May AAII Asset Allocation Survey: Pullback in Fixed-Income Exposure

Individual investors' exposure to fixed income pulled back in May, retreating from its 26-month high set in April 2023. The May AAII Asset Allocation Survey also shows slightly higher equity allocations and a small change in cash allocations.

Stock and stock fund allocations increased by 0.9 percentage points to 65.2%. The increase keeps stock and stock fund allocations above their historical average of 61.5% for the 36th consecutive month. 

Bond and bond fund allocations decreased by 0.9 percentage points to 14.8%. May was the 27th consecutive month with fixed-income allocations below their historical average of 16.0%. 

Cash allocations increased by a modest 0.1 percentage points to 20.0%. Cash allocations are below their historical average of 22.5% for the sixth consecutive month. 

Pessimism in the weekly AAII Sentiment Survey pulled back from unusually high levels during the second half of May. Large-cap stocks—particularly large-cap growth—fared well during May. The gains in equity were not widespread, however, as mid-cap, small-cap and value stocks all declined.