The number of millionaires will spike by 40% globally in the next 5 years — but most won’t come from the US. Here is the country to watch (and how to invest in it)

The number of millionaires globally will increase by 40% in the next 5 years - but most will not come from the US.  Here's the country to watch (and how to invest in it)

The number of millionaires globally will increase by 40% in the next 5 years – but most will not come from the US. Here’s the country to watch (and how to invest in it)

According to a new report from Credit Suisse, the number of millionaires worldwide is on the rise, expected to increase by 40% over the next five years.

Credit Suisse Group AG’s Global Wealth Report 2022 reveals that by 2026 we will have millions of millionaires: more than 87.5 million globally.

You might be thinking that this means that the US But the richer it is.

But in fact, today, the leading country in charge of producing millionaires is not the United States: it is China.

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A million dollar surprise

Certainly, China lost much in productivity and economic drive during the Covid-19 pandemic as the lockdown engulfed the country. But developing markets are likely to see a faster recovery from the economic downturn, the report said.

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Private wealth will grow 36% to $169 trillion by 2026, Credit Suisse reports. That’s quite a rise given the current decline in Chinese markets; The MSCI China index has fallen more than 30% year-to-date.

Yet the report is perhaps a bit optimistic? Growth in China has its associated risks, especially in the US. Along with geopolitical tensions and a 2024 deadline to delist some Chinese stocks from Wall Street. Meanwhile, the rivalry between the two nations continues unabated in the tech, energy and telecom sectors.

Consider some Chinese ETFs

If you want to invest in Chinese exchange-traded funds (ETFs), low prices make this a good time. Given the size of the Chinese economy, it is likely to recover at a faster pace than other developing countries, Credit Suisse reports. With that in mind, consider these top ETFs.

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WisdomTree China Ex-State-Own Enterprises Fund (CXSE) An attractive option given the large decline in communication services and cyclical stocks. Additionally, it has a non-state-owned strategy that allows the company to invest in emerging markets with less risk than other Chinese ETFs.

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If you are looking for a great growth opportunity, Emerging Markets Internet and Ecommerce ETF (EMQQ) It has its advantages. China has tremendous growth potential in the internet and ecommerce sectors.

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If the tech industry picks up, this fund could lead the way among tech sector ETFs at a cheaper price than its US counterparts.

Growth is coming

ETFs allow easy access to growing industries and eliminate the volatility that comes with betting on a single stock. That said, remember that China’s economy needs time to recover, and the tensions mentioned above are not going to disappear.

As with many investment strategies, patience is key.

China has shown muscle in ecommerce and electric vehicle manufacturing, to name a few areas with tremendous potential.

And where Credit Suisse sees opportunity, the wealthy will be well-advised to follow — and become millionaires no matter where they call home.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.


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