One of the market’s hottest trades is everything AI can’t replace

As investors worry about all of the companies that AI will wipe out, they are rotating into the ones that AI will have a harder time disrupting. And the HALO trade, as it is called, is working.

HALO, which stands for “heavy assets, low obsolescence,” was coined by Josh Brown, co-founder and CEO of Ritholtz Wealth Management, in February, premised on the idea that an era of rapid AI disruption requires a search by investors for companies that are immune to it. In Brown’s view, it is one of the most important investment trends of the year.

Goldman Sachs and Morgan Stanley have both incorporated HALO into their investment research in 2026 as HALO stocks are doing well across the board. Some of the stocks cited by Brown are examples: FedEx and ExxonMobil are both up close to 30% since the beginning of the year, while Coca-Cola is up close to 17%.

HALO companies share two traits, according to Dave Mazza, CEO of Roundhill Investments, whose firm launched an ET based on the HALO theme last week. These stocks require meaningful hard physical assets in order to generate revenue, and they are durable. While AI may change how work gets done at low obsolescence companies, it does not eliminate the need for work at them, according an article he wrote on the topic. For example, electricity has to flow and goods have to get produced.

The Roundhill Halo ETF (LOHA) launched on Thursday. The fund tracks an index that screens the largest listed U.S. companies for businesses whose value is focused in physical assets and infrastructure AI can not replace, from sectors including industrials to transportation and mining.

“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,” said Brown on CNBC’s “Halftime Report” on Thursday to discuss the new ETF.

He joined Roundhill on a limited advisory basis after learning the firm was building the product. “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?” Brown said. He added that he has known the firm’s founders for many years.

Some of the top holdings in the LOHA ETF include Cummins, AutoZone, TFI International, CSX, JB Hunt, and Lennox. “Some of them are 100-years-old,” Brown said, adding that represents a notable flip side to the increasingly visible part of the market where names like Adobe, ServiceNow, and Salesforce have drifted to 52-week lows while investors reassess software companies’ exposure to AI disruption.

Roundhill recently had a huge hit with the launch of its Memory ETF (DRAM) on April 2, which according to VettaFi, hit $9.8 billion in assets in 43 days, the fastest-ever for an ETF. The fund is up 85% since its launch, but Mazza pushed back against the idea that the launch of an ETF was in some way the sign of a top in a thematic trade. “I think it’s a little bit easy just to say that because you’re launching an ETF, it means a trade’s over,” Mazza said on “Halftime Report.”

“In fact, I think it’s actually unlocking the potential for investors to access stocks that they haven’t had before,” he said.

Brown said Roundhill’s new ETF based on the HALO theme isn’t a bet against AI, but a way to stay invested in a world that is being changed by it. “Let’s not be invested in the most disruptible companies. Let’s look for the companies that are AI resistant,” he said.

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