{
    "ucits": true,
    "type": "ETF",
    "leverage": false,
    "derivatives": true,
    "swaps": false,
    "inverse": false,
    "replication_method": "physical",
    "complex_factors": "Convertible Bonds, Structured Products, Securities Lending",
    "classification": "complex",
    "supporting_data": "The SPDR FTSE Global Convertible Bond UCITS ETF is a UCITS-compliant ETF investing primarily in global convertible bonds, including investment grade and non-investment grade, fixed and floating rate, and perpetual convertible bonds. Convertible bonds embed derivatives and are explicitly classified as complex under MiFID II appropriateness rules (Art. 19(6) and CESR/ESMA guidance). The ETF uses a stratified sampling strategy holding a subset of the index securities, which is a physical replication method, generally non-complex. However, the underlying assets are convertible bonds, which embed derivatives and have complex risk profiles including redemption risk, liquidity risk, credit risk, and equity-debt hybrid characteristics. The Fund may use financial derivative instruments for efficient portfolio management, but the main complexity arises from the nature of the convertible bonds themselves. Securities lending is used up to 70% of NAV, introducing counterparty risk, which may contribute to complexity but is secondary. The ETF does not use significant leverage beyond UCITS limits. The risk profile is medium-high (category 5/7), reflecting market volatility and the complexity of convertible bonds. According to MiFID II and ESMA guidelines, convertible bonds and instruments embedding derivatives are always complex, requiring an appropriateness assessment for retail investors. Therefore, despite being a UCITS ETF with physical replication, the Fund's investment in convertible bonds and use of derivatives for portfolio management classify it as complex under MiFID II. This classification aligns with the regulatory framework that treats convertible bonds and structured products as complex due to their embedded derivatives and risk features, which are not easily understood by retail investors."
}