{
    "type": "ETF",
    "ucits": true,
    "fund_name": "HSBC JAPAN SCREENED EQUITY UCITS ETF",
    "investment_objective": "Track the FTSE Japan ESG Low Carbon Select Index",
    "primary_asset_class": "Equity",
    "geographic_focus": "Japan",
    "replication_method": "physical",
    "swaps": true,
    "derivatives": false,
    "leverage": false,
    "inverse": false,
    "complex_factors": [
        "Use of total return swaps up to 10% of assets",
        "Counterparty risk from derivatives",
        "Securities lending up to 30% of assets",
        "Tracking error risk",
        "Investment in other funds up to 10%"
    ],
    "classification": "complex",
    "supporting_data": "The Fund aims to physically replicate the FTSE Japan ESG Low Carbon Select Index by investing in shares of companies in the Index, primarily through physical holdings. However, the Fund may invest up to 10% of its assets in total return swaps and contracts for difference, which are derivative instruments, and up to 10% in other funds, some of which may use derivatives. The KIID and PRIIPs documents disclose counterparty risk related to derivatives and securities lending (up to 30% of assets). The Fund does not employ leverage or inverse strategies, and the replication method is physical rather than synthetic. The derivatives are used for investment purposes and efficient portfolio management, but since swap usage is inherent to the strategy (up to 10%), this triggers complexity classification under MiFID II. The risk profile is high (category 6 in KIID, 5 in PRIIPs), reflecting market volatility and derivative-related risks. The Fund is UCITS compliant and uses a straightforward index with ESG screening, but the presence of swap agreements and counterparty risk, even at moderate levels, leads to a 'complex' classification. No capital protection or structured features are present. Costs are simple with no performance fees, but swap and securities lending fees may apply. The PRIIPs KID does not include a comprehension warning but confirms derivative and counterparty risks. The monthly factsheet confirms physical replication with limited swap usage and no leverage. Overall, the Fund is complex due to the use of total return swaps and counterparty risk exposure, despite physical replication and no leverage."
}