Some 500,000 people joined the ranks of the world's millionaires in 2003 thanks to a roaring stock market and strong economic conditions, a survey showed Tuesday.

The survey showed the number of high net worth individuals rose by 7.5 per cent to 7.7 million individuals, while their assets grew by 7.7 per cent to $28.8 trillion. The survey counts those with $1 million in assets, excluding home real estate.

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The report by Capgemini and Merrill Lynch showed a return to levels of wealth prior to recessions in North America and elsewhere as a result of improving conditions in 2003.

The rebound came after a mixed year for wealthy investors in 2002, during which the number of US millionaires and their net worth declined modestly while the group's overall assets rose just 3.6 per cent.

"If 2002 was a 'lost year' for HNWI investors, then global financial markets recovered most of these losses by the end of 2003, which had a restorative effect on investor confidence and HNWI wealth," said the 2004 World Wealth Report.

"As in previous years, high net worth individuals were quick to respond to global trends affecting their ability to preserve and grow wealth," said James Gorman, president of Merrill Lynch's Global Private Client group.

"They benefited from a strong stock market rally and solid, global economic growth. In particular, wealthy investors in the US, China and India were able to capitalise on these trends despite a great deal of geopolitical uncertainty."

The trend is likely to stay intact, the report said, predicting 7 per cent annual growth in the assets of this group to over $40 trillion by 2008.

North America and Asia led the rise in wealth creation, with more modest growth in Europe, Latin America and the Middle East.

The number of millionaires in the United States stood at 2.27 million at the end of 2003, up 13.5 per cent or a net 272,000 compared with the previous year.

The assets of these people were up 13.6 per cent. There was also strong growth amid a smaller number of millionaires in China, which saw a 12 per cent increase in the number of millionaires, and India, which saw a 22 per cent increase, the report said.

The report said Europe continued to show lower growth in millionaires and their assets than North America, "primarily due to restrictive income-tax policies which impede the ability to accumulate personal wealth."

Overall, in Asia the number of millionaires grew by 8.4 per cent and their assets rose by 10 per cent.

The number of millionaires in Europe grew 2.4 per cent to 2.6 million, the report said. But, it said, Spain, Russia and the Czech Republic were exceptions where the wealthy investor count increased more rapidly.

In Latin America, the number of millionaires rose by just 1.3 per cent, but it continued to have the highest average wealth of any major region among the group.

The number of millionaires in the Middle East rose 2.4 per cent last year, with their assets up 3.3 per cent.

Globally, a very small but fast-growing group of 70,000 belonged to the 'ultra-rich' category with more than $30 million in financial assets, up from 58,000 a year ago.

The survey is aimed at drawing attention to the value of investment advice for those with high net worth.

"A growing number of HNWIs are successfully mirroring the behavior of institutional investors," said Alvi Abuaf, vice president at Capgemini.

"This can be seen in their following a structured process, looking for integrated solutions rather than buying isolated products, and taking the emotion out of investing."

-- AFP