State Street Tapped as Default for Trump Account Investments
Money flowing into President Donald Trump’s newly created accounts for children will initially be invested in a State Street Corp. exchange-traded fund, as the US Treasury Department prepares to roll out the program.
At first, all contributions will go into the State Street SPDR Portfolio S&P 500 ETF, according to a statement from the Treasury Department Wednesday. The government also chose four other alternative options that people can select later on, including BlackRock Inc.’s iShares Core S&P 500 ETF and iShares Core S&P Total US Stock Market ETF, Vanguard Total Stock Market ETF, and State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF.
The federal government created the so-called Trump accounts for children as part of the One Big Beautiful Bill Act. Each account will be seeded with $1,000 from the government for children born in the US from the start of 2025 through the end of 2028.
The default State Street S&P 500 index fund is the lowest-fee of the five funds approved. It carries a 0.02% expense ratio, which is below the 0.03% on the other funds.
“In the coming months, Treasury expects to make available functionality that will allow parents or guardians to choose how to allocate funds across the additional investment options,” according to the statement. “Until that functionality is available, all contributions will remain invested in the default fund.”
State Street Investment Management Chief Business Officer Anna Paglia said in a separate statement that the company is excited to have the accounts start with one of the company’s funds. Vanguard Group Inc. called the Trump accounts an innovative way to help families save and invest.
“Trump Accounts can help millions build long-term financial security, develop a greater stake in the future of the country, and share more directly in the growth and prosperity of the United States,” BlackRock Chief Executive Officer Larry Fink said in a separate statement.
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