Treasury Proposed Rules Cement VTI's Place in Trump Accounts with 0.1% Fee Cap

The Treasury Department and IRS on August 20 issued proposed regulations formally defining which investments qualify for Trump Accounts (530A accounts), the government-seeded custodial program that launched on July 4. The proposed rules limit eligible holdings during the growth period — from account opening through December 31 of the year a beneficiary turns 17 — to mutual funds and ETFs that track a U.S. equity index, avoid leverage, and charge no more than 0.1% in annual expenses. Vanguard Total Stock Market ETF (VTI), already named as one of the five approved fund options at launch, carries an expense ratio of 0.03%, placing it well inside that threshold.

Treasury's framework effectively codifies the design philosophy that led to VTI's selection in the first place. The five-fund lineup — led by the default State Street SPDR Portfolio S&P 500 ETF (SPYM) alongside VTI, iShares Core S&P 500 ETF (IVV), State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM), and iShares Core S&P Total U.S. Stock Market ETF (ITOT) — all carry expense ratios between 0.02% and 0.03%, far below Congress's statutory 0.1% ceiling. Vanguard, which confirmed its role as an official alternate fund partner in July, is the only provider offering a total-market fund covering roughly 3,700 domestic stocks across the full market cap spectrum rather than a subset index.

The IRS has opened a comment period through October 20, with the proposed regulations set to apply to tax years beginning on or after January 1, 2026. For Vanguard, the formalization of cost and index-tracking criteria as the legal standard for Trump Account eligibility reinforces the structural advantage of the firm's passive, low-fee model at a moment when the program is expected to channel tens of billions of dollars into eligible equity funds over the next decade.