{
    "type": "ETF",
    "ucits": true,
    "fund_name": "UBS BBG TIPS 1-10 UCITS ETF, class hEUR acc",
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": true,
    "inverse": false,
    "complex_factors": "Use of OTC derivatives for hedging and efficiency, Counterparty risk, Currency hedging via forwards",
    "classification": "complex",
    "supporting_data": "The ETF tracks the Bloomberg US Government 1-10 Year Inflation-Linked Bond hedged to EUR Index. It primarily invests in inflation-linked US Treasury bonds with maturities between 1 and 10 years. The replication method is physical full replication of the underlying bonds, as confirmed by the factsheet. However, the KIID and PRIIPs KID explicitly state that the fund may use derivatives, including OTC derivatives and currency forwards, to gain exposure where direct replication is impractical or to generate efficiencies. The use of OTC derivatives introduces counterparty risk, although mitigated by collateral policies. The fund employs currency hedging via selling currency forwards at the one-month forward rate to reduce currency risk. There is no leverage, inverse or amplified exposure. The risk profile in the KIID is moderate (category 3) and low in the PRIIPs KID (category 2), reflecting the bond nature and hedging. Costs are straightforward with a low TER and no performance fees. The presence of OTC derivatives and swap agreements for index exposure and currency hedging, even if used for efficiency and risk management rather than speculative leverage, triggers MiFID II complexity classification. The fund does not use synthetic replication exclusively, but the partial use of derivatives and OTC swaps for exposure and hedging means it cannot be considered non-complex. There are no capital protection or structured product features. The underlying assets are liquid US Treasury inflation-linked bonds, not complex structured products. The complexity arises mainly from the derivative usage and counterparty risk disclosures. The PRIIPs KID does not carry a comprehension warning but confirms derivative use and counterparty risk. Therefore, under MiFID II, this ETF is classified as complex due to the use of OTC derivatives and swaps, despite physical replication being the primary method and the absence of leverage or inverse exposure."
}