Demand 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 of ETFs has been great for investors, but convenience can also breed complacency," said certified financial planner Jon Ulin, managing principal of Ulin & Co. Wealth Management in Boca Raton, Florida.

"The biggest mistakes" aren't about the products, but how investors use them, he said.

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