Financial Assets: 2025 sets a fresh record

A comparison with pre-Covid real-terms also exposes a stark regional divide: As of end-2025 Western Europe’s real financial assets were only 0.5% above their 2019 level, effectively experiencing six years without a meaningful net gain in real terms. Over the same period, real financial assets in China rose by 70%, in Asia excluding Japan and China by 40%, in North America by 21% and in Japan by 13%. Western Europe was therefore not merely the slowest-growing region, it was the only one to experience virtual stagnation.

The enormous stock of global financial assets held by private households is not distributed evenly across the world. In fact, it is heavily concentrated in North America (Figure 2), which alone accounts for roughly half of all private financial assets worldwide. Remarkably, its share has changed little over the past two decades, despite China’s spectacular rise from 3% in 2005 to almost 15% in 2025. China’s gains came largely at the expense of the other advanced wealth centers: Western Europe’s share fell by more than 10pps to 19%, while Japan’s more than halved to 5%.

North America’s resilience reflects a powerful combination of scale and performance. Its financial assets grew by an average of 5.9% annually between 2006 and 2025, broadly in line with the global rate of 6.0%. Western Europe and Japan achieved only 3.7% and 2.0%, respectively, falling short of global growth by 2.3pps and 4.0pps per year.

In 2025, North American financial assets accelerated by 9.2%, outperforming the global rate of 8.6% (Figure 3). Emerging markets grew even faster, led by Eastern Europe, China and Latin America, all at around 11%. Western Europe lagged markedly at 4.5%, while Japan recorded growth of 6.5%.

Adjusting for inflation and population growth does not fundamentally change the long-term picture: North American financial wealth has kept pace with global growth. Population growth alone accounts for only part of the story – per-capita wealth creation runs 0.8pps below the aggregate global rate in many key regions, North America included. The exception is Japan, where a shrinking population actually lifts per-capita growth above the headline figure (Figure 4). 

Inflation, by contrast, has a much larger effect than population growth: it erases more than half of nominal growth globally in real terms. North America is no exception, with real per-capita wealth growing at 2.4% a year against a nominal 5.0%. That 2.4% real rate, however, is exactly in line with the global average and comfortably ahead of Western Europe's 1.2% – only Japan and China erode less to inflation than North America does, and even Japan's real per-capita growth (1.4%) is just narrowly quicker than Western Europe's, not America's. Compounded over two decades, this leaves the purchasing power of North American financial assets up by a factor of 1.6 – matching the global multiple, and ahead of the 1.3x recorded in both Western Europe and Japan. China remains the one region genuinely out of reach on this measure, with real per-capita wealth compounding at an astounding 11.9% a year and purchasing power up almost tenfold over the same 20 years.

Thanks to its enormous asset base, North America remains the main driver of global financial wealth growth in nominal terms, real and per-capita adjustments notwithstanding. It generated 51.4% of the worldwide increase in financial assets in 2025. Over the past two decades, it accounted for 47.5% of the total increase, compared with 20.1% for China and 14.3% for Western Europe. In global wealth creation, the US remains clearly in the driver's seat.

North America’s recent outperformance in household financial-asset growth is a relatively new phenomenon. In the years following the global financial crisis, US financial assets frequently grew more slowly than the global average. The shift began around 2017, when escalating US–China trade tensions heralded the end of ever-deeper globalization and the increasingly seamless integration of emerging economies into the global division of labor.

This changing environment is also visible in the narrowing growth gap between emerging and advanced economies (Figure 5). In the decade leading up to 2017, emerging-market financial assets on average grew more than 13pps faster per year. In 2024–2025, their advantage was only around 3pps. Emerging markets are still growing faster, but no longer fast enough to sustain the rapid convergence of the early 2000s. In an increasingly fragmented global economy, the closing of the global wealth gap has clearly lost momentum.

American supremacy is also reflected in per capita gross financial assets, at least when looking at averages: in fact, only Switzerland ranks ahead of the US. All other countries follow at a considerable distance (Figure 6).

