The personal wealth of Taiwanese has increased faster than that of their Asian neighbors, according to the latest Citibank Consumer Wealth Review 2002 released yesterday.
The total personal wealth of Taiwanese has grown by 4.91 percent between 1999 and 2001, compared to a 4.6 percent rise among comparable Asian countries and in contrast to 7.6 percent decrease in the US.
Individuals in Taiwan, South Korea, Singapore and Hong Kong are better at managing their wealth and keeping liquid by balancing cash and deposits against risky investments in stock markets and mutual funds, said a Citibank official, citing the reveiw.
"These four developed Asian economies have held up well in growing their assets over the last two years," despite a global economic slowdown since mid-2000, Malik Sarwar, Citibank regional director of investment and wealth management, said at a press conference held yesterday.
At the end of 2001 Asia-Pacific countries (excluding China, Japan and Australia) had US$2.8 trillion in personal wealth, of which the big four accounted for US$1.9 trillion, or 67.86 percent, Sarwar said.
However, individuals in the four Asian nations have tended to be more conservative with their overall wealth following the regional financial crisis, Sarwar said.
Over 50 percent of their wealth is in deposits which yield low returns but which also pose very little risks to principal and are thereby quite manageable, he said.
Indeed, of the nearly US$70 trillion held by individuals worldwide, very little is professionally managed, according to Kenneth Dowd, executive vice president and global head of investment business of Citibank.
Dowd, who also attended yesterday's event, said around 58 percent of total household financial assets are professionally managed in the US, that number is just about 25 percent in Asia on average.
As for Taiwan, financial assets held by households here are the highest among the four developed Asian countries, at US$783 billion. Yet only 23 percent or US$183 billion is professionally managed, said Victor Kuan (
The rollercoaster ride of global markets over the last two years has encouraged some people to trust their investments with professionals.
"In a bear market, the need for financial managers actually goes up because of uncertainties," Sarwar said.
The money management industry grew nearly 11 percent during the 1996-2001 period, the report said.
Specifically, Asian consumers are investing in professionally managed assets such as guaranteed and bond funds, as well as life insurance products which offer tax shelter, seen as a safe alternative during a slowdown, Sarwar said.
The fastest growth for financial investment products in the four Asian countries actually lies in bonds, which grew 23.6 percent to US$46 billion, life insurance products by 16.3 percent to US$234 billion, and cash and deposits which grew 9.1 percent to US$1.01 trillion, the report said.
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