Sector Momentum in Semis, Clean Energy (ETFs: PSI, PBW, IGW)

Includes: PBW, PSI, SOXX
by: Nick Perry

Nick Perry (Schaeffer's Investment Research) submits: Last week we saw a slight bias to the downside as utilities and energy-related funds were the only funds to gain ground. This week offers a much different picture:

Losses were minute and mainly limited to bonds, utilities and energy-related funds. In other words, the bottom-performing funds weren't so much a situation of funds seeing selling, but rather a list that merely lagged. Given last week's strength in utilities and energy-related funds, this week's action looks like a bit of a resting period.

The best-performing side of the graph shows a mix of "niche" groups tracked by the PowerShares Funds, materials, various technology sub-groups, and small caps. Among the tech groups, semiconductors were the clear leader.

For a longer-term perspective, the bullets below show how the ETFs listed above have faired over the last six months, prior to this week.

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

* PS Semiconductors (NYSEARCA:PSI) +12.3%
* PS WilderHill Clean Energy (NYSEARCA:PBW) +14.8%
* iShares GS Semiconductor (IGW) +9.4%
* iShares DJ U.S. Basic Materials (NYSEARCA:IYM) +4.9%
* SPDR-Materials (NYSEARCA:XLB) +5.1%
* PS Building & Construction (NYSEARCA:PKB) n/a
* PS Water Resource (NASDAQ:PHO) n/a
* PS Retail (NYSEARCA:PMR) n/a
* Software HOLDRS (NYSE:SWH) +2.9%
* iShares GS Networking (NYSEARCA:IGN) +10.8%
* Telecom HOLDRS (NYSEARCA:TTH) -5.4%
* iShares Russell 2000 (NYSEARCA:IWM) +3.4%

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

* iShares Nasdaq Biotech (NASDAQ:IBB) +5.6%
* Oil Service HOLDRS (NYSEARCA:OIH) +34.2%
* SPDR-Energy (NYSEARCA:XLE) +18.5%
* iShares DJ U.S. Energy (NYSEARCA:IYE) +16.3%
* PS Energy Exploration & Production (NYSEARCA:PXE) n/a
* iShares Lehman Aggregate Bond Fund (NYSEARCA:AGG) -0.9%
* iShares DJ U.S. Utilities (NYSEARCA:IDU) +0.5%
* Biotech HOLDRS (NYSEARCA:BBH) +2.1%
* iShares Lehman 7-10 Year Bond (NYSEARCA:IEF) -0.7%
* SPDR-Utilities (NYSEARCA:XLU) +1.4%
* Utilities HOLDRS (NYSEARCA:UTH) +3.6%
* iShares Lehman 20+ Year Bond (NYSEARCA:TLT) -0.8%

Heading into this week, semis had shown some decent strength and this week's pop adds to the momentum. And while the PS WilderHill Clean Energy (PBW) fund has lagged the more traditional Oil Service HOLDRS (OIH) , the PBW appears to be gaining momentum. With oil flirting with its highs, it might be worth keeping an eye on the PBW given its exposure to some of the alternative energy stocks.

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