A new report from Global X has shed light on the shifting priorities and criteria investors are seeking in equities.
Billy Leung, Senior Investment Strategist, said for much of the past decade, equity markets rewarded companies that required relatively little physical capital.
This included software platforms and digital businesses.
These companies demonstrated how scale could be achieved without extensive infrastructure, allowing revenue growth to accelerate faster than investment.
Asset-light models became associated with high returns on capital, rapid scalability and structural market leadership.
However, Mr Leung contends there is a different set of economic forces is now drawing attention to industries built on physical capacity.
Rising real interest rates increase the cost of capital and change how markets value long-duration growth. At the same time, geopolitical fragmentation and supply chain restructuring are forcing governments and corporations to reconsider how critical systems are built and maintained. Energy networks must expand, industrial production is being reshored across multiple regions, and infrastructure once taken for granted is being reassessed as strategically important.
This has brought attention to the HALO investing framework.
What is HALO investing?
The HALO acronym stands for Heavy Assets, Low Obsolescence.
According to Global X, the concept focuses on companies built around substantial physical infrastructure. It also focusses on long-lived capital assets that are difficult to replicate.
Their advantage is not based on rapid innovation cycles but on scale, engineering complexity and the time required to build the systems they operate. These assets often sit at the centre of economic activity, quietly supporting the movement of energy, goods and materials across entire economies.
However, several structural forces are now shifting the balance in favour of these equities.
Governments across major economies are investing heavily in energy security, domestic manufacturing capacity and strategic infrastructure.
Supply chains once prioritised efficiency. They are now being redesigned with resilience and redundancy in mind.
This is prevalent in sectors linked to energy systems, transportation networks and advanced industrial production.
What are examples of HALO industries?
For investors interested in how this looks in the real world, some examples include:
- Energy infrastructure (power grids, pipelines, generation) – requires huge investment and becomes foundational once built
- Transportation networks (rail, ports, freight corridors) – are long-term projects enabling regional and global trade
- Industrial manufacturing – depends on complex facilities and machinery that take years to develop and are hard to replicate.
According to Global X, viewing markets through the HALO framework highlights a different source of competitive advantage.
Instead of focusing exclusively on companies capable of scaling rapidly with minimal capital investment, the approach emphasises industries where value is embedded in infrastructure and physical capacity.
Assets such as power grids, pipelines, rail corridors and industrial facilities cannot be recreated quickly. Their value reflects decades of investment, regulatory frameworks and specialised engineering capabilities. These systems underpin the movement of energy, materials and goods that support broader economic activity.
How can investors gain exposure?
For investors looking for exposure to HALO investment opportunities, some ASX ETFs to consider include:
- Global X Ai Infrastructure ETF (ASX: AINF) – Exposure to companies involved in the physical infrastructure supporting modern computing, including data centres, power systems and network capacity.
- Global X Uranium ETF (ASX: ATOM) – Provides exposure to companies across the uranium and nuclear fuel ecosystem supporting nuclear power generation.
- Global X Green Metal Miners ETF (ASX: GMTL) – Tracks producers of metals such as copper, nickel and lithium that are essential inputs for infrastructure, energy systems and industrial capacity.
The post What is HALO investing and how do investors gain exposure to it? appeared first on The Motley Fool Australia.
Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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