(a)
|
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Go Paperless with eDelivery
|
26
|
|
Board Approval of Investment Advisory Agreement
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
||
Months(1)
|
Year
|
Years
|
Years
|
||
Hennessy Cornerstone Growth Fund –
|
|||||
Investor Class (HFCGX)
|
37.37%
|
52.55%
|
17.67%
|
10.68%
|
|
Hennessy Cornerstone Growth Fund –
|
|||||
Institutional Class (HICGX)
|
37.56%
|
53.04%
|
18.05%
|
11.01%
|
|
Russell 2000® Index
|
19.66%
|
13.32%
|
5.83%
|
7.22%
|
|
S&P 500® Index
|
20.98%
|
22.66%
|
13.19%
|
12.41%
|
(1)
|
Periods of less than one year are not annualized.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2024 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Oscar Health, Inc., Class A
|
2.35%
|
LendingTree, Inc.
|
2.30%
|
Tutor Perini Corp.
|
2.26%
|
IES Holdings, Inc.
|
2.21%
|
Tenet Healthcare Corp.
|
2.14%
|
Stride, Inc.
|
2.11%
|
Liberty Energy, Inc.
|
2.09%
|
Dell Technologies, Inc., Class C
|
2.07%
|
Sprouts Farmers Market, Inc.
|
2.06%
|
Universal Technical Institute, Inc.
|
2.06%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 95.06%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Communication Services – 1.72%
|
||||||||||||
Live Nation Entertainment, Inc. (a)
|
67,800
|
$
|
6,028,098
|
1.72
|
%
|
|||||||
Consumer Discretionary – 21.45%
|
||||||||||||
American Eagle Outfitters, Inc.
|
266,600
|
6,467,716
|
1.84
|
%
|
||||||||
Dave & Buster’s Entertainment, Inc. (a)
|
108,400
|
5,788,560
|
1.65
|
%
|
||||||||
Dream Finders Homes, Inc., Class A (a)
|
162,900
|
5,782,950
|
1.65
|
%
|
||||||||
Groupon, Inc. (a)
|
591,600
|
6,838,896
|
1.95
|
%
|
||||||||
Guess?, Inc.
|
223,100
|
5,974,618
|
1.70
|
%
|
||||||||
PVH Corp.
|
55,580
|
6,047,104
|
1.72
|
%
|
||||||||
Stellantis NV
|
247,400
|
5,517,020
|
1.57
|
%
|
||||||||
Stride, Inc. (a)
|
110,900
|
7,402,575
|
2.11
|
%
|
||||||||
The Gap, Inc.
|
277,300
|
5,690,196
|
1.62
|
%
|
||||||||
Toll Brothers, Inc.
|
54,600
|
6,503,406
|
1.85
|
%
|
||||||||
Universal Technical Institute, Inc. (a)
|
477,500
|
7,267,550
|
2.06
|
%
|
||||||||
Urban Outfitters, Inc. (a)
|
155,700
|
6,066,072
|
1.73
|
%
|
||||||||
75,346,663
|
21.45
|
%
|
||||||||||
Consumer Staples – 2.06%
|
||||||||||||
Sprouts Farmers Market, Inc. (a)
|
109,800
|
7,250,094
|
2.06
|
%
|
||||||||
Energy – 5.87%
|
||||||||||||
Liberty Energy, Inc.
|
333,200
|
7,330,400
|
2.09
|
%
|
||||||||
TechnipFMC PLC
|
274,100
|
7,022,442
|
1.99
|
%
|
||||||||
Ultrapar Participacoes SA – ADR
|
1,252,000
|
6,285,040
|
1.79
|
%
|
||||||||
20,637,882
|
5.87
|
%
|
||||||||||
Financials – 12.28%
|
||||||||||||
Assurant, Inc.
|
37,300
|
6,505,120
|
1.85
|
%
|
||||||||
LendingTree, Inc. (a)
|
167,600
|
8,090,052
|
2.30
|
%
|
||||||||
Mercury General Corp.
|
132,900
|
6,945,354
|
1.98
|
%
|
||||||||
Oscar Health, Inc., Class A (a)
|
475,600
|
8,261,172
|
2.35
|
%
|
||||||||
SiriusPoint Ltd. (a)
|
547,805
|
6,453,143
|
1.84
|
%
|
||||||||
The Allstate Corp.
|
40,500
|
6,887,430
|
1.96
|
%
|
||||||||
43,142,271
|
12.28
|
%
|
||||||||||
Health Care – 10.14%
|
||||||||||||
Amneal Pharmaceuticals, Inc. (a)
|
1,154,700
|
6,985,935
|
1.99
|
%
|
||||||||
Brookdale Senior Living, Inc. (a)
|
1,036,500
|
7,037,835
|
2.00
|
%
|
||||||||
DAVITA, Inc. (a)
|
50,700
|
7,047,807
|
2.00
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Health Care (Continued)
|
||||||||||||
Tenet Healthcare Corp. (a)
|
66,900
|
$
|
7,512,201
|
2.14
|
%
|
|||||||
Teva Pharmaceutical Industries Ltd. – ADR (a)
|
502,200
|
7,055,910
|
2.01
|
%
|
||||||||
35,639,688
|
10.14
|
%
|
||||||||||
Industrials – 30.77%
|
||||||||||||
American Woodmark Corp. (a)
|
69,900
|
6,436,392
|
1.83
|
%
|
||||||||
AZZ, Inc.
|
90,900
|
6,511,167
|
1.85
|
%
|
||||||||
Blue Bird Corp. (a)
|
182,000
|
5,997,810
|
1.71
|
%
|
||||||||
Cimpress PLC (a)
|
76,300
|
6,506,101
|
1.85
|
%
|
||||||||
EMCOR Group, Inc.
|
19,700
|
7,036,249
|
2.00
|
%
|
||||||||
Greenbrier Cos., Inc.
|
136,400
|
6,736,796
|
1.92
|
%
|
||||||||
Griffon Corp.
|
96,800
|
6,342,336
|
1.81
|
%
|
||||||||
IES Holdings, Inc. (a)
|
57,100
|
7,715,352
|
2.21
|
%
|
||||||||
Interface, Inc.
|
420,900
|
6,435,561
|
1.83
|
%
|
||||||||
JELD-WEN Holding, Inc. (a)
|
329,800
|
6,760,900
|
1.92
|
%
|
||||||||
Masterbrand, Inc. (a)
|
380,100
|
6,336,267
|
1.80
|
%
|
||||||||
Moog, Inc., Class A
|
44,500
|
7,078,615
|
2.01
|
%
|
||||||||
Quanex Building Products Corp.
|
190,418
|
6,325,686
|
1.80
|
%
|
||||||||
REV Group, Inc.
|
318,600
|
6,964,596
|
1.98
|
%
|
||||||||
Tutor Perini Corp. (a)
|
477,081
|
7,933,857
|
2.26
|
%
|
||||||||
VSE Corp.
|
89,346
|
6,975,242
|
1.99
|
%
|
||||||||
108,092,927
|
30.77
|
%
|
||||||||||
Information Technology – 7.34%
|
||||||||||||
Celestica, Inc. (a)
|
153,800
|
6,664,154
|
1.90
|
%
|
||||||||
Dell Technologies, Inc., Class C
|
58,400
|
7,278,976
|
2.07
|
%
|
||||||||
SMART Global Holdings, Inc. (a)
|
334,700
|
6,114,969
|
1.74
|
%
|
||||||||
Turtle Beach Corp. (a)
|
406,900
|
5,737,290
|
1.63
|
%
|
||||||||
25,795,389
|
7.34
|
%
|
||||||||||
Materials – 1.88%
|
||||||||||||
Koppers Holdings, Inc.
