NAVswap Applications

Fund Flow Management
Allows managers to keep cash on hand for shareholder redemptions, and invest subscriptions opportunistically, without cash drag.
Cash Management Efficiencies for Sub-Advised Funds
Gives advisors the ability to consolidate fund liquidity and realize a return on it equal to the return on the fund’s NAV, allowing sub-advisors to focus on their mandate and hold less cash.
Rebalancing Events
Reduces urgency in executing large rebalance events. Funds can minimize market impact while remaining fully invested.

How It Works

NAVswap is an ISDA governed total return swap in which the mutual fund receives a return that matches the daily change of the fund’s Net Asset Value.

In return, the mutual fund pays a financing rate plus a spread.

The NAV and financing rate are reset daily.
The notional amount is fund-determined and it can reset daily based on cash holdings as reported by fund accountant.
There is no disclosure of fund’s portfolio holdings.
There is no collateral posted between fund and ReFlow. Tight intra-month triggers minimize counterparty risk.
The swap is marked to market daily with monthly settlement.

NAVswap Advantages

ReFlow has provided U.S. mutual funds with greater than $4 billion in notional exposure through NAVswap.

Simple

Cash equitization in one product.

Customized

No basis risk is introduced as compared to using futures or ETFs.

Transparent

Performance is tied directly to fund’s own NAV performance.

Flexible

Exposure can be adjusted daily and automatically tied to portfolio cash.

Convenient

No need for additional accounts or collateral posting.

The NAVswap concept is simple: