Public funds assess "HALO" investment; over 70% of institutions predict the market will experience volatility and divergence

Since March, the A-share market has shown a clear structural trend. Driven by the global revaluation of physical assets and domestic policies to “counteract internal competition” in industries, sectors such as oil and gas, precious metals, and chemicals—collectively known as “HALO” (heavy assets, low淘汰)—have continued to strengthen.

According to the latest survey results released by Public Fund排排网, 63.16% of public fund institutions believe that the current popularity of the “HALO” sector is reasonable and remains in a rational allocation stage; 31.58% think it shows signs of overheating, with trading becoming crowded; another 5.26% believe the heat is relatively low, and some structural opportunities still need to be explored.

A representative from Golden Eagle Fund told Securities Daily that, amid the near “one-sided” AI (artificial intelligence) rally in 2025, there is a need for diversified allocation of funds in 2026. The market’s prosperity and liquidity are marginally improving, favoring cyclical manufacturing assets with low valuations. Therefore, current “HALO” investments have a medium- to long-term narrative logic.

However, some institutions also warn of short-term overheating risks. Tao Diwei, a fund manager at Jiahé Fund’s equity investment department, believes that when A-shares follow the hype around “HALO,” it often indicates that the valuations of related assets are no longer cheap, and overheating risks should be watched carefully.

Regarding the future six-month trend of the “HALO” sector, the consensus among public fund institutions is clearer. The survey shows that 75% believe the “HALO” rally will enter a phase of oscillation and differentiation, with good opportunities for high-quality targets; 12.50% expect the trend to continue strengthening; and 6.25% each believe the market will return to calm or face a correction.

A representative from Red Soil Innovation Fund believes that in the next six months, “HALO” investments will enter a phase of oscillation and differentiation, with performance verification becoming a key dividing line. Assets with the following characteristics are expected to continue outperforming: high order visibility (e.g., some transformer companies have overseas orders scheduled until 2028), strong profit improvement certainty (e.g., some copper mining companies benefiting from supply-demand gaps with rising gross margins), stable cash flow (e.g., some utility companies with dividend safety margins), and solid industry logic (e.g., increased electricity demand driven by AI computing power).

Where will opportunities in the differentiated market focus? The survey indicates that the most favored areas among public fund institutions are related to computing and electricity synergy, such as AI data center energy solutions and power grid equipment, favored by 39.13% of institutions; energy security (oil and gas, green electricity) and resource commodities (copper, silver, and other industrial metals) tie for second place, each supported by 26.09%; some institutions also favor high-end industrial equipment and utilities.

A representative from Red Soil Innovation Fund believes that computing and electricity synergy is the most direct reflection of the “HALO” logic in A-shares, possessing both “rigid demand” and “supply bottleneck” attributes. On the demand side, AI development drives a surge in electricity demand; on the supply side, global power grid equipment (such as large transformers) faces multi-year delivery cycles and supply gaps. China’s technological advantages in ultra-high voltage and smart grids, along with significant grid investment plans during the 14th Five-Year Plan, give A-share related sectors a notable edge.