|
128,900
|
6,609,992
|
1.88
|
%
|
||||||||
Real Estate – 1.55%
|
||||||||||||
Forestar Group, Inc. (a)
|
175,500
|
5,438,745
|
1.55
|
%
|
||||||||
Total Common Stocks
|
||||||||||||
(Cost $343,424,845)
|
333,981,749
|
95.06
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 3.81%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Money Market Funds – 3.81%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (b)
|
13,380,673
|
$
|
13,380,673
|
3.81
|
%
|
|||||||
Total Short-Term Investments
|
||||||||||||
(Cost $13,380,673)
|
13,380,673
|
3.81
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $356,805,518) – 98.87%
|
347,362,422
|
98.87
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 1.13%
|
3,969,813
|
1.13
|
%
|
|||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
351,332,235
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of April 30, 2024.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
6,028,098
|
$
|
—
|
$
|
—
|
$
|
6,028,098
|
||||||||
Consumer Discretionary
|
75,346,663
|
—
|
—
|
75,346,663
|
||||||||||||
Consumer Staples
|
7,250,094
|
—
|
—
|
7,250,094
|
||||||||||||
Energy
|
20,637,882
|
—
|
—
|
20,637,882
|
||||||||||||
Financials
|
43,142,271
|
—
|
—
|
43,142,271
|
||||||||||||
Health Care
|
35,639,688
|
—
|
—
|
35,639,688
|
||||||||||||
Industrials
|
108,092,927
|
—
|
—
|
108,092,927
|
||||||||||||
Information Technology
|
25,795,389
|
—
|
—
|
25,795,389
|
||||||||||||
Materials
|
6,609,992
|
—
|
—
|
6,609,992
|
||||||||||||
Real Estate
|
5,438,745
|
—
|
—
|
5,438,745
|
||||||||||||
Total Common Stocks
|
$
|
333,981,749
|
$
|
—
|
$
|
—
|
$
|
333,981,749
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
13,380,673
|
$
|
—
|
$
|
—
|
$
|
13,380,673
|
||||||||
Total Short-Term Investments
|
$
|
13,380,673
|
$
|
—
|
$
|
—
|
$
|
13,380,673
|
||||||||
Total Investments
|
$
|
347,362,422
|
$
|
—
|
$
|
—
|
$
|
347,362,422
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2024 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $356,805,518)
|
$
|
347,362,422
|
||
Dividends and interest receivable
|
1,015,038
|
|||
Receivable for fund shares sold
|
4,116,366
|
|||
Prepaid expenses and other assets
|
34,517
|
|||
Total assets
|
352,528,343
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
835,738
|
|||
Payable to advisor
|
208,306
|
|||
Payable to administrator
|
49,689
|
|||
Payable to auditor
|
11,280
|
|||
Accrued distribution fees
|
35,773
|
|||
Accrued service fees
|
21,182
|
|||
Accrued trustees fees
|
5,042
|
|||
Accrued expenses and other payables
|
29,098
|
|||
Total liabilities
|
1,196,108
|
|||
NET ASSETS
|
$
|
351,332,235
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
278,473,988
|
||
Total distributable earnings
|
72,858,247
|
|||
Total net assets
|
$
|
351,332,235
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
261,016,728
|
||
Shares issued and outstanding
|
8,006,860
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
32.60
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
90,315,507
|
||
Shares issued and outstanding
|
2,652,209
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
34.05
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
2,036,384
|
||
Interest income
|
188,236
|
|||
Total investment income
|
2,224,620
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
855,427
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
128,258
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
18,533
|
|||
Distribution fees – Investor Class (See Note 5)
|
141,552
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
109,021
|
|||
Service fees – Investor Class (See Note 5)
|
94,368
|
|||
Federal and state registration fees
|
17,354
|
|||
Trustees’ fees and expenses
|
12,018
|
|||
Audit fees
|
11,284
|
|||
Compliance expense (See Note 5)
|
9,574
|
|||
Reports to shareholders
|
8,384
|
|||
Legal fees
|
1,926
|
|||
Other expenses
|
16,752
|
|||
Total expenses
|
1,424,451
|
|||
NET INVESTMENT INCOME
|
$
|
800,169
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
87,213,572
|
||
Net change in unrealized appreciation/depreciation on investments
|
(27,745,202
|
)
|
||
Net gain on investments
|
59,468,370
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
60,268,539
|
(1)
|
Net of foreign taxes withheld and issuance fees of $61,294.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2024
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2023
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
800,169
|
$
|
1,626,833
|
||||
Net realized gain (loss) on investments
|
87,213,572
|
(4,138,289
|
)
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(27,745,202
|
)
|
5,434,239
|
|||||
Net increase in net assets resulting from operations
|
60,268,539
|
2,922,783
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(606,782
|
)
|
(5,391,788
|
)
|
||||
Distributable earnings – Institutional Class
|
(167,283
|
)
|
(694,551
|
)
|
||||
Total distributions
|
(774,065
|
)
|
(6,086,339
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
83,067,795
|
11,362,449
|
||||||
Proceeds from shares subscribed – Institutional Class
|
68,456,484
|
9,926,784
|
||||||
Dividends reinvested – Investor Class
|
578,789
|
5,220,465
|
||||||
Dividends reinvested – Institutional Class
|
152,444
|
627,346
|
||||||
Cost of shares redeemed – Investor Class
|
(15,197,536
|
)
|
(26,505,700
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(8,895,723
|
)
|
(6,562,918
|
)
|
||||
Net increase (decrease) in net assets
|
||||||||
derived from capital share transactions
|
128,162,253
|
(5,931,574
|
)
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
187,656,727
|
(9,095,130
|
)
|
|||||
NET ASSETS:
|
||||||||
Beginning of period
|
163,675,508
|
172,770,638
|
||||||
End of period
|
$
|
351,332,235
|
$
|
163,675,508
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
2,570,345
|
465,038
|
||||||
Shares sold – Institutional Class
|
2,041,631
|
400,968
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
20,835
|
227,645
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
5,260
|
26,210
|
||||||
Shares redeemed – Investor Class
|
(519,523
|
)
|
(1,164,869
|
)
|
||||
Shares redeemed – Institutional Class
|
(290,808
|
)
|
(266,969
|
)
|
||||
Net increase (decrease) in shares outstanding
|
3,827,740
|
(311,977
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
23.82
|
||
Income from investment operations:
|
||||
Net investment income (loss)(1)
|
0.09
|
|||
Net realized and unrealized gains (losses) on investments
|
8.79
|
|||
Total from investment operations
|
8.88
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.10
|
)
|
||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
(0.10
|
)
|
||
Net asset value, end of period
|
$
|
32.60
|
||
TOTAL RETURN
|
37.37
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
261.02
|
||
Ratio of expenses to average net assets
|
1.29
|
%(3)
|
||
Ratio of net investment income (loss) to average net assets
|
0.60
|
%(3)
|
||
Portfolio turnover rate(4)
|
139
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not Annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
24.07
|
$
|
29.83
|
$
|
19.91
|
$
|
19.15
|
$
|
22.17
|
|||||||||
0.22
|
0.26
|
(0.14
|
)
|
(0.08
|
)
|
(0.01
|
)
|
|||||||||||
0.35
|
0.62
|
10.06
|
0.84
|
(1.19
|
)
|
|||||||||||||
0.57
|
0.88
|
9.92
|
0.76
|
(1.20
|
)
|
|||||||||||||
(0.27
|
)
|
—
|
—
|
—
|
—
|
|||||||||||||
(0.55
|
)
|
(6.64
|
)
|
—
|
—
|
(1.82
|
)
|
|||||||||||
(0.82
|
)
|
(6.64
|
)
|
—
|
—
|
(1.82
|
)
|
|||||||||||
$
|
23.82
|
$
|
24.07
|
$
|
29.83
|
$
|
19.91
|
$
|
19.15
|
|||||||||
2.54
|
%
|
2.51
|
%
|
49.82
|
%
|
3.97
|
%
|
-5.19
|
%
|
|||||||||
$
|
141.36
|
$
|
154.25
|
$
|
151.96
|
$
|
110.96
|
$
|
125.10
|
|||||||||
1.33
|
%
|
1.33
|
%
|
1.34
|
%
|
1.36
|
%
|
1.34
|
%
|
|||||||||
0.95
|
%
|
1.10
|
%
|
(0.51
|
)%
|
(0.45
|
)%
|
(0.07
|
)%
|
|||||||||
90
|
%
|
102
|
%
|
98
|
%
|
98
|
%
|
95
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
24.91
|
||
Income from investment operations:
|
||||
Net investment income (loss)(1)
|
0.17
|
|||
Net realized and unrealized gains (losses) on investments
|
9.15
|
|||
Total from investment operations
|
9.32
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.18
|
)
|
||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
(0.18
|
)
|
||
Net asset value, end of period
|
$
|
34.05
|
||
TOTAL RETURN
|
37.56
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
90.32
|
||
Ratio of expenses to average net assets:
|
0.99
|
%(3)
|
||
Ratio of net investment income (loss) to average net assets:
|
1.08
|
%(3)
|
||
Portfolio turnover rate(4)
|
139
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
25.17
|
$
|
31.09
|
$
|
20.68
|
$
|
19.83
|
$
|
22.88
|
|||||||||
0.29
|
0.34
|
(0.05
|
)
|
(0.03
|
)
|
0.05
|
||||||||||||
0.38
|
0.67
|
10.46
|
0.88
|
(1.22
|
)
|
|||||||||||||
0.67
|
1.01
|
10.41
|
0.85
|
(1.17
|
)
|
|||||||||||||
(0.35
|
)
|
—
|
—
|
—
|
—
|
|||||||||||||
(0.58
|
)
|
(6.93
|
)
|
—
|
—
|
(1.88
|
)
|
|||||||||||
(0.93
|
)
|
(6.93
|
)
|
—
|
—
|
(1.88
|
)
|
|||||||||||
$
|
24.91
|
$
|
25.17
|
$
|
31.09
|
$
|
20.68
|
$
|
19.83
|
|||||||||
2.85
|
%
|
2.84
|
%
|
50.34
|
%
|
4.29
|
%
|
-4.86
|
%
|
|||||||||
$
|
22.32
|
$
|
18.52
|
$
|
15.78
|
$
|
11.65
|
$
|
14.62
|
|||||||||
1.02
|
%
|
1.01
|
%
|
1.01
|
%
|
1.05
|
%
|
1.01
|
%
|
|||||||||
1.18
|
%
|
1.38
|
%
|
(0.17
|
)%
|
(0.14
|
)%
|
0.27
|
%
|
|||||||||
90
|
%
|
102
|
%
|
98
|
%
|
98
|
%
|
95
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of partnership
income and wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book
purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized
gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund for the
prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax
benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of discount,
is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or decrease, as
applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of the property
received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class),
and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and
paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption price per share
for the Fund is equal to the Fund’s NAV per share.
|
i).
|
REIT Equity Securities – Distributions received from real estate investment trusts (“REITs”) may be classified as dividends, capital gains, or return of capital. Investments in REITs may require the Fund to accrue
and distribute income not yet received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it otherwise would have
continued to hold. At other times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings. If the Fund distributes these amounts, these distributions could constitute a return of capital to Fund
shareholders for U.S. federal income tax purposes. Dividends received by the Fund from a REIT generally do not constitute qualified dividend income and do not qualify for the dividends-received deduction.
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that the Fund
limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven calendar days or
less without the sale or disposition significantly changing the market value of the investment.
|
HENNESSY FUNDS
|
1-800-966-4354
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds and
Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight key information.
The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and available for delivery free of charge
to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale
Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring the fair value. The
amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that are not active
for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit risk curves, default rates,
and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable inputs are
unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual funds, partnerships,
rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on which the
securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued
at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges
generally are not valued at the same time the Fund calculates its NAV because most foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim. In certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events
occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a
potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending NAV
provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S. government
agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently
executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate observable market data,
such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified in Level 2 of the fair value
hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as of the
61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below.
Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
146,542,218
|
|||
Gross tax unrealized appreciation
|
$
|
28,373,689
|
|||
Gross tax unrealized depreciation
|
(10,813,980
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
17,559,709
|
|||
Undistributed ordinary income
|
$
|
462,915
|
|||
Undistributed long-term capital gains
|
—
|
||||
Total distributable earnings
|
$
|
462,915
|
|||
Other accumulated gain/(loss)
|
$
|
(4,658,851
|
)
|
||
Total accumulated gain/(loss)
|
$
|
13,363,773
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2024
|
October 31, 2023
|
||||||||
Ordinary income(1)
|
$
|
774,065
|
$
|
2,073,376
|
|||||
Long-term capital gains
|
—
|
4,012,963
|
|||||||
Total distributions
|
$
|
774,065
|
$
|
6,086,339
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,373.70
|
$7.61
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.45
|
$6.47
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,375.60
|
$5.85
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.94
|
$4.97
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.29% for Investor Class shares or 0.99% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 182/366 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help the Board assess
each such factor;
|
|
(3)
|
A summary of the advisory agreement;
|
|
(4)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor provides
high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the Fund
by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of the Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as appropriate),
conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance providers for fidelity bond,
D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers, and maintains books and records.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services to the
Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor participates
in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor compensates, in part, a
number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight
personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to various indices
at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The Trustees concluded that the
performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the funds included in the Morningstar categories for purposes of the materials considered at the meeting. The
Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are reasonable and warranted
continuation of the advisory agreement.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the Fund are
variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party platform fees increase as a fund’s assets grow.
|
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor has put into managing
and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by way of example,
its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any such products and services have
been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the Advisor from its relationship with the Fund were
reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are merely supplemental to the Advisor’s own efforts in the
performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Go Paperless with eDelivery
|
26
|
|
Board Approval of Investment Advisory Agreements
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
||
Months(1)
|
Year
|
Years
|
Years
|
||
Hennessy Focus Fund –
|
|||||
Investor Class (HFCSX)
|
12.43%
|
8.10%
|
6.09%
|
8.00%
|
|
Hennessy Focus Fund –
|
|||||
Institutional Class (HFCIX)
|
12.65%
|
8.52%
|
6.48%
|
8.40%
|
|
Russell 3000® Index
|
21.09%
|
22.30%
|
12.43%
|
11.81%
|
|
Russell Midcap® Growth Index
|
24.49%
|
20.70%
|
9.52%
|
10.85%
|
(1)
|
Periods of less than one year are not annualized.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2024 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Ashtead Group PLC
|
7.58%
|
Markel Group, Inc.
|
7.51%
|
Brookfield Corp.
|
7.44%
|
O’Reilly Automotive, Inc.
|
6.84%
|
Aon PLC, Class A
|
6.22%
|
Encore Capital Group, Inc.
|
6.19%
|
CarMax, Inc.
|
6.13%
|
Applied Materials, Inc.
|
5.94%
|
American Tower Corp., Class A
|
5.94%
|
CDW Corp.
|
5.62%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 92.47%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Communication Services – 8.71%
|
||||||||||||
AST SpaceMobile, Inc. (a)
|
2,982,567
|
$
|
6,591,473
|
1.07
|
%
|
|||||||
Cogent Communications Holdings, Inc.
|
492,488
|
31,607,880
|
5.11
|
%
|
||||||||
Shenandoah Telecommunications Co.
|
796,737
|
10,214,168
|
1.65
|
%
|
||||||||
Warner Music Group Corp., Class A
|
165,601
|
5,464,833
|
0.88
|
%
|
||||||||
53,878,354
|
8.71
|
%
|
||||||||||
Consumer Discretionary – 23.49%
|
||||||||||||
CarMax, Inc. (a)
|
557,049
|
37,862,621
|
6.13
|
%
|
||||||||
Floor & Decor Holdings, Inc., Class A (a)
|
62,000
|
6,840,460
|
1.11
|
%
|
||||||||
Hilton Worldwide Holdings, Inc.
|
95,481
|
18,836,492
|
3.05
|
%
|
||||||||
NVR, Inc. (a)
|
2,660
|
19,787,341
|
3.20
|
%
|
||||||||
O’Reilly Automotive, Inc. (a)
|
41,739
|
42,292,458
|
6.84
|
%
|
||||||||
Restoration Hardware Holdings, Inc. (a)
|
79,151
|
19,554,255
|
3.16
|
%
|
||||||||
145,173,627
|
23.49
|
%
|
||||||||||
Financials – 30.28%
|
||||||||||||
Aon PLC, Class A
|
136,427
|
38,473,778
|
6.22
|
%
|
||||||||
Brookfield Asset Management Ltd.
|
455,853
|
17,409,026
|
2.82
|
%
|
||||||||
Brookfield Corp.
|
1,145,672
|
45,964,361
|
7.44
|
%
|
||||||||
Brookfield Reinsurance Ltd.
|
15,721
|
631,513
|
0.10
|
%
|
||||||||
Encore Capital Group, Inc. (a)
|
930,669
|
38,241,189
|
6.19
|
%
|
||||||||
Markel Group, Inc. (a)
|
31,845
|
46,442,748
|
7.51
|
%
|
||||||||
187,162,615
|
30.28
|
%
|
||||||||||
Health Care – 3.19%
|
||||||||||||
Danaher Corp.
|
80,007
|
19,731,326
|
3.19
|
%
|
||||||||
Industrials – 14.10%
|
||||||||||||
American Woodmark Corp. (a)
|
205,724
|
18,943,066
|
3.06
|
%
|
||||||||
Ashtead Group PLC
|
641,544
|
46,831,774
|
7.58
|
%
|
||||||||
TransDigm Group, Inc.
|
17,119
|
21,365,025
|
3.46
|
%
|
||||||||
87,139,865
|
14.10
|
%
|
||||||||||
Information Technology – 11.56%
|
||||||||||||
Applied Materials, Inc.
|
184,865
|
36,723,432
|
5.94
|
%
|
||||||||
CDW Corp.
|
143,625
|
34,737,143
|
5.62
|
%
|
||||||||
71,460,575
|
11.56
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Real Estate – 1.14%
|
||||||||||||
Altus Group Ltd.
|
191,795
|
$
|
7,038,451
|
1.14
|
%
|
|||||||
Total Common Stocks
|
||||||||||||
(Cost $281,680,950)
|
571,584,813
|
92.47
|
%
|
|||||||||
REITS – 5.94%
|
||||||||||||
Real Estate – 5.94%
|
||||||||||||
American Tower Corp., Class A
|
213,982
|
36,710,752
|
5.94
|
%
|
||||||||
Total REITS
|
||||||||||||
(Cost $164,766)
|
36,710,752
|
5.94
|
%
|
|||||||||
SHORT-TERM INVESTMENTS – 1.65%
|
||||||||||||
Money Market Funds – 1.65%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (b)
|
10,172,218
|
10,172,218
|
1.65
|
%
|
||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $10,172,218)
|
10,172,218
|
1.65
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $292,017,934) – 100.06%
|
618,467,783
|
100.06
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.06)%
|
(340,043
|
)
|
(0.06
|
)%
|
||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
618,127,740
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of April 30, 2024.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
53,878,354
|
$
|
—
|
$
|
—
|
$
|
53,878,354
|
||||||||
Consumer Discretionary
|
145,173,627
|
—
|
—
|
145,173,627
|
||||||||||||
Financials
|
187,162,615
|
—
|
—
|
187,162,615
|
||||||||||||
Health Care
|
19,731,326
|
—
|
—
|
19,731,326
|
||||||||||||
Industrials
|
87,139,865
|
—
|
—
|
87,139,865
|
||||||||||||
Information Technology
|
71,460,575
|
—
|
—
|
71,460,575
|
||||||||||||
Real Estate
|
7,038,451
|
—
|
—
|
7,038,451
|
||||||||||||
Total Common Stocks
|
$
|
571,584,813
|
$
|
—
|
$
|
—
|
$
|
571,584,813
|
||||||||
REITS
|
||||||||||||||||
Real Estate
|
$
|
36,710,752
|
$
|
—
|
$
|
—
|
$
|
36,710,752
|
||||||||
Total REITS
|
$
|
36,710,752
|
$
|
—
|
$
|
—
|
$
|
36,710,752
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
10,172,218
|
$
|
—
|
$
|
—
|
$
|
10,172,218
|
||||||||
Total Short-Term Investments
|
$
|
10,172,218
|
$
|
—
|
$
|
—
|
$
|
10,172,218
|
||||||||
Total Investments
|
$
|
618,467,783
|
$
|
—
|
$
|
—
|
$
|
618,467,783
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2024 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $292,017,934)
|
$
|
618,467,783
|
||
Dividends and interest receivable
|
130,642
|
|||
Receivable for fund shares sold
|
822,458
|
|||
Prepaid expenses and other assets
|
45,864
|
|||
Total assets
|
619,466,747
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
514,114
|
|||
Payable to advisor
|
475,261
|
|||
Payable to administrator
|
115,807
|
|||
Payable to auditor
|
11,283
|
|||
Accrued distribution fees
|
67,188
|
|||
Accrued service fees
|
28,792
|
|||
Accrued trustees fees
|
6,052
|
|||
Accrued expenses and other payables
|
120,510
|
|||
Total liabilities
|
1,339,007
|
|||
NET ASSETS
|
$
|
618,127,740
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
237,545,261
|
||
Total distributable earnings
|
380,582,479
|
|||
Total net assets
|
$
|
618,127,740
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
336,650,824
|
||
Shares issued and outstanding
|
8,184,289
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
41.13
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
281,476,916
