Hilan Ltd.
Hilan Ltd. engages in the provision of Software as a Service (SaaS) for the purpose of managing the enterprise human capital. Its solutions include payroll, human resources, time and attendance, pension, analytics, and business process outsourcing (BPO). The firm offers its services to the industry, high-tech, finance, academic, communications, healthcare, municipal, transportation, retail, education, government, social care, associations, and hotels sectors. It operates through the following segments: Payroll Services, Human Resources, and Organizational Systems, Business Solutions, Computing Infrastructures, and Marketing of Software Products. The Payroll Services, Human Resources, and Organizational Systems segment provides payroll management services, pension operations, enterprise resource planning, other value-added services, and attendance, human resources, business, financial, and relationship management. The Business Solutions segment is involved in the sale of outsourcing and technological value-added solutions, as well as solutions and projects in the field of computing, digital, and innovation. The Computing Infrastructures segment sells solutions in the field of computing infrastructures, managed public and private clouds, advanced information security, and cyber. The Marketing of Software Products segment is composed of the distribution and assimilation of software products and solutions in the field of control, data, analytics and business intelligence, infrastructures and applications in the information technology world, document and content management, information and cyber security, and content delivery network. The company was founded on December 16, 1992 and is headquartered in Tel Aviv, Israel.
COMMENTARY
Global equity markets rose in October, with both developed and emerging regions delivering positive results. Conditions were shaped by delayed US data releases following government shutdowns and by late-month policy developments that triggered sharp shifts across regions and sectors.
US equities advanced despite administrative disruptions, supported by resilient corporate results. Europe also moved higher, although performance was more muted given its limited exposure to commodity and technology sectors. Asia ex-Japan led global markets, helped by a major US China trade agreement announced on the final day of the month. The agreement reduced tariff rates and suspended several export controls, prompting a strong rally in Korea and Taiwan as semiconductor exporters responded to improved trade visibility and ongoing demand for AI infrastructure.
Style factors played a central role in monthly market leadership. Quality was the weakest factor as investors rotated toward value, yield, and low volatility exposures. This shift proved temporary, with quality regaining support after the Federal Reserve cut rates by 25 basis points, bringing the policy rate to its lowest level in nearly three years. The decision supported growth-oriented small caps, although the impact was moderated by the Fed’s continued data-dependent stance.
Sector performance reflected these rotations. Technology outperformed on renewed semiconductor optimism, while healthcare extended its recent gains. Materials weakened further, and within small caps, defensive consumer areas were noticeably softer. These conditions created challenges for quality-focused portfolios but also set up opportunities as factor pressures stabilised late in the month.
Portfolio Commentary
The Fund delivered a modest gain in October but lagged the benchmark as market conditions continued to favour styles other than quality. The rotation away from high return on equity businesses created headwinds, though it also provided opportunities to add high quality companies at more attractive valuations. Portfolio activity reflected this backdrop, with selective additions in the United States and the exit of two Korean holdings where conviction had declined.
Two new positions were introduced. Sensient Technologies, a US based specialty chemicals company focused on natural food colourants and flavours, was added after valuation compression during the quality sell off. The business is supported by resilient demand for natural ingredients, strong pricing power and consistent cash generation across its core natural colours franchise.
Cavco Industries, a leading US manufacturer of factory built homes, was also initiated following detailed sector work. Structural housing shortages and favourable demographic trends underpin its demand outlook, while disciplined operations and ongoing brand alignment position the company for continued market share gains. These additions reduced the Fund’s US underweight while maintaining an emphasis on durable return profiles.
Two Korean positions were exited. Hugel, a producer of aesthetic medical products, was sold due to concerns around management transition and rising competition in domestic markets. Samyang Foods, a well known packaged food manufacturer, was also sold after strong share price appreciation and a reassessment of the risk reward outlook as competitive pressures increased in key export channels.
Performance was mixed across existing holdings. Nextracker, a US leader in solar tracking systems, was a top contributor as strong results and growing traction in adjacent solar infrastructure components supported sentiment. ChemoMetec, a Danish manufacturer of automated cell counting and analysis systems, added value as bioprocessing demand strengthened. Mirion Technologies, a US based provider of radiation detection and measurement systems, also performed well due to improving conditions in nuclear power markets and the ongoing expansion of its software and compliance offerings.
Weaker contributors included Hawkins, a US specialty chemical distributor facing pressure in water treatment margins, and Dorman Products, an automotive aftermarket supplier affected by softer repair activity and customer inventory adjustments.
Overall, portfolio performance reflected an environment that has continued to challenge quality-oriented strategies, while the team maintains confidence that improving fundamentals will become a more important driver of returns.