Funds Get Hit by Fannie Mae Selloff

In terms of total Fannie shares, the (AWSHX Quote)Washington Mutual Investors fund is the largest holder of stock at over 21 million shares, or 2.2% of Fannie's outstanding stock.

Morningstar, which also provides independent research on individual stocks, says it remains positive on Fannie Mae's business model despite the cloud over its accounting. Morningstar analyst Ryan Batchelor says he believes the company's primary growth driver, mortgage debt outstanding, remains strong. Nevertheless, Morningstar has suspended its individual stock rating on Fannie "because of our lack of confidence in the financial statements needed to accurately value the business."