AI Resilience ETF

Defiance ETFs has filed for a new passive fund designed to hold US large-cap companies least vulnerable to artificial intelligence disruption, betting on capital-intensive businesses with physical infrastructure that AI cannot easily replace. The move reflects a growing institutional pivot away from pure AI upside plays toward “HALO” stocks, Heavy Asset, Low Obsolescence firms, that have outperformed their digital-first peers by 35% since early 2025.

• Defiance filed for the US AI Resilience ETF tracking roughly 50 large-cap companies selected from the VettaFi US AI Resilience Index, weighted by float-adjusted market cap with individual caps at 3%.
• Goldman Sachs’ HALO framework shows capital-intensive companies outperformed capital-light, digital-first peers by approximately 35% since the start of 2025.
• The fund will launch on Nasdaq within approximately 75 days pending SEC effectiveness, filling a contrarian niche in Defiance’s thematic lineup alongside its $4 billion quantum computing ETF.

• 35% Capital-intensive stock outperformance versus digital-first peers since early 2025
• $8 billion Total assets under management across all Defiance ETFs as of filing date
• ~50 Large-cap US companies to be held in the resilience index portfolio

Defiance ETFs filed a preliminary prospectus with the Securities and Exchange Commission on Thursday for the Defiance US AI Resilience ETF, a passively managed fund structured to capture upside from companies least likely to face disruption from artificial intelligence advancement.

Rather than chase AI winners, the strategy inverts the typical thematic play by targeting established, asset-heavy businesses in sectors where physical infrastructure and inelastic consumer demand create a structural moat against algorithmic displacement.

The fund tracks the VettaFi US AI Resilience Index, which selects approximately 50 US large-cap companies meeting the criteria known as “HALO”, Heavy Asset, Low Obsolescence, firms with long-life physical infrastructure, stable revenue streams insulated from labor automation, and capital-intensive business models.

Goldman Sachs’ HALO Framework Shows 35% Outperformance Over AI-Native Peers

The investment thesis underpinning the new fund rests on a framework Goldman Sachs introduced in early 2026. The bank’s research found that capital-intensive companies relying on physical assets have outperformed their capital-light, digital-first counterparts by approximately 35% since the start of 2025.

This divergence reflects a fundamental economic reality: transmission grids, pipelines, industrial manufacturing capacity, and transportation infrastructure are extraordinarily expensive to build and remain largely insulated from the reach of generative AI, which excels at automating software and information work.

By contrast, software companies and services built primarily on digital platforms face mounting displacement risk as AI systems become increasingly capable of automating their core functions, coding, design, customer support, and content generation among them.

The HALO thesis posits that traditional sectors including Consumer Staples, Energy, Healthcare, Industrials, Materials, and Utilities offer structural resilience precisely because their revenues depend on tangible, difficult-to-replace assets rather than human or algorithmic labor performing repeatable digital tasks.

This framework has gained traction among institutional investors seeking portfolio diversification during an era when technology and AI stocks have dominated capital flows.

Defiance’s filing arrives as Wall Street’s appetite for HALO-type investments continues to accelerate, suggesting the firm believes demand for a dedicated passive vehicle tracking this theme will attract both hedge funds and long-only managers seeking a systematic hedge against concentration risk in their existing AI-heavy allocations.

Defiance’s $8 Billion Asset Base Extends into Contrarian AI Strategy

Defiance ETFs, which manages over $8 billion in total assets, already operates a suite of thematic funds targeting quantum computing, AI power infrastructure, and drone automation.

Its flagship Quantum Computing ETF, ticker QTUM, recently surpassed $4 billion in assets under management and holds a five-star Morningstar rating, demonstrating the firm’s ability to attract institutional capital into specialized thematic bets.

The new AI Resilience ETF extends that track record into more contrarian territory, acknowledging that the most defensible returns in an AI-driven world may come not from technology leaders but from the infrastructure and consumer staples companies least threatened by algorithmic displacement.

The fund will employ either full replication or representative sampling to track the index, with holdings weighted by float-adjusted market capitalization and individual position caps set at 3% to avoid excessive concentration.

Under normal operating conditions, at least 80% of net assets will be invested in companies meeting the AI-resilience criteria, allowing the remaining 20% for cash or transitional holdings. Quarterly rebalancing will maintain index alignment and manage turnover.

The prospectus filing represents a strategic expansion for Defiance into what institutional investors increasingly recognize as a distinct asset class within equity markets: businesses whose fundamentals are structurally insulated from AI-driven disruption.

SEC Review Process and Risk Disclosures Highlight Capital-Intensity Trade-offs

The prospectus remains preliminary, with the fund’s final ticker symbol not yet assigned and management fees listed as placeholders pending SEC review. Defiance expects the filing to become effective within approximately 75 days, at which point the fund will begin trading on Nasdaq.

The timeline aligns with standard SEC review procedures for ETF filings that do not encounter substantive objections from the regulator or require material amendments to the prospectus.

The filing discloses several principal risks specific to the HALO investment thesis. Interest-rate sensitivity represents a primary concern for capital-intensive holdings, which typically carry high debt loads and generate returns sensitive to changes in borrowing costs.

Rising rates can compress valuations for utilities, energy infrastructure, and industrial companies despite their operational stability.

Sector concentration risk is also highlighted: the index’s emphasis on Consumer Staples, Energy, Healthcare, Industrials, Materials, and Utilities creates meaningful exposure to commodity cycles and regulatory changes in heavily regulated sectors like energy and healthcare.

Penserra Capital Management, a specialized index fund administrator and portfolio manager, will handle day-to-day portfolio management and index methodology administration. This operational structure separates index governance from fund sponsorship, aligning with industry best practices and reducing potential conflicts of interest in methodology adjustments or constituent selection.

Institutional investors tracking the filing should monitor the SEC’s response during its preliminary review window for any requests for additional risk disclosures or index methodology clarifications; the fund’s launch timeline and initial asset flows will signal whether the HALO thesis has reached sufficient mainstream adoption to sustain a dedicated passive vehicle, or whether demand remains concentrated among a smaller cohort of contrarian allocators seeking explicit exposure to AI-resilience factors.

Why Institutional Flows Are Rotating Into Physical Infrastructure Over Software

The timing of Defiance’s filing aligns with a measurable shift in institutional capital allocation. Since January 2025, money managers have redirected an estimated $47 billion from pure software and cloud computing funds into industrials, utilities, and real estate investment trusts, according to Morningstar flow data through March.

This represents a reversal of the five-year trend that saw capital flood into AI-native and software-as-a-service plays, signaling that large allocators are now pricing in meaningful economic displacement risk in digital-first sectors.

Goldman Sachs’ HALO framework gained institutional traction after the firm published research in February showing that capital-intensive companies generate durable competitive advantages when facing generalized AI competition.

The logic is structural: a railroad or power utility cannot be meaningfully disrupted by a language model, whereas a software company with high margins and concentrated intellectual property faces direct replacement risk from cheaper, open-source alternatives.

Defiance’s fund manager believes this dynamic will persist through 2027, when AI automation may have penetrated administrative and coding roles more deeply than today.

The $47 billion rotation raises a critical question: whether this represents a permanent repricing of AI risk or a tactical pullback before the next software earnings cycle. The Nasdaq-100’s performance relative to the Russell 1000 Value Index over the next two quarters will likely determine whether Defiance can build a sustainable AUM base for this strategy or whether the fund remains a niche hedge vehicle.