Texas Capital Launches Government Money Market Exchange Traded Fund
Texas Capital Bank Private Wealth Advisors and Texas Capital Funds Trust have launched the Texas Capital Government Money Market ETF (NYSE: MMKT), a first-of-its-kind ETF holding highly liquid, short-term U.S. government debt instruments and cash equivalents. This innovative fund combines the intraday liquidity and flexibility of an ETF with the risk and return characteristics of a money market fund, following Rule 2a-7 of the Investment Company Act of 1940.
The MMKT ETF aims to provide high current interest income while maintaining liquidity and stability of principal. It joins Texas Capital's suite of funds, including the Texas Capital Texas Equity Index ETF (NYSE Arca: TXS). The fund is managed by J. Steven Orr, chief investment officer of Texas Capital Bank Private Wealth Advisors, with over 30 years of portfolio management experience.
Texas Capital Bank Private Wealth Advisors e Texas Capital Funds Trust hanno lanciato il Texas Capital Government Money Market ETF (NYSE: MMKT), un ETF innovativo che detiene strumenti di debito governativo statunitensi a breve termine altamente liquidi e equivalenti di cassa. Questo fondo innovativo combina la liquidità intraday e la flessibilità di un ETF con le caratteristiche di rischio e rendimento di un fondo del mercato monetario, in conformità con la Regola 2a-7 del Investment Company Act del 1940.
L'ETF MMKT ha l'obiettivo di fornire un elevato reddito da interessi attuali mantenendo nel contempo liquidità e stabilità del capitale. Si unisce al portafoglio di fondi di Texas Capital, incluso il Texas Capital Texas Equity Index ETF (NYSE Arca: TXS). Il fondo è gestito da J. Steven Orr, chief investment officer di Texas Capital Bank Private Wealth Advisors, con oltre 30 anni di esperienza nella gestione di portafogli.
Texas Capital Bank Private Wealth Advisors y Texas Capital Funds Trust han lanzado el Texas Capital Government Money Market ETF (NYSE: MMKT), un ETF innovador que posee instrumentos de deuda pública de EE. UU. a corto plazo y equivalentes de efectivo altamente líquidos. Este fondo innovador combina la liquidez intradía y la flexibilidad de un ETF con las características de riesgo y rendimiento de un fondo del mercado monetario, siguiendo la Regla 2a-7 de la Ley de Compañías de Inversión de 1940.
El ETF MMKT tiene como objetivo proporcionar un alto ingreso por intereses actuales mientras mantiene la liquidez y la estabilidad del capital. Se une al conjunto de fondos de Texas Capital, incluido el Texas Capital Texas Equity Index ETF (NYSE Arca: TXS). El fondo está gestionado por J. Steven Orr, director de inversiones de Texas Capital Bank Private Wealth Advisors, con más de 30 años de experiencia en la gestión de carteras.
텍사스 캐피탈 뱅크 프라이빗 웰스 어드바이저스와 텍사스 캐피탈 펀드 트러스트가 텍사스 캐피탈 정부 머니 마켓 ETF (NYSE: MMKT)를 출시했습니다. 이는 고도로 유동적인 단기 미국 정부 채무 상품 및 현금 equivalent를 보유한 최초의 ETF입니다. 이 혁신적인 펀드는 1940년 투자 회사법의 규칙 2a-7을 따르며, ETF의 일중 유동성과 유연성을 머니 마켓 펀드의 위험 및 수익 특성과 결합합니다.
MMKT ETF는 유동성과 원본의 안정성을 유지하면서 높은 현재 이자 수익을 제공합니다. 이는 텍사스 캐피탈의 펀드 모음에 추가되며, 텍사스 캐피탈 텍사스 주식 인덱스 ETF (NYSE Arca: TXS)도 포함됩니다. 이 펀드는 텍사스 캐피탈 뱅크 프라이빗 웰스 어드바이저스의 최고 투자 책임자 J. Steven Orr에 의해 관리되며, 그는 30년 이상의 포트폴리오 관리 경험을 갖추고 있습니다.
