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Fixed-Income Allocations Rise to Three-Year High in July AAII Asset Allocation Survey

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Individual investors held their largest exposure to fixed-income investments in more than three years, according to the July AAII Asset Allocation Survey. Equity allocations were unchanged, while cash levels rose.

Stock and stock fund allocations stayed at 64.1% for a second month. July was the 40th consecutive month equity allocations were above their historical average of 60.5%.

Bond and bond fund allocations rebounded by 0.6 percentage points, to 18.0%. Fixed-income allocations were last higher in May 2013 (18.1%). The rise keeps bond and bond fund allocations above their historical average of 16.0% for the 12th consecutive month.

Cash allocations declined 0.6 percentage points, to 17.9%. June was the 56th consecutive month with cash allocations below their historical average of 23.5%.

There has been an overall increase in fixed-income exposure this year, particularly to bond funds. Relative to the range recorded for the current three-year period, six of the eight months with the highest fixed-income allocations were in 2016. This trend has occurred as optimism about the short-term direction of the stock market has remained below average for 38 consecutive weeks.

The ongoing investment environment remains tough for individual investors. Yields are low, while valuations for both stocks and bonds are elevated.

July Asset Allocation Survey results:

  • Stocks and Stock Funds: 64.1%, no change
  • Bonds and Bond Funds: 18.0%, up 0.6 percentage points
  • Cash: 17.9%, down 0.6 percentage points

July Asset Allocation Survey details:

  • Stocks: 29.3%, down 1.2 percentage points
  • Stock Funds: 34.9%, up 1.2 percentage points
  • Bonds: 3.3%, down 0.3 percentage points
  • Bond Funds: 14.7%, up 0.9 percentage points

Historical Averages:

  • Stocks/Stock Funds: 60.5%
  • Bonds/Bond Funds: 16.0%
  • Cash: 23.5%

*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.

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

If you want to become an effective manager of your own assets and achieve your financial goals, consider a risk-free 30-day Trial AAII Membership.

 

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