Sector ETF performance so far this year (XLE, IYE, OIH, IGE, UTH, BBH, RWR, ICF)

In a column earlier this week I looked at the leading and lagging groups over the last year and said I would return to note what groups led and lagged in the first six months of this year, writes Nick Perry, who covers ETFs for Schaeffer's Investment Research. Here you can see the top and bottom performing groups from last December through this morning:

On Monday we saw that that energy related groups, such as the Energy Sector SPDR (ticker: XLE), the Oil Service HOLDRS (ticker: OIH), and the iShares Natural Resource (ticker: IGE) were among the best performing groups, along with the Utilities HOLDRS (ticker: UTH), since last June. Meanwhile we noted that pharmaceuticals and biotech, joined a number of technology related groups, such as the Internet HOLDRS (ticker: HHH), as the worst performing groups.

As you might expect, given the overlap in time frames, we see a somewhat similar picture with many of the energy and utility related groups leading the way while technology groups are among the laggards. While this might not be a huge revelation is does tell us that the longer-term trends are in place.

For the most part, the returns we see in this chart are smaller than what we saw earlier this week. For example, the OIH is up more than 40 percent over the last year while it has gained 20 percent in the last six months. This is what I meant about the long-term trends. However, you might notice one interesting standout - the Internet HOLDRS (HHH). The graph I posted Monday showed the HHH was down a little more than 10 percent during the last year. This graph shows that the HHH is down twice that in the past six months.

While this might seem confusing, you can look back to the graph I showed Monday and see why. The HHH rallied into December 2004 before peaking. Given the group's poor near-term performance and its lacluster longer-term return, I think it is important to keep analysts opinions in mind. According to Zacks, Google  (ticker: GOOG) and Yahoo (ticker: YHOO) currently carry a combined 44 analyst ratings, of which 35 (80 percent) are "buys". In other words the group is top heavy with "buy" recommendations which opens up the possibility to see a shift to downgrades.

And given that it is also the end of the second quarter, I thought it might be interesting to see what groups led and lagged over the last three months.

As a whole it looks like gainers outpace losers in the second quarter as just a handful of groups showed losses - basic materials, transports and industrials. Missing from the top gainers is energy, which sold off and then bounced back, but oil services and utilities do make the list. The BBH was the top gainer but you might notice that the iShares Nasdaq Biotech (ticker: IBB) is not on the list. This is due to the fact that Genentech  (ticker: DNA), which rallied more than 40 percent in the second quarter, carries a disproportionate weight in the BBH. The IBB is more evenly weighted while DNA accounts for 42 percent of the BBH.

Nick Perry ([e-mail])