Global banking giant HSBC has launched a formal review of a controversial holding in U.S. technology firm Palantir within its sharia-compliant Islamic equity fund, after multiple investors raised ethical concerns over the company’s ties to Israeli military activities.
According to reporting from the Financial Times, the review was initiated after UK state-backed workplace pension provider Nest — which invests its own sharia fund through HSBC’s Islamic Global Equity Index Fund — flagged objections to Palantir’s inclusion in the fund portfolio. The move comes after independent Muslim media outlet Hyphen first revealed that HSBC’s fund, the largest halal investment vehicle in the United Kingdom, had acquired $38 million worth of Palantir shares in the first half of 2026.
Subsequent analysis by Middle East Eye (MEE) uncovered that over the same six-month period, the fund had purchased more than $100 million in shares of companies with direct links to the Israeli military. Among these holdings was $35.7 million in stock from RTX, formerly known as Raytheon — the world’s second-largest arms manufacturing corporation.
Nest, which counts roughly 40,000 members invested in the sharia fund through HSBC, confirmed to the FT that it had received multiple member inquiries regarding Palantir’s presence in the portfolio. Palantir CEO Alex Karp has publicly acknowledged that his company’s technology is used by Israeli forces, and in a 2025 interaction with a pro-Palestinian protester, he admitted that the technology has been used to kill Palestinians in Gaza, claiming that those killed “are mostly terrorists.”
Following the initial revelations about these controversial holdings, Nest’s senior leadership confirmed it had opened direct discussions with HSBC to address the concerns. In an official statement announcing the upcoming review, HSBC emphasized that it takes investor feedback seriously. “We take any concerns from our clients seriously and will review this matter carefully, in partnership with independent expert advisers, to assess whether the approach still meets investors’ expectations,” the bank said.
MEE, which first published the broader analysis of military-linked holdings in the fund, provides independent coverage of the Middle East, North Africa and surrounding regions.