{
    "type": "ETF",
    "ucits": true,
    "replication_method": "physical",
    "swaps": true,
    "derivatives": false,
    "leverage": false,
    "inverse": false,
    "complex_factors": [
        "Use of total return swaps (up to 10% of assets)",
        "Counterparty risk from swaps",
        "Securities lending (up to 30% of assets)",
        "Concentration risk in a limited number of securities",
        "Emerging markets exposure",
        "Dynamic capping in index construction"
    ],
    "classification": "complex",
    "supporting_data": "The HSBC S&P India Tech UCITS ETF is a UCITS-compliant ETF that primarily uses physical replication of the S&P India Tech Index, investing directly in shares of index constituents. However, the Fund may invest up to 10% of its assets in total return swaps and contracts for difference, which are derivative instruments used to gain exposure when direct investment is not practical. This swap usage introduces counterparty risk and complexity. The Fund also engages in securities lending up to 30% of assets, which adds operational and collateral management risks. The index tracked is concentrated, with a few large constituents capped at 15% and others at 10%, and uses dynamic capping mechanisms, which can add complexity to the tracking process. The Fund is exposed to emerging markets risks, which are inherently more volatile and less liquid. The Risk and Reward Indicator rates the Fund at 6 out of 7, indicating high risk and potential leverage effects from derivatives usage, although no explicit leverage or inverse exposure is present. The derivatives are used for investment purposes but limited to 10%, and the Fund does not employ leverage or inverse strategies. The PRIIPs KID does not include a comprehension warning but highlights investment leverage risk and counterparty risk. The monthly factsheet confirms physical replication as the primary method, with derivative use limited and for exposure purposes. Given the presence of total return swaps, counterparty risk, securities lending, and index concentration, the Fund meets MiFID II criteria for a complex financial instrument despite its physical replication base and moderate risk profile."
}