A major British bank’s Islamic investment fund held approximately £98 million in five companies linked to Israel’s military during the first half of 2026, despite being marketed as Sharia-compliant. The fund is used by halal workplace pension schemes in Britain, meaning Muslim savers may have money invested in these companies through their pensions.
The largest holding was approximately £29 million in Palantir, the US data analytics and surveillance technology company. In January 2024, Palantir signed a strategic partnership with Israel’s Ministry of Defence to provide technology supporting “war-related missions”. Its software supports the Israeli military in ‘battlefield decision-making’.
The fund also held approximately £27 million in RTX, whose subsidiary Raytheon works with Israeli defence company Rafael on interceptors for the Iron Dome missile defence system; £15 million in Analog Devices, whose components have reportedly been supplied to Israeli defence company Elbit Systems; £14 million in Honeywell, whose products have been linked to Israeli military equipment; and £13 million in Rolls-Royce, which supplies engines for Israeli Merkava tanks and Eitan armoured vehicles.
The investments raise questions about how Islamic investment standards assess companies whose products or partnerships are connected to military operations. Sharia-compliant screening often focuses on a company’s main business and the proportion of its revenue from prohibited activities, meaning military-related contracts may not automatically disqualify a company.
The fund tracks an Islamic equity index rather than selecting every investment individually. However, the findings raise questions about whether existing screening criteria adequately account for companies involved in military operations and surveillance. According to the reporting, HSBC did not respond to requests for comment.
