{
    "type": "ETF",
    "ucits": true,
    "replication_method": "synthetic",
    "swaps": true,
    "derivatives": false,
    "leverage": false,
    "inverse": false,
    "complex_factors": [
        "Swaps",
        "Synthetic replication",
        "Counterparty risk"
    ],
    "classification": "complex",
    "supporting_data": "The Invesco Communications S&P US Select Sector UCITS ETF uses unfunded swaps to synthetically replicate the performance of the S&P Select Sector Capped 20% Communications Services Index. The Fund holds a basket of equities that do not fully replicate the index and enters into swap agreements with counterparties to exchange the performance of these equities for the index performance. This synthetic replication introduces counterparty risk, as explicitly disclosed in the KIID and PRIIPs KID documents. The Fund is UCITS compliant but relies on derivative contracts (swaps) as an inherent part of its investment strategy rather than for risk management purposes, which mandates classification as complex under MiFID II. There is no leverage or inverse exposure, and no capital protection or structured features. The risk profile is medium-high (risk category 5-6), reflecting the use of swaps and concentration in a single sector. Costs are straightforward with no performance fees, but swap usage is a complexity driver. The PRIIPs KID does not include a comprehension warning but confirms the synthetic nature and counterparty risk. The monthly factsheet confirms synthetic replication and swap usage with no leverage or complex underlying assets beyond equities. Therefore, the primary complexity driver is the synthetic replication via unfunded swaps and associated counterparty risk, which under MiFID II rules classifies the ETF as complex."
}