Fannie Mae, looking to attract more individual investors, has redesigned its annual report to present itself more effectively to this audience.

The change is part of a much broader program to increase individual ownership of Fannie's shares. Jayne Shontell, senior vice president for investor relations, said the company began the effort about a year ago when it split its shares to bring their price down to about $30, a more comfortable level for retail investors.

"We are significantly institutionally held," she said, indicating that this concentration was 86% before the program started. Because of the stock's liquidity, so-called momentum players tend to move in and out of the shares, she added, producing short-term volatility in the price. With individuals known to be long-term investors, bigger retail holdings could stabilize the stock price.

"We have been working on educating retail investors about the stock," Ms. Shontell said. Fannie is now sending out quarterly reports aimed at individuals. Previously, its only quarterly report was a highly detailed packet sent to institutions.

One of the quarterly reports included a survey, which elicited many requests for more information about Fannie and its business.

Fannie Mae has also been working with brokerage houses. It has arranged broadcasts to the sales forces at Merrill Lynch & Co., Smith Barney & Co., PaineWebber Inc., Dean Witter Reynolds, Edward Jones & Co., and Prudential Securities.

The company has also prepared a two-page fact sheet that it supplies to brokers for distribution to their customers, and it has been advertising in broker-oriented publications.

Ms. Shontell said the program is beginning to show results. The number of shares held by brokerage houses for their retail investors has climbed by 10 million, or 1% of Fannie's stock outstanding.

Many companies have tried to change their shareholder mix, with varying results. Some have found the task practically impossible or overly costly; others have made gradual progress over many years.

But Fannie has more than just the stock price in mind. It wants to educate the public about Fannie Mae's role in promoting homeownership. "We want every consumer to know what we are," Ms. Shontell said.

Indeed, sections of the new annual report are far more educational that promotional.

James A. Johnson, chairman, answers a variety of questions from the public in one two-page spread. The content ranges from an explanation of the difference between the primary and secondary markets to a look at Fannie's niche among other high-performance stocks.

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