{
    "ucits": true,
    "type": "ETF",
    "leverage": false,
    "derivatives": true,
    "swaps": false,
    "inverse": false,
    "replication_method": "physical",
    "complex_factors": "Use of derivatives for currency hedging and risk management",
    "classification": "non-complex",
    "supporting_data": "The Xtrackers Nikkei 225 UCITS ETF is a UCITS-compliant ETF that aims to replicate the Nikkei 225 index primarily through physical replication by buying all or a substantial number of the underlying securities. It uses derivatives only for efficient portfolio management purposes, specifically to hedge currency risk between the fund's assets (JPY) and the share class currency (EUR hedged). The derivatives use is limited and intended to reduce currency fluctuation effects, not to achieve the investment objective via synthetic replication or leverage. The fund also engages in securities lending as a secondary income source, well-managed under UCITS rules with collateral requirements, which does not automatically render it complex. The ETF does not embed derivatives in a way that alters the payoff structure or introduces complex features such as contingent convertible bonds or structured products. The index tracked is a transparent, well-known equity index, and the ETF's structure and risks (market volatility, tracking error, currency risk) are straightforward and understandable by retail investors with basic knowledge. According to MiFID II Article 25(4)(a)(iv) and Article 57 criteria, UCITS ETFs that use physical replication and derivatives only for efficient portfolio management with minimal risk impact are classified as non-complex. The presence of currency hedging derivatives does not trigger complexity if the derivatives are not integral to the investment objective and risks are limited and transparent. Therefore, this ETF is classified as non-complex under MiFID II appropriateness rules."
}