May 19, 2026
The HALO Trade Nobody’s Talking About at Dinner
A quiet rotation into ‘heavy assets, low obsolescence’ is already running – and the numbers back it up.
First a note from our friends at i2i
“Top Gun” Energy Is Entering the Space Economy
In Top Gun, Maverick’s need for speed wasn’t about thrills – it was about survival.
That same dynamic is emerging in the space economy.
As satellites and hypersonic systems move from research into real-world use, speed is starting to determine who stays relevant.
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The next advantage isn’t just bigger rockets. It’s faster access and faster validation.
A small, operational aerospace company is positioning right at that pressure point – where speed, testing, and access come together.
FEATURED
The HALO Trade Nobody’s Talking About at Dinner
While everyone’s arguing about which AI stock wins the chip war, a completely different theme has been compounding quietly since February – and it just got its own ETF last week.
It’s called HALO. And if you haven’t heard of it yet, that’s sort of the point.
HALO stands for Heavy Assets, Low Obsolescence. The concept was coined by Josh Brown, CEO of Ritholtz Wealth Management, in early 2026. The premise is straightforward: in an era of rapid AI disruption, the most interesting move might not be betting on who wins AI – it might be betting on the companies AI simply cannot touch.
Goldman Sachs and Morgan Stanley have both incorporated HALO-style framing into their investment research this year. That’s not a retail trend. That’s institutional money trying to articulate something portfolio managers already felt but hadn’t yet named.
What’s Actually Working
The numbers are hard to argue with. Caterpillar is up roughly 50% year to date. Deere is up about 20%. FedEx is up approximately 22%. ExxonMobil is up close to 28-30%. Coca-Cola is up roughly 15-16%. Meanwhile, the S&P 500 is up around 6%, and the Roundhill Magnificent Seven ETF is down on the year.
The energy, materials, and consumer staples sectors are some of the better-performing corners of the market in 2026. Technology – specifically capital-light software – has been a laggard.
What HALO companies share: they require meaningful hard physical assets to generate revenue, and they are durable. Electricity still has to flow. Goods still have to get produced and shipped. An algorithm – no matter how intelligent – does not replace a bulldozer, a refinery, or a long-haul freight network.
The ETF That Just Showed Up
Roundhill Investments – the same firm whose Memory ETF (DRAM) hit $9.8 billion in assets in 43 days, the fastest pace ever for an ETF according to TMX VettaFi – launched the Roundhill HALO ETF (LOHA) on May 14, 2026. Josh Brown, who coined the HALO term, joined Roundhill on a limited advisory basis after learning the firm was building the product.
LOHA tracks the Akros US Heavy Assets Low Obsolescence Index, holds 100 equally weighted companies, rebalances quarterly, and charges a 0.35% expense ratio. Top holdings include Cummins (CMI), AutoZone (AZO), TFI International (TFII), CSX, and JB Hunt. Goldman Sachs estimates roughly 45% of the S&P 500 is now tied to AI-related companies – LOHA is built for the other side of that equation.
Here’s what’s worth understanding. HALO isn’t anti-AI. It’s not a doomer position. The framework is simply recognizing that a world being reshaped by AI will still need pipelines, freight networks, mining operations, and physical infrastructure at scale. Some HALO names – Caterpillar is a good example – are actively using AI to improve margins and operational efficiency. The difference is they can’t be replaced by it. That’s a meaningful distinction.
The Risk Worth Knowing
Not every HALO name is working cleanly. McDonald’s, which fits the profile on paper – physical real estate, franchise infrastructure, brand moat – is down on the year. Consumer sentiment is under pressure and elevated food costs are hitting the exact demographic McDonald’s serves most. Heavy assets don’t protect you from a consumer spending slowdown. That’s the nuance the ETF marketing won’t put on the fact sheet.
Caterpillar also flagged roughly $2.6 billion in expected tariff costs for 2026, which is why even a strong Q1 beat – the company reported $17.4 billion in revenue and $5.54 adjusted EPS against a $4.65 consensus – didn’t fully settle the valuation debate. The stock is trading at an NTM P/E around 34x, well above its historical average of roughly 25x. Strong demand is priced in. What happens to that premium if tariff friction intensifies is a real question.
The broader move out of capital-light software risk and into physical asset durability is not something that reverses in a week. It’s a fundamental shift in where earnings growth is expected to come from – and based on where institutional money is flowing right now, it looks like it still has room to run.
