Physical replication means the fund buys the shares in its index — all of them, or a representative sample when there are thousands. Synthetic replication means the fund holds a basket of other assets and signs a swap with a bank, the swap counterparty, which promises to pay it the index's return.
Each carries a different risk. A physical fund's main risk is the shares themselves, though many also lend their shares out for a fee, which adds a smaller borrower risk. A synthetic fund adds the bank: if the counterparty fails, the fund is left with its collateral basket instead of the promised return. UCITS rules cap how much a fund can be owed by any one counterparty, which limits the damage but doesn't remove it. The replication method is on the fund's factsheet; the app doesn't show it.
One carries the risk of the shares. The other adds the risk of the bank that made the promise.
Educational content only. It is not personal financial advice.