When it comes to the countries with the most millionaires in the world, the usual suspects still dominate: the United States, Japan, Germany and China.
But India is rising up the ranks quickly. The world’s second most populous country saw its number of millionaires rocket more than 12% last year, far faster than any of its competitors. So reports consultancy Cap Gemini in its latest annual Global Wealth Report.
Most Read from MarketWatch
This emerging South Asian economic power now boasts 359,000 people with at least $1 million in investable assets, Cap Gemini estimates. That’s more than twice as many as a decade ago.
India minted 40,000 new millionaires last year alone — about one every 15 minutes.
Cap Gemini says its definition of high net worth is someone with “investable assets of $1 million or more, excluding their primary residence, collectibles, consumables, and consumer durables.”
India is still a long, long way behind Asian rivals China, with 1.5 million high-net-worth individuals, and Japan, with 3.8 million. Let alone the United States, where the ranks of millionaires rose more than 7% last year to 7.8 million.
But if you’re promoting a business that exists by selling to the newly rich, go east, young man (or woman). If history is any judge, they’ll be eager buyers of pointless, extravagant status symbols like temperamental sports cars, luxury watches and high-fee hedge funds. As P.T. Barnum might have said, there’s a millionaire born every fifteen minutes.
The ‘next China’
India’s rapid rise gives more teeth to the argument that the country will be the “next China” — meaning it may do in the years ahead what China has done in the past 25 years.
China by some measures now has the largest economy in the world, and has emerged as the first significant geopolitical threat to the U.S. and the west since the collapse of the Soviet Union more than 30 years ago.
As recently as 2002 China’s economic output, when measured in real or purchasing power terms, accounted for about 8% of the global economy. That’s the same figure that India accounts for today.
India’s rise is important news for the U.S. and its allies, as this helps counterbalance the growing anti-democratic alliance of China, Russia and Iran. Since the COVID-19 pandemic, India’s economy has been growing significantly faster than that of China, let alone the U.S.
India is already the subject of a massive financial boom, as global investors bet on the country’s continued economic expansion. In the past four years India’s stock market has earned staggering returns of 150% in U.S. dollars — about twice the return of both the Nasdaq Composite COMP and the S&P 500 SPX.
Indian stocks reeled briefly earlier this week on the news that Prime Minister Narendra Modi failed to secure a majority in the latest election. Despite the volatility, India’s benchmark BSE Sensex Index IN:1 is up about 4% for the year so far and 20% higher than a year ago. FactSet’s broader index of Indian stocks is up 11% so far this year and 40% over the past year.
Crumbling BRICs
Yet for those who are inclined to chase investment fads, there’s a lesson in here. It’s been about 15 years since the hottest fashion in finance was for “emerging markets” — especially the so-called BRICs, meaning Brazil, Russia, India and China.
You’d have done far better ignoring any of the faddish BRICs and holding a broad-based world stock fund. For example, Vanguard Total World Stock Index ETF VT has earned you more than the MSCI Emerging Markets Index, or Brazil or China — let alone Russia, which effectively went to zero in 2022 after Russia’s invasion of the Ukraine provoked global sanctions. If you go back 15 years, Vanguard Total World Stock Index has outperformed them all, including India.
So much for jumping on the latest bandwagon at the peak of the market.
More: India ETF slides most since 2021 after Modi’s narrower-than-expected win stuns
Most Read from MarketWatch
Signup bonus from
