{
    "type": "ETF",
    "ucits": true,
    "fund_name": "UBS BBG USD EM Sovereign UCITS ETF, class hEUR acc",
    "investment_objective": "Passive management tracking Bloomberg Emerging Markets USD Sovereign & Agency 3% Country Capped Index using stratified sampling and portfolio optimisation",
    "primary_asset_class": "Bonds (Emerging Markets USD Sovereign & Agency bonds)",
    "geographic_focus": "Emerging Markets (USD-denominated sovereign and agency bonds)",
    "replication_method": "physical",
    "swaps": true,
    "derivatives": false,
    "leverage": false,
    "inverse": false,
    "complex_factors": "Use of derivatives for currency hedging and partial index exposure; Emerging market bonds with credit and liquidity risks",
    "classification": "complex",
    "supporting_data": "The fund uses a stratified sampling strategy with portfolio optimisation to replicate the Bloomberg Emerging Markets USD Sovereign & Agency 3% Country Capped Index. The KIID and PRIIPs documents state that the fund achieves exposure either through direct investment or through derivatives or a combination thereof. The fund employs currency forwards to hedge currency risk (one-month forward contracts). The use of derivatives is primarily for hedging currency risk and possibly to achieve index exposure, but not for leverage or amplification. The fund does not engage in securities lending. The replication method is physical stratified sampling, but the possibility of partial derivative use for index exposure is explicitly mentioned. The PRIIPs KID states the product is 'not simple and may be difficult to understand,' indicating complexity under MiFID II. The risk profile is moderate (risk category 5 in KIID, 3 in PRIIPs), reflecting volatility and credit risk of emerging market bonds, which are less liquid and have higher credit risk. The fund invests in emerging market sovereign and agency bonds, which are inherently more complex due to credit risk, liquidity risk, and market volatility. There is no leverage or inverse exposure. No capital protection or structured features are present. Costs are straightforward with no performance fees or swap fees explicitly mentioned. The presence of derivative instruments (currency forwards) and partial use of derivatives for index exposure, combined with the complexity of the underlying emerging market bonds, leads to classification as complex under MiFID II. Although derivatives are used mainly for hedging, the KIID states derivatives may also be used to achieve index exposure, which under MiFID II requires classification as complex. The fund is UCITS compliant. The monthly factsheet confirms physical stratified sampling as the main replication method and use of currency forwards for hedging. No mention of total return swaps or synthetic replication. The complexity arises from the partial derivative use and the nature of the underlying assets (emerging market bonds with credit and liquidity risks).",
    "risk_level": "Moderate (5/7 in KIID, 3/7 in PRIIPs), reflecting volatility and credit risk of emerging market bonds; aligns with complexity due to underlying asset risk and derivative usage for hedging and partial exposure."
}