Trump Accounts for Kids Feature 5 Low-Cost ETFs: How Much Big Tech Exposure Do They Carry?
Key takeaways
- Trump Accounts give kids a low‑cost, tax‑deferred way to invest, but the tech‑heavy ETFs could amplify gains or losses depending on future market leadership.
- SPYM expense ratio 0.02% ($2 per $10,000 annually)
- IVV, SPTM, ITOT, VTI expense ratio 0.03% ($3 per $10,000 annually)
- SPYM/IVV 15.1% annualized return (past decade)
What happened
The Trump Accounts program will let eligible U.S. children open tax‑deferred investment accounts that automatically invest in five low‑cost exchange‑traded funds (ETFs). The lineup includes SPDR Portfolio S&P 500 Exchange-traded fund — a basket of stocks or bonds you can buy like a single share.ETF
Why it matters
Parents can now give their children a government‑backed, low‑fee entry into the stock market, with the option to choose between a narrow large‑cap focus or a broader market spread. The choice matters because the ETFs’ technology weightings—up to 38% in IVV—can drive returns and risk, especially as mega‑cap tech…
Short-term and longer-term
Short-term. For the next few weeks, watch how parents respond to the program’s launch and whether they favor the narrow S&P 500 ETFs or the broader total‑market options.
Longer-term. Over the next 12–18 months, the program could shift long‑term investment habits toward low‑fee, tech‑heavy ETFs.
Words on this card
- Expense ratio
- The annual fee a fund charges as a percentage of assets under management
- Tax‑deferred
- Investments that grow without immediate tax consequences until withdrawal
- ETF Learn
- An exchange‑traded fund that trades like a stock but holds a basket of assets
- S&P 500
- An index of 500 large‑cap U.S. companies
- S&P 1500
- An index that includes the S&P 500 plus mid‑cap companies
- Total U.S. Stock Market
- An index covering large, mid, small and micro‑cap U.S. stocks