{
    "type": "ETF",
    "ucits": true,
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": true,
    "inverse": false,
    "complex_factors": "Currency Hedging Swaps",
    "classification": "complex",
    "supporting_data": "The AMUNDI Japan TOPIX II UCITS ETF EUR Hedged Dist is a UCITS-compliant ETF that tracks the TOPIX Gross Total Return Index through physical replication of the underlying Japanese equities, primarily by direct purchase of index components with possible sampling. The fund uses a daily currency hedging strategy to reduce EUR/JPY exchange risk, implemented via OTC derivatives, specifically currency swaps. The factsheet explicitly mentions counterparty risk related to OTC swaps with counterparties such as Morgan Stanley Bank AG and Soci\u00e9t\u00e9 G\u00e9n\u00e9rale, with exposure capped at 10% of total assets. There is no leverage, inverse or amplified exposure, and no capital protection or structured features. The risk profile is moderate (4/7), consistent with equity market exposure and currency hedging. Although derivatives are used, they serve a risk management purpose (currency hedging) rather than being an inherent element of the investment strategy. However, the presence of funded or unfunded swap agreements and counterparty risk exposure triggers MiFID II complexity classification. The PRIIPs KID does not include a comprehension warning but notes liquidity and counterparty risks. Costs are straightforward with no performance fees, and ongoing charges are typical for ETFs. The replication is physical, not synthetic, but the use of currency swaps for hedging introduces complexity under MiFID II rules. Therefore, despite the fund\u2019s straightforward equity exposure and physical replication, the use of OTC currency swaps and associated counterparty risk leads to a classification as complex under MiFID II."
}