Texas State ETF Charges Ten Times The Expense Ratio Of The Cheapest Large-Cap Equities ETF

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November 5, 2009 1:03pm ETF BASIC NEWS NYSE:TXF

texas“OOK Advisors has launched their second state-specific exchange traded fund (ETF), this time focusing on Texas. It’s called the TXF Large


 Companies Exchange Traded Fund (TXF). While the concept of capturing the Texas economy is good, the ETF itself appears to be little concerned with actual Texas exposure and more so with making high fees and appealing to many people’s affinity with the state,” Vincent Fernando Reports From Business Insider.

“That’s because, as ETF database highlights, the fund charges ten times the expense ratio of the cheapest large-cap equities ETF. TXF’s expense ratio is 0.85%, putting it near the 1% some active managers charge for customized porfolio management,” Fernando Reports.

“We’ll go further and point out that the fund is merely filled with companies headquartered in Texas, such as Exxon Mobil (XOM). But come on, Exxon isn’t nearly a play on Texas, it’s majority-exposed to the economic environment of its businesses across the world, not Texas.  Many other TXF holdings are similarly not Texas-exclusive plays. So despite having a portfolio filled with Texas headquartered companies, are you primarily getting exposure to Texas? Not at all. Thus the ETF isn’t a proper Texas bet of any sort,” Fernando Reports.

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