Many investors have a strong preference for stocks that are below $20 a share. As a small investor myself, I can definitely relate. It can feel a little embarrassing almost to tell people that you only have two shares of this or four shares of that, even if you are putting a sizable portion of your portfolio into a particular security.
This preference also carries over to the ETF world, but unfortunately, many ETFs do trade at ‘premium’ prices, limiting the number of shares than a retail investor may be able to buy. In fact, there are less than 200 ETFs that currently trade below $20 out of over 1,500 total funds, suggesting that choices are pretty limited for investors who like to get a good number of shares from their investment.
This is particularly true when you only look for ETFs that are below $20 and also possessing a Zacks ETF Rank of at least a 2 (Buy). This list is below a dozen, but there are definitely some gems that investors who like buys that have a lower share price need to be aware of.
Below, we highlight three of our favorite from this subset, any of which might be interesting choices for investors who are looking for top ETF picks that are trading below $20:
Global X FTSE Norway 30 ETF (NYSEARCA:NORW)
A variety of issues have kept oil prices elevated as of late. A stronger developed market economy and concerns over Russia and their encroachment on Eastern Europe have helped to keep oil prices steady in recent months, greatly assisting the prospects of Norway in the process.
That is because Norway is a huge exporter of oil, and due to its location in Europe and friendly relations with many in the West, it could become even more important for Western Europe’s energy needs. The country has also developed a huge sovereign wealth fund thanks to its oil, so it looks to be better positioned than most natural resource countries to weather a slump too (see all the European Equity ETFs here).
Given these factors, a look towards NORW could be an excellent idea in the near term. The fund has roughly half of its assets in energy stocks (and then close to 17% in energy and 10% in materials) and could definitely benefit directly from the current geopolitical realities in Europe. The ETF has also been outperforming the S&P 500 YTD, and has really taken off lately suggesting now could be the time to take a closer look at this product.
This European ETF has a Zacks ETF Rank #2 (Buy), while it is currently trading just below $17.50/share.
First Trust NASDAQ Clean Edge ETF (NASDAQ:QCLN)
Although there has been a bit of a pull back in clean energy lately, QCLN is still handily beating out the S&P 500 on a year to date look. And given the incredible growth potential of the sector over the long term, there are plenty of reasons to still like a diversified play on the space, such as with QCLN (read A Comprehensive Guide to Alternative Energy ETFs).
It also helps that QCLN has such a broad focus on the space, as the fund holds companies engaged in a variety of industries from solar and biofuels, to batteries and electric transportation companies. In fact, roughly one-third of the portfolio goes to technology, while another 30% zeroes in on the energy space, suggesting a pretty wide net, and especially so when compared to more laser-focused funds like those that only hold technology firms in the alternative energy world.
In total, the ETF holds 50 stocks in its basket, allocating no more than 8.4% to any one stock. The fund definitely has a big holding in small and mid caps, and though volatility looks to be high in this product, it has shown a history of outperformance and it has plenty of potential to surge back in the months ahead as well.
QCLN has a Zacks ETF Rank #2 (Buy) and a ‘High’ risk rating. The fund currently trades at just under $19/share, a bit off of its 52 week of $21.62/share