{
    "ucits": true,
    "type": "ETF",
    "leverage": false,
    "derivatives": true,
    "swaps": false,
    "inverse": false,
    "replication_method": "physical",
    "complex_factors": "Active management, use of derivatives for investment purposes, potential for market leverage, quantitative models, ESG screening, counterparty risk, liquidity risk, concentrated sector/country/currency risk",
    "classification": "complex",
    "supporting_data": "The iShares Emerging Markets Equity Enhanced Active UCITS ETF is a UCITS-compliant, physically replicated ETF. However, it is actively managed and explicitly states that the investment manager may use financial derivative instruments (FDIs) for investment purposes to achieve the fund's objective, reduce risk, lower costs, and generate additional income. The fund may also generate varying amounts of market leverage via FDIs. These features introduce complexity beyond the standard UCITS ETF framework, as the use of derivatives is not limited to efficient portfolio management but is integral to the investment strategy. The fund also employs quantitative models for stock selection, which adds another layer of complexity. While the fund is physically replicated (not synthetic), the active use of derivatives for purposes beyond hedging or efficient portfolio management, combined with the potential for leverage and the use of complex quantitative models, means the product's structure and risks are not easily understood by a retail investor with only basic knowledge. Under MiFID II, UCITS are generally non-complex, but this presumption is overturned if the product incorporates features that make its risks or payoff difficult for the average retail investor to understand[1][2]. ESMA guidance and the MiFID II Delegated Regulation (Article 57) clarify that if a UCITS uses derivatives in a way that is central to its strategy (not just for hedging or efficient portfolio management), or if it employs complex portfolio management techniques (such as active quantitative models), it should be considered complex and subject to the appropriateness test[3]. The fund's KIID also highlights risks such as counterparty risk (from derivatives usage), liquidity risk, and concentrated exposures, further supporting a complex classification. Therefore, despite being a UCITS and physically replicated, the fund's active management, derivative usage for investment (not just hedging), potential leverage, and quantitative model-driven strategy make it complex under MiFID II."
}