Fannie, Freddie Still Favorites in Some Funds

Investment News (07/21/08); Benjamin, Jeff
Although Fannie Mae and Freddie Mac's stock prices have taken severe hits in recent weeks, several mutual funds continue to hold the securities. For instance, the Fidelity Select Home Finance Fund had a 23.6-percent combined weighting in the two government-sponsored enterprises as of the end of May, while the MSCI U.S. Investable Market Thrifts & Mortgage Finance Index continues to have a 44-percent weighting in them. Shares of Fannie Mae and Freddie Mac have declined a whopping 76 percent since Jan. 1 and lost 52 percent of their value during the first two weeks of this month. Clinton Struthers, president of Struthers Financial Services, states, "You can't have loose lending practices and soaring real estate prices and not expect some kind of a problem."