LONDON — HSBC’s Islamic Global Equity Index Fund, described by Middle East Eye as the UK’s largest “sharia-compliant” fund, holds roughly $130 million in five companies the outlet links to Israel’s military, and the bank has not answered questions about it.
Middle East Eye analysed the fund’s semi-annual report for the first half of 2026, and added a Palantir figure from a Hyphen report published on Tuesday. The holdings it lists are RTX, $35.7 million, which works with Israeli arms firm Rafael on Iron Dome interceptors; Palantir, $38.3 million, in partnership with Israel’s Ministry of Defence; Analog Devices, $20.3 million, which sent components to Elbit Systems in 2024; Honeywell, $18.9 million, whose unit MEE says was found in a missile that hit a Gaza school in June 2024; and Rolls-Royce, $17.6 million, which supplies engines for Merkava tanks and Eitan armoured vehicles. Those figures add up to about $131 million.
The scale matters. HSBC’s September monthly report puts the fund’s size at about $3.22 billion, so the five positions are roughly 4 percent of assets, by TEH’s arithmetic, though the holdings and the fund size come from different dates. They are small beside the fund’s top holdings, which are Apple, Microsoft, Alphabet and Nvidia.
How the money got there is the quieter point. The fund is passively managed and aims to track the Dow Jones Islamic Market Titans 100 Index in generally the same proportions, according to HSBC’s own factsheet. A Shariah Committee monitors it through the year and issues an annual compliance certificate. So the exposure is a product of index weights and screening rules, not a portfolio manager’s choice, and the question for savers is whether those rules fit what they believed they were buying.
Middle East Eye reported that HSBC did not respond to its request for comment. Analog Devices said its shares trade on the open market and that it “does not direct or control the investment decisions of any fund.” Rolls-Royce said it would not comment on investors’ actions, and RTX and Honeywell did not respond. Ibrahim Khan, co-founder of Islamic Finance Guru, said the fund’s criteria “can and should be changed,” while arguing HSBC should be pressed to improve rather than written off.
The defence names are not marginal to the market. TEH reported in September that Raytheon and Lockheed shares rose as US strikes on Iran resumed, a reminder that arms makers are widely held in global index funds.
The limits are worth stating. The links between the five companies and the Israeli military are MEE’s and Hyphen’s claims, not findings TEH has independently verified. HSBC’s factsheet does not list these positions and does not say how the Shariah Committee treated them, and the June holdings and September fund size cannot be matched exactly.
Whether five small positions in a $3 billion index fund are a screening failure or index arithmetic is a question the Shariah Committee’s certificate would have to answer, and HSBC has not published its reasoning.
