US-based ETF issuer Roundhill Investments has filed with the US Securities and Exchange Commission (SEC) to launch six novel exchange-traded funds (ETFs) tied to event contracts on the outcome of the 2028 US presidential election. The proposed lineup includes the Roundhill Democratic President ETF, the Roundhill Republican President ETF, and similar funds for Democratic and Republican control of the Senate and House of Representatives.
The filing details that each fund would invest in or seek exposure to a "unique type of derivative instrument known as an event contract," structured to pay out based on a defined, measurable political outcome. The fund tied to the winning outcome aims for capital appreciation, while the filing explicitly warns that the other five ETFs could lose almost all their value as contracts tied to losing results settle toward zero.
ETF analyst Eric Balchunas called the proposed structure "potentially groundbreaking" in a social media post, stating that approval "opens up huge door to all kinds of stuff." He highlighted the accessibility advantage, noting that while prediction market applications are easy to use, ETFs are "just that much easier" for investors through standard brokerage accounts.
The filing cautions investors about significant risks, including extreme price volatility as contracts near settlement. "This convergence will result in a sudden and substantial increase or decrease in the value of the Fund’s NAV, which is highly unique among other investment products," the document states. It also warns of an "evolving" regulatory landscape, noting that political outcome event contracts face "heightened regulatory scrutiny and debate" and that regulators may limit or prohibit them.
This filing follows a recent shift in regulatory posture. On February 5, the US Commodity Futures Trading Commission (CFTC) withdrew a Biden-era proposal to ban sports and political prediction markets, which are popular forms of event contracts. The SEC's review of this ETF application will be closely watched as it seeks to place these contracts inside a registered fund structure.
