US Election Prediction Market ETFs to Debut on Wall Street

In a groundbreaking move, Roundhill Investments is poised to launch the first US exchange-traded funds linked to prediction markets, with the introduction of six funds tied to the 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 are the Roundhill Democratic President ETF, Republican President ETF, Democratic Senate ETF, Republican Senate ETF, Democratic House ETF, and Republican House ETF. These products are connected to the outcome of the November 3, 2026 elections for the House and Senate, and the November 7, 2028 presidential election. The funds achieve exposure through swap agreements referencing binary event contracts traded on CFTC-regulated markets, which settle at $1 if the predicted outcome occurs and $0 if it does not.

A warning in the prospectus cautions that if the targeted party fails to win, the fund will lose nearly all its value. 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.

The prospectus explicitly states that if the market is later proven incorrect, shareholders will have no recourse. Other companies, such as Bitwise and GraniteShares, have filed similar proposals, with Bitwise's funds terminating shortly after each outcome is determined, while GraniteShares, like Roundhill, plans to roll into the next election.

While political event contracts are already traded on prediction markets like Polymarket and Kalshi, the introduction of ETFs could increase accessibility by allowing them to be held in ordinary 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 tied to the possibility of a US recession, as reported by Bloomberg ETF analyst Eric Balchunas.