First-Ever US Election Prediction Market ETFs Set to Launch on Wall Street

Roundhill Investments is poised to introduce the first US exchange-traded funds tied 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 include 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 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 referencing 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 highlights that if the targeted party fails to win, the fund will likely lose nearly all its value. Roundhill has opted not 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.

The prospectus also notes that if the market's decision is later proved incorrect, there will be no recourse for shareholders. Other asset managers, such as Bitwise and GraniteShares, have filed similar proposals, with distinct structures; Bitwise's funds will terminate shortly after each outcome is determined, while GraniteShares' funds will roll into the next election.

Currently, political event contracts are traded on prediction markets like Polymarket and Kalshi, but 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 the 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.