A good year for Fannie, Freddie investors

By Noah Guillaume

April 01, 2014 at 10:07 AM

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2013 was a very good year for investors holding Fannie Mae and Freddie mac preferred stock.

According to SNL Financial, "a vast majority" of the roughly 40 of the publicly traded issues it tracks quadrupled in value. Some, such as Fannie Mae's 5.1 percent series E noncumulative preferreds, went even higher. Those securities, which trade under the symbol FNMFM, saw a meteoric rise from $1.60 per share as of Jan. 2, 2013, to $14.00 per share as of Dec. 31, 2013.

One of the top holders of these preferreds in the life space is TIAA-CREF with roughly 1.3 million shares of Freddie Mac and 3.1 million shares of Fannie Mae. The fair value of TIAA-CREF's holdings in these securities gained in value through 2013, climbing 420.4 percent to $38.8 million from only $7.5 million in 2012.

According to filings, Jackson National sold a combined 1.8 million shares of Fannie and Freddie preferreds on Dec. 5, 2013. This data is taken from the Schedule D sections of statutory filings from Jackson National Life Insurance Co. and Jackson National Life Insurance Co. of New York.

W. R. Berkley Corp. went the other direction, adding more preferred stock to its investment portfolio in 2013. While the company sold off some of its existing holdings, it ended up adding a net 918,000 preferred shares of Fannie Mae.