Here’s how world's ultra-high net worth individuals invest their money

A detailed answer for the question of how the world’s wealthiest people invest their money will be a key for some at least to know how to manage their funds successfully.

Knight Frank published 2023's "Wealth Report," which details the finances of ultra-high net worth individuals (UHNWIs).

The report estimated the world's richest people lost over $10 trillion in total. It also shared insights into how the elite's financial portfolios are composed.

Knight Frank surveyed over 500 private bankers, wealth advisors, and family offices representing a combined wealth of more than $2.5 trillion.

This is how the world's richest people store their money. Each asset category makes up a percentage of the average portfolio, with the total adding up to just over 100% thanks to rounding in Knight Frank's report.

A 26% of the world's richest people's investment portfolios goes into equities, or stocks and shares in companies. This proportion jumped to 33% in the Americas, and 28% in Europe, but declined to 25% in the Middle East.

About 21% of the world’s UHNWIs put their money directly into commercial property, while a further 13% is invested indirectly. Moreover, 43% of respondents say their clients currently invest in offices — the most common type of commercial property. Meanwhile, healthcare was the most popular sector with 35% representation.

Bonds have long been touted as a convenient way to invest money, so it's no surprise that they make up 17% of the average UHNWI's portfolio.

A bond is effectively a type of IOU, typically issued by governments or corporations.
 

Bonds receive increasing turnout as investors were advised to pile into bonds as federal interest rates continue to rise.

The world's richest people will average 9% of their portfolio into Private equity. Private equity means investing in a company which is not on the stock market yet, and if it's venture capital, that means it's riskier but the company has high growth potential.

Commercial assets through debt funding represented 13%. Knight Frank's survey also lists "other" investments, which take up 7% of the average portfolio, but does not specify what this category includes, while real estate investment trusts (REITs) accounted for 7%.

Investments of passion are things like art, cars, and wine — which might be bought for enjoyment or simply as an investment. They make up approximately 5% of the average portfolio.

59% of Knight Frank's survey respondents said that their clients were likely to purchase art this year.

The world's richest people also store 3% of their investments in gold. In fact, they consider it the second-safest purchase behind property.

The world's wealthiest people consider crypto to be the most volatile investment, but it still makes up 2% of the average portfolio.

In the Middle East, investments in stocks were the best, comprising 25% of UHNWIs’ portfolios. It was followed by commercial properties – direct investments – with 24%, bonds (14%), and finally private equity and venture investment (11%).

Business Insider