Worried about the AI bubble? Sign up for The Daily Upside for smart, actionable market news, built for investors.
Vinyl sales are up, kids are using flip phones, brands are trending towards IRL marketing – everything analog is coming back.
In the world of ETFs there is no exception: Wedbush recently filed an introductory prospectus for the Analog Economy ETF, which will track an index of about 50 companies “whose business model depends on human labor, physical assets and real output.” With more and more money in the AI trade (and growing threats that it could kill us all), this fund is trying to remind investors that the real world still exists, and there’s still money to be made. But the question is whether the ownership of funds will be enough to differentiate.
“It’s a mix of industrial and materials sectors, and there are many ETFs out there that can provide exposure to that sector,” said Loren Fox, director of research at Fuse Research Network. “If you really want one ETF that combines industries and materials in one ticker, then that’s a little more distinctive… For some investors and financial advisors, one of the questions will be: ‘Do I really want all these sectors in one ETF?’ Because they don’t have to be driven by all the same trends.”
Sign up for The Daily Upside at no cost for premium analysis on all your favorite stocks.
READ ALSO: Why Treasury Destroys 351 ETFs Conversion and With Hester Peirce’s SEC Exit, the Crypto Industry Loses an Ally
Concrete, Not Counting
The Wedbush fund will focus on companies in industries including construction and materials, machinery, vehicle and equipment manufacturing, distribution and environmental and commercial services, according to the prospectus. It will exclude companies whose business is mainly connected to AI, semiconductors, data centers or power plants.
The closest analog (sorry, no sorry) is a fund that tracks the HALO (asset heavy, low obsolescence) index, of which there are at least two:
-
Roundhill HALO ETF (LOHA) launched in May and has about $50 million under management, per ETF.com.
-
Tuttle Capital Heavy Assets Low Obsolescence ETF (HALX) was also launched in May and represents around $2.5 million. Both funds are up about 1.5% since inception.
Your Hedge Bot: The HALO fund or Wedbush’s Analog Economy ETF may have to wait for the defeat of AI to see some real action, said Athanasios Psarofagis, an ETF analyst at Bloomberg Intelligence. “I like to be a fence for all this AI stuff,” he said. “At some point, we will become waxed with some massive selloff, and I think people will reassess a little.”
This post first appeared on The Daily Upside. To receive exclusive news and analysis of the rapidly evolving ETF landscape, built for advisors and capital allocation, subscribe to the free ETF Upside newsletter.