By selling mortgage certificates, Ginnie Mae creates a continuing pool of mortgage money. Ginnie Mae returns should be compared to certificates of deposit and treasury securities. Because they are fully guaranteed by the U.S. government, there is no risk of default.
Investors receive a certain amount of money each month.
This includes both the principal and the interest of the pooled mortgages. Don't be fooled into thinking that they reflect a high rate of interest. If you spend the entire amount, you are spending your principal as well as the interest. When the certificate matures, you will have nothing left, not even your initial investment. These mutual funds pool investors' money to buy mortgage certificates.