Eric Balchunas Says Roundhill Election ETFs Could Be Potentially Groundbreaking Soon

TLDR

• Roundhill filed for six ETFs tied to 2028 US election outcomes through event contracts.
• The lineup covers the presidency plus Senate and House control for each major party.
• The filing says five funds could lose almost all value when event outcomes settle.
• Eric Balchunas wrote on X that the structure could be “potentially groundbreaking.”

Roundhill Investments has filed with the US Securities and Exchange Commission to launch six exchange-traded funds tied to event contracts on the 2028 US election. ETF analyst Eric Balchunas said in an X post that, if approved, the products could be “potentially groundbreaking” because they place prediction-style exposure inside a familiar ETF wrapper.

Six Party Outcome ETFs Tied to President, Senate, and House

Roundhill submitted the filings on Friday and proposed funds linked to outcomes for the presidency and control of Congress. The lineup includes the Roundhill Democratic President ETF and the Roundhill Republican President ETF, along with Democratic and Republican ETFs tied to the Senate and the House.

The filing says each fund would invest in, or seek exposure to, a “unique type of derivative instrument known as an event contract.” These contracts are structured to pay out based on a defined and measurable outcome. In this case, the outcome is which party wins the presidency or which party controls each chamber after the election.

Why Observers Call the Structure Potentially Groundbreaking

Balchunas wrote on X on Saturday that approval could open “a huge door to all kinds of stuff.” He added that prediction market applications can be easy to sign up for, but ETFs are “just that much easier.” His comments pointed to the way ETFs can be bought and sold through standard brokerage accounts and used within common investment workflows.

Roundhill’s filing also explains why the funds may behave differently from many traditional ETFs. It warns that as the contracts approach settlement, prices may converge quickly and cause sharp net asset value moves. “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 filing said.

Risk Warnings and Regulation Remain Central to the Proposal

Roundhill told investors that the fund tied to the winning election outcome seeks “capital appreciation,” but it warned the other five ETFs could lose almost all their value. This is because event contracts can settle to a binary outcome, and contracts tied to losing results can fall toward zero as settlement nears.

The filing also says US rules governing event contracts are “evolving,” and it warns that any change in how event contracts are classified or restricted could affect the funds. “Political outcome event contracts have been the subject of heightened regulatory scrutiny and debate,” the filing said, adding that regulators may decide certain contracts should be limited, modified, suspended, or prohibited. 

It also states that investors who are not comfortable with regulatory uncertainty should avoid purchasing shares. On Feb. 5, the US Commodity Futures Trading Commission withdrew a prior proposal that would have restricted certain sports and political prediction market contracts. The policy debate remains active, and the SEC’s review will be closely watched because the filing seeks to place event contracts inside a registered ETF structure.

The post Eric Balchunas Says Roundhill Election ETFs Could Be Potentially Groundbreaking Soon appeared first on CoinCentral.