Halo trade reshapes Wall Street portfolios. Is China set to lead the heavy-asset era?

Halo, short for heavy assets, low obsolescence, has emerged as a major Wall Street theme in recent weeks. Investors are rotating from tech stocks to companies with real physical assets amid fears over artificial intelligence, geopolitical tensions and rising prices of resources and infrastructure.

Here’s what you need to know about how the strategy gained popularity and why it matters to China.

What is Halo?

The term was coined last month by Josh Brown, CEO of Ritholtz Wealth Management, to describe firms that own large, high-barrier physical assets and have stable business models, making them less vulnerable to disruption by AI or other new technologies.

Brown said the “Halo trade” was a more accurate framework for finding winners in today’s market. The investment strategy was later amplified in a February report by Goldman Sachs.

The investment bank defines Halo companies by two key traits.

South China Morning Post