NEW YORK (TheStreet) - Analysts and market commentators will have their sights set today on FedEx (FDX) - Get Report as the delivery firm and notable economic bellwether reports its earnings performance for the most recent three-month period.

The report will be made public days after announcing that Dec. 13 was the firm's busiest day ever in terms of deliveries when it reportedly delivered 16 million packages.

Strong numbers from FedEx will bode well for transportation heading into the New Year. However, investing in the industry may prove tricky in 2011. Ultimately, the best way investors can take a long-term approach to this sector is through a broadly focused ETF such as the

iShares Dow Jones Transportation Average Index Fund

(IYT) - Get Report


IYT is a well diversified product that provides investors with exposure to all facets of the transportation industry. The fund, however, is noticeably conservative, dedicating the largest sector slices of its index to industries including railroads delivery services, and trucking. Together, these three sectors account for 75% of the fund's total portfolio. More volatile regions of the transports industries such as airlines represent far smaller slices.

The fund has seen some impressive action recently and has managed to jump in our long- term momentum rankings.


Fidelity Select Transportation Portfolio

(FSRFX) - Get Report

is another promising endeavor for bullish investors with a desire for transportation exposure.

Like IYT, FSRFX is largely reliant on the performance of rail and other ground-based transportation companies. However, the fund sets aside a noticeably larger percentage of its index to airlines, with


(DAL) - Get Report



(LUV) - Get Report

, and

United Continental

(UAL) - Get Report

accounting among the mutual fund's top 10 holdings.

Over the past year, FSRFX's dedication to airlines has helped it outperform its ETF competitor. Year to date, FSRFX has gained nearly 40% while IYT has jumped 25%.

Traditionally, given the advantage FSRFX has had thanks to its airline exposure, I would advise aggressive, risk tolerant investors to utilize an airline sub-sector fund in order to get more upside out of their transportation investment. A fund such as

Guggenheim Airline ETF


, for instance, is solely dedicated to tracking this industry and therefore tends to see more pronounced day-to-day swings.

However, when it comes to investing in transportation in the coming year, airlines do not look overwhelmingly promising. In fact, while they have recently seen some strength, the 2011 forecasts are already calling for turbulent skies.

This week, Giovanni Bisignani, CEO of the International Air Transport Association, had a dour prediction for the airline industry. Pointing to fuel costs and macroeconomic issues including the sovereign debt issues facing Europe, Bisignani said the industry may see a combined 40% dip in profits as a whole in the next year.

The transportation industry has fared well in 2010 as markets around the world continue along the road to recovery. I foresee more healing down the road and therefore, 2011 may be another strong year for this slice of the market.

For now, however, I would advise investors to be cautious when taking to the skies. Instead, it would be more fruitful for the long term to take a broader approach to tracking this industry using products such as IYT and FSRFX.

Written by Don Dion in Williamstown, Mass.

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At the time of publication, Dion Money Management owned none of the equities mentioned.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.