U.S. investors have warmed to exchange-traded funds in a big way over the past five years and their growing familiarity with the expanding variety of products available helped pushed the total value of U.S. ETF assets over the $1 trillion mark last month, according to a report from State Street Global Advisors.

In February alone, investment into these funds grew 3.5%, or $34.9 billion, and -- perhaps more telling -- investors added more than $6 billion to ETFs than they withdrew, a clear sign that many financial advisors and broker-dealers recognize that the growing variety of ETFs and the tax efficiency of these relatively new investment vehicles make them a viable alternative to mutual funds, annuities and other traditional investment products.

"The $1 trillion-dollar benchmark is certainly significant and notable," said Tom Anderson, global head of ETF strategy and research at State Street Global Advisors. "Investors, financial advisors and, especially, broker-dealers are becoming much more comfortable with ETFs and we see no reason to expect this recent growth rate to slow."

Over the past five years, ETF assets have grown at a compounded annual growth rate of 27% a year. If ETF investment maintains that pace, total ETF assets should hurdle the $2 trillion mark sometime in 2013.

Today there are roughly 1,000 ETFs from which advisors and investors can choose, ranging from standard S&P 500-tracking funds to more eccentric funds for gold, emerging international markets, currency and those heavy in industry-specific equities.

This variety of ETFs will only expand -- State Street has introduced five new ones itself this year -- as investors seek out new investment opportunities and providers construct portfolios laden with different types of ETFs to cover every conceivable investment strategy.

Anderson said the volatility and sharp declines in markets in the U.S. and around the world in recent years has resulted in investors opting more and more for passive investment options like ETFs to reduce fees paid to brokers and advisors.

"Traditional every day investors now can get access to ETFs at their online brokerage firm or through a financial advisor," he said. "When it's a rough market, you see this move from active management to passive management and this trend has certainly supported ETFs."

State Street, BlackRock and Vanguard remained the top three ETF managers in the U.S. through February, accounting for almost 83% of all ETFs listed on the U.S. market.

Anderson said it was especially encouraging to see that almost $5 billion in ETF assets flowed back into large-cap, U.S.-based ETFs and, after investing more than $27 billion last year into emerging international market ETFs, investors are increasingly turning to bond-based ETFs and developed international funds to round out their portfolios.

"Sometimes people will complain that there are too many ETFs out there," he said. "But there's actually much fewer of them than mutual funds. But this wide variety of ETFs is giving investors a lot of choice to tailor and build out their investments."