Asia-Pacific’s high net worth individual population grew to 2.6 million last year, an increase of 8.6 per cent, according to the second annual Asia-Pacific Wealth Report. The figures released by Merrill Lynch and Capgemini show that Asia-Pacific accounts for 27.1 per cent of the global HNW population. The wealth of Asia-Pacific HNWs totalled $8.4 trillion in 2006, an increase of 10.5 per cent over 2005. Their wealth was concentrated in Japan and China, which accounted for 43.7 per cent and 20.6 per cent, respectively, of the region’s total wealth. Asia-Pacific was home to five of the 10 fastest growing markets for HNWs, including Singapore, India and Indonesia, where the HNW populations grew by 21.2 per cent, 20.5 per cent and 16.0 per cent, respectively, compared with the global HNW expansion of 8.3 per cent. Korea and Hong Kong were also in the top 10 fastest growing markets globally. The latest Asia-Pacific Wealth Report takes an in-depth look at the HNW population and behaviour in nine regional markets – Australia, China, Hong Kong, India, Indonesia, Japan, Singapore, South Korea and Taiwan. These markets account for almost 94 per cent of the region’s 2.6 million HNWs. The report’s authors point to growth in real GDP and stock market capitalisations as being key drivers of wealth in Asia-Pacific last year. The Asia-Pacific region showed among the highest GDP growth rates in the world. China and India drove the region with 10.5 per cent and 8.8 per cent real GDP growth, respectively. Additionally, savings rates, as a percentage of GDP, were higher in Asia-Pacific than most developed markets. China, Singapore and Hong Kong all had domestic savings rates in excess of 40 per cent. China, Indonesia, India and Hong Kong benchmark stock indices outperformed most mature capital markets, as well as their peer markets in the region with returns over 30 per cent. The report found that within the region, asset allocation differed significantly from market to market. Australian HNWs, for example, allocated 37 per cent of their assets to equities, the highest level in the region. Investors in China and Indonesia also had relatively high equity allocations. Investors in South Korea, on the other hand, allocated the largest percentage of their portfolios to real estate. And Asia-Pacific HNWs are increasingly looking at internationalising their investment portfolios and, over the longer term, re-balancing their asset allocations in favour of alternative investments, equities and fixed income. The region’s HNWs are increasing their international exposure although still maintain a very regional portfolio focus. Slightly more than half of Asia-Pacific HNW’s assets were invested within the region and slightly more than a quarter of their holdings were allocated to North America. The majority of HNWs in all markets are male; however, the proportions of male HNWs are highest in India, Australia and South Korea at more than 80 per cent. On the other hand, females represent 43 per cent of Taiwan’s HNW population, and more than 30 per cent in China and Hong Kong, the report found. “Overall, it’s a story of growth, growth and more growth for the HNW marketplaces throughout the region,” said Rahul Malhotra, managing director, head of Asia Pacific, Merrill Lynch Global Wealth Management. “While HNW investment behaviours differ from market to market, the underlying drivers of wealth remain strong overall and we expect the region will continue to outpace the global rate of growth in HNW wealth.”