Home etfexpress.com Deep in the heart of Texas 

Deep in the heart of Texas 

Texas Capital Bank first opened its doors back in December 1998 and nowadays offers wealth-management services, as well as commercial, investment and personal banking.   

Last year, there was a significant development for the firm as Texas Capital moved into the ETF space, launching three Texas-themed ETFs within six months.  

Its first ETF, Texas Capital Texas Equity Index (TXS) was introduced in July 2023. Composed of public companies headquartered in the state of Texas, it focuses on large/mid-cap companies and holdings include Tesla, Charles Schwab and Exxon.  

Then in December, the next two ETFs, TXSS and OILT made their debut. TXSS (Texas Capital Texas Small Cap Equity Index) tracks the performance of the Texas Capital Texas small-cap equity index. Key business sectors include industrials, energy, consumer discretionary, health care and real estate. 

OILT (Texas Capital Texas Oil Index) focuses on the state’s energy sector. It tracks the performance of the Alerian Texas weighted oil and gas index, an index which provides exposure to companies that extract oil and gas in Texas. Companies in the index must be publicly traded and responsible for more than 0.1 percent of the annual state oil-and-gas production of Texas over the past 10 years, based on data published by the Texas Railroad Commission

Edward Rosenberg, managing director, head of ETF & funds management, joined Texas Capital just over a year ago, bringing almost 30 years of funds-management experience.  Prior to taking up this position, he was head of ETFs at American Century Investments. His other previous roles included the FlexShares head of ETF Capital Markets at Northern Trust and head of capital markets at Russell Investments. He began his career at Vanguard, working on ETF product development. 

His role now is to build and lead the ETF and funds platform for Texas Capital Securities, the bank’s broker-dealer subsidiary. 

At the launch of the second and third of the trio of ETFs, he explained: 

“We are strategically broadening our ETF offerings, granting global investors unparalleled access to the dynamic investment opportunities in the Lone Star State.”

He added: “The momentum led by TXS serves as a strong foundation for additional products and we are confident that the TXSS and OILT ETFs present opportunities for investors to gain exposure to the thriving Texas economy.”

Each of the funds got off the ground with USD10m and TXS now has assets under management (AUM) of USD21.5 million. As at late March, its year-to-date (YTD) return was 6.33 per cent. TXSS now has AUM of USD11.57 million and a YTD return of 0.73 per cent. OILT AUM has grown to USD12.27 million and YTD return stands at 11.86 per cent.  

Rosenberg says that while these three ETFs may be the firm’s first, they will not be the last: “We have plans for more,” he confirms: “We’re currently talking to clients to understand what they’re looking for.”

He adds: “We want to focus on growing TXS, TSXX and OILT first. But we definitely have a pipeline of other products that we’re currently testing to see how they might work.”

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