{
    "type": "ETF",
    "ucits": true,
    "fund_name": "HSBC USA SCREENED EQUITY UCITS ETF",
    "investment_objective": "Track the FTSE USA ESG Low Carbon Select Index",
    "primary_asset_class": "Equity",
    "geographic_focus": "United States",
    "replication_method": "physical",
    "swaps": true,
    "derivatives": false,
    "leverage": false,
    "inverse": false,
    "complex_factors": "Swaps usage for partial exposure, Counterparty risk, ESG screening complexity",
    "classification": "complex",
    "supporting_data": "The Fund aims to physically replicate the FTSE USA ESG Low Carbon Select Index, investing primarily in shares of US companies. The monthly factsheet confirms physical full replication as the primary method. However, the KIID and PRIIPs KID disclose that the Fund may invest up to 10% of its assets in total return swaps and contracts for difference, though this is not expected to exceed 5%. This swap usage, even if limited, introduces counterparty risk and derivative exposure beyond mere risk management, triggering complexity under MiFID II. The Fund also engages in securities lending up to 30% of assets, which adds operational complexity. The risk profile is high (category 6 in KIID, 5 in PRIIPs), reflecting price volatility and derivative-related risks. There is no leverage or inverse exposure. The derivatives are not used solely for risk management but as part of gaining exposure when direct investment is impractical, so 'derivatives' is marked false per instructions, but 'swaps' true due to inherent swap usage. The Fund invests in a complex ESG index with exclusionary criteria, which may add to investor comprehension difficulty. Costs are straightforward with no performance fees, but swap fees and securities lending are present. Overall, the presence of swap instruments, counterparty risk, and partial synthetic exposure classify this ETF as complex under MiFID II despite physical replication being the main method."
}