{
    "type": "ETF",
    "ucits": true,
    "fund_name": "HSBC DEVELOPED WORLD SUSTAINABLE EQUITY UCITS ETF",
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": true,
    "inverse": false,
    "complex_factors": "Swaps",
    "classification": "complex",
    "supporting_data": "The Fund aims to track the FTSE Developed ESG Low Carbon Select Index using primarily physical replication, investing directly in shares of companies in developed markets. The monthly factsheet confirms 'Physical - Full' replication method. However, the KIID and PRIIPs KID documents disclose that the Fund may invest up to 10% of its assets in total return swaps and contracts for difference, with swap usage not expected to exceed 5%. These swaps are used both for investment purposes and efficient portfolio management. The Fund also engages in securities lending up to 30% of assets. The presence of total return swaps and contracts for difference, even at limited levels, introduces counterparty risk and derivative exposure inherent to synthetic replication elements. There is no leverage, inverse exposure, or capital protection features. The risk rating is 6 in the KIID (high risk) but 4 in the PRIIPs KID (medium risk), reflecting market volatility and derivative usage. The Fund is UCITS compliant and physically replicates the index but uses derivatives as an inherent part of the strategy to gain exposure when direct investment is impractical. According to MiFID II criteria, any use of swaps or contingent bonds mandates classification as complex. Therefore, despite physical replication predominance and moderate risk profile, the Fund is classified as complex due to swap usage and derivative exposure. No leverage or inverse features are present. The underlying assets are liquid equities in developed markets, and the index is a standard ESG low carbon index without complex structured products. No capital protection or structured features are present. Costs are straightforward with no performance fees, but derivative costs and securities lending are noted. Overall, the complexity arises primarily from the use of total return swaps and contracts for difference, which are inherent to the investment strategy rather than solely for risk management."
}