Investing.com -- HSBC Asset Management is examining whether to remove Palantir from its $9 billion Islamic Global Equity Index fund after major UK workplace pension schemes questioned the US software company's presence in the portfolio according to the Financial Times.

Nest, the UK state-backed workplace pension scheme, and People's Pension, which serves more than 7 million members, contacted HSBC about Palantir's inclusion in the fund, according to people familiar with the matter.

The HSBC fund, which follows the S&P Global 1200 Shariah Select Index, bought $38.3 million of Palantir shares in the first half of the year. Nest had approximately 40,000 members invested in the fund and received a small number of inquiries about Palantir's inclusion.

The technology company faces criticism due to its connections to the US and Israeli defense sectors. Government agencies in Switzerland, Germany and France have rejected or replaced Palantir's tools.

London mayor Lord Sadiq Khan blocked Palantir's £50 million contract with the Metropolitan Police earlier this year. The mayor's office stated the decision was not based on the company's values or ethics.

Sharia-compliant funds follow Islamic law and Islamic ethics principles, which limit the types of companies eligible for investment. HSBC changed the index tracked by its Islamic Global Equity Index fund from the Dow Jones Islamic Market Titans 100 Index in March.

Nest confirmed that senior executives started discussions with HSBC Asset Management after receiving questions about Palantir's inclusion. People's Pension also reached out to the asset manager.

HSBC stated it would assess whether the current approach meets investors' expectations. The bank added that it takes client concerns seriously and will review the matter.

Umer Suleman, a board member of Islamic Finance Council UK, said several fund investors contacted him expressing outrage and shock over Palantir's inclusion.