{
    "type": "ETF",
    "ucits": true,
    "fund_name": "HSBC MSCI Emerging Markets Climate Paris Aligned UCITS ETF",
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": true,
    "inverse": false,
    "complex_factors": [
        "Swaps usage",
        "Emerging Markets exposure",
        "Securities lending",
        "Potential tracking error"
    ],
    "classification": "complex",
    "supporting_data": "The Fund is a UCITS ETF physically replicating the MSCI Emerging Markets Climate Paris Aligned Index, investing primarily in equities across emerging markets. The replication method is physical full replication, but the Fund may invest up to 10% of its assets in total return swaps and contracts for difference, with swap usage explicitly mentioned. These swaps are used to gain exposure when direct investment is not possible or practical, and for efficient portfolio management. The Fund also engages in securities lending up to 30% of assets. The Risk and Reward Indicator rates the Fund at 6 out of 7 in the KIID, indicating high risk and leverage risk due to derivatives usage. However, the derivatives are used for investment purposes and efficient portfolio management, not for leverage amplification, and the Fund does not employ leverage or inverse strategies. The PRIIPs KID shows a medium risk rating (4/7) but confirms derivative and swap usage. The Fund invests in emerging markets equities, which are inherently more volatile and less liquid, adding complexity. No capital protection or structured features are present. Costs are straightforward with no performance fees, but swap fees and securities lending are part of the cost structure. The presence of total return swaps, counterparty risk disclosures, and leverage risk warnings, combined with emerging markets exposure and securities lending, drive the MiFID II classification as complex despite physical replication and no leverage. The complexity arises mainly from the use of derivatives (swaps) and the nature of the underlying emerging market assets, which may be less transparent and more volatile, making the product less straightforward for retail investors to understand fully."
}