Roundhill Investments is poised to introduce the first US exchange-traded funds connected to prediction markets, with the launch of six funds that 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 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 tied to the outcomes 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 that reference binary event contracts traded on CFTC-regulated markets, with these contracts settling at $1 if the specified 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.
Rather than terminating the funds after settlement, Roundhill will roll them into the next cycle once the market prices a winner at above $0.995 or below $0.005 for five consecutive trading days. The prospectus also notes that if the market is later proven incorrect, there will be no recourse for shareholders. Other asset managers, such as Bitwise and GraniteShares, have filed similar proposals, with Bitwise using a 'PredictionShares' brand and differing structures in terms of fund termination and rollover.
While political event contracts are already traded on prediction markets, the introduction of ETFs could expand access by allowing them to be held in ordinary brokerage accounts and certain retirement accounts. This development follows the CFTC's withdrawal of a proposal that would have banned political event contracts, although state regulators continue to challenge these contracts in court.
Roundhill has also filed to list non-political prediction market ETFs focused on the possibility of a US recession.