APAC high net-worth wealth down 5% in 2018

China accounted for 53% of the region’s decline.

High net-worth (HNW) wealth in Asia-Pacific fell 5% to US$1t in 2018 as the region suffered the sharpest asset decline, according to the World Wealth Report by Capgemini. The number of high net-worth individuals (HNWI) also dipped 2% over the same period.

China accounted for 53% of the region’s wealth decline and was responsible for more than 25% of the global losses. The country’s HNWI population also declined by 5%, from 1.26 million to 1.19 million.

The population and wealth of Hong Kong’s ultra-rich saw a steep decline of 10.1% and 13.0% in 2018, pushing the city to fall down two slots to 21st position in the global HNWI population list. The number of Hong Kong HNWIs also dropped from more than 170,000 to around 153,000 following decline to corrections in the stock market and property prices accompanied by regional headwinds originating from the slowdown in China.

In a show of strength, the number of rich Singaporeans increased by 2.1%, although their combined wealth declined by 1.3%.

HNW wealth also reportedly shrunk across almost all regions: Latin America shrunk 4%, Europe declined by 3%, and North America was down 1%. Middle East bucked the negative trend after HNW wealth and population rose 4% and 6% respectively.

Meanwhile, United States, Japan, Germany, and China still represented 61% of the global HNWI population in that order, similar to the previous year.

Globally, overall high net-worth individual (HNWI) wealth dropped by 3% for a worldwide loss of US$2t (S$2.71t) in 2018, representing the first decline after seven straight years of expansion.

Accordingly, decline in HNW wealth and population were driven by the higher wealth segments. Ultra-HNWIs, or people with assets of at least US$30m (S$40.71m), accounted for 75% of the total wealth decrease. Mid-tier millionaires (US$5-30m) made up 20% of the total wealth deduction; millionaire-next-door-segment (US$1-5m), who make up 90% of HNWI population, was affected the least with only a 0.5% drop.

Asset allocation also shifted as cash replaced equities as the most held asset class by the ultra-rich in Q1, with the affluent population seeking refuge from volatile trading conditions in the cold hard cash at 28% compared to 26% that pooled their money in equities. Alternative investments accounted for 13% of the total wealth, a 4 percentage point increase from the previous year.