{
    "type": "ETF",
    "ucits": true,
    "fund_name": "HSBC FTSE EPRA NAREIT DEVELOPED UCITS ETF",
    "investment_objective": "Track as closely as possible the returns of the FTSE EPRA NAREIT Developed Index",
    "primary_asset_class": "Equity (Real Estate Investment Trusts - REITs)",
    "geographic_focus": "Developed markets globally, with significant US exposure (~65%)",
    "replication_method": "physical",
    "swaps": true,
    "derivatives": false,
    "leverage": false,
    "inverse": false,
    "complex_factors": [
        "Swaps",
        "Derivative exposure for efficient portfolio management",
        "Securities lending"
    ],
    "classification": "complex",
    "supporting_data": "The Fund primarily invests physically in shares of companies in the FTSE EPRA NAREIT Developed Index, which consists of listed real estate companies and REITs. The replication method is physical full replication as per the factsheet. However, the Fund may invest up to 10% of its assets in total return swaps and contracts for difference, and up to 10% in other funds, including HSBC funds. The KIID and PRIIPs KID confirm the use of derivatives for both investment and efficient portfolio management purposes, including securities lending up to 30% of assets. The Fund is UCITS compliant and does not employ leverage or inverse strategies. The risk indicator is 5/7, indicating medium-high risk, driven by market volatility and derivative usage. Although derivatives are used, the documents specify that derivatives are not used for leverage but for gaining exposure when direct investment is impractical and for risk/cost management. The presence of total return swaps and derivative contracts, even at limited levels, triggers the MiFID II complexity classification. There is no capital protection or structured product features. The Fund invests in liquid, transparent equity securities (REITs) and does not hold complex underlying assets like contingent convertible bonds or CLOs. The complexity arises mainly from the use of swaps and derivative instruments inherent in the investment strategy, and securities lending activities. No leverage or inverse exposure is present. The PRIIPs KID does not carry a specific comprehension warning but highlights derivative and counterparty risks. The ongoing charges are straightforward with no performance fees. Overall, the Fund\u2019s use of swaps and derivatives for gaining exposure and efficient management, combined with securities lending, leads to a classification as complex under MiFID II despite physical replication being the primary method.",
    "risk_level_assessment": "The Fund\u2019s risk rating of 5 out of 7 aligns with a medium-high risk profile, reflecting market volatility and derivative-related risks. This risk level supports the complex classification as it indicates that the Fund\u2019s risk profile is elevated compared to simple physical ETFs, mainly due to derivative and counterparty exposures."
}