September AAII Asset Allocation Survey: Equity Exposure Decreases Slightly

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Despite downward volatility and unusually low levels of optimism, the September AAII asset allocation survey shows only a slight decrease in individual investors’ allocation to equities.

Equity and equity fund allocations decreased 1.1 percentage points to 63.4%. Although at At a two-year low, equity exposure remains above the historical average of 61.5% for the 28th consecutive month. Allocations to equities and equity funds were last lower in November 2020 (63.2%).

Bond and bond fund allocations increased by 0.3 percentage point to 14.7%. This is the fourth time in five months that fixed income allocations have increased. Nevertheless, bond and bond fund allocations are below their historical average of 16.0% for the 19th consecutive month.

Cash allowances rebounded 0.7 percentage points to 21.9%. September is the 29th consecutive month that cash allocations are below their historical average of 22.5%.

There were three weeks in September with bullish sentiment readings ranking among the 50 lowest in the history of our sentiment survey. At the same time, bond yields continued to rise, despite some heightened volatility towards the end of September. Still, AAII members have largely met their allocations. This is because they follow a long-term investment approach, as we encourage them to do.

September AAII Asset Allocation Survey Results:

  • Stocks and equity funds: 63.4%, down 1.1 percentage points
  • Bonds and bond funds: 14.7%, up 0.3 percentage points
  • Cash: 21.9%, up 0.7 percentage points

September AAII Asset Allocation Survey Details:

  • Equities: 29.9%, down 0.5 percentage points
  • Equity funds: 33.5%, down 0.6 percentage points
  • Bonds: 3.4%, up 0.4 percentage points
  • Bond funds: 11.4%, unchanged

Historical averages:

  • Stocks/stock funds: 61.5%
  • Bonds/Bond Funds: 16.0%
  • Cash: 22.5%

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, equity funds, bonds, bond funds and cash.

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