While the two top spots have remained unchanged for years, there has been some movement among the top ten. Two decades ago, Sweden, Taiwan, Australia and New Zealand were not yet part of this illustrious circle, which at that time included Belgium, the UK, Italy and Japan. The Netherlands remains the highest-ranked Eurozone country, but is only ninth, down from fourth place in 2005. Germany’s ranking remained unchanged from last year at 13th, but it has improved by six places since 2015 – partly reflecting a significant data revision. Among the other Eurozone countries, only Ireland, Malta, Croatia and the Baltic states also improved their rankings over this period. And China? It now ranks 32nd, up eight places from 2005.

Inflation may be well below its post-pandemic peak, but the affordability crisis has not gone away. In the US, 47%² of registered voters cite the cost of living as the single most important factor in deciding their 2026 midterm vote – a sign that lower headline inflation has yet to translate into a sustained recovery in household purchasing power.

In fact, the recovery in purchasing power has gone into reverse. After the post-Covid inflation shock, wage growth had again overtaken inflation, allowing real incomes to recover in both the US and Europe. But in 2026, renewed energy-price pressures and sticky services inflation have reversed part of that improvement: inflation has risen to around 3.4% in the US and 3.3% in Europe and could be pushed higher by the energy-price shock triggered by the war in the Middle East. With nominal labor-income growth failing to keep pace, real labor-income growth has turned negative again for the first time since the post-pandemic inflation shock.

The squeeze is also highly unequal. Lower-income households spend a higher share of their budgets on necessities and therefore have less room to adjust. In Europe, food, housing and energy absorb around 61% of disposable income for those in the bottom income quintile, compared with 45% for the top. In the US, lower-income households devote around 6pps more of their spending to essential goods. As a result, differences in consumption baskets can translate into an effective inflation rate around 1-2pps higher for poorer households.

The cumulative price shock continues to bite as lower inflation rates do not undo earlier price increases: US food prices, for example, remain around 36% above 2019 levels. For households already spending most of their income on essentials, this makes it harder to recover the purchasing power lost during the inflation shock.

The affordability hangover can extend from household budgets to the ballot box. Historical evidence across 365 elections in 18 advanced economies since 1948 finds that a 10pp positive inflation surprise is associated with a 15% increase in the vote share of extremist, anti-system and populist parties, with the effect particularly pronounced when real wages fall. Inflation does not determine voting behavior, but sharp and unexpected losses of purchasing power can amplify political discontent.

Bringing inflation down is therefore not the same as restoring affordability. Broad price subsidies can provide quick relief but are costly, often poorly targeted and can weaken incentives to adjust consumption. Support should instead focus on households most exposed to essential-price shocks, for example through targeted transfers or tax relief, while structural policies tackle the underlying drivers of living costs – particularly housing supply, energy costs and competition in essential services. Wage and benefit systems should meanwhile avoid turning temporary price shocks into persistent inflation.

The longer-term challenge is to protect households’ capacity to save. When essentials absorb more income, saving is often the adjustment margin, turning today’s affordability squeeze into tomorrow’s wealth gap. Strengthening access to long-term saving, funded pensions and financial participation can help prevent an inflation shock from leaving a lasting scar on household wealth.

Financial wealth grows through two channels: households add new savings, and market movements change the value of existing portfolios. The second channel works primarily through securities, especially equities. Portfolio composition therefore determines how strongly households benefit from rising markets.

In 2025, securities, including shares, bonds and investment funds, rose by +12.4%, compared with +5.7% for bank deposits and +5.0% for insurance and pension assets (Figure 9). Securities thus led the three major asset classes for the third consecutive year.

With the sustained stock-market boom delivering substantial gains, the past three years have been exceptionally rewarding for invested savers. Between 2023 and 2025, securities grew by an average of +12.1% annually, more than twice as fast as deposits (+5.2%) and insurance and pension assets (+5.9%). Their growth advantage persists over the long term, although it is less pronounced because capital markets also experience periodic reversals.

Over the past 20 years, securities grew by an average of +6.9% annually, compared with +6.0% for total financial assets. The message is clear: capital-market participation is increasingly decisive for long-term wealth accumulation.

Securities are by far the dominant asset class. At the end of 2025, they accounted for a record 46.9% of global financial assets. Despite periodic stock-market setbacks, the long-term trend has been clear: overall holdings of shares, investment funds and other securities increased by 7.4pps compared with 2005. Conversely, the share of insurance and pension assets declined by a similar amount to a record low of 24.8%. Bank deposits meanwhile increased their share slightly to 26.0% (Figure 10).

