{
    "type": "ETP",
    "ucits": true,
    "replication_method": "synthetic",
    "leverage": true,
    "derivatives": true,
    "swaps": false,
    "inverse": false,
    "complex_factors": [
        "Leverage",
        "Daily Reset Leverage",
        "Compounding Effect",
        "Collateralised Debt Security",
        "Futures Rolling and Contango Effects"
    ],
    "classification": "complex",
    "supporting_data": "The WisdomTree CAC 40 3x Daily Leveraged product is a UCITS eligible Exchange Traded Product (ETP) that provides 3x leveraged exposure to the CAC 40 Net Return Index. It is described as a fully collateralised, certificated, registered, collateralised debt security rather than a traditional ETF. The product uses a daily reset leverage mechanism, which means the leverage factor is applied daily and resets each day, causing a compounding effect that can significantly deviate returns over periods longer than one day. The product tracks a leveraged index (CAC 40 X3 Leverage NR Index) that is based on futures contracts, with explicit mention of rolling futures and the impact of contango/backwardation, indicating complexity in the benchmark construction. The KIID explicitly states the product is 'not simple and may be difficult to understand' and is intended for informed investors with specific knowledge or experience. The risk indicator is at the highest level (7/7), reflecting very high risk. The product is not capital protected and can lose the entire investment. There is no mention of swap agreements or total return swaps, so swaps are not identified, but the use of futures and leverage confirms synthetic replication and derivative use. The product is a collateralised debt security, which is structurally more complex than a physical ETF. The product does not have inverse exposure but is leveraged 3x, which is a key complexity trigger. Costs include management fees and transaction costs related to maintaining the leveraged position. The product\u2019s complexity arises primarily from the leveraged exposure, daily reset and compounding effects, use of futures contracts with rolling costs, and the collateralised debt security structure. These factors make it difficult for retail investors to understand and align with MiFID II criteria for complex financial instruments."
}