Aug 6 Reuters The spike in stock market volatility may be good news for at least one group of asset managers those rolling out buffer exchangetraded funds ETFs that offer investors the chance to swap some stock market upside for downside protection.

Over the last three years, assets invested in these products have soared to 41 billion or more from less than 10 billion. They have seen inflows in recent days as well, as investors seek shelter from a rout in global stocks and other risky assets.

Average weekly net inflows into this category have jumped to 283 million since the beginning of July from an average of 160 million throughout the first six months of the year, according to Morningstar data. In the week ended Aug. 2, net inflows jumped to 360 million from 166 million in the previous week.

The SP 500 index has dropped around 5 so far this month, in a rout fueled by U.S. economic worries and the unwind of a global carry trade that has also hammered stocks from Japan to Europe.

Our inflows last week were probably five or six times what we would see in a typical week, said Graham Day, chief investment officer at Innovator ETFs, which launched the first buffer ETF six years ago.

Buffer ETFs typically use options to put a floor on how much an investor can lose while also eliminating the potential for unlimited gains. Investors or often, their financial advisors are drawn to variants of these products as a way to resist the temptation to abandon stocks when markets…