Consumer staples exchange traded funds are rated overweight by S&P Capital IQ, based on their defensive nature in volatile markets. The Eurozone debt crisis continues to loom and global growth is stagnating, which has led to stock markets that are uncertain at best.

“The S&P Capital IQ Equity Strategy continues to recommend overweighting the S&P 500 Consumer Staples sector, an approach viewed as offering a hedge to ongoing global economic concerns,” the firm said in a research note. “The strategy team sees the sector having defensive characteristics, with a comparatively high dividend yield and attractive dividend growth potential.”

The search for high quality ETFs that yield a dividend is still on, especially those that will hedge global market volatility. S&P Capital IQ has ranked several consumer staples ETFs Overweight. Year-to-date, through July 10, the sector has gained  7.6%, a bit better than the 6.7% for the Standard & Poor 500, notes Tom Graves, for S&P Capital IQ.

The Consumer Staples Select Sector SPDR (NYSEArca: XLPwith $5.8 billion in assets, is the largest of the focused sector ETFs. There is a small 0.18% expense ratio and the fund has trended up about 7.5% year to-date. The Vanguard Consumer Staples ETF (NYSEArca: VDCrivals XLP, and costs 0.19%. VDC is up 9% this year. [5 ETFs Hitting 2012 Highs]

Graves reports that S&P Capital IQ considers the Market Vectors Agribusiness ETF (NYSEArca: MOOa staples fund, and this has gained about 4.3% in 2012. Likewise, the iShares Dow Jones US Consumer Goods Sector Index Fund (NYSEArca: IYKhas gained 4.8% this year, and charges 0.47%. Both IYK and MOO are rated Overweight by S&P Capital IQ. [Why Consumer Staples ETFs Are Holding Their Own]