HSBC 'sharia-compliant' fund to exclude arms companies after Israeli-linked revenue exposed

After Middle East Eye exposed HSBC's investment in Israeli-linked companies, the UK's largest "sharia-compliant" fund is set to divest from arms companies. HSBC's Islamic Global Equity Index Fund, which tracks companies screened for Islamic finance principles, will exclude defense and weapons industries, military contractors, and related sectors starting November 23.

Companies that may be removed from the fund include RTX, Rolls-Royce, Honeywell International, BAE Systems, and Palantir. RTX, a world-leading arms manufacturer, was revealed to have earned more than $100 million from HSBC's fund in the first half of 2026. Honeywell, another major company that designs sensors and guidance devices used in weaponry, is also likely to be excluded due to its military revenue.

Rolls-Royce, which produces engines for Israeli tanks and ships, and BAE Systems, Britain's largest arms company, are set to be removed as well. Palantir, a data surveillance firm with ties to Israeli abuses, may also be excluded following its partnership with the Israeli Ministry of Defence.