{
    "type": "ETF",
    "ucits": true,
    "leverage": false,
    "derivatives": false,
    "swaps": false,
    "inverse": false,
    "replication_method": "physical",
    "complex_factors": [],
    "classification": "non-complex",
    "supporting_data": "The iShares Global Aerospace & Defence UCITS ETF is a physically replicated fund that aims to track the S&P Developed BMI Select Aerospace & Defense 35/20 Capped Index. The fund primarily invests in equity securities of companies in the aerospace and defense sector. While the KIID mentions the potential use of financial derivative instruments (FDIs) for direct investment purposes, it specifies that these are used for efficient portfolio management (e.g., FX contracts) rather than as a core part of the investment strategy. The fund does not employ leverage, inverse strategies, or synthetic replication. The risk profile is rated 7, but this is due to sector concentration risks rather than structural complexity. The fund is UCITS-compliant, which imposes strict limits on derivative usage and leverage. The absence of complex underlying assets, capital protection mechanisms, or significant counterparty risk exposure further supports the non-complex classification.",
    "confidence": 95,
    "counter_argument": "Some might argue that the use of derivatives (even for EPM) could introduce complexity. However, the derivatives are not used in a way that materially alters the risk profile or requires specialist knowledge to understand. The fund's physical replication and straightforward equity exposure outweigh this concern.",
    "risk_level": 7,
    "risk_explanation": "The risk level of 7 is primarily due to the concentrated sector exposure (aerospace and defense) rather than structural complexity. The fund's performance is directly tied to the underlying equities, and there are no additional layers of complexity from derivatives or leverage."
}