Brokerage houses have yet to offer a mom and apple pie mutual fund, but Fidelity's defense sector fund might speak to investors looking for a play with patriotic returns.

The ( FSDAX) Fidelity Select Defense & Aerospace fund provides exposure to companies that may benefit from the U.S.' military and homeland security efforts, and its top 10 holdings include the big defense names you would expect, such as Raytheon ( RTN), General Dynamics ( GD), L-3 Communications ( LLL) and Lockheed Martin ( LMT).

While other funds, such as the ( RCMFX) Schwartz Value fund, are heavily weighted toward homeland security and defense companies, Morningstar points out that Fidelity's fund is the only one mandated to buy defense stocks, and thus provides a pure play on the sector.

The $970 million fund is a mid-cap growth play that gets a five-star rating from Morningstar and has posted a 2.69% return year to date vs. the S&P 500's 1.95% return.

Fidelity Defense and Aerospace also has seen a 22.67% return over three years, nearly double the S&P's 12.23% growth over the same period.

The fund is somewhat heavily weighted toward certain names -- its top five holdings equal about 30% of all assets.

"It's a specialty fund, so by design and mandate it will cover only a narrow set of stocks," says Deborah Pont, a spokeswoman at Fidelity. "One of the biggest advantages is that you don't have to deal with the cost of buying each security and having to monitor each one."

The defense sector has been on a tear, as evidenced by the fund's top three holdings: General Dynamics, Precision Castparts ( PCP) and Rockwell Collins ( COL).

General Dynamics has posted a 13.3% year-to-date return and is up 16.5% over the past 52 weeks. In that time, the S&P 500 has had just a 3.85% return. Precision Castparts has logged 6.89% since the beginning of 2006 and 38.87% over the past 52 weeks, while Rockwell has gained 17.02% year to date and 13.25% over the past full year.

Having such a concentrated fund does have its drawbacks. Stocks that have moved to lofty heights will likely correct at some point. And within the fund itself, hardware plays in the top five holdings have not performed as spectacularly as the industrial materials stocks.

For example, Harris ( HRS) is up 22.3% over the last 52 weeks, but is down 10.68% year to date. And L-3 is down 4.94% over the past 52 weeks and 1.41% since the beginning of 2006.

Jeff Tjornehoj, a senior research analyst at Lipper, says this speaks to the risk built into the world of select funds, which focus on certain industries. "A diversified fund can simply say, 'We won't hold any defense and aerospace right now,' if the sector looks like it's heading for a downturn. But this particular fund must hold these stocks."

While there has undoubtedly been a greater emphasis on defense spending since 2001, and defense-related companies have come to play big roles in government programs, Tjornehoj notes this could change if an administration comes in and decides to resolve problems politically rather than militarily.

And even if an investor believes that business at defense-related companies will continue to grow, contributing factors such as geopolitical tensions and the war on terror could already be "baked into the cake" for many of them, analysts who cover these stocks told TheStreet.com.

Be In the Know

A select fund like Fidelity's defense portfolio takes the pressure off of stock-picking, and it allows investors to get more exposure to fast-rising sectors that make up only a small portion of an index fund. But this also means that investors need to be more proactive about monitoring select mutual funds than they would with a broad index fund.

Fidelity's Pont says select funds are for investors who believe in the fundamentals of a specific sector and want more exposure to it, but who also are aware of what's going on in that industry. They also make sense for people who work in a specific industry or are in some way positioned to follow a sector closely.

Fidelity Defense & Aerospace Top 10 Holdings
YTD Return % % Net Assets
General Dynamics (GD) 13.13 6.57
Precision Castparts (PCP) 6.89 6.35
Rockwell Collins (COL) 17.02 5.97
Harris (HRS) -10.68 5.76
L-3 Communications (LLL) -1.41 5.59
Goodrich (GR) -4.34 5.18
Raytheon (RTN) 9.49 5.03
EchoStar Communications (DISH) 11.96 4.25
Lockheed Martin (LMT) 11.61 3.68
DRS Technologies (DRS) -11.29 3.62

"You have to have a strong opinion about the future fortunes of whatever industry is covered by a select series fund," says Tjornehoj. "Going about it willy-nilly or allocating part of your portfolio to it as a whim will cost you an arm and a leg. These products are geared toward intermediate to sophisticated investors who have a pretty good idea of trends in the marketplace."

Andrew Hatem, who manages Fidelity Defense and Aerospace, has held the reins only since December, so it's difficult to gauge his performance. He has worked as an investment analyst, sector research specialist and research analyst since joining Fidelity in 1994.

Tjornehoj says the Fidelity Defense fund gets high ratings for total returns, consistent returns and expenses. "This fund does a good job of preserving capital," he says.

There is a 75-basis-point charge for investors who try to sell in the first 30 days, but otherwise there are no redemption fees. There also is a 57-basis-point management fee. Morningstar estimates that the total cost over three years will be about $300 for every $10,000 invested.

For a more active trader looking to avoid the expenses of trading too many times with a mutual fund, there are exchange-traded funds that will offer a similar play as the Fidelity fund. The PowerShares Aerospace & Defense ( PPA) and the iShares Dow Jones US Aerospace & Defense ( ITA) fund provide many of the same names that Fidelity's mutual fund product owns, and can be traded like a stock.