The latest buzz acronym in the investment community, spurred in part by the artificial intelligence (AI) trade, is HALO, or “heavy assets, low obsolescence.”
The catchy acronym is relevant to dividend investors because many of the companies in the hard assets realm are dividend payers. Likewise, scores of low obsolescence firms related to are high-payout, dividend growers or both. The ALPS O’Shares U.S. Quality Dividend ETF (OUSA) is one of the ETFs to consider as the HALO trade gains momentum.
OUSA is outperforming the S&P 500 this year. Of course, that not may be saying much. However, the ETF’s emphasis on quality and steady payout growth could compel equity income investors looking to capitalize on the HALO trade. Those traits are also relevant because even with the benefit of HALO, dividend investors need to remain vigilant.
“Still, it’s far too early for dividend investors to take victory laps. We’re less than three months into 2026, and anything can happen,” noted Morningstar’s Dan Lefkovitz. “In recent years, there have been periods in which dividend stocks outperformed, only to cede leadership. For example, dividend stocks held up relatively well during the tariff-driven selloff of February-April 2025, and before that during a jittery third quarter of 2024. If you go back further, dividend stocks performed admirably in the inflation-driven selloff of 2022. All those resilient episodes get obscured by longer-term performance data.”
OUSA Has Multiple Selling Points
OUSA, which turns 11 in July, has multiple sources of allure relating to both the AI and HALO trades. Regarding the latter, the ETF devotes more than 42% of its weight to the healthcare, consumer discretionary and industrial sectors. Those groups arguably fit the bill as low obsolescence.
Conversely, the ETF also offers some leverage to a potential rebound by the AI trade. The fund allocates about 31% of its roster to technology and communication services equities. Don’t forget the fact that dividend stocks and ETFs such as OUSA have the potential to reduce turbulence.
“Dividend-focused portfolios have provided a smoother ride than the overall US equity market. Over all trailing periods, the dividend indexes have registered a lower standard deviation of returns (a measure of volatility) than the broad market,” added Lefkovitz. “Suppressed volatility comports with dividend payer stereotypes: more established, slower growing, and lower priced.”
Plus, OUSA is a credible dividend growth outlet. Financial services, healthcare and technology are among the leading sectors in terms of recent payout growth. Those groups combine for about 54% of the OUSA roster.
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