The investor who coined the 'HALO trade' says now's the time to buy the dip in software

• The investor who coined the HALO trade focused on hard assets says he strayed from the framework.
• Josh Brown, Ritholtz Wealth Management CEO, bought software after the AI sell-off tanked valuations.
• The HALO trade is viewed as a hedge against AI volatility.

Josh Brown created an investing framework that serves as a hedge against AI volatility. Now, he's straying away from it to buy the dip in the downtrodden software sector.

Brown, the CEO of Ritholtz Wealth Management, is known for coining the "HALO trade," an acronym meaning Heavy Assets and Low Obsolescence.

In a blog post published at the end of March, he said he bought the iShares Expanded Tech-Software Sector ETF (IGV) on Friday, March 27, when it closed at its lowest level since 2023. The fund has since rallied.

"Has the software sell-off been overdone — at least, in the short-term? I thought so. I got long," Brown wrote.

He continued: "I basically just wanted to buy pure, unadulterated panic at the close of trading last week."

Brown made it clear, however, that he bought in to ride a temporary bounce. He doesn't intend to stay in IGV for an extended period. He should be back to the HALO trade soon.

"I don't know if the bounce lasts an hour, a day, a week or a month," Brown wrote. "I won't be here long."

The software ETF was among the hardest hit by the market's AI sell-off in early 2026 with many of its top weighted holdings falling victim to the so-called "SaaSpocalypse."

Brown isn't alone in buying the dip in software.

Deutsche Bank strategists issued a bullish call on software stocks mid-March saying that AI replacement fears had peaked.

"Software companies are trading at historically low premiums versus the market," they wrote, highlighting that despite this dramatic downturn in valuation, so far, no software company reported expecting AI to have a negative effect on revenue this year.

Jefferies, JPMorgan, Morningstar, and Wedbush have released AI sell-off stock pick lists and software names like Intuit, Salesforce, ServiceNow, and Adobe made the cut.

Some of these firms, notably Goldman Sachs and JPMorgan, were among the A-list analysts that were aligned with Brown's HALO framework.

The HALO trade accurately described the market's defensive shift away from tech leaders that dominated market gains in recent years at a time as investors grew wary of AI, capturing the phenomena in a catchy acronym.