Published : Oct-2018
No. of Pages : 43
1. EXECUTIVE SUMMARY 2
1.1. Market summary 2
1.2. Key findings 2
1.3. Critical success factors 2
2. DENMARK'S WEALTH MARKET IS ON THE UP 8
2.1. Introduction 8
2.2. An enviable economic position will lead to strong growth for the wealth market 8
2.2.1. The Danish economy is a strong position, with few headwinds on the horizon 8
2.2.2. Danes have high levels of personal debt, but higher levels of personal assets 9
2.2.3. The rebounding affluent population is set to record a CAGR of 4.5% to 2022 9
2.2.4. The Danish market has a notable emerging affluent segment 9
2.2.5. Growth in liquid assets will be stronger over the next five years than the previous five 10
2.2.6. HNW individuals also hold notable assets in less liquid assets, particularly property 11
2.3. Offshore investments account for just over 12% of total HNW assets 12
2.3.1. Equities, alternatives, and property account for the majority of offshore wealth 12
2.3.2. Tax efficiency is a key driver for offshore investment, but Danish authorities are tightening the net on evasion 13
2.3.3. Denmark also plays an active role in global tax transparency efforts, having signed TIEAs and double taxation conventions with many offshore centers globally 13
3. DENMARK'S WELL-DEVELOPED RETAIL SAVINGS AND INVESTMENTS MARKET REMAINS BUOYANT 15
3.1. Introduction 15
3.2. Total retail savings and investments are set to grow by 5.0% to 2022 15
3.2.1. The strong investment component of the market aids growth 15
3.2.2. Mutual funds and equities are set to experience the strongest future growth 16
3.3. Retail deposit growth has largely been driven by inflows 17
3.3.1. Deposits continue to attract inflows, despite negative interest rates 17
3.4. Mutual funds will continue to go from strength to strength 18
3.4.1. Strong inflows are propelling the market 18
3.4.2. The mixed allocation of funds buffers investors from the extremes of the stock market 19
3.5. Equities will continue to grow, but this is contingent on performance 20
3.5.1. Stock market performance rather than inflows is driving equity growth 20
3.5.2. The Danish government is introducing tax benefits to further encourage equity inflows 22
3.6. Bonds will remain a peripheral asset for retail investors 22
3.6.1. Retail investors are pulling out of bonds 22
4. AN UNLIKELY OFFSHORE CENTER, DENMARK IS NOT DEVOID OF NON-RESIDENT INVESTMENT ACTIVITY 24
4.1. Non-resident investments are concentrated in the equity and bond markets 24
4.1.1. Non-resident holdings accounted for 28% of total retail equity balances in 2017 24
4.1.2. The world's largest covered bond market is proving a draw for foreign investors 25
5. APPENDIX 27
5.1. Abbreviations and acronyms 27
5.2. Supplementary data 28
5.3. Definitions 33
5.3.1. Affluent 33
5.3.2. Domicile 34
5.3.3. Double taxation convention 34
5.3.4. Emerging affluent 34
5.3.5. FATCA 34
5.3.6. HNW 34
5.3.7. Individual 34
5.3.8. Liquid assets 35
5.3.9. Mass affluent 35
5.3.10. Mass market 35
5.3.11. Onshore 35
5.3.12. Residency 36
5.3.13. Exchange of information 36
5.3.14. TIEAs 37
5.4. Methodology 37
5.4.1. 2018 Global Wealth Managers Survey 37
5.4.2. Retail Investments Analytics 37
5.4.3. Global Wealth Model 39
5.4.4. Exchange rates 40
5.5. Bibliography 41
5.6. Further reading 42
List of Tables
Table 1: Number of adults in Denmark segmented by asset band (000s), 2006-11 28
Table 2: Number of adults in Denmark segmented by asset band (000s), 2012-17 29
Table 3: Number of adults in Denmark segmented by asset band (000s), 2018f-22f 30
Table 4: Retail liquid assets in Denmark segmented by asset band ($m), 2006-11 31
Table 5: Retail liquid assets in Denmark segmented by asset band ($m), 2012-17 32
Table 6: Retail liquid assets in Denmark segmented by asset band ($m), 2018f-22f 33
Table 7: US dollar exchange rates with the Danish krone 41
List of Figures
Figure 1: Affluent individuals accounted for 22.16% of the adult population by the end of 2017 10
Figure 2: The mass affluent segment accounts for almost half of retail liquid assets in Denmark 11
Figure 3: Danish HNWs hold 12.1% of their assets offshore 12
Figure 4: Denmark is part of the CRS early adopter group 14
Figure 5: A diversified retail savings and investments market aids growth 16
Figure 6: The decline of retail bond holdings is the only negative in the savings and investments market 17
Figure 7: Deposit growth has rallied since 2015, despite low interest rates 18
Figure 8: Strong inflows have driven consistent growth in the mutual fund market 19
Figure 9: The Danish mutual fund market is dominated by bond and equity funds 20
Figure 10: Retail investors in Denmark have been withdrawing assets from the stock market 21
Figure 11: Healthcare companies make up the majority of the Copenhagen Stock Exchange main index 22
Figure 12: Retail bond investments have been in decline since 2009 23
Figure 13: Non-resident investors are primarily drawn to Denmark's equity and bond markets 25
Figure 14: Example of a four-input forecasting process 39
