Key Moments
- HSBC Asset Management is reviewing the inclusion of Palantir in its $9 billion Islamic Global Equity Index fund following concerns from major UK workplace pension schemes.
- The fund, which tracks the S&P Global 1200 Shariah Select Index, acquired $38.3 million of Palantir shares in the first half of the year.
- Nest and People’s Pension raised questions with HSBC after members queried Palantir’s presence in the Sharia-compliant portfolio.
UK Pension Schemes Challenge Palantir Exposure
HSBC Asset Management is reassessing whether Palantir should remain in its Islamic Global Equity Index fund, a vehicle with approximately $9 billion in assets, after its holding in the US software company drew scrutiny from prominent UK workplace pension providers, according to the Financial Times.
Nest, the state-backed UK workplace pension plan, and People’s Pension, which serves more than 7 million members, contacted HSBC to question why Palantir appears in the fund’s holdings, people familiar with the situation said.
Nest had around 40,000 members invested in the HSBC Islamic fund and received a small number of member inquiries about the presence of Palantir in the portfolio.
Details of the Palantir Position and Index Shift
The HSBC Islamic Global Equity Index fund is designed to mirror the S&P Global 1200 Shariah Select Index. In the first half of the year, the fund purchased $38.3 million of Palantir shares in line with that benchmark.
Earlier, in March, HSBC altered the benchmark followed by this Sharia strategy, moving from the Dow Jones Islamic Market Titans 100 Index to its current S&P Global 1200 Shariah Select Index.
| Item | Detail |
|---|---|
| Fund name | HSBC Islamic Global Equity Index fund |
| Fund size | $9 billion |
| Current benchmark | S&P Global 1200 Shariah Select Index |
| Previous benchmark | Dow Jones Islamic Market Titans 100 Index |
| Palantir position | $38.3 million (bought in the first half of the year) |
| Nest members in fund | Approximately 40,000 |
Concerns Over Defense Ties and Public Sector Contracts
Palantir has drawn criticism related to its work with the US and Israeli defense industries. The article notes that government agencies in Switzerland, Germany and France have either turned down or replaced Palantir’s software tools.
In the UK, London mayor Lord Sadiq Khan blocked a £50 million contract between Palantir and the Metropolitan Police earlier this year. According to the article, the mayor’s office said that this move was not based on Palantir’s “values or ethics.”
Sharia Compliance and Investor Reactions
Sharia-compliant funds operate under Islamic law and ethical principles that restrict the types of businesses in which they can invest. Against this backdrop, the inclusion of Palantir has sparked debate among stakeholders in the HSBC Islamic fund.
Nest confirmed that its senior leadership began discussions with HSBC Asset Management after members raised questions about Palantir’s role in the portfolio. People’s Pension also contacted HSBC to seek clarity on the issue.
HSBC said it will evaluate whether its current investment approach continues to align with investor expectations. The bank indicated it treats client feedback as a priority and intends to review the situation.
Umer Suleman, a board member of Islamic Finance Council UK, said several investors in the fund had approached him to express “outrage and shock” at Palantir’s inclusion.
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