Each year, Knight Frank publishes its Wealth Report, a deep dive detailing the finances of ultra-high net worth individuals or UHNWIs.
For its 2023 report the company surveyed over 500 private bankers, wealth advisors, and family offices representing a combined wealth of more than $2.5 trillion.
And while its report estimates the world’s richest people lost over $10 trillion in total, it also shares insights into how the elite’s financial portfolios are composed.
From fast cars and NFTs to art collections and more, each asset category in the Knight Frank report makes up a percentage of the average portfolio.
So here goes, this is the breakdown of how global HNWIs spend their money.
Equities — 26%
26% of the world’s richest people’s investment portfolios goes into equities, or stocks and shares in companies, Knight Frank’s survey showed. In the Americas, that proportion reaches as high as one-third.
Commercial property — 34%
When totted up, commercial property makes up more of the portfolios of the super-rich than equities, but Knight Frank’s report splits that into direct and indirect investments.
The average portfolio sees 21% put directly into commercial property, while a further 13% is invested through debt funding or REITs.
43% of respondents said their clients currently invest in offices — the most common type of commercial property — while healthcare was the most popular sector with 35% representation.
Environmental factors are significant in how the wealthy choose which properties to invest in, with 57% saying their clients look at whether the property has a green energy source.
Bonds — 17%
Bonds are well known as a convenient way to invest money, so it’s no surprise that they make up 17% of the average UHNWI’s portfolio.
BlackRock, the world’s largest asset manager, recently said investors should pile into bonds as federal interest rates rise.
Private equity/venture capital — 9%
A considerably smaller percentage than the amount being invested into equities, but still a sizeable number as part of the overall portfolio make up. When it comes to Private Equity or VC, many are betting big on the unicorns of the future.
Investments of passion — 5%
Investments of passion can be anything like art, cars, and wine — which might be bought for enjoyment or simply as an investment.
59% of Knight Frank’s survey respondents said that their clients were likely to purchase art this year. Watches and wine were the next most popular, while about a third expected clients to buy classic cars.
20% are in the market for luxury handbags, the survey showed.
Gold — 3%
On average, the world’s richest people store 3% of their investments in gold. In fact, they consider it the second-safest purchase behind property.
Financial analyst James Jason, of commodities trading platform Mitrade said: “History has shown that during economic slowdowns, from the Great Depression to the COVID-19 pandemic, gold appreciates in value.”
Crypto — 2%
The world’s wealthiest people consider crypto to be the most volatile investment, but it still makes up 2% of the average portfolio.
In last year’s report Knight Frank said 18% of UHNWIs owned some kind of cryptocurrency.
And while 34% still believe the NFT market has a lot of potential, 20% changed their minds after the crypto crash.
Other — 7%
Knight Frank’s survey also lists “other” investments, which take up 7% of the average portfolio, but does not specify what this category includes.