LOHA holds 100 equally weighted stocks of physical-infrastructure companies like Cummins, AutoZone, and Lennox. A counterweight to AI-heavy portfolios, it carries new-fund risk and cyclical exposure.
Roundhill Investments launched the Roundhill Heavy Assets and Low Obsolescence ETF (LOHA) in May 2026, a fund designed to own companies whose value sits in physical infrastructure rather than software. The idea comes from Josh Brown of Ritholtz Wealth Management, who coined the acronym HALO – heavy assets and low obsolescence. LOHA holds 100 U.S. stocks, equally weighted and rebalanced quarterly, with a 0.35% expense ratio.
The thesis is straightforward. A company whose competitive position depends on physical scale – mines, factories, distribution centers, truck fleets – cannot be disintermediated by a startup with GPUs. Replicating AutoZone’s roughly 20% operating margin requires building thousands of stores stocked with the right parts within a short drive of a mechanic. Replicating Cummins’ multi-year hyperscaler agreement for backup diesel generators requires foundries, engineering depth, and permits that a model checkpoint cannot provide.
LOHA’s top holdings make the pitch explicit. Cummins (CMI) builds engines and generators. AutoZone (AZO) runs the largest aftermarket auto parts network in the country. TFI International (TFII) hauls freight. Lennox International (LII) makes furnaces and rooftop HVAC units. Newmont (NEM) mines gold. If AI-heavy indices own the software layer, LOHA owns what sits under, around, and behind it.
The irony is that the physical economy is now partly a levered play on the AI buildout itself. Cummins’ Power Systems segment posted record Q2 sales of $2.3 billion, up 19%, as data centers need standby diesel generators. So the anti-AI fund’s flagship holding sells into the very trend the fund is marketed against. Josh Brown called that a feature rather than a problem, since the fund is not a pure short on AI but a bet on physical infrastructure regardless of end demand.
Heavy assets are not a free hedge. They are capital-intensive, cyclical, and often commodity-linked. Lennox told investors in July that elevated mortgage rates, inflationary pressures, and low consumer confidence were constraining demand, and that residential new construction revenues declined roughly 30%. Newmont’s margins swing with the gold price, which carried a realized price of $4,414 per ounce in Q2 and could reverse. What LOHA holders buy is exposure to the operating leverage of physical capacity, which cuts both ways.
AlphaScala’s proprietary scoring gives AutoZone a 23 out of 100, labeled Weak, and Lennox a 41 out of 100, labeled Mixed. Both sit in the consumer discretionary and industrial sectors respectively, where cyclical pressures are evident. The fund’s equal weighting caps dependence on any single winner and forces a mechanical rebalance each quarter – the opposite of how cap-weighted tech indices behave.
LOHA held roughly $50 million in assets as of late July, with only a few months of history. New-fund liquidity risk and no full-cycle track record mean anyone treating it as a proven diversifier is projecting. The reasonable use case is a 3% to 7% sleeve for an investor whose broad-market exposure has drifted into heavy overlap with the Nasdaq-100. For that investor, owning engines, trucks, HVAC, and gold miners in equal measure is genuine diversification at the business-model level.
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