In the first quarter, the S&P 500 gained nearly 13 percent, while the ALPS Alerian MLP ETF managed to eke out a 1.7 percent gain. A slight spike in Treasury yields seems to have pulled at least some income seekers away from master limited partnerships (MLP), while questions about the level of oil and natural gas demand also took a toll. The fact that the Obama administration nixed the construction of the northern run of the Keystone XL Pipeline also didn’t help matters.

Thus far, April hasn’t been a particularly positive month for the MLP space either, as the ETF has tracked the downward trend of the broader S&P 500 for a loss of just over 2 percent. Still, we see this as an opportunity to lock in a better yield on shares.

The fund holds a capitalization-weighted portfolio of 25 primarily midstream MLPs, including names such as Enterprise Products Partners (NYSE: EPD), Kinder Morgan Energy Partners (NYSE: KMP) and Magellan Midstream Partners (NYSE: MMP).

Enterprise Products Partners operates both onshore and offshore natural gas and crude oil pipelines and storage facilities, 25 natural gas processing facilities and two natural gas import and export facilities. Kinder Morgan Energy Partners owns more than 35,000 miles of pipeline and 180 crude, natural gas and bulk materials terminals. Both companies operate in the largest and fastest-growing, energy-producing regions in the US.

While obviously energy-focused, the operations of most midstream MLPs are fairly diversified and largely insulated from commodity prices. Rather than being paid according to the value of the commodities they move, pipeline operators are paid by volume.

Given that midstream operators’ profitability is driven more by aggregate demand than commodity prices, we remain extremely positive on the sector.

A surge in drilling and production activity in US shale oil and gas plays is spurring huge demand for additional pipeline capacity. In fact, the abundance of natural gas trapped in regions that lack the infrastructure to transport them elsewhere is one of the reasons the commodity has become so inexpensive in the US.

As a result, MLPs such as Energy Transfer Equity (NYSE: ETE) have proposed the construction of a number of new export terminals to allow the sale of US liquefied natural gas on the international market. A critical component of those plans is the construction of additional pipeline capacity–which won’t cross international borders and require presidential approval–in order for the gas to reach the coasts. That will spark a profitable building boom for pipeline MLPs.

Another potential boon for natural gas prices is the fact that a number of electric utilities such as Southern Company (NYSE: SO) have announced plans to switch from coal to gas. With natural gas prices near historic lows, utilities are moving to capture the cost advantage as well as the opportunity to reduce carbon emissions. That, in turn, is lowering costs for consumers, which should boost electricity demand and create a virtuous cycle for gas prices.

ALPS Alerian MLP ETF currently yields 6 percent, one of the highest yields in the exchange-traded fund (ETF) space. The reason for such an impressive payout is the structure of MLPs; they’re not subject to corporate-level income tax, so most of their income is passed along to investors. But this isn’t a case of questionable companies making higher distributions just to attract investors; these are strong companies that take advantage of a unique structure to maximize unit-holder returns. And many have been able to tap into relatively inexpensive financing to fund acquisitions and organically grow their businesses. As a result, payout growth in the sector has averaged between 5 percent and 6 percent over the past several quarters.

So while there are some short-term headwinds still in place for MLPs, the long-term growth story for the sector remains intact. Although we already have a better than 9 percent gain in the position, this is an excellent opportunity to pick up an even more attractive yield from MLPs. Continue buying ALPS Alerian MLP ETF under 20.

The Global ETF Profits Way

As a reminder, the Global ETF Profits Model Portfolio is divided into three sections: Growth, Income & Hedges (I&H) and Short-Term Opportunities.

The Model Portfolio provides the full spectrum of strategic approaches to investing by recommending growth, income, and hedging strategies, as well as shorter-term tactical opportunities. Additionally, the use of exchange-traded funds (ETF) can capitalize on trends in specific sectors without incurring the risk of selecting the wrong stocks in those sectors.

The Growth and I&H Portfolios are appropriate starting points for investors seeking to establish positions for the long term. The Short-Term Opportunities Portfolio is best suited for those investors who have a greater tolerance for risk. We’ll adjust the ETFs in the overall Model Portfolio on an ongoing basis to reflect investment objectives. Our recommendations are sorted in descending order of preference, starting with our favorite pick at the top of each section.

It’s important to buy a cross-section of recommendations–taking into account, of course, your objectives and risk tolerance–in order to gain broad exposure to the investment themes we’ve highlighted, as well as to maintain proper diversification.