A sell-off for companies feared to be at risk from AI disruption has been one of 2026’s big stock market trends. The incumbent data and software providers have been in the eye of the storm.
On the other side of the trade, firms perceived to be immune to disruption by chatbots and the rapid advances in large language models (LLMs) have caught a bid from investors.
Wealth management CEO and respected CNBC financial pundit Josh Brown coined the acronym ‘HALO’ to describe this trade. HALO stands for Heavy Assets, Low Obsolescence.
As Brown wrote recently in his blog: ‘We spent 15 years salivating for so-called asset-light business models with high margins and reliable cash flows. These are the cash flows that Big AI is coming for.’
Time to visit Jurassic Park?
Chris Salih, head of multi-asset and investment trust research at FundCalibre, tells Sharesify:
‘As interest rates have reset to a more normal level, we’ve seen a clear shift in market leadership. Bond proxies and long-duration growth stocks have de-rated, while so-called “old economy” sectors (banks, energy, materials and industrials) are back in favour.’
Salih continues: ‘Higher rates structurally support bank profitability, and rising geopolitical tensions have sharpened the focus on energy security, resilient supply chains and tangible, cash-generative assets.
‘Ironically, in an AI-driven world, it may be the “Jurassic Park” industries that prove hardest to disrupt. Some software stocks sold off on fears that AI would commoditise what they do, i.e. making it easier to build apps or automate services.
‘But you can’t commoditise what is already commoditised – one cannot “vibe code” new copper mines into existence. If anything, AI’s expansion into data centres, electrification and robotics is likely to increase demand for metals and real assets significantly.’
Ways to play
For investors looking to capture this theme, Salih identifies investment trust BlackRock World Mining (BRWM).
The £1.95 billion cap trust offers ‘diversified exposure across the global mining cycle, from major producers to developers, with meaningful positions in copper and other critical materials.’
| Share price: £10.42 | Discount to NAV: 7.4% |
| Market cap: £1.95bn | Yield: 2.1% |
Salih also observes that UK large cap funds such as investment trust City of London (CTY) provide access to the cash-generative end of the FTSE 100, which has benefited from the resurgence in banks, energy and defence.
‘Blending these “dinosaur” sectors with selective exposure to AI beneficiaries creates a more balanced way to navigate what could be a profoundly transformative decade.’
Hard assets making hard cash
Greg Eckel manages Canadian General Investments (CGI), the North America-focused trust trading on a cavernous 42% discount to net asset value (NAV).
He says Canada’s role as a major producer of energy, metals and critical resources (including copper, lithium and nickel) is becoming increasingly relevant as investors focus on energy security, supply-chain resilience and the persistence of inflation.
| Share price: £27 | Discount to NAV: 42% |
| Market cap: £576m | Yield: 2.1% |
‘For portfolios, this means access to business backed by tangible assets, long-term demand and, in many cases, the ability to pass through higher costs,’ says Eckel.
‘Franco-Nevada Corporation (FNV) is one such company that illustrates this well. A gold royalty and streaming business focused on precious metals, it offers exposure to commodity prices without many operational risks that come with running mines.
‘This type of company proves diversification and a degree of protection during periods of uncertainly like we have seen at the start of this year.’
First Quantum Minerals (FM) offers a different angle. This Canada-based miner provides exposure to base metals linked directly to electrification, infrastructure development and global industrial activity.
‘While inherently cyclical, demand for these materials is underpinned by long-term trends that remain underrepresented in many global equity portfolios,’ stresses Eckel.
‘Infrastructure is another traditional sector becoming increasingly attractive, supported by powerful structural tailwinds including nearshoring, electrification and decarbonisation.’
Eckel is also bullish on Stantec (STN), a global leader in sustainable design and engineering.
‘Its diversified footprint across energy, water and transport positions it perfectly for North America’s rebuilding cycle.
‘A focus on efficiency has delivered industry-leading profit margins, while exposure to US and Canadian infrastructure spending bodes well for growth.’
Two beauties
Ben Peters, manager of investment fund Evenlode Global Income (BF1QMV6), says the consumer staples sector has seen a recent change in sentiment.
Within this the beauty sector has proven to be a resilient category in the most recent downturn following the pandemic.
While growth slowed, it remained in the mid-single digits for the category which stands in contrast to other consumer goods such as food or alcoholic beverages.
‘Consumers have always traded down in a downturn but tend to stick with brands they know and love for long periods of time,’ notes Peters.
‘L’Oreal (OR) is by far the global market leader and thus has the resources to acquire brands, whether already household names or up-and-coming marques,’ he enthuses.
‘In fact, brand acquisition has been a very successful part of their core growth strategy for many decades, and that is likely to continue.’
Brand halo
Peters believes luxury goods conglomerate LVMH (MC) is interesting too. It can leverage its enviable stable of fashion brands, of which Louis Vuitton is the largest. ‘This helps create a halo around the brand in question, bringing new consumers in,’ insists Peters.
‘We tend to look at companies over longer time periods and think that the category is well placed to grow for the medium term, with innovation being driven by key players and startup brands alike.
‘We think there is selective value to be found in the beauty sector, with L’Oreal being a core holding for the Evenlode Global Income fund. LVMH is also a position, although this is much broader than a beauty story, covering fashion, jewellery, beverages and retailing into the mix.’
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