Two ETFs Looking For a Revival

As we approach the waning half of the second quarter, there are a couple of ETFs that would likely prefer to put the first-half behind them.

The iShares Dow Jones U.S. Healthcare Provider Fund(IHF) and the PowerShares WilderHill Clean Energy Fund(PBW) represent two sectors of the market that experienced particularly rough going in the early part of the year.

Year to date, these ETFs are down 22.4% and 17%, respectively.

While the Healthcare Provider fund has remained relatively flat over the past couple of months, the Clean Energy fund has begun to regain momentum in the past few weeks. It has rebounded 5.1% in the last month.

Will this reversal continue? Will the healthcare providers be brought back to life?

One Sick Quarter

In March, the health insurers were dragged lower by Humana's(HUM) revelation that it would need to slash its 2008 earnings forecast as it had been mispricing its Medicare prescription drug plans. WellPoint(WLP) also contributed to the downward spiral, as it too was forced to cut its earnings outlook on account of rising medical costs and a weak economy.

During this time period, the ETF plunged 14% in less than two weeks.

"A whole series of events have hurt the sector," said Paul Alan Davis, a manager of the Schwab Health Care Fund(SWHFX).

The Healthcare Provider ETF is heavily weighted with managed-care companies, which Davis acknowledges have been met with a great deal of adversity.

"We have trimmed our managed care to market weight from overweight," he said. "We still like the fundamentals and growth characteristics, but the momentum hasn't been too good right now. We are reluctant to take an underweight position in the event that things begin to rebound."