ETFs have now become one of the most popular investment vehicles for investors. While many want to focus on ETFs with the highest allocation to valuable companies or higher-priced names, low-priced ETFs, especially those trading under $20 per share, can offer unique opportunities for growth, diversification and accessibility.

The recent market bloodbath has provided investors with a great opportunity to tap some of these ETFs. Though there are only a handful of ETFs that currently trade below $20 out of more than 2,000 funds, these could lead to huge gains in the coming months based on market trends.  We have highlighted five ETFs that are trading below $20 and have a Zacks ETF Rank #1 (Strong Buy) or #2 (Buy). These are Schwab U.S. Large-Cap ETF SCHX, Global X Cloud Computing ETF CLOU, U.S. Global Jets ETF JETS, Global X SuperDividend U.S. ETF DIV and Motley Fool Next Index ETF TMFX.

Why Invest in Low-Priced ETFs?

Affordability & Accessibility: Low-priced ETFs are more affordable and accessible, as these enable the purchase of 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.

Potential for Higher Percentage Gains: Low-priced ETFs may offer higher growth potential. For example, if a stock is priced at $20 and increases by $1, that's a 5% gain. This is in contrast to stocks priced at $100 or above, which see 1% or lower gains if shares move up by $1.

Diversification on a Budget: These ETFs can serve as building blocks in a diversified portfolio. Investors can spread their investments across various sectors without needing significant capital.

ETFs Under $20

Schwab U.S. Large-Cap ETF (SCHX) - Last Closing Price: $19.60

Trump’s tariff bomb has erased trillions of dollars in market value from U.S. stocks, making it attractive for bargain hunters. Schwab U.S. Large-Cap ETF offers exposure to the largest U.S. companies as ranked by full market capitalization. It tracks the Dow Jones U.S. Large-Cap Total Stock Market Index, holding 752 stocks in its basket, with none making up for more than 6% share. Information technology takes the top spot at 31.9% of assets, while financials, consumer discretionary and healthcare round off the next three spots with double-digit exposure each. 

Schwab U.S. Large-Cap ETF charges investors 3 bps in fees per year and has AUM of $45.3 billion. It has a Zacks ETF Rank #2 and has dropped about 19% from its February peak.

Global X Cloud Computing ETF (CLOU) – Last Closing Price: $18.31 

The demand for cloud computing will continue to rise with the adoption of artificial intelligence (AI). The global cloud computing market is expected to reach $912.77 billion in 2025 and will witness a CAGR of 21.20% from 2025 to 2034. 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 offering computing Software-as-a-Service, Platform-as-a-Service, Infrastructure-as-a-Service, managed server storage space and data center real estate investment trusts, and/or cloud and edge computing infrastructure and hardware. It tracks the Indxx Global Cloud Computing Index and holds 37 stocks in its basket with each accounting for less than 5.3% of assets.

Global X Cloud Computing ETF has AUM of $276.6 million and charges 68 bps in annual fees. It has a Zacks ETF Rank #2 and plummeted about 44% from its peak in late January.

U.S. Global Jets ETF (JETS) - Last Closing Price: $17.37

The beaten-down prices have made JETS extremely attractive. The airline industry is now valued at a P/E ratio of 6.48 compared with 16.69 for the S&P 500 ETF (IVV). The industry’s earnings are expected to witness above-market growth of 9.8% this year. 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 58 securities and charges 60 bps on an annual basis (read: 4 Sector ETFs Hard Hit From Escalating Trade War). 

U.S. Global Jets ETF has gathered $641.8 million in its asset base and has a Zacks ETF Rank #1. The ETF has plunged 36% from its peak in late January.

Global X SuperDividend U.S. ETF (DIV) - Last Closing Price: $16.54

The stock market remains clouded by growing uncertainty around the new U.S. administration’s economic tariffs. Dividend-paying securities are major sources of consistent income for investors when returns from the equity market are at risk. These stocks offer the best of both worlds — safety in the form of payouts and stability in the form of mature companies that are less volatile to large swings in stock prices. Global X SuperDividend U.S. ETF provides exposure to 50 highest dividend-paying equities in the United States, potentially increasing a portfolio's yield by tracking Indxx SuperDividend U.S. Low Volatility Index. It has key holdings in energy, real estate, utilities and consumer staples. 

Global X SuperDividend U.S. ETF has amassed $605 million in its asset base and charges 45 bps in annual fees. It carries a Zacks ETF Rank #2. DIV plummeted about 15% from its peak reached in late November (read: 5 U.S. Dividend ETFs Outperforming Amid Market Turmoil).

Motley Fool Next Index ETF (TMFX) - Last Closing Price: $15.93

Motley Fool Next Index ETF offers exposure to the top-rated, highest-conviction, small- and mid-cap stock picks from The Motley Fool, LLC analysts. It tracks the Motley Fool NEXT Index and holds 192 stocks in its basket, with none accounting for more than 2% share. From a sector look, information technology is the top sector at 25.9% while industrials, consumer discretionary and healthcare round off the next three with double-digit exposure.

Motley Fool Next Index ETF has AUM of $26.3 million and charges 50 bps in annual fees. It has a Zacks ETF Rank #2 and has declined 32.6% from its peak.

A Caveat!

Low-priced ETFs can be much more volatile than higher-priced ones, leading to significant losses if the stock price decreases. They are also more susceptible to price manipulation, such as "pump and dump" schemes. Further, low-priced ETFs might belong to smaller and less-established companies, which may not be required to file with the SEC, making it harder to find reliable information.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

U.S. Global Jets ETF (JETS): ETF Research Reports

Global X SuperDividend U.S. ETF (DIV): ETF Research Reports

Schwab U.S. Large-Cap ETF (SCHX): ETF Research Reports

Global X Cloud Computing ETF (CLOU): ETF Research Reports

Motley Fool Next Index ETF (TMFX): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research