Fortunes take a tumble for US millionaires

Millionaires in the US and Canada saw their net worth fall last year for the first time in at least seven years. An annual wealth survey also recorded its lowest growth rate in the number of high net worth individuals.

Millionaires in the US and Canada saw their net worth fall last year for the first time in at least seven years. An annual wealth survey also recorded its lowest growth rate in the number of high net worth individuals.

The report from Cap Gemini Ernst & Young and Merrill Lynch found that Europe's wealthy grew the value of their assets by 4.8 per cent in 2002 to $8,800bn (£5,300bn). However, in North America, high net worth individuals suffered the first reversal in their fortunes in the seven years the report has been produced, seeing their wealth down 2.1 per cent.

The 2.2 million US and Canadian high net worth individuals ­ defined as those with liquid assets of more than $1m ­ kept a higher proportion of their wealth in equities, which fell, and were slow to diversify into other assets.

By contrast, Europe's 2.6 million high net worth people proved to be more sophisticated investors, going more into bonds and alternative investments, such as hedge funds and metals, at the right time. The wealthy in Asia returned the best performance by far, seeing their wealth increase by 10.7 per cent to £5,700bn. Overall, there was a large proportion of assets held in cash, as a "flight to safety" was the theme for these people in 2002.

Howard Murray, a vice president at Cap Gemini, said: "They were concerned with wealth preservation, rather than the more aggressive acquiring of wealth." On a global basis, despite sharp stock market falls, corporate scandals and the looming war in Iraq, the number of the rich increased.

Some 200,000 individuals were added to the ranks of those with $1m or more in liquid assets ­ which does not include their primary home. The total numbers of high net worth individuals grew 2.1 per cent to 7.2 million, the slowest growth rate recorded by the survey. Their net worth grew 3.6 per cent globally last year to $27,200bn.

Mr Murray said that, short of a world war or something akin to the 1970s oil crisis, these people would increase their worth every year. Any dip in one region would be counter-balanced elsewhere. The report covers 59 countries, representing 96 per cent of global GDP.