AAII Asset Allocation Survey: 17-Month Low for Fixed-Income Allocations


Bonds and bond funds accounted for the lowest percentage of individual investors’ portfolios in 17 months, according to the December AAII Asset Allocation Survey. Cash allocations rose last month, while equity allocations were barely changed.

Stock and stock fund allocations declined by a very modest 0.1 percentage points, to 66.3%. December was the 45th consecutive month with equity allocations above their historical average of 60.5%.

Bond and bond fund allocations declined 0.6 percentage points, to 15.8%. Fixed-income allocations were last lower in July 2015 (15.5%). The historical average is 16.0%.

Cash allocations rebounded by 0.7 percentage points, to 17.9%. The increase was not large enough to prevent cash allocations from remaining below their historical average of 23.5% for the 61st consecutive month.

The drop in fixed-income allocations followed the rise in bond yields that occurred during the second-half of 2016. In addition, the Federal Open Market Committee raised the interest rate mid-month and forecast additional rate hikes to occur in 2017. Many AAII members have previously expressed concerns about a drop in bond prices due to rising yields.

December AAII Asset Allocation Survey results:

  • Stocks and stock funds: 66.3%, down 0.1 percentage points
  • Bonds and bond funds: 15.8%, down 0.6 percentage points
  • Cash: 17.9%, up 0.7% percentage points

December AAII Asset Allocation Survey details:

  • Stocks: 30.0%, down 1.2 percentage points
  • Stock funds: 36.4%, up 1.1 percentage points
  • Bonds: 2.8%, down 0.2 percentage points
  • Bond funds: 13.0%, down 0.4 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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