Roundhill Investments is poised to launch the inaugural U.S. exchange-traded funds tied to prediction markets, with an expected launch date of May 5, as reported by Bloomberg ETF analyst James Seyffart.

This move is followed by two other asset managers preparing to introduce similar products. According to a filing with the U.S.

Securities and Exchange Commission, Roundhill will list six funds that are tied to the potential control of the White House, Senate, and House by either the Democrats or Republicans. The funds in question include the Roundhill Democratic President ETF (BLUP), Republican President ETF (REDP), Democratic Senate ETF (BLUS), Republican Senate ETF (REDS), Democratic House ETF (BLUH), and Republican House ETF (REDH). While the House and Senate products are linked to the outcomes of the November 3, 2026, elections, the presidential products are connected to the November 7, 2028, election.

These funds achieve exposure through swap agreements that reference binary event contracts traded on CFTC-regulated markets, with settlements of $1 if an outcome occurs and $0 if it does not. The prospectus explicitly warns that if the targeted party fails to win, the fund will incur substantial losses.

Roundhill has chosen not to terminate the funds after settlement. Instead, once the market prices a winner at above $0.995 or below $0.005 for five consecutive trading days, the fund treats the outcome as decided and transitions into the next cycle. For the midterm funds, this means exposure to the 2028 House and Senate elections, and for BLUP and REDP, it means exposure to the 2032 presidential race. However, the prospectus also notes that if the market's prediction is later proven incorrect, shareholders will have no recourse.

Bitwise and GraniteShares have filed similar six-fund proposals in February, with Bitwise utilizing a 'PredictionShares' brand. A key distinction lies in the structures of these funds: Bitwise's funds terminate shortly after each outcome is determined, whereas GraniteShares, like Roundhill, rolls into the next election.

Although political event contracts are already traded on prediction markets such as Polymarket and Kalshi, encapsulating them in ETFs could significantly expand access by enabling them to be held in standard brokerage accounts and certain retirement accounts. This development follows the CFTC's withdrawal of a Biden-era proposal in February that would have prohibited political event contracts. Nevertheless, state regulators in Massachusetts, New York, Nevada, and other states continue to challenge the underlying contracts in court. Roundhill has also filed to list non-political prediction market ETFs tied to the possibility of the U.S.

entering a recession, as indicated by a filing flagged by Bloomberg ETF analyst Eric Balchunas.