{
    "type": "ETC",
    "ucits": false,
    "leverage": true,
    "derivatives": true,
    "swaps": true,
    "inverse": false,
    "replication_method": "synthetic",
    "complex_factors": [
        "Leverage",
        "Swaps",
        "Complex Indices",
        "Daily Compounding Effect"
    ],
    "classification": "complex",
    "supporting_data": "The WisdomTree Coffee 2x Daily Leveraged ETC is classified as complex due to several key factors. Firstly, it employs a 2x daily leverage, which inherently introduces complexity through the compounding effect and potential for magnified losses. The product uses synthetic replication via fully funded swaps, exposing investors to counterparty risk and the mechanics of swap agreements. The underlying Bloomberg Coffee Subindex Excess Return Index involves futures contracts with rolling costs, contango/backwardation effects, and daily resets, which are not easily understood by retail investors. The high-risk rating of 7 out of 7, along with warnings about the product's complexity and suitability only for informed investors, further supports this classification. The presence of leverage, swaps, and the need for daily monitoring due to the compounding effect make this a complex instrument under MiFID II.",
    "confidence": 95
}