The list of FAA employee prohibited investments is located here:
http://www.faa.gov/about/office_org/headquarters_offices/agc/pol_adjudication/agc400/ethics/media/prohibited%20Investments.pdf
The limit on broad mutual funds is no more than 30% of the assetes of the fund invested in the prohibited sector. You can contact FAA's AGC if you have questions about whether or not your fund is crossing the line, and get them (AGC) to write you a legal opinion regarding your investment. You risk having them rule that you must divest, but they usually have been known to put the answer in writing for you, based on the actual data you provide.
The actual wording is:
"
(b)
Federal Aviation Administration (FAA). Except as provided in paragraphs (c) and (d) of this section, no FAA employee, or spouse or minor child of the employee, may hold stock or have any other securities interest in an airline or aircraft manufacturing company, or in a supplier of components or parts to an airline or aircraft manufacturing company.
(c)
Exception. The prohibitions in paragraphs (a)(1) and (b) of this section do not apply to a financial interest in a publicly traded or publicly available investment fund, provided that, at the time of the employee's appointment or upon initial investment in the fund, whichever occurs later, the fund does not have invested, or indicate in its prospectus the intent to invest
more than 30 percent of its assets in a particular transportation or geographic sector and the employee neither exercises control nor has the ability to exercise control over the financial interests held in the fund.
(d)
Waiver. An agency designee may grant a written waiver from the prohibition contained in paragraph (b) of this section, based on a determination that the waiver is not inconsistent with 5 CFR part 2635 or otherwise prohibited by law, and that, under the particular circumstances, application of the prohibition is not necessary to avoid the appearance of misuse of position or loss of impartiality, or otherwise to ensure confidence in the impartiality and objectivity with which FAA programs are administered. A waiver under this paragraph may be accompanied by appropriate conditions, such as requiring execution of a written statement of disqualification. Notwithstanding the granting of any waiver, an employee remains subject to the disqualification requirements of 5 CFR 2635.402 and 2635.502.
(e)
Period to divest. An individual subject to this section who acquires a financial interest subject to this section, as a result of gift, inheritance, or marriage, shall divest the interest within a period set by the agency designee. Until divestiture, the disqualification requirements of 5 CFR 2635.402 and 2635.502 remain in effect.
