Treasury picks BlackRock, Vanguard ETFs for Trump Accounts launching July 4

The U.S. Treasury selected five low-cost index ETFs from BlackRock, State Street and Vanguard for Trump Accounts, the federal child savings program set to begin accepting contributions July 4.

The Treasury Department chose BlackRock's iShares Core S&P 500 ETF (IVV) and iShares Core S&P Total U.S. Stock Market ETF (ITOT), each carrying expense ratios of 0.03%, and named Vanguard's Total Stock Market ETF (VTI) as an alternate fund partner, according to a Wednesday announcement. State Street's SPDR Portfolio S&P 500 ETF (SPYM) will serve as the default investment when the accounts begin receiving money, with four additional low-cost index funds available once allocation tools are built out. The expense ratios range between 0.02% and 0.03%, well below the 0.10% fee cap Congress set for the program.

"By giving younger Americans the opportunity to start investing earlier, 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 Chairman and Chief Executive Officer Larry Fink said in a statement.

Under the program, the Treasury will deposit $1,000 as seed money into an investment account for each child with a valid Social Security number born between Jan. 1, 2025, and Dec. 31, 2028. More than 6 million children have been enrolled since the start of the year, the Treasury Department reported. Families can contribute up to $5,000 annually in after-tax dollars, with earnings growing tax-free until withdrawal. BNY Mellon serves as financial agent, while Robinhood acts as brokerage and initial trustee.

The fund lineup answers one of the most pressing questions financial advisors have faced since the One Big Beautiful Bill Act created the accounts last year, but it leaves significant operational and tax issues unresolved. The Treasury has not clarified how account balances will factor into financial-aid formulas for college, whether pre-18 contributions can later convert to a Roth IRA, or when families will be able to choose among the five funds rather than default into the State Street S&P 500 option.

Unanswered Questions Weigh on Advisor Adoption

Financial advisors have approached Trump Accounts with measured enthusiasm, citing the unresolved regulatory framework. "There's a mix of curiosity and interest when it comes to Trump Accounts," said Judson Meinhart, director of financial planning at Modera Wealth Management. "Clients are intrigued, especially around the 'free' $1,000 government contribution, but they're also asking a lot of practical questions."

The Department of Labor's Technical Release 2026-02 clarified that employer matching or pre-tax payroll contributions to a dependent's Trump Account will not trigger ERISA coverage, while Treasury Revenue Procedure 2026-25 provided a safe harbor exempting individual contributions from gift tax reporting. But CFP Board Managing Director of Government Relations Erin Koeppel said most items flagged in a May comment letter remain outstanding, including whether the statutory fee cap applies at the fund level or the account level.

BlackRock, Vanguard and State Street have each committed to matching the government's $1,000 contribution for their own employees' children, joining a growing list of employers making similar pledges. BlackRock's charitable arm has also funded financial-literacy campaigns tied to the program, including grants supporting state-level children's savings initiatives.

What Advisors Need to Know Now

For financial advisors, the standout use case is building long-term retirement savings for children, since contributions can begin before a child has earned income — a meaningful differentiator from custodial Roth IRAs. "Trump accounts will likely be a niche solution rather than a default one," Meinhart said, adding that 529 plans remain more tax-efficient for education goals while UTMAs offer greater flexibility for general gifting.

The program represents a structural shift in how Americans can begin investing across generations, with the potential to channel billions into low-cost index funds over time. But until the Treasury clarifies the conversion path to Roth IRA rules and the treatment of account balances in financial-aid formulas, many families may treat the $1,000 government seed money as a starting point rather than a primary savings vehicle.

This article is for informational purposes only and does not constitute investment advice.