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Most investors want to put their money in equities but may not be able to afford large stakes in valuable companies with higher-priced stocks. For them, low-priced stocks could be attractive as these will enable them to buy more shares instead of just a handful of higher-priced shares for the same amount. For example, an investor willing to spend $10,000 can either purchase at least 500 shares of a stock trading under $20 or only 100 shares of a stock trading at $100.
Additionally, stocks under $20 reap huge profits as an increase of as less as a dollar in share price adds 5% to the portfolio. This is in contrast to stocks priced at $100 or above, which see 1% or lower gains if shares move up by $1. Further, most of the low-priced stocks have high levels of liquidity, giving these stocks an added advantage. This means that cash can be converted quickly and investors could easily get their money out of the securities. In fact, trading in higher average daily volumes keeps the bid/ask spread tight and does not lead to extra cost for investors.
And guess what, the recent volatility, induced by skyrocketing inflation, geopolitical tension and Fed rate hike, has provided investors a great opportunity to tap some of these stocks. The preference is not only limited to the stock world but can be felt in the ETF space. In fact, there are only a handful of ETFs that currently trade below $20 out of nearly 2,000 funds, suggesting that the choices are limited for investors who like to get a decent number of shares from their investment (read: 5 Stocks in S&P 500 ETF Defying Losing Streak Since 2011).
So, let us dig into some of the ETFs that are below $20 and have AUM of more than $50 million to ensure enough liquidity. Further, these funds have a Zacks ETF Rank #2 (Buy) or 3 (Hold). These low-priced ETFs could lead to huge gains in the coming months based on market trends.
Global X SuperDividend ETF (SDIV - Free Report) – Last Closing Price: $10.06
The appeal for dividend-focused ETFs has been on the rise as volatility grips the stock market. Soaring inflation and rising interest rates have sparked worries of a recession, resulting in a sharp-sell-off in high-growth stocks. Additionally, supply chain issues stemming from the spike in COVID-19 cases in China and the ongoing war in Ukraine are weighing on investor sentiment (read: A Guide to the 10 Most-Popular Dividend ETFs).
Global X SuperDividend ETF provides exposure to the 93 highest-dividend-paying equities around the world by tracking the Solactive Global SuperDividend Index. It has amassed $827.4 million in its asset base and sees a good trading volume of about 536,000 shares a day on average. Global X SuperDividend ETF has an expense ratio is 0.58% and carries a Zacks ETF Rank #3 with a Low risk outlook. It has lost about 15% so far this year.
iShares U.S. Oil Equipment & Services ETF (IEZ - Free Report) - Last Closing Price: $17.15
Energy has been the best performing sector so far this year on soaring oil prices buoyed by tightening supply conditions and robust demand. iShares U.S. Oil Equipment & Services ETF offers exposure to U.S. companies that provide equipment and services for oil exploration and extraction. It follows the Dow Jones U.S. Select Oil Equipment & Services Index, holding 25 stocks in its basket.
iShares U.S. Oil Equipment & Services ETF has amassed $383.1 million in its asset base while charges 41 bps in fees per year from investors. It trades in an average daily volume of 659,000 shares and has a Zacks ETF Rank #3 with a High risk outlook. Though IEZ has risen 33.2% so far this year, it dropped 14% over the past month, suggesting a solid entry point.
The Global X Cloud Computing ETF (CLOU - Free Report) – Last Closing Price: $17.27
Demand for cloud computing services surged during the pandemic and is expected to grow further, as work, school, and social activities moved increasingly to digital experiences. Global X Cloud Computing ETF seeks to invest in companies positioned to benefit from the increased adoption of cloud computing technology, including companies whose principal business is in offering computing Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), Infrastructure-as-a-Service (IaaS), managed server storage space and data center real estate investment trusts, and/or cloud and edge computing infrastructure and hardware. The ETF tracks the Indxx Global Cloud Computing Index.
Global X Cloud Computing ETF holds 34 stocks in its basket with American firms accounting for 88.1% of assets. It has AUM of $746.2 million and trades in an average daily volume of 707,000 shares. The ETF charges 68 bps in annual fees and has a Zacks ETF Rank #2. It has tumbled nearly 40% this year.
iShares Global Clean Energy ETF (ICLN - Free Report) - Last Closing Price: $17.45
Countries across the globe are scaling their renewable energy investments. The United States has been at the forefront of making the climate clean with President Joe Biden’s pledge to go greener. iShares Global Clean Energy ETF provides global exposure to 102 companies that produce energy from solar, wind and other renewable sources by tracking the S&P Global Clean Energy Index. The United States and China take the top two spots in terms of country exposure with 44% and 13.3% share, respectively.
iShares Global Clean Energy ETF has AUM of $5.2 billion and charges 42 bps in annual fees and expenses. It trades in a heavy volume of 6 million shares and has a Zacks ETF Rank #2. ICLN plunged 17.6% in the year-to-date timeframe.
U.S. Global Jets ETF (JETS - Free Report) - Last Closing Price: $19.28
Travel ETFs surged on optimism that consumers will continue flying this year despite higher fares. U.S. Global Jets ETF provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index. The product holds 51 securities and charges 51 bps in annual fees (read: 4 Sector ETFs That Survived the Market Rout in April).
U.S. Global Jets ETF has gathered $3.5 billion in its asset base while seeing a heavy trading volume of nearly 9 million shares a day. JETS is down 8.6% this year and has a Zacks ETF Rank #2.
