The UK’s largest sharia-compliant investment fund purchased more than $100 million worth of shares in companies linked to the Israeli military in the first half of 2026, according to an analysis by Middle East Eye (MEE).

The HSBC Islamic Global Equity Index Fund, in which most halal pension schemes in Britain are invested, bought shares in several major companies whose products or services have been linked to Israel’s military operations.

The findings come after Hyphen reported on Tuesday that the fund had purchased $38.3 million worth of shares in Palantir, a US technology company whose surveillance and data-analysis systems have been linked to Israeli military operations.

MEE’s analysis of the fund’s semi-annual report found that it purchased $35.7 million worth of shares in RTX, the world’s second-largest arms company.

RTX subsidiary Raytheon works with Israeli defence company Rafael to produce interceptors for Israel’s Iron Dome missile defence system. The Campaign Against Arms Trade has described Raytheon as a significant supplier of missiles and other goods and services to the Israeli military and said the company has been implicated in Israel’s war on Gaza.

Raytheon has supplied thousands of missiles to Israel, including weapons reportedly used in attacks in Gaza. It also provides weapons systems and components for F-15, F-16 and F-35 fighter jets deployed in the Palestinian territory.

RTX did not respond to MEE’s request for comment.

The HSBC fund also purchased $20.3 million worth of shares in Analog Devices, a US semiconductor company that supplied critical components to Elbit Systems, Israel’s largest weapons manufacturer, in 2024, according to reports.

Elbit supplies the Israeli military with 80% of its land-force equipment and 85% of its combat drones.

In a statement to MEE, Analog Devices said its shares were traded on the open market and that the company did not control the investment decisions of funds.

Its products were sold worldwide for a broad range of applications, the company said, adding that its sales were subject to US and other applicable export-control and sanctions laws, including government licensing requirements.

The fund also purchased $18.9 million worth of shares in Honeywell International, a US conglomerate that designs sensors and guidance devices used in weapons.

According to an Al Jazeera analysis, Honeywell manufactured an inertial measurement unit used for precision targeting that was found in a missile used in an attack on a school in Gaza in June 2024. The attack killed at least 40 Palestinians, including 14 children and nine women.

Honeywell’s UK business had also received three licences to export aircraft components to Israel in 2022 and 2023. The company did not respond to MEE’s request for comment.

Another $17.6 million was invested in Rolls-Royce, which produces engines for Israeli Merkava tanks and Israeli naval vessels through its German subsidiary, MTU.

In April 2025, Rolls-Royce Solutions America became the principal contractor for supplying engines for Israel’s Eitan armoured personnel carrier under a $180 million foreign military sale to Israel.

A Rolls-Royce spokesperson told MEE that the company would not comment on investors’ decisions.

The fund’s investment in Palantir has also drawn attention because of the company’s links to Israeli military operations and its growing presence in the UK’s public sector.

Since 2020, Palantir has secured more than £670 million in contracts with British civilian and defence bodies. In January 2024, the company announced a partnership with Israel’s Defence Ministry to deploy its technology in support of what it described as “war-related missions”.

In April 2025, Palantir chief executive Alex Karp responded to allegations that the company’s technology had enabled the killing of Palestinians in Gaza by saying that those killed were “mostly terrorists, that’s true”.

A July 2025 report by UN Special Rapporteur Francesca Albanese said there were reasonable grounds to believe that Palantir had provided Israel with predictive policing technology, defence infrastructure for the rapid development and deployment of military software, and an artificial intelligence platform capable of integrating battlefield data for automated decision-making.

The HSBC fund also holds a stake worth $386,784 in BAE Systems, Britain’s largest arms company, which manufactures components for F-35 fighter jets used by the Israeli military in Gaza.

In addition, it holds shares in Booking.com and Expedia. Both companies have been named by the United Nations in connection with listings of properties in Israeli settlements in occupied Palestinian territory.

Ibrahim Khan, co-founder of the Islamic Finance Guru website, said the criteria governing sharia-compliant funds had been established long ago and could not be changed overnight.

“ But it is also the case that these criteria can and should be changed, particularly if the community that they are serving believes very strongly in certain things,” Khan told MEE, urging HSBC to take the issue seriously.

He said HSBC had served the Muslim community and its pension schemes through the fund for decades and that investors should not abandon it entirely over the issue.

“It is right that we put pressure on them and demand better, but also that we deal with them in a fair way,” he said.

HSBC did not respond to MEE’s request for comment.

The findings come as investment funds face growing pressure from activists to withdraw investments linked to Israel, particularly following its war on Gaza.

In May, MEE reported that Border to Coast Pensions Partnership, the UK’s largest public-sector pension pool, had quietly sold its holdings of Israeli government bonds the previous year.

Border to Coast manages nearly £120 billion in assets on behalf of around two million local government workers.