All of the World’s Wealth in One Visualization
The financial concept of wealth is broad, and it can take many forms.
While your wealth is most likely driven by the dollars in your bank account and the value of your stock portfolio and house, wealth also includes a number of smaller things as well, such as the old furniture in your garage or a painting on the wall.
From the macro perspective of a country, wealth is even more all-encompassing — it’s not just about the assets held by private households or businesses, but also those owned by the public. What is the value of a new toll bridge, or an aging nuclear power plant?
Today’s visualization comes to us from HowMuch.net, and it shows all of the world’s wealth in one place, sorted by country.
Total Wealth by Region
In 2019, total world wealth grew by $9.1 trillion to $360.6 trillion, which amounts to a 2.6% increase over the previous year.
Here’s how that divvies up between major global regions:
|Region||Total Wealth ($B, 2019)||% Global Share|
Last year, growth in global wealth exceeded that of the population, incrementally increasing wealth per adult to $70,850, a 1.2% bump and an all-time high.
That said, it’s worth mentioning that Credit Suisse, the authors of the Global Wealth Report 2019 and the source of all this data, notes that the 1.2% increase has not been adjusted for inflation.
Ranking Countries by Total Wealth
Which countries are the richest?
Let’s take a look at the 15 countries that hold the most wealth, according to Credit Suisse:
|Rank||Country||Region||Total Wealth ($B, 2019)||% Global Share|
|#1||🇺🇸 United States||North America||$105,990||29.4%|
|#5||🇬🇧 United Kingdom||Europe||$14,341||4.0%|
|#9||🇨🇦 Canada||North America||$8,573||2.4%|
|#11||🇰🇷 South Korea||Asia-Pacific||$7,302||2.0%|
|All Other Countries||$56,585||15.7%|
The 15 wealthiest nations combine for 84.3% of global wealth.
Leading the pack is the United States, which holds $106.0 trillion of the world’s wealth — equal to a 29.4% share of the global total. Interestingly, the United States economy makes up 23.9% of the size of the world economy in comparison.
Behind the U.S. is China, the only other country with a double-digit share of global wealth, equal to 17.7% of wealth or $63.8 trillion. As the country continues to build out its middle class, one estimate sees Chinese private wealth increasing by 119.5% over the next decade.
Impressively, the combined wealth of the U.S. and China is more than the next 13 countries in aggregate — and almost equal to half of the global wealth total.
The Dominance of U.S. Companies in Global Markets
U.S.-based companies have a heavy weighting in global equity markets. In most industries, their market capitalization exceeds 50% of the total.
U.S. Companies Dominate Global Markets
Are global indexes as “global” as you think they are?
With the aim of tracking market performance around the world, these indexes incorporate securities from various regions. However, while the number of securities may be relatively well diversified across countries, a dollar perspective tells a different story. When market capitalization is taken into account, country weightings may become much more unbalanced.
Today’s visualization is based on a concept by S&P Dow Jones Indices that shows the percentage of U.S.-based companies in global sectors and industries as of December 31, 2019. The calculations reflect the market capitalization of companies in the S&P Global Broad Market Index (BMI), an index that tracks over 11,000 stocks across 50 developed and emerging economies.
Percentage of U.S. Companies by Sector
U.S-based companies—those that maintain their primary business affairs in the U.S.—are a major component of many global sectors and industries.
Here’s how it breaks down:
|Sector||% of U.S.-based Companies||Most U.S.-heavy Subsector|
|Information technology||73%||Software (86%)|
|Health care||65%||Health care providers (82%)|
|Utilities||53%||Electric utilities (57%)|
|Real estate||51%||Equity REITs (69%)|
|Consumer discretionary||49%||Specialty retail (73%)|
|Consumer staples||46%||Household products (74%)|
|Industrials||46%||Aerospace & defense (73%)|
|Energy||44%||Energy - other (73%)|
|Financials||44%||Financials - other (73%)|
U.S.-based companies make up a staggering 73% of the information technology (IT) sector. However, China may soon threaten this dominance. The Made in China 2025 plan highlights new-generation IT as a priority sector for the country.
The U.S. is still the world’s leader, but China is coming up very fast.
—Rebecca Fannin, Journalist & Author of Tech Titans of China
Healthcare is also heavily skewed towards U.S-based stocks, which make up 65% of the sector’s market capitalization. This weighting is perhaps not surprising given the success of many U.S. healthcare companies. In Fortune’s list of the 500 most profitable U.S. companies, 41 healthcare organizations made the cut.
