Consumer staples producers are usually recession-resistant, buoyed by necessary demand from consumers. However, the depth of the current recession has hurt even the consumer staples industry, sending related ETFs lower.

The once categorized “safe investment,” Consumer Staples Select Sector SPDR (XLP: Quote, Profile, Advanced Chart, News), faced a major performance blow as its leading holding, Proctor and Gamble, issued a weak earnings report, according to The Street. The fund is over-weighted in Proctor and Gamble, choosing to invest a risky 16% of its fund assets into the company. XLP is just another case of an under-diversified ETF which invests 66% of all assets into its top 10 holdings. The fund is currently invested in 42 different stocks.

Other impacted ETFs in the sector include PowerShares Dynamic Consumer Staples ETF (PSL: Quote, Profile, Advanced Chart, News) and Rydex S&P Equal Weight Consumer Staples ETF (RHS: Quote, Profile, Advanced Chart, News), whose combined funds contain less than $45 million in assets - a value easily dwarfed by XLP’s $2 billion in assets.

Emerging market exchange-traded funds will soon experience a dramatic shift in the countries they invest. As of this year, South Korea, a staple in most emerging market ETFs, will be upgraded to a developed nation status and no longer qualifies for investment from emerging market-only funds.

The Street reports that one particular fund, the iShares MSCI Emerging Markets ETF (EEM: Quote, Profile, Advanced Chart, News), will be radically changed by the upgrade and suggests that Thailand and Chile could make up the void. Chile is one of the few emerging market nations that has a trade surplus from its copper reserves. Thailand, a net exporter of clothing and other manufactured materials, is another solution for the South Korean void, but it lacks the stability of the Chilean government.

Whatever the result, emerging market ETFs across the board will see large changes in holdings and volatility in light of South Korea’s upgrade.

FaithShares will be releasing five new ETFs to capitalize upon today’s socially responsible investing trend. The new funds are designed around investments that are aligned with five prominent religions in the United States.

According to the SEC Filing, FaithShares announced the names for its five new exchange traded funds:

-FaithShares Catholic Values Fund
-FaithShares Methodist Values Fund
-FaithShares Baptist Values Fund
-FaithShares Lutheran Values Fund
-FaithShares Christian Values Fund

A popular trend among mutual funds, socially responsible investment options in ETFs have been limited, with one company, iShares, controlling the only two SRI ETFs. FaithShares is hoping to take a share of the market, and each fund is set to offer portfolios encompassing 100 US stocks, with all positions being equally weighted to 1% of the fund.

The funds will select companies from a broad selection of industries, including oil and gas, telecommunications, technology, basic materials, health care, utilities, industrials, consumer services, and financials.

In the world of sports, defense typically wins championships. A defensive investment strategy in times of economic weakness tends to be the correct approach as well. The consumer staples industry is considered to be defensive-minded, as the companies within this segment seem to hold strong in the face of market turmoil. Michael Maiello and David Serchuk of Intelligent Investing Panel in Forbes explain that large companies such as Wal-Mart and Costco not only withstand the deflationary cycle but seem to thrive as consumers continue to purchase necessary household items. In addition, companies within the consumer staples industry are in better position to ride out the economic storms since they usually are bigger companies that are financially sound and profitable.

Major issuers carry a consumer staples ETF to capture the performance of this industry. The ETFs for three known issuers are: Consumer Staples Select Sector SPDR (XLP: Quote, Profile, Advanced Chart, News), Vanguard Consumer Staples ETF (VDC: Quote, Profile, Advanced Chart, News), and Rydex S&P Equal Weight Consumer Staples ETF (RHS: Quote, Profile, Advanced Chart, News). To view a comparison of the three ETFs, click here.

The chart below illustrates the performance of XLP (green line) compared to the S&P 500 broad index over the past year.

Three major categories were judged for Vanguard and Fidelity ETFs and winners have emerged. Betro | Mileszko & Company, an independent money manager, has uncovered the funds that have performed the best in 2008. A PR Web press release reports the results for each issuer based on the best domestic sector, domestic bond, and international equity funds. John Mileszko, Chief Investment Officer, is quoted in the press release saying, “When we concluded our analysis, there were a few surprises with this year’s award winners and losers. Vanguard’s Extended Duration Treasury ETF gained 55%, an incredible advance for a fund holding U.S. Treasury securities.” Mileszko is referring to Vanguard’s Extended Duration Treasury ETF (EDV: Quote, Profile, Advanced Chart, News), which won the award for best domestic bond. Staying with Vanguard, its domestic sector winner went to the consumer staples sector and its corresponding ETF, Vanguard Consumer Staples ETF (VDC: Quote, Profile, Advanced Chart, News). Finally, the international ETF recognized was Vanguard Pacific Stock ETF (VPL: Quote, Profile, Advanced Chart, News).