An analysis by Middle East Eye showed that the UK's largest Sharia-compliant fund acquired shares in companies linked to Israeli military forces worth over $100 million in the first half of this year.
This report was published after Hyphen reported on Tuesday that the HSBC Global Equity Index Fund invested $38 million in the controversial American technology company Palantir.
Most Halal-compliant pension schemes in Britain invest in the HSBC fund, which claims to manage 'portfolios based on Islamic investment principles that provide both returns and better outcomes for society as a whole.'
MEE's analysis of the Islamic Global Equity Index Fund's activities for the first half of 2026, presented in its semi-annual report, found that the fund purchased RTX shares worth $35.7 million, which is the world's second-largest arms company.
RTX's subsidiary, Raytheon, collaborates with the Israeli arms giant Rafael to produce interceptors for Israel's Iron Dome missile defense system. CAAT describes Raytheon as a 'significant supplier of missiles and other goods and services to Israeli military' and as 'involved in the war in Gaza.' The company has supplied thousands of missiles to Israel, some of which are reported to have been used in the genocide in Gaza. Furthermore, Raytheon supplies weapon systems and components for F-15, F-16, and F-35 fighters deployed in the Palestinian Strip.
The HSBC fund also acquired Analog Devices shares worth $20.3 million. This American semiconductor company supplied critical components to Elbit Systems, Israel's largest weapons manufacturer, in 2024 during the genocide in Gaza. Elbit provides Israeli armed forces with 80 percent of ground equipment and 85 percent of combat drones.
The fund also invested $18.9 million in Honeywell International, an American conglomerate developing sensors and guidance devices used in weaponry. According to Al Jazeera, an inertial measurement unit manufactured by Honeywell was found in a missile that struck a school in Gaza in June 2024, aiding in precise targeting. This attack resulted in the deaths of at least 40 Palestinians, including 14 children and nine women. Honeywell's business in the UK also received three licenses for exporting aviation components to Israel in 2022 and 2023.
Subsequently, the HSBC fund acquired Rolls-Royce shares worth $17.6 million. This company manufactures engines for Merkava tanks widely used by Israel in Gaza, as well as for Israeli vessels through its German subsidiary MTU. In April 2025, Rolls-Royce Solutions America became the primary contractor for supplying engines for the Israeli Eitan APC within an $180 million Foreign Military Sale deal.
Hyphen previously reported that the HSBC fund acquired $38.3 million worth of Palantir shares. This American data surveillance firm, linked to human rights violations in occupied Palestine, has held contracts worth over £670 million with British civilian and defense sectors since 2020.
In January 2024, Palantir announced a partnership with the Israeli Ministry of Defense to implement its technology to support 'war-related operations,' which use drone-mounted missiles to strike civilians in Gaza, including journalists and humanitarian aid workers. In April 2025, Palantir CEO Alex Karp responded to accusations that Palantir's technology contributed to the killing of Palestinians in Gaza, stating: 'mostly terrorists, that's true.'
In July 2025, UN Special Rapporteur Francesca Albanese's report indicated that 'there are sufficient grounds to believe that Palantir provided automated predictive policing technology, core defense infrastructure for rapid and large-scale construction and deployment of military software, as well as its artificial intelligence platform that allows integrating battlefield data in real time for automated decision-making.'
The HSBC fund also holds an existing stake in BAE Systems—the largest British arms company, valued at $386,784—which produces components for F-35 fighters used by Israeli military forces in Gaza. Additionally, the fund owns shares in Booking.com and Expedia, which were named by the United Nations for placing properties in illegal Israeli settlements in occupied Palestinian territory.
Ibrahim Khan, co-founder of the popular website Islamic Finance Guru, told MEE: 'The criteria for these funds were established long ago, and it is not easy to change them overnight.'
He added: 'But it is also true that these criteria can and should be changed, especially if the community they serve strongly believes in certain things. It is an issue that HSBC must take seriously and decide upon.'
Khan emphasized: 'HSBC has served the Muslim community and our pensions for several decades through this fund. We cannot simply throw the baby out with the bathwater because they made a mistake—and it is a mistake. It is right that we put pressure on them and demand more, but also that we treat them fairly.'
HSBC did not respond to MEE's request for comment. Many funds have tried to distance themselves from Israel in the last three years under pressure from activists regarding the genocide in Gaza. MEE revealed in May that the UK's largest state pension fund, Border to Coast Pensions Partnership, quietly sold its Israeli government bonds last year. Border to Coast manages assets worth nearly £120 billion ($160 billion) on behalf of about two million local government employees.
