{
    "type": "ETF",
    "ucits": true,
    "fund_name": "HSBC EMERGING MARKET SCREENED EQUITY UCITS ETF",
    "investment_objective": "Track the FTSE Emerging ESG Low Carbon Select Index",
    "primary_asset_class": "Equity",
    "geographic_focus": "Emerging Markets",
    "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 disclosed",
        "Emerging market exposure",
        "Securities lending up to 30%",
        "High concentration in benchmark",
        "Derivatives used for efficient portfolio management"
    ],
    "classification": "complex",
    "supporting_data": "The Fund primarily uses physical replication investing directly in shares of companies in the FTSE Emerging ESG Low Carbon Select Index, an equity emerging markets index. However, the Fund may invest up to 10% of its assets in total return swaps and contracts for difference, which are derivative instruments. The KIID and PRIIPs documents explicitly mention counterparty risk related to these swaps and derivatives. Although derivatives are used mainly for efficient portfolio management and not as a core investment strategy, the presence of total return swaps and contracts for difference, even at limited levels, triggers complexity under MiFID II. The Fund does not employ leverage or inverse strategies, and the replication method is physical full replication. The risk profile is high (category 6 in KIID) due to emerging market volatility and derivative risks. The PRIIPs KID shows a medium risk rating (4/7), reflecting a more moderate view but still acknowledges investment leverage risk and counterparty risk. The monthly factsheet confirms physical replication as the primary method but acknowledges up to 10% exposure to total return swaps and contracts for difference. The Fund also engages in securities lending up to 30%, which adds operational complexity. The benchmark is concentrated, which may increase tracking error risk. No capital protection or structured features are present. Costs are straightforward with no performance fees, but derivative-related costs exist. Overall, the presence of swap usage and counterparty risk, even if limited, classifies this ETF as complex under MiFID II rules.",
    "risk_level_assessment": "The Fund's stated risk profile is high (6/7) in the KIID due to emerging market volatility and derivative risks, aligning with the complexity classification. The PRIIPs KID shows a medium risk (4/7), reflecting the Fund's moderate use of derivatives and physical replication. The complexity arises mainly from derivative counterparty risk and emerging market exposure rather than leverage or structured products."
}