{
    "type": "ETF",
    "ucits": true,
    "replication_method": "synthetic",
    "swaps": true,
    "derivatives": false,
    "leverage": false,
    "inverse": false,
    "complex_factors": [
        "Unfunded swaps",
        "Synthetic replication",
        "Counterparty risk"
    ],
    "classification": "complex",
    "supporting_data": "The Invesco FTSE 100 UCITS ETF uses synthetic replication via unfunded swap agreements with approved counterparties to achieve its investment objective of tracking the FTSE 100 Index. The Fund holds a basket of equities that do not fully replicate the index and swaps the performance of these equities for the index performance. This introduces counterparty risk, as explicitly disclosed in the KIID and factsheet. The Fund is UCITS compliant but relies on derivative contracts (swaps) as an inherent part of its strategy, not merely for risk management. There is no leverage or inverse exposure. The risk profile is medium (risk level 4 out of 7 in PRIIPs KID), which is moderate but does not negate the complexity arising from the synthetic structure. Costs include a swap fee (0.15% p.a.) in addition to the ongoing charge (0.09% p.a.), reflecting derivative usage. The PRIIPs KID does not include a comprehension warning but confirms the use of swaps and counterparty risk. The factsheet confirms synthetic replication and swap usage, with no leverage or capital protection features. Given MiFID II criteria, the use of unfunded swaps and synthetic replication classifies this ETF as complex, despite the absence of leverage or structured capital protection. The complexity arises primarily from the swap-based synthetic replication and associated counterparty risk, which may be difficult for retail investors to fully understand."
}