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5 ETFs Under $20 to Add to Your Portfolio
Most investors want to put their money in equities but may not be able to afford large stakes in valuable companies with higher-priced stocks. For them, low-priced stocks could be attractive as these will enable them to buy more shares instead of just a handful of higher-priced shares for the same amount. For example, an investor willing to spend $10,000 can either purchase at least 500 shares of a stock trading under $20 or only 100 shares of a stock trading at $100.
Additionally, stocks under $20 reap huge profits as an increase of as less as a dollar in share price adds 5% to the portfolio. This is in contrast to stocks priced at $100 or above, which see 1% or lower gains if shares move up by $1. Further, most of the low-priced stocks have high levels of liquidity, giving these stocks an added advantage. This means that cash can be converted quickly and investors could easily get their money out of the securities. In fact, trading in higher average daily volumes keeps the bid/ask spread tight and does not lead to extra cost for investors.
And guess what, the recent volatility, induced by skyrocketing inflation, geopolitical tension and Fed rate hike, has provided investors a great opportunity to tap some of these stocks. The preference is not only limited to the stock world but can be felt in the ETF space. In fact, there are only a handful of ETFs that currently trade below $20 out of nearly 2,000 funds, suggesting that the choices are limited for investors who like to get a decent number of shares from their investment (read: 5 Stocks in S&P 500 ETF Defying Losing Streak Since 2011).
So, let us dig into some of the ETFs that are below $20 and have AUM of more than $50 million to ensure enough liquidity. Further, these funds have a Zacks ETF Rank #2 (Buy) or 3 (Hold). These low-priced ETFs could lead to huge gains in the coming months based on market trends.
Global X SuperDividend ETF (SDIV - Free Report) – Last Closing Price: $10.06
The appeal for dividend-focused ETFs has been on the rise as volatility grips the stock market. Soaring inflation and rising interest rates have sparked worries of a recession, resulting in a sharp-sell-off in high-growth stocks. Additionally, supply chain issues stemming from the spike in COVID-19 cases in China and the ongoing war in Ukraine are weighing on investor sentiment (read: A Guide to the 10 Most-Popular Dividend ETFs).
Global X SuperDividend ETF provides exposure to the 93 highest-dividend-paying equities around the world by tracking the Solactive Global SuperDividend Index. It has amassed $827.4 million in its asset base and sees a good trading volume of about 536,000 shares a day on average. Global X SuperDividend ETF has an expense ratio is 0.58% and carries a Zacks ETF Rank #3 with a Low risk outlook. It has lost about 15% so far this year.
iShares U.S. Oil Equipment & Services ETF (IEZ - Free Report) - Last Closing Price: $17.15
Energy has been the best performing sector so far this year on soaring oil prices buoyed by tightening supply conditions and robust demand. iShares U.S. Oil Equipment & Services ETF offers exposure to U.S. companies that provide equipment and services for oil exploration and extraction. It follows the Dow Jones U.S. Select Oil Equipment & Services Index, holding 25 stocks in its basket.
iShares U.S. Oil Equipment & Services ETF has amassed $383.1 million in its asset base while charges 41 bps in fees per year from investors. It trades in an average daily volume of 659,000 shares and has a Zacks ETF Rank #3 with a High risk outlook. Though IEZ has risen 33.2% so far this year, it dropped 14% over the past month, suggesting a solid entry point.
The Global X Cloud Computing ETF (CLOU - Free Report) – Last Closing Price: $17.27
Demand for cloud computing services surged during the pandemic and is expected to grow further, as work, school, and social activities moved increasingly to digital experiences. Global X Cloud Computing ETF seeks to invest in companies positioned to benefit from the increased adoption of cloud computing technology, including companies whose principal business is in offering computing Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), Infrastructure-as-a-Service (IaaS), managed server storage space and data center real estate investment trusts, and/or cloud and edge computing infrastructure and hardware. The ETF tracks the Indxx Global Cloud Computing Index.
Global X Cloud Computing ETF holds 34 stocks in its basket with American firms accounting for 88.1% of assets. It has AUM of $746.2 million and trades in an average daily volume of 707,000 shares. The ETF charges 68 bps in annual fees and has a Zacks ETF Rank #2. It has tumbled nearly 40% this year.
iShares Global Clean Energy ETF (ICLN - Free Report) - Last Closing Price: $17.45
Countries across the globe are scaling their renewable energy investments. The United States has been at the forefront of making the climate clean with President Joe Biden’s pledge to go greener. iShares Global Clean Energy ETF provides global exposure to 102 companies that produce energy from solar, wind and other renewable sources by tracking the S&P Global Clean Energy Index. The United States and China take the top two spots in terms of country exposure with 44% and 13.3% share, respectively.
iShares Global Clean Energy ETF has AUM of $5.2 billion and charges 42 bps in annual fees and expenses. It trades in a heavy volume of 6 million shares and has a Zacks ETF Rank #2. ICLN plunged 17.6% in the year-to-date timeframe.
U.S. Global Jets ETF (JETS - Free Report) - Last Closing Price: $19.28
Travel ETFs surged on optimism that consumers will continue flying this year despite higher fares. U.S. Global Jets ETF provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index. The product holds 51 securities and charges 51 bps in annual fees (read: 4 Sector ETFs That Survived the Market Rout in April).
U.S. Global Jets ETF has gathered $3.5 billion in its asset base while seeing a heavy trading volume of nearly 9 million shares a day. JETS is down 8.6% this year and has a Zacks ETF Rank #2.