During oil’s bear market, some big name oil producers and master limited partnerships (MLPs) reduced or halted share buybacks. Others suspended, cut or did not grow dividends.

Understandably, those actions can leave a sour taste in an investor’s mouth, but do not count out the energy sector when it comes to income-generating opportunities.

 

The Energy Select Sector SPDR (NYSEArca: XLE), the largest equity-based energy exchange traded fund, and rival energy ETFs are delivering for investors as the energy sector is the best-performing group in the S&P 500 this year.

Making the sector’s rebound this year all the more impressive is that it comes against the backdrop of still low oil prices, little help in the way of significant production cuts and massive spending reductions by global oil majors.

Related: 4 Energy ETFs may be at Near-Term Tops

For investors looking for a plain vanilla approach to energy, XLE and rivals such as the Fidelity MSCI Energy Index ETF (NYSEArca: FENY) are viable income options due to their hefty weights to Dow components Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX). The dividend situations for Exxon Mobil and Chevron, the two largest U.S. oil companies, are solid at the moment.

“Broadly-diversified energy ETFs are often the best option for investors seeking more variation in their retirement portfolios, but since a large amount of funds have been allocated to them in recent months, choosing the right ones can affect returns,” according to TheStreet.com.

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