If you're an income-oriented investor, then you may want to consider putting a portion of your portfolio in the hands of a professional money manager -- especially one with expertise in the income field. One of the best ways to do this is to invest in a well-diversified mutual fund.

The good news is that dividend-focused equity funds can provide you with much more than just a regular income stream. Because they hold a mix of stocks from different industries, they can also reduce your portfolio risk.

However, you do pay for the benefit of having an experienced money manager who keeps the portfolio as profitable as possible. So you want to check out additional expenses -- management expense ratios, sales fees, taxes -- that could cut into your yield. A fund with an enticing 5% dividend yield but a 1.5% expense ratio carries an effective yield of just 3.5%.

Before investing, you'll also want to carefully examine each fund's specific portfolio holdings. Some high-yielding funds focus all their portfolio holdings on one sector. For instance, although AEW Real Estate Income Fund (RIF) sports an enticing 7.2% yield, it also exposes investors exclusively to the highly interest rate sensitive REIT sector.

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Some funds hold a mix of both stocks and bonds in their portfolios. Bonds may juice the yield, but they could also be more vulnerable to interest rate changes. With this in mind, a conservative investor looking for a stable income stream may prefer to stick with a portfolio of quality stocks.

Also, the dividend portion that comes from stocks would likely qualify for the reduced 15% dividend tax rate. By contrast, any bond income would be taxed at the higher income tax rate.

With these thoughts in mind, I recently searched through the investment universe to find dividend-focused funds with the highest yields, the most diverse stock portfolios, and the lowest expense ratios. To pass the muster, a fund needed to meet these criteria:

-- Dividend yield of at least 5%
-- Diverse stock portfolio with no more than 5% bond holdings
-- Expense ratio no more than 30% of the dividend yield

The following seven funds met all of these criteria (ranked by dividend yield):

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