|
||
Shares issued and outstanding
|
6,521,682
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
43.16
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
1,865,860
|
||
Interest income
|
305,966
|
|||
Total investment income
|
2,171,826
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
2,869,062
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
381,652
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
111,522
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
288,094
|
|||
Distribution fees – Investor Class (See Note 5)
|
277,449
|
|||
Service fees – Investor Class (See Note 5)
|
184,966
|
|||
Federal and state registration fees
|
24,884
|
|||
Reports to shareholders
|
21,880
|
|||
Trustees’ fees and expenses
|
16,010
|
|||
Audit fees
|
11,284
|
|||
Compliance expense (See Note 5)
|
9,574
|
|||
Legal fees
|
7,266
|
|||
Other expenses
|
62,660
|
|||
Total expenses
|
4,266,303
|
|||
NET INVESTMENT LOSS
|
$
|
(2,094,477
|
)
|
|
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
58,629,676
|
||
Net change in unrealized appreciation/depreciation on investments
|
15,276,484
|
|||
Net gain on investments
|
73,906,160
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
71,811,683
|
(1)
|
Net of foreign taxes withheld of $78,164.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2024
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2023
|
|||||||
OPERATIONS:
|
||||||||
Net investment loss
|
$
|
(2,094,477
|
)
|
$
|
(2,967,717
|
)
|
||
Net realized gain on investments
|
58,629,676
|
155,366,048
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
15,276,484
|
(118,570,475
|
)
|
|||||
Net increase in net assets resulting from operations
|
71,811,683
|
33,827,856
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(79,757,816
|
)
|
(55,979,529
|
)
|
||||
Distributable earnings – Institutional Class
|
(49,294,820
|
)
|
(38,238,761
|
)
|
||||
Total distributions
|
(129,052,636
|
)
|
(94,218,290
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
3,487,666
|
5,238,833
|
||||||
Proceeds from shares subscribed – Institutional Class
|
110,401,961
|
33,286,516
|
||||||
Dividends reinvested – Investor Class
|
77,544,027
|
54,418,112
|
||||||
Dividends reinvested – Institutional Class
|
44,780,386
|
35,095,377
|
||||||
Cost of shares redeemed – Investor Class
|
(67,519,933
|
)
|
(97,262,475
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(64,984,119
|
)
|
(139,348,625
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
103,709,988
|
(108,572,262
|
)
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
46,469,035
|
(168,962,696
|
)
|
|||||
NET ASSETS:
|
||||||||
Beginning of period
|
571,658,705
|
740,621,401
|
||||||
End of period
|
$
|
618,127,740
|
$
|
571,658,705
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
78,257
|
107,578
|
||||||
Shares sold – Institutional Class
|
2,417,287
|
655,626
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
1,909,481
|
1,168,021
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
1,052,418
|
721,682
|
||||||
Shares redeemed – Investor Class
|
(1,543,484
|
)
|
(1,980,392
|
)
|
||||
Shares redeemed – Institutional Class
|
(1,387,404
|
)
|
(2,730,525
|
)
|
||||
Net increase (decrease) in shares outstanding
|
2,526,555
|
(2,058,010
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
46.14
|
||
Income from investment operations:
|
||||
Net investment loss(1)
|
(0.17
|
)
|
||
Net realized and unrealized gains (losses) on investments
|
5.77
|
|||
Total from investment operations
|
5.60
|
|||
Less distributions:
|
||||
Dividends from net realized gains
|
(10.61
|
)
|
||
Total distributions
|
(10.61
|
)
|
||
Net asset value, end of period
|
$
|
41.13
|
||
TOTAL RETURN
|
12.43
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
336.65
|
||
Ratio of expenses to average net assets
|
1.49
|
%(3)
|
||
Ratio of net investment loss to average net assets
|
(0.78
|
)%(3)
|
||
Portfolio turnover rate(4)
|
10
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
51.12
|
$
|
80.48
|
$
|
71.68
|
$
|
85.11
|
$
|
83.20
|
|||||||||
(0.29
|
)
|
(0.56
|
)
|
(0.63
|
)
|
(0.66
|
)
|
(0.52
|
)
|
|||||||||
2.15
|
(16.93
|
)
|
31.46
|
(4.21
|
)
|
16.90
|
||||||||||||
1.86
|
(17.49
|
)
|
30.83
|
(4.87
|
)
|
16.38
|
||||||||||||
(6.84
|
)
|
(11.87
|
)
|
(22.03
|
)
|
(8.56
|
)
|
(14.47
|
)
|
|||||||||
(6.84
|
)
|
(11.87
|
)
|
(22.03
|
)
|
(8.56
|
)
|
(14.47
|
)
|
|||||||||
$
|
46.14
|
$
|
51.12
|
$
|
80.48
|
$
|
71.68
|
$
|
85.11
|
|||||||||
3.52
|
%
|
-25.55
|
%
|
52.87
|
%
|
-6.79
|
%
|
24.16
|
%
|
|||||||||
$
|
357.13
|
$
|
431.67
|
$
|
709.40
|
$
|
678.72
|
$
|
1,213.20
|
|||||||||
1.50
|
%
|
1.52
|
%
|
1.49
|
%
|
1.51
|
%
|
1.47
|
%
|
|||||||||
(0.58
|
)%
|
(0.92
|
)%
|
(0.88
|
)%
|
(0.88
|
)%
|
(0.67
|
)%
|
|||||||||
12
|
%
|
5
|
%
|
4
|
%
|
5
|
%
|
2
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$ |
48.32
|
||
Income from investment operations:
|
||||
Net investment loss(1)
|
(0.11
|
)
|
||
Net realized and unrealized gains (losses) on investments
|
6.07
|
|||
Total from investment operations
|
5.96
|
|||
Less distributions:
|
||||
Dividends from net realized gains
|
(11.12
|
)
|
||
Total distributions
|
(11.12
|
)
|
||
Net asset value, end of period
|
$
|
43.16
|
||
TOTAL RETURN
|
12.65
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
281.48
|
||
Ratio of expenses to average net assets
|
1.12
|
%(3)
|
||
Ratio of net investment loss to average net assets
|
(0.49
|
)%(3)
|
||
Portfolio turnover rate(4)
|
10
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
53.34
|
$
|
83.66
|
$
|
74.24
|
$
|
87.83
|
$
|
85.66
|
|||||||||
(0.11
|
)
|
(0.34
|
)
|
(0.37
|
)
|
(0.39
|
)
|
(0.25
|
)
|
|||||||||
2.23
|
(17.63
|
)
|
32.62
|
(4.36
|
)
|
17.41
|
||||||||||||
2.12
|
(17.97
|
)
|
32.25
|
(4.75
|
)
|
17.16
|
||||||||||||
(7.14
|
)
|
(12.35
|
)
|
(22.83
|
)
|
(8.84
|
)
|
(14.99
|
)
|
|||||||||
(7.14
|
)
|
(12.35
|
)
|
(22.83
|
)
|
(8.84
|
)
|
(14.99
|
)
|
|||||||||
$
|
48.32
|
$
|
53.34
|
$
|
83.66
|
$
|
74.24
|
$
|
87.83
|
|||||||||
3.90
|
%
|
-25.27
|
%
|
53.43
|
%
|
-6.45
|
%
|
24.59
|
%
|
|||||||||
$
|
214.53
|
$
|
308.95
|
$
|
498.51
|
$
|
387.55
|
$
|
586.25
|
|||||||||
1.13
|
%
|
1.13
|
%
|
1.12
|
%
|
1.14
|
%
|
1.12
|
%
|
|||||||||
(0.22
|
)%
|
(0.53
|
)%
|
(0.50
|
)%
|
(0.51
|
)%
|
(0.32
|
)%
|
|||||||||
12
|
%
|
5
|
%
|
4
|
%
|
5
|
%
|
2
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash sales
for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may include
short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to
shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund for
the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax
benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or
decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of the
property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a
specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and
paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption price per share
for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Foreign Currency – Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market exchange rate at the time of valuation. Purchases and sales of investments and
income are translated into U.S. dollars using the spot market exchange rate prevailing on the respective dates of such transactions. The Fund does not isolate the portion of the results of operations resulting from fluctuations in foreign
exchange rates on investments from fluctuations resulting from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain/loss on investments. Foreign investments present
additional risks due to currency fluctuations, economic and political factors, lower liquidity, government regulations, differences in accounting standards, and other factors.
|
j).
|
REIT Equity Securities – Distributions received from real estate investment trusts (“REITs”) may be classified as dividends, capital gains, or return of capital. Investments in REITs may require the Fund to accrue
and distribute income not yet received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities in its portfolio (including when it is not
|
HENNESSY FUNDS
|
1-800-966-4354
|
advantageous to do so) that it otherwise would have continued to hold. At other times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings. If the Fund distributes these
amounts, these distributions could constitute a return of capital to Fund shareholders for U.S. federal income tax purposes. Dividends received by the Fund from a REIT generally do not constitute qualified dividend income and do not qualify
for the dividends-received deduction.
|
|
k).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that the
Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven calendar
days or less without the sale or disposition significantly changing the market value of the investment.
|
l).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds and
Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight key
information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and available for delivery
free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of
Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not
considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and
interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that are not
active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit risk curves, default
rates, and similar data).
