TEXX concentrates on Texas-domiciled companies, betting that the state's business-friendly environment, energy dominance, and population growth will drive outsized returns. This is a pure-play bet on Texas outperforming other states economically.
How It Works
The fund appears to focus on companies headquartered or with significant operations in Texas, likely capturing energy giants, regional banks, homebuilders, and tech firms fleeing California. Given Horizon Kinetics' value-oriented approach, expect a tilt toward owner-operated businesses and companies with pricing power. The portfolio construction probably overweights sectors where Texas has competitive advantages.
Key Features
- Pure exposure to Texas economy without dilution from national companies
- Captures both traditional energy strength and emerging tech hub growth
- Horizon Kinetics' focus on inflation beneficiaries aligns with Texas commodity exposure
Risks
- Energy price collapse could crater 30-40% of holdings given Texas oil dependence
- Single-state concentration means no geographic diversification during regional downturns
- Political risk if federal policies target red states or fossil fuel industries
Who Should Own This
Someone who believes state-level economics matter more than sector allocation and wants to bet on Texas's combination of no income tax, light regulation, and energy resources. Works as a satellite holding for investors already overweight California tech who want geographic balance, or those betting on continued blue-to-red state migration.