September AAII Association Survey: Fixed-Income Allocations Rise to 7-Month High


Fixed-income allocations rose to a seven-month high last month, as equity and cash allocations declined, according to the September AAII Asset Allocation Survey.

Stock and stock fund allocations declined 0.4 percentage points to 60.1%. The drop puts the September’s equity allocation near the historical average of 60%.

Bond and bond allocations rose 0.5 percentage points to 21.9%. This is the largest allocation to fixed income since February 2012. It is also the 39th consecutive month that fixed-income allocations are above their historical average of 16%.

Cash allocations slipped 0.1 percentage points to 18.0%. The decline leaves cash allocations at their lowest level since May 2011. It also makes September the 10th consecutive month that cash allocations are below their historical average of 24%.

A rise in interest rates during the first half of the month may have made bonds more attractive to individual investors. At the same time, however, many AAII members remain frustrated over the low level of interest rates. Many also continue to be concerned about the pace of economic growth, Washington politics and the European sovereign debt crisis. These concerns dampened enthusiasm for stocks, even as stock prices rose further during September.

This month’s special question asked AAII members what changes, if any, they made to their portfolios in response to this summer’s rise in stock prices. Responses were mixed. The largest number of respondents said they did not make any changes. The second largest group said they increased their cash allocation, primarily by selling stocks. The third largest group, conversely, said they added to their stock holdings. A small group of individual investors said they simply rebalanced their portfolio.

September Asset Allocation Survey results:

  • Stocks/Stock Funds: 60.1%, down 0.4 percentage points
  • Bonds/Bond Funds: 21.9%, up 0.5 percentage points
  • Cash: 18.0%, down 0.1 percentage points

September Asset Allocation Survey details:

  • Stocks: 30.2%, down 1.3 percentage points
  • Stock Funds: 29.9%, up 0.9 percentage points
  • Bonds: 5.3%, up 0.9 percentage points

Historical Averages:

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

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: