{
    "type": "ETF",
    "ucits": true,
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": true,
    "inverse": false,
    "complex_factors": "Swaps, Concentrated Index",
    "classification": "complex",
    "supporting_data": "The HSBC Hang Seng TECH UCITS ETF primarily uses physical full replication of the Hang Seng TECH Index, investing directly in shares of the 30 largest technology companies in Hong Kong SAR. However, the Fund may invest up to 10% of its assets in total return swaps and derivatives, though this is not expected to exceed 5%. The use of total return swaps and derivatives is for gaining exposure when direct investment is impractical and for efficient portfolio management, but the presence of swaps (even at limited levels) triggers a complex classification under MiFID II. The Fund also engages in securities lending up to 30% of assets, which adds to complexity. The underlying index is highly concentrated, with a few securities making up a significant proportion, increasing risk and complexity. The risk profile is high (category 6-7), reflecting high volatility and leverage risk due to derivatives usage. There is no leverage or inverse exposure, and no capital protection or structured features. Costs are straightforward with no performance fees, but derivative and swap usage fees are embedded. The PRIIPs KID confirms the complexity with a high risk rating and explicit counterparty and leverage risk disclosures. The monthly factsheet confirms physical replication as primary but acknowledges swap usage up to 10%, validating the partial synthetic element. Therefore, despite physical replication predominance, the presence of funded or unfunded total return swaps and derivative instruments, combined with counterparty risk and a concentrated index, leads to a MiFID II classification of 'complex'."
}