{
    "complex": false,
    "leverage": false,
    "derivatives": true,
    "swaps": true,
    "inverse": false,
    "replication_method": "physical",
    "ucits": true,
    "type": "ETF",
    "complex_factors": [
        "Currency hedging using forward contracts",
        "Potential tracking error due to physical replication limitations",
        "Complex index methodology (dividend-weighted with risk scoring)"
    ],
    "classification": "non-complex",
    "supporting_data": "The WisdomTree Japan Equity UCITS ETF - GBP Hedged is classified as non-complex under MiFID II despite using derivatives for currency hedging. Key factors supporting this classification include: (1) Physical replication as the primary investment method, (2) Derivative usage limited to currency hedging (forward contracts) for efficient portfolio management rather than for leverage or complex strategies, (3) UCITS compliance ensuring regulatory oversight and transparency, (4) Straightforward equity exposure to Japanese dividend-paying companies, and (5) Risk profile that remains easily understandable for retail investors. The fund's complexity factors (currency hedging, complex index methodology) do not rise to the level required for a 'complex' classification under MiFID II. The use of derivatives is for risk management purposes and does not materially alter the fund's risk profile or make it unsuitable for retail investors. The PRIIPs KID and factsheet confirm the physical replication method and UCITS compliance, further supporting the non-complex classification.",
    "confidence": 90
}