Knight Franks’ annual release of The Wealth Report highlights trends and attitudes of ultra-high-net-worth individuals (UHNWIs) worldwide. These are four of the top investment trends for 2022.
- Cryptomania continues. According to The Economist magazine, the global value of crypto assets increased exponentially in the two years from early 2020 to late 2021. The sector value at the close of the assessment period was US$2.4 trillion with 18% of UHNWIs now owning a piece of the market. Today investors can choose from more than 8,000 cryptocurrencies and myriad non-fungible tokens (NFTs). 11% of UHNWIs have invested in the latter.
- The role of private capital in markets is growing with increasing opportunities for wealth growth and preservation in private equity/ venture capital.
- Real estate accounts for 27% of UHNWIs’ investable wealth, occupying “a unique position somewhere between bonds and equities”, states the report. Real estate provides security of income through rentals in volatile periods and improved income when rentals and values increase in line with economic expansion. It can also act as an inflation hedge.
- This year, 20% of the survey respondents plan to make indirect investments via funds and real estate investment trusts (REITs). This allows for exposure with greater diversification, reduces the need for direct management, and can improve liquidity. However, this is dependent on the timing of the investment and the scale of the fund.
