Morningstar, a US investment information provider, has stated that mutual funds managed by Morgan Stanley, Fidelity, and Blackrock, along with Silicon Valley Bank (SVB) and Signature Bank, are among the most at risk from the recent collapse in US banks, which have lost over $100bn due to a market sell-off. Although few funds have investments in the banks large enough to cause serious damage, further sell-offs in regional bank stocks could exacerbate the pressure.
The third-largest bank failure in US history, Signature Bank, has been closed down by regulators, and shareholders of both SVB and Signature Bank are unlikely to recover their investments. US authorities have taken emergency measures to help bank customers.
According to Morningstar’s report, the Morgan Stanley Institutional Global Concentrated Portfolio Class R6 had 4.1% of its assets in SVB as of December 2022, making it the second-highest among all US mutual funds. The fund declined 3.3% on Friday, having risen 1.2% this year.
BlackRock Future Financial and Tech ETF had 3% of its assets in Signature Bank and 1.7% in SVB as of December 2022, while the $47 million Fidelity Disruptive Finance fund held 4.2% of its portfolio in Signature Bank and 2.3% in SVB. Both funds have experienced a decline in their value due to the bank crisis.
As of the time of writing, Morgan Stanley, BlackRock, and Fidelity have not yet commented on the report.