Wealth Opportunity Index

 

Written by  The Economist Intelligence Unit

The 2019 Wealth Opportunity Index examines the drivers of wealth creation in 15-regions. Ranking is based on an overall index score measured by four pillars: economic fundamentals, market dynamics, innovation and risk.

Region ranking

Overall index

The overall index score is based on analysis of economic fundamentals, market dynamics, innovation and risk categories. Wealth opportunity is defined as the ability of individuals and households to generate investable assets with a medium-term outlook.

Key insights

  • The index highlights wealth opportunity hotspots in the U.S., mainland China and Singapore. India and Hong Kong (SAR) round out the top five regions ranked.
  • Overall, Asia Pacific outperforms other regions, with high scores across all four pillars. The U.S. tops the index, bolstered by its robust stock market and innovative business climate.
  • While Western Europe enjoys a low-risk environment, overall the region underperforms, ranking in the lower half of the index due to a muted economic outlook and market dynamics.
Region ranking Score
1. United States of America
57.7%
2. Mainland China
55.9%
3. Singapore
54.9%
4. India
54.1%
5. Hong Kong (SAR)
53.7%
6. Australia
50.8%
7. Canada
49.9%
8. Switzerland
48.6%
9. Japan
47.6%
10. Germany
46.6%
11. France
41.5%
12. United Kingdom
41.1%
13. United Arab Emirates
40.3%
14. Mexico
34.4%
15. Russia
29.7%

Economic fundamentals

This category examines macroeconomic and demographic drivers linked to future growth in wealth including economic outlook from real GDP growth, population age and forecasted growth, personal disposable income growth, gross national savings and household debt.

Key insights

  • Mainland China and India demonstrate the strongest economic fundamentals for wealth opportunity, with the strongest growth in GDP income per head.
  • The United Kingdom lags on economic fundamentals, with a weak economic outlook, slow growth in income per head and a low savings rate.
Region ranking Score
1. Mainland China
66.7%
2. India
66.4%
3. Singapore
45.9%
4. United Arab Emirates
45.7%
5. Hong Kong (SAR)
45.3%
6. Switzerland
42.3%
7. Australia
42.3%
8. Canada
35.0%
9. Germany
29.3%
10. United States of America
29.3%
11. France
27.6%
12. United Kingdom
26.0%
13. Mexico
22.9%
14. Japan
21.8%
15. Russia
20.8%

Market dynamics

This category measures a region’s demonstrated propensity for generating new businesses, products and services. This category looks at market capitalization levels, market capitalization growth, access to finance, returns to liquid assets and growth of house prices.

Key insights

  • The U.S. boasts the strongest market dynamics for wealth opportunity, underpinned by its large and robust stock market. It is followed by India, Canada and Hong Kong (SAR), which all demonstrate strong property price and stock market growth.
  • The regions with the weakest market dynamics for wealth opportunity tend to have smaller markets and modest growth in property prices (United Arab Emirates, Switzerland and Singapore).
Region ranking Score
1. United States of America
80.4%
2. India
45.7%
3. Canada
44.3%
4. Hong Kong (SAR)
43.4%
5. Japan
39.6%
6. Germany
37.6%
7. Mexico
37.4%
8. United Kingdom
35.4%
9. Mainland China
35.2%
10. Australia
32.7%
11. Russia
32.6%
12. France
32.2%
13. Singapore
28.7%
14. Switzerland
28.1%
15. United Arab Emirates
20.3%

Innovation

This category examines a region’s demonstrated propensity for generating new businesses, products and services, taking into consideration business dynamism, research and development (R&D) spending, patent applications and total factor productivity growth.

Key insights

  • Japan, Singapore and the U.S. have the strongest innovation environments for wealth opportunity, propelled by high R&D spending and patent application.
  • Mainland China ranks fourth on innovation environment for wealth, bolstered by strong productivity growth, and Hong Kong (SAR) ranks fifth, also with strong productivity growth and a high number of patent applications, owing to a dynamic and successful environment for innovation.
  • Germany ranks sixth in the innovation pillar due to a high level of R&D spending and a dynamic business environment.
Region ranking Score
1. Japan
77.0%
2. Singapore
72.1%
3. United States of America
68.9%
4. Mainland China
59.1%
5. Hong Kong (SAR)
58.6%
6. Germany
55.8%
7. Australia
54.6%
8. Canada
50.7%
9. Switzerland
45.3%
10. United Kingdom
39.5%
11. France
39.4%
12. India
37.8%
13. Russia
28.9%
14. United Arab Emirates
27.3%
15. Mexico
27.0%

Risk

This category assesses macroeconomic, financial and political risks that influence sustainable wealth generation. The analysis focused on banking sector risk, currency risk, political risk and rule of law.

Key insights

  • Developed markets enjoy low-risk environments for wealth opportunity, due to their stable macroeconomic, financial and political climates.
  • Of note, Switzerland, Canada and Australia round out the top three spots in this category.
  • Emerging markets, including mainland China and India, which boast the strongest economic outlooks, also carry higher relative risk across macroeconomic, financial and political dimensions.
Region ranking Score
1. Switzerland
84.8%
2. Canada
84.5%
3. Australia
82.3%
4. Singapore
82.0%
5. Germany
80.8%
6. France
80.5%
7. United States of America
80.5%
8. United Kingdom
78.8%
9. Japan
77.8%
10. Hong Kong (SAR)
76.0%
11. United Arab Emirates
62.8%
12. Mexico
61.8%
13. India
54.3%
14. Mainland China
52.0%
15. Russia
45.3%

This document contains the key findings for the 2019 RBC Wealth Management Wealth Opportunity Index and summarizes The Economist Intelligence Unit (EIU) methodology to develop the index.

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