Treasury Picks The Stocks America’s Kids Will Own

Treasury Picks The Stocks America’s Kids Will Own

Mitchell Duran

Fri, August 21, 2026 at 12:19 AM GMT+3 3 min read

• SPYM +0.39%

THE GIST

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The Treasury Department on Thursday announced new guidance for its "Trump Accounts," which seeks to give American children tax-advantaged long term savings. It picked a group of low-cost index funds that the federal government says will help keep more money in the account holders' pockets.

WHAT HAPPENED

Trump Accounts are basically IRAs for kids under 18.

The tax-advantaged accounts are funded through a few distinct avenues: a one-time, tax-free $1,000 federal seed grant; up to $5,000 annually from parents, family, and friends; employer contributions capped at $2,500 tax-free per year; and qualified private donors. A child can have an account opened on their behalf at any age from birth up until they turn 18.

So…who's getting the contributions?

In July, the Treasury Department announced the State Street SPDR Portfolio S&P 500 ETF (SPYM) would be the go-to default for all Trump Accounts. This is what Treasury meant by focusing on "keeping costs low, promoting broad diversification," and "helping children's savings grow over the long term." Treasury also included four additional low-cost index ETFs as well: the iShares Core S&P 500 ETF from BlackRock (IVV), the Vanguard Total Stock Market ETF from Vanguard (VTI), the SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM), and the iShares Core U.S. Aggregate Stock Market ETF (ITOT).

All of them have a low expense ratio (an annual fee charged by the fund manager) of 0.02%–0.03%, meaning your investment returns can compound over time across anywhere from 500 to 2,500 holdings.

WHY IT MATTERS

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Treasury is making it clear with the new guidance that they'll be "limiting" Trump Accounts to only "choices with low expense ratios" and "excluding products with excessive fees or unnecessarily complex strategies."

By emphasizing straightforward, low-cost investment options, they say children will be able to benefit "more fully" from decades of compound growth, and ensure that more of that is kept in their pockets rather than to pay down fees.

It's essentially a bet on diversification, rather than consolidating all that Trump Account money into a single sector. And there's a lot on the line. The Congressional Budget Office projects annual U.S. births to hover around 3.3 million to 3.6 million over the next 20 years. When the federal government stops contributing to Trump Accounts, on December 31, 2028, at $1,000 per child, that comes to approximately $13.8 billion, assuming the parent or guardian elects to receive the federal contribution.

Given SPYM's 0.02% annual fee, that could translate into anywhere from $5.5 million to $11 million in fees over time, depending on the collective fund balance, including contributions from families and employers.

WHAT'S NEXT

The technology sector will end up being the biggest winner here, as it's the heaviest category in all five funds. Software and services, semiconductors and equipment, as well as hardware, are all going to have a new avenue of revenue from these Trump Accounts.

Think Apple, Amazon, Nvidia, and likely Anthropic once they IPO. There's also Robinhood, which was selected by the Treasury as the official brokerage partner and initial trustee of the Trump Accounts. The Trump Accounts automatically convert into a traditional IRA hosted on the Robinhood app once the child turns 18.