Tidal Files for Two Prediction-Market ETFs Linked to Fed Rate Decisions
Tidal Investments has filed for two prediction-market ETFs tied to Federal Reserve FOMC rate decisions. The Prediction Market Fed Funds Consensus ETF and the Prediction Market Fed Funds Surprise ETF would allow investors to gain indirect exposure through ETFs to event contracts linked to FOMC interest-rate decisions without participating directly in individual prediction markets.
The two funds are designed to invest in federal funds target-rate decisions through over-the-counter total return swaps (TRS) and prepaid forward contracts tied to event contracts regulated by the CFTC. The Prediction Market Fed Funds Consensus ETF would build its portfolio around event contracts reflecting the rate outcome the market views as most likely at scheduled FOMC meetings.
Tidal Investments, an affiliate of Tidal Financial Group, will serve as investment adviser to both ETFs and plans to bear most of the funds' operating expenses itself, or have third parties cover them. The management fees for the funds have not yet been determined.