Cash of the titans: Global HNWI wealth grew 9 per cent in 2019

With all that’s happened so far this year, it’s easy to forget the troubles of 2019 – from the global economic slowdown to international trade wars and geopolitical tensions. Nothing came close to the chaos caused by the coronavirus crisis of course, but 2019 wasn’t exactly plain sailing either.

Despite those headwinds though, high net worth individuals (HNWIs) around the world continued to prosper with HNWI wealth growing by 9 per cent globally. And as Capgemini’s latest World Wealth Report reveals, North America and Europe led the way with growth of 11 per cent and 9 per cent respectively, ahead of Asia-Pacific (8 per cent) for the first time since 2012.

With global economies braced for a 4.9 per cent decline in 2020 though, next year’s report may not paint quite such a pretty picture…

And the future may not be so bright for retirees who have put their faith – and savings – in structured products either, according to 7IM, with the investment management firm going so far as to call the pre-packaged investments ‘an accident waiting to happen’. Given the scale of market falls seen earlier in the year, many structured products may now be ‘underwater’, according to Matthew Yeates the firm’s senior investment manager, who advocates retirement propositions with a much more flexible mandate, and far greater diversification. “Investors looking for a portfolio that maximises their chance of meeting their retirement spending needs should focus on the total return of portfolios, incorporating both capital returns and income,” he says.

New research from MBH Corporation meanwhile, reveals that an overwhelming majority of both institutional investors and IFAs believe that investors should increase allocations to the small and micro-cap sectors. “The Coronavirus has had a more severe impact on the share price and valuations of smaller businesses than larger ones, but there are still many very profitable and well-run small enterprises that now represent excellent value for investors,” says MBH CEO Callum Laing.

According to eToro though, it’s a ‘big’ investment opportunity that has caught the attention of retail investors recently, with the company’s latest statistics suggesting investors around the world are pouring cash into the giants of the US tech stock scene, including Microsoft, Facebook, Apple, Alphabet (Google), and Netflix.

“The rally in global share prices is being driven by the US tech giants, particularly in the past few weeks,” says eToro’s Adam Vitesse. “Therefore, it’s not surprising that investors want to latch onto these fast-growing behemoths after what was a hugely painful shock to markets earlier this year.”

Wealth Adviser
 

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