealth grow in the double digits when measured in USD. Sincethen, not a single one comes close to 10%. While there is a multitude of causes behind these devel-opments, demographics no doubt play a role in the slowdown witnessed in Japan and Italy, since shrinking populations and ageing societies both tend to reduce the level of economic activity.The strength of the US dollar vis-à-vis most other curren-cies in our sample of markets since 2011 explains some of the slowdown shown in the table on this page. However, other factors such as maturing economies in Asia-Pacific and Latin America as well as the sovereign debt crisis in Europe also played a part.This trend is nearly universal: it is shared by 53 out of the 56 markets in our sample. The only significant exception is the United States, where average wealth growth has spiked from barely 3.7% in 2000–2010 to nearly 6.3% between 2010 and 2023. This is in no small part due to the US being the epicenter of the Global Financial Crisis, with its negative impact on house prices, the main asset most people own. The slump in real estate depressed household wealth up to 2010, only to boost it in the fol-lowing decade thanks to a favorable “base effect,” i.e., low base of comparison that flattered the subsequent recovery. The other two exceptions are Hong Kong SAR and Taiwan, but in both cases the increase in growth is far less pro-nounced. A few further developments are worth noting:–In Mainland China and India, average annual wealthgrowth has more than halved since 2010.–Annual wealth growth has fallen by over two-thirds inBrazil, the United Arab Emirates and Australia.–In the first decade of this millennium, not a singlemarket in our sample experienced negative growth inaverage annual wealth.–Between the start of the second decade and 2023, onthe other hand, there have been four markets withnegative wealth growth: Greece, Japan, Italy and Spain.–In the first period, over half of our sample, 29 markets,enjoyed average annual wealth growth in thedouble digits. In the successive period, not one cameeven close to 10%.Comparison of wealth growth rates over time, selected markets2000–20102010–2023Evolution (%)Compound annual growth rateEvolution (%)Compound annual growth rateKazakhstan676% 20% 190% 9%Mainland China588% 19% 185% 8%Qatar983% 24% 157% 8%Israel114% 7% 140% 7%India339% 14% 133% 7%Hong Kong SAR82% 6% 127% 7%Indonesia274% 13% 125% 6%United States49% 4% 121% 6%Czechia222% 11% 113% 6%Hungary169% 9% 109% 6%Taiwan83% 6% 108% 6%Singapore186% 10% 106% 6%Saudi Arabia104% 7% 95% 5%Mexico173% 10% 91% 5%Thailand240% 12% 79% 5%United Arab Emirates 401% 16% 69% 4%Sweden212% 11% 66% 4%Australia344% 15% 66% 4%Switzerland127% 8% 65% 4%Canada162% 9% 64% 4%Russia631% 20% 58% 4%United Kingdom71% 5% 57% 4%Brazil384% 15% 55% 3%Germany94% 6% 51% 3%Portugal127% 8% 48% 3%Chile191% 10% 48% 3%South Africa270% 13% 30% 2%Belgium131% 8% 28% 2%France188% 10% 22% 2%Türkiye227% 11% 11% 1%Spain248% 12%−1% −0%Italy109% 7%−4% −0%Greece103% 7%−20% −2%Japan48% 4%−23% −2%Note: all values measured in US dollars.Global Wealth Report 202411WelcomeGlobal wealth levelsThe world since 2008Wealth distributionWealth mobilityThe outlook for wealth
  12. WelcomeGlobal wealth levelsThe world since 2008Wealth distributionWealth mobilityThe outlook for wealthA comparison with equity markets shows that in 2023, the growth in global wealth significantly lagged that of the MSCI All Country World Index, with the former rising by 4.2% vs. 22.8% for the latter in USD terms. It was a year in which equity markets generally performed rather well, therefore it is unsurprising that aggregate wealth growth did not keep up with this asset class. However, it also shows once more that wealth growth is dependent on a myriad of factors rather than just the major asset classes that tend to dominate finan-cial headlines. One such factor is real estate, which in 2023 suffered from rising interest rates in most markets. Commer-cial property fared particularly badly due to the added headwind of high vacancy rates for office and retail space. Growth in MSCI ACWI equity index4.2%22.8%Growth in global wealth in USD in 2023The importance of financial wealth in the composition of the world’s aggregate wealth levels varies significantly from one region to another. In EMEA, financial wealth has grown much faster than non-financial wealth over the past fifteen years, namely by over 53% vs. nearly 29%. However, the opposite has been the case in APAC, where financial wealth growth of nearly 170% has trailed non-financial wealth growth of just under 187%. It is only in the Americas that the two stand almost equal at under 130%. Therefore, in the Americas, developments in financial wealth can be taken as a rough proxy for total wealth, but this is not the case all over the world. 0EMEAAPACAmericas100%200%Financial versus non-financial growth(since 2008)Non-financial wealthFinancial wealth28.5%126%169.5%129.2%186.7%53.4%0EMEAAPACAmericas100%200%Financial versus non-financial growth(since 2008)Non-financial wealthFinancial wealth28.5%126%169.5%129.2%186.7%53.4%Global Wealth Report 202412
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