Nine ETFs for an Uncertain '09

Telecommunications is, arguably, closely akin to a utility industry. Anyone who has ever tried to pry a cell phone away from a teenager's ear will confirm that it is likely to take more than a severe recession to temper telecom usage.

So with worldwide wireless voice communications and text messaging unlikely to slacken much, even in an economic slowdown, the iShares S&P Global Telecom (IXP Quote) makes sense as an ETF choice for 2009. Geographically well diversified, the fund is 29% invested in U.S. securities, 13% in the U.K., 10% in Spain, 6% each in Japan and Mexico and 5% in Canada.

IXP's major holdings include AT&T (T Quote), Vodafone (VOD Quote), Telefonica SA (TEF Quote) and Verizon (VZ Quote).

The five ETFs in the "Income & Safety" section of the accompanying table are all graded in the "A" and "B" ranges by TheStreet.com Ratings, making each a buy-recommended fund. With the continued rapid expansion of the ETF population, the remaining funds on the list are from the classes of 2007 and 2008, not having sufficient performance histories to receive marks from TheStreet.com Ratings.

Incoming president Barack Obama is promising huge economic stimulus expenditures in addition to the sums already committed to battling the slump. He continues to promote an alternative-energy program, which could potentially turn around the investments held by iShares S&P Global Clean Energy Industry (ICLN Quote). Most alt-energy ETFs focus on one aspect of the effort, such as wind, solar, biofuels or nuclear energy. But ICLN is well-diversified across several of these fields.

It will be some time before alternative energy generates sufficient profits to put that sector in the same league with the petroleum industry. But it seems as if some cadre of investors are keeping the faith, as alt-energy funds regularly pop up unexpectedly on lists of top-performing ETFs. The performance of youthful ICLN has thus far not been sufficient to draw much positive attention.