If you're a fan of exchange-traded funds (ETFs) and you seek dividend income, you may well be invested in the iShares Dow Jones Select Dividend Index (AMEX:DVY), an ETF that invests exclusively in dividend-paying stocks. If you're not invested in this ETF, you may want to learn more about it.

Back when this ETF was new, in December of 2003, it was profiled in a special report for subscribers of our Motley Fool Income Investor newsletter. "The fund invests in the 50 highest-yielding companies in the Dow Jones U.S. Total Market Index and boasts a respectable yield of 3.85%. That's a welcome addition to any income-oriented portfolio."

Indeed. Today, though, the fund has become less concentrated, which isn't always a good thing. It now invests in 100 or more securities -- 115, at last count. Top holdings included Altria Group (NYSE:MO), PNC Financial (NYSE:PNC), and Pinnacle West (NYSE:PNW). Fairly common for income-oriented funds, Select Dividend is heavily weighted in financials and utilities.

Its yield isn't what it used to be, either -- recently sitting around 3.1%. Still, that's much better than the average stock's yield. With quality blue-chip names peppering its core holdings, this is a welcome addition to any income-oriented portfolio. Better still, this ETF also has one of the lowest expense ratios in its class, at just 0.40%.

I can't argue too much with Select Dividend as a compelling ETF, but I'd also like to suggest that you consider investing in some individual companies that offer significant dividend yields. You might do this instead of, or in addition to, investing in Select Dividend. I invite you to take advantage of a free trial of Income Investor -- that way, you'll be able to see the entire list of recommended investments and how they've fared, as well as have access to all past issues and special reports. Not a bad deal for free, eh?

You can learn a lot more about ETFs in our ETF Center. Click in to learn how ETFs stack up against mutual funds, how to develop an investment strategy with ETFs, pitfalls to avoid, how to avoid the ETF imposters out there, and more. These articles may also be of interest:

This article was originally published on Jan. 5, 2006. It has been updated by Fool sector editor Joey Khattab, who does not own any of the shares mentioned. The Fool has a disclosure policy.