Global funds embrace the theme of "transition from virtual to real"! Under the "HALO" halo, European stock markets achieve the longest monthly consecutive gains in 13 years.

European stock markets are heading towards setting a record for the longest monthly consecutive increase since 2013 as they open on the last trading day of February. Among the group of investors seeking alternative options outside of the US stock market, concerns over "AI disrupting everything" have impacted the digital asset and light asset-heavy US stock market, leading to a preference for the solid asset and stable cash flow "old economy" sectors in Europe among retail investors and high-leverage hedge funds. As of Wednesday, stock funds focused on the European stock market received inflows of about $3.2 billion this week, marking the fourth consecutive week of large net inflows. So far this year, investors have injected around $18 billion into European stock funds. As of the time of writing, the European stock market benchmark - the Stoxx Europe 600 index - is nearly flat near record highs, having risen 3.6% since February and is on track to record eight consecutive months of strong gains. Year-to-date, the Stoxx Europe 600 index has outperformed the S&P 500 index by 6 percentage points. In early European trading on Friday, European stocks collectively opened higher with the Euro Stoxx 50 index rising by 0.05%, the German DAX index by 0.07%, the UK FTSE 100 index by 0.22%, the French CAC 40 index by 0.01%, and the Italian FTSE MIB index by 0.19%. Mining and healthcare stocks performed the best in the European stock market, while the travel and media sectors lagged behind. As shown above, the European stock market is poised to set a record for the longest consecutive increase since 2013 - with the Stoxx Europe 600 index expected to record eight consecutive months of gains. Amid concerns about AI disrupting everything, its market weight composition is also providing strong support. So far this year, heavy asset and traditional economic sectors in the European stock market, such as basic resources, energy, telecommunications, and utilities, have performed well, with gains reaching double digits, with the Stoxx 600 index rising by 7%. Additionally, European companies have announced record stock buybacks. According to data tracked by Barclays Bank, companies in the Stoxx Europe 600 index have announced stock buybacks totaling 85.7 billion (approximately $101 billion) in January and February, the highest level during the same period. In the midst of AI disrupting everything, where is the safe haven? Goldman Sachs provides the answer with the keyword: HALO The strategy analysts at the Wall Street financial giant Goldman Sachs released a research report stating that stocks of companies with tangible production assets are significantly outperforming global stock markets. This is the core logic behind European stocks significantly outperforming US stocks. Global investors, including hedge funds and retail investors, are actively seeking safe havens to avoid the "AI disrupting everything" sell-off storm, turning their investment focus to heavy asset-intensive HALO (Heavy Assets, Low Obsolescence) stocks, which have a high weight in Europe and a lower weight in US stocks. The Goldman Sachs research team states that since the beginning of 2025, the "heavy asset-intensive" stock basket they compiled - whose economic value comes from tangible assets or tangible production materials and has a higher dependence on human labor or digital resources/capital - has significantly outperformed the "lightweight capital-intensive" stock comparison group by around 35%. The "HALO effect" referenced in the Goldman report is not the psychological "halo effect" but refers to companies whose value mainly comes from highly replicable, long-lasting physical assets/core capacities/manufacturing networks/infrastructure and, therefore, are considered less likely to be rapidly replaced or "technologically obsolete" by AI, making them more likely to receive a "safe haven premium" as AI anxiety intensifies. "The market is rewarding capacity, high-density manufacturing networks, infrastructure, and extremely complex manufacturing projects - assets with extremely high replication costs that require significant AI system investment for 'trial-and-error' processing or production testing, making them less vulnerable to AI technological obsolescence," write the Goldman Sachs strategists. Typical characteristics primarily include two points: heavy asset barriers to production materials, such as grids/mines/oil assets/large utility networks, key AI infrastructure manufacturers, etc., in these areas, the AI replication costs are extremely high, and human technological value is difficult to overcome by AI; secondly, a low technological obsolescence rate, those core capacities that even with AI advancements are difficult to "completely replace with software and Siasun Robot & Automation" in the short term, human technological value is equally difficult to overcome by AI, the most typical are technology links such as the semiconductor equipment supply chain, chip foundry, advanced packaging and testing of chips, and so on. The US stock market's S&P 500 and Nasdaq, in recent years, have heavily relied on a few highly valued tech giants and SaaS software leaders; whereas the European market's weight is more inclined towards sectors such as banking, resources, energy, industry, healthcare, utilities, defense, etc., which are "cash flow-heavy" and "heavy asset-intensive" industries. Recently, amid concerns about AI capital expenditure and fears of AI disrupting software and impacting white-collar employment, these sectors are becoming more favored, as evidenced by the frequent leading performances of mining in the European stock market, semiconductor equipment, utilities, essential consumption, and medical devices. The Financial Times recently pointed out that amid AI disruption, heavy asset industries such as energy and utilities have once again become safe havens for funds. Steady profits and economic growth Ulrich Urbahn, the head of multi-asset strategies and research at Berenberg, stated that the rise in European stocks in February is driven by the risk-averse effect of heavy assets under AI panic, steady corporate profit growth, and positive momentum in economic growth. "We maintain an overweight rating on European and emerging market stocks because we believe that global new capital will mainly focus on these regions to reduce the high valuation exposure to the US market that many investors still have," he said. Max Kettner, a senior strategist at HSBC, increased his "overweight" rating on European stocks this week, stating that investors are overly focused on AI-related trades. "We may have overlooked the fact that the economy is actually experiencing a genuine cyclical recovery. Smaller-scale manufacturing-driven economies have begun to show signs of a real recovery in the past two months," Kettner said. According to statistics from EPFR Global cited by strategists at Bank of America, European stock funds received as much as $3.2 billion in inflows in the week leading up to Wednesday, marking four consecutive weeks of net inflows. Year-to-date, investors have poured $18 billion into stock funds in the European market.