Trump Accounts: US Treasury Selects BlackRock and Vanguard ETFs for Program

BlackRock, the world's largest asset manager, runs the iShares family of exchange traded funds along with a broad advisory and technology business that oversees trillions of dollars for institutions and individuals. The stock slid 2.52% to 984.89 dollars on July 8, even as the company landed a prominent role in a new federal savings program for children.

Trump Accounts Bring BlackRock a New Line of Business

The U.S. Treasury picked two BlackRock funds, the iShares Core S&P 500 ETF (IVV) and the iShares Core S&P Total U.S. Stock Market ETF (ITOT), as the default investment vehicles for Trump Accounts, a government backed child savings program launching July 4. Both funds carry expense ratios of just 0.03%. Vanguard's Total Stock Market ETF (VTI) was named as an alternate option, giving families a choice outside the BlackRock lineup.

Every child born between 2025 and 2028 with a valid Social Security number will have 1,000 dollars deposited into one of these accounts by the Treasury, and a number of employers, BlackRock among them, have said they will match that seed contribution for their own workers' children. BlackRock CEO Larry Fink framed the program as a way to give younger Americans a head start on investing, calling it a path toward long term financial security. For a firm whose iShares platform lives on scale and low fees, being named the default choice for a new government program is a meaningful, if not immediately material, win in terms of visibility and future asset flows.

BlackRock's Valuation, Momentum and Yield

The market's reaction to the news was muted at best. Shares fell to 984.89 dollars, putting the stock roughly in the middle of its 52 week range of 947.21 to 1,111.09 dollars. Market cap sits at 156.46 billion dollars, and the stock trades at a price to earnings ratio of 24.23, based on earnings per share of 40.65 dollars. That valuation reflects a business that still commands premium pricing for its scale and brand, even as fee compression across the ETF industry has been a persistent theme for years.

The Relative Strength Index reads 43.48, a level that sits below the neutral 50 mark and suggests the stock has leaned toward selling pressure recently rather than overbought enthusiasm. Income focused investors get a dividend yield of 2.33% at current prices, a steady if unspectacular payout for a company of BlackRock's size.

The bull case rests on distribution. Being the default fund provider for a new government savings program, even one funded by a modest 1,000 dollar deposit per child, plants BlackRock's iShares brand in front of millions of new accounts that could compound for decades. Add in the corporate matching commitments from BlackRock and other employers, and the program could quietly seed a large base of long term ETF holders.

The bear case is more about what the numbers already show than what the program might deliver. IVV and ITOT charge just 0.03%, so the direct revenue impact from Trump Accounts is likely to be tiny relative to BlackRock's overall asset base. The stock's RSI near 43 and its position below the midpoint of its 52 week range suggest investors are not yet pricing in much upside from the news, and a P/E above 24 leaves little room for disappointment if broader markets wobble or if fee pressure across passive investing intensifies.