(OILT) Texas Capital Funds Trust - Ratings and Ratios

Texas Capital Funds Trust (NYSE ARCA:OILT) is an exchange-traded fund (ETF) designed to track the performance of an economic-value weighted index focused on companies engaged in oil and gas extraction within Texas. The fund invests at least 80% of its assets in securities from its underlying index, including depositary receipts and underlying stocks tied to the index. This approach allows for targeted exposure to the Texas energy sector, though it is classified as a non-diversified fund, meaning it may hold a higher concentration of securities compared to diversified funds.

The underlying index employs an economic-value weighting methodology, which considers factors such as a companys revenue, reserves, and production levels rather than solely market capitalization. This unique weighting approach aims to provide a more accurate representation of the economic significance of companies operating in the Texas oil and gas industry. As a result, the fund offers investors a way to gain exposure to the economic activity of Texas-based energy firms involved in upstream operations.

From a technical perspective, OILT is currently trading below its key moving averages, with the last price of $22.87 falling below the SMA 20 ($24.45), SMA 50 ($24.96), and SMA 200 ($25.44). The Average True Range (ATR) of 0.47 indicates relatively low volatility, while the average 20-day volume of 1,650 shares suggests limited trading activity. These metrics collectively point to a bearish trend in the short term, with potential challenges in liquidity due to low trading volume.

Fundamentally, the ETF has assets under management (AUM) of $12.83 million, which is relatively small compared to other energy-focused ETFs. This smaller AUM may result in higher expense ratios and less negotiating power in trading securities. However, it also allows for a more concentrated exposure to the specific segment of the Texas oil and gas market targeted by the fund.

Looking ahead, the next three months may see continued pressure on OILTs price if the broader energy sector remains subdued. The funds technical indicators, particularly the positioning below all major moving averages, suggest a challenging near-term outlook. Additionally, the low average volume could exacerbate price movements, making the fund more sensitive to market sentiment shifts. However, any positive developments in oil prices or increased demand for Texas-based energy production could provide a catalyst for recovery. Investors should closely monitor both the technical trends and underlying fundamentals, as well as broader energy market dynamics, when evaluating OILT in the coming months.