of Texas Capital Texas Oil Index ETF (NYSE Arca: OILT ) launched late last year focusing on companies responsible for oil and gas production in the state of Texas. Unlike other funds focused on oil and gas exploration and production, THE OIL ETF weights securities based on oil and gas production as reported by the Railroad Commission of Texas, which directs investments in producers operating in the Permian Basin, Granite Wash and Barnett, Eagle Ford and Haynesville/Bossier Shales.
West Texas Intermediate (WTI) is known for its high quality grade of crude oil that is used as a global and national benchmark for the price of petroleum commodities. This global recognition is due to WTI's suitability for refining gasoline and other high-demand products. Because Texas is the leading state for the production of oil ultimately traded as WTI, OILT presents a unique opportunity for investors as it is the only equity ETF that has exposure only to companies that have been active in this region. In 2023, Texas crude oil production reached an all-time high 5.49 million barrels per day, which accounted for about 40% of all US crude oil production. We believe this oil production has the best geographic access to US oil infrastructure as well as major global shipping ports located in South Texas.
OILT consists of 31 constituents as of December 31, 2023. Top names in the index include Diamondback Energy (FANG), ConocoPhillips (COP) and Pioneer Natural Resources Company (PXD). Companies in the index must be publicly traded and be responsible for more than 0.1% of Texas' annual state oil and gas production over the past 10 years, based on data published by the Texas Railroad Commission. See more at University here.
The second new ETF, Texas Capital Texas Small Cap Index ETF (Nasdaq: TXSS), focuses on the backbone of the Texas economy – small businesses. This new ETF recognizes the key role small businesses play in the state's economy, offering investors an opportunity to increase their investment exposure to the economic trends driving the Texas economy.
Similar to Texas Capital's existing flagship fund, the Texas Capital Texas Equity Index (NYSE Arca: TXS), Texas Capital believes that companies headquartered in Texas can enjoy certain economic, regulatory, tax, labor and other benefits in connection with companies based in other countries. Small-cap companies can enjoy these benefits in greater proportion when compared to larger and more geographically diverse companies. The strong business environment in the state of Texas is demonstrated by, among other things, its infrastructure spending and resources, relatively low cost of doing business, export records, and third-party rankings and recognitions.
The fund is weighted by sector GDP and then weighted by market capitalization within each sector, providing diversified exposure to key business sectors, including industrials, energy, consumer discretionary, healthcare and real estate . See more at TXSS here.
Discoveries:
Investors should carefully consider the fund's investment objectives, risks and fees before investing. The prospectus contains this and other information about the fund, and should be read carefully before investing. Investors can obtain a copy of the prospectus by calling 844.TCB. ETFS (844.822.3837).
Investment and market risk. As with all investments, an investment in the Fund is subject to investment risk. Investors in the Fund may lose money, including the possible loss of the entire principal amount of an investment, for short or long periods of time.
Risk of index tracking. There is no guarantee that the Fund will achieve a high degree of correlation with the Index and therefore achieve its investment objective. The Fund may have difficulty achieving its investment objective due to fees, expenses (including rebalancing costs) and other transaction costs associated with the normal operation of the Fund. These costs that may be incurred by the Fund are not incurred by the Index, which may make it more difficult for the Fund to track the Index.
The Danger of the New Counselor. The Adviser has not previously served as an adviser to a registered mutual fund or ETF. As a result, there is no long-term track record against which an investor can judge the Adviser, and it is possible that the Adviser may not achieve the Fund's intended investment objective.
New Fund Risk. The Fund is new and has no outstanding shares at the date of this Prospectus. If the Fund does not grow large once it begins trading, it will be at greater risk than larger funds of wider bid-ask spreads for its shares, trading at a greater premium or discount to NAV, liquidation and/or suspension of trading. Any liquidation of the Fund may cause the Fund to incur high transaction costs for the Fund and adverse tax consequences for its shareholders.
The risk of geographic concentration. Because the Fund and the Index will invest only in issuers headquartered in a particular geographic region, the Fund's performance is expected to be closely related to various factors such as social, financial, economic and political conditions within that region. Events adversely affecting that region could cause the value of the Fund's shares to decline, in some cases significantly. As a result, the Fund may be more volatile than more geographically diverse funds.
The risk of small capital companies. Investments in the securities of small-cap companies may be riskier, more volatile and more vulnerable to economic, market and industry changes than investments in larger, more established companies. As a result, stock price changes may be more sudden or erratic than the prices of other equity securities, especially in the short term. Small-cap companies often have less predictable earnings, more limited product lines, markets, distribution channels, or financial resources, and the management of such companies may depend on one or a few key people. The equity securities of small-cap companies are generally less liquid than the securities of larger companies.
Energy Sector Risk. Companies operating in the energy sector are subject to risks including, but not limited to, economic growth, worldwide demand, political instability in the regions where the companies operate, government regulation that determines rates charged by utilities, the sensitivity of interest rates, oil price volatility, energy. conservation, environmental policies, resource depletion and the cost of providing specific utility services and other factors beyond their control.
The risk of oil and gas companies. Oil and gas companies develop and produce crude oil and natural gas and provide services related to the production and distribution of drilling and other energy resources. Stock prices for these types of companies are affected by supply and demand for both their specific product or service, as well as for energy products in general. The price of oil and gas, exploration and production expenses, government regulation, world events and economic conditions will also affect the performance of these companies. Accordingly, the securities of oil and gas companies are subject to rapid fluctuations in price and supply caused by events related to international politics, energy conservation, the success of exploration projects and other tax and regulatory policies. governmental. Weak demand for companies' products or services or for energy products and services in general, as well as negative developments in these and other areas, would negatively affect the Fund's performance. Oil and gas exploration and production can be significantly affected by natural disasters, as well as changes in exchange rates, interest rates, government regulations, world events and economic conditions. These companies may also be at risk for environmental damage claims.
Texas Capital Bank Wealth Management Services, Inc. d/b/a Texas Capital Bank Private Wealth Advisors (“PWA”), a wholly owned subsidiary of Texas Capital Bank serves as investment advisor to Texas Capital Funds Trust (a Delaware statutory trust formed in 2023 and registered as a open-ended investment company under the Investment Company Act of 1940) for its funds (the “Funds”) and is paid a fee for its services. Shares of the Funds are not deposits or obligations of, or guaranteed or endorsed by, Texas Capital Bank or its affiliates. Funds are not insured by the FDIC or any other government agency. Funds are distributed by Northern Lights Distributors, LLC, member FINRA/SIPC, which is not affiliated with Texas Capital Private Wealth Bank Advisors.
Not a deposit. Not FDIC insured. Not guaranteed by the Bank. It may lose value. It is not insured by any Federal Government Agency.
Distributed by Northern Lights Distributors, LLC, member FINRA/SIPC, which is not affiliated with Texas Capital Private Wealth Bank Advisors.
17934074-NLD-02/29/2024