{
    "type": "ETC",
    "ucits": false,
    "replication_method": "synthetic",
    "leverage": true,
    "derivatives": true,
    "swaps": true,
    "inverse": false,
    "complex_factors": [
        "3x Leverage",
        "Synthetic replication via fully funded collateralised swaps",
        "Counterparty risk due to swap counterparties",
        "Daily reset and compounding effects",
        "Commodity futures rolling with contango/backwardation risk",
        "High risk rating (7/7)",
        "Not UCITS compliant"
    ],
    "classification": "complex",
    "supporting_data": "The WisdomTree Wheat 3x Daily Leveraged product is a fully collateralised Exchange Traded Commodity (ETC) that provides 3 times the daily performance of the Bloomberg Wheat Sub Excess Return Index via synthetic replication using fully funded swap agreements. The product explicitly uses swaps with collateral held at a third party custodian, exposing investors to counterparty risk. The leverage factor of 3x and daily reset mechanism introduces compounding effects that cause the product's returns over periods longer than one day to deviate significantly from a simple multiple of the underlying index. The product is not UCITS compliant and is classified with the highest risk rating of 7 out of 7, indicating very high risk and complexity. The use of commodity futures indices involves roll costs and contango/backwardation effects, adding further complexity. The KIID and factsheet both emphasize the need for investors to have specific knowledge and to monitor the product daily, highlighting its complexity. These factors combined meet MiFID II criteria for classification as a complex financial instrument."
}