Many retail investors who scoffed at conservative government bond funds 18 months ago are the very ones who are now flooding assets into slow and steady GNMA (Ginnie Mae) funds, making them one of the best selling fund sub-sectors in the industry, according to industry executives and observers.

The funds, which are comprised of mortgage-backed securities issued by the Government National Mortgage Association, have experienced a complete turnaround in flows this year from last because of market volatility and overall investor uncertainty, executives say. As other sectors crater, investors are seeking shelter in GNMA funds from the market fallout.

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