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 participating fund receives a return that matches the daily change of the fund’s Net Asset Value.

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

The NAV and financing rate are reset daily.
The notional amount is fund-determined and can be reset daily based on changes in cash holdings.
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 participating funds with more than $5 billion of cash equitization through NAVswaps.

Simple

Single, daily-resetting total return swap.

Customized

No basis risk, unlike using futures or ETFs to equitize cash.

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: