{
    "ucits": true,
    "type": "ETF",
    "leverage": false,
    "derivatives": true,
    "swaps": false,
    "inverse": false,
    "replication_method": "physical",
    "complex_factors": "Derivative use for currency hedging, Mortgage Backed Securities (MBS) as underlying assets, Optimisation techniques may include use of financial derivative instruments (FDIs) for direct investment purposes",
    "classification": "non-complex",
    "supporting_data": "This UCITS ETF is physically replicated, aiming to track a transparent, well-documented index of US agency mortgage-backed securities. While it uses derivatives (FX forwards) for currency hedging, this use is ancillary and not central to the investment objective. The underlying assets are MBS, which are complex in structure, but the ETF itself is a UCITS and thus benefits from the regulatory presumption of non-complexity under MiFID II Article 25(4)(a)(iv), unless it is a 'structured UCITS'u2014which this is not, as there is no evidence of algorithm-based payoffs or similar complex features. The use of derivatives for hedging is disclosed and within UCITS limits, and the risks (credit, interest rate, liquidity, counterparty) are clearly explained in the KID. There is no significant leverage, no embedded swaps or contingent convertible bonds, and no indication that the structure or risks are opaque or require advanced knowledge beyond basic financial literacy. Therefore, despite the complexity of the underlying MBS and the use of derivatives for hedging, the ETF remains non-complex under MiFID II for distribution purposes[1][2]."
}