Two weeks ago, we featured the Fidelity Select Transportation Fund as our fund of the week as transportation stocks rallied due to the low gas prices. This week, we have chosen the Fidelity Select Air Transportation Fund (FSAIX) as low gas prices have sent airline stocks flying and the IPO of Virgin America (VA) on Friday has gained investor attention.
We have seen the airline companies soar so far in 2014, with American Airlines up nearly 80%, Delta (DAL) up over 60%, United Continental (UAL) up over 50% and Southwest Airlines (LUV) up over 110%.
Inside the Fund
The Fidelity Select Air Transportation Fund (FSAIX) was launched in 1985 and is managed by Matthew Moulis. The fund currently has approximately $459 million in assets under management (AUM).
The fund focuses on medium to giant sized companies that are in the industrials industry. It is heavily invested, with less than 3% of its assets in cash.
Historical Performance
| 2010 | 2011 | 2012 | 2013 | YTD |
|---|---|---|---|---|
| 33.37% | -.607% | 19.16% | 50.65% | 14.56% |
Fidelity Select Air Transportation Fund’s Largest Holdings
Nearly 40% of the fund is compiled of its top five holdings. While the airline stocks in the top five have had a great year, some of the other holdings have lagged.
| Symbol | Stock | Portfolio Weight | YTD Performance |
|---|---|---|---|
| BA | Boeing | 10.18% | -4% |
| UPS | United Parcel Service | 9.22% | +1.25% |
| DAL | Delta Air Lines | 7.41%% | +64% |
| PCP | Precision Castparts | 6.85% | -14% |
| AAL | American Airlines | 6.29% | +79% |
The Bottom Line
This fund is a great way for investors to gain exposure to the airline industry as it benefits from lower gas prices. By purchasing a mutual fund like this one, investors are able to gain exposure to the industry while remaining diversified.