{
    "type": "ETF",
    "ucits": true,
    "fund_name": "HSBC EUROPE SCREENED EQUITY UCITS ETF",
    "investment_objective": "Track the FTSE Developed Europe ESG Low Carbon Select Index",
    "primary_asset_class": "Equity",
    "geographic_focus": "Developed Europe",
    "replication_method": "physical",
    "swaps": true,
    "derivatives": false,
    "leverage": false,
    "inverse": false,
    "complex_factors": "Swaps usage for partial exposure, ESG screening, concentrated benchmark",
    "classification": "complex",
    "supporting_data": "The Fund aims to physically replicate the FTSE Developed Europe ESG Low Carbon Select Index by investing primarily in shares of companies in the Index. The replication method is physical full replication as confirmed by the monthly factsheet. However, the Fund may invest up to 10% of its assets in total return swaps and contracts for difference, with expected usage not exceeding 5%. This swap usage, even if limited, introduces counterparty risk and derivative exposure beyond efficient portfolio management, which under MiFID II rules classifies the Fund as complex. The Fund is UCITS compliant and invests mainly in liquid equities but uses derivatives and swaps as an inherent part of gaining exposure when direct investment is not possible. There is no leverage or inverse exposure. The risk profile is high (category 6) due to market volatility and derivative risks. The PRIIPs KID classifies the Fund as medium risk (category 4) but notes investment leverage risk due to derivatives. The Fund also engages in securities lending up to 30%, which adds operational complexity. The benchmark is concentrated, which may increase tracking error and complexity. No capital protection or structured features are present. Costs are straightforward with no performance fees, but swap and derivative costs are implicit. Overall, the presence of swap agreements and derivative instruments for gaining exposure, combined with counterparty risk and a high risk rating, drive the classification as complex under MiFID II despite physical replication being the primary method."
}