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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, low-priced stocks often have the potential for significant percentage gains. 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.

Further, 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 costs for investors.

However, low-priced stocks can be much more volatile than higher-priced stocks, thereby leading to significant losses if the stock price decreases. These are more susceptible to price manipulation, such as "pump and dump" schemes, which can lead to significant losses. Further, low-priced stocks, especially penny stocks, belong to smaller and less-established companies. These companies may not be required to file with the SEC, making it harder to find reliable information.

Still, low-priced stocks are affordable and allow greater diversification rather than investing in higher-priced stocks. The recent volatility has provided investors with 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.
 
So, let us dig into some of the ETFs that are below $20 and have a Zacks ETF Rank #1 (Strong Buy) or #2 (Buy). These low-priced ETFs could lead to huge gains in the coming months based on market trends.

Range Cancer Therapeutics ETF (CNCR - Free Report) - Last Closing Price: $14.66

Though biotech firms are racing toward weight loss drugs, cancer is going to create potentially substantial market demand for new, novel, and effective therapeutics. Being the leading cause of death globally, cancer remains one of the most worrying public health issues and will remain at the forefront of investment and technological innovation.

Range Cancer Therapeutics ETF offers exposure to a wide range of cancer therapeutic modalities. It follows the Range Oncology Therapeutics Index and holds 77 stocks in its basket, with each accounting for less than 3.1% of the assets. Range Cancer Therapeutics ETF has AUM of $16.3 million and charges 79 bps in annual fees. The fund trades in an average daily volume of 17,000 shares.

First Trust Energy AlphaDEX Fund (FXN - Free Report) - Last Closing Price: $18.34

The energy sector has been witnessing volatility this year. While the OPEC cartel and other allies’ decision to raise production later this year and rising oil inventories are weighing on oil price, rate cuts in Canada and Europe as well as the revamped bets for Fed rate cuts are a welcome news for the sector.

First Trust Energy AlphaDEX Fund follows the StrataQuant Energy Index, which employs the AlphaDEX stock selection methodology to select stocks from the Russell 1000 Index. It holds 37 stocks in its basket, with none accounting for more than 5.4% share. Crude producers take the largest share at 50%, followed by double-digit allocation each in pipelines, oil refining and marketing, and oil equipment and services. First Trust Energy AlphaDEX Fund has amassed $622.2 million in its asset base while trading in average daily volume of 2.5 million shares.

Global X Cloud Computing ETF (CLOU - Free Report) – Last Closing Price: $19.69

The demand for cloud computing will remain high, given the ongoing artificial intelligence (AI) boom. A large number of companies are adopting cloud computing to tap into AI capabilities. Increasing AI investments are likely to boost cloud’s share of total IT spending from an estimated 15% in 2023 to roughly 40% in 2030, as companies look to capitalize on the flexibility of the cloud model (read: Can NVIDIA's AI Chip Dominance Continue?).

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 36 stocks in its basket. Global X Cloud Computing ETF has AUM of $447.1 million and trades in an average daily volume of 177,000 shares. The ETF charges 68 bps in annual fees.

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