These global figures mask large differences between countries and regions, and thus the extent to which savers benefit from rising securities prices. North American savers have the greatest capital-market exposure, with securities accounting for 60.7% of their portfolios. In the US, the share is even higher, at 61.4%. This was not always the case: following the global financial crisis, North America’s securities share fell below 46%.

Securities also play a disproportionately large role in Latin America, accounting for 45.8% of financial assets. These holdings, however, are more likely to include unlisted equity than in North America. Brazil stands out, with a securities share of 62.1%. In Asia, by contrast, bank deposits generally play a much larger role: they account for 54.6% of financial assets in China and 48.8% in Japan. However, there are important exceptions. In Australia, many savers participate indirectly in capital markets through superannuation funds, with insurance and pension assets accounting for 54.6% of household portfolios.

Western Europe, meanwhile, is characterized by a more balanced portfolio structure, with securities significantly less important than in North America. Here, too, national differences are substantial: securities account for 54.0% of financial assets in Italy, while insurance and pension assets dominate in the Netherlands, with a share of 50.4%.

These different portfolio structures demonstrate the wide variation in savings behavior around the world. They also help explain why North American savers have increased their financial assets broadly in line with global developments in recent years, unlike their Japanese and European counterparts. Despite North America’s already very high level of wealth, its greater exposure to capital markets has supported continued growth. Portfolio structure is therefore not merely a reflection of savings preferences, rather it is an increasingly important determinant of wealth creation.

Savers added less new money in 2025, but markets more than compensated: 4 out of every 5 euros of additional financial wealth came from valuation gains rather than fresh savings.

In 2025, new savings declined by -5.4% to EUR4.1trn (Figure 11). While this was well below the peaks of the exceptional years 2020 and 2021, it was still 56% higher than in 2015. Developments diverged markedly across regions. New savings in North America fell by -17.5%, largely because US purchases of securities, insurance and pension products declined. Nevertheless, the region still mobilized EUR1.8trn and accounted for around 45% of total new savings. By contrast, new savings increased by +34.6% in Japan, +22.2% in Australia and +13.3% in the eurozone. Overall these flows explain only around one-fifth of the increase in global assets, with valuation gains generating the remaining four-fifths.

Another striking feature was the continued recovery in bank deposits. The savings pool shrank, but the appetite for liquidity grew: almost one-third of fresh savings flowed into bank deposits. Inflows had virtually dried up in 2023, primarily because American savers withdrew more than EUR500bn and shifted funds into higher-yielding assets. After recovering in 2024, global deposit inflows increased by a further +18.1% to EUR1.3trn in 2025. As a result, deposits attracted 31.7% of new savings, up from 25.4% in the previous year.

While this is significantly higher than in the previous two years, it is still significantly lower than in the pre-pandemic years, when this figure averaged over 40%. The “rediscovery” of bank deposits is therefore likely due more to falling interest rates making the opportunity cost of leaving money in a current account lower, rather than due to their attractiveness. This is also evident in Japan, where the delayed interest rate turnaround caused the proportion of savings in bank deposits to fall to a historic low. The recovery was particularly pronounced in the US, where deposit inflows more than tripled to EUR321bn. Japan moved in the opposite direction: although deposit inflows increased slightly in absolute terms, their share of new savings fell from 28.4% to 23.4%.

Securities suffered another setback after the exceptional inflows of previous years. Net purchases fell by -20.5% to EUR1.8trn in 2025, following a decline of -10.9% in 2024. Even so, securities remained the preferred destination for new savings, accounting for 42.4% of total flows – a historically high level – more than any other asset class.

North American savers continued to dominate securities purchases, but their share fell from almost three-quarters in 2024 to around two-thirds in 2025. The US alone accounted for 59% of global purchases. The cooling of securities flows was therefore largely an American phenomenon: North American purchases declined by -29.4% to EUR1.2trn, while inflows remained broadly stable in Western Europe at EUR333bn and increased in Japan to EUR79bn. Eastern Europe also recorded a strong increase, albeit from a much lower base. Global appetite for securities therefore did not disappear; it became less concentrated in the US.

