October AAII Asset Allocation Survey: Fixed-Income Allocations Decline to a 21-Month Low

Individual investors’ exposure to fixed-income assets declined to its lowest level in 21 months according to the October AAII Asset Allocation Survey. Cash allocations declined as well, while equity exposure rose.

Stock and stock fund allocations rose by 2.2 percentage points to 65.8%. This marks the sixth consecutive month and the eighth month since the start of 2020 that stock and stock fund allocations are above the historical average of 61.0%.

Bond and bond fund allocations declined 1.1 percentage points to 16.8%. Fixed-income exposure was last lower in February 2019 (15.8%). This is the 21st consecutive month and the 22nd month since the start of 2019 that allocations to bonds and bond funds are above the historical average of 16.0%.

Cash allocations declined by 1.0 percentage points to 17.5%. The last time cash allocations were at the historical average of 23.0% was in April 2020 (23.0%).

Bond yields rose to their highest levels since June last month, reducing the value of bond holdings. We also saw a shift in our weekly sentiment survey with optimism improving on a relative basis and pessimism pulling back from its previously unusually high levels.

October AAII Asset Allocation results:

• Stocks and Stock Funds: 65.8%, up 2.2 percentage points
• Bonds and Bond Funds: 16.8%, down 1.1 percentage points
• Cash: 17.5%, down 1.0 percentage points

October AAII Asset Allocation details:

• Stocks: 30.6%, up 0.4 percentage points
• Stock Funds: 35.1%, up 1.9 percentage points
• Bonds: 3.0, down 0.5 percentage points
• Bond Funds: 13.8%, down 0.7 percentage points

Historical Averages:

• Stocks/Stock Funds: 61.0%
• Bonds/Bond Funds: 16.0%
• Cash: 23.0%

The numbers are rounded and may not add up to 100%.

The AAII Asset Allocation Survey has been conducted monthly since November 1987 and asks AAII members what percentage of their portfolios are allocated to stocks, stock funds, bonds, bond funds and cash. The survey and its results are available online at: www.aaii.com/investor-surveys.