BOSTON ( TheStreet) -- Mutual funds that mainly buy transportation stocks have almost doubled the 2010 returns of the S&P 500 Index, the benchmark for most diversified U.S. funds.

Transportation-focused mutual funds have risen an average of 33% this year, reflecting expectations for faster economic growth in 2011. The performance may stretch well into next year if railroad-freight and airline-passenger traffic continues to increase and Internet-based sales growth remains on the same path, boosting package-delivery firms.

The Dow Jones Transportation Average, which tracks 20 industry stocks, is up 24% this year, led by United Continental ( UAL), the world's largest airline, with a gain of 81%. The S&P 500 has climbed almost 13% and the technology-heavy Nasdaq has advanced 17%.

United Continental, United Parcel Service ( UPS) and Union Pacific Railroad ( UNP), each the leader in their respective industry, are the consensus top picks of transportation-fund managers.

Indicative of the brightening outlook for the sector, October was the 10th straight month that air traffic has risen, according to the Air Transport Association of America. And it forecast a 3% rise in holiday-season travel.

And FedEx ( FDX), in reporting its fiscal second-quarter results Dec. 17, said it has seen strong gains in package shipping internationally and domestically, and raised its expectations for U.S. gross domestic product growth to 2.9% from 2.6% for 2011, and to 3.2% for 2012. FedEx and UPS are both viewed as economic bellwethers because their shipments cover a broad range of industries.

A growing number of retailers, including Wal-Mart ( WMT) and Amazon ( AMZN), offered free shipping to online customers during the holiday season, which raised package volume for FedEx and UPS.

U.S. sales by Web retailers rose 15.4% to $36.4 billion from November through Dec. 23, according to MasterCard SpendingPulse, which tracks sales at 72,000 retailers. Internet sales also climbed 15% last year in the same period, but from a much smaller base.

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