2012 was a groundbreaking year for the exchange traded fund industry. Assets under management grew 27% from 2011, to $1.3 trillion. About $188 billion in new inflows were received by U.S.-listed ETFs.

“Exchange-traded fund flows reached a record $191 billion in 2012, surpassing the $169 billion flow in 2008. Unlike that year, which was dominated by strong flows into U.S. stock ETFs, 2012 saw record flows into international, fixed-income, and sector stock ETFs. Flows were pushed past the record by a strong showing of $37.7 billion in flows for the month of December,” Michael Rawson wrote for Morningstar.

“It was the best year ETFs ever had,” Dave Nadig said to NY Daily News.

The industry growth is a reflection of a rise in assets in global stocks, including the Dow’s 7.3% rise last year, as well as the funds’ performances, reports Phyllis Furman for the NY Daily News. The ETF business managed to post growth amid the Eurozone debt crisis, the uncertainty of U.S. legislation and the looming possibility of another U.S. recession. [Global ETF Assets Setting New Records]

The passive management of most broad-based ETFs is a positive trait that has kept investors interested in the business. Most ETFs are inexpensive compared to mutual funds which are actively managed. Another characteristic of ETFs is the tax efficiency. Capital gains are rarely distributed to ETF investors, unlike mutual funds. This has been a big deal as the U.S. fiscal cliff drama kept investors on their toes. [iShares ETFs: Dates to Watch After the Fiscal Cliff Deal]