HSBC ‘sharia-compliant’ fund to exclude arms companies after Israeli-linked firms exposed

HSBC’s Islamic Global Equity Index Fund is expected to sell shares in major defence and military-related companies after its benchmark tightened its rules. The change follows reporting that the fund had bought more than $100 million in shares in firms linked to the Israeli military, raising questions about how its investments aligned with its sharia-compliant designation.

The S&P Global 1200 Shariah Select Index will apply the new rules from 23 November, excluding companies with more than 5 per cent of revenue from areas including military contracting and specified weapons. The fund, which passively tracks the index and is overseen by Islamic scholars, held shares in RTX, Honeywell, Rolls-Royce, BAE Systems and Palantir; the first four are expected to be excluded, while the article says the effect on Palantir is likely given its military contracting links.