{
    "type": "ETF",
    "ucits": true,
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": false,
    "inverse": false,
    "complex_factors": "Contingent Convertible Bonds",
    "classification": "complex",
    "supporting_data": "The WisdomTree AT1 CoCo Bond UCITS ETF - USD Hedged is a UCITS-compliant ETF that physically (optimised) replicates the iBoxx Contingent Convertible Liquid Developed Europe AT1 Index. The fund invests primarily in Additional Tier 1 (AT1) contingent convertible bonds (CoCos), which are hybrid debt instruments with complex features such as discretionary coupons, potential principal write-downs, or conversion into equity upon trigger events related to regulatory capital ratios. The ETF uses a representative sampling strategy and currency hedging via forward contracts, but there is no indication of synthetic replication, swap agreements, or leverage. The risk profile is moderate (SRRI 4), reflecting the inherent complexity and risk of CoCos rather than leverage or derivatives usage. The fund discloses significant counterparty risk related to service providers but does not use derivatives as an inherent part of the investment strategy, only for currency hedging. The complexity arises mainly from the nature of the underlying assets (CoCos), which are complex, relatively new, and have contingent loss absorption features that are difficult for retail investors to understand. The PRIIPs KID confirms the need for specific investor knowledge and highlights the risk of capital loss due to the contingent features of CoCos. No swap or total return swap usage is mentioned in any document, and the replication is physical. The ETF does not employ leverage or inverse strategies. The cost structure is straightforward with a TER of 0.39% and no performance fees. The complexity classification under MiFID II is driven by the underlying asset complexity (CoCos) rather than by leverage, synthetic replication, or derivative usage. This aligns with the fund's moderate risk rating but flags it as complex due to the nature of contingent convertible bonds and their risk profile, which may not be easily understood by retail investors."
}