Treasury Picks Five Low-Cost ETFs for Trump Accounts

The U.S. Department of the Treasury announced the investment lineup for Trump Accounts, a federal program that began accepting accounts on July 4. The program provides a $1,000 federal seed contribution to eligible children under 18 and allows family members, friends and employers to contribute up to $5,000 per child.

At account opening, all initial contributions will be invested automatically in State Street’s SPDR Portfolio S&P 500 ETF (SPYM). SPYM tracks the S&P 500 and has an expense ratio of 0.02%.

The Treasury approved four additional ETFs that will become selectable options after account customization features are activated: BlackRock’s iShares Core S&P 500 ETF (IVV), State Street’s SPDR Portfolio S&P 1500 Composite ETF (SPTM), Vanguard’s Total Stock Market ETF (VTI) and iShares’ Core S&P Total U.S. Stock Market ETF (ITOT). Each of those funds carries an expense ratio near 0.03%.

SPYM and IVV track the S&P 500 and focus on the largest U.S. companies by market value. SPTM, VTI and ITOT include mid- and small-cap stocks and cover a larger portion of the U.S. equity market.

The Treasury will publish the activation date for individual account adjustments and will provide custodians with step-by-step guidance for reallocating balances away from the default SPYM allocation when that functionality is available.

When a beneficiary turns 18, the account holder gains full access and may use the funds for investing or other purposes.

The listed funds are all U.S.-equity ETFs chosen for low expense ratios and broad market exposure to be available within the Trump Accounts program.