Investors seemed to lose some of their faith in mutual funds largely made up of mortgage securities from the Government National Mortgage Association, as the flow of cash into the funds decreased in July.

According to the Investment Company Institute, Ginnie Mae mortgage funds gained a total of $534.9 million in net new sales for July, down from $660.9 million in new sales for June and $778.3 million of new sales in July 1998.

Total assets for July were $58.9 billion, down from $59.8 billion in June, but up from $58.1 billion a year earlier.

Other Ginnie Mae mutual fund data released for July included the following:

Total sales, including reinvested dividends, were $1.515 billion, down from $1.71 billion in June and $1.79 billion in July 1998.

Total sales, less reinvested dividends, were $1.33 billion, down from $1.5 billion in June and $1.612 million in July 1998.

Redemptions were $980.2 million, down from $1.052 billion in June and up from $1.007 billion a year earlier.

Exchanges into the funds were $537.1 million, down from $716.7 million in June and up from $410 million in July 1998.

Exchanges out of the funds were $514.6 million, down from $879.5 million in June and up from $483.7 million a year earlier.

Liquid assets were minus-$4.92 billion, down from minus-$3.5 billion in June and minus-$1.75 billion in July 1998.

Liquidity ratios were minus-8.2%, down from minus-5.7% in June and minus-3.0% a year earlier.

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