Corporate & Securities Law

SNSFE Investigating Funds And Other Investment Vehicles That Heavily Invested In Beaten-Down Fannie, Freddie, Lehman, AIG And Merrill

By James Eccleston

Investors owning shares in mutual funds ought to know what their exposure is to Fannie and Freddie.  According to MorningstarAdvisor report published recently, the top firms holding Fannie and Freddie are Fidelity Select Home, Touchstone, Morgan Stanley Financial Services and Schneider Value. 

Fidelity, for example, has 17% of its total holdings in Fannie and Freddie, followed by Touchstone with 11.79%.  If you look at fund families, you'll find that Schneider funds is the most heavily weighted in Fannie and Freddie with 6.5% overall invested in those companies, followed by Thompson. 

Now let's take a look at other stocks that have taken a beating - Lehman, AIG - Merrill.  What are the big holders of Lehman Brothers?  The top funds are Fidelity Select Brokerage, Morgan Stanley Financial Services, and Legg Mason Partners Aggressive Growth.  How about AIG?  Those mutual funds are Fidelity Select Insurance, which owns a whopping 16.7% of AIG, followed by Clipper and Fidelity Growth & Income.  In terms of Merrill Lynch, Natixis Harris Associates Large Cap Value leads the pack, followed by Morgan Stanley Financial Services and MassMutual Select Focused Value. 

Those investors suffering losses ought to take a look at the prospectus and see if this risk was adequately disclosed.  SNSFE continues to investigate mutual funds as well as other investment vehicles that invested in these financial stocks that have taken a beating.

Source:  MorningstarAdvisor

Full post as published by FinancialCounsel on September 26, 2008 (boomark / email).