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable inputs are
unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual funds,
partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on
which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities
exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are
classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV because most foreign markets close well before such time. The earlier close of
most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In certain circumstances, it may be determined that a foreign security needs to be fair valued
because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by
a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending NAV
provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S. government
agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently
executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate observable market data,
such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified in Level 2 of the fair value
hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as of the
61st day prior to maturity are amortized. Amortized cost is not used if its use would
|
HENNESSY FUNDS
|
1-800-966-4354
|
be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below. Short-term securities are generally classified in Level 1 or Level
2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
261,126,172
|
|||
Gross tax unrealized appreciation
|
$
|
324,894,701
|
|||
Gross tax unrealized depreciation
|
(13,721,336
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
311,173,365
|
|||
Undistributed ordinary income
|
$
|
—
|
|||
Undistributed long-term capital gains
|
129,052,636
|
||||
Total distributable earnings
|
$
|
129,052,636
|
|||
Other accumulated gain/(loss)
|
$
|
(2,402,569
|
)
|
||
Total accumulated gain/(loss)
|
$
|
437,823,432
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2024
|
October 31, 2023
|
||||||||
Ordinary income(1)
|
$
|
—
|
$
|
—
|
|||||
Long-term capital gains
|
129,052,636
|
94,218,290
|
|||||||
Total distributions
|
$
|
129,052,636
|
$
|
94,218,290
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,124.30
|
$7.87
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,017.45
|
$7.47
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,126.50
|
$5.92
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.29
|
$5.62
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.49% for Investor Class shares or 1.12% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 182/366 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory and sub-advisory agreements and the relevant factors for
consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory and sub-advisory agreements and also referenced the documents that had been provided to
help the Board assess each such factor;
|
|
(3)
|
Summaries of the advisory and sub-advisory agreements;
|
|
(4)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the Sub-Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund;
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale;
|
|
(9)
|
A completed questionnaire from the Sub-Advisor;
|
|
(10)
|
A summary of the Sub-Advisor’s responses to the questionnaire, as well as relevant information from the Sub-Advisor’s Form ADV and the certifications submitted by the Sub-Advisor each quarter;
|
|
(11)
|
Financial information of the Sub-Advisor; and
|
|
(12)
|
The Sub-Advisor’s Code of Ethics.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The nature and quality of the advisory services provided by the Advisor and the Sub-Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor and the Sub-Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor and the Sub-Advisor from serving as an investment advisor to the Fund (other than the advisory and sub-advisory fees).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor provides
high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the Fund
by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor oversees the Sub-Advisor for the Fund, and the Sub-Advisor acts as the portfolio manager for the Fund by providing portfolio management services.
|
||
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of the Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Sub-Advisor and the Fund’s other service providers (including their codes of
ethics, as appropriate), conducts on-site visits to the Sub-Advisor and the Fund’s other service providers, as feasible, monitors incidents of abusive trading
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory
examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers, and maintains books and records.
|
|||
(f)
|
The Advisor oversees the selection and continued employment of the Sub-Advisor, reviews the Fund’s investment performance, and monitors the Sub-Advisor’s adherence to the Fund’s investment objectives, policies,
and restrictions.
|
||
(g)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services to
the Fund.
|
||
(h)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(i)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(j)
|
For each annual report of the Fund, the Advisor reviews the written summary prepared by the Sub-Advisor of the Fund’s performance during the most recent 12-month period.
|
||
(k)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor participates
in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor compensates, in part, a
number of these third-party providers of NTF programs out of its own revenues.
|
||
(l)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight
personnel, as well as management executives.
|
||
(m)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(n)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees considered the services identified below that are provided by the Sub-Advisor. Based on this review and an assessment of the Sub-Advisor’s performance, the Trustees concluded that the Sub-Advisor
provides high-quality services to the Fund. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the Fund by the Sub-Advisor and that the nature and extent of the
services provided by the Sub-Advisor were appropriate to assure that the Fund’s portfolio aligns properly with its investment objective and principal investment strategies.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(a)
|
The Sub-Advisor acts as the portfolio manager for the Fund. In this capacity, the Sub-Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio; and
|
|||
(iii)
|
manages proxy voting for the Fund.
|
(b)
|
The Sub-Advisor ensures that its compliance program includes policies and procedures relevant to the Fund and the Sub-Advisor’s duties as a portfolio manager to the Fund.
|
||
(c)
|
For each annual report of the Fund, the Sub-Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(d)
|
The Sub-Advisor provides a quarterly compliance certification to the Board regarding trading and allocation practices, supervisory matters, the Sub-Advisor’s compliance program (including its code of ethics),
compliance with the Fund’s policies, and general firm updates.
|
(3)
|
Trustees considered the distinction between the services performed by the Advisor and the Sub-Advisor. The Trustees noted that the management of the Fund, including the oversight of the Sub-Advisor, involves more
comprehensive and substantive duties than the duties of the Sub-Advisor. Specifically, the Trustees considered the lists of Advisor services previously identified and concluded that the services performed by the Advisor for the Fund require
a higher level of service and oversight than the services performed by the Sub-Advisor. Based on this determination, the Trustees concluded that the differential in advisory fees between the Advisor and the Sub-Advisor is reasonable.
|
|
(4)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to various
indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor and the Sub-Advisor manage the Fund in a manner materially consistent with its stated investment objective and style. The Trustees
concluded that the performance of the Fund over various periods warranted the continuation of the advisory and sub-advisory agreements.
|
|
(5)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the funds included in the Morningstar categories for purposes of the materials considered at the meeting. The
Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are reasonable and warranted
continuation of the advisory and sub-advisory agreements.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(6)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the Fund are
variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party platform fees and sub-advisory fees increase as a fund’s assets
grow.
|
|
(7)
|
The Trustees considered the profitability of the Advisor and the Sub-Advisor, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor
has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor and the Sub-Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(8)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(9)
|
The Trustees considered any benefits to the Advisor and the Sub-Advisor from serving as an advisor to the Fund (other than the advisory and sub-advisory fees). The Trustees noted that the Advisor and the
Sub-Advisor may derive ancillary benefits from, by way of example, their association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the
Fund. The Trustees determined that any such products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional
benefits realized by the Advisor and the Sub-Advisor from their relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ findings that (i) the research, analytical, statistical, and other information
and services provided by brokers are merely supplemental to the Advisor’s and the Sub-Advisor’s own efforts in the performance of their duties under the advisory and sub-advisory agreements and (ii) although the Sub-Advisor could derive
benefits from the conversion of Fund shareholders into separate account clients, the Fund also could benefit from potential institutional shareholders who might choose to invest in the Fund.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Go Paperless with eDelivery
|
26
|
|
Board Approval of Investment Advisory Agreement
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
||
Months(1)
|
Year
|
Years
|
Years
|
||
Hennessy Cornerstone
|
|||||
Mid Cap 30 Fund –
|
|||||
Investor Class (HFMDX)
|
29.58%
|
40.18%
|
19.27%
|
11.50%
|
|
Hennessy Cornerstone
|
|||||
Mid Cap 30 Fund –
|
|||||
Institutional Class (HIMDX)
|
29.78%
|
40.66%
|
19.69%
|
11.88%
|
|
Russell Midcap® Index
|
22.00%
|
16.35%
|
9.06%
|
9.40%
|
|
S&P 500® Index
|
20.98%
|
22.66%
|
13.19%
|
12.41%
|
(1)
|
Periods of less than one year are not annualized.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2024
(Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Abercrombie & Fitch Co., Class A
|
5.36%
|
Modine Manufacturing Co.
|
5.12%
|
The Gap, Inc.
|
4.90%
|
Comfort Systems USA, Inc.
|
4.57%
|
EMCOR Group, Inc.
|
4.28%
|
Sprouts Farmers Market, Inc.
|
3.89%
|
XPO, Inc.
|
3.58%
|
Parsons Corp.
|
3.56%
|
Sterling Infrastructure, Inc.
|
3.47%
|
Carpenter Technology Corp.
|
3.25%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 95.80%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Communication Services – 2.30%
|
||||||||||||
Cinemark Holdings, Inc. (a)
|
1,325,400
|
$
|
22,717,356
|
2.30
|
%
|
|||||||
Consumer Discretionary – 21.35%
|
||||||||||||
Abercrombie & Fitch Co., Class A (a)
|
435,200
|
52,885,504
|
5.36
|
%
|
||||||||
Group 1 Automotive, Inc.
|
94,000
|
27,637,880
|
2.80
|
%
|
||||||||
Guess?, Inc.
|
1,167,100
|
31,254,938
|
3.17
|
%
|
||||||||
The Gap, Inc.
|
2,358,200
|
48,390,264
|
4.90
|
%
|
||||||||
Modine Manufacturing Co. (a)
|
546,100
|
50,585,243
|
5.12
|
%
|
||||||||
210,753,829
|
21.35
|
%
|
||||||||||
Consumer Staples – 7.08%
|
||||||||||||
Coca-Cola Consolidated, Inc.
|
38,056
|
31,434,256
|
3.19
|
%
|
||||||||
Sprouts Farmers Market, Inc. (a)
|
582,000
|
38,429,460
|
3.89
|
%
|
||||||||
69,863,716
|
7.08
|
%
|
||||||||||
Energy – 20.30%
|
||||||||||||
California Resources Corp.
|
442,100
|
23,369,406
|
2.37
|
%
|
||||||||
CONSOL Energy, Inc.
|
241,600
|
19,994,816
|
2.03
|
%
|
||||||||
EnLink Midstream LLC
|
2,053,400
|
28,172,648
|
2.85
|
%
|
||||||||
Liberty Energy, Inc.
|
1,368,900
|
30,115,800
|
3.05
|
%
|
||||||||
Oceaneering International, Inc. (a)
|
967,500
|
22,165,425
|
2.24
|
%
|
||||||||
Par Pacific Holdings, Inc. (a)
|
708,600
|
21,824,880
|
2.21
|
%
|
||||||||
PBF Energy, Inc., Class A
|
489,234
|
26,061,495
|
2.64
|
%
|
||||||||
Plains GP Holdings LP, Class A
|
1,578,300
|
28,740,843
|
2.91
|
%
|
||||||||
200,445,313
|
20.30
|
%
|
||||||||||
Financials – 0.95%
|
||||||||||||
NCR Atleos Corp. (a)
|
470,850
|
9,384,041
|
0.95
|
%
|
||||||||
Industrials – 36.11%
|
||||||||||||
Applied Industrial Technologies, Inc.
|
156,600
|
28,696,950
|
2.91
|
%
|
||||||||
Comfort Systems USA, Inc.
|
146,000
|
45,173,860
|
4.57
|
%
|
||||||||
EMCOR Group, Inc.
|
118,500
|
42,324,645
|
4.28
|
%
|
||||||||
Flowserve Corp.
|
632,000
|
29,805,120
|
3.02
|
%
|
||||||||
Fluor Corp. (a)
|
697,500
|
28,130,175
|
2.85
|
%
|
||||||||
MillerKnoll, Inc.
