{
    "type": "ETF",
    "ucits": true,
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": true,
    "inverse": false,
    "complex_factors": "Swaps usage, Complex ESG index",
    "classification": "complex",
    "supporting_data": "The HSBC FTSE EPRA NAREIT DEVELOPED CLIMATE PARIS ALIGNED UCITS ETF is a UCITS-compliant ETF that primarily uses physical replication to track the FTSE EPRA Nareit Developed Green EU PAB Index. However, the KIID and PRIIPs documents disclose that the Fund may invest up to 10% of its assets in total return swaps and contracts for difference, with swap usage explicitly mentioned. This swap exposure, even if limited, triggers a classification of 'complex' under MiFID II rules because any swap usage mandates complexity classification. The Fund does not employ leverage or inverse strategies, and derivatives are used only as part of the replication strategy rather than for risk management alone, so 'derivatives' is marked false. The underlying index is ESG-focused and excludes certain sectors, adding some complexity to the investment universe. The risk profile is medium-high (5/7), reflecting market and counterparty risks, including counterparty risk from swaps. Costs are straightforward with no performance fees, but securities lending up to 30% is allowed, which adds operational complexity. The monthly factsheet confirms physical replication as the primary method but acknowledges swap usage up to 10%. There is no leverage or inverse exposure. The presence of swap agreements and counterparty risk disclosures, combined with the use of derivatives for replication, leads to the 'complex' classification despite the fund's physical replication and moderate risk profile. No capital protection or structured features are present. The PRIIPs KID does not carry a specific comprehension warning but confirms the medium-high risk and counterparty risk. Overall, the key complexity driver is the use of total return swaps and derivative instruments as part of the replication strategy, which under MiFID II rules classifies the ETF as complex."
}