{
    "type": "ETC",
    "ucits": false,
    "replication_method": "synthetic",
    "leverage": true,
    "derivatives": true,
    "swaps": true,
    "inverse": false,
    "complex_factors": [
        "Leverage",
        "Synthetic replication via fully funded collateralised swaps",
        "Counterparty risk",
        "Daily reset and compounding effects",
        "Commodity futures rolling (contango/backwardation effects)"
    ],
    "classification": "complex",
    "supporting_data": "The WisdomTree Coffee 2x Daily Leveraged product is a fully collateralised Exchange Traded Commodity (ETC) that provides 2x leveraged exposure to the Bloomberg Coffee Sub Excess Return Index. It uses a synthetic replication method via fully funded collateralised swap agreements with swap counterparties, as explicitly stated in the factsheet and KIID. The product is not UCITS compliant. The leverage factor is 2x with daily reset, causing compounding effects that make returns over periods longer than one day deviate from a simple 2x multiple of the index. The product carries significant counterparty risk, mitigated by collateral held at a custodian but still present. The underlying exposure is to commodity futures contracts, which involve rolling futures and thus are subject to contango and backwardation effects, adding complexity. The risk indicator is at the highest level 7/7, reflecting the high risk and complexity. The product is described as not simple and difficult to understand, intended only for informed investors with specific knowledge of leveraged ETCs and daily rebalancing. These factors combined\u2014leverage, synthetic replication via swaps, counterparty risk, and complex underlying commodity futures exposure\u2014drive the classification as a complex financial instrument under MiFID II."
}