US investors pouring billions into ETFs — but these 3 mistakes are quietly eroding returns for many in the process

Core Insights - Exchange-traded funds (ETFs) have gained significant popularity, with $540 billion in new investments in the first half of 2025 [1] - The market saw the introduction of 464 new ETFs in the same period, including crypto, money-market, and public-private credit ETFs [1][2] - A notable percentage of non-ETF investors (45%) are considering purchasing ETFs in the next two years, indicating growing interest [2] Group 1: ETF Characteristics - ETFs vary widely; some track broad indexes like the S&P 500, while others focus on specific sectors or themes, which may not align with all investors' goals [4] - Narrowly focused ETFs can lead to increased volatility, posing risks to investors [4] Group 2: Investor Behavior - A common mistake among investors is assuming that past performance of ETFs guarantees future results, which can lead to significant losses [5] - The case of the ARK Innovation ETF illustrates the risk of chasing past performance, as it experienced a dramatic decline after initial success [5]