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The Rich Got $17 Trillion Richer

Despite the many negative headlines, 2012 was a good year for markets. Listed below is a rough snapshot of total returns in USD

Most asset classes returned double-digits. 2012 was a year to look through pessimism – how did your PA do?

I would estimate that Global Financial Wealth rose by $17,500,000,000,000 to $162 trillion (I ignore bank assets and real estate and use IMF data; BCG also hasgood studies on the topic). That seems like a lot, but it is only $23,200 per capita after the year’s $2,500 gain if it were equally divided, which it ain’t (more specifically, BCG calculates that 12.6 million “millionaire households” control 40% of the total but comprise just 1% of their sample population). Anyway here are the numbers:

Fixed Income:

Global Sovereign: 13.4%

Global Corporate* 11.2%

Global High-yield 19.6%

US Munis 6.8%

US Treasuries** 2.0%

EM Currencies 7.5%

EM Loc FI (GBI-EM) 19.9%

EM Ext Debt (EMBIG) 18.5%

EM Corporates 15.2%

Equities:

Global 16.5%

EM 18.6%

S&P 500 16.0%

Commodities:

CRB Index -3.4%

Gold 7.1%

* This doesn’t mean spreads widened; sovereigns did well thanks to currency effects (different weights from Corporates) and PIIGS’ high yields. Corporate spreads rallied all year long, coming in from 260 to 148 at year end, a major rally.

** These are market weighted, so most of the index is short-maturity, very low yielding stuff. The 10-year did somewhat better, returning ~5%.

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