Key Points from the UBS Global Wealth Report for 2024

UBS released its 15^th edition of the Global Wealth Report 2024, offering a comprehensive overview of global wealth from levels to distribution to mobility.

UBS released its 15^th edition of the Global Wealth Report 2024, offering a comprehensive overview of global wealth from levels to distribution to mobility. It says, “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.” Of course, there’s a lot that goes into wealth management –picking stocks is just part of the overall value proposition– and we’ve selected the following seven key points that we think are worth recognizing.

7 Key Points from the UBS Global Wealth Report for 2024

1. Global Wealth Recovery: After a slump in 2022 thanks to fixed income and equity markets falling concurrently, global wealth rebounded in 2023, climbing 4.2% in U.S. dollar terms globally. Global wealth falls infrequently- in the last 15 years, the only drops came in 2008, 2015 and 2022. While it may be useful to plan for tougher times for planning and investment purposes, the overall trend for wealth, equities and other broad investment classes has been higher over longer periods of time.
2. Wealth Distribution and Mobility: Wealth is becoming more evenly distributed across the globe. Since 2000, the proportion of people in the lowest wealth bracket (below USD 10,000) has nearly halved, while the middle-class wealth segment has grown substantially. Wealth mobility, or the movement between wealth brackets, has been upward more often than downward. Approximately one in three people move into a higher wealth band over a decade, indicating growing opportunities for wealth accumulation.
3. Inflation’s Impact on Wealth: As the chart below shows, average global wealth growth varies a lot by country. Since 2008, real wealth has grown by 4.7% on average, compared with the nominal (real + inflation) growth rate of 5.2%. Certainly, inflation has been high recently and has commanded a lot of attention (rightfully so), but the longer-term data shows it hasn’t been a huge drag on wealth creation.

   

    

4. Wealth Trends in Local Currency: There are significant regional differences in wealth accumulation depending on the local currency. The chart below shows that dollar-denominated wealth generally trended in the positive direction, while local-currency wealth tended to exhibit wide gaps in both directions, sometimes by 10% or more.

   

    

5. The Wealth Pyramid: The global share of adults with less than $10,000 of wealth fell from 75.2% to 39.5%, with the $10,000 to $100,000 band growing from 16.9% to 42.7%. The wealth pyramid shows that 1,6 billion adults have $10,000 to $100,000 and more than 58 million people have in excess of $1 million.

   

    

6. The Horizontal Wealth Transfer: A notable finding in the report is the ongoing “horizontal wealth transfer,” where wealth is transferred between spouses before passing to the next generation. Over the next 20 to 25 years, UBS estimates that $83 trillion of assets are expected.
7. Global Wealth Outlook: Between 2023 and 2028, UBS expects the number of millionaires to continue to rise, with emerging markets seeing their count rise in excess of 30%. The United States is expected to see the number if millionaires rise from 22 million to 25.4 million, a 16% increase and in the middle of the pack. Of the 56 countries in the analysis, just four are expected to see a drop in the number of millionaires (including Netherlands and the United Kingdom).

   

Our Take

The UBS Global Wealth Report for 2024 was a worthwhile change of pace, as we spend a healthy chunk of our waking hours diving deep into our universe of eligible stocks, endeavoring to uncover Value opportunities in every corner of the market. We’d normally say that such a report offered a great 35,000-foot view of wealth dynamics, but in this situation, it’s probably more appropriate to consider it a great view from space. To learn more about how we can manage your wealth, please see our Wealth Management page or reach out to Jason Clark, CFA at jclark@kovitz.com.