US Elections to See First Prediction Market ETFs Launched by 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. According to a US Securities and Exchange Commission filing, Roundhill will list six funds linked to the control of the White House, Senate, and House by Democrats or Republicans. The launch is scheduled for May 5, as reported 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. 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 race. These funds gain 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 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 will treat the outcome as decided and roll into the next cycle. The prospectus notes that if the market is later proven wrong, there will be no recourse for shareholders. Bitwise and GraniteShares have filed identical six-fund slates in February, with Bitwise using a 'PredictionShares' brand, though their structures differ. Political event contracts are already traded on prediction markets, but wrapping them in ETFs could expand access 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 continue to challenge the underlying contracts in court. Roundhill has also filed to list non-political prediction market ETFs tied to the possibility of the US entering a recession.