Three ETFs To Watch This Week: IYZ, SMH, XLV

by on January 23, 2012 | ETFs Mentioned:

This week will watch earnings season continue in full stride as a number of bellwether firms are set to announce their most recent fiscal quarter’s statements. Last week saw some mixed results, with companies like Citigroup and Google missing, while others like Wells Fargo, IBM, and Intel were able to lift markets. In fact, the S&P 500 was able to break through the 1,300 barrier for the first time since August of last year, sparking some much needed investor confidence. Many are also happy to see the focus come off Europe for a while and keep the U.S. in headlines, especially because our last few profitable earnings seasons have been largely overshadowed by international affairs. With the coming week packed full of data, we outline three ETFs to keep an eye on as big earnings are released [see also Earnings Spotlight: Freeport McMoRan Copper & Gold (FCX)].

Dow Jones U.S. Telecommunications Index Fund (IYZ)

Why IYZ Will Be In Focus: This ETF seeks to replicate an index which measures the performance of the Telecommunications sector of the U.S. Equity market. The fund has over $530 million in assets and an average daily volume just under 375,000. IYZ will be in focus this week as its top two holdings, AT&T (T) and Verizon Wireless (VZ), will be reporting earnings through out the week. Verizon, which accounts for 14% of IYZ, will announce on Tuesday, while AT&T, which makes up 17.7% of IYZ, will be reporting on Thursday. With the two top holdings of this ETF in heavy competition, it may be that one’s win is another’s loss, which could even out the fund on the week, but there will certainly be some trading opportunities after each individual report [see also How To Invest Like UBS In 2012 (Using Only ETFs)].

Market Vectors Semiconductor ETF (SMH)

Why SMH Will Be In Focus: This ETF, which was a HOLDR product until its conversion late last year, now replicates an index that is  intended to track the overall performance of 25 of the largest U.S. listed, publicly traded semiconductor companies. Despite its recent conversion, the product has remained strong by gaining nearly 10% in 2012 alone. It also has upheld its investor popularity with an ADV topping 1.2 million in the trailing month. SMH will be in focus this week as one of its top holdings, Texas Instruments (TXN), will be reporting earnings. Analysts are calling for their Monday report to feature EPS of $0.39 with revenues eclipsing the $3.2 billion mark [see also HOLDRS Conversion Begins: Investor Action Required].

Health Care Select Sector SPDR (XLV)

Why XLV Will Be In Focus: This sector SPDR tracks health care and pharmaceutical companies domesticated in the US. The fund is part of the elusive billion-dollar club, with over $4 billion in assets and a massive ADV of 5.7 million to match it. From a performance standpoint, the fund was able to clinch gains of roughly 14% over the past year, along with a 3.3% gain so far in 2012. XLV will be pushed into the limelight this week as its top holding, Johnson & Johnson (JNJ), will be reporting earnings. On Tuesday, analysts are expecting JNJ to see EPS of $1.10 with strong revenues of $16.3 billion. If this firm, which makes up 13% of XLV, hits its marks, look for this ETF to have a good week, but be warned that an earnings miss could turn the fund sour on the week [see also ETF Insider: High Hopes, Big Gains].

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Disclosure: No positions at time of writing.