HSBC’s Islamic Global Equity Index Fund bought $131.018 million in shares of five companies with varying ties to Israel’s military during the first half of 2026, drawing attention to its investment screening.
The fund’s interim report lists purchases of $38.338 million in Palantir Technologies, $35.792 million in RTX, $20.308 million in Analog Devices, $18.919 million in Honeywell International and $17.661 million in Rolls-Royce. Those figures are the cost of shares bought during the six months ended June 30, 2026. The five holdings were worth a combined $122.421 million on June 30, when the fund reported $8.181 billion in net assets.
The companies’ military connections differ. Palantir disclosed in a 2024 securities filing that it had agreed to supply technology to Israel’s Defense Ministry. RTX said a venture involving its Raytheon business received a $1.25 billion contract in November 2025 to supply Israel with Tamir air-defense missiles. The U.S. Defense Security Cooperation Agency (DSCA) named Rolls-Royce Solutions America as the principal contractor for a proposed $180 million sale of Eitan powerpack engines.
The Ditch reported that shipping records it said it obtained showed an Analog Devices subsidiary sent components to Israeli arms maker Elbit Systems in 2024. Al Jazeera reported finding a Honeywell-made component in missile debris after an Israeli strike on a Gaza school that year.
HSBC changed the fund’s benchmark to the S&P Global 1200 Shariah Select Index on March 23, 2026. The fund seeks to hold index securities in roughly the same proportions. S&P’s published Shariah screening methodology does not list weapons or defense among its excluded sectors. HSBC says the fund’s Shariah Committee reviews investment policy and index methodology but does not make decisions on individual holdings.
A fund supplement dated Sept. 21, 2026, lists companies deriving income from weapons and defense among activities deemed inappropriate unless the Shariah Committee approves otherwise. It was issued after the first-half purchases and provides no account of a committee review of these positions. The filings do not establish a breach of the fund’s rules. Muhammed Ebrahim, a professor of finance at Durham University Business School, told Al Jazeera that screens focused on a company’s main business can miss how its products are ultimately used.
The supplement says the index undergoes monthly Shariah compliance reviews and is scheduled for a quarterly rebalance in December 2026.
