Exchange-traded funds (ETFs) have soared in popularity in recent years. And the funds are adding up. In the first six months of 2025, ETFs collected $540 billion in new money, according to Morningstar. (1) As investors pour money into ETFs, more are coming to market. In the first half of 2025, 464 new ETFs were brought to market. But not all ETFs are the same. Some of the most recent additions to the landscape include crypto ETFs, money-market ETFs and a public-private credit ETF. Even many investors and ...

Core Insights - The Nasdaq-100 ETF is heavily concentrated, with approximately 60% of its assets in technology stocks and around 50% in its top 10 holdings, indicating a lack of diversification [1] - The Invesco QQQ Trust, which tracks the Nasdaq-100 index, exemplifies that not all ETFs are low-risk investments, as some can be quite aggressive [2] - The YieldMax Bitcoin Option Income Strategy ETF has a high expense ratio of 0.99%, raising concerns about cost versus benefit for investors [3] - The SPDR S&P 500 ETF has an expense ratio of 0.09%, while the Vanguard S&P 500 ETF has a lower expense ratio of 0.03%, highlighting the importance of cost in ETF selection [4] - The Roundhill Meme Stock ETF has been reintroduced, focusing on stocks driven by retail sentiment, which poses significant risks due to their volatility [8][9] Investment Considerations - Long-term investing requires a strategic approach rather than impulsive decisions, emphasizing the need for careful consideration before purchasing ETFs [6] - Diversification is crucial when building a portfolio, as relying solely on ETFs can create a false sense of security regarding diversification [10] - Investors should actively seek to include a variety of ETFs, such as those that provide exposure to international stocks, to enhance overall portfolio diversification [11][12] - Ignoring portfolio-level diversification can lead to owning similar ETFs, which may result in significant losses if those ETFs decline simultaneously [13] - While ETFs simplify investing, understanding their mechanics is essential to avoid overpaying and investing in high-risk assets [14]

Businessman working in the officePixelfit | E+ | Getty ImagesDemand for exchange-traded funds continues to grow as investors seek lower-cost, tax-friendly options to meet their financial goals. But missteps can happen, experts say.   ETFs brought in $540 billion in new money during the first half of 2025, which exceeded total inflows for the same period in 2024, according to Morningstar. Meanwhile, companies have launched 464 new ETFs through June, which could pass the 2024 record of more than 700."The rise ...