The below-average increase in financial and non-financial assets in Germany over the past ten years can be attributed on the one hand to relatively weak income growth and a correspondingly modest trend in savings. Apart from the lower returns on financial assets, returns on non-financial assets in Germany have also been lower than in other countries. German households currently possess assets to the tune of around EUR 125,000 per head. This is an increase of 25 % over 1997. The US figure stands at EUR 174,700 (+ 59 % on 1997) and in Japan at EUR 131.000 per head (- 5,9 % on 1997).
Wealth report 2007
The wealth structure in Germany has shifted in recent years away from property into financial assets. On the financial asset side bank deposits and bonds have a relatively high share, whereas the proportion of equities is relatively low. In an international comparison Germans prefer conservative, relatively safe investments. Given the conservative investment structure and fairly low and more long-term debt, stock market setbacks or sudden surges in interest rates probably have less of an impact than in other countries.
The price of this security is a relatively low return. As a result, in order to meet its savings and wealth objectives, the German population has had to forgo more consumption. Whereas investors in the US achieved a real annual return from their assets of 3.6 %, German investors saw only 2.3 % over the same period. Based on long-term performance, a ten percentage point increase in the equity ratio could generate an additional annual return of around EUR 18bn.
An international comparison of returns shows that Germans’ portfolio structure needs to be optimized. The objective must be a higher return. This could be achieved by focusing more on equities, equity funds and certificates. Portfolios should be scrutinized regularly. In this context it is also important to pursue long-term objectives, in particular with regard to retirement provision. In order to offset the gradual withdrawal of public sector provision regimes, it is essential to shift the focus more towards capital market products in order to cover one’s own individual needs.
Only available in German.