Treasury Shares Investment Options for Trump Accounts
The default will be a State Street exchange-traded fund based on the S&P 500, and four more index funds will be available in the coming months.
The Department of the Treasury selected the State Street SPDR Portfolio S&P 500 ETF as the default investment option for Trump Accounts, which launch July 4.
According to the announcement, the Treasury will make four additional low-cost index fund options available as investments in the coming months.
Those options are:
- iShares Core S&P 500 ETF;
- Vanguard Total Stock Market ETF;
- State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF; and
- iShares Core S&P total U.S. Stock Market ETF.
“These funds have been selected to provide diversified exposure across major segments of the financial markets while keeping investment costs low,” the Treasury stated in the announcement.
Actual fee levels were not part of the announcement. The published expense ratio for State Street’s fund, ticker SPY, is 0.02%. The published expense ratio for each of the four additional funds is 0.03%.
Annual fees for Trump Accounts are legally capped at 0.10%.
Treasury also stated that it will release future guidance about how and when account holders can allocate funds across the additional investment options and make changes, if they so desire.
The July 1 announcement clarifies what investments will be eligible for the accounts, which are intended to invest in broad, U.S.-based index funds.
The announcement did not mention any intention to further diversify the investment options available, such as adding opportunities for investors to include international equity exposure, or bonds.