Roundhill Investments is poised to unveil the inaugural US exchange-traded funds tied to prediction markets, with two additional asset managers preparing similar offerings. A filing with the US Securities and Exchange Commission reveals that Roundhill will list six funds linked to the control of the White House, Senate, and House by Democrats or Republicans.
According to Bloomberg ETF analyst James Seyffart, the launch is scheduled for May 5. The funds in question are the Roundhill Democratic President ETF, Republican President ETF, Democratic Senate ETF, Republican Senate ETF, Democratic House ETF, and Republican House ETF.
The House and Senate products are tied to the outcome of the November 3, 2026 elections, while the presidential products are linked to the November 7, 2028 election. Exposure is gained through swap agreements referencing binary event contracts traded on CFTC-regulated markets, which settle at $1 if the outcome occurs and $0 if it does not. The prospectus explicitly warns that if the targeted party fails to win, the fund will lose nearly all its value.
Roundhill has no plans to terminate the funds after settlement; instead, once the market prices a winner 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, exposure to the 2032 presidential race.
The prospectus cautions that if the market is later proven incorrect, there will be no recourse for shareholders. Bitwise and GraniteShares have filed identical six-fund slates in February, with Bitwise utilizing a PredictionShares brand; their structures differ in that Bitwise's funds terminate shortly after each outcome is determined, whereas GraniteShares and Roundhill roll into the next election. While political event contracts are already traded on prediction markets like Polymarket and Kalshi, wrapping them in ETFs could expand accessibility by allowing them to be held in ordinary brokerage accounts and certain retirement accounts. This development follows the CFTC's withdrawal of a Biden-era proposal in February that would have banned political event contracts, although state regulators in Massachusetts, New York, Nevada, and elsewhere 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 US entering a recession, as revealed in a filing flagged by Bloomberg ETF analyst Eric Balchunas.