August 20, 2008 at 11:00 am by Tom Lydon
Worries about the fate of Fannie Mae (FNM) and Freddie Mac (FRE) are persisting, and it continues to drag down financial exchange traded funds (ETFs).
Investors seem increasingly convinced that if the government bails them out, their shares will plunge to zero, reports Alan Zibel for the Associated Press. Fannie Mae’s CEO reassured investors that a bailout isn’t imminent, but shares are still way down midday to their lowest point in nearly 20 years.
A government bailout package was unveiled on July 13 that included a plan to provide unlimited government loads to the mortgage giants. Critics say the bailout is too open-ended and could expose taxpayers to billions in potential losses.
Financial ETFs are breaking even so far in trading today:
- iShares Dow Jones U.S. Financial (IYR), down 3.9% year-to-date
- KBW Bank (KBE), down 28.3% year-to-date
- First Trust Financials AlphaDEX Fund (FXO), down 21.9% year-to-date
Subscribe to Our RSS Feed
