The First Prediction Market ETFs for US Elections Are 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 focus on the 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 linked to the outcomes of the upcoming elections, with the House and Senate funds tied to the results of the November 3, 2026 elections, and the presidential funds pointing 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 predicted outcome occurs and $0 if it does not. A warning in the prospectus states that if the targeted party does not win, the fund will lose nearly all its value.

Roundhill has opted not to terminate the funds after settlement; instead, once the market prices a winner at 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. The prospectus also notes that if the market is later proven incorrect, there will be no recourse for shareholders. Bitwise and GraniteShares have filed similar six-fund slates, with Bitwise using a 'PredictionShares' brand, and their structures differ in that Bitwise's funds terminate shortly after each outcome is determined, while GraniteShares, like Roundhill, rolls into the next election.

While political event contracts are already traded on prediction markets, wrapping them in ETFs could increase accessibility by allowing them to be held in ordinary brokerage accounts and some 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 underlying contracts in court. Roundhill has also filed to list non-political prediction market ETFs tied to the likelihood of the US entering a recession, as flagged by Bloomberg ETF analyst Eric Balchunas.