Investors Are Looking to Put a HALO Around Their Portfolio

One of the most useful frameworks to emerge in this year’s leg of the AI boom is Ritholtz Wealth CEO Josh Brown’s HALO trade, short for Heavy Assets, Low Obsolescence. The intuition is simple: As software gets cheaper to build and easier to replicate, investors increasingly gravitate toward businesses rooted in the physical economy. These are companies whose value can’t be “shipped as code” and whose relevance is less dependent on the next model release.

HALO isn’t a bet against technology. It’s a reminder that much of ecomomic value creation still happens in the world of atoms: Power generation, manufacturing, critical services, regulated infrastructure, and the networks that keep modern life functioning, often reinforced by regulatory or structural moats. These businesses can be cyclical and capital intensive, but they’re also hard to replace, slow to obsolesce, and often essential.

What HALO Screens For

In practice, HALO is less about a specific sector rotation and more about defining durability—built on the real-world constraints that shape demand, competition, and staying power. Many HALO candidates share characteristics like:

Not all heavy-asset businesses qualify. Some are brutally competitive and commoditized. The stronger expression of HALO tends to emerge where hard assets are paired with scarcity or structural moats—so the asset base becomes an advantage, not just a cost.

Why HALO Can’t Be Indexed Cleanly

This is where HALO stops fitting into a neat financial category and starts to look more like an active judgment call. “Low obsolescence” isn’t a standard factor with a single metric. Even within the same industry, one company may have pricing power, contractual stickiness, and regulatory insulation, while another is a price taker in a crowded field.

That is why HALO is hard to package in a static, rules-based index. A simplistic screen can pull in businesses that are physical but unprotected. It can also exclude mission-critical enablers simply because they don’t fit a standard industry label. The craft is identifying where the real-world bottlenecks are and who gets paid as throughput grows.

HALO in Practice: Tollkeepers

HALO is the umbrella. Tollkeepers are one of the clearest ways to put the idea to work.

Tollkeepers sit on chokepoints: Indispensable infrastructure, components, systems, or services that others must use to operate. They often combine tangible constraints with sticky economics and moats such as switching costs, embedded positions, and regulatory barriers to entry. For more on this, read our recent article on finding the tollkeepers.

Why This Matters to Investors

HALO reframes a common investor anxiety. It’s not growth versus value, but disruptable versus durable. In periods of rapid technological change, markets can re-rate businesses based on perceived obsolescence risk. HALO doesn’t eliminate risk. These companies still face cycles, costs, and execution challenges. But it shifts the focus toward a different kind of resilience.

Waiting for a HALO ETF? You Don’t Have To

As the HALO framework gains attention, it’s natural to ask whether funds will be built explicitly around it. The more important point is that the concept is already showing up in portfolios today.

The Tema Durable Quality ETF (TOLL) offers a clear expression of HALO, investing in companies with tangible moats, high barriers to entry, and strong earnings visibility, many of which hold monopoly positions within their industries.

For more of our research and recent insights on durable quality and more, view and subscribe to our insights.