{
    "type": "ETF",
    "ucits": true,
    "fund_name": "HSBC EUROPE EX UK SUSTAINABLE EQUITY UCITS ETF",
    "investment_objective": "Track the FTSE Developed Europe ex UK ESG Low Carbon Select Index",
    "primary_asset_class": "Equity",
    "geographic_focus": "Developed Europe ex UK",
    "replication_method": "physical",
    "swaps": true,
    "derivatives": false,
    "leverage": false,
    "inverse": false,
    "complex_factors": [
        "Use of total return swaps up to 10%",
        "Use of contracts for difference up to 10%",
        "Securities lending up to 30%",
        "High concentration in benchmark",
        "Use of other funds including HSBC funds up to 10%"
    ],
    "classification": "complex",
    "supporting_data": "The Fund is a UCITS ETF investing primarily in equities of developed Europe ex UK companies, tracking an ESG Low Carbon Select Index. The replication method is primarily physical with full replication of the index constituents. However, the Fund may invest up to 10% of its assets in total return swaps and contracts for difference, which are derivative instruments used to gain exposure when direct investment is not practical. This derivative usage is inherent to the investment strategy rather than solely for risk management, triggering complexity classification. The Fund also engages in securities lending up to 30% of assets, which adds operational and counterparty risk. The benchmark is highly concentrated, meaning a few securities dominate the index, increasing tracking risk and complexity. The risk profile is medium to high (category 6 in KIID), reflecting market volatility and derivative usage. There is no leverage or inverse exposure. The PRIIPs KID confirms derivative and swap usage and highlights counterparty and liquidity risks. The monthly factsheet confirms physical full replication as the primary method but acknowledges derivative usage up to 10%. The presence of total return swaps and contracts for difference, even at limited levels, combined with securities lending and a concentrated index, leads to a MiFID II classification of complex. Although derivatives are used partly for efficient portfolio management, the Fund\u2019s ability to invest via swaps as an inherent part of its strategy means 'derivatives' is marked false only if derivatives are used solely for risk management, which is not the case here. No leverage or inverse exposure is present. The Fund is UCITS compliant and an ETF. The complexity arises mainly from swap usage, derivative exposure, securities lending, and benchmark concentration, which may reduce transparency and increase counterparty risk, making it less straightforward for retail investors to understand and assess risk fully."
}