Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some low-volatility, dividend-paying stocks to your portfolio, the PowerShares S&P 500 High Dividend Portfolio ETF (SPHD -0.80%) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously. It tracks an index that focuses on dividends as well as low volatility.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The PowerShares ETF's expense ratio -- its annual fee -- is a low 0.30%. It recently yielded about 4.3%. The fund is fairly small, too, so if you're thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.

Launched last year, this ETF is too young to have a sufficient track record to assess. As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why dividends?
The power of dividend investing is often underappreciated. They can be powerful portfolio supporters, providing income even during market downturns. Consider parking them in an IRA, too, to postpone or avoid taxes on dividends.

More than a handful of dividend-paying companies had strong performances over the past year, but many advanced just a bit or are down. As long as the company is healthy and growing, that can be a good thing, as a fallen stock price means a boosted dividend yield.

People's United Financial (PBCT) gained 6%. The conservatively run New England-based bank has been growing via acquisitions and has a solid commercial banking business, but it has bears worrying about its steep tier-1 risk-adjusted capital ratio and high net non-interest expense. It's also among the least-efficient regional banks, by its efficiency ratio. Its dividend yield was recently 5.1%, the dividend has been hiked by an annual average of 8.3% over the past five years, and the company is planning to buy back a lot of its stock. The bank has been relatively conservatively run, but it's aiming to increase its commercial lending, which can up its risk profile some.

Holding company TECO Energy (NYSE: TE) was roughly flat. It recently yielded 5.2% and has been paying dividends for 89 consecutive years. The company is struggling some due to its coal operations, and sees further performance pressures in 2013. It recently received an upgrade from sell to neutral from analysts at UBS.

Rural telecom specialist Windstream (WINMQ) shed 13%. It sports a massive dividend yield of 10.2%, but with its free cash flow less than its dividend payout, its payout may seem threatened, though the company just maintained it last week. Windstream's revenue has been growing while net income has been shrinking. The company is diversifying away from rural operations a bit via acquisitions.

Pitney Bowes (PBI -0.71%) sank 17%. Long known for its postage-meter business, it recently yielded a whopping 10.8%. The company has been struggling with electronic communications replacing many mailed communications. It's involved in other less-threatened and higher-margin businesses as well, and has bulls hopeful about deals such as providing geocoding software to companies such as Facebook. The company recently posted estimate-topping quarterly results and its single-digit P/E ratio is enticing, but consider its risks such as debt before jumping in.

The big picture
A well-chosen ETF can grant you instant diversification across any industry or group of companies -- and make investing in and profiting from it that much easier.