{
    "type": "ETF",
    "ucits": true,
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": false,
    "inverse": false,
    "complex_factors": "Contingent Convertible Bonds (CoCos)",
    "classification": "complex",
    "supporting_data": "The WisdomTree AT1 CoCo Bond UCITS ETF physically replicates the iBoxx Contingent Convertible Liquid Developed Europe AT1 Index using a representative sampling strategy. The fund is UCITS compliant and does not employ synthetic replication, swaps, or leverage. Currency risk is hedged via forward contracts, but these are used solely for currency risk management and not as an inherent part of the investment strategy, so derivatives usage is considered false. The fund invests primarily in Additional Tier 1 contingent convertible bonds (CoCos), which are hybrid debt instruments with complex features such as discretionary coupons, loss absorption via principal write-down or conversion to equity, no stated maturity, and regulatory triggers. These characteristics make the underlying assets inherently complex and difficult for retail investors to understand. The risk profile is medium (SRRI 4/7), reflecting the complexity and risks of CoCos, including potential capital loss even when equity holders do not lose capital, liquidity risk, and counterparty risk. The fund does not use leverage or inverse strategies, nor does it have capital protection or structured features. Costs are straightforward with a TER of 0.39% and no performance fees or swap fees. The PRIIPs KID confirms the complexity by stating the product is intended for informed investors with specific knowledge and warns about the risk of capital loss and the discretionary nature of coupons. The monthly factsheet confirms physical (optimised) replication and no use of swaps or synthetic instruments. Therefore, the classification as complex is driven primarily by the nature of the underlying contingent convertible bonds, which are complex financial instruments with embedded contingent loss absorption features, rather than by the fund's structure or replication method."
}