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updated 4/19/2006 6:31:00 PM ET 2006-04-19T22:31:00

The number of very rich people in the U.S. grew last year at the fastest pace in at least a decade as their moves into international stock markets, real estate and alternative investments paid off.

The number of households with $5 million or more in investable assets — excluding the family home — rose by 26 percent to a record 930,000, according to a study by Spectrem Group. That is the biggest jump since Spectrem began its survey in 1996. The number of millionaires rose by 11 percent, to a record 8.3 million – the second biggest jump in the decade since they were surveyed.

The overall affluent market – households with $500,000 or more – rose by 7 percent to a record 14 million. This group fared the worst in the wake of the stock market collapse, with their numbers falling sharply from 2000. Last year was the first time their total passed that of their peak in 1999.

Catherine McBreen, a managing director at Spectrem, said: "It's been a great couple of years for America's millionaires ... the stock market, which posted solid improvement in 2005, was one reason for the advance. However, for the wealthiest Americans it appears the increased use of international markets and alternative investments were key drivers of their improvement."

George Walper, president of Spectrem, said the group had questioned respondents on their investments and returns, and also examined the returns of international markets and alternative investments to ensure the veracity of the results. In a sudden reversal of their longstanding affinity for their domestic market, U.S. investors last year put more than $130 billion into international mutual funds, more than three times the amount they put into U.S. funds.

Most overseas markets performed better than the U.S. market, so their switch paid off.

Hedge funds returned on average only slightly more than the U.S. stock market last year, but investable real estate and some private equity investments returned more than this.

Affluent households, on average, held close to half their money in assets — stocks, bonds and alternative investments — and a larger than usual amount of cash, Spectrem said.

The affluent reported a greater satisfaction with their financial advisers than in recent years, but this was still short of the highest level previously reported. Those who used advisers were shifting back to use full-service brokers as their main advisers.

Copyright The Financial Times Ltd. All rights reserved.

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