Texas Capital Bank Private Wealth Advisors et Texas Capital Funds Trust ont lancé le Texas Capital Government Money Market ETF (NYSE: MMKT), un ETF inédit qui détient des instruments de dette gouvernementale américaine à court terme et des équivalents de liquidités hautement liquides. Ce fonds innovant combine la liquidité intrajournalière et la flexibilité d'un ETF avec les caractéristiques de risque et de rendement d'un fonds du marché monétaire, conformément à la Règle 2a-7 de la Loi de 1940 sur les sociétés d'investissement.
L'ETF MMKT vise à fournir un revenu d'intérêts actuels élevé tout en maintenant la liquidité et la stabilité du capital. Il s'ajoute à la gamme de fonds de Texas Capital, y compris le Texas Capital Texas Equity Index ETF (NYSE Arca: TXS). Le fonds est géré par J. Steven Orr, directeur des investissements de Texas Capital Bank Private Wealth Advisors, qui possède plus de 30 ans d'expérience dans la gestion de portefeuilles.
Texas Capital Bank Private Wealth Advisors und Texas Capital Funds Trust haben den Texas Capital Government Money Market ETF (NYSE: MMKT) ins Leben gerufen, einen erstmaligen ETF, der hochliquide, kurzfristige US-Regierungsschuldeninstrumente und Geldäquivalente hält. Dieser innovative Fonds kombiniert die intraday Liquidität und Flexibilität eines ETFs mit den Risiko- und Renditeeigenschaften eines Geldmarktfonds und folgt der Regel 2a-7 des Investment Company Act von 1940.
Das Ziel des MMKT ETF ist es, hohe aktuelle Zinserträge zu bieten und gleichzeitig die Liquidität und Stabilität des Kapitals aufrechtzuerhalten. Er erweitert das Portfolio von Texas Capital, zu dem auch der Texas Capital Texas Equity Index ETF (NYSE Arca: TXS) gehört. Der Fonds wird von J. Steven Orr, dem Chief Investment Officer von Texas Capital Bank Private Wealth Advisors, geleitet, der über 30 Jahre Erfahrung im Portfoliomanagement verfügt.
- Launch of innovative first-of-its-kind Government Money Market ETF (NYSE: MMKT)
- Combines ETF flexibility with money market fund characteristics
- Follows Rule 2a-7, providing a regulated investment option
- Aims to provide high current interest income with liquidity and stability
- Expands Texas Capital's ETF offerings, complementing existing funds
- None.
Insights
The launch of the Texas Capital Government Money Market ETF (MMKT) represents a significant innovation in the ETF space. This first-of-its-kind product combines the liquidity and flexibility of an ETF with the risk and return characteristics of a money market fund, adhering to Rule 2a-7 regulations.
Key points to consider:
- The ETF aims to provide high current interest income while maintaining liquidity and principal stability.
- It offers investors a new tool for managing credit risk and capital preservation in a volatile market environment.
- The fund's structure may appeal to institutional investors and retail clients seeking a balance between accessibility and safety.
While innovative, the success of this product will depend on investor adoption and its performance relative to traditional money market funds. The current high-interest rate environment could make this an attractive option for yield-seeking investors, potentially impacting Texas Capital's asset management revenues positively.
The MMKT ETF launch is a groundbreaking development in the ETF industry. By combining ETF tradability with money market fund structure, Texas Capital is addressing a gap in the market. This could potentially disrupt the
Key considerations:
- Intraday liquidity of ETFs could provide an advantage over traditional money market funds, which typically price once daily.
- The fund's focus on government securities aligns with risk-averse investor preferences in uncertain economic conditions.
- As the first mover in this space, Texas Capital may gain a competitive advantage and attract significant assets under management.
