September AAII Asset Allocation Survey: Fixed-Income Exposure Reverts Back to July Low

According to the latest AAII Asset Allocation Survey, individual investors’ exposure to fixed-income assets reverted to back the 15-month low recorded in July. Equity exposure declined as well, while cash allocations rose.

Stock and stock fund allocations decreased by 1.2 percentage points to 63.6%. This marks the fourth consecutive month and the sixth month since the start of 2020 that stock and stock fund allocations are above their historical average of 61.0%.

Bond and bond fund allocations declined 1.0 percentage points to 17.9%. This is the 19th consecutive month and the 20th month since the start of 2019 that fixed-income exposure is above its historical average of 16.0%.

Cash allocations saw an increase of 2.2 percentage points to 18.5%. The last time cash allocations were at their historical average of 23.0% was in April 2020 (23.0%).

Equity allocations have stayed within a 2.6-percentage-point range over the past four months (62.2% to 64.8%). Over the same period, fixed-income allocations have fluctuated within a one-percentage-point range (17.9% to 18.9%).

Sentiment about the short-term direction of the stock market worsened with bullish sentiment being unusually low for much of September. At the same time, low interest rates continued to be a challenge for AAII members, many of whom are retired.

September AAII Asset Allocation results:

• Stocks and stock funds: 63.6%, down 1.2 percentage points
• Bonds and bond funds: 17.9%, down 1.0 percentage points
• Cash: 18.5%, up 2.2 percentage points

September AAII Asset Allocation details:

• Stocks: 30.3%, down 1.8 percentage points
• Stock funds: 33.3%, down 3.1 percentage points
• Bonds: 3.5, up 0.5 percentage points
• Bond funds: 14.5%, down 1.4 percentage points

Historical Averages:

• Stocks and stock funds: 61.0%
• Bonds and 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.