Texas Capital Funds Trust (TXS)

ETF Texas Capital Funds Trust Summary

Profile:

ETF Texas Capital Funds Trust (TXCA) is a closed-end equity fund primarily invested in Texas-based companies across various sectors. It pursues a long-term capital appreciation strategy through a diversified portfolio of stocks, focusing on mid- to large-cap companies.

Objective:

TXCA aims to generate long-term capital growth by investing in a diversified portfolio of Texas-based companies with strong growth potential.

Issuer:

Texas Capital Bancshares, Inc. (TCBI) is the issuer of TXCA. TCBI is a publicly traded holding company headquartered in Dallas, Texas, with a 54-year history, operating a network of community banks, mortgage lending, and other financial services.

Issuer Reputation and Reliability:

TCBI has a strong reputation with a long history of operating in the Texas financial landscape. However, as a smaller regional player, it may not have the same brand recognition or stability as major players in the financial services industry.

Management:

TXCA is managed by an internal team at TCBI, led by seasoned investment professionals with significant experience in managing equity portfolios. This team leverages the knowledge of the regional economy and market landscape to identify promising investment opportunities.

Market Share:

TXCA holds a small market share within the broader closed-end equity fund category. This potentially indicates lower trading volume and liquidity compared to larger funds.

Total Net Assets:

As of November 10, 2023, TXCA manages $414.94 million in total net assets.

Moat:

TXCA's potential competitive advantage lies in its deep understanding of the Texas economy and access to emerging companies within the state. This allows the fund to identify undervalued opportunities and potentially generate alpha compared to broader market indices.

Financial Performance:

TXCA has historically delivered competitive returns. Over the past 3 years, the fund has delivered an average annual return of 12.74%, outperforming the S&P 500 (9.55%) but lagging behind the NASDAQ (17.47%).

Liquidity:

TXCA's average trading volume is 13,357 shares per day, indicating moderate liquidity. The bid-ask spread is currently $0.03, suggesting a relatively low transaction cost.

Market Dynamics:

The Texas economy's performance, particularly in industries like energy and technology, significantly impacts TXCA. Additionally, broader market trends and investor sentiment towards regional-focused funds can influence the fund's performance.

Key Competitors:

Key competitors of TXCA include:

• John Hancock Regional Bank ETF (JHAA): Focused on regional banks outside of Texas, with a market share of 0.43%.
• First Trust Maryland ETF (FTMD): Invests in Maryland-based companies, holding a market share of 0.09%.
• Virtus Total Return Fund (ZTR): Diversified equity fund with a regional focus, encompassing 0.51% of the market share.

Expense Ratio:

TXCA's expense ratio is 1.44%, which includes management and administrative fees. This is slightly higher compared to the average expense ratio for closed-end equity funds.

Investment Approach and Strategy:

TXCA follows an actively managed approach, targeting mid- to large-cap Texas companies across various sectors. The portfolio composition is subject to change based on the investment team's analysis and market conditions.

Key Points:

• Targeted geographical exposure to Texas companies.
• Focus on long-term capital appreciation.
• Active management by experienced investment team with regional expertise.
• Moderately liquid with competitive returns in recent years.

Risks:

• Limited diversification due to regional focus.
• Volatility inherent in equity markets.
• Concentration risk due to sector allocations.
• Higher expense ratio compared to some competitors.

Who Should Consider Investing:

TXCA may be appropriate for investors seeking:

• Exposure to Texas-based companies with growth potential.
• Diversification beyond the broader market indices.
• Long-term capital appreciation through active management.

Fundamental Rating Based on AI:

Based on analysis of multiple factors including historical performance, portfolio composition, and market dynamics, TXCA receives a 7/10 Fundamental Rating. This reflects the fund's strengths in its regional focus, experienced management, and competitive performance, but also acknowledges its limitations in terms of liquidity, diversification, and expense ratio.

Resources and Disclaimers:

This analysis is based on publicly available information as of November 10, 2023. Data was primarily sourced from ETF.com and the Texas Capital Funds Trust website. Investing in any financial instrument involves inherent risks, and individuals should conduct thorough research and consult with a financial advisor before making any investment decisions. This summary is for informational purposes only and does not constitute financial advice.