US Election Prediction Market ETFs to Debut on Wall Street

Roundhill Investments is poised to introduce the first US exchange-traded funds tied to prediction markets, with two additional asset managers preparing similar offerings. A filing with the US Securities and Exchange Commission reveals that Roundhill will list six funds linked to Democratic or Republican control of the White House, Senate, and House. The launch is scheduled for May 5, according to 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. The House and Senate products are tied to the outcome of the November 3, 2026 elections, while the presidential products are linked to the November 7, 2028 election.

Exposure is gained 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 warns that if the targeted party does not win, the fund will lose nearly all its value. Roundhill will not 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 rolls into the next cycle.

The prospectus notes that if the market is later proved incorrect, there will be no recourse for shareholders. Bitwise and GraniteShares have filed similar six-fund slates, with differing structures; Bitwise's funds terminate after each outcome is determined, while GraniteShares and Roundhill roll into the next election. Prediction markets such as Polymarket and Kalshi already trade political event contracts, but wrapping them in ETFs could expand access by allowing them to be held in ordinary brokerage accounts and some retirement accounts.

This development follows the CFTC's withdrawal of a Biden-era proposal 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 tied to the possibility of a US recession, according to a filing flagged by Bloomberg ETF analyst Eric Balchunas.