{
    "ucits": true,
    "type": "ETF",
    "leverage": false,
    "derivatives": true,
    "swaps": false,
    "inverse": false,
    "replication_method": "physical",
    "complex_factors": "Use of derivatives for direct investment purposes and securities lending",
    "classification": "complex",
    "supporting_data": "The asset is a UCITS ETF investing primarily in fixed income securities reflecting the J.P. Morgan EMBI Global Core Index, which includes emerging market sovereign and quasi-sovereign bonds. The ETF uses optimizing techniques that may include the use of financial derivative instruments (FDIs) for direct investment purposes, not limited to efficient portfolio management. This derivative use introduces complexity due to potential counterparty risk and the need for understanding derivatives beyond basic financial literacy. Additionally, the fund engages in securities lending, which introduces counterparty risk, although this alone does not automatically make the ETF complex. The replication method is physical, holding underlying securities, which generally supports non-complexity, but the embedded derivative use for investment purposes and securities lending contribute to complexity. According to MiFID II Article 254 and Delegated Regulation EU 2017/565 Article 57, any ETF embedding derivatives integral to its investment strategy is classified as complex. The fund's risk profile includes credit risk, liquidity risk, and counterparty risk, which are not straightforward for retail investors to understand without advanced knowledge. Therefore, despite being a UCITS ETF, the presence of derivatives used beyond EPM and securities lending leads to a complex classification under MiFID II rules."
}