TXS Profile
The Texas Capital Texas Equity Index ETF (TXS) is designed to track the performance of an index that includes companies significantly contributing to the Texas economy. The fund adviser identifies that companies based in Texas may benefit from unique economic advantages such as favorable regulatory environments, tax benefits, and access to a skilled workforce, which can enhance their competitive positioning compared to firms based in other states. By focusing on these Texas-based companies, TXS aims to capture the economic growth and opportunities within the state.
The ETF’s underlying index consists of equity securities from a broad universe of eligible companies that meet specific size and liquidity criteria. Initially, all qualifying securities are selected based on these parameters. The index then categorizes companies into sectors according to their contributions to Texas's Gross Domestic Product (GDP), as reported by the U.S. Bureau of Economic Analysis. This sector-based weighting ensures that the index reflects the economic impact of each industry within the state, aligning the fund’s investments with Texas's economic strengths.
Within each sector, companies are weighted based on their market capitalization, with the index employing a minimum weighting of 0.05% and a maximum weighting of 10% per individual constituent. This market-cap weighted approach balances the representation of large and small companies within the index, while also ensuring that no single stock disproportionately affects the overall performance of the ETF. The fund does not impose specific market-cap limits, allowing for a diverse range of company sizes to be included in the index.
The Texas Capital Texas Equity Index ETF may concentrate its investments in particular industries or sectors if the underlying index exhibits such a concentration. This reflects the economic focus of Texas and the index's sector weighting. By investing in TXS, investors gain exposure to a targeted selection of companies driving Texas's economic growth, leveraging the benefits associated with the state's economic and business environment. This strategic focus aims to deliver returns aligned with Texas's economic performance and opportunities.
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