With only a few days until launch, Treasury announced that all Trump Accounts will be defaulted into investing in the State Street SPDR Portfolio S&P 500 ETF (“SPYM”), which is a low-cost exchange-traded fund (“ETF”) that tracks the performance of the S&P 500 Index. The fund was selected to provide broad exposure to the U.S. stock market while maintaining expenses well below the maximum 10 basis point fee allowed by law.
In the coming months, the following additional funds will be available (along with instructions on how to change from the default fund):
• 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)
• iShares Core S&P total U.S. Stock Market ETF (ITOT)
These funds are the first to get Treasury approval, and they meet the parameters set forth in Notice 2025-68 regarding an eligible investment — a mutual fund or exchange traded fund (“ETF”) that tracks an index of primarily U.S. companies (such as the Standard and Poor’s 500 stock market index), does not use leverage, does not have annual fees and expenses of more than 10 basis points on the balance of the investment in the fund, and meets other criteria that the Treasury Secretary determines appropriate.
An estimated 6 million Trump Accounts have been opened to date. If each account were funded with $1000 on July 6, $6 billion dollars would flow into the default fund. Although there is talk on the Hill regarding expanding the investment line beyond passive investments, it begins with SPYM.
At launch, all contributions to Trump Accounts will be invested in the State Street SPDR Portfolio S&P 500 ETF ("SPYM") a low-cost exchange-traded fund ("ETF") that tracks the performance of the S&P 500 Index. The fund was selected to provide broad exposure to the U.S. stock market while maintaining expenses well below the statutory fee limitation.
