Trump Accounts Are Open: 500,000 Signed Up in Days. Here’s What the 0.10% Fee Cap Actually Lets You Buy
Half a million Trump Accounts opened in days, and most new holders are about to pick the same S&P 500 fund without realizing a cheaper eligible option exists inside the very fee cap designed to protect them.
The Vanguard S&P 500 ETF (NYSEARCA:VOO) is the fund most retail investors reach for when they want the S&P 500 in one ticker. Treasury opened Trump Accounts on July 4, and roughly 500,000 were opened in the first few days. Contributions are capped at $5,000 a year, and eligible investments are limited to US-equity index funds with an expense ratio of 0.10% or less. VOO clears that bar easily, which is why it will be the default choice for many new account holders. It also deserves a second look before the money goes in.
Why VOO Became the Default
At a 0.03% expense ratio, VOO delivers tight tracking of the S&P 500 and carries the weight of Vanguard’s brand recognition. Retail engagement has been steady, with Reddit sentiment peaking at 78, which registers as bullish, on July 10, driven largely by threads like “Is $100/week on VOO a good idea?” Performance has stayed right in line with the index it follows, coming in at 19.58% over the past year and 82.79% over five years on an adjusted basis. In a taxable brokerage account, none of that raises any red flags.
The iShares Core S&P 500 ETF (NYSEARCA:IVV) is the near-clone of BlackRock, with an identical 0.03% expense ratio and a 19.59% one-year return. Either is a reasonable default. Both fit inside the Trump Account fee cap with room to spare.
Where the Default Falls Short
The 0.10% ceiling is a ceiling, not a target. Inside a Trump Account, the meaningful question is which eligible fund costs the least while delivering the same index. VOO at 3 basis points is not the cheapest option available in the eligible universe.
The State Street Alternative
The SPDR Portfolio S&P 500 ETF (NYSEARCA:SPYM) charges 0.02%, one basis point below VOO and IVV. State Street renamed the fund from SPLG to SPYM on October 31, 2025, as part of a rebrand grouping its portfolio-tier funds under the SPY family. The index exposure did not change. Top holdings mirror the S&P 500’s mega-cap concentration: NVIDIA at 7.57%, Apple at 6.66%, and Microsoft at 4.91% as of March 31, 2026.
One-year total return on SPYM was 19.57%, within a rounding error of VOO’s 19.58% and IVV’s 19.59%. Over five years, SPYM returned 82.81% against VOO’s 82.79%. The funds are functionally the same portfolio at slightly different price points.
What the Basis Point Actually Buys
On a maxed $5,000 annual contribution, the difference between 0.03% and 0.02% is 50 cents in the first year. It compounds as the account grows across years of contributions and market returns, but the edge is measured in dollars per year for most of the account’s life. The case for SPYM is that it delivers the same index with one less basis point of drag, and a Trump Account with a low contribution ceiling is precisely the container where fee minimization is worth doing on principle.
Tradeoffs Worth Naming
On any given day, SPYM’s tracking will not match VOO’s exactly, and those small performance gaps above reflect that reality. Both funds hold effectively the same 500 names with the same weights, so the underlying exposure is nearly identical. With $157.41 billion in assets and daily volume around 8.9 million shares, SPYM sits well past any liquidity threshold that would matter for retail-sized trades. VOO’s $5.99 trillion asset base is certainly larger, but AUM does not translate into a return advantage when the underlying index is exactly the same.
How to Set It Up
Because Trump Accounts are new and funded with fresh dollars, there is no tax friction in choosing SPYM at the start rather than switching later. For existing taxable positions in VOO or IVV outside the account, selling to buy SPYM can trigger capital gains, and the one-basis-point savings will not offset that. The decision that matters is which fund receives the new contributions inside the Trump Account, where the fee cap defines the game.
Deciding What Goes In
For a Trump Account holder who would otherwise default to VOO, SPYM is the same index for one basis point less. The edge is small and consistent rather than dramatic. IVV remains a fine choice at 0.03% for anyone who prefers the iShares platform. The reader who wants the cheapest eligible S&P 500 exposure available under the 0.10% rule has a clear answer, and it is not the fund most of them are about to pick.
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David Beren has been a Flywheel Publishing contributor since 2022. Writing for 24/7 Wall St. since 2023, David loves to write about topics of all shapes and sizes. As a technology expert, David focuses heavily on consumer electronics brands, automobiles, and general technology. He has previously written for LifeWire, formerly About.com. As a part-time freelance writer, David’s “day job” has been working on and leading social media for multiple Fortune 100 brands. David loves the flexibility of this field and its ability to reach customers exactly where they like to spend their time. Additionally, David previously published his own blog, TmoNews.com, which reached 3 million readers in its first year. In addition to freelance and social media work, David loves to spend time with his family and children and relive the glory days of video game consoles by playing any retro game console he can get his hands on.
