NAVswap

The NAVswap concept is simple: ReFlow pays mutual funds a return on their cash that matches the return on their Net Asset Value (NAV).

NAVswap enables funds to stick to their investment targets by providing a built in liquidity pool to meet outflows and put inflows to work, while not giving up performance.

  • NAVswap reduces distractions and time spent managing shareholder flow that may ultimately hurt performance.
  • Gives portfolio managers time to find the right opportunities and execute at the time of their choosing.
  • The Portfolio cash earns a return equivalent to the fund’s NAV performance, eliminating ‘cash drag.'

NAVswap Applications

Cash Equitization
Mutual funds can stay true to their asset allocation targets while not giving up performance associated with ‘cash drag’ in the portfolio.

Fund Flow Management
Enables managers to gain control over shareholder flow such as meeting redemptions without having to trade the underlying portfolio.

Cash Management Sleeve For Sub-advised Funds
NAVswap can give Advisors increased control over Fund cash positions, allowing for better control of the Fund level cash position and more efficient management of Sub-advisor allocations.

Rebalancing Events
NAVswap can be a great tool to prepare for and execute large rebalancing events while allowing managers to maintain target cash exposure.

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 one-month LIBOR plus a spread. The NAV, one-month LIBOR, and notional amount are reset daily.

  • Proactively build a customized liquidity buffer for funds.
  • Eliminate ‘cash drag’ and decrease tracking error without incurring basis risk.
  • Reduce frictional transaction costs and market impact of forced trading.
  • No collateral posted between fund and ReFlow.

NAVswap Advantages


  • Flexible: Daily liquidity.
  • Efficient: Reduces portfolio turnover and trading costs.
  • Transparent: Performance is tied directly to fund’s own NAV performance.
  • Low touch: NAVswap exposure can be tied to portfolio cash and adjusts automatically.
  • Customized: No basis risk or “slippage” is introduced when using NAVswap as compared to using futures or ETFs.
  • Secure: No collateral posting and tight intra-month triggers minimize counter-party risk.

get in touch

The Presidio of San Francisco
220 Halleck Street, Suite 230 San Francisco, California 94129
Email: Info@reflow.com
Phone: (866) 473-3569

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Investors

Thanks for your interest in ReFlow Fund, which provides mutual funds with short-term liquidity and tax solutions. Founded by Mr. Gordon Getty in 2002, ReFlow Fund is designed to track the S&P 500 Index leveraging its patented operational structure, and outperform this Index with the fee income it generates from ReFlow Fund's liquidity and tax services. The investment manager of ReFlow Fund, ReFlow Services, LLC, manages all day-to-day operations.


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