With Trump Accounts set to officially launch on July 4, the US Treasury Department is detailing where the money in those accounts will be invested.
At launch, all funds in a Trump Account will be automatically invested in the State Street SPDR Portfolio S&P 500 ETF (SPYM), which tracks the performance of the S&P 500 index. That includes contributions by parents and others to the child's account.
That fund was selected as the default investment because it is the lowest-cost S&P 500 ETF, according to the Treasury Department, with an expense ratio of only 2 basis points, while also offering broad exposure to the US stock market. Key to the Treasury's selection of funds was that the vehicles were the lowest cost for the public.
Other low-cost index ETFs eligible for Trump accounts include iShares Core S&P 500 ETF (IVV), Vanguard Total Stock Market ETF (VTI), State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM), and iShares Core S&P Total US Stock Market ETF (ITOT).
In the coming months, the Treasury Department says parents will be able to choose how to allocate funds across other investment options. Until then, all contributions will be invested by default in the State Street fund.
At launch, all funds in a Trump Account will be automatically invested in the State Street SPDR Portfolio S&P 500 ETF (SPYM), which tracks the performance of the S&P 500 index. That includes contributions by parents and others to the child's account.
That fund was selected as the default investment because it is the lowest-cost S&P 500 ETF, according to the Treasury Department, with an expense ratio of only 2 basis points, while also offering broad exposure to the US stock market. Key to the Treasury's selection of funds was that the vehicles were the lowest cost for the public.
Other low-cost index ETFs eligible for Trump accounts include iShares Core S&P 500 ETF (IVV), Vanguard Total Stock Market ETF (VTI), State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM), and iShares Core S&P Total US Stock Market ETF (ITOT).
In the coming months, the Treasury Department says parents will be able to choose how to allocate funds across other investment options. Until then, all contributions will be invested by default in the State Street fund.
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