The materials sector has the smallest weighting of U.S.-based stocks, but they still account for almost one-third of the overall market capitalization. Three American companies are in the sector’s top 10 holdings: Air Products & Chemicals, Ecolab, and Sherwin-Williams.
U.S. Equity Views in a Global Context
Given the high weighting of U.S. stocks in global sectors and industries, having a U.S. view is important. This refers to investors gaining a clear perspective on the risks and opportunities that exist in the country. Investors can consider the trends influencing American companies in order to help explain stock performance.
U.S. stock dominance also impacts geographic diversification. While it helps non-U.S. investors overcome their home bias, American investors may want to consider targeting specific international markets for well-rounded exposure.
Intangible Assets: A Hidden but Crucial Driver of Company Value
Intangible assets – such as goodwill and intellectual property – have rapidly risen in importance compared to tangible assets like cash.
Intangible Assets Take Center Stage
View the high resolution version of this infographic by clicking here
In 2018, intangible assets for S&P 500 companies hit a record value of $21 trillion. These assets, which are not physical in nature and include things like intellectual property, have rapidly risen in importance compared to tangible assets like cash.
Today’s infographic from Raconteur highlights the growth of intangible asset valuations, and how senior decision-makers view intangibles when making investment decisions.
Tracking the Growth of Intangibles
Intangibles used to play a much smaller role than they do now, with physical assets comprising the majority of value for most enterprise companies. However, an increasingly competitive and digital economy has placed the focus on things like intellectual property, as companies race to out-innovate one another.
To measure this historical shift, Aon and the Ponemon Institute analyzed the value of intangible and tangible assets over nearly four and a half decades on the S&P 500. Here’s how they stack up:
In just 43 years, intangibles have evolved from a supporting asset into a major consideration for investors – today, they make up 84% of all enterprise value on the S&P 500, a massive increase from just 17% in 1975.
The Largest Companies by Intangible Value
Digital-centric sectors, such as internet & software and technology & IT, are heavily reliant on intangible assets.
Brand Finance, which produces an annual ranking of companies based on intangible value, has companies in these sectors taking the top five spots on the 2019 edition of their report.
|Rank||Company||Sector||Total Intangible Value||Share of Enterprise Value|
|1||Microsoft||Internet & Software||$904B||90%|
|2||Amazon||Internet & Software||$839B||93%|
|3||Apple||Technology & IT||$675B||77%|
|4||Alphabet||Internet & Software||$521B||65%|
|5||Internet & Software||$409B||79%|
|7||Tencent||Internet & Software||$365B||88%|
|8||Johnson & Johnson||Pharma||$361B||101%|
|10||Alibaba||Internet & Software||$344B||86%|
|12||Procter & Gamble||Cosmetics & Personal Care||$305B||101%|
Note: Percentages may exceed 100% due to rounding.
Microsoft overtook Amazon for the top spot in the ranking for 2019, with $904B in intangible assets. The company has the largest commercial cloud business in the world.
Pharma and healthcare companies are also prominent on the list, comprising four of the top 20. Their intangible value is largely driven by patents, as well as mergers and acquisitions. Johnson & Johnson, for example, reported $32B in patents and trademarks in their latest annual report.
A Lack of Disclosure
It’s important to note that Brand Finance’s ranking is based on both disclosed intangibles—those that are reported on a company’s balance sheet—and undisclosed intangibles. In the ranking, undisclosed intangibles were calculated as the difference between a company’s market value and book value.
The majority of intangibles are not reported on balance sheets because accounting standards do not recognize them until a transaction has occurred to support their value. While many accounting managers see this as a prudent measure to stop unsubstantiated asset values, it means that many highly valuable intangibles never appear in financial reporting. In fact, 34% of the total worth of the world’s publicly traded companies is made up of undisclosed value.
“It is time for CEOs, CFOs, and CMOs to start a long overdue reporting revolution.”
—David Haigh, CEO of Brand Finance
Brand Finance believes that companies should regularly value each intangible asset, including the key assumptions management made when deriving their value. This information would be extremely useful for managers, investors, and other stakeholders.
A Key Consideration
Investment professionals certainly agree on the importance of intangibles. In a survey of institutional investors by Columbia Threadneedle, it was found that 95% agreed that intangible assets contain crucial information about the future strength of a company’s business model.
Moreover, 98% agree that more transparency would be beneficial to their assessment of intangible assets. In the absence of robust reporting, Columbia Threadneedle believes active managers are well equipped to understand intangible asset values due to their access to management, relationships with key opinion leaders, and deep industry expertise.
By undertaking rigorous analysis, managers may uncover hidden competitive advantages—and generate higher potential returns in the process.
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