UBS: Billionaire-Controlled Stocks Outperform

Listed firms controlled by billionaires outperformed the broader market with such entities in Asia leading the pack in relative gains.

In the past 15 years to 2018-end, billionaire-controlled listed companies posted equity returns of 17.8 percent compared to 9.1 percent for the MSCI benchmark in the same period. By region, Asia Pacific ranked second in demonstrating this trend delivering annualized average returns of 18.3 percent – just 0.1 percent behind the first-ranked Americas.

According to a report co-published by UBS and PwC, the outperformance can be attributed to what it called the billionaire effect or the tendency for self-made entrepreneurs for smart risk appetite and longer-term planning.

Political uncertainty and economic volatility led global wealth to dip 4.3 percent and Asia was not immune, registering a $217.6 billion wealth drop and a decrease of billionaires by 7.4 percent to 754.

Still, the region boasted a quadrupling of billionaire wealth in the last five years and unsurprisingly, China led the regional ranks with 325 billionaires. Interestingly, the region was also a significant contributor to female billionaire wealth, which grew by a quarter to $871.2 billion globally, with the number of billionaires doubling over the last five years.

Entrepreneurs, which account for 70 percent of our client base in Asia Pacific, has been the driving force of the rapid wealth creation in the region, said Amy Lo, co-head wealth management Asia Pacific at UBS Global Wealth Management.