The investment landscape is undergoing a profound transformation driven by the accelerating pace of artificial intelligence, prompting a significant reallocation of capital towards companies deemed resilient to AI’s disruptive forces. In a notable development reflecting this trend, Roundhill Investments officially launched the Roundhill Halo ETF (LOHA) last week, offering investors a novel avenue to access what has been dubbed the "HALO" trade—an acronym for "heavy assets, low obsolescence." This strategic move comes as the market grapples with the dual impact of AI: the immense potential it unlocks for innovation and efficiency, alongside the very real threat of obsolescence it poses to traditional business models and even established technology firms.
The HALO concept, first articulated by Josh Brown, co-founder and CEO of Ritholtz Wealth Management, emerged in February of the current year (2026) as a prescient response to the growing anxieties among investors. Brown’s thesis, shared across platforms like CNBC and his popular blog, centered on the idea that in an era of unprecedented technological upheaval, a prudent investment strategy would involve identifying companies whose core operations are inherently insulated from digital displacement. These are enterprises characterized by substantial physical assets and a fundamental, enduring need for their services, making them difficult, if not impossible, for AI to completely replicate or eliminate.
The Genesis of the HALO Investment Thesis
The year 2026 has been marked by a palpable shift in investor sentiment, largely influenced by the rapid advancements and mainstream adoption of generative AI. While the early phases of the AI boom primarily rewarded software and semiconductor companies facilitating this revolution, a more nuanced understanding of AI’s broader economic impact has begun to take hold. Investors, initially euphoric about the potential for AI-driven productivity gains, have increasingly turned their attention to the flip side: which industries and companies stand to be fundamentally disrupted, and which possess an inherent immunity?
It was against this backdrop of both excitement and apprehension that Josh Brown introduced the HALO framework. His insights, widely disseminated through financial media, quickly resonated with a market searching for clarity amidst the AI-induced fog. Brown posited that while AI could automate processes, analyze data, and even generate creative content, it could not easily replace the physical infrastructure, logistical networks, or fundamental material production that underpins the global economy. Companies that own and operate "heavy assets" – think factories, transportation fleets, energy grids, and physical retail chains – possess a tangible moat against purely digital disruption. Furthermore, their services often fall into categories of "low obsolescence," meaning the demand for them is stable and unlikely to diminish significantly, regardless of how advanced AI becomes. Goods still need to be transported, electricity must be generated and distributed, and essential consumer products will always be required.
Rapid Market Validation and Performance
The intellectual rigor and intuitive appeal of the HALO thesis quickly garnered attention from some of the financial industry’s most influential players. By March 2026, leading investment banks, including Goldman Sachs and Morgan Stanley, had integrated the HALO concept into their proprietary investment research, signaling a broad recognition of its relevance. This institutional endorsement provided significant validation for Brown’s framework, transforming it from a niche idea into a widely discussed and adopted investment theme.
The performance of stocks aligning with the HALO criteria has further cemented its credibility. Since the beginning of the year, several companies frequently cited by Brown as prime examples of HALO investments have demonstrated robust growth. FedEx, a global logistics giant reliant on an extensive physical network of aircraft, vehicles, and sorting facilities, has seen its stock climb close to 30%. Similarly, ExxonMobil, a behemoth in the energy sector with vast oil and gas exploration, production, and refining assets, has also surged by nearly 30%. Even consumer staples giant Coca-Cola, with its global bottling plants, distribution networks, and enduring brand power, has recorded gains approaching 17%. These performances stand in stark contrast to the struggles observed in other parts of the market.
The Counterpoint: Software Under Scrutiny
The HALO trade’s success is particularly illuminating when viewed against the backdrop of challenges faced by certain segments of the technology sector, particularly software companies. While these firms were once seen as impervious growth engines, the advent of sophisticated AI has introduced new vulnerabilities. Companies like Adobe, ServiceNow, and Salesforce, which offer various software-as-a-service (SaaS) solutions, have seen their stock prices drift to 52-week lows. This decline reflects investor reassessment of their long-term growth trajectories, with concerns that AI could either automate away the need for some of their specialized functions, empower customers to build their own solutions more cheaply, or intensify competition by lowering barriers to entry for new software developers. The narrative is clear: while AI is a boon for some, it poses an existential threat to others, fundamentally reshaping the competitive landscape.
Roundhill’s Strategic ETF Launch: LOHA
Capitalizing on the burgeoning interest in AI-resistant investing, Roundhill Investments, a firm known for its innovative thematic ETFs, introduced the Roundhill Halo ETF (LOHA) on a recent Thursday. Dave Mazza, CEO of Roundhill Investments, elaborated on the meticulous criteria underpinning the ETF’s construction. According to Mazza, HALO companies are identified by two primary characteristics: a significant reliance on hard physical assets to generate revenue and an inherent durability that ensures their services remain essential.
Mazza explained in an article discussing the fund that while AI will undoubtedly transform workflows and operational efficiencies even within low obsolescence companies, it will not eradicate the fundamental necessity for the work they perform. The laws of physics and the basic needs of civilization dictate that electricity must continue to flow, goods must be produced and transported, and physical infrastructure must be built and maintained. The LOHA ETF is designed to track an index that rigorously screens the largest publicly listed U.S. companies, identifying businesses whose value is intrinsically tied to physical assets and infrastructure that AI cannot realistically replace. This encompasses a broad spectrum of sectors, including industrials, transportation, mining, utilities, and certain consumer staple categories.
