{
    "type": "ETP",
    "ucits": true,
    "replication_method": "synthetic",
    "swaps": true,
    "derivatives": true,
    "leverage": true,
    "inverse": false,
    "complex_factors": [
        "Leverage",
        "Synthetic replication via FX forward contracts",
        "Daily reset leverage with compounding effect",
        "Counterparty risk due to collateralised debt security structure",
        "Complex underlying index with FX forwards and roll costs"
    ],
    "classification": "complex",
    "supporting_data": "The WisdomTree Long JPY Short EUR 3x Daily product is a UCITS eligible Exchange Traded Product (ETP) that provides 3x leveraged exposure to the JPY relative to EUR via FX forward contracts. The product uses synthetic replication through total return swaps or similar derivative instruments, as it tracks the MSFXSM Triple Long Japanese Yen/Euro Total Return Index, which is based on FX forwards. The leverage factor is reset daily, causing a compounding effect that makes the product's return path-dependent and more complex than a simple linear exposure. The product is a collateralised debt security, exposing investors to counterparty risk. The risk indicator is at the highest level (7/7), reflecting the high risk and complexity. The KIID explicitly states the product is 'not simple and may be difficult to understand' and is intended for informed investors with specific knowledge. The product does not use physical replication but synthetic replication via derivatives. The presence of leverage, synthetic replication, daily reset compounding, and counterparty risk all drive the classification as complex under MiFID II. The product's risk profile aligns with this classification, showing the highest risk level and warnings about potential total loss and currency risk. No capital protection or principal guarantee is provided. The costs include management fees and transaction costs but no performance fees. The product's complexity is further supported by the underlying index's use of FX forwards and the impact of roll costs and compounding effects, which are difficult for retail investors to understand fully."
}