HSBC Reviews Palantir Holding in Islamic Equity Fund
The asset manager is re-evaluating its investment following questions regarding Palantir's defense contracts.
Updated on Oct. 21, 2026 in Public Companies
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HSBC Asset Management is reviewing the inclusion of Palantir shares in its $9 billion Islamic Global Equity Index fund. The review follows inquiries from UK pension funds Nest and the People's Pension, which expressed concerns about Palantir's defense work for the United States and Israel.
Why it matters
Critics argue that Palantir's role in defense operations contradicts the ethical standards associated with the fund's specific investment approach. HSBC is now weighing whether to remove the stock or push for changes to the underlying index screening process.
HSBC Asset Management holds approximately $38.3 million of Palantir stock in its $9 billion fund. Palantir currently maintains a market capitalization of $462.8 billion and trades at 164.7 times trailing earnings.
The players
HSBC Asset Management
This is a global investment manager that oversees billions in assets and operates various specialized index funds.
Palantir
This is a public software company known for providing data analytics tools to government and defense organizations.
Nest
This is a major UK-based workplace pension scheme established by the government to support retirement savings.
People's Pension
This is a large multi-employer pension provider operating within the United Kingdom's financial sector.
The details
Government agencies in France, Germany, and Switzerland have previously replaced or rejected Palantir tools. The firm is currently expected to report its Q3 earnings on November 2, 2026, with revenue guidance set between $2.160 billion and $2.164 billion.
Timeline
The HSBC fund acquired $38.3 million in Palantir shares during the first half of 2026.
Palantir stock closed at $192.60 on October 20, 2026.
Palantir is scheduled to release its Q3 earnings report on November 2, 2026.
Market Landscape
This development highlights the ongoing tension between large index-based investment strategies and specific Shariah-compliant investment guidelines. The review places HSBC in a difficult position as it balances passive index tracking against the increasing ethical demands of institutional clients.
Investors in the HSBC Islamic Global Equity Index fund may see changes to the portfolio composition if Palantir is removed or replaced. These institutional shifts often reflect broader movements in ESG and ethical investing that can impact the risk profile of retail-accessible funds.
The takeaway
Institutional investors are increasingly scrutinized for how their holdings align with the specific ethical mandates of their funds. Investors should regularly review the underlying assets of their own holdings to ensure they meet personal or religious compliance standards.
What happens next
Palantir is expected to release its third-quarter earnings report on November 2, 2026, which will provide updated financial performance data.
Further reading
Find more analysis on institutional investment trends in the Public Companies section.
Source note: This article includes information reported by FinanceFeeds.
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