Roundhill Investments is poised to introduce the first U.S. exchange-traded funds tied to prediction markets, with a launch date set for May 5, as reported by Bloomberg ETF analyst James Seyffart. This move is followed by two other asset managers preparing similar products.

According to a filing with the U.S. Securities and Exchange Commission, Roundhill will list six funds tied to the control of the White House, Senate, and House by Democrats or Republicans.

The funds 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 focus on post-election control after November 3, 2026, while the presidential products are tied to the November 7, 2028, election.

Exposure is gained through swap agreements referencing binary event contracts traded on CFTC-regulated markets, with these contracts settling at $1 if the outcome occurs and $0 if it does not. A warning in the prospectus cautions that if the targeted party does not 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 above $0.995 or below $0.005 for five consecutive trading days, the fund treats the outcome as decided and moves into the next cycle. For the midterm funds, this means exposure to the 2028 House and Senate elections, and for BLUP and REDP, it means the 2032 presidential race. The prospectus also notes that if the market is later proved incorrect, there will be no recourse for shareholders. Other companies, such as Bitwise and GraniteShares, have filed similar proposals, with differing structures in how they handle fund termination and continuation.

The introduction of these ETFs could expand access to political event contracts, currently traded on platforms like Polymarket and Kalshi, by allowing them to be held in ordinary brokerage and some retirement accounts. This development follows the CFTC's withdrawal of a proposal that would have banned political event contracts, although challenges from state regulators continue.

Roundhill has also filed to list non-political prediction market ETFs, including those tied to the possibility of a U.S. recession.