A New York-based firm is launching a new exchange-traded fund for investments in Texas businesses, including those based in Fort Worth.

BlackRock debuted its iShares Texas Equity exchange-traded fund on June 24 because the Lone Star State is the eighth-largest economy in the world with a 2024 gross domestic product of a record $2.7 trillion. 

What is an exchange-traded fund?

An ETF is an investment fund that holds a basket of securities, like stocks or bonds, and trades on a stock exchange, similar to individual stocks. ETFs offer diversification by allowing investors to buy a single share that represents ownership in a collection of underlying assets.

Source: Investopedia

Fort Worth-based businesses, including American Airlines Group Inc., Range Resources Corp., FirstCash Holdings Inc., AZZ Inc. and Omnicell Inc., are among the publicly traded companies that the exchange-traded fund has invested in. It is listed as TEXN on the NASDAQ stock exchange.

North Texas-based companies make up about 35% of the holdings in the exchange-traded fund, which will track investments in the Russell Texas Equity Index. That index measures the financial performance of the state’s publicly traded companies.

Jay Jacobs, BlackRock’s U.S. head of equity exchange-traded funds, said the new Texas Exchange-Traded Fund, or ETF, resulted from clients’ demands.

“What we’ve been hearing from clients is that there’s interest in having a precise ETF, providing exposure to Texas-based companies,” Jacobs told the Fort Worth Report. “When we hear that demand from clients, it’s largely driven by that growth story.”

The exchange-traded fund is “a great vehicle for delivering that exposure, for individuals, for financial advisers, doing the research to get a diversified basket of Texas-based companies is either cumbersome or something they can’t do very efficiently,” Jacobs said. “But being able to do all of that in the convenience of an ETF, where literally with one click, you can get exposure to a diversified basket of those stocks is very efficient for our investors.”

TEXN offers more choice to investors who are seeking convenient, tax-efficient and transparent solutions to build portfolios, BlackRock said.

“Three-quarters of Texan voters believe that the state’s economy outperforms the national economy in withstanding and bouncing back from economic challenges,” said Joe DeVico, head of the Americas Client Business at BlackRock. TEXN presents a new opportunity for Texans, and investors across the country, to invest in nearly 200 companies powering the state’s economy and to capitalize on Texas’ twin engines of business and population growth,” 

The BlackRock move comes as investors have signaled more interest in putting their dollars into the state’s economic success. 

The New York Stock Exchange has launched NYSE Texas Inc., an equities exchange headquartered in Dallas that focuses on Texas stocks and another group. The Texas Stock Exchange has filed to open an exchange focused on Lone Star businesses. Nasdaq has also opened a new regional headquarters in Dallas as it looks to expand investment in the state. 

To learn more about BlackRock’s state investments, visit the BlackRock in Texas page. 

Eric E. Garcia is a senior business reporter at the Fort Worth Report. Contact him at eric.garcia@fortworthreport.org

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