As concerns mount about the potential impact of artificial intelligence (AI) on various industries, investors are increasingly pivoting towards companies perceived as resistant to disruption. This trend, dubbed the HALO trade—an acronym for “heavy assets, low obsolescence”—is gaining momentum in the investment community. Coined by Josh Brown, co-founder and CEO of Ritholtz Wealth Management, the HALO strategy encourages investors to seek out businesses that are less likely to be affected by the rapid advancements in AI technology.
According to Brown, the HALO trend is emerging as one of the most significant investment themes this year. Major financial institutions such as Goldman Sachs and Morgan Stanley have taken note, incorporating HALO stocks into their research forecasts for 2026. Notably, companies within this category have been performing well; for instance, FedEx and ExxonMobil have seen increases of nearly 30% since the year began, while Coca-Cola’s stock has risen by approximately 17%.
The characteristics that define HALO companies are twofold, as outlined by Dave Mazza, CEO of Roundhill Investments. These firms rely on substantial physical assets for revenue generation and demonstrate durability against market changes. In his analysis, Mazza asserts that while AI may alter the methods of operation for such companies, it won’t eliminate the underlying need for their services. Essential functions like electricity generation and goods production remain paramount; thus, these businesses continue to thrive despite technological advancements.
Adding to the momentum, Roundhill recently launched the Roundhill Halo ETF (LOHA), which debuted last Thursday. This exchange-traded fund aims to encompass the largest U.S. companies whose valuation is anchored in physical assets and infrastructure that AI cannot easily replace. The fund spans various sectors, including industrials, transportation, and mining. During his appearance on CNBC’s “Halftime Report,” Brown emphasized the uniqueness of HALO stocks, stating, “There’s nothing you could type into an LLM that’s going to change what they do, at least not in a negative way.”
Brown’s relationship with Roundhill extends beyond the launch of the ETF, as he joined the firm in an advisory capacity after recognizing the opportunity to innovate within this investment space. Some of the prominent holdings in the LOHA ETF include Cummins, AutoZone, TFI International, CSX, JB Hunt, and Lennox—many of which boast centuries of operational history.
Interestingly, while some tech giants and software firms like Adobe and Salesforce are facing significant declines in their stock prices as investors reconsider their vulnerabilities to AI disruption, the HALO strategy presents a contrasting opportunity. Roundhill’s recent success with its Memory ETF (DRAM), which amassed nearly $9.8 billion in assets within just 43 days, serves as a benchmark for potential growth in thematic investment strategies.
Mazza, however, notes that the launch of a new ETF isn’t necessarily an indicator of overvaluation in a thematic trade. He affirmed on “Halftime Report” that launching the HALO ETF unlocks potential access for investors to stocks previously unavailable, promoting a wider range of investment opportunities.
Ultimately, Brown views the HALO ETF not as a dismissal of AI but rather as a strategic approach to invest in a landscape increasingly shaped by technological advancements. He encourages investors to identify and prioritize companies that exhibit qualities of AI resistance, thereby crafting a resilient investment strategy for the future.
