HSBC Asset Management is reviewing Palantir’s inclusion in its Islamic Global Equity Index fund, which has approximately $9 billion in assets. Major worker pension plans raised concerns about the company’s connections to the U.S. and Israeli defense industries and whether they meet the ethical standards for Sharia-compliant investments.
The fund acquired more than $38.3 million in Palantir shares earlier this year. If HSBC removes the stock, the decision could prompt significant selling from the index-linked fund.
Investors are watching for a formal removal and whether the concerns spread to other ESG, ethical, or faith-based investment mandates. The issue adds to scrutiny of Palantir’s valuation: analysts at Charles Schwab say the stock trades at 124 times forward earnings, far above the industry average.