Roundhill Investments is poised to unveil the first US-based exchange-traded funds tied to prediction markets, with two additional asset managers preparing to launch similar products. A filing with the US Securities and Exchange Commission reveals that Roundhill will list six funds linked to the potential control of the White House, Senate, and House by Democrats or Republicans. The launch is scheduled for May 5, according to Bloomberg ETF analyst James Seyffart. The funds in question include the Roundhill Democratic President ETF (BLUP), Republican President ETF (REDP), Democratic Senate ETF (BLUS), Republican Senate ETF (REDS), Democratic House ETF (BLUH), and Republican House ETF (REDH).
The House and Senate products are tied to the control of these entities following the November 3, 2026 elections, while the presidential products are linked to the November 7, 2028 election. The funds achieve exposure 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 cautions in capitalized text 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. 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 2028 House and Senate exposure for the midterm funds and the 2032 presidential race for BLUP and REDP.
The prospectus notes 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 as Bitwise's funds terminate shortly after each outcome is determined, while GraniteShares, like Roundhill, transitions into the next election. Political event contracts are already traded on prediction markets such as Polymarket and Kalshi, but incorporating them into ETFs could expand accessibility by allowing them to be held in ordinary brokerage accounts and certain retirement accounts.
This development comes after the CFTC withdrew 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 linked to the potential US recession, according to a filing flagged by Bloomberg ETF analyst Eric Balchunas.