The U.S. Treasury has selected two BlackRock exchange-traded funds to serve as the primary investment options for the governments new child savings initiative, known as Trump Accounts, and has identified a Vanguard ETF as an alternate choice. The program is scheduled to launch on July 4.
BlackRocks iShares Core S&P 500 ETF (IVV) and iShares Core S&P Total U.S. Stock Market ETF (ITOT) were named by Treasury officials as the funds that will be used under the scheme. Both ETFs carry expense ratios of 0.03%.
Vanguards Total Stock Market ETF (VTI) was designated as the alternate investment option, to be used if the primary funds are unavailable or if the Treasury implements the contingency plan associated with the program.
Larry Fink, chairman and chief executive officer of BlackRock, commented on the selection, saying: "By giving younger Americans the opportunity to start investing earlier, Trump Accounts can help millions build long-term financial security."
Under the program structure set out by the Treasury, the government will deposit $1,000 as seed money into an investment account for each child with a valid Social Security number who is born between 2025 and 2028. The accounts are intended to provide an early start to long-term saving for the eligible cohort.
Several investment firms and corporations have indicated they will participate in the program by matching the U.S. governments $1,000 contribution for their employees. BlackRock is among the companies that said it would provide such a match. The Treasurys announcement did not list a comprehensive roster of participating employers or provide further operational detail about employer matches.
Context and considerations
- The Treasury has chosen two low-cost iShares ETFs as the primary funds and a Vanguard ETF as the alternate.
- The program begins on July 4 and targets children born between 2025 and 2028 who have valid Social Security numbers.
- Employer or corporate matching of the government seed contributions has been pledged by multiple firms, including BlackRock, though the announcement does not catalogue all participants.
The Treasurys selection of passive, broadly diversified U.S. equities ETFs with minimal expense ratios underscores a focus on low-cost, market-cap-weighted exposure for the initial investment accounts. Beyond the named funds and the quoted comment from BlackRocks chief executive, the announcement provides limited detail on additional program mechanics or the extent of third-party employer participation.