The First Prediction Market ETFs for US Elections Are Launching on Wall Street

Roundhill Investments is poised to introduce the first US exchange-traded funds linked to prediction markets, with the launch of six funds that will track the potential control of the White House, Senate, and House by Democrats or Republicans. According to SEC filings, the funds will be listed on May 5, as confirmed by Bloomberg ETF analyst James Seyffart. The funds in question include 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 will focus on the outcome of the November 3, 2026 elections, while the presidential products will focus on the November 7, 2028 election. These funds will gain exposure through swap agreements tied to binary event contracts traded on CFTC-regulated markets, which settle at $1 if the predicted outcome occurs and $0 if it does not. The prospectus explicitly warns that if the targeted party fails to win, the fund will suffer substantial losses.

Roundhill has decided against terminating the funds after settlement; instead, once the market determines a winner with a price above $0.995 or below $0.005 for five consecutive trading days, the fund will roll into the next cycle. The prospectus also notes that if the market's prediction is later proven incorrect, shareholders will have no recourse. Other companies, such as Bitwise and GraniteShares, have also filed for similar ETFs, with Bitwise's funds set to terminate shortly after each outcome is determined, while GraniteShares will follow a structure similar to Roundhill's. Although political event contracts are already being traded on prediction markets like Polymarket and Kalshi, the introduction of ETFs could expand accessibility by allowing them to be held in standard brokerage accounts and certain retirement accounts.

This development comes after the CFTC withdrew a proposal that would have banned political event contracts, although state regulators in several states continue to challenge these contracts in court. Roundhill has also filed to list non-political prediction market ETFs that will track the likelihood of the US entering a recession, as reported by Bloomberg ETF analyst Eric Balchunas.