Dr. Lorenz Weimann
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Last year's good performance owed a lot to the year-end rally on stock markets, in particular in industrialized countries. Almost 70% of asset growth last year was attributable to changes in the value of portfolios, only 30% was due to original savings; the year before, it was the other way round. The composition of fresh savings is quite surprising. Private savers sold more securities than they bought but poured as much as two-thirds of fresh funds into banks – a new record high. “The saving behavior of private investors is still decidedly risk-averse”, said Michael Heise, chief economist of Allianz. “While financial assets grew over the last few years mainly thanks to the good performance on securities markets, new money is mostly put into bank accounts, not least in industrialized countries. But here, they not only generate no returns but actually suffer real losses: In 2016 alone, savers are thought to have lost around EUR 300 billion owing to inflation; this year, with rising inflation, the figure might be twice as high. For decision makers in the financial industry, the economy and politics, solving this paradox is one of the biggest challenges in the coming years: How can we create the backdrop that households not only save, but invest, with a long-term horizon and decent returns? Against the backdrop of the necessary build-up of old-age provisions on the one hand and the need to increase real investments in our economy on the other, we are not making the most of the chances global financial wealth offers.”
Last year's acceleration in growth came mostly from industrialized countries, where asset growth doubled to 5.2%. However, Asia (excluding Japan) was once again the uncontested leader in 2016, with growth of 15%. In a long-term comparison, too, Asia (excluding Japan) is the dominant region, particularly when inflation is also taken into account. Gross per capita financial assets in Asia (excluding Japan) grew by almost 11% per year in real terms in the last decade. The other two emerging regions, Latin America and Eastern Europe, achieved growth of only about 5%, which was still more than twice as fast as the growth rates in North America (+2.1% real growth since 2006) and Western Europe (+1.4%). As a consequence, the three regions of Latin America, Eastern Europe and Asia (excluding Japan) accounted for just under 23% of global gross financial assets in 2016. This share has more than doubled over the last ten years. Emerging markets have an even bigger weighting when it comes to asset growth, with 42% of the last decade’s growth attributable to this group of countries. However, this is largely due to the development in China, which alone accounted for roughly 30% of global growth since 2006.