Kalshi remains a privately-owned enterprise, yet the prominent player in prediction markets has successfully made its entrance into another exchange-traded fund (ETF).
On Monday, ERShares, the provider of the ERShares Private-Public Crossover ETF (NASDAQ: XOVR), revealed its investment of $30 million in Kalshi during the ETF’s recent rebalancing. This $459 million ETF caters to both privately owned and publicly traded entities.
“Kalshi aims to translate uncertainty into pricing,” stated Eva Ados, Chief Investment Strategist and COO of ERShares. “This is why we believe prediction markets are significant. They offer investors, institutions, businesses, and individuals timely insights on future events within a regulated market framework.”
With this $30 million contribution, Kalshi represents 1.42% of the XOVR portfolio, according to issuer documentation. Only five assets in the ETF portfolio have a smaller allocation.
XOVR Expands its Portfolio with Kalshi
XOVR is not the inaugural ETF to hold a stake in Kalshi, the leading operator in prediction markets. That distinction belongs to the Tema Durable Quality ETF (CBOE: TOLL), which in May announced its investment in Kalshi via a special purpose vehicle (SPV). Kalshi is currently the largest component of that fund, accounting for a weight of 7.49%.
As demand grows among investors for access to pre-IPO companies like Kalshi, ETF issuers are adapting by utilizing SPVs to facilitate this exposure. ERShares implemented a similar strategy for SpaceX (NASDAQ: SPCX) before its IPO in June. This record-breaking IPO is one reason XOVR has gained popularity. Originally restructured in 2024, XOVR pioneered the integration of public and private equity under a single ETF wrapper.
“SpaceX paved the way for this approach, and Kalshi is the next focus of our venture capital lens,” said Joel Shulman, Ph.D., CFA, Founder and CIO of ERShares. “XOVR was designed to fulfill what traditional ETFs have historically failed to do: provide exposure to private equity alongside innovative public leaders within a transparent, Nasdaq-listed framework. We believe Kalshi is crucial in advancing financial market infrastructure.”
In terms of IPOs, Kalshi, which reportedly aims for another financing round at a valuation of $40 billion, has acknowledged that an IPO is being contemplated but will not take place this year.
XOVR Boasts Strong Prediction Market Representation
At present, dedicated prediction market ETFs are lacking in the marketplace, although Tema is expected to potentially change this situation soon. In the interim, ERShares’ XOVR serves as a reasonable alternative.
The fund allocates approximately 5.7% of its assets to Robinhood Markets (NASDAQ: HOOD) and DraftKings (NASDAQ: DKNG), both of which are gaining traction in the prediction market landscape. Additionally, Meta Platforms (NASDAQ: META), the parent company of Facebook and rumored to be developing its own prediction market, ranks as the ETF’s fourth-largest holding at 5.23%.