{
    "type": "ETF",
    "ucits": true,
    "fund_name": "HSBC MSCI KOREA CAPPED UCITS ETF",
    "investment_objective": "Track as closely as possible the returns of the MSCI Korea Capped Net Index",
    "primary_asset_class": "Equity",
    "geographic_focus": "South Korea",
    "replication_method": "physical",
    "swaps": true,
    "derivatives": false,
    "leverage": false,
    "inverse": false,
    "complex_factors": "Use of total return swaps for up to 10% of assets; exposure to concentrated emerging market index",
    "classification": "complex",
    "supporting_data": "The Fund primarily uses physical full replication of the MSCI Korea Capped Net Index, investing directly in shares of South Korean companies. However, it may invest up to 10% of its assets in total return swaps and contracts for difference, which are derivative instruments. These swaps are used to gain exposure when direct investment is not possible or practical, indicating synthetic elements in the strategy. The Fund also may invest up to 10% in other funds and up to 35% in securities from a single issuer under exceptional conditions, adding concentration risk. The Risk and Reward Indicator rates the Fund at 7 (highest risk), reflecting high volatility and emerging market risks. The PRIIPs KID classifies the Fund at risk level 5 out of 7, noting investment leverage risk due to derivatives use, although leverage is not explicitly employed. The Fund does not use leverage or inverse strategies. The presence of total return swaps and derivative contracts, even if limited to 10%, triggers MiFID II complexity classification. The Fund is UCITS compliant and uses physical replication as primary method, but the derivative usage for gaining exposure beyond direct holdings is material for complexity. No capital protection or structured features are present. Fees are straightforward with no performance fees, but swap usage and counterparty risk disclosures are noted. The Fund tracks a concentrated emerging market index, which may add to complexity for retail investors. Overall, the synthetic element via swaps and derivative exposure, combined with counterparty risk and emerging market concentration, leads to a classification of complex under MiFID II despite physical replication being the main method.",
    "risk_level_assessment": "The Fund's stated risk profile is high (7/7) in the KIID and medium-high (5/7) in the PRIIPs KID, reflecting volatility and derivative-related risks. This aligns with the complexity classification, as the use of derivatives and exposure to emerging markets increase risk and complexity for retail investors."
}