By Michael Johnston of ETF Database

NEW YORK (

TheStreet

) -- Still scarred by memories of the not-so-distant recession, many investors have been spooked by recent volatility in equity markets, wondering whether they should bail on the market before another double dip.

But even fresher are the memories of the bull market of 2009, especially for those who regretfully watched from the sidelines as equity markets soared.

The psychological battle between fear of loss and anxiety over the potential regret of missing out on another rally plays out differently for different investors. Some will run for the exits, while others decide to stay the course. Many more land somewhere in the middle, looking for a way to reduce downside risk while maintaining significant exposure to another uptick in asset prices.

Below, we take a look at five defensive equity ETFs that have historically delivered strong relative performances during times of economic turmoil.

For investors looking for a middle ground, these funds may be an efficient way to reduce volatility while maintaining significant upside exposure as well (for more actionable ETF ideas, sign up for our

free ETF newsletter

):

Claymore/Sabrient Defensive Equity Index ETF (DEF) - Get Report

As its name suggests, this ETF invests primarily in "defensive" stocks that tend to perform relatively well during economic downturns.

The index underlying this fund is designed to actively represent a group of securities that reflect occurrences such as low relative valuations, conservative accounting, dividend payments and a history of outperformance during bearish market periods. Not surprisingly, DEF has its largest weightings in the

utilities

and

consumer staples

sectors.

Utilities Select Sector SPDR ETF (XLU) - Get Report

Utilities have historically been one of the least volatile sectors of the U.S. economy, as evidenced by this ETF's beta relative to the

S&P 500

of just 0.60. Most utilities companies provide essential services, meaning that revenue is relatively inelastic and profitability varies little between bull and bear markets. Major holdings in XLU include electric utilities, independent power producers, energy traders and gas utilities.

XLU is only one of several utilities ETFs available to investors (see a complete list here). ETFdb Pro members can read more about drivers of utilities ETFs and read fund recommendations in the

ETFdb Category Report

.

Consumer Staples Select Sector SPDR ETF (XLP) - Get Report

The consumer staples industry is another low-beta sector that focuses on stocks of companies that sell essential items and services.

This ETF includes companies selling food and beverages, household products, tobacco, and personal products, and major components include

Procter & Gamble

(PG) - Get Report

TST Recommends

,

Wal-Mart

(WMT) - Get Report

, and

Philip Morris International

(PM) - Get Report

.

XLP outperformed SPY by about 15% during the recent recession, and has a beta relative to the S&P 500 of less than 0.50.

PowerShares Dynamic Food and Beverage Portfolio (PBJ) - Get Report

This cleverly named ETF is a more targeted variation on traditional consumer staples funds, investing primarily in U.S. companies principally engaged in the manufacture, sale, and distribution of food and beverage products, agriculture products, and products related to the development of new food technologies.

PBJ is linked a PowerShares Indellidex benchmark that evaluates potential components on a variety of investment merit criteria, including fundamental growth, stock valuation, and investment timeliness.

Market Vectors Gold Miners ETF (GDX) - Get Report

During the most recent downturn, GDX was one of the best performing equity ETFs, boosted by rising gold prices as investors flocked to safe havens. Because domestic equity markets and gold bullion generally move in opposite directions, GDX has the potential to lessen the blow to investor portfolios during a downturn.

It should be noted that the relationship between gold mining stocks and broader equity markets isn't always an inverse one: GDX plummeted in January as both gold prices and domestic stocks lost ground. See this

complete guide

to gold ETFs for other ways to access gold bullion through ETFs.

Quick Look Back

Between September 2008 and the bear market lows in March of the following year, each of the ETFs profiled above lost value, with some declining by as much as 40%. But all of these funds outperformed SPY by at least 500 basis points during that period, with an average outperformance of 15% (10% excluding GDX).

These ETFs aren't a silver bullet during economic downturns. During the next recession, these funds will likely lose value, and could drop significantly. But they will generally offer lower volatility than the broad market while still allowing investors to participate in upside.

Written by Michael Johnston in Chicago.

At the time of publication, Johnston had no positions in equities mentioned.

Michael Johnston is the senior analyst and founder of ETF Database, a Web-based investment resource providing actionable ETF investment ideas and an

ETF Screener

for investors analyzing potential ETF investments. Johnston oversees ETF Database's free

ETF Newsletter

, one of the most popular sources for news and commentary focusing exclusively on the exchange-traded fund industry. Johnston also maintains and develops content for

ETFdb Pro

, a line of analyst reports and model portfolios designed to help investors utilize ETFs to meet their investment goals.

Johnston has completed the Chartered Financial Analyst (CFA) program, and obtained his bachelor's degree in finance from the University of Notre Dame. Prior to founding ETF Database, Michael worked in a private client service group performing valuations of companies operating in a wide range of industries.