{
    "ucits": true,
    "type": "ETF",
    "leverage": false,
    "derivatives": true,
    "swaps": false,
    "inverse": false,
    "replication_method": "physical",
    "complex_factors": "Derivative use for currency hedging, securities lending, and optimising techniques",
    "classification": "non-complex",
    "supporting_data": "This UCITS ETF is physically replicated, tracking a transparent, well-documented index of USD-denominated emerging market corporate bonds. The ETF uses derivatives (FX forwards) solely for currency hedging to reduce the effect of exchange rate fluctuations between the share class currency (GBP) and the fund's base currency (USD). This use of derivatives is limited to efficient portfolio management (EPM) and does not form an integral part of the investment strategyu2014the primary exposure is to the underlying bonds, not to the derivatives. Securities lending is employed to generate additional income, but this is a secondary activity, well within UCITS limits, and does not dominate the risk profile. There is no significant leverage, no embedded derivatives, and no complex or opaque features in the index or the ETF structure. The risks disclosed (credit risk, liquidity risk, counterparty risk from securities lending and derivatives) are standard for fixed income ETFs and are clearly explained in the KID. The structure, risks, and objectives are straightforward and can be understood by a retail investor with basic knowledge. Under MiFID II, all UCITS are automatically non-complex unless they are structured UCITS or use derivatives integrally to achieve their objective, which is not the case here[1]. The use of derivatives for hedging and securities lending for cost offset does not, under current regulatory practice, override the UCITS presumption of non-complexity, provided these activities are ancillary, well-disclosed, and do not introduce material complexity or opacity[1]. Therefore, this ETF is classified as non-complex."
}