Financial exchange traded funds (ETFs) are smack in the middle of a rough week.

Lehman Brothers Holdings (LEH) said it plans to sell a majority stake in its investment management unit and spin off commercial real estate assets, reports Dan Wilchins for Reuters. This is after posting a third-quarter loss of $3.9 billion.

Analyst forecasts were for $88 million. Lehman lost $2.8 billion in the second quarter. ClusterStock for the Tech Ticker expressed frustration that Lehman is seemingly doing nothing about the losses aside from considering several strategic moves.

As Lehman’s problems ignited concerns around the world, global stocks fell toward two-year lows today.

In the S&P 500 Index, Fannie Mae (FNM) and Freddie Mac (FRE) are getting the boot, reports Eric Martin for Bloomberg. Shares for the mortgage giant have fallen below $1 apiece. They’ll be replaced by (CRM), the largest seller of Web-based customer-management software and Fastenal (FAST), the biggest U.S. retailer of nuts, bolts and other fasteners. Fannie and Freddie’s last day on the S&P will be today, and the new entrants will join after the close on Sept. 12.

Gary Gordon for ETF Expert wonders if someone knows something we don’t when it comes to financial ETFs, though. Coming off the market low of July 15, these ETFs have been up impressively:

  • Financial Select Sector SPDR (XLF): up 23.6%; down 26.8% year-to-date
  • iShares Dow Jones U.S. Financial Services (IYG): up 29%; down 26.6% year-to-date

What’s going on? Gordon suggests insiders, as bank directors and financial execs bought $300 million of their own stock in May, June and July. This level of buying is the most since data aggregator Washington Service began compiling stats in 1986, report Linda Shen and Brett Gering for Bloomberg.