Courtesy of Trump Accounts, more than seven million American children now hold a piece of Corporate America before most of them can talk, let alone trade a stock. And nearly all of that money is sitting in a single, two-basis-point index fund run by State Street.
According to Allison Bonds Mazza, senior managing director and head of U.S. Wealth at State Street Investment Management, billions of dollars have flowed into those accounts in the program’s first month. Although she declined to give a precise figure, there are some floating around the industry.
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With the U.S. Treasury Department’s pledge to deposit $1,000 for every child born between 2025 and 2028, the 1.4 million qualifying children already registered add up to $1.4 billion, Treasury Secretary Scott Bessent said. -
Families deposited nearly $125 million in Trump Accounts in the first five days alone, according to the White House. -
Tech billionaire Michael Dell pledged $6.25 billion to provide a $250 match for up to 25 million lower-income children under 10, according to the BBC. -
Wells Fargo estimates that the program will push more than $20 billion into U.S. equity index funds in 2026 alone.
Every one of those dollars landed, by default, in the State Street SPDR Portfolio S&P 500 ETF (SPYM), which the U.S. Treasury named the program’s exclusive default investment in a July 1 announcement. The Treasury said its selection criteria included broad exposure to the U.S. stock market at the lowest possible cost, and the State Street fund fit the bill.
The SPDR portfolio tracks the S&P 500 and charges two basis points, which makes it cheaper than any other U.S.-listed ETF tracking the index, Mazza said. “Every basis point matters, particularly for these longer-term investors, because every dollar that’s not going to expenses is a dollar that can compound.”
The Treasury’s announcement also named four other low-cost index funds that parents will eventually be able to choose as well in the future: the iShares Core S&P 500 ETF (IVV), the Vanguard Total Stock Market ETF (VTI), the State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM) and the iShares Core S&P Total U.S. Stock Market ETF (ITOT).
Until the government’s system is fully operational so that parents or custodians can reallocate to those other funds, however, every dollar for now stays in the default SPYM fund, Mazza confirmed.
Trump Accounts allow anyone born between 2025 and 2028 to receive a onetime $1,000 seed deposit, but the accounts can be opened even without that seed money to any American child under 18, Mazza said. Families, grandparents and employers can add to the accounts up to an annual cap, and when the child turns 18, the money can convert into an IRA or pay for costs like college, a first home or starting a business.
Of particular interest to financial advisors, Mazza said, is that the accounts land squarely inside the generational wealth transfer strategy, something that dominates advisor conversations already.
“The advisor that manages the parents’ money today isn’t automatically going to manage the children’s money tomorrow when they inherit it,” she said. Trump Accounts give advisors a reason to engage an entire family before that transfer happens, potentially expanding an advisor’s role from managing wealth that already exists to helping build it across generations.
That means advisors can add value now by answering certain important questions: about whether a client should open an account for a grandchild, whether a grandparent should contribute, how a Trump Account fits alongside a 529 plan, and how it fits into a family’s broader financial plan.
Mazza said State Street is in the process of building a range of tools and educational materials for advisors and clients, and she was expansive about how increased familiarity and comfort with exchange-traded funds will create a new generation of low-cost investors.
“Many of these children, their first investment experience isn’t going to be a stock. It’s not going to be a mutual fund. It’s going to be a low-cost ETF providing broad market exposure,” Mazza said. “We’ll be creating lifelong investors.”
Meanwhile, dozens of companies, including Goldman Sachs, JPMorgan Chase, Morgan Stanley, Bank of America, BlackRock and Charles Schwab, along with tech firms such as Intel, Nvidia and Uber, have pledged to match contributions for employees’ children, generally up to $2,500 a year.
State Street is one of them, Mazza said, though she had not yet opened accounts for her own three daughters.
“It’s on my list of things to do this weekend,” she said.