Nine ETFs for an Uncertain '09

For equity exposure, a conservative strategy is to stick with investments in areas where consumers are most likely to continue to patronize, even during an economic slump. With investments in strong companies dealing in food and basics, a logical choice is the Consumer Staples Select SPDR (XLP Quote). Its major holdings include old-line standby firms such as Proctor & Gamble (PG Quote), Wal-Mart (WMT Quote) and Kraft Foods (KFT Quote).

As with the other funds in the "Income & Safety" section of the accompanying table, XLP's current payout rate of more than 3% exceeds the yield to maturity of a typical triple-A corporate bond.

One area where consumers are likely not to skimp is in health care. The promise of a boost in health-care spending by the incoming administration, in addition to expansion of the worldwide middle class, makes iShares S&P Global Healthcare (IXJ Quote) an ETF worth considering. It is 64% invested in the U.S. with 12% of its holdings in Swiss investments and 9% in the U.K. Its major holdings include Johnson & Johnson (JNJ Quote), Pfizer (PFE Quote), Abbott Labs (ABT Quote) and Merck (MRK Quote).

IXJ is also likely to benefit from the actuarial reality of an aging Baby Boom generation as well as advances in medical technology and pharmacology.

Besides being least likely to be driven out of business in a recession, many utilities will benefit from the slump in energy prices as well as the retreat in interest rates. Vanguard Utilities ETF (VPU Quote), with a yield in the 4% range, holds major positions in Exelon (EXC Quote), Southern Co. (SO Quote), Dominion Resources (D Quote) and Duke Energy (DUK Quote).