Financial assets of households rose by a significant 7.7% to EUR 168 trillion in 2017, supported by synchronized economic recovery and strong financial markets according to the ninth edition of the ‘Allianz Global Wealth Report’. However, first data for 2018 suggests a much reduced growth. The report puts the asset and debt situation of households in more than 50 countries under the microscope.
There was a noticeable shift in investment behavior last year. Savers had largely ignored shares and investment funds in the post-crisis years, but 2017 saw significant inflows into this asset class. Its share last year reached almost a fifth of fresh funds, even more than in the years preceding the crisis. In the context of booming stock markets, this meant that securities enjoyed by far the strongest growth among all asset classes in 2017, increasing by 12.2% in total and representing over 42% of all savings at the end of the year. In the second place were receivables from insurance companies and pensions, which accounted for 29% of the asset portfolio and grew by 5.2% last year.
While investors rediscovered the capital markets, bank deposits fell out of favor with house-holds across the globe. Only 42% of new investments went to banks, compared with 63% the year before. In absolute numbers, this meant a drop of over EUR 390 billion. As a consequence, growth in deposits declined by two percentage points to 4.3%.
The years following the crisis were mainly characterized by relatively weak asset growth in industrialized nations compared with emerging countries. This also changed in 2017. The acceleration in growth was due solely to development in industrialized nations: while growth in these countries increased by more than one percentage point to 6.5%, in emerging countries it slackened by three percentage points to 12.9%. The growth differential between these two groups of countries was thus at its lowest level since 2005, at 6.5 percentage points. The average figure for the past decade was twice as high at 13 percentage points. The “catch-up” of industrialized nations is mainly due to the positive stock markets.