Recent losses taken by mortgage investors Fannie Mae (FNM) and Freddie Mac (FRE) added to a collective drop for thrift and mortgage finance stocks and related exchange traded funds (ETFs). Freddie posted a $2 billion loss and may cut dividends to meet capital requirements. MENAFN reports the increased net loss was primarily due to higher credit-related expenses and mark-to-market losses on derivatives and credit-related items.
Some financial related ETFs that hold mortgage finance stocks include:
- Financial Select Sector SPDR (XLF) – down 19% for the year
- Vanguard Financials (VFH) – down 17.8%
- KRW Bank Index (KBE) – down 18.9%
- ProShares UltraShort Financials (SKF) – this ETF seeks the inverse of the financial index
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.