Mutual funds that invest in mortgage-backed securities are wrapping up a banner year.

Battered by interest rate upheaval, these funds have seen roughly $20 billion in outflows since the end of 1993. But this year, assets have begun to creep back up, albeit slowly. Net inflows have totaled $1 billion, boosting assets to $54.7 billion as of Oct. 31, according to the Investment Company Institute, a Washington-based trade group.

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