Investing $20k to BTC and ETH is the best option for sure. These are the most recommended coins, the price history of these coins are proven enough. If we want to choose the coins with low risk, BTC and ETH are the perfect choice. But the increase of BTC and ETH won't be as significant as altcoins with cheap prices.
It is not a must to invest all the money to all top coins. People can use 5% of their money to small coins that have the potential to increase their prices significantly in the future. If I have $20k, I may allocate 5% for small coins, I think it is not a big deal. I think all crypto coins are risky, although small coins can be riskier. However, the riskier coins sometimes offer a bigger profit.
It is true that the cryptocurrency market is a risky market and every coin has a risk of loss, but every investor tries to choose coins where the risk of loss is minimal. Of course small coins can generate huge profits, but the risk of loss is also very high. However, you are right that 5% of your capital can be invested in risky coins, and the risk should be taken for big returns.