ETF Intel Q&A: Texas Capital ETF & Funds Management

Danielle Rutsky, Lead Product Manager of ETF Listings at Nasdaq, joins Carlos Pena, Vice President, Portfolio Manager, Texas Capital ETF & Funds Management, for a conversation about the key initiatives their team is focused on in 2025.

What are some of the key initiatives you are currently focused on at Texas Capital?

After an extensive transformation of our firm over the past four years, Texas Capital is a full-service financial services firm headquartered in Texas. The breadth of our platform allows us to serve clients with products and services that range from simple depository accounts to advice regarding the most complex transactions. As always, we remain focused on supporting our clients through any economic environment.

You launched the Texas Capital Texas Small Cap Equity Index ETF (TXSS) on Nasdaq. What trends are you seeing for small-cap ETFs?

We launched the Texas Capital Texas Small Cap Equity Index ETF (Nasdaq: TXSS) in December 2023. TXSS presents an innovative approach within small-cap ETFs as a fund that provides the opportunity for everyone, including those not blessed to live and work in Texas, to benefit from the performance of stocks in small-cap companies headquartered in Texas. TXSS uses an innovative weighting scheme that most small-cap ETFs may not use in the marketplace today. TXSS weights sectors by contribution to the Texas Gross Domestic Product (GDP) and then uses market-cap to weight qualifying Texas-headquartered companies within the sectors. The approach gives investors a strategy that Texas Capital believes is constructed to match the economy and drivers of growth in Texas. Regional focused strategies offer investors the ability to be selective and invest in a focused growth area. We believe that Texas, and TXSS by extension, has an important place in investor portfolios thanks to expectations of economic opportunity in Texas.

What are some example use cases for investors utilizing this regional strategy?

Texas is the eighth largest economy in the world by GDP¹, and the Texas Capital Texas Small Cap Equity ETF (TXSS) seeks to capitalize on the advantages the companies within the fund enjoy due to their headquarters being in a business-friendly state. These benefits include a diverse and specialized workforce, unrivaled infrastructure investment, and pro-business policies. The fund’s innovative weighting and construction aims to promote diversification and exposure to the drivers of growth within the Texas economy. Within a portfolio, TXSS can be used as a standalone core small-cap position or as a complementary satellite position that gives investors regional exposure to a national and global economic powerhouse.

What's next for Texas Capital over the next 12 months?

From our beginning as a Texas bank focused on Texas businesses, we now offer a full suite of treasury, payments, lending, underwriting, trading, private wealth, investment banking and other products and services that leverage our industry expertise, our global reach and our uniquely Texan approach to client service. Over the next 12 months and beyond, we expect to continue delivering exceptional service and creative solutions to clients by leveraging Texas’ only full-service platform. Our ETFs & Funds Management team has driven innovation within small-cap, all-cap equity and money market ETFs. As we look ahead, the Texas Capital ETFs & Funds Management team will look to continue to be a force of innovation in the ETF marketplace by developing strategies that give investors access to unique growth opportunities.

Source: ¹Texas Economic Strength and Growth