Preferences within the securities category shifted again: households were net sellers of bonds and other debt securities, with global outflows of EUR63bn compared with purchases of EUR183bn in 2024. This reversal was driven by American savers, who sold EUR145bn after the bond-buying boom of 2022 and 2023. Italian and Japanese households remained the largest net buyers among the countries covered, purchasing EUR24bn and EUR31bn, respectively. However, their paths diverged: Japanese purchases edged up from EUR29bn in 2024, while Italian purchases more than halved from EUR55bn.

Shares meanwhile remained in strong demand. Global purchases reached EUR830bn in 2025, down by -11.3% from the previous year but still the fourth-highest amount on record. Once again, the US was the decisive force, accounting for EUR814bn and therefore virtually all global net purchases. Elsewhere, activity was broadly balanced: Western European purchases were close to zero, while Japanese savers remained net sellers. Investment funds attracted EUR954bn, a decline of -11.1% but still the third-highest amount on record. Unlike direct share purchases, fund inflows were more broadly distributed: Western European purchases rose by +10.7% to a record EUR298bn, while North American inflows fell by -25.0% to EUR500bn. The continued popularity of Exchange Traded Funds (ETFs) is likely to have supported these flows.

Inflows into insurance and pension assets declined by -10.1% to EUR928bn, accounting for only 22.4% of new savings. However, the global decline was entirely driven by North America, where inflows fell by -40.8% to EUR269bn. Western European inflows meanwhile increased by +25.4% to EUR417bn, while Japan recorded an even stronger recovery, with inflows rising by +151.9% to EUR49bn, albeit from a low base. Nevertheless, the long-term trend remains clear: during the decade before the pandemic, insurance and pensions attracted an average of 44% of new savings – almost twice their share in 2025.

North American savers continue to show a clear preference for securities. In 2025, they directed 63% of fresh savings into securities, compared with just 26% in Western Europe (Figure 13). This greater capital-market exposure has amplified the effect of their savings, which becomes visible over the course of ten years.

Within this time period, North American financial assets grew by an average of +6.9% annually, compared with +3.9% in Western Europe. This happened although Western European households added fresh savings equivalent to an average of 2.4% of their existing financial assets each year, while North Americans added just 2.1%.

The decisive difference, however, stems from contributions generated by valuation gains: they generated 71% of the increase in North American financial assets, but only 36% in Western Europe. In other words, North American portfolios made each euro of fresh savings work harder.

Germany provides an instructive example. Its financial assets grew by a relatively strong +6.0% annually over the past decade, but this required fresh savings equivalent to 3.9% of existing assets each year – almost twice the North American rate. Valuation gains accounted for only 33% of German asset growth, less than half the North American share. Germany achieved similar growth through much greater savings efforts; North America benefited from a substantially stronger market multiplier.

For Europe, the conclusion is straightforward: its households do not suffer from a lack of savings, but from a weaker transmission of savings into wealth creation. Greater capital-market participation could raise long-term returns without requiring households to save more. The question is therefore not only how much Europeans save, but how effectively their savings are put to work.

Artificial intelligence could transform both the pace and distribution of wealth creation, potentially weakening the traditional link between working, earning and accumulation. Developing AI models and building out computing, data and energy infrastructure require large upfront investments, while successful applications can be replicated at low marginal cost. This favors scale and allows output to grow without a corresponding increase in employment. AI could also make workers more productive and efficient, raise wages and lower prices. How widely these gains are shared will depend on policy choices that shape competition, workers’ bargaining power and access to capital ownership.

The shift in value creation from labor towards capital is not new, but AI could accelerate it sharply. Recent US data show the distributional landscape into which AI is arriving. Pre-tax corporate profits reached an annualized USD4.8trn in the second quarter of 2026, equivalent to 18% of national income and the highest share since the aftermath of WWII (figure 14). Meanwhile employee compensation fell to 60%, its lowest share since the 1950s. Inflation, outsourcing and cyclical factors also matter, so these developments cannot be attributed primarily to AI, but they reveal an existing shift towards capital that AI could amplify if productivity gains accrue mainly through margins, rather than wages.

