{
    "type": "ETF",
    "ucits": true,
    "fund_name": "Invesco JPX-Nikkei 400 UCITS ETF",
    "replication_method": "synthetic",
    "swaps": true,
    "derivatives": false,
    "leverage": false,
    "inverse": false,
    "complex_factors": [
        "Swaps",
        "Synthetic replication",
        "Counterparty risk"
    ],
    "classification": "complex",
    "supporting_data": "The fund uses unfunded swaps as a core part of its replication strategy, explicitly described as synthetic replication. The Fund enters into swap agreements with approved counterparties to exchange the performance of a basket of equities held by the Fund for the performance of the JPX-Nikkei 400 Net Total Return Index. The Fund also uses currency hedging swaps to minimize FX risk between the Fund's base currency (JPY) and the Share Class currency (USD). The KIID and PRIIPs KID documents both highlight the reliance on counterparties to deliver index performance via swaps and the associated counterparty risk. The Fund purchases securities not contained in the index, which is typical for synthetic replication. The risk profile is medium-high (risk category 6 in KIID, 4 out of 7 in PRIIPs), reflecting the complexity and risks associated with swap usage and counterparty exposure. There is no leverage or inverse exposure. The underlying assets are equities, but the synthetic replication and swap usage introduce complexity beyond physical replication. The ongoing charges include a swap fee (0.20% p.a.) in addition to management fees, indicating derivative costs. The PRIIPs KID does not carry a specific comprehension warning but does emphasize the counterparty risk and the medium risk level. The monthly factsheet confirms synthetic replication and swap usage, with no leverage or structured capital protection features. The index tracked is a broad Japanese equity index with currency hedging via forward FX contracts embedded in the index methodology, adding some complexity but not leverage or structured features. Overall, the presence of unfunded swaps, synthetic replication, and counterparty risk drives the classification as complex under MiFID II rules."
}