August AAII Asset Allocation Survey: Highest Fixed-Income Exposure in Six Years

Individual investors’ exposure to fixed-income investments rose to their highest level in more than six years last month. The August AAII Asset Allocation Survey also shows an increase in cash holdings and a decline in equity exposure.

Stock and stock fund allocations pulled back by 2.2 percentage points to 64.3%. Equity allocations were last lower in January 2019 (63.2%). Nonetheless, equity allocations remain above their historical average of 61.0% for the 77th consecutive month.

Bond and bond fund allocations rose 1.0 percentage points to 19.4%. Fixed-income allocations were last higher in April 2013 (19.7%). The increase keeps bond and bond fund allocations above their historical average of 16.0% for the sixth consecutive month and the seventh time in eight months.

Cash allocations rebounded by 1.2 percentage points to 16.3%. Cash allocations remain below their historical average of 23.0% for the 93rd consecutive month.

The six-year high in fixed-income allocations occurred as yields continue to fall. Declining yields boost the prices of bonds. At the same time, optimism about the short-term direction of the stock market was at an unusually low level during much of August.

August AAII Asset Allocation Survey results:

• Stocks and stock funds: 64.3%, down 2.2 percentage points          
• Bonds and bond funds: 19.4%, up 1.0 percentage points          
• Cash: 16.3%, up 1.2 percentage points

August AAII Asset Allocation Survey details:

• Stocks: 26.0%, down 2.7 percentage points
• Stock Funds: 38.2%, up 0.5 percentage points
• Bond Funds: 15.4%, up 1.2 percentage points
• Bonds: 4.0%, down 0.2 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.