February AAII Asset Allocation Survey: 22-Month High for Equity Exposure

Individual investors’ exposure to equities reached a 22-month high in February according to the latest AAII Asset Allocation Survey. Fixed-income allocations, meanwhile, declined to a 24-month low.

Stock and stock fund allocations increased by 0.3 percentage points to 67.7%. Equity allocations were last higher in April 2019 (67.8%). The historical average is 61.0%.

Bond and bond fund allocations pulled back by 1.0 percentage points to 16.0%. The last time fixed-income allocations were near this level was in February 2019 (15.8%). Even with the decrease, bond and bond fund allocations are in line with their historical average of 16.0%. Fixed-income allocations have not fallen under their historical average for 24 consecutive months.

Cash allocations increased 0.7 percentage points to 16.3%. Despite this increase, February marks the 10th consecutive month that cash allocations have been below their historical average of 23.0%.

The decline in fixed-income exposure occurred as bond yields rose. Differences in which AAII members participated in the survey last month relative to January may have also played a role. As far as the increase in equity exposure, stocks of all market sizes rose throughout February. At the same time, optimism in our weekly AAII Sentiment Survey was above 45% for most of the month.

• Stocks and Stock Funds: 67.7%, up 0.3 percentage points
• Bonds and Bond Funds: 16.0%, down 1.0 percentage points
• Cash: 16.3%, up 0.7 percentage points

• Stocks: 29.0%, up 0.6 percentage points
• Stocks Funds: 38.8%, down 0.4 percentage points
• Bonds: 2.1%, down 0.3 percentage points
• Bond Funds: 13.9%, down 0.7 percentage points

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