A Collaborative Effort: Brown and Roundhill
The launch of the LOHA ETF was not merely an opportunistic move by Roundhill; it involved a direct collaboration with Josh Brown, the progenitor of the HALO concept. Brown joined Roundhill in a limited advisory capacity after learning of the firm’s intention to develop a product based on his thesis. Reflecting on the initial discussions, Brown humorously recounted on CNBC’s "Halftime Report" his direct approach: "I spoke to these guys shortly after they filed. And I said we could do a deal together, or maybe a lawsuit. I don’t know, what do you want to do?" This lighthearted remark underscores the proprietary nature of the HALO concept and the strategic importance of aligning with its creator. Brown’s long-standing relationship with Roundhill’s founders facilitated this unique partnership, ensuring the ETF accurately reflects the core principles of his investment philosophy.
Brown articulated his conviction regarding the future of HALO companies: "There’s nothing you could type into an LLM, that’s going to change what they do, at least not in a negative way. They’re probably all beneficiaries of AI." This perspective highlights a crucial distinction: HALO investing is not a bet against AI, but rather a strategy for thriving in an AI-permeated world by focusing on businesses that are not only immune to disruption but could potentially leverage AI to enhance their existing, indispensable operations.
The LOHA ETF’s top holdings exemplify this philosophy, featuring companies deeply embedded in the physical economy and often boasting long histories of resilience. These include Cummins (CMI), a global power solutions leader; AutoZone (AZO), a prominent retailer of automotive aftermarket parts; TFI International (TFII), a diversified North American transportation and logistics company; CSX (CSX), a major freight railroad operator; JB Hunt (JBHT), a leading surface transportation and logistics provider; and Lennox (LII), a manufacturer of climate control products. Brown emphasized the longevity of many of these firms, noting, "Some of them are 100-years-old," further reinforcing the theme of enduring value in a rapidly evolving market.
The Broader Context of Thematic ETFs and Market Trends
Roundhill Investments is no stranger to launching highly successful thematic ETFs. The firm recently achieved a spectacular hit with the launch of its Memory ETF (DRAM) on April 2, 2026. This fund, designed to capture the growth in the memory chip sector, which is a crucial "picks and shovels" component of the AI build-up, amassed an astonishing $9.8 billion in assets under management (AUM) in just 43 days. According to VettaFi, this made DRAM the fastest-growing ETF ever, marking an unprecedented surge in investor interest. The fund has since delivered an impressive 85% return since its inception.
The rapid success of DRAM, and now the launch of LOHA, places Roundhill at the forefront of thematic investing. However, the launch of a new thematic ETF sometimes triggers discussions among market participants about whether it signals a "top" in a particular trade, suggesting that the opportunity might be nearing its peak. Dave Mazza firmly pushed back against this notion during his "Halftime Report" appearance: "I think it’s a little bit easy just to say that because you’re launching an ETF, it means a trade’s over." He argued that, on the contrary, such launches are "actually unlocking the potential for investors to access stocks that they haven’t had before," democratizing access to specialized investment themes that might otherwise be difficult for individual investors to research and assemble.
The advent of the HALO ETF also highlights a broader shift in investment psychology. For years, the market celebrated intangible assets, software, and "asset-light" business models as the epitome of modern enterprise. However, the AI revolution is recalibrating this perception. While digital innovation remains paramount, the foundational importance of physical infrastructure and essential services is being re-emphasized. HALO investing represents a pragmatic adaptation to a world where technological progress is a given, but fundamental human needs and the physical means to meet them remain constant.
Implications and Future Outlook
The launch of the Roundhill Halo ETF signifies more than just a new product; it reflects a maturing understanding of AI’s long-term economic consequences. Investors are no longer simply chasing the immediate beneficiaries of AI development but are also strategically positioning themselves against its disruptive potential. The HALO theme offers a compelling narrative for diversification and resilience in an increasingly volatile technological landscape.
For investors, the LOHA ETF provides a curated portfolio of companies that offer a distinct blend of stability and potential growth. These companies, often characterized by strong cash flows, established market positions, and the ability to pass on costs, can serve as a defensive anchor in portfolios heavily exposed to high-growth, high-disruption technology sectors. While HALO stocks may not offer the explosive, exponential returns sometimes seen in nascent tech, they aim to deliver consistent performance and capital preservation through economic cycles, including periods of significant technological change.
However, it is crucial for investors to recognize that no investment is entirely immune to all forms of risk. While HALO companies may be resistant to AI-driven obsolescence, they remain subject to traditional economic factors such as inflation, interest rate fluctuations, commodity price volatility, and regulatory changes. Furthermore, even "heavy asset" industries will likely adopt AI to optimize operations, supply chains, and customer interactions, meaning their competitive advantage will also hinge on their ability to integrate these technologies effectively.
Ultimately, Josh Brown’s vision for HALO investing is not one of technological Luddism but rather strategic pragmatism. As he summarized, "Let’s not be invested in the most disruptible companies. Let’s look for the companies that are AI resistant." This philosophy is now made accessible to a broader investor base through the Roundhill Halo ETF, marking a significant milestone in how the market is adapting to and preparing for the profound and multifaceted impacts of the artificial intelligence era. This trend, focusing on enduring value and foundational economic pillars, is poised to be a dominant investment theme for 2026 and well into the future.
