Political Event ETFs Could Launch as Early as May

While American lawmakers are struggling to obtain tighter rules on prediction markets, exchange-traded funds (ETFs) connected to political event contracts are on the verge of reaching the market, and it’s sooner than you think. 

Namely, next week, according to Roundhill Investments’ filed Form N-1A, and they’re not alone.

Six EFTs, Underway

The 2018-founded SEC-registered investment advisor with a focus on innovative EFTs initially announced its intention to launch six ETFs linked to the results of major US elections in February, when it filed the form with the US Securities and Exchange Commission. 

These include funds tied to Democratic and Republican outcomes for the presidency, the House of Representatives, and the Senate.

If approved, the EFTs could begin trading on May 5. The proposed products are the Roundhill Democratic President ETF (BLUP), Roundhill Republican President ETF (REDP), Roundhill Democratic Senate ETF (BLUS), Roundhill Republican Senate ETF (REDS), Roundhill Democratic House ETF (BLUH), and Roundhill Republican House ETF (REDH).

The ETFs’ structure will reflect election outcomes. When one party wins control of a chamber, the corresponding ETF connected to the respective result gains value, with the opposing fund dropping. 

The presidential ETFs are also designed to continue beyond a single election cycle. After the 2028 election, they are expected to roll into products tracking the 2032 race rather than being closed.

Roundhill, known for its Roundhill Sports Betting & iGaming ETF, has also expanded its filings beyond politics. The firm has proposed two additional funds tied to recession outcomes, the Roundhill Recession Yes ETF (GDPD) and the Roundhill Recession No ETF (GDPU), which would track whether the US economy enters a downturn.

Others Follow Suit

Another issuer, GraniteShares, has very similar plans. In filings submitted earlier this week, the company listed May 8 as the effective date for its own set of election-related ETFs, which would cover Democratic and Republican outcomes across the presidency, Senate, and House.

Similar to Roundhill’s products, GraniteShares’ funds would also update following each election cycle, shifting the focus to future contests like the 2028 midterms or the 2032 presidential election.

Bitwise Investments is a third issuer that filed for similar ETFs but has not yet updated its application. 

All three firms have said they intend to work with designated contract markets to source the underlying election-linked contracts, even though they did not mention any specific providers.