May AAII Asset Allocation Survey: Six-Year High for Fixed-Income Exposure

Individual investors’ exposure to fixed-income investments reached a six-year high in May. The latest AAII Asset Allocation Survey also shows a pullback in equity exposure and a slight increase in cash allocations.

Stock and stock fund allocations declined 2.0 percentage points to 65.8%. Even with the decline, equity allocations remain above their historical average of 61.0% for the 74th consecutive month.

Bond and bond fund allocations rose 1.8 percentage points to 18.9%. Fixed-income allocations were last higher in April 2013 (19.7%). May was the fourth time in five months with bond and bond fund allocations above their historical average of 16.0%.

Cash allocations were 0.2 percentage points higher at 15.3%. Cash allocations remained below their historical average of 23.0% for the 90th consecutive month.

A down month for stocks combined with falling yields for bonds had an influence on the portfolio allocations for many individual investors, including those who did not actively make any adjustments. At the same time, optimism about the short-term direction of stocks in our weekly Sentiment Survey fell to an unusually low level during the latter half of May.

May AAII Asset Allocation survey results:

• Stocks and stock funds: 65.8%, down 2.0 percentage points         
• Bonds and bond funds: 18.9%, up 1.8 percentage points
• Cash: 15.3%, up 0.2 percentage points

May AAII Asset Allocation survey details:

• Stocks: 30.0%, down 0.8 percentage points
• Stock Funds: 35.8%, down 1.1 percentage points
• Bonds: 3.6%, up 0.3 percentage points
• Bond Funds: 15.3%, up 1.5 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.

Want to weigh in? Take the survey yourself and see results online at www.aaii.com/assetallocationsurvey