{
    "type": "ETF",
    "ucits": true,
    "replication_method": "synthetic",
    "swaps": true,
    "derivatives": true,
    "leverage": false,
    "inverse": false,
    "complex_factors": [
        "Unfunded swaps",
        "Synthetic replication",
        "Counterparty risk",
        "Non-index securities held",
        "Medium-high risk rating (6/7)"
    ],
    "classification": "complex",
    "supporting_data": "The Invesco MSCI World UCITS ETF uses unfunded swap agreements to synthetically replicate the MSCI World Index performance. The Fund holds a basket of equities that do not fully replicate the index and swaps the performance of these equities with the counterparty to achieve index returns. This introduces counterparty risk and derivative exposure inherent to the strategy. The KIID explicitly states the use of unfunded swaps and counterparty risk, and the risk rating is 6 out of 7, indicating a medium-high risk profile. The PRIIPs KID confirms the synthetic replication and swap usage, with a medium risk indicator of 4 out of 7, and highlights the reliance on counterparties to deliver index performance. The monthly factsheet corroborates the synthetic replication method, swap fee of 0.03% p.a., and the presence of counterparty risk. There is no leverage or inverse exposure. The Fund is UCITS compliant. The use of synthetic replication via unfunded swaps and the associated counterparty risk are the primary drivers for classifying this ETF as complex under MiFID II, despite the absence of leverage or capital protection features. The complexity arises from the derivative instruments used as an inherent part of the investment strategy and the potential difficulty for retail investors to fully understand the implications of swap-based replication and counterparty risk."
}