Soman Advisors LLC

Registered Investment Advisor

(California CRD # 334599)

Portfolio and Cash Overlay

solutions for diverse objectives

Engineered Portfolio Overlays

Portfolio Goals

  • Portfolio Preservation

  • No liquidation

  • Downside Protection

  • Hedged Growth

  • Hedged Income

  • Virtual Diversification

  • Expanded Market/Sector participation

  • Cash at ~SOFR rates

  • Tax Efficiency and Estate Transfer

Soman Advisors designs sophisticated Portfolio Overlay architectures on existing portfolios or cash-origin investment structures using disciplined Index, ETF, and stock option strategies. Cash in the portfolio is treated as a Position for Overlay

The Overlays simultaneously enable Portfolio downside protection, Hedged Growth, Hedged Income, Expanded Market/Sector participation, liquidity flexibility, and capital efficiency while preserving long-term ownership continuity of existing holdings. Overlay Strategies do not require liquidation of existing positions or use of conventional Broker Margin

Overlay architectures also address Concentrated Portfolio positions. Concentrated positions can be Virtually Diversified allowing expanded Market/Sector exposure

The architectures also emphasizes Tax-Aware portfolio continuity across the investment lifecycle, including long-term estate and wealth-transfer considerations as well as Capital Gains Offsets

Portfolio Stage, Goals and Overlay Suitability

Current Portfolio Composition

Overlay Goals and Objectives

Suitable For

Mature Portfolio

  • Appreciated positions

  • Mix of various sector exposure

  • Fixed income component

  • Reasonably stable Portfolio

  • Low cash-origin component

Highly Concentrated Positions

  • Protection, Preservation of positions and gains

  • Bounded risk

  • Unconstrained performance of existing positions in the Portfolio

  • No liquidation of any positions

  • Hedged Income as a kicker

  • Hedged Growth as a kicker

  • Tax Efficiency through life cycle

  • Stepped-up basis for Estate Transfer.

  • Expanded Hedged exposure to other sectors

    for Growth kicker. Virtual Diversification

  • Tax Efficiency, One-time Capital Gains offsets

  • Cash-borrow at low cost (~SOFR)

  • Families in Mid Career to Retirement

  • HNW / UHNW families

  • Family Offices

Founders, Executives

IPO recepients

Current Portfolio Composition

Overlay Goals and Objectives

Suitable for

Cash-origin Portfolio

  • Portfolio Build up stage starting from mostly Cash-Origin

  • Dollar-cost-averaging opportunities

  • Hedged growth. Bounded risk

  • Some aggressive growth sector exposure

  • Yield compounding. Longer time horizon

  • Better than Treasuries return with bounded risk for cash management

  • Early/Mid career families

Company Treasury management of working capital or idle cash

Portfolio Overlays Strategies and Toolkit

Portfolio Protection Overlay

(“HEDG” Strategy)

Yield Generation Overlay

(“DISC” Strategy)

  • Portfolio loss has a Floor

  • Portfolio gain may be capped

  • Floor/Cap is selectable

  • Active monitoring

  • No liquidation of Portfolio

  • No broker margin

  • Bounded and known risk

  • Harvests difference between dividend yield of blue-chip companies and current interest rates

  • Stacked Performance over Portfolio Performance

Market/Sector Exposure Overlay

(“MAREX” Strategy)

Low-Cost Cash Borrow

(“POCASH” Strategy)

  • Virtual Diversification

  • No liquidation of Portfolio

  • Stacked Performance

  • No broker margin

  • Bounded and known risk

  • Expanded Exposure to Index/Sector/Other Stocks

  • Cash generated in the account at ~SOFR rate

  • No payment till term end

  • Cost of borrowing treated as Capital Loss

  • Base Portfolio protected by HEDG strategy

  • No liquidation of Portfolio

  • No Margin Borrowing

Illustration 1

Client has following Portfolio with signification unrealized gains and no cash position

Client wants simultaneous Preservation, Income, Asset Diversification and access to Low-Cost cash

Client Portfolio

Client Portfolio Goals and Objectives

  • Preservation of unrealized gains

  • Unconstrained Portfolio performance

  • Income without any liquidation

  • Additional market or sector exposure without any liquidation

  • Cash-borrow at low cost (~SOFR rate) without any liquidation

  • No Broker Margin

  • Transfer Portfolio to heirs in Tax Efficient way

Simultaneous Independent Overlay of our strategies enable the client to address above goals

For Hedged Income

Use DISC Overlay

Base Portfolio

For Hedged market/sector exposure

Use MAREX Overlay

Base Portfolio

For Preservation and Protection

Use HEDG Overlay

Base Portfolio

For cash-borrow at ~SOFR rate

Use POCASH Overlay

Base Portfolio

Each Portfolio Overlay can be used simultaneously

Performance of each Overlay is independent of other Overlays

Performance of each Overlay is Stacked (Additive) over the performance

of base Portfolio

Hence Goals in this Illustration 1 are achieved simultaneously

Overlays do not use any conventional Broker Margin.

All portfolio positions are preserved. No liquidation

Illustration 2

Client has cash-origin Portfolio

Client wants Hedged Growth and/or Hedged Income

We treat "Cash-origin" as a Portfolio Position. Our Overlay paradigm works equally well on "Cash-origin" as a Portfolio

For Hedged Income

Use DISC Overlay

Cash-Origin $$

For Hedged market/sector exposure

Use MAREX Overlay

Cash-Origin $$

MAREX Overlay on cash enables Hedged Market/Sector exposure

DISC Overlay on cash enables Hedged Income

Simultaneous use of DISC and MAREX enable Growth and/or Income goals

This approach has the potential to generate Market Alpha with bounded risk

How We Help

Clients' Voices

Testimonials from our satisfied clients.

John Clark

"Soman Advisory made filing my taxes a breeze. Their attention to detail and personalized service exceeded my expectations."

Elizabeth Johnson

"I highly recommend Soman Advisory for their professionalism and expertise. They helped me navigate complex tax issues with ease."

Michael Wim

"Soman Advisory provided me with valuable tax advice that saved me money. Their team is knowledgeable and dedicated to client satisfaction."

Disclaimer and important information

  • The strategies listed are for Illustration and Education purposes only

  • There is no explicit or implicit guarantee of future performance of these strategies

  • All investments involve risk of loss of Principal

  • These strategies rely on Options instruments which are derivative products and have their own risks

  • Contact Soman Advisors for further discussion of these strategies

Soman Advisors, LLC is a California-registered investment adviser. Information is for educational purposes only and does not constitute investment advice.

All investments involve risk, including loss of principal. Options and derivatives strategies involve additional risks and may not be suitable for all investors.

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