HSBC 'sharia-compliant' fund to exclude arms companies after spending $100m on Israeli military-linked firms

The UK’s largest “sharia-compliant” fund is divesting from companies which take more than 5 percent of their revenue from weaponry, after Middle East Eye revealed last month that it purchased more than $100m worth of shares in companies linked to the Israeli military in the first half of this year.

The new change means the British banking giant HSBC’s Islamic Global Equity Index Fund is expected to divest from major companies including RTX, Rolls-Royce, Honeywell International, BAE Systems and Palantir.

The HSBC fund began tracking the S&P Global 1200 Shariah Select Index, a benchmark of companies screened for compliance with Islamic finance principles, in March. The fund is passively managed, which means it mirrors the index's investments.