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7 Promising ETFs Under $20

Sweta Killa

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 (read: 10 Most-Heavily Traded ETFs of 2018).

And guess what, market volatility has provided investors a great opportunity to tap some of these stocks from a long list. 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.
 

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.

ETFMG Prime Junior Silver ETF SILJ – Last Closing Price: $8.88

The product provides direct exposure to the silver mining exploration and production industry by tracking the Prime Junior Silver Miners & Explorers Index. Holding 30 stocks in its basket, the fund is heavily concentrated on the top four firms that make up for double-digit allocation each. Canadian firms take the largest share at 48%, while the United States and Mexico take 21% and 15% share, respectively. The fund has managed assets worth $51.1 million and trades in solid volume of around 56,000 shares a day. It charges 69 bps in annual fees.

Alerian MLP ETF AMLP AMLP – Last Closing Price: $9.81

This ETF delivers exposure to the Alerian MLP Infrastructure Index, a capped, float-adjusted, capitalization-weighted composite of energy infrastructure Master Limited Partnerships (MLPs) that earn the majority of their cash flow from midstream activities. Holding 25 stocks in its basket, it is concentrated on the top five firms, with each accounting for more than 9% share each. AMLP is the most popular and most liquid ETF in the MLP space, with AUM of $8.9 billion and average daily volume of 19.7 million shares. It charges 85 bps in fees per year from investors (read:  ETFs & Tax Efficiency: What Investors Need to Know).

First Trust ISE-Revere Natural Gas Index Fund FCG – Last Closing Price: $16.25

This fund offers exposure to U.S. stocks that derive a substantial portion of their revenues from the exploration and production of natural gas. It follows the ISE-REVERE Natural Gas Index and holds 35 stocks in its basket, with each accounting for less than 3.9% share. The fund has amassed $97.7 million in its asset base while charging 60 bps in annual fees. Volume is good with 258,000 shares exchanged per day on average. The product has a Zacks ETF Rank #3 (Hold) with a High risk outlook.

Amplify Transformational Data Sharing ETF BLOK – Last Closing Price: $16.86

This is an actively managed ETF providing investors global exposure to a basket of the leading companies engaged in the development and utilization of blockchain technologies. It has AUM of $104.3 million in its asset base and trades in average daily volume of 56,000 shares. The product holds a basket of 53 stocks, with none of the securities making up for more than 4.5% of assets. American firms dominate with about 48.7% of the portfolio, followed by Asia (41.1%) and Europe (10%). The ETF has an expense ratio of 0.70% (read: 5 Rising Technology ETFs in 2019).

Invesco High Yield Equity Dividend Achievers ETF PEY – Last Closing Price: $17.38

This fund offers exposure to well-diversified 50 stocks selected principally based on dividend yield and consistent growth in dividends. It tracks the NASDAQ US Dividend Achievers 50 Index, charging 54 bps in fees from investors. Utilities, consumer staples, financials and energy are the top four sectors accounting for double-digit exposure each. The product has amassed $750.4 million in AUM and sees average daily volume of 183,000 shares a day. It has a Zacks ETF Rank #3 with a Medium risk outlook.

iShares MSCI Global Gold Miners ETF RING – Last Closing Price: $17.39

This ETF offers global exposure to companies that derive the majority of their revenues from gold mining by tracking the MSCI ACWI Select Gold Miners Investable Market Index. It holds 36 securities in its portfolio with double-digit concentration on the top two firms. Canadian firms take more than half of the portfolio, while United States and Australia round out the top three with double-digit exposure each. RING is the cheapest choice in the gold mining space, charging 39 bps in fees and expenses. The fund has been able to manage assets worth $205 million and trades in good volume of 273,000 shares per day (read: Newmont-Goldcorp Deal Puts Gold Mining ETFs in Focus).

Fidelity MSCI Energy Index ETF FENY – Last Closing Price: $17.46

The fund targets the broad energy sector and follows the MSCI USA IMI Energy Index. It holds 133 stocks in its basket with heavy concentration on the top two firms that collectively make up for a 38.19 share. The product charges 8 bps in annual fees and trades in a good volume of around 343,000 shares. It has accumulated $472.6 million in its asset base and has a Zacks ETF Rank #3 with a High risk outlook (read: Exxon, Chevron Beat on Q4 Earnings: Energy ETFs in Focus).

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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