However, the success of this ETF will depend on its ability to deliver competitive yields and maintain a stable NAV. The product's unique structure may also require investor education to drive adoption. Overall, this innovation could strengthen Texas Capital's position in the asset management space.
First-of-its-kind Money Market ETF to trade under the ticker MMKT
DALLAS, Sept. 25, 2024 (GLOBE NEWSWIRE) -- Texas Capital Bank Private Wealth Advisors, a subsidiary of Texas Capital Bank, and the Texas Capital Funds Trust today announced the launch of the Texas Capital Government Money Market ETF (NYSE: MMKT) (the “MMKT ETF” or “Fund”). This innovative and first-of-its-kind ETF will hold highly liquid, short-term U.S. government debt instruments and cash equivalents, providing an exchange-traded investment option for investors focused on managing credit risk and preserving capital.
The MMKT ETF is the latest fund launched by Texas Capital ETF & Funds Management, whose managed ETFs include the flagship Texas Capital Texas Equity Index ETF (NYSE Arca: TXS) that helps investors gain investment exposure to the diversity and growth of the eighth largest economy in the world, Texas1. Complementing Texas Capital’s other funds, the MMKT ETF is designed to provide investors with a government money market fund in the form of an ETF, combining the intraday liquidity and flexibility of an ETF with the risk and return characteristics of a money market fund.
“With the substantial changes in the interest rate environment over the last few years, the Texas Capital Government Money Market ETF offers an exciting alternative for investors,” said Daniel S. Hoverman, Head of Corporate & Investment Banking at Texas Capital. “As the first ETF committed to following Rule 2a-7, the provision of the Investment Company Act of 1940 that governs money market funds, Texas Capital believes the combination of the tradability of an ETF and the structure of a money market fund will prove an important investment alternative for investors looking to manage liquidity, volatility and credit risks in their securities portfolio.”
The Texas Capital Government Money Market ETF seeks to provide as high a level of current interest income as is consistent with maintaining liquidity and stability of principal while following Rule 2a-7.
“As the premier full-service financial services firm headquartered in the state of Texas, the launch of the MMKT ETF continues our commitment to serving our clients’ liquidity and investment needs,” added Hoverman. “Innovation is an integral part of the Texas Capital experience, ranging from Initio, our commercial banking platform that enables new account onboarding within a single business day, to today’s announcement about the revolutionary combination of ETF flexibility and money market sensibility. We look forward to welcoming investors in MMKT to our suite of funds and to Texas Capital.”
The Texas Capital Funds Trust is a Delaware statutory trust formed in 2023 and registered as an open-end management investment company under the Investment Company Act of 1940. The Trust has retained Texas Capital Bank Wealth Management Services, Inc., doing business as Texas Capital Bank Private Wealth Advisors, as the adviser to the Fund. Edward Rosenberg, head of ETF & Funds Management for Texas Capital serves as the president of the Texas Capital Funds Trust. The Fund’s portfolio is managed by the chief investment officer of Texas Capital Bank Private Wealth Advisors, J. Steven Orr, who brings more than 30 years of portfolio management experience. The Board of Trustees for the Texas Capital Funds Trust includes Hayman Capital Management Founder and Chief Investment Officer J. Kyle Bass, Texas Capital’s Head of Corporate & Investment Banking Daniel S. Hoverman, Avery Capital Co-founder and Chief Executive Officer Avery Johnson, Texas Capital’s Head of Investor Relations & Corporate Development Jocelyn Kukulka and PIXIU Founder and Chief Executive Officer Eddie Margain.
Additional details on the Fund can be found here.
