NEW YORK (CNN/Money) - They're back!

The number of millionaires in the United States surged 14 percent in 2003, to 2.3 million, according to the World-Wide Wealth of High Net Worth Individuals survey released Tuesday by Merrill Lynch and Capgemini.

"High net worth individuals benefited from a strong stock market rally and solid, global economic growth," said James Gorman, president of Merrill Lynch's Global Private Client group. "They were able to capitalize on these trends despite a great deal of geopolitical uncertainty."

In 2002, when the S&P 500 stock index dropped 22 percent, the number of high net worth individuals (defined as those with $1 million or more in investment capital excluding home equity) fell 100,000. The S&P rallied 28.7 percent in 2003.

Worldwide, a half a million individuals joined the millionaire's club, which topped 7.7 million. Their overall wealth topped $28.8 trillion, a jump of 7.7 percent over the year before.

The United States produced the most new millionaires but Hong Kong, at 30 percent, and India, at 22 percent showed the largest percentage gains. China, with a 12 percent jump in millionaires, was right behind the United States.

Europe's elite grew more modestly; the number of new millionaires there climbed just 2.4 percent to a total of 2.6 million.

The report asserted that many of the wealthy returned to stocks last year after, to a large degree, sitting out the stock market decline of 2001. Rather than trying to create new wealth, they opted to preserve their assets during the down times by investing in fixed income vehicles, real estate, and keeping lots of cash.

Many U.S. millionaires benefited from tax law changes undertaken by the Bush administration, according to the report. The Tax Relief Act of 2001 meant a drop in the maximum tax bracket to 35 percent for 2003.

The trend to alternate investments such as hedge funds, which often offer higher returns continued in 2003, increasing to 13 percent of the total invested, up from 10 percent in 2002.

Robert Fairbairn, managing director of Merril Lynch Investment Managers, says "Investment in these has become mainstream in the last three to four years."

The report predicted that the wealth of millionaires would continue to grow at a high rate, 7 percent annually though 2008. North America's wealthy, with 10.7 percent growth, will lead the way.