May AAII Asset Allocation Survey: Lowest Equity Exposure Since 2020

Individual investors’ allocations to equities fell to their lowest level since late 2020 last month. The May AAII Asset Allocation Survey also shows cash levels rising to their highest level in nearly a year.

Stock and stock fund allocations declined 2.7 percentage points to 67.1%. This was the smallest exposure to equities since November 2020 (63.2%). However, the decrease was not small enough to keep equity allocations from staying above their historical average of 61.0% for the 24th consecutive month.

Bond and bond fund allocations rebounded by 1.2 percentage points to 13.8%. Fixed-income exposure fluctuated within an 0.4-percentage-point range for the fourth consecutive month. Bond and fund allocations are also below their historical average of 16.0% for the 15th consecutive month.

Cash allocations increased by 1.5 percentage points to 19.1%. Cash exposure was last higher in July 2020 (19.9%). Even with the increase, May was the 25th consecutive month that cash allocations have been below their historical average of 23.0%.

Because the survey is conducted throughout the month, some AAII members responded as the stock market was trading at or near its recent lows.

Optimism in our weekly Sentiment Survey stayed at unusually low levels throughout May. Sentiment does not always result in altered allocations as many AAII members follow a long-term approach to investing.

• Stocks and Stock Funds: 67.1%, down 2.7 percentage points
• Bonds and Bond Funds: 13.8%, up 1.2 percentage points
• Cash: 19.1%, up 1.5 percentage points

• Stocks: 31.2%, down 2.0 percentage points
• Stocks Funds: 35.9%, down 0.6 percentage points
• Bonds: 3.0%, up 0.2 percentage points
• Bond Funds: 10.7%, up 0.9 percentage points

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