Wealth Drivers and Key Events in 2020

THE ULTRA WEALTHY IN 2020

Resilience in a tumultuous year

The size of the global ultra high net worth (UHNW) population — individuals with a net worth above $30m — rose by 1.7% in 2020 to 295,450 individuals. This was a much slower pace of expansion than near double-digit growth a year earlier, and masked large regional and sectoral differences, but was a resilient performance nonetheless amid the upheaval of the Covid-19 pandemic — national lockdowns, international travel bans, trade disruption and the deepest contraction in world economic output for a generation.

Huge monetary stimulus from global central banks and expansive government intervention drove a strong rally in financial markets after an initial pandemic-driven slump. With late-year vaccine progress also bolstering investor sentiment and ‘risk-on’ assets, almost all major stock market indices posted healthy annual returns. Overall, the combined net worth of the UHNW population in 2020 increased by 2% to $35.5trn.

On a different path

This expansion of ultra wealth in a period of intense economic turmoil, widespread unemployment and falling incomes for many non-wealthy individuals underlined the polarizing effects of the pandemic across society. The extent to which the ultra wealthy were able to weather the storm (and, in some cases, significantly expand their fortunes) in one sense augers well for future wealth-creation prospects. However, it will also raise more questions over widening wealth inequality and could spur more concerted redistributive policy efforts in areas such as tax and regulation.

GROWTH OF THE WORLD'S ULTRA WEALTHY POPULATION

5% 4% 3% 2% 1% 0% -1% -2% -3% -4% 3.3% 3.8% 3.6% 263,390

265,390

233,410 290,400 2.8% 295,450 350,000 300,000 250,000 200,000 150,000 100,000 50,000

-3.3% 2016 2017 2018 2019 2020

World real GDP year-on-year change Global UHNW population

Sources: Wealth-X; International Monetary Fund World Economic Outlook – April 2021