If you're in the market for dividend-paying investments, good for you! They make a heck of a lot of sense for many, if not most, investors. If you need a refresher course on why they're so nifty, check out these articles:

The world of exchange-traded funds (ETFs) has not ignored dividends, either. Over the past year, a bunch of dividend-focused ETFs have been introduced. One that has received some positive press is the First Trust Morningstar Dividend Leaders Index Fund (AMEX:FDL), featuring a not-too-unreasonable expense ratio of 0.45%. As those offering the shares explain, the ETF tracks the Morningstar Dividend Leaders Index, "a modified market cap weighted index of publicly traded companies that have a consistent record of above average dividend payment and capital appreciation potential. Only companies domiciled in U.S. are considered for inclusion in the index."

According to Morningstar.com, the ETF contains 100 stocks, though the top 10 holdings make up some two-thirds of its value. Check out the recent top holdings (as of mid-September):


Percent of net assets
Recent dividend yield
Bank of America (NYSE:BAC) 9.8% 3.9%
Citigroup 9.5% 3.8%
Pfizer (NYSE:PFE) 9.0% 3.2%
Altria (NYSE:MO) 8.7% 4.0%
AT&T (NYSE:T) 7.3% 4.1%
Verizon (NYSE:VZ) 6.5% 4.4%
Merck (NYSE:MRK) 5.0% 3.6%
Wachovia 4.1% 4.1%
US Bancorp 3.0% 4.0%
BellSouth 3.0% 2.7%

So should you run out and grab some shares of this ETF? Maybe. They do make sense for many investors, after all. And it's a simple way to be instantly invested in a lot of hefty dividend payers. If you're looking for quick exposure to the financial and telecommunication and health care industries, this ETF will do it.

But if you'd rather invest in dividend payers that you select yourself, perhaps ignoring some industries that give you have little confidence about their future, that's a viable strategy, too. We'd love to help by introducing you to dozens of promising growers and payers via our Motley Fool Income Investor newsletter. Over several years, its picks are up an average 21% vs. 13% for the S&P 500. Try it for free and you'll be able to access all past issues and see all recommendations and how they've done.

Learn much more in our ETF Center. It features info on how ETFs stack up against mutual funds, how to develop an investment strategy with ETFs, pitfalls to avoid, and how to avoid ETF imposters.

These articles may also be of interest:

Bank of America is a Motley Fool Income Investor recommendation, and Pfizer is a Motley Fool Inside Value pick.

Longtime Fool contributor Selena Maranjian owns shares of Pfizer. The Motley Fool has a full disclosure policy.