{
    "type": "ETF",
    "ucits": true,
    "fund_name": "iShares MSCI World GBP Hedged UCITS ETF",
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": true,
    "inverse": false,
    "complex_factors": "Currency Hedging via FX Forwards and Use of Swaps",
    "classification": "complex",
    "supporting_data": "The Fund aims to track the MSCI World 100% Hedged to GBP Index, which uses one-month FX forward contracts to hedge currency exposure. The Fund uses optimising techniques including strategic selection of securities and financial derivative instruments (FDIs) for direct investment purposes. The KIID and PRIIPs documents explicitly mention the use of FX forward contracts and derivative instruments to replicate the hedging methodology of the index. The monthly factsheet confirms the product structure as 'Physical' but also notes the use of currency hedging on a monthly basis. The KIID mentions counterparty risk related to derivatives and FX forwards. There is no leverage, inverse exposure, or capital protection features. The risk rating is medium (4 out of 7 in PRIIPs, 6 in KIID, reflecting equity market risk and derivative counterparty risk). Although derivatives are used primarily for hedging currency risk rather than to create leverage or synthetic exposure, the presence of swap agreements and FX forwards as an inherent part of the investment strategy classifies the ETF as complex under MiFID II. The Fund does not use synthetic replication of equity exposure but uses derivatives for currency hedging, which is a complexity factor. No contingent bonds or structured products are held. Costs are straightforward with no performance fees, but derivative-related counterparty risk and hedging complexity remain. Therefore, despite physical replication of equities, the use of derivatives and swaps for currency hedging and the associated counterparty risk drive the classification as complex.",
    "risk_level_assessment": "The Fund's risk profile is medium (4-6 on a 7-point scale), reflecting equity market risk and derivative counterparty risk. The use of FX forwards and swaps introduces counterparty risk and complexity beyond a simple physical equity ETF. This aligns with the MiFID II complexity classification, as investors may not easily understand the impact of currency hedging and derivative counterparty risk on returns."
}