AAII Asset Allocation Survey: Bond Allocations at 18-Month Low

Individual investors' exposure to equities was essentially unchanged, while bond allocations fell to an 18-month low in the February AAII Asset Allocation Survey.

Stock and stock fund allocations fell 0.2 percentage points to 63.3%. This kept stock allocations within the tight range they have held since last November. The historical average is 60%.

Bond and bond fund allocations fell by 1.5 percentage points to 17.5%. This was the lowest fixed-income allocations have been since August 2009. The historical average is 15%.

Cash allocations rose 1.7 percentage points to 19.2%, a five-month high. The historical average is 25%.

The rise in cash allocations comes as optimism about the short-term outlook for stocks has declined in recent weeks and individual investors fret about the outlook for interest rates and inflation. Also playing a role is a decision by some investors to shift money out of bonds and into dividend-yielding stocks.

This month's special question asked AAII members if they have increased or decreased their exposure to international markets. The responses were split, with the largest number of respondents saying they increased their exposure. A sizeable number responded that they either kept their global allocations unchanged or reduced international exposure, however.

February Asset Allocation Survey Results:

• Stocks and Stock Funds: 63.3%, down 0.2 percentage points
• Bonds and Bond Funds: 17.5%, down 1.5 percentage points
• Cash: 19.2%, up 1.7 percentage points

Asset Category Details:

• Stocks: 27.8%, down 1.8 percentage points
• Stock Funds: 35.5%, up 1.5 percentage points
• Bonds: 3.2%, down 1.6 percentage points
• Bond Funds: 14.3%, up 0.1 percentage points

Asset Category Details

• Stocks: 29.5%, up 0.4 percentage points
• Stock Funds: 34.0%, up 0.9 percentage points
• Bonds: 4.8%, up 0.1 percentage points
• Bond Funds: 14.2%, down 1.1 percentage points

> Historical Averages:

• Stocks Total: 60%
• Bonds Total: 15%
• Cash: 25%

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.