Goldman Sachs analyst Guillaume Jaisson recommended on the 7th (local time) that investors should strengthen their positions in HALO (Heavy Assets, Low Obsolescence) companies—firms with substantial tangible assets and low technology obsolescence risk. According to Business Insider, Jaisson stated in a report that the next upward phase of HALO trades will be driven by corporate earnings performance. The recommendation addresses investor portfolios remaining underweight in value stocks long-term, leaving them insufficiently prepared for an environment where physical assets, infrastructure, and industrial production capacity regain strategic importance. Goldman Sachs' HALO pair trade strategy—buying asset-intensive companies while selling asset-light companies—has delivered approximately 20% returns this year, demonstrating resilience even amid financial market volatility from the Iran war.
Goldman Sachs HALO Strategy Delivers 20% Returns This Year
HALO is a term created by Josh Brown, CEO of Ritholtz Wealth Management, referring to an investment strategy targeting asset-intensive companies that hold large-scale tangible assets with low risk of value impairment from technological change. Jaisson diagnosed that investor portfolios remain underweight in value stocks long-term, insufficiently prepared for an environment where physical assets, infrastructure, and industrial production capacity regain strategic importance.
Goldman Sachs has consistently presented strategies favoring asset-intensive companies in infrastructure, manufacturing, and defense over asset-light companies such as software firms this year. The HALO pair trade strategy—buying asset-intensive companies while selling asset-light companies—has recorded approximately 20% returns this year, according to Goldman Sachs.
Asset-Intensive Companies Recover After Iran War Volatility
Jaisson stated that in the early stages of the Iran war, asset-intensive companies experienced temporary corrections due to movements to reduce investment exposure to companies with high global trade exposure. However, he noted that these stocks subsequently recorded superior performance compared to asset-light companies, surpassing pre-war levels.
The strategy maintained strong performance despite expanded financial market volatility from the Iran war, demonstrating the resilience of asset-intensive investments during geopolitical turbulence.
Corporate Earnings to Drive Future HALO Trade Performance
Jaisson forecasted a transition to a phase where corporate earnings will determine stock prices going forward. He explained that the strong performance of asset-intensive companies has significantly narrowed the valuation gap with asset-light companies, stating that future returns will be determined more significantly by whether earnings improve.
Goldman Sachs evaluated sectors related to energy security and industrial sovereignty as particularly promising. The firm maintains 'Buy' ratings on approximately half of the asset-intensive companies selected by its analysts.
Goldman Sachs Names Enel, Shell, Airbus Among Top HALO Investments
Goldman Sachs' primary HALO investment targets include Enel in the infrastructure sector, Shell and BP in the basic materials sector, Airbus and Rheinmetall in the aerospace and defense sector, Volvo and BMW in the manufacturing sector, and ASML and ASM International in the technology infrastructure sector.
Goldman Sachs forecasted that if earnings improvements continue, the next upward phase of HALO trades will begin in earnest, supported by the firm's 'Buy' ratings on about half of selected asset-intensive companies.
FAQ
What is the HALO investment strategy recommended by Goldman Sachs?
HALO (Heavy Assets, Low Obsolescence) is an investment strategy created by Josh Brown, CEO of Ritholtz Wealth Management, that targets asset-intensive companies holding large-scale tangible assets with low risk of value impairment from technological change. Goldman Sachs analyst Guillaume Jaisson recommended on the 7th (local time) strengthening positions in these companies, stating the next upward phase will be driven by corporate earnings performance.
How did Goldman Sachs' HALO strategy perform this year?
Goldman Sachs' HALO pair trade strategy—buying asset-intensive companies while selling asset-light companies—delivered approximately 20% returns this year. The strategy maintained strong performance despite financial market volatility from the Iran war, with asset-intensive companies recovering to surpass pre-war levels and outperform asset-light companies.
Which companies does Goldman Sachs recommend for HALO investments?
Goldman Sachs' primary HALO investment targets include Enel in infrastructure, Shell and BP in basic materials, Airbus and Rheinmetall in aerospace and defense, Volvo and BMW in manufacturing, and ASML and ASM International in technology infrastructure. The firm maintains 'Buy' ratings on approximately half of its selected asset-intensive companies.
