Permitted Investments for Children Under 18
Conservative Investment Strategy
To protect children's savings during the Growth Period, the program restricts investment options to low-risk, broad-based equity funds:
Approved Investment Types
- Low-cost mutual funds tracking broad U.S. equity indices (e.g., S&P 500 index funds)
- Exchange-Traded Funds (ETFs) with similar broad market exposure
- Diversified index-based investment vehicles
Fee Cap Requirement
- Maximum Fee: 10 basis points (0.10%) annually
- Purpose: Ensures maximum growth and minimizes expenses
- Approved Funds: Most major index fund providers (Vanguard, Fidelity, Schwab) offer funds well below this cap
What's NOT Permitted
- Individual stocks
- Bonds or fixed-income securities
- Commodities or forex trading
- Options or derivatives
- High-fee active mutual funds
- Speculative investments
Why These Guardrails?
By restricting investments to low-cost index funds, the program ensures:
- Broad market exposure and diversification
- Protection against individual stock risk
- Maximum compounding growth over the long term
- Transparency and ease of monitoring