Volatility Shares Takes a Slap Shot on NHL ETFs

One ETF issuer wants to skip the peewee league and go straight to pro.

Volatility Shares has plans for 32 exchange-traded funds, one for each team in the National Hockey League. The firm filed Aug. 14 with the Securities and Exchange Commission for ETFs that would track season performance across the league. The Anaheim Ducks ETF, for example, would invest in futures contracts on the CME FSPI NHL Anaheim Ducks Index, which “is designed to systemically measure the cumulative team performance … during games played over the regular and post-season.”

“The sums invested in these ETFs would not go to any economically productive use. Rather, they would be part of a zero-sum exchange, with one side wagering on one outcome and the other on the opposite, with money changing hands between them,” Morningstar Managing Director Jeffrey Ptak told ETF Upside. “The bottom line is that this would be another form of financialized betting, with all the associated problems.”

Skate to Where the Fund Is

How the SEC will respond to the proposed funds is unknown, though the regulator has asked issuers to hold off on launching prediction-market-style ETFs while it currently reviews public comment. Until now, those products proposed by a handful of companies have centered on election outcomes and all-or-nothing wagers on market-related events. Sports betting would be a new angle. Volatility Shares declined to comment on the line of hockey ETFs, though the prospectuses state that the funds would not invest directly in prediction markets or event contracts. Rather, they would perform based on increases or decreases in the associated futures contracts.

That speaks to another difference the hockey ETFs would have from other prediction-market-themed funds:

• Other ETFs to date all seem to be binary, with investors winning or losing completely, Ptak noted.
• The Volatility Shares hockey funds “sound more akin to traditional futures whose value can fluctuate,” he said. “If you believed, say, that the worst franchise in the NHL to that point would see its fortunes improve through the end of the season, then you could invest in the ETF in an attempt to cash in on that improvement.”

My Other ETF Is a Zamboni: The proposed funds reinforce a couple of trends, with issuers pushing the envelope of what an ETF can invest in, while simultaneously prepping or rolling out a wide range of new products. Almost certainly, anything resembling gambling will be viewed skeptically by financial advisors and buy-and-hold investors. But it’s also clear that a lot of Americans have the gambling bug: Trading volume on prediction markets like Kalshi and Polymarket reached $24 billion in April, according to figures from Pew. “ETFs were created to give investors efficient exposure to markets,” securities lawyer Adam Gana told ETF Upside. “Products like this are entertaining for sure, but are less about investing and more about packaging sports speculation in a securities wrapper.”