{
    "type": "ETF",
    "ucits": true,
    "fund_name": "HSBC MSCI EMERGING MARKETS UCITS ETF",
    "replication_method": "physical",
    "leverage": false,
    "inverse": false,
    "derivatives": false,
    "swaps": true,
    "complex_factors": "Swaps usage, Emerging Markets exposure, Securities lending",
    "classification": "complex",
    "supporting_data": "The Fund is a UCITS ETF aiming to track the MSCI Emerging Markets Index primarily through physical replication of underlying shares. However, it may invest up to 10% of its assets in total return swaps and contracts for difference, with swap exposure not expected to exceed 5%. The Fund also uses derivatives for efficient portfolio management and risk management purposes, but these are not leveraged or inverse in nature. Securities lending is employed up to 30% of assets, which adds operational complexity. The underlying index covers emerging markets, which are inherently more volatile and less liquid, increasing complexity. The Risk and Reward Indicator rates the Fund at 6 out of 7, indicating high volatility and risk. The PRIIPs KID rates the risk at 4 out of 7, medium risk, but notes additional risks including counterparty and investment leverage risk. The Fund does not employ leverage above 1:1, nor does it have capital protection or structured features. The presence of swap agreements, even at limited levels, and counterparty risk exposure, combined with emerging markets and securities lending, drive the MiFID II classification as complex. The Fund\u2019s replication is physical but supplemented by limited synthetic elements (swaps). The derivatives are used as an inherent part of the strategy to gain exposure when direct investment is impractical, not solely for risk management, so derivatives flag is set to false but swaps true, triggering complexity classification. No leverage or inverse exposure is present. Costs are straightforward with no performance fees, but swap and securities lending fees are implicit. Overall, the Fund\u2019s complexity arises from partial synthetic replication via swaps, emerging markets exposure, and securities lending, which may reduce retail investors\u2019 ability to fully understand the product\u2019s risk profile despite a physical replication base."
}