{
    "type": "ETF",
    "ucits": true,
    "replication_method": "physical",
    "swaps": true,
    "derivatives": false,
    "leverage": false,
    "inverse": false,
    "complex_factors": "Use of OTC derivatives for currency hedging and tracking efficiency",
    "classification": "non-complex",
    "supporting_data": "The UBS (Lux) Fund Solutions - Bloomberg US 1-3 Year Treasury Bond UCITS ETF is a UCITS-compliant ETF that primarily invests in US Treasury bonds with maturities between 1 and 3 years. The fund uses physical replication (full replication) of the Bloomberg US 1-3 Year Treasury Bond hedged to EUR Total Return Index, investing directly in substantially all component securities. The fund employs OTC derivatives, specifically currency forwards, to hedge currency risk between USD and EUR. These derivatives are used solely for risk management (currency hedging) and to improve tracking efficiency, not as an inherent part of the investment strategy. The KIID and PRIIPs KID documents confirm the use of derivatives but clarify that these are for hedging purposes, with counterparty risk mitigated by collateral policies. There is no leverage, inverse exposure, or capital protection features. The risk profile is low (risk category 2 out of 7), consistent with investment grade short-term government bonds. Fees are straightforward with a low TER of 0.10%, no performance fees, and no securities lending. The fund does not engage in securities lending. The monthly factsheet confirms physical replication and no use of synthetic replication or funded/unfunded swaps. The derivatives exposure is limited to currency forwards, which under MiFID II guidance does not trigger complexity classification. No complex underlying assets such as contingent convertible bonds or CLOs are held. The fund\u2019s strategy and structure are transparent and straightforward, with a clear linear relationship to the underlying index performance. Therefore, despite the presence of derivatives for hedging, the fund does not meet the MiFID II criteria for a complex financial instrument."
}