{
    "type": "ETF",
    "ucits": true,
    "fund_name": "UBS MSCI Canada UCITS ETF, class CAD Ukdis",
    "investment_objective": "Passive replication of MSCI Canada Index (Net Return) via direct investments and/or derivatives to gain exposure efficiently",
    "primary_asset_class": "Equity",
    "geographic_focus": "Canada",
    "replication_method": "physical",
    "swaps": true,
    "derivatives": false,
    "leverage": false,
    "inverse": false,
    "complex_factors": "Use of OTC derivatives including swaps for efficient exposure and counterparty risk; securities lending; structured notes holdings",
    "classification": "complex",
    "supporting_data": "The ETF primarily uses physical replication (full replication) of the MSCI Canada Index but also employs derivatives, including OTC swaps, to gain exposure where direct replication is impractical or to improve efficiency. The KIID and PRIIPs documents explicitly mention the use of OTC derivatives and associated counterparty risk mitigated by collateral policies. The fund may hold structured notes and engage in securities lending, adding complexity. Although derivatives are used for exposure rather than active leverage, the presence of funded or unfunded swap agreements and counterparty risk triggers a complex classification under MiFID II. The risk profile is medium to high (risk category 5 in KIID, 4 in PRIIPs), reflecting equity volatility and derivative usage. The fund is UCITS compliant and does not use leverage or inverse strategies. The fact sheet confirms physical replication as primary but acknowledges derivative use for efficiency. No capital protection or structured contingent features are present. Costs are straightforward with no performance fees but include derivative trading costs and securities lending. Overall, the use of OTC swaps and counterparty risk, even if mitigated, and derivative usage for exposure rather than pure risk management, lead to a MiFID II classification of complex despite the fund\u2019s straightforward equity index tracking objective.",
    "risk_level_assessment": "The fund\u2019s stated risk profile is medium to high due to equity market volatility and derivative usage. The KIID risk category is 5 (on a 1-7 scale), indicating elevated risk but not extreme. The PRIIPs KID rates risk at 4/7, medium risk. This aligns with the complexity arising from derivative use and counterparty exposure, which may not be fully understood by all retail investors, supporting the complex classification."
}