New BlackRock ETF Tracks Emerging Financial Hub Texas

Investors looking for exposure to companies in the Lone Star State such as Tesla Inc. (TSLA) and Exxon Mobil Corp. (XOM) have a new way to do so: BlackRock’s iShares Texas Equity ETF (TEXN), which launched on Tuesday.

The $5 million fund tracks the Russell Texas Equity Index, which measures the performance of U.S. companies headquartered in Texas like Oracle Corp. (ORCL), Chevron Corp. (CVX) and AT&T Inc. (T), according to BlackRock. The expense ratio is 0.2%. Trading activity wasn't immediately available.

The launch came after Texas removed BlackRock from its list of companies seen as boycotting the oil and gas industry. 

The TEXN Appeal 

The fund was launched in part as the result of client demand, Jay Jacobs, U.S. head of equity ETFs at BlackRock, told etf.com. The world’s largest asset manager heard from investors, financial advisors and institutions that they were looking for efficient ways to get exposure to the Texas economy through the equity market.

BlackRock also saw a strong investment case for an exposure this fund provides. Texas is home to one in 10 publicly traded companies in the U.S. and, since 2015, more than 300 companies have moved their headquarters to the state, according to BlackRock’s press release. The state also ranked first in population growth in 2024 and is the eighth-largest economy in the world by gross domestic product.

“It became very clear to us that this is an exposure that can make sense in portfolios,” Jacobs said. The population and GDP growth as well as the number of companies headquartering in Texas "paints a very clear picture that there's a really dynamic economic environment in Texas that people would be looking to add to their portfolios.” 

A Growing Texas ETF Market 

Texas has recently positioned itself as a leader in the financial space: The Texas Stock Exchange is planning to launch trading in early 2026, and Nasdaq plans to open its first regional headquarters in Dallas. As other financial firms and exchanges head south to establish new operations, Dallas’s booming financial sector has been dubbed “Y’all Street.”

Fund providers are taking notice. The Texas Capital Texas Equity Index ETF (TXS) launched in 2023 and has since accumulated $32 million in assets under management and posted a one-year return of 20%, according to FactSet data. Meanwhile, the Texas Capital Texas Small Cap Equity Index ETF (TXSS), which also launched in 2023, has accumulated $9.9 million in assets under management and posted a 3.7% one-year return. 

State Exposure in the Portfolio 

Jacobs said the firm sees this fund as a way to add to the core of a portfolio, similar to how investors may use the iShares Core MSCI International Developed Markets ETF (IDEV) to get international exposure complemented by a more targeted country play to overweight individual countries they have a better outlook for.

“[We’re] taking kind of what's been tried and true in the regional-plus-single-country space to the United States with the state exposure,” Jacobs added.