{
    "fund_name": "First Trust FactorFX UCITS ETF",
    "type": "ETF",
    "ucits": true,
    "replication_method": "synthetic",
    "leverage": false,
    "derivatives": true,
    "swaps": true,
    "inverse": false,
    "complex_factors": [
        "Synthetic replication using derivatives",
        "Currency forwards and swaps",
        "Complex index tracking (Bloomberg Cumulative FX Carry Trade Index)",
        "Potential counterparty risk from derivative instruments"
    ],
    "classification": "complex",
    "confidence": 90,
    "supporting_data": "The ETF uses synthetic replication through derivatives (currency forwards, swaps, options) to achieve its investment objective of delivering returns through global currency exposure. While it does not use leverage or inverse strategies, the extensive use of derivatives for replication and the complexity of the underlying index (Bloomberg Cumulative FX Carry Trade Index) make it a complex product under MiFID II. The KIID also mentions potential counterparty risk from derivative instruments, which is another complexity factor. The risk profile (category 4) and the active management strategy involving discretionary deviations from the index further support this classification. The fact sheet confirms the use of currency forwards and swaps, reinforcing the synthetic nature of the replication method."
}