# HSBC Islamic Fund Invested Over $130 Million in Companies Linked to Israeli Military

> HSBC's Islamic Global Equity Index Fund channeled over $130 million into companies tied to the Israeli military in the first half of 2026, prompting a review by the bank.

By PrimaryBrief newsroom · Published 2026-10-22T21:05:13.122015Z
Canonical: https://primarybrief.com/article/hsbc-islamic-fund-invested-over-130-million-in-companies-linked-to-israeli-military-3d71927d

HSBC's Islamic Global Equity Index Fund, a UK-based Sharia-compliant investment vehicle, invested over $130 million in companies linked to the Israeli military during the first half of 2026 [3][4][7][13]. This series of investments, detailed in the fund's semi-annual report, has prompted a review by HSBC Asset Management and raised questions about adherence to Islamic finance principles [1][2][4][5][6].

For many UK Muslim savers, whose pension schemes are largely invested in this fund, these revelations present an ethical dilemma [1][2][3][12]. The controversy has exposed a potential gap in how Islamic finance screens investments, particularly concerning products with military applications [2][3][4].

## What the records show

An analysis of the HSBC Islamic Global Equity Index Fund's semi-annual report for the first half of 2026 revealed investments in five companies with ties to the Israeli military [1][3][5]. The fund purchased $38.3 million in Palantir Technologies, a US data surveillance firm that announced a partnership with the Israeli Ministry of Defence in January 2024 for "war-related missions" [1][4][5]. It also acquired $35.7 million in RTX, the world's second-largest arms company, known for co-producing Tamir interceptor missiles for Israel's Iron Dome and supplying components for F-series military aircraft [1][3][4][5][10]. Analog Devices received $20.3 million, with its Irish subsidiary reportedly supplying components to Elbit Systems, Israel's largest weapons manufacturer, in 2024 [1][3][4][5][10]. Honeywell International, a producer of sensors and guidance devices, saw an $18.9 million investment, with one of its guidance units reportedly found in a missile strike on a Gaza school in June 2024 [1][3][4][5]. Rolls-Royce Holdings, the sole British company identified, received $17.6 million, as it produces engines for Israeli Merkava tanks and other military vehicles [1][3][4][5].

## What changed and for whom

Following reports by Hyphen and Middle East Eye, HSBC agreed to review the investments [1][2][5]. An HSBC spokesperson stated that the bank understood the importance of funds reflecting investor values and committed to a careful review with independent expert advisors, promising swift action [2][4]. Major UK workplace pension schemes, including Nest and The People's Pension, contacted HSBC with concerns about Palantir's inclusion in the fund [5][6]. The fund is marketed as "Sharia-compliant" to Muslim savers, many of whom hold it through halal pension schemes [3][11].

## What we could not confirm

How the Sharia-compliance screening process failed to identify these military links prior to investment [3][4]. The specific timeframe for HSBC's review and when any changes to the fund's holdings will be implemented [2][4]. The process by which the independent expert advisors will assess the investments [2][4].

## Evidence cited
1. MEE analysis reveals HSBC's Islamic Global Equity Index Fund purchased shares in world's second-largest arms company (middleeasteye.net) — https://middleeasteye.net/
2. Global bank HSBC to review its ‘halal’ fund’s $38m stake in Israeli-military tech firm (muslimnetwork.tv) — https://muslimnetwork.tv/
3. How HSBC’s Islamic fund invested millions in Israeli war-linked firms (aljazeera.com) — https://aljazeera.com/
4. HSBC's Sharia-compliant fund invested over $130m in companies linked to Israeli military (tbsnews.net) — https://tbsnews.net/
5. HSBC Islamic Global Equity Index Fund: Halal or Haram? - Ziyad Finance (ziyadfinance.com) — https://ziyadfinance.com/
6. HSBC reviews Palantir inclusion in Islamic fund after concerns By Investing.com (investing.com) — https://investing.com/
7. HSBC's 'sharia-compliant' fund invested $130 million in five companies linked to Israeli military (easternherald.com) — https://easternherald.com/
8. HSBC's Islamic Fund's Israeli Military Links Spark Outcry (pakobserver.net) — https://pakobserver.net/
9. HSBC Islamic fund invests $38mln in Palantir shares despite Israeli military links | Salaam Gateway (salaamgateway.com) — https://salaamgateway.com/
10. HSBC's Sharia-compliant fund invested over $100m in companies linked to Israeli military (dailywaadaa.com) — https://dailywaadaa.com/
11. HSBC Islamic Funds and the IDF: What Happened? (Palantir, RTX etc) #HalalInvesting (youtube.com) — https://www.youtube.com/watch?v=3g82cT2M_tI
12. Middle East Eye on Instagram: "The UK's largest “sharia-compliant” fund has purchased more than $100m worth of shares in companies linked to the Israeli military in the first half of this year, a Middle East Eye analysis can reveal. This comes after Hyphen reported on Tuesday that the British banking giant HSBC's Islamic Global Equity Index Fund purchased $38m worth of shares in the controversial American technology firm Palantir. Most halal pension schemes in Britain are invested in HSBC's fund (instagram.com) — https://www.instagram.com/p/DB1fFwts532/
13. Islamic Finance Shake-Up: HSBC Sharia Fund Sells Off Israeli Military-Linked Assets Amidst Controversy - Kalyar Traders (kalyartraders.com) — https://kalyartraders.com/news/islamic-finance-shake-up-hsbc-sharia-fund-sells-off-israeli-military-linked-assets-amidst-controversy/
14. What's happened with HSBC's Islamic funds and what you can do about it (youtube.com) — https://www.youtube.com/watch?v=nDOFZtjZreM