function retun from string

In my function, i use 2 parameters and i am getting result as null. kindly suggest to get the correct data

CREATE TABLE [dbo].[Table_Prod](
	[Id] [int] NULL,
	[Code] [nchar](10) NULL
) ON [PRIMARY]

GO



CREATE TABLE [dbo].[Table_Mat](
	[Id] [int] NULL,
	[Code] [nchar](10) NULL,
	[MatCode] [nvarchar](50) NULL
) ON [PRIMARY]


insert into [Table_Prod] values (1,'A-01'), (1,'B-01'), (1,'C-02'), (1,'D-02'),(1,'E-01'),(1,'E-02')
insert into [Table_Mat] values  (1,'A-01','AAA'),(1,'B-01','BBB'),(2,'A-01','AAA'),(2,'D-02','DDD'),(3,'A-01','AAA')

CREATE  function [dbo].fnList()
RETURNS nvarchar(max)
AS
 
BEGIN  

	DECLARE @retI  nvarchar(max)
	DECLARE @retM nvarchar(max)
	 
			SELECT @retI   = STUFF((SELECT ''',''' + convert(varchar(100),ltrim(rtrim([Code]))) from Table_Prod for xml path('')),1,2,'') + ''''
			SELECT @retM  = STUFF((SELECT distinct ',' +  convert(varchar(100),[MatCode]) 
						FROM    [Table_Mat]
					WHERE    [Code] in (@retI)
		--					WHERE    [Code] in ('A-01','B-01','C-02','D-02','E-01','E-02')
			 			for xml path('')),1,1,'')   
				RETURN (@retM)
END  

SELECT  dbo.fnList() 
 
is reutrning
------------------
NULL
Expected Result
------------------
AAA,BBB,DDD

ShanmugaRaj