Sector Week-in-Review: Strength in Energy, Financials Offset By Weakness in Tech (ETFs: OIH, PKB, PXJ, SMH, PSI)

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Includes: OIH, PKB, PSI, PXJ, SMH
by: Nick Perry


Nick Perry (Schaeffer's Investment Research) submits: Last week we saw most groups gain ground, with telecom and biotech in the lead. This week we see a more balanced picture:

Broadly speaking, it was a relatively quiet week, as moves were contained to near two percent. Strength in energy and financials was offset by weakness in technology related funds.

For a longer-term perspective, the bullets below show how the ETFs listed above have faired during the past six-months, prior to this week. In other words, it shows how they had performed before this week's move.

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

* Oil Service HOLDRS (NYSEARCA:OIH) +21.0%
* PS Building & Construction (NYSEARCA:PKB) n/a
* PS Oil Services (NYSEARCA:PXJ) n/a
* Regional Bank HOLDRS (NYSEARCA:RKH) +6.8%
* iShares DJ U.S. Financial Services (NYSEARCA:IYG) +9.3%
* SPDR-Energy (NYSEARCA:XLE) +10.0%
* PS WilderHill Clean Energy (NYSEARCA:PBW) +27.6%
* iShares DJ U.S. Energy (NYSEARCA:IYE) +8.2%
* PS Water Resource (NASDAQ:PHO) n/a
* SPDR-Financial (NYSEARCA:XLF) +9.4%
* PS Utilities (NASDAQ:PUI) n/a
* iShares DJ U.S. Financial (NYSEARCA:IYF) +8.9%

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

* PS Retail (NYSEARCA:PMR) n/a
* Retail HOLDRS (NYSEARCA:RTH) +0.1%
* iShares GS Technology (NYSEARCA:IGM) +7.5%
* PS Telecom & Wireless (PTE) n/a
* SPDR-Technology (NYSEARCA:XLK) +5.5%
* iShares DJ U.S. Telecomm (BATS:IYZ) +5.7%
* Wireless HOLDRS (WMH) +2.9%
* PS Lux Nanotech (NYSEARCA:PXN) n/a
* iShares GS Semiconductor (IGW) +14.4%
* Semiconductor HOLDRS (NYSEARCA:SMH) +3.6%
* Telecom HOLDRS (NYSEARCA:TTH) +8.3%
* PS Semiconductors (NYSEARCA:PSI) +23.5%

A quick scan of the list reveals an interesting point - most groups have been gaining ground during the past six months. Given that both the Russell 2000 (RUT) and the Dow Jones Industrial Average (DJIA) hit new highs this week, this point probably isn't too surprising, but I thought it was still worth pointing out.

One other point worth noting is the relatively large difference in recent performance between the Semiconductor HOLDRS Trust (SMH) and the PowerShares Semiconductors (PSI). It would appear that the discrepancy can be explained by the way each fund is set-up. The SMH is fairly top-heavy, with more traditional names such as Texas Instruments (NYSE:TXN), Intel (NASDAQ:INTC) , and Applied Materials (NASDAQ:AMAT) accounting for nearly half its weighting. Meanwhile, the PSI shows a more balanced weighting, and focuses on the small names such as Advanced Micro Devices (NASDAQ:AMD) , Broadcom (BRCM), and Micron Technology (NASDAQ:MU). This difference is something to keep in mind if you are looking to trade the group.