About Texas Capital
Texas Capital Bancshares, Inc. (NASDAQ®: TCBI), a member of the Russell 2000® Index and the S&P MidCap 400®, is the parent company of Texas Capital Bank (“TCB”). Texas Capital is the collective brand name for TCB and its separate, non-bank affiliates and wholly-owned subsidiaries. Texas Capital is a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs and individual customers. Founded in 1998, the institution is headquartered in Dallas with offices in Austin, Houston, San Antonio and Fort Worth, and has built a network of clients across the country. With the ability to service clients through their entire lifecycles, Texas Capital has established commercial banking, consumer banking, investment banking and wealth management capabilities. All services are subject to applicable laws, regulations, and service terms. Deposit and lending products and services are offered by TCB. For deposit products, member FDIC. For more information, please visit www.texascapital.com.
Trading in securities and financial instruments, strategic advisory, and other investment banking activities are performed by TCBI Securities, Inc., doing business as Texas Capital Securities. TCBI Securities, Inc. is a member of FINRA and SIPC and has registered with the SEC and other state securities regulators as a broker dealer. TCBI Securities, Inc. is a subsidiary of TCB. All investing involves risks, including the loss of principal. Past performance does not guarantee future results. Securities and other investment products offered by TCBI Securities, Inc. are not FDIC insured, may lose value and are not bank guaranteed.
Disclosures
Investors should carefully consider the investment objectives, risks and charges of the Fund before investing. The prospectus contains this information and other information about the Fund, and it should be read carefully before investing. Investors can obtain a copy of the prospectus by calling 844.TCB.ETFS (844.822.3837).
Credit Risk. Issuers of money market instruments or financial institutions that have entered into repurchase agreements with the Fund may fail to make payments when due or complete transactions or they may become less willing or less able to do so.
Interest Rate Risk. The value of the Fund’s investments generally will fall when interest rates rise, and its yield will tend to lag behind prevailing rates. The Fund may face a heightened level of interest rate risk due to certain changes in general economic conditions, inflation and monetary policy, such as certain types of interest rate changes by the Federal Reserve.
U.S. Government Securities Risk. There are different types of U.S. government securities with different levels of credit risk, including the risk of default, depending on the nature of the particular government support for that security. For example, a U.S. government-sponsored entity, such as Federal National Mortgage Association (“Fannie Mae”) or Federal Home Loan Mortgage Corporation (“Freddie Mac”), although chartered or sponsored by an Act of Congress, may issue securities that are neither insured nor guaranteed by the U.S. Treasury and are therefore riskier than those that are.
Repurchase Agreements Risk. Repurchase agreements carry certain risks not associated with direct investments in securities, including a possible decline in the market value of the underlying obligations.
Portfolio Liquidity Risk. Although the Fund invests in a diversified portfolio of high-quality instruments, the Fund’s investments may become less liquid as a result of market developments or adverse investor perception. In stressed market conditions, the market for the Fund’s shares may become less liquid in response to deteriorating liquidity in the markets for the Fund’s underlying portfolio holdings.
Management Risk. The risk that the investment strategies, techniques and risk analyses employed by the Adviser may not produce the desired results.
Investment and Market Risk. As with all investments, an investment in the Fund is subject to investment risk. Investors in the Fund could lose money, including the possible loss of the entire principal amount of an investment, over short or prolonged periods of time. Markets can decline in value sharply and unpredictably which may affect the Fund’s net asset value (“NAV”) per share. The increasing interconnectivity between global economies and financial markets increases the likelihood that events or conditions in one region or financial market may adversely impact issuers in a different country, region, or financial market.
ETF Risks. The Fund is an ETF, and because of the ETF’s structure, it is exposed to the following risks:
Authorized Participants, Market Makers, and Liquidity Providers Concentration Risk. The Fund has a limited number of financial institutions that may act as Authorized Participants (“APs”). In addition, there may be a limited number of market makers and/or liquidity providers in the marketplace. To the extent either of the following events occur, Shares may trade at a material discount to NAV and possibly face trading halts or delisting: (i) APs exit the business or otherwise become unable to process creation and/or redemption orders and no other APs step forward to perform these services; or (ii) market makers and/or liquidity providers exit the business or significantly reduce their business activities and no other entities step forward to perform their functions.
