BlackRock’s New ETF Lets You Invest in the State Everyone’s Fleeing To (And Can’t Afford to Leave)

When COVID hit, it didn’t take long for Silicon Valley and energy execs to start packing boxes. The choice was pretty clear: stay in a locked-down state, pay sky-high taxes, and step over a guy using heroin outside your WeWork office… or move to Texas, where you could go to work, keep more of your paycheck, and maybe even buy a house that wasn’t the size of a dishwasher for under $2 million (we’re talking an acre, an inground pool, a 4-car garage, and enough yard to host your own Civil War reenactments if that’s your thing). They chose Texas. Because of course they did. (Aside from the finance bros who took a wrong turn and ended up in Miami wearing linen pants and regret.)

Since 2015, more than 300 companies have moved their headquarters to the Lone Star State. We’re talking Tesla, SpaceX, Oracle, Hewlett Packard Enterprise… basically anyone who got tired of paying $9 for coffee and $90K for a permit to hang a sign. The choice was clear: “Yeah, I can deal with rednecks and rattlesnakes if it means lower taxes and a backyard.”

And now BlackRock (the $10 trillion gorilla of asset management) has decided to turn that migration trend into a tradable product. Not a sector ETF. Not a megatrend ETF. A state ETF. It’s called the iShares Texas Equity ETF (TEXN), and yes, it invests in nearly 200 companies headquartered in Texas. Because apparently, Texas isn’t just a state anymore. It’s a full-blown portfolio strategy.

BlackRock’s thesis is pretty straightforward: Texas is winning. If it were its own country, it’d be the eighth-largest economy in the world with a $2.7 trillion GDP… right between Italy and Brazil, but with better barbecue. It also led the U.S. in population growth last year, now home to over 31 million people. And unlike some states, people aren’t just moving there temporarily… they’re staying, building, hiring, and occasionally welding things in their driveways for fun.

Throw in no income tax, fewer regulations than a gas station fireworks stand, and a business culture that still thinks fax machines are stupid, and it’s not hard to see why Wall Street is taking Texas seriously. Even if, let’s be honest, the state flag still looks like a gas station logo.

The ETF tracks the Russell Texas Equity Index, which is pretty much a bundle of public companies headquartered in Texas. That includes AT&T, Texas Instruments, Comerica, CBRE, Southwest, and yes… Tesla, which technically moved its HQ to Austin, though Elon still seems to be broadcasting from whatever bunker he has in California. The fund charges a 0.20% expense ratio, which is low-cost and right in line with what you’d expect from a passive ETF that’s riding a geographic wave. And BlackRock does have a history of packaging trends with just enough polish to make Wall Street click “buy.”

Sector-wise, it breaks down pretty much how you'd expect. Houston’s oil and gas firms make up 38% of the allocation. Dallas-Fort Worth brings 35%, mostly a mix of airlines, real estate, and financials. Austin’s tech scene delivers another 24%, with San Antonio and the rest of the state fighting over the remaining scraps. In plain terms, it’s an oil and chip-powered engine that lets you also bet on commercial property, air travel, and people swiping right for love (yes, Match Group is in the fund too).

So, all Texas jokes aside… is TEXN actually worth buying? It depends on what kind of investor you are. This isn’t a fund built to beat the S&P. It’s a regional concentration play. If you think Texas will keep outgrowing the rest of the country (economically and demographically) it could be a smart, focused way to ride that momentum. The state’s GDP is strong, its population growth is steady, and it continues to attract both Fortune 500s and startup weirdos in equal measure.

You’re getting significant exposure to energy and tech, which means it could run hot (or tank) depending on where the market shifts. So no, it’s not ideal for someone who wants a safe, stable place to park cash. But if you're comfortable with a little sector volatility and like the idea of betting on one state that’s punching above its weight in nearly every economic category, TEXN starts to look pretty compelling.

As Jay Jacobs from BlackRock put it, “Generally speaking, the U.S. remains a very attractive economy... but getting more granular… to isolate some of the most attractive areas like Texas, is something our clients want.” Translation: people are tired of getting 2% Texas exposure through the S&P 500 while the other 98% is tied up in companies trying to sell metaverse goggles to preschoolers.

So yeah, BlackRock saw where the economic wind was blowing (spoiler: it was warm and smelled like mesquite), and now they’re offering a simple, tradable way to invest in it.

At the time of publishing this article, Stocks.News holds positions in Tesla and AT&T as mentioned in the article.