Home foreclosures and market volatility are running high. So any investment even remotely connected to mortgages is the last place to look if you're trying to protect your retirement savings, right?

Not necessarily. Many investors seeking safe harbor and modest yield are finding both in mutual funds that specialize in buying Ginnie Maes, which are pools of mortgages guaranteed by the Government National Mortgage Association.

Ginnie Mae, which extracts fees for guaranteeing mortgage investors are repaid, is a smaller and more conservative player in the mortgage market than Fannie Mae and Freddie Mac. Those factors helped the agency avoid the troubles that ensnared its siblings and led the government to seize control of Fannie and Freddie in September.

Last year, Ginnie Maes thrived even as Fannie and Freddie suffered. Nearly

$6 billion flowed into about two-dozen funds that invest mostly in Ginnie Maes, boosting total assets to nearly $55 billion, according to fund tracker Lipper Inc.

The niche's newfound popularity lies in its returns. They're modest, Ginnie Mae funds collectively earned a 2008 return of 5.24 percent, according to Lipper, with the three-year average annual return at 5.07 percent. So far this year, those returns have fallen closer to 4 percent.

A few considerations for investors thinking of Ginnie Mae funds:

Not all are alike: While it may seem funds investing in the same narrow category of government-guaranteed mortgages would yield positive returns year after year, things can go wrong. For example, Putnam U.S. Government (PGSIX) lost nearly

5 percent last year. Alongside its Ginnie Mae holdings, the fund invested in collateralized mortgage obligations whose market value sank because of their high risk compared with other mortgage-related securities.

Rate volatility: Sudden changes in mortgage rates can make Ginnie Maes complex investments. Fund managers put cash to work by sifting through the market for Ginnie Mae-backed mortgages of varying maturities, such as 30 years and 10 years, and placing bets on the pools of mortgages offering the best prospects.

Costs count: With Ginnie Maes typically earning only modest returns, expenses can eat away much of it. Harry Milling, a fund analyst with Morningstar Inc., said cost should be the top consideration in comparing Ginnie Mae funds, since they're similar.