Texas ETF Begins Trading: TXF

Following last week’s launch of an Oklahoma-focused ETF, yesterday (11/4/09) the same firm introduced its Texas version. TXF Large Companies ETF (TXF) is the second offering from OOK Advisors.

Those who read my post last week about OOK will recall that I said it is essentially an energy fund in disguise. It appears that TXF is only slightly more diversified. The sector breakdown reveals that TXF has more than 63% of its assets in energy stocks. The top ten holdings of the underlying index, the SPADE Texas Index, as of 11/4/09 were:

• Conocophillips (COP) 5.5%
• Schlumberger (SLB) 5.3%
• ExxonMobil (XOM) 5.0%
• AT&T (T) 4.6%
• Burlington Northern Santa Fe (BNI) 3.7%
• Apache Corp (APA) 3.7%
• Anadarko Petroleum (APC) 3.5%
• Texas Instruments (TXN) 3.3%
• Dell Inc. (DELL) 3.2%
• Halliburton (HAL) 3.0%

BNI is in the process of being acquired by Warren Buffett’s Berkshire Hathaway (BRK). The pop in BNI helped the underlying index, but the ETF’s launch was a day too late to capture it. If OOK is an energy fund, then we have to say that TXF is mainly an energy/technology/telecom fund that holds a few smaller stocks from other sectors. This isn’t necessarily a bad combination, but I have a hard time fitting such a fund into a portfolio strategy.

Owning OOK or TXF does accomplish one definitely good thing. The sponsor is donating 10% of its management fees to Aaron’s Bridge, a non-profit organization that helps children with developmental disabilities like autism. This is a worthy cause, and I’m glad to see the company getting involved. More ETF sponsors should do likewise.

For more information visit the TXF web site.

Disclosure compliant with FTC 16 CFR Part 255 covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.