Asset Managers Propose 12 New Election-Based ETFs
On Tuesday, asset managers Bitwise and GraniteShares each submitted filings to the U.S. Securities and Exchange Commission (SEC) to introduce a new category of exchange-traded funds. Bitwise filed for six ETFs under the brand "PredictionShares," while GraniteShares proposed six similar funds. Both sets of products are designed to allow investors to speculate on the outcomes of U.S. elections, with plans to list on the NYSE Arca exchange. The funds specifically target the 2028 U.S. presidential election, as well as the 2026 contests for control of the Senate and House of Representatives.
Funds Settle at $1 or $0 Based on Political Outcomes
The structure of these ETFs centers on binary event contracts, a type of derivative traded on exchanges regulated by the Commodity Futures Trading Commission (CFTC). According to the prospectuses, each fund will invest at least 80% of its net assets in these contracts, which are designed to pay out $1 if a specific political outcome occurs and $0 if it does not. Consequently, the share price of each ETF will fluctuate between $0 and $1, reflecting the market's real-time implied probability of that party winning. The filings explicitly warn that if an investor bets on an outcome that does not happen, the fund is expected to lose "substantially all of its value."
'ETF-ization of Everything' Trend Accelerates
These proposals from Bitwise and GraniteShares are not the first of their kind, indicating a broader industry movement. They follow a similar filing from Roundhill Investments on February 14 for its own slate of election-based ETFs. The flurry of applications points to a growing effort to package new forms of speculation into the accessible and regulated ETF wrapper. This development prompted Bloomberg ETF analyst James Seyffart to remark on the ongoing expansion of investment products into novel areas.
The financialization and ETF-ization of everything continues.
— James Seyffart, Bloomberg ETF Analyst.
