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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, which give 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 current market volatility 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 as well. In fact, there are only a handful of ETFs that currently trade below $20 out of nearly 2,000 funds, suggesting that choices are pretty worthy for investors who like to get a decent number of shares from their investment (read: 5 Ultra-Cheap Growth ETFs to Tap on Global Stimulus Hopes).
So, let us dig into some of the ETFs that are below $20, and have AUM of over $50 million and average daily volume of at least 50,000 shares. These low-priced ETFs could lead to huge gains in the coming months.
This product invests in some of the largest, most-liquid midstream Master Limited Partnerships (MLPs) by tracking the Solactive MLP Infrastructure Index.
Last Closing Price: $8.39 Zacks Rank: NA AUM: $943.8 million Expense Ratio: 0.45% Average Daily Volume (in shares): 658,000
SILJ provides direct exposure to the silver mining exploration and production industry by tracking the Prime Junior Silver Miners & Explorers Index (read: Why Silver ETFs are Outshining Gold).
Last Closing Price: $10.30 Zacks Rank: NA AUM: $105.7 million Expense Ratio: 0.69% Average Daily Volume (in shares): 242,000
This 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 (read: WisdomTree's Cloud ETF on Deck).
Last Closing Price: $14.98 Zacks Rank: NA AUM: $489.6 million Expense Ratio: 0.68% Average Daily Volume (in shares): 425,000
This fund offers exposure to stocks selected principally based on dividend yield and consistent growth in dividends. It tracks the NASDAQ US Dividend Achievers 50 Index (read: 5 High-Dividend ETFs Available Under $20).
Last Closing Price: $18.58 Zacks Rank: #3 AUM: $867.6 million Expense Ratio: 0.54% Average Daily Volume (in shares): 142,000
Bottom Line
The above-mentioned ETFs should draw the attention of investors seeking to accumulate a larger number of low-priced funds that are poised to outperform. Even small investors could add a decent holding of some of these names with a modestly sized investment. These products could fetch higher returns.
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5 Excellent ETFs Under $20
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, which give 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 current market volatility 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 as well. In fact, there are only a handful of ETFs that currently trade below $20 out of nearly 2,000 funds, suggesting that choices are pretty worthy for investors who like to get a decent number of shares from their investment (read: 5 Ultra-Cheap Growth ETFs to Tap on Global Stimulus Hopes).
So, let us dig into some of the ETFs that are below $20, and have AUM of over $50 million and average daily volume of at least 50,000 shares. These low-priced ETFs could lead to huge gains in the coming months.
Global X MLP ETF (MLPA - Free Report)
This product invests in some of the largest, most-liquid midstream Master Limited Partnerships (MLPs) by tracking the Solactive MLP Infrastructure Index.
Last Closing Price: $8.39
Zacks Rank: NA
AUM: $943.8 million
Expense Ratio: 0.45%
Average Daily Volume (in shares): 658,000
ETFMG Prime Junior Silver ETF (SILJ - Free Report)
SILJ provides direct exposure to the silver mining exploration and production industry by tracking the Prime Junior Silver Miners & Explorers Index (read: Why Silver ETFs are Outshining Gold).
Last Closing Price: $10.30
Zacks Rank: NA
AUM: $105.7 million
Expense Ratio: 0.69%
Average Daily Volume (in shares): 242,000
Global X Cloud Computing ETF (CLOU - Free Report)
This 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 (read: WisdomTree's Cloud ETF on Deck).
Last Closing Price: $14.98
Zacks Rank: NA
AUM: $489.6 million
Expense Ratio: 0.68%
Average Daily Volume (in shares): 425,000
Fidelity MSCI Energy Index ETF (FENY - Free Report)
The fund targets the broad energy sector and follows the MSCI USA IMI Energy Index.
Last Closing Price: $16.31
Zacks Rank: #3 (Hold)
AUM: $434 million
Expense Ratio: 0.08%
Average Daily Volume (in shares): 218,000
Invesco High Yield Equity Dividend Achievers ETF (PEY - Free Report)
This fund offers exposure to stocks selected principally based on dividend yield and consistent growth in dividends. It tracks the NASDAQ US Dividend Achievers 50 Index (read: 5 High-Dividend ETFs Available Under $20).
Last Closing Price: $18.58
Zacks Rank: #3
AUM: $867.6 million
Expense Ratio: 0.54%
Average Daily Volume (in shares): 142,000
Bottom Line
The above-mentioned ETFs should draw the attention of investors seeking to accumulate a larger number of low-priced funds that are poised to outperform. Even small investors could add a decent holding of some of these names with a modestly sized investment. These products could fetch higher returns.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>