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HALX sells SpaceX to keep its AI hedge honest

A five-for-five rebalance trades a record-IPO holding for industrial ballast, giving up the name some shareholders bought the fund to own.

At a glance

  1. As ETF Trends reported, SpaceX, Ross Stores, American Electric Power, Weyerhaeuser and J.B. Hunt came out; AutoZone, Mettler-Toledo, United Therapeutics, NiSource and Copart went in.
  2. The HALO label, heavy assets and low obsolescence, is a wager that plants, inventory and equipment resist automation better than a software margin does, and SpaceX has been drifting off that description.
  3. AutoZone is the plainer expression of the screen: an automotive parts and maintenance manufacturer carries physical assets and slow-turning inventory, the profile the HALO filter is built to hold, and Copart's online car auctions and Mettler-Toledo's laboratory instruments arguably fit the same mold.

SpaceX was the exit that mattered this month, when five names left Tuttle Capital's Heavy Assets Low Obsolescence index and five took their places. As ETF Trends reported, SpaceX, Ross Stores, American Electric Power, Weyerhaeuser and J.B. Hunt came out; AutoZone, Mettler-Toledo, United Therapeutics, NiSource and Copart went in. For an index built to hold companies insulated from AI disruption, removing a company that just went public in what the article calls a record IPO is less a housekeeping item than a methodology asserting itself in public.

The HALO label, heavy assets and low obsolescence, is a wager that plants, inventory and equipment resist automation better than a software margin does, and SpaceX has been drifting off that description. The article notes shares that have been volatile in recent months and an AI infrastructure pivot that may have put the company at odds with the thesis it once fit. Rules-based screens are not sentimental about that, which is what index licensing fees buy; the disclosure under the piece names VettaFi as HALX's index provider and a recipient of a licensing fee on the fund, a quiet revenue line under every rebalance of this kind.

AutoZone is the plainer expression of the screen: an automotive parts and maintenance manufacturer carries physical assets and slow-turning inventory, the profile the HALO filter is built to hold, and Copart's online car auctions and Mettler-Toledo's laboratory instruments arguably fit the same mold. Read as a portfolio move, the rebalance takes ballast in and lets a narrative out, the same trade our coverage of THNR's September rebalance described, where a roster reshuffle left a $5.8 million fund's return riding on Eli Lilly.

The rebalance also marks where the AI capital cycle has moved: the power-and-data-center buildout keeps pulling public and private money toward the infrastructure sitting behind AI, and a space company pivoting toward AI infrastructure is one more name drifting into that current. HALX chooses to stand outside it, a deliberate position for a fund whose pitch is what AI leaves behind.

AI-disruption insurance pays nothing in the years the risk stays hidden, and HALX has just given up a headline AI-adjacent holding to keep a claim about obsolescence intact. The fund will keep trading away whatever the screen flags, even when the name on the way out is the reason some holders bought in. AutoZone is what that discipline costs today.

Reported by the Passive & Indexing desk from ETF Trends. Published . Corrections

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