For most households, labor income remains the first rung on the wealth ladder. Wages provide the means to save, while ownership of productive assets adds access to investment income and compounding returns. If AI strengthens capital returns while weakening earnings prospects for some workers, that ladder could become harder to climb. In the US, the top 10% own around 87% of corporate equities and mutual-fund shares. AI could therefore generate strong aggregate wealth growth without a similarly broad improvement in household prosperity. AI’s labor-market impact is likely to be substantial but uneven and remains subject to high uncertainty. According to our own Allianz Research forecasts, AI will affect 1 in 4 jobs across major economies over the next three years. Reorganization is expected to dominate, affecting 10% of jobs, compared with augmentation of 5% and displacement of 8%. This corresponds to 52.5mn jobs in the US and 21.8mn across major European economies including Germany, France, Italy, Spain and the UK. New occupations should offset some losses, but probably not immediately: firms can deploy technology faster than workers can retrain or move between occupations. This transition gap could temporarily leave displacement running ahead of job creation.

AI could also reshape wealth differences between countries. It can make expertise cheaper and more widely available, potentially delivering large productivity gains where skilled labor is scarce. Countries need not produce frontier AI to benefit from adopting it. However, ownership of models, platforms, semiconductors and infrastructure is concentrated, so part of the income generated by successful adoption may flow to foreign technology owners. Economies combining widespread adoption with ownership of the underlying technologies and businesses, like the US, are better placed to capture both productivity gains and investment income. However households can also participate through diversified investments in foreign companies, meaning that national technological leadership is not the only route to sharing in AI-driven returns.

Policy must address both sides of the transition: protecting labor income and widening participation in capital returns. Three priorities stand out. First, education and retraining should focus on skills that complement AI, supported portable benefits, wage insurance and occupational mobility. This can help shorten the gap between displaced work and new opportunities. Second, tax systems should not unnecessarily favor machines over workers. Labor is subject to income taxes and social contributions, while automated production may face a lighter effective burden. For example, a tax on AI tokens treating computational output as a proxy for machine labor could moderate excessively rapid substitution and protect the tax base as value creation shifts towards capital. Recycling the proceeds into training, wage insurance or general revenues could also broaden participation in AI-driven gains. Third, policy should broaden access to capital returns through wider pension coverage, matched long-term savings, employee profit-sharing and collective investment vehicles. Governments could also establish citizen wealth funds financed from AI-related revenues that invest in productive assets on behalf of the population. Stronger financial literacy would help households take greater responsibility for their financial futures and make informed decisions about saving, investment and risk. Together, these measures would create a lasting and more widely shared claim on technological progress.

If AI shifts value creation further towards capital, wider ownership will become increasingly important to translating technological progress into broadly shared wealth. Broad participation in the gains will be essential not only for prosperity, but also for social cohesion and continued public support for technological progress. An AI transformation that concentrates rewards while spreading disruption would ultimately prove economically and politically unsustainable.

Global financial assets are on course for another strong year in 2026. Financial markets have so far proven remarkably resilient, supported by continued enthusiasm around AI and solid corporate earnings. Given the central role of securities in household portfolios, these gains should once again provide the main impetus for wealth growth. We expect global financial assets to increase by around +9% in 2026, above the +8.6% recorded in 2025 and once again well above their long-term growth rate of +6.0%.

Markets, rather than fresh savings, are likely to do most of the work. Higher energy prices following the outbreak of war in the Middle East are squeezing real disposable incomes and households’ capacity to save. Elevated uncertainty may encourage precautionary saving, partly offsetting this pressure, but additional funds are likely to favor liquid deposits over longer-term investments. Fresh savings should therefore provide only limited additional momentum, while renewed inflation means that gains in purchasing power are likely to remain well below nominal wealth growth.

The economic backdrop leaves little room for complacency. AI-related investment provides an important growth impulse, but geopolitical conflict, trade fragmentation and higher energy costs weigh on the wider economy. With no swift resolution of the conflict in the Middle East in sight, renewed inflationary pressures at a minimum will keep monetary policy restrictive and most likely prompt further tightening into 2027. With economic growth moderate and interest rates elevated, further asset-price gains increasingly depend on corporate earnings delivering on already high expectations.

This is where AI becomes both the main upside and the main risk to the wealth outlook. If today's enormous investment in computing capacity, infrastructure and applications translates into stronger productivity and profits, the rally may have further to run. But markets may also have priced in some of tomorrow's gains too early. In a downside scenario, in which earnings disappoint and expectations prove too optimistic, a 25% correction in the S&P 500 could wipe around USD27trn from US household wealth, equivalent to almost 14% of total net worth. The resulting hit to confidence and consumption, combined with weaker AI investment, could push the US economy into recession (see Box 3: US households on the front line of an AI stock-market correction).

