Airline, Transport Stocks Buoy Mutual Funds

Fidelity mutual funds posted the biggest gains in the first quarter, helped by airline, railroad and package-delivery companies.
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NEW YORK (TheStreet) -- Airlines are flying high again, buoyed by a rebound in the world economy and expectations that people are ready to travel again after slogging through a deep recession.

Fidelity's Select Air Transportation Portfolio

(FSAIX) - Get Report

returned 22% last quarter on holdings in

Delta Air Lines

(DAL) - Get Report

,

Southwest Airlines

(LUV) - Get Report

and

Boeing

(BA) - Get Report

.

The

Fidelity Select Transportation Portfolio

(FSRFX) - Get Report

followed at No. 2, with a gain of 21%. Along with airlines, the mutual fund owns railroads

Union Pacific

(UNP) - Get Report

,

CSX

(CSX) - Get Report

and

Norfolk Southern

(NSC) - Get Report

, as well as package-delivery company

United Parcel Service

(UPS) - Get Report

. A healthy shipping industry is another sign of stronger economic growth.

To speed up the economy, the U.S. government put in place public-transportation construction worth $3.7 billion in the first two months of the year. That's 15% ahead of 2009's pace at a time when total public construction shrank 4.3%, and public and private construction declined 14%.

The third-best performer in the first quarter,

Birmiwal Oasis Fund

(BIRMX)

, rose 20%. The mutual fund isn't open to new investors.

The only other "buy"-rated mutual fund among the top-10 performers is the

FBR Small Cap Financial Fund

(FBRSX)

, which increased 16%. Manager David Ellison seeks out savings and regional banks with conservative-lending policies and high-quality liabilities such as low interest-rate checking accounts.

Institutions that meet those criteria include

Astoria Financial

(AF)

,

Fulton Financial

(FULT) - Get Report

and

Dime Community Bancshares

(DCOM) - Get Report

.

For the best rated mutual funds, check out our

Top Rated Mutual Funds

page.

Kevin Baker became the senior financial analyst for TheStreet Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.