{
    "leverage": true,
    "derivatives": true,
    "swaps": false,
    "inverse": false,
    "replication_method": "synthetic",
    "ucits": false,
    "type": "ETC",
    "complex_factors": "Leverage, Derivatives, Synthetic Replication, Commodity Futures Exposure, Daily Reset Compounding, High Risk Profile",
    "classification": "complex",
    "supporting_data": "The WisdomTree Wheat 2x Daily Leveraged ETC is a leveraged product (2x daily exposure), which automatically makes it complex under MiFID II rules. It uses derivatives (commodity futures) to achieve its leveraged exposure, and the daily reset mechanism introduces compounding effects that are difficult for retail investors to understand. The product is not a UCITS, but even if it were, the use of leverage and derivatives would override the UCITS presumption of non-complexity. The ETCu2019s structure, risk profile (highest risk class, 7/7), and the fact that returns over periods longer than one day do not simply track 2x the index due to compounding, all contribute to its complexity. The productu2019s KID explicitly states it is 'not simple and may be difficult to understand,' targeting informed investors with specific knowledge of similar products. The presence of leverage, synthetic replication via futures (not physical holdings), and the associated risks (market, liquidity, counterparty, and compounding) are central to the productu2019s strategy and are not ancillary or for efficient portfolio management. These features are clearly beyond the understanding of a retail investor with basic knowledge, as required by MiFID II Article 57 and ESMA guidance."
}