January AAII Asset Allocation Survey: Fixed-Income Allocations Near a 2-Year High


Individual investors’ allocations to bonds and bond funds rose to their highest level in nearly two years, according to the January AAII Asset Allocation Survey. Equity allocations stayed within their recent range, while cash allocations increased slightly.

Stock and stock fund allocations declined 1.3 percentage points to 67.2%. The decrease reverses December’s increase in equity allocations and matches November’s levels. January 2015 was the 22nd consecutive month and the 24th out of the past 25 months with stock and stock fund allocations at or above their historical average of 60%.

Bond and bond fund allocations increased by 0.7 percentage points to 17.5%. This was the largest allocation to fixed-income since May 2013 (18.1%). The increase also kept bond and bond fund allocations at or above their historical average of 16% for the eighth consecutive month.

Cash allocations were 0.5 percentage points higher in January than in December, at 15.3%. The magnitude of the increase was not large enough to keep cash allocations from staying below their historical average of 24% for the 38th consecutive month.

The increase in fixed-income exposure was due to a larger allocation to bond funds. Among surveyed AAII members, the average allocation to bond funds was 14.4% last month, a 1.1 percentage-point increase over December and a 1.9 percentage-point increase over November. The current allocation to bond funds is the largest recorded by our survey since April 2013 (15.9%).

The downward trend in yields led to a good year for longer-term bond funds and may have made them more attractive to individual investors. A down month for stocks may have also played a role in shifting investment dollars out of equities, even though short-term sentiment among individual investors largely stayed above average throughout January. Even with this month’s allocation survey results, many AAII members continue to be frustrated by low bond yields and low interest rates on money market accounts.

January AAII Asset Allocation Survey results:

  • Stocks and Stock Funds: 67.2%, down 1.3 percentage points
  • Bonds and Bond Funds: 17.5%, up 0.7 percentage points
  • Cash: 15.3%, up 0.5% percentage points

January AAII Asset Allocation Survey details:

  • Stocks: 31.0%, down 1.1 percentage points
  • Stock Funds: 36.2%, down 0.1 percentage points
  • Bonds: 3.1%, down 0.4 percentage points
  • Bond Funds: 14.4%, up 1.1 percentage points

Historical averages:

  • Bullish: 39.0%
  • Neutral: 30.5%
  • Bearish: 30.5%

*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. The survey and its results are available online at: http://www.aaii.com/investor-surveys.


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