{
    "type": "ETF",
    "ucits": true,
    "fund_name": "UBS (Lux) Fund Solutions - MSCI Switzerland 20/35 UCITS ETF (hedged to USD) A-dis",
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": true,
    "inverse": false,
    "complex_factors": [
        "Swaps",
        "Currency Hedging"
    ],
    "classification": "complex",
    "supporting_data": "The ETF is a UCITS-compliant, physically replicated fund that tracks the MSCI Switzerland 20/35 100% hedged to USD Index. The fund primarily invests in equities and uses physical replication (full replication) of the index components. However, the KIID and PRIIPs KID documents explicitly state that the fund may use derivatives, including OTC derivatives and currency forwards, to achieve currency hedging and to gain exposure to the index where direct replication is not practicable. The use of OTC derivatives introduces counterparty risk, although mitigated by collateral policies. The fund employs currency forwards to hedge currency risk between CHF and USD, which is a form of swap agreement. This derivative usage is inherent to the fund's strategy to maintain the currency hedge and index exposure efficiently, not merely for risk management. The monthly factsheet confirms physical replication but also acknowledges the use of currency and forward currency transactions for hedging purposes. There is no leverage, inverse exposure, or capital protection features. The risk profile is medium (4 out of 7 in PRIIPs KID, 5-6 in KIID), reflecting equity market volatility rather than derivative complexity. Despite the physical replication of equities, the presence of funded or unfunded swap agreements and OTC derivatives for index exposure and currency hedging triggers MiFID II complexity classification. The fund does not use leverage or complex underlying assets like contingent convertible bonds. Costs are straightforward with no performance fees, but derivative-related costs and counterparty risk disclosures are present. Therefore, the fund is classified as complex under MiFID II due to its use of swaps and OTC derivatives as an inherent part of its investment strategy, which may not be easily understood by retail investors.",
    "risk_level_assessment": "The fund's stated risk profile is medium (4 out of 7 in PRIIPs KID, 5-6 in KIID), primarily due to equity market volatility and currency hedging. This aligns with the complexity arising from derivative use, counterparty risk, and currency hedging. The risk disclosures highlight counterparty risk and derivative-related risks, supporting the complexity classification."
}