The U.S. exchange traded fund industry is celebrating its 25-year anniversary with a bang.Forty new funds launched in January, while assets grew by $219 billion to a record $3.64 trillion, according to research group ETFGI.January's strong start follows a record year in 2017.Total U.S. assets, which include funds and notes, grew by 34% to $3.42 trillion last year.The industry saw net inflows of $468 billion and the launch of 275 new funds.Ernst & Young estimates that global ETF assets could reach $7.6 trillion by 2020. The U.S. market is dominated by three major players: BlackRock, Vanguard and State Street. ETFs overtook hedge funds in total assets in 2015, but the mutual fund industry remains the clear leader, with $16.3 trillion in funds under management.Investors have been flocking to ETFs because of their low-cost, tax-friendly structure and wide variety of investment options.