|
1,021,100
|
25,966,573
|
2.63
|
%
|
||||||||
MSC Industrial Direct Co., Inc., Class A
|
249,600
|
22,773,504
|
2.31
|
%
|
||||||||
Oshkosh Corp.
|
257,500
|
28,909,525
|
2.93
|
%
|
||||||||
Parsons Corp. (a)
|
447,900
|
35,164,629
|
3.56
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Industrials (Continued)
|
||||||||||||
Sterling Infrastructure, Inc. (a)
|
337,200
|
$
|
34,259,520
|
3.47
|
%
|
|||||||
XPO, Inc. (a)
|
328,600
|
35,311,356
|
3.58
|
%
|
||||||||
356,515,857
|
36.11
|
%
|
||||||||||
Information Technology – 4.46%
|
||||||||||||
Kyndryl Holdings, Inc. (a)
|
1,628,300
|
32,012,378
|
3.24
|
%
|
||||||||
NCR Voyix Corp. (a)
|
978,000
|
11,980,500
|
1.22
|
%
|
||||||||
43,992,878
|
4.46
|
%
|
||||||||||
Materials – 3.25%
|
||||||||||||
Carpenter Technology Corp.
|
374,400
|
32,086,080
|
3.25
|
%
|
||||||||
Total Common Stocks
|
||||||||||||
(Cost $758,187,151)
|
945,759,070
|
95.80
|
%
|
|||||||||
SHORT-TERM INVESTMENTS – 3.50%
|
||||||||||||
Money Market Funds – 3.50%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (b)
|
34,546,073
|
34,546,073
|
3.50
|
%
|
||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $34,546,073)
|
34,546,073
|
3.50
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $792,733,224) – 99.30%
|
980,305,143
|
99.30
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.70%
|
6,890,327
|
0.70
|
%
|
|||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
987,195,470
|
100.00
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
22,717,356
|
$
|
—
|
$
|
—
|
$
|
22,717,356
|
||||||||
Consumer Discretionary
|
210,753,829
|
—
|
—
|
210,753,829
|
||||||||||||
Consumer Staples
|
69,863,716
|
—
|
—
|
69,863,716
|
||||||||||||
Energy
|
200,445,313
|
—
|
—
|
200,445,313
|
||||||||||||
Financials
|
9,384,041
|
—
|
—
|
9,384,041
|
||||||||||||
Industrials
|
356,515,857
|
—
|
—
|
356,515,857
|
||||||||||||
Information Technology
|
43,992,878
|
—
|
—
|
43,992,878
|
||||||||||||
Materials
|
32,086,080
|
—
|
—
|
32,086,080
|
||||||||||||
Total Common Stocks
|
$
|
945,759,070
|
$
|
—
|
$
|
—
|
$
|
945,759,070
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
34,546,073
|
$
|
—
|
$
|
—
|
$
|
34,546,073
|
||||||||
Total Short-Term Investments
|
$
|
34,546,073
|
$
|
—
|
$
|
—
|
$
|
34,546,073
|
||||||||
Total Investments
|
$
|
980,305,143
|
$
|
—
|
$
|
—
|
$
|
980,305,143
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2024 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $792,733,224)
|
$
|
980,305,143
|
||
Dividends and interest receivable
|
3,489,614
|
|||
Receivable for fund shares sold
|
4,505,115
|
|||
Return of capital receivable
|
773,186
|
|||
Prepaid expenses and other assets
|
62,439
|
|||
Total assets
|
989,135,497
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
1,035,135
|
|||
Payable to advisor
|
599,975
|
|||
Payable to administrator
|
147,509
|
|||
Payable to auditor
|
11,280
|
|||
Accrued distribution fees
|
60,795
|
|||
Accrued service fees
|
36,530
|
|||
Accrued trustees fees
|
1,738
|
|||
Accrued expenses and other payables
|
47,065
|
|||
Total liabilities
|
1,940,027
|
|||
NET ASSETS
|
$
|
987,195,470
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
796,691,565
|
|||
Total distributable earnings
|
190,503,905
|
|||
Total net assets
|
$
|
987,195,470
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
437,753,367
|
||
Shares issued and outstanding
|
19,678,533
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
22.25
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
549,442,103
|
||
Shares issued and outstanding
|
23,429,584
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
23.45
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
6,729,104
|
||
Interest income
|
690,389
|
|||
Total investment income
|
7,419,493
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
2,949,824
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
411,579
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
188,697
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
360,145
|
|||
Distribution fees – Investor Class (See Note 5)
|
280,870
|
|||
Service fees – Investor Class (See Note 5)
|
187,247
|
|||
Federal and state registration fees
|
37,960
|
|||
Reports to shareholders
|
21,370
|
|||
Trustees’ fees and expenses
|
15,202
|
|||
Audit fees
|
11,284
|
|||
Compliance expense (See Note 5)
|
9,574
|
|||
Legal fees
|
4,996
|
|||
Other expenses
|
45,450
|
|||
Total expenses
|
4,524,198
|
|||
NET INVESTMENT INCOME
|
$
|
2,895,295
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
87,492
|
||
Net change in unrealized appreciation/depreciation on investments
|
185,392,141
|
|||
Net gain on investments
|
185,479,633
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
188,374,928
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2024
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2023
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
2,895,295
|
$
|
1,162,868
|
||||
Net realized gain on investments
|
87,492
|
63,162,651
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
185,392,141
|
(36,349,926
|
)
|
|||||
Net increase in net assets resulting from operations
|
188,374,928
|
27,975,593
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(30,621,646
|
)
|
(37,371,548
|
)
|
||||
Distributable earnings – Institutional Class
|
(30,645,521
|
)
|
(30,112,291
|
)
|
||||
Total distributions
|
(61,267,167
|
)
|
(67,483,839
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
115,618,558
|
118,407,401
|
||||||
Proceeds from shares subscribed – Institutional Class
|
217,611,117
|
149,518,551
|
||||||
Dividends reinvested – Investor Class
|
29,980,981
|
36,888,250
|
||||||
Dividends reinvested – Institutional Class
|
29,053,170
|
29,290,877
|
||||||
Cost of shares redeemed – Investor Class
|
(64,719,591
|
)
|
(52,168,702
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(58,698,748
|
)
|
(40,806,405
|
)
|
||||
Net increase in net assets derived
|
||||||||
from capital share transactions
|
268,845,487
|
241,129,972
|
||||||
TOTAL INCREASE IN NET ASSETS
|
395,953,248
|
201,621,726
|
||||||
NET ASSETS:
|
||||||||
Beginning of period
|
591,242,222
|
389,620,496
|
||||||
End of period
|
$
|
987,195,470
|
$
|
591,242,222
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
5,493,184
|
6,016,089
|
||||||
Shares sold – Institutional Class
|
9,918,432
|
7,194,865
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
1,609,285
|
2,163,534
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
1,481,549
|
1,638,192
|
||||||
Shares redeemed – Investor Class
|
(3,141,044
|
)
|
(2,782,892
|
)
|
||||
Shares redeemed – Institutional Class
|
(2,732,683
|
)
|
(2,066,940
|
)
|
||||
Net increase in shares outstanding
|
12,628,723
|
12,162,848
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
18.92
|
||
Income from investment operations:
|
||||
Net investment income (loss)(1)
|
0.05
|
|||
Net realized and unrealized gains (losses) on investments
|
5.18
|
|||
Total from investment operations
|
5.23
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
—
|
|||
Dividends from net realized gains
|
(1.90
|
)
|
||
Total distributions
|
(1.90
|
)
|
||
Net asset value, end of period
|
$
|
22.25
|
||
TOTAL RETURN
|
29.58
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
437.75
|
||
Ratio of expenses to average net assets
|
1.34
|
%(3)
|
||
Ratio of net investment income (loss) to average net assets
|
0.50
|
%(3)
|
||
Portfolio turnover rate(4)
|
0
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
20.83
|
$
|
19.78
|
$
|
13.27
|
$
|
12.01
|
$
|
16.87
|
|||||||||
0.01
|
0.17
|
(0.14
|
)
|
(0.03
|
)
|
(0.02
|
)
|
|||||||||||
1.68
|
1.22
|
6.65
|
1.29
|
(0.34
|
)
|
|||||||||||||
1.69
|
1.39
|
6.51
|
1.26
|
(0.36
|
)
|
|||||||||||||
—
|
(0.34
|
)
|
—
|
—
|
—
|
|||||||||||||
(3.60
|
)
|
—
|
—
|
—
|
(4.50
|
)
|
||||||||||||
(3.60
|
)
|
(0.34
|
)
|
—
|
—
|
(4.50
|
)
|
|||||||||||
$
|
18.92
|
$
|
20.83
|
$
|
19.78
|
$
|
13.27
|
$
|
12.01
|
|||||||||
10.03
|
%
|
7.12
|
%
|
49.06
|
%
|
10.49
|
%
|
-1.22
|
%
|
|||||||||
$
|
297.37
|
$
|
215.00
|
$
|
219.58
|
$
|
188.71
|
$
|
206.11
|
|||||||||
1.34
|
%
|
1.35
|
%
|
1.36
|
%
|
1.37
|
%
|
1.36
|
%
|
|||||||||
0.09
|
%
|
0.84
|
%
|
(0.74
|
)%
|
(0.27
|
)%
|
(0.15
|
)%
|
|||||||||
120
|
%
|
176
|
%
|
0
|
%
|
94
|
%
|
70
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
19.91
|
||
Income from investment operations:
|
||||
Net investment income (loss)(1)
|
0.10
|
|||
Net realized and unrealized gains (losses) on investments
|
5.44
|
|||
Total from investment operations
|
5.54
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
—
|
|||
Dividends from net realized gains
|
(2.00
|
)
|
||
Total distributions
|
(2.00
|
)
|
||
Net asset value, end of period
|
$
|
23.45
|
||
TOTAL RETURN
|
29.78
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
549.44
|
||
Ratio of expenses to average net assets
|
0.96
|
%(3)
|
||
Ratio of net investment income (loss) to average net assets
|
0.92
|
%(3)
|
||
Portfolio turnover rate(4)
|
0
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
21.84
|
$
|
20.66
|
$
|
13.81
|
$
|
12.46
|
$
|
17.38
|
|||||||||
0.09
|
0.24
|
(0.07
|
)
|
0.01
|
0.03
|
|||||||||||||
1.76
|
1.29
|
6.92
|
1.34
|
(0.36
|
)
|
|||||||||||||
1.85
|
1.53
|
6.85
|
1.35
|
(0.33
|
)
|
|||||||||||||
—
|
(0.35
|
)
|
—
|
—
|
—
|
|||||||||||||
(3.78
|
)
|
—
|
—
|
—
|
(4.59
|
)
|
||||||||||||
(3.78
|
)
|
(0.35
|
)
|
—
|
—
|
(4.59
|
)
|
|||||||||||
$
|
19.91
|
$
|
21.84
|
$
|
20.66
|
$
|
13.81
|
$
|
12.46
|
|||||||||
10.43
|
%
|
7.52
|
%
|
49.60
|
%
|
10.83
|
%
|
-0.84
|
%
|
|||||||||
$
|
293.88
|
$
|
174.62
|
$
|
169.19
|
$
|
136.09
|
$
|
168.79
|
|||||||||
0.97
|
%
|
1.00
|
%
|
0.99
|
%
|
1.01
|
%
|
1.00
|
%
|
|||||||||
0.44
|
%
|
1.18
|
%
|
(0.38
|
)%
|
0.09
|
%
|
0.20
|
%
|
|||||||||
120
|
%
|
176
|
%
|
0
|
%
|
94
|
%
|
70
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash
sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains
distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund for
the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax
benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or
decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of
the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a
specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets. Distributions received from the Fund’s investments in master limited partnerships (“MLPs”)
generally consist of ordinary income, capital gains, and return of capital. The Fund records investment income on the ex-date of the distributions. For financial statement purposes, the Fund uses return of capital and income estimates to
allocate the dividend income received. Such estimates are based on historical information available from the MLPs and other industry sources. These estimates may subsequently be revised based on information received from the MLPs after
their tax reporting periods are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Fund.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared
and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption price per
share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that the
Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven calendar
days or less without the sale or disposition significantly changing the market value of the investment.
