Asia-Pac HNWI market approaches US$10 tn: report

Asia-Pac HNWI market approaches US$10 tn: report

Tuesday, 28 September 2010 12:35pm

The combined wealth of Asia-Pacific's high net worth individuals (HNWI) surged almost 31 per cent in 2009 to US$9.7 trillion, erasing the losses recorded in 2008 and placing the Asian market above Europe for the first time on record, a new survey has found.

According to the 2010 Asia-Pacific Wealth Report released today by Merrill Lynch Global Wealth Management and Capgemini, Australia remains the third largest market in Asia-Pacific for HNWI's, behind China and Japan, with India in fourth place.

Australia accounts for almost 6 percent of the region's HNWI population, with 173,600 HNWIs and a total combined wealth of US$519.4 billion. India enjoyed the second fastest rate of growth in the region, with 127,000 HNWIs and US$477 billion in wealth.

Meanwhile, India, which experienced the second fastest rate of growth in the region had 127,000 HNWIs and US$477 billion in wealth.

Confirming Australia's obsession with property, Australian HNWIs were the heaviest investors in real estate in the region, with 40 percent of Australian HNWI assets held in property, compared to 26 per cent for the region and 18 per cent globally.

"Australian high net worth individuals turned the risk switch off in 2009, with investors perceiving real estate to be less volatile than many other forms of investment," said Peter Opie, senior vice president, investments at Merrill Lynch Wealth Management. "This is a trend that has continued through 2010," he added.

Opie told Financial Standard that Australian HNWIs preference for property could partially be explained by the lack of a domestic market for fixed income. At just 14 per cent, Australian HNWIs allocations to fixed income were significantly lower than their overseas counterparts at 31 per cent, he explained . Property was Australia's de facto fixed income, he argued.

Opie described the finding that Australian HNWIs derived a greater proportion of wealth from salaries and bonuses as a "big outlier" relative to other countries, where business ownership plays a much bigger role.

John McDuling
Financial Standard