Asia's high net worth population is predicted to double to 2.82 million by 2015, and triple in assets to $15.8 trillion, as the region's positive economic climate drives wealth creation.

Asia's high net worth population is predicted to double to 2.82 million by 2015, and triple in assets to $15.8 trillion, as the region's positive economic climate drives wealth creation, according to a new report by Swiss bank Julius Baer and investment manager and brokerCLSA Asia-Pacific Markets.

According to the inaugural Julius Baer Wealth Report, the number of high net worth individuals in Asia as of 2010 is currently estimated at 1.16 million, with total wealth of $5.6 trillion. High net worth individuals are defined as those with at least $1 million in investable assets. 

Of the Asian countries, China's growth story is the most compelling. By 2015, China is forecast to have 1.4 million HNW individuals holding a combined net worth of $8.76 trillion. Indonesia will likely have the highest growth rate, at 25 per cent over the 5-year period, the study said, rising to 99,000 HNW individuals with a total net worth of $487 million.

The rapidly burgeoning wealth can be attributed to two main factors: stock market returns and currency appreciation. Stock market returns are predicted to average 12 per cent over the period, and local currencies will continue to appreciate. Currency appreciation alone is forecast to create 600,000 new HNW individuals across Asia before 2015, as US dollar-based investors benefit from continuing currency appreciations across the region.

The study was conducted in cooperation with independent brokerage and investment firm CLSA and involved over 100 survey respondents and 20 in-depth client interviews. The report looked at China, India, Indonesia, South Korea, Taiwan, Hong Kong, Singapore, Philippines and Malaysia.

Julius Baer Lifestyle Index

The Swiss bank also launched the annual Julius Baer Lifestyle Index, which records HNWI financial behavior based on a basket of 20 luxury goods and services and the cost disparities between locations. For example, a root canal surgery in Shanghai costs $385, compared to $3,218 in Hong Kong. At the same time, a luxury hotel suite costs 11 per cent more in Shanghai than in Hong Kong.

The index is an aggregate of price changes based on responses from high-end vendors across Hong Kong, Shanghai, Singapore, and Mumbai. 

Investment practices

The report also reviewed the asset class allocation of Julius Baer’s Asia-based non-discretionary clients. Relative to Switzerland, Europe and Latin America, Asia-based clients have the highest share of equities, at 62 per cent. Furthermore, relative to Switzerland, Europe and Latin America, Asia-based clients also have the highest share of assets in their home region - at 47 per cent. This can be partly attributed to the stringent regulations of overseas investment in many Asia countries.

The report argued that we are living in an Asia-centric world, and the region will increasingly open its doors to the mutual transfer of global capital. China and India will account for more than 40 per cent of global growth in 2011 and 2012 as deteriorating economic conditions worldwide drive further supportive, pro-growth policies from China in the months ahead.

"We talk to our clients about key issues influencing their lifestyles and investment decisions on a daily basis. Our report is unique as many of the insights come from conversations with our clients, enabling a deeper understanding of what is important in this market," said Boris Collardi, the chief executive of Julius Baer, in a statement.

Julius Baer considers Asia its second home market and holds its North and South East Asia headquarters in Hong Kong and Singapore.