|
HENNESSY FUNDS
|
1-800-966-4354
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds and
Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight key
information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and available for delivery
free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of
Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not
considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and
interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that are not
active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit risk curves,
default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable inputs are
unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, exchange-traded funds, closed-end mutual funds, partnerships, rights, MLPs, and real
estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on which the securities are
listed. Securities listed
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for which a
last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in Level 1
of the fair value hierarchy.
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending NAV
provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S. government
agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently
executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate observable market data,
such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified in Level 2 of the fair value
hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as of
the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below.
Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
558,796,241
|
|||
Gross tax unrealized appreciation
|
$
|
26,472,783
|
|||
Gross tax unrealized depreciation
|
(24,343,731
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
2,129,052
|
|||
Undistributed ordinary income
|
$
|
—
|
|||
Undistributed long-term capital gains
|
61,267,092
|
||||
Total distributable earnings
|
$
|
61,267,092
|
|||
Other accumulated gain/(loss)
|
$
|
—
|
|||
Total accumulated gain/(loss)
|
$
|
63,396,144
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2024
|
October 31, 2023
|
||||||||
Ordinary income(1)
|
$
|
—
|
$
|
—
|
|||||
Long-term capital gains
|
61,267,167
|
67,483,839
|
|||||||
Total distributions
|
$
|
61,267,167
|
$
|
67,483,839
|
|||||
(1) Ordinary income includes short-term capital gains.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,295.80
|
$7.65
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.20
|
$6.72
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,297.80
|
$5.48
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,020.09
|
$4.82
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.34% for Investor Class shares or 0.96% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 182/366 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help the Board
assess each such factor;
|
|
(3)
|
A summary of the advisory agreement;
|
|
(4)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor provides
high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the
Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of the Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as appropriate),
conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance providers for fidelity bond,
D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers, and maintains books and
records.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services to
the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor
participates in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor
compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight
personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to various
indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The Trustees concluded that
the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the funds included in the Morningstar categories for purposes of the materials considered at the meeting. The
Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are reasonable and warranted
continuation of the advisory agreement.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the Fund are
variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party platform fees increase as a fund’s assets grow.
|
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor has put into
managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by way of
example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any such products and
services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the Advisor from its relationship with
the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are merely supplemental to the Advisor’s own
efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
23
|
|
Proxy Voting Policy and Proxy Voting Records
|
25
|
|
Availability of Quarterly Portfolio Schedule
|
25
|
|
Federal Tax Distribution Information
|
25
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
25
|
|
Go Paperless with eDelivery
|
25
|
|
Board Approval of Investment Advisory Agreement
|
26
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
||
Months(1)
|
Year
|
Years
|
Years
|
||
Hennessy Cornerstone
|
|||||
Large Growth Fund –
|
|||||
Investor Class (HFLGX)
|
20.96%
|
24.05%
|
11.69%
|
9.65%
|
|
Hennessy Cornerstone
|
|||||
Large Growth Fund –
|
|||||
Institutional Class (HILGX)
|
21.06%
|
24.36%
|
11.99%
|
9.92%
|
|
Russell 1000® Index
|
21.17%
|
22.82%
|
12.87%
|
12.14%
|
|
S&P 500® Index
|
20.98%
|
22.66%
|
13.19%
|
12.41%
|
(1)
|
Periods of less than one year are not annualized.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2024
(Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Dell Technologies, Inc., Class C
|
2.87%
|
Williams-Sonoma, Inc.
|
2.59%
|
Valero Energy Corp.
|
2.27%
|
Tractor Supply Co.
|
2.25%
|
United Rentals, Inc.
|
2.21%
|
The Kroger Co.
|
2.20%
|
AutoZone, Inc.
|
2.19%
|
Exxon Mobil Corp.
|
2.19%
|
Devon Energy Corp.
|
2.14%
|
Marathon Petroleum Corp.
|
2.13%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 97.94%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Communication Services – 1.90%
|
||||||||||||
Omnicom Group, Inc.
|
30,400
|
$
|
2,822,336
|
1.90
|
%
|
|||||||
Consumer Discretionary – 21.69%
|
||||||||||||
AutoZone, Inc. (a)
|
1,100
|
3,252,040
|
2.19
|
%
|
||||||||
Best Buy Co., Inc.
|
36,300
|
2,673,132
|
1.80
|
%
|
||||||||
Darden Restaurants, Inc.
|
16,900
|
2,592,629
|
1.75
|
%
|
||||||||
DR Horton, Inc.
|
17,500
|
2,493,575
|
1.68
|
%
|
||||||||
Genuine Parts Co.
|
19,600
|
3,081,316
|
2.08
|
%
|
||||||||
Lowe’s Companies, Inc.
|
12,300
|
2,804,277
|
1.89
|
%
|
||||||||
NVR, Inc. (a)
|
400
|
2,975,540
|
2.01
|
%
|
||||||||
PulteGroup, Inc.
|
25,600
|
2,852,352
|
1.92
|
%
|
||||||||
Tractor Supply Co.
|
12,200
|
3,331,576
|
2.25
|
%
|
||||||||
Ulta Beauty, Inc. (a)
|
5,600
|
2,267,104
|
1.53
|
%
|
||||||||
Williams-Sonoma, Inc.
|
13,400
|
3,842,852
|
2.59
|
%
|
||||||||
32,166,393
|
21.69
|
%
|
||||||||||
Consumer Staples – 13.14%
|
||||||||||||
Altria Group, Inc.
|
65,100
|
2,852,031
|
1.92
|
%
|
||||||||
Dollar General Corp.
|
20,200
|
2,811,638
|
1.90
|
%
|
||||||||
Kimberly-Clark Corp.
|
21,900
|
2,990,007
|
2.02
|
%
|
||||||||
Lamb Weston Holdings, Inc.
|
25,300
|
2,108,502
|
1.42
|
%
|
||||||||
Philip Morris International, Inc.
|
28,500
|
2,705,790
|
1.82
|
%
|
||||||||
The Hershey Co.
|
14,200
|
2,753,664
|
1.86
|
%
|
||||||||
The Kroger Co.
|
59,000
|
3,267,420
|
2.20
|
%
|
||||||||
19,489,052
|
13.14
|
%
|
||||||||||
Energy – 16.64%
|
||||||||||||
Cheniere Energy, Inc.
|
16,400
|
2,588,248
|
1.75
|
%
|
||||||||
ConocoPhillips
|
24,400
|
3,065,128
|
2.07
|
%
|
||||||||
Devon Energy Corp.
|
62,100
|
3,178,278
|
2.14
|
%
|
||||||||
EOG Resources, Inc.
|
23,500
|
3,105,055
|
2.09
|
%
|
||||||||
Exxon Mobil Corp.
|
27,400
|
3,240,598
|
2.19
|
%
|
||||||||
Halliburton Co.
|
79,200
|
2,967,624
|
2.00
|
%
|
||||||||
Marathon Petroleum Corp.
|
17,400
|
3,161,928
|
2.13
|
%
|
||||||||
Valero Energy Corp.
|
21,100
|
3,373,257
|
2.27
|
%
|
||||||||
24,680,116
|
16.64
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Financials – 2.11%
|
||||||||||||
LPL Financial Holdings, Inc.
|
11,600
|
$
|
3,121,908
|
2.11
|
%
|
|||||||
Health Care – 6.29%
|
||||||||||||
Cencora, Inc.
|
12,400
|
2,964,220
|
2.00
|
%
|
||||||||
HCA Healthcare, Inc.
|
9,600
|
2,974,272
|
2.01
|
%
|
||||||||
McKesson Corp.