Costs of Buying or Selling Shares. Due to the costs of buying or selling Shares, including brokerage commissions imposed by brokers and bid/ask spreads, frequent trading of Shares may significantly reduce investment results and an investment in Shares may not be advisable for investors who anticipate regularly making small investments.
Large Shareholder Risk. From time to time, an AP, a third-party investor, an affiliate of the Adviser, or a fund may invest in the Fund and hold its investment for a specific time period to allow the Fund to achieve size or scale. There can be no assurance that any such entity will not redeem its investment or that the size of the Fund will be maintained at such levels, which could negatively impact the Fund.
Premium-Discount Risk. The Shares may trade above or below their NAV. The market prices of Shares will generally fluctuate in accordance with changes in NAV as well as the relative supply of, and demand for, Shares on the Exchange or other securities exchanges. The existence of significant market volatility, disruptions to creations and redemptions, or potential lack of an active trading market for Shares (including through a trading halt), among other factors, may result in the Shares trading significantly above (at a premium) or below (at a discount) to NAV.
Trading Risk. Although Shares are listed for trading on the Exchange and may be traded on U.S. exchanges other than the Exchange, there can be no assurance that Shares will trade with any volume, or at all, on any stock exchange. In stressed market conditions, the liquidity of Shares may begin to mirror the liquidity of the Fund’s underlying portfolio holdings, which can be significantly less liquid than Shares.
Trading Halt Risk. Sharp price declines in securities owned by the Fund may trigger trading halts, which may result in the Fund’s shares trading in the market at an increasingly large discount to NAV during part (or all) of a trading day or cause the Fund itself to halt trading. In such market conditions, market, or stop-loss orders to sell the ETF shares may be executed at market prices that are significantly below NAV or investors might not even be able to transact in Shares if the Fund halts trading.
New Adviser Risk. The Adviser has only served as an adviser to a registered fund for less than one year. As a result, there is no long-term track record against which an investor may judge the Adviser and it is possible the Adviser may not achieve the Fund’s intended investment objective.
New Fund Risk. The Fund is new and does not have shares outstanding as of the date of this Prospectus. As a result, prospective investors have no track record or history on which to base their investment decisions. In addition, there can be no assurance that the Fund will grow to or maintain an economically viable size. If the Fund does not grow large once it commences trading, it will be at greater risk than larger funds of wider bid-ask spreads for its shares, trading at a greater premium or discount to NAV, liquidation and/or a stop to trading. Any liquidation of the Fund could cause the Fund to incur elevated transaction costs for the Fund and negative tax consequences for its shareholders.
Shares are not individually redeemable and are issued and redeemed at their net asset value only in large, specified blocks of shares called creation units. Shares otherwise can be bought and sold only through exchange trading at market price (not NAV). Shares may trade at a premium or discount to their net asset value in the secondary market. Brokerage commissions will reduce returns.
Texas Capital Bank Wealth Management Services, Inc. d/b/a Texas Capital Bank Private Wealth Advisors (“PWA”), a wholly owned subsidiary of Texas Capital Bank and a Registered Investment Advisor with the U.S. Securities and Exchange Commission (“SEC”), serves as investment adviser to the Texas Capital Government Money Market ETF and Texas Capital Texas Equity Index ETF and is paid a fee for its services. Shares of the Texas Capital Government Money Market ETF and Texas Capital Texas Equity Index ETF are not deposits or obligations of, or guaranteed or endorsed by, Texas Capital Bank or its affiliates. The Texas Capital Government Money Market ETF and Texas Capital Texas Equity Index ETF are not insured by the FDIC or any other government agency. The Texas Capital Government Money Market ETF and Texas Capital Texas Equity Index ETF are distributed by Northern Lights Distributors, LLC, member FINRA/SIPC, which is not affiliated with Texas Capital Bank Private Wealth Advisors.
INVESTMENTS: NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE
1 Source: Texas Economic Development Corporation
FAQ
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