"The president gives newborns 1.5 million won each"... 'Trump Accounts' to pour 27 trillion won into U.S. stocks

[Financial News]  As the U.S. government officially launched 'Trump Accounts,' a program that gives newborns seed money for investing, expectations are growing that a large amount of new capital will flow into the U.S. stock market. With government subsidies and corporate donations combined, some forecasts say at least $20 billion (about 27 trillion won) could move into U.S. equities in the second half of this year alone.
According to foreign media outlets including CNN and CNBC, as well as the U.S. Department of the Treasury, Trump Accounts officially began operations on the 4th (local time). U.S. President Donald Trump attended a joint opening bell ceremony with the New York Stock Exchange (NYSE) and Nasdaq at The White House and formally announced the launch of the program, saying, "It will be a truly amazing benefit for children."
Trump Accounts are long-term investment accounts for children under 18 in the United States. In particular, the U.S. government will deposit $1,000 per account for newborn U.S. citizens born between Jan. 1, 2025, and Dec. 31, 2028. The system works by having the government provide the initial investment once a parent or legal guardian opens an account.
According to the Treasury Department, about 6 million children have opened Trump Accounts so far. Of them, about 1.4 million newborns can immediately receive the government's $1,000 contribution. The rest opened accounts through voluntary parental deposits or private donations.

The biggest feature of Trump Accounts is that investments are concentrated in U.S. stocks.
Individual stock trading is not allowed in the accounts. Instead, investors can only put money into mutual funds and exchange-traded funds (ETFs) that track major U.S. indexes such as the S&P500 and Nasdaq-100 (NDX).
The Treasury Department has designated State Street's "SPDR Portfolio S&P500 ETF (SPYM)" as the default investment product for all accounts. It plans to expand the lineup so that additional ETFs can be selected in the future. Annual management fees are capped at 0.1% of assets. If $1,000 is invested, the annual fee would be at most about $1.
Parents can manage their children's accounts through a dedicated app or website jointly developed by Robinhood and BNY.
Wall Street sees Trump Accounts as a new driver for the U.S. stock market. Wells Fargo & Company, one of the major banks in the United States, projected that more than $19.5 billion (about 27 trillion won) will flow into Trump Accounts in the second half of this year alone.
Ohsung Kwon, Chief Equity Strategist at Wells Fargo, said, "$20 billion is only about 3% of the amount contributed each year to 401(k) retirement plans, but because most of it is expected to come in during the third quarter, its market impact will be even greater."
In particular, unlike retirement plans, which are diversified across bonds and overseas assets, Trump Accounts invest only in U.S. equity ETFs. As a result, analysts expect a stronger boost to the stock market, especially large-cap technology stocks.

Private companies are also stepping up their participation.
Michael Dell and his wife Susan Dell have decided to contribute $250 per account to 25 million children age 10 and under who were born before Jan. 1, 2025 and are therefore not eligible for government support.
Gwynne Shotwell, president of SpaceX, also announced that the company will donate one SpaceX share each to more than 2 million children through Trump Accounts.
In addition, Goldman Sachs, Morgan Stanley, JPMorgan Chase & Co., and BlackRock, as well as Comcast Corporation, Micron, and Intel, plan to provide additional support equal to the government subsidy for the children of their employees.
y27k@fnnews.com Seo Yoon-kyung Reporter