Real Estate Sector Asserts Itself

Includes: BBH, ICF, IYR, PBE, PPH, RWR
by: Nick Perry

Nick Perry (Schaeffer's Investment Research) submits: Last week we saw an upside bias with housing and semiconductors leading. This week we find another skew to the upside:


Despite the Thanksgiving holiday-shortened week, we still have some large movers. Realty funds, took the lead with moves in excess of five percent. The iShares DJ U.S. Real Estate Fund (NYSEARCA:IYR), Wilshire REIT Fund (NYSEARCA:RWR), and iShares C&S Realty Majors Fund (NYSEARCA:ICF) are all at new highs now. Silver and materials-related funds also had a strong week. Drugs and biotech lagged the action with minor losses.

For a longer-term perspective, the bullets below show how the ETFs listed above have fared during the past six months, prior to this week.

Prior Six-Month Returns for This Week's Top Performing Sector Exchange Traded Funds:

* iShares C&S Realty Majors (ICF) +23.8%
* Wilshire REIT Fund (RWR) +21.8%
* iShares DJ U.S. Real Estate (IYR) +20.5%
* iShares Silver Trust (NYSEARCA:SLV) -2.2%
* SPDR-Materials (NYSEARCA:XLB) +7.0%
* iShares DJ U.S. Basic Materials (NYSEARCA:IYM) +4.3%
* Oil Service HOLDRS (NYSEARCA:OIH) -6.0%
* streetTRACKS Gold (NYSEARCA:GLD) -6.9%
* iShares GS Natural Resources (NYSEARCA:IGE) +3.3%
* iShares GS Networking (NYSEARCA:IGN) +3.9%
* PS Semiconductors (NYSEARCA:PSI) -0.8%
* Internet HOLDRS (NYSE:HHH) +5.9%

Prior Six-Month Returns for This Week's Bottom Performing Sector Exchange Traded Funds:

* iShares DJ U.S. Healthcare (NYSEARCA:IYH) +10.7%
* SPDR Dividend ETF (NYSEARCA:SDY) +11.1%
* SPDR-Consumer Staples (NYSEARCA:XLP) +9.3%
* SPDR-Health Care (NYSEARCA:XLV) +10.7%
* iShares DJ Select Dividend (NYSEARCA:DVY) +13.4%
* iShares Nasdaq Biotech (NASDAQ:IBB) +16.3%
* Regional Bank HOLDRS (NYSEARCA:RKH) +7.4%
* Retail HOLDRS (NYSEARCA:RTH) +5.7%
* PS Pharmaceuticals (NYSEARCA:PJP) +16.5%
* Biotech HOLDRS (NYSEARCA:BBH) +12.0%
* PS Biotechnology & Genome (NYSEARCA:PBE) +21.8%
* Pharmaceutical HOLDRS (NYSEARCA:PPH) +11.5%

As far as overall takeaways for the week, I don't have much to offer in terms of concrete conclusions. I look at relative strength/weakness as a way to gauge where money is flowing in the market. The downside to this approach is that light trading weeks, such as this, can lead to whipsaw movements. So, I tend to put less emphasis on the action. I do think it is important to note what happened this week, but we will need to see how this continues into next week before drawing any conclusions.

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