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Black and Hispanic American millionaires own the fewest stocks, finds UBS

(Bloomberg) — Black millionaires in America, as well as those who are Hispanic and Latino, have lower-than-average allocations in equities and a greater interest in sustainable investments, according to UBS Group AG.

Black Americans with at least $1 million hold an average of 26% of their money in global equities, while Hispanic and Latino millionaires allocate 29% to shares, according to a study released Wednesday by the Zurich-based bank’s wealth management unit. High-net-worth investors widely have 41% of their assets tied to public equities.

The findings suggest that even at the millionaire level, widespread racial and ethnic inequality owned by equity remains elevated from the start of the Covid-19 pandemic until the end of 2021. Federal Reserve data shows that while more than half of White and other households own the stock, that drops to about 24% and 34% for Hispanic and Black households, respectively.

Sustainable investing is part of the solution to this gap, one with particular resonance for black investors, said Melinda Hightower, head of the strategic client segment for multicultural investors at UBS Global Wealth Management.

The survey found that 79% of black millionaires and 72% of Hispanic high-net-worth individuals favor investments that have a positive social impact, such as promoting equality and inclusion, compared to 49% overall. Black millionaires were also more likely to shift their purchases and donations toward companies and charities that lead or support members of their community.

“When you have investors who are really focused on ensuring equitable futures in their philanthropy and their purchasing behavior, why not have the same thread run through their investments?” Hightower said in an interview. “It’s dollars at work.”

Most of those surveyed for the UBS Global Wealth Management Report said the financial industry is now more inclusive than it was in the past generation. Still, 56% of black millionaires and nearly a quarter of Hispanic and Latino high-net-worth individuals said they had experienced discrimination from financial firms before.

The study surveyed more than 3,000 Asian, black and Hispanic or Latino investors and nearly 2,000 white investors. UBS’s internal research shows that there are approximately 2 million investors within the former group nationwide.

Among other findings: Hispanic millionaires supported extended families, leaving less money to invest; A greater proportion of black high-net-worth individuals were invested in real estate than the overall group; And Asian millionaires used to cite workplace compensation as their primary source of wealth.

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