Over the medium term, AI should remain an important driver of global wealth creation, but the path is likely to become more volatile. Productivity gains could lift growth, corporate profits and asset returns, while AI may also trigger a notable shift in economic rewards from labor towards capital (see Box 2: Who will capture the AI wealth dividend?). How widely this wealth dividend is shared will depend not only on which countries and companies develop and adopt AI, but also on who owns the productive assets and on policy choices affecting workers' participation in the gains. At the same time, the structural headwinds are unlikely to disappear. Economic fragmentation, lingering inflation, elevated public debt and unpredictable policymaking will constrain returns and increase volatility. We therefore expect global financial assets to grow by around +5-6% annually over the next few years. AI offers substantial upside, but translating its technological promise into durable and broadly shared wealth will take time.

US households profited strongly from the AI-fueled stock market rally, thanks to their significant exposure to equities. But this may prove to be a vulnerability should markets correct. The S&P500 increased by around 95% between the end of 2022 and Q2 2026 with the six hyperscaler stocks³ driving 43% of the rise. With US households’ significant exposure to equities – 34.0% of their financial savings are held in corporate equities, 23.3% in pension funds (defined benefits and defined contribution entitlements) and 9.4% in mutual fund shares – their gross financial assets grew by 42.0% or just under USD45.4trn, and total US household net wealth by 36.9% during the same period. But this notable exposure – a combined 66.6% of financial savings, around 7pps above the long-term average, and almost 28ppt higher than in Europe –  is a double-edged sword. When markets rally, consumers feel more confident and are likely to increase spending. The AI-induced equities rally of the past four years was likely a key driver of the resilience in US consumption growth in that time period. But when markets correct, consumers are likely to tighten their belts. The resulting retreat in spending can topple the US economy as household consumption is typically the most important driver of US GDP growth. The increasingly unbalanced, K-shaped structure of the US economy is adding to economic fragility while leaving the broader economy more exposed to shocks and bouts of heightened volatility. According to the latest available figures, the majority of the asset classes mentioned above is concentrated among the top 10% of US households: collectively, they own 87.3% of the total private wealth invested in corporate equities and mutual fund shares (Figure 14).

In addition, more than half (55.6%) of total defined contribution pension entitlements are held by the richest 10% of households. Overall, the top wealth decile holds 68.0% of total net household wealth. Moreover, US GDP growth has been increasingly powered by high-income consumers and the dominance of mega-cap corporations, leaving fewer households and sectors carrying a disproportionate share of economic momentum. This concentration also creates fragility as momentum rests on markets and affluent consumers, while lower-income households and smaller firms lack meaningful buffers. Any significant market downturn could rapidly erode high-income consumption and corporate confidence, amplifying negative economic outcomes.

If the AI equity bubble bursts, it would weigh on US economic growth and heighten recession risks. To gauge the economic and wealth impact we run two scenarios. While overall we do not dismiss the profound impact that AI will have on economies, the real risk is that markets may have priced in decades of growth overnight, leaving valuations vulnerable if adoption proves slower than expected. So in a first scenario an earnings miss triggers a correction to the tune of 15% in the S&P500. Given that the set-back will not be triggered by fundamental concerns about the viability of the AI business case, but rather exuberant expectations, it would be followed by a swift V-shaped recovery completed over a time horizon of six to nine months. Such a correction would lead to a 5.8% drop in total US household net wealth. The overall drag on annual GDP would tally up to -0.6pp.

In a downside scenario, more fundamental concerns about the AI business case trigger a -25% S&P500 correction eliminating USD27trn in household wealth. The equivalent -14% drop in total net worth leads to a prolonged period of weaker confidence and spending. The resulting erosion in wealth and sentiment, together with a collapse in AI investment, pushes the US economy into a recession despite substantial monetary easing. With equity markets taking up to two years to recover in this scenario, the drag on economic activity would be substantial: US GDP growth in 2027 would be -2.0pps lower relative to the baseline. The most severe impact would be visible in investment, as the bubble would also trigger an abrupt reversal in total business investment. Household consumption would be severely affected because of weak sentiment and negative wealth effects inducing households to hold back spending.