BlackRock launches Texas-focused fund to tap into state's 'dynamic' economy

Erica Grieder, San Antonio Express-NewsSan Antonio Express-News

Jun. 25—The world's largest investment firm has launched a new fund focused on the Texas economy.

BlackRock, which has around $11 trillion under management, on Tuesday debuted the iShares Texas Equity ETF, which trades on the Nasdaq market under the symbol TEXN. It is an index fund composed only of publicly traded companies headquartered in Texas.

In a statement, BlackRock said the fund aims to provide investors "targeted exposure to a dynamic state economy." More than 300 companies have moved their headquarters to Texas over the past 10 years, BlackRock noted, and last year, the state ranked first in the nation for population growth. Texas GDP reached a record $2.7 trillion in 2024, making the state the world's eighth-largest economy if considered on a standalone basis.

"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," Joe DeVico, head of the Americas client business at BlackRock, said in a statement.

The fund has about $5 million in assets under management and 190 holdings. The largest holdings within the fund are Tesla Inc., Exxon Mobil Corp., Oracle Corp., Chevron Corp. and AT&T. Also included are San Antonio-based Valero Energy Corp., Cullen/Frost Bankers Inc., Victory Capital Holdings Inc. and Xpel Inc., along with New Braunfels-based Rush Enterprises Inc. and Seguin-based Alamo Group Inc. The fund closed at $24.96 Wednesday.

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The Texas-focused exchange traded fund, an investment vehicle that holds a number of underlying assets, joins BlackRock's existing "geography-based products." Through iShares, the firm offers more than 60 mutual funds and ETFs that target a single country or region, comprising more than $100 billion in assets under management.

The launch of the ETF comes after several years of friction between the state and BlackRock, and is consistent with an apparent desire for détente on the latter's part.

In 2022, BlackRock was among ten financial services firms placed on a sort of statewide naughty list after they were deemed to be "boycotting" the oil and gas industry. Under a 2021 state law, firms boycotting fossil fuel-based companies could be subject to divestment by pension funds including the Employees Retirement System of Texas and Teacher Retirement System of Texas.

BlackRock representatives denied that the firm was boycotting fossil fuels. The firm's co-founder and CEO, Larry Fink, had emerged as a leading Wall Street voice in favor of various priorities of the environmental, social and governance movement, including reducing carbon emissions. BlackRock nonetheless maintained significant investments in Texas oil and gas companies. The firm said at the time that it was managing more than $100 billion in assets invested in Texas energy companies.

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Still, with billions of dollars of investments in Texas pension funds at stake, BlackRock went on to make overtures to statewide GOP officials. In 2024, for example, Lt. Gov. Dan Patrick spoke at a conference in Houston hosted by BlackRock, focused on building more natural gas-fired power plants in the state.

A number of firms have tempered their support for the ESG movement since President Donald Trump took office for his second term in January, including by moving away from the term "ESG." In January, BlackRock left the Net-Zero Asset Managers Initiative, a coalition of asset managers committed to the goal of net-zero carbon emissions by 2050.

The iShares page for the new fund notes that TEXN offers a way to "express a view in your portfolio" as well as participating in "Texas' growth potential."

"TEXN offers more choice to investors seeking convenient, tax-efficient, and transparent ways to build portfolios that reflect their investment views," Elise Terry, head of U.S. iShares at BlackRock, said in the statement.