May AAII Asset Allocation Survey: Cash Allocations Hit an 8-Month High


Cash allocations rose to an eight-month high last month, according to the latest AAII Asset Allocation Survey. Individual investors reduced their equity exposure, while holding their fixed-income allocations relatively steady.

Stock and stock fund allocations fell 1.7 percentage points to 65.3%. This is a six-month low. The decline was not steep enough to prevent equity allocations from remaining above their historical average of 60% for the 14th consecutive month and for 16 out of the past 17 months, however.

Bond and bond fund allocations declined 0.1 percentage points to 15.5%. The decline put fixed-income allocations below their historical average of 16% for the third consecutive month and the fourth in the past six months.

Cash allocations rose 1.8 percentage points to 19.2%. As noted above, this is the largest allocation to cash since September 2013 (19.6%). Even with the increase, May was the 30th consecutive month with cash allocations below their historical average of 24%.

The reduced exposure to stocks and stock funds occurred as the proportion of individual investors describing their six-month outlook for stocks as “neutral” in our weekly Sentiment Survey stayed above 40% for five consecutive weeks. Equity funds saw the biggest decline, with allocations declining by 4.1 percentage points. Though some of this drop is partially due to having a different group of AAII members take the Asset Allocation Survey in May than in April (there were likely some members who took the survey during both months), the Investment Company Institute estimates show equity funds experiencing $6.0 billion of net outflows during the first three weeks of April. While there is uncertainty about the short-term direction of stocks, the drop in yields has hurt the attractiveness of bonds to income-seeking investors.

June’s special question asked AAII members when they last changed their portfolio allocations specifically because of their age. Nearly a third of all respondents (32.3%) said that they never have changed their allocations, or that they have never changed their allocations specifically because of their age. Slightly more than 14% changed their allocation due to their age five or more years ago. Approximately 22% altered their allocations as result of their age within the past 18 months. Many respondents said they altered their allocations at retirement and have not changed their allocation due to their age since.

Here is a sampling of the responses:

  • “At age 65, I dropped from 70% equity funds to 60% and plan to keep between 50% and 60% in equities forever.”
  • “We began investing in dividend-paying stocks and increasing our cash position upon retirement, approximately 15 years ago.”
  • “Specifically because of age? The year I retired.”
  • “Never because of age. I only change my portfolio based on the market.”
  • “Never have. Pension, Social Security and rental incomes cover my expenses, so I have not had to adjust my stock and bond allocations.”
  • “I will shift my allocation to a standard when my brain no longer can analyze the markets.”

May Asset Allocation Survey results:

  • Stocks and stock funds: 65.3%, down 1.7 percentage points
  • Bonds and bond funds: 15.5%, down 0.1 percentage points
  • Cash: 19.2%, up 1.8 percentage points

May Asset Allocation Survey details:

  • Stocks: 35.1%, up 2.4 percentage points
  • Stock funds: 30.2, down 4.1 percentage points
  • Bonds: 3.7%, up 0.7 percentage points
  • Bond funds: 11.8%, down 0.8 percentage points

Historical Averages:

  • Stocks/Stock Funds: 60%
  • Bonds/Bond Funds: 16%
  • Cash: 24%

*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:


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