I am looking for mutual funds that invest specifically in the airline
industry? Could u tell me some?

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Request for Question Clarification by vercingatorix-ga on 20 Feb 2003 14:38 PST

As far as I know, there are no mutual funds that invest entirely in
airlines. After all, there aren't that many publicly traded airlines,
and even buying all of them, including the worst stinkers, you
wouldn't have enough stocks to satisfy most mutual fund managers.

I can probably find you some transportation mutual funds with airline
exposure. Will that do?

V

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Clarification of Question by mobiusme-ga on 21 Feb 2003 06:46 PST

Thanks. I am familiar with some transportation funds though. I
appreciate your help, though.

bye

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Request for Question Clarification by markj-ga on 21 Feb 2003 11:16 PST

mobiusme --

I have found one mutual fund (offered by a large fund group) that
"normally invests at least 80% of assets in common stocks of companies
principally engaged in the regional, national, and international
movement of passengers, mail, and freight via aircraft."   Besides
airlines, its investments include aviation service firms and
manufacturers of aeronautical equipment.

It has a $2500 minimum initial investment.  

After considerable research, I have not found any others with a
similar concentration in air transportation stocks.

Would information on this fund be a sufficient answer to your
question?

markj-ga

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Clarification of Question by mobiusme-ga on 22 Feb 2003 11:54 PST

Yes, It will be. Thanks.

mobiusme --

The fund that best meets your specification is called the Fidelity
Specialty Air Transportation Portfolio (ticker symbol FSAIX).   As
noted at this linked page at the Fidelity Investments website, the
fund "[n]ormally invests at least 80% of assets in common stocks of
companies principally engaged in the regional, national, and
international movement of passengers, mail, and freight via aircraft":
Fidelity.com: Fidelity Specialty Air Transportation Portfolio:
Snapshot
http://personal.fidelity.com/products/funds/mfl_frame.shtml?316390798

Because the fund specializes in one industry -- air transportation --
it holds significantly fewer stocks than the average diversified stock
mutual fund.  Among its top 25 holdings (out of a total of 29), the
following airline stocks are represented, according to the most recent
information posted on Morningstar.com:
Southwest Air
Delta Airlines
AMR (American Airlines)
Continental Air
Northwest Air
SkyWest
Alaska Air Group
Atlantic Coast Air
Westjet Airlines
Frontier Air

The rest of its holdings include aviation service firms and
manufacturers of aeronautical equipment.

Here is a link to comprehensive information about the Fidelity
Specialty Air Transportation Portfolio at the Morningstar.com site:
Morningstar.com: Fidelity Select Air Transportation
http://quicktake.morningstar.com/Fund/Portfolio.asp?Country=USA&Symbol=FSAIX&qttab=portfolio#anchor4

In a 2001 article, several other funds were cited as having a special
concentration in airline stocks.  However, that post-9/11 article
accurately predicted that those funds "are likely to fall
significantly with the [airline] industry."  In fact, three out of
four of those funds (Fidelity Specialty Air Transportation Portfolio
being the only exception) no longer have an extra-large weighting in
airline stocks.  That article, linked here, should make interesting
reading for you:
Morningstar.com: Today's Market Turmoil Will Hit Some Funds Hard
http://news.morningstar.com/news/Wire/0,1230,6113,00.html

The Fidelity Specialty Air Transportation Portfolio is one of class of
mutual funds called "specialty" or "sector" funds."   These term are
used interchangeably to describe funds that invest in either "sectors"
of the economy or, more narrowly, individual industries within a
sector.  These investment vehicles are generally intended for
investors who are seeking short term gains by overweighting their
investments in particular areas of the economy that they expect to
outperform the economy in general.  Here is a short article about the
subject, which points out that it is a "tough challenge" to find a
fund that invests in a specific industry:
Fundadvice.com: Finding a Specialty Fund
http://www.fundadvice.com/QA/cbs/cbs082602.html


Additional Sites:

Here are Morningstar portfolio summaries for the three sector funds
that also had heavy weighting in airline stocks in 2001, but no longer
do:
Morningstar.com: Fidelity Select Transportation
http://quicktake.morningstar.com/Fund/Portfolio.asp?Country=USA&Symbol=FSRFX

Morningstar.com: Rydex Transportation
http://quicktake.morningstar.com/Fund/Portfolio.asp?Country=USA&Symbol=RYPIX

Morningstar.com: Icon Industrials
http://quicktake.morningstar.com/Fund/Portfolio.asp?Country=USA&Symbol=ICTRX


Search Strategy:

Google search terms:
"sector funds" transportation airlines
://www.google.com/search?sourceid=navclient&q=%22sector+funds%22+transportation+airlines

"specialty funds" 
://www.google.com/search?sourceid=navclient&q=%22specialty+funds%22

Various site searches at http://www.morningstar.com

I am confident that this information is fully responsive to your
question.   If any of the information needs clarification or if any of
the links don't function, please post a clarification request before
rating this answer.

markj-ga

Thank you. Very well done.