The U.S. Treasury Department released proposed regulatory guidance Thursday regarding eligible investment options for Trump Accounts, a new type of tax-deferred savings vehicle designed for children. The guidance establishes criteria for what investment products may qualify as options within the accounts going forward.
Under the proposed framework, eligible investments must consist of index funds designed to track broad segments of either the U.S. or global equity markets using objective financial criteria. The guidance emphasizes low expense ratios and other cost-related qualifications. Treasury officials stated that limiting investments to straightforward, low-cost options would allow accounts to retain a larger share of investment returns over time through compound growth.
Bank of New York Mellon currently serves as the official manager for newly established Trump Accounts. The proposed guidelines would also apply to any future trustees if account holders decide to transfer their assets to different custodians. Currently, Trump Account contributions are invested in exchange-traded funds tracking the S&P 500, with State Street SPDR Portfolio S&P 500 ETF (SPYM) designated as the default investment option.
Additional investment options currently available include the 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 U.S. Stock Market ETF (ITOT). Account holders can monitor their investments through the Trump Accounts app, which was developed in partnership with RobinHood. Treasury officials emphasized that modest differences in annual costs can accumulate significantly over decades of investing, making low-cost options particularly important for accounts held from birth through adulthood.
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