{
    "type": "ETF",
    "ucits": true,
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": true,
    "inverse": false,
    "complex_factors": "Swaps",
    "classification": "complex",
    "supporting_data": "The HSBC NASDAQ GLOBAL SEMICONDUCTOR UCITS ETF primarily uses physical replication to track the Nasdaq Global Semiconductor Index, investing directly in the shares of the 80 largest global semiconductor companies. However, the Fund may invest up to 10% of its assets in total return swaps and contracts for difference, with derivative use also for efficient portfolio management and investment purposes. The KIID and PRIIPs KID documents explicitly mention the use of total return swaps and derivatives, and counterparty risk is disclosed. The Fund does not employ leverage or inverse strategies, and the risk profile is medium-high (risk category 5 out of 7). The presence of swap agreements, even at a limited level, triggers the MiFID II complexity classification. The Fund is UCITS compliant and does not use leverage or inverse exposure. The underlying assets are liquid equities in the semiconductor sector, but the use of swaps and derivatives for gaining exposure and efficient management introduces complexity. No capital protection or structured features are present. Costs are straightforward with no performance fees, but derivative-related costs exist. The monthly factsheet confirms physical replication as the primary method but acknowledges up to 10% exposure to total return swaps. Therefore, despite the physical replication and straightforward underlying assets, the use of swaps and derivative instruments for investment purposes leads to a classification of 'complex' under MiFID II rules."
}