HSBC Sharia fund invested millions in Israeli-linked firms despite weapons screening

Fund rules and reported holdings

The fund’s website says it aims to deliver investment returns alongside better outcomes for society. Its stated Sharia approach describes ethical investments that benefit society and excludes businesses or financial practices considered impermissible under its screening rules, overseen by a Sharia committee.

Technology and defence companies

RTX, the US defence company whose businesses include Raytheon, was also among the holdings. Raytheon makes missiles and air-defence systems, jointly developed David’s Sling with an Israeli company, and supplies components for F-series fighter jets deployed in the occupied Palestinian territory.

Other investments and supply links

HSBC invested $20.3 million in Analog Devices shares, according to the article. The Ditch reported that the company’s Irish-registered subsidiary shipped components from the Philippines to Elbit Systems in August, October and November 2024.

The fund also bought $18.9 million in Honeywell International shares. Its German subsidiary, MTU Aero Engine, has supplied power systems for Israeli military vehicles, including the Merkava tank, Namer armoured personnel carrier and Eitan armoured vehicle.

Different screening approaches

Ebrahim told Al Jazeera that companies classified as technology or industrial may pass business-activity screening even when their products enter weapons systems. He said screening does not typically trace supply chains to determine whether components are used in civilian harm, pointing to a potential gap between a company’s classification and its products’ uses.