{
    "type": "ETF",
    "ucits": true,
    "replication_method": "synthetic",
    "swaps": true,
    "derivatives": false,
    "leverage": false,
    "inverse": false,
    "complex_factors": [
        "Unfunded total return swaps",
        "Counterparty risk",
        "Synthetic replication",
        "Concentrated sector exposure"
    ],
    "classification": "complex",
    "supporting_data": "The Global X Europe Focused Defence Tech UCITS ETF uses synthetic replication via total return 'unfunded' OTC swaps and exchange-traded equity futures to track the Mirae Asset Europe Defence Tech Index. The KIID explicitly mentions the use of 'unfunded' swaps and counterparty risk associated with derivatives, which are complexity indicators under MiFID II. Although the fund is UCITS compliant and does not employ leverage or inverse exposure, the synthetic replication method and derivative counterparty risk elevate its complexity classification. The fund also has a high risk rating of 7, reflecting volatility and concentration risk in the defence technology sector. The derivatives are used as an inherent part of the investment strategy rather than solely for risk management, so 'derivatives' is marked false per instructions. No capital protection or structured features are present. The fund invests primarily in equities but uses swaps to replicate the index, which includes companies with specialized sector exposure, adding to complexity. Costs are straightforward with no performance fees, but securities lending is used, which is common and not a complexity driver here. Overall, the synthetic replication via unfunded swaps and associated counterparty risk are the main drivers for classifying this ETF as complex under MiFID II."
}