{
    "type": "ETP",
    "ucits": false,
    "replication_method": "synthetic",
    "leverage": true,
    "derivatives": true,
    "swaps": true,
    "inverse": false,
    "complex_factors": [
        "Leverage",
        "Swaps",
        "Synthetic replication",
        "Daily reset and compounding",
        "Counterparty risk"
    ],
    "classification": "complex",
    "supporting_data": "The WisdomTree FTSE 250 2x Daily Leveraged product is a fully collateralised, UCITS eligible Exchange Traded Product (ETP) that provides 2x leveraged exposure to the FTSE 250 index. It achieves this exposure via a fully collateralised swap structure, explicitly described as using swap agreements and referencing counterparty exposure and collateral management. The replication method is synthetic, not physical, relying on total return swaps to deliver the leveraged daily return. The product features daily leverage reset and compounding effects, which introduce path dependency and complexity in returns over periods longer than one day. The risk indicator is at the highest level (7/7), reflecting the high risk and complexity. The product is not UCITS compliant despite being UCITS eligible, and it is structured as a collateralised debt security rather than a traditional ETF. The use of swaps, leverage (2x), synthetic replication, and the presence of counterparty risk and collateral management risks are all complexity indicators under MiFID II. The product is intended for informed investors with specific knowledge of leveraged products and is not suitable for retail investors without such experience. The costs include significant transaction costs related to maintaining the leveraged position. The product\u2019s complexity is further highlighted by the daily reset of leverage and the compounding effect, which can cause returns to deviate significantly from a simple multiple of the underlying index over time. These factors combined lead to a classification of 'complex' under MiFID II rules."
}