|
5,500
|
2,954,655
|
1.99
|
%
|
||||||||
Solventum Corp. (a)
|
6,725
|
437,192
|
0.29
|
%
|
||||||||
9,330,339
|
6.29
|
%
|
||||||||||
Industrials – 17.20%
|
||||||||||||
3M Co.
|
24,900
|
2,403,099
|
1.62
|
%
|
||||||||
Builders FirstSource, Inc. (a)
|
16,200
|
2,961,684
|
2.00
|
%
|
||||||||
Caterpillar, Inc.
|
9,300
|
3,111,501
|
2.10
|
%
|
||||||||
Deere & Co.
|
6,900
|
2,700,729
|
1.82
|
%
|
||||||||
Lockheed Martin Corp.
|
6,000
|
2,789,580
|
1.88
|
%
|
||||||||
Masco Corp.
|
39,700
|
2,717,465
|
1.83
|
%
|
||||||||
PACCAR, Inc.
|
28,600
|
3,034,746
|
2.05
|
%
|
||||||||
United Parcel Service, Inc., Class B
|
17,000
|
2,507,160
|
1.69
|
%
|
||||||||
United Rentals, Inc.
|
4,900
|
3,273,151
|
2.21
|
%
|
||||||||
25,499,115
|
17.20
|
%
|
||||||||||
Information Technology – 13.21%
|
||||||||||||
Cisco Systems, Inc.
|
53,700
|
2,522,826
|
1.70
|
%
|
||||||||
Cognizant Technology Solutions Corp., Class A
|
36,200
|
2,377,616
|
1.60
|
%
|
||||||||
Dell Technologies, Inc., Class C
|
34,000
|
4,237,760
|
2.87
|
%
|
||||||||
HP, Inc.
|
90,200
|
2,533,718
|
1.71
|
%
|
||||||||
Jabil, Inc.
|
20,900
|
2,452,824
|
1.65
|
%
|
||||||||
Microchip Technology, Inc.
|
31,600
|
2,906,568
|
1.96
|
%
|
||||||||
ON Semiconductor Corp. (a)
|
36,400
|
2,553,824
|
1.72
|
%
|
||||||||
19,585,136
|
13.21
|
%
|
||||||||||
Materials – 5.76%
|
||||||||||||
CF Industries Holdings, Inc.
|
34,400
|
2,716,568
|
1.83
|
%
|
||||||||
Nucor Corp.
|
16,100
|
2,713,333
|
1.83
|
%
|
||||||||
Steel Dynamics, Inc.
|
23,900
|
3,109,868
|
2.10
|
%
|
||||||||
8,539,769
|
5.76
|
%
|
||||||||||
Total Common Stocks
|
||||||||||||
(Cost $125,834,594)
|
145,234,164
|
97.94
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 2.10%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Money Market Funds – 2.10%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (b)
|
3,110,119
|
$
|
3,110,119
|
2.10
|
%
|
|||||||
Total Short-Term Investments
|
||||||||||||
(Cost $3,110,119)
|
3,110,119
|
2.10
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $128,944,713) – 100.04%
|
148,344,283
|
100.04
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.04)%
|
(53,041
|
)
|
(0.04
|
)%
|
||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
148,291,242
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of April 30, 2024.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
2,822,336
|
$
|
—
|
$
|
—
|
$
|
2,822,336
|
||||||||
Consumer Discretionary
|
32,166,393
|
—
|
—
|
32,166,393
|
||||||||||||
Consumer Staples
|
19,489,052
|
—
|
—
|
19,489,052
|
||||||||||||
Energy
|
24,680,116
|
—
|
—
|
24,680,116
|
||||||||||||
Financials
|
3,121,908
|
—
|
—
|
3,121,908
|
||||||||||||
Health Care
|
9,330,339
|
—
|
—
|
9,330,339
|
||||||||||||
Industrials
|
25,499,115
|
—
|
—
|
25,499,115
|
||||||||||||
Information Technology
|
19,585,136
|
—
|
—
|
19,585,136
|
||||||||||||
Materials
|
8,539,769
|
—
|
—
|
8,539,769
|
||||||||||||
Total Common Stocks
|
$
|
145,234,164
|
$
|
—
|
$
|
—
|
$
|
145,234,164
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
3,110,119
|
$
|
—
|
$
|
—
|
$
|
3,110,119
|
||||||||
Total Short-Term Investments
|
$
|
3,110,119
|
$
|
—
|
$
|
—
|
$
|
3,110,119
|
||||||||
Total Investments
|
$
|
148,344,283
|
$
|
—
|
$
|
—
|
$
|
148,344,283
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2024 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $128,944,713)
|
$
|
148,344,283
|
||
Dividends and interest receivable
|
106,846
|
|||
Receivable for fund shares sold
|
3,611
|
|||
Prepaid expenses and other assets
|
19,683
|
|||
Total assets
|
148,474,423
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
7,523
|
|||
Payable to advisor
|
92,480
|
|||
Payable to administrator
|
24,535
|
|||
Payable to auditor
|
11,280
|
|||
Accrued distribution fees
|
19,375
|
|||
Accrued service fees
|
10,963
|
|||
Accrued trustees fees
|
5,281
|
|||
Accrued expenses and other payables
|
11,744
|
|||
Total liabilities
|
183,181
|
|||
NET ASSETS
|
$
|
148,291,242
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
123,492,560
|
||
Total distributable earnings
|
24,798,682
|
|||
Total net assets
|
$
|
148,291,242
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
130,141,236
|
||
Shares issued and outstanding
|
11,115,631
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
11.71
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
18,150,006
|
||
Shares issued and outstanding
|
1,533,945
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
11.83
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
1,575,229
|
||
Interest income
|
48,887
|
|||
Total investment income
|
1,624,116
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
535,191
|
|||
Distribution fees – Investor Class (See Note 5)
|
95,085
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
70,485
|
|||
Service fees – Investor Class (See Note 5)
|
63,390
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
54,018
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
5,795
|
|||
Federal and state registration fees
|
18,056
|
|||
Trustees’ fees and expenses
|
11,740
|
|||
Audit fees
|
11,284
|
|||
Compliance expense (See Note 5)
|
9,574
|
|||
Reports to shareholders
|
5,720
|
|||
Legal fees
|
1,562
|
|||
Interest expense (See Note 7)
|
189
|
|||
Other expenses
|
14,104
|
|||
Net expenses
|
896,193
|
|||
NET INVESTMENT INCOME
|
$
|
727,923
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
4,682,558
|
||
Net change in unrealized appreciation/depreciation on investments
|
21,300,141
|
|||
Net gain on investments
|
25,982,699
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
26,710,622
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2024
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2023
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
727,923
|
$
|
1,525,599
|
||||
Net realized gain on investments
|
4,682,558
|
4,429,506
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
21,300,141
|
6,248,824
|
||||||
Net increase in net assets resulting from operations
|
26,710,622
|
12,203,929
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(4,666,709
|
)
|
(19,315,909
|
)
|
||||
Distributable earnings – Institutional Class
|
(700,235
|
)
|
(2,556,836
|
)
|
||||
Total distributions
|
(5,366,944
|
)
|
(21,872,745
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
465,978
|
1,360,431
|
||||||
Proceeds from shares subscribed – Institutional Class
|
415,241
|
1,393,373
|
||||||
Dividends reinvested – Investor Class
|
4,502,505
|
18,623,426
|
||||||
Dividends reinvested – Institutional Class
|
687,942
|
2,501,083
|
||||||
Cost of shares redeemed – Investor Class
|
(6,425,169
|
)
|
(13,722,728
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(1,360,211
|
)
|
(1,777,358
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
(1,713,714
|
)
|
8,378,227
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
19,629,964
|
(1,290,589
|
)
|
|||||
NET ASSETS:
|
||||||||
Beginning of period
|
128,661,278
|
129,951,867
|
||||||
End of period
|
$
|
148,291,242
|
$
|
128,661,278
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
42,210
|
131,258
|
||||||
Shares sold – Institutional Class
|
37,331
|
131,707
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
419,889
|
1,887,812
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
63,274
|
250,554
|
||||||
Shares redeemed – Investor Class
|
(568,018
|
)
|
(1,344,112
|
)
|
||||
Shares redeemed – Institutional Class
|
(116,144
|
)
|
(171,833
|
)
|
||||
Net increase (decrease) in shares outstanding
|
(121,458
|
)
|
885,386
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
10.06
|
||
Income from investment operations:
|
||||
Net investment income(1)
|
0.05
|
|||
Net realized and unrealized gains (losses) on investments
|
2.01
|
|||
Total from investment operations
|
2.06
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.11
|
)
|
||
Dividends from net realized gains
|
(0.30
|
)
|
||
Total distributions
|
(0.41
|
)
|
||
Net asset value, end of period
|
$
|
11.71
|
||
TOTAL RETURN
|
20.96
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
130.14
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement/recoupment
|
1.27
|
%(3)
|
||
After expense reimbursement/recoupment
|
1.27
|
%(3)
|
||
Ratio of net investment income to average net assets:
|
||||
Before expense reimbursement/recoupment
|
0.97
|
%(3)
|
||
After expense reimbursement/recoupment
|
0.97
|
%(3)
|
||
Portfolio turnover rate(5)
|
55
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
The Fund had an expense limitation agreement in place through November 30, 2019.
|
(5)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
10.92
|
$
|
14.35
|
$
|
10.21
|
$
|
10.54
|
$
|
12.24
|
|||||||||
0.11
|
0.09
|
0.09
|
0.09
|
0.13
|
||||||||||||||
0.87
|
(1.66
|
)
|
4.64
|
(0.15
|
)
|
0.56
|
||||||||||||
0.98
|
(1.57
|
)
|
4.73
|
(0.06
|
)
|
0.69
|
||||||||||||
(0.08
|
)
|
(0.08
|
)
|
(0.10
|
)
|
(0.14
|
)
|
(0.09
|
)
|
|||||||||
(1.76
|
)
|
(1.78
|
)
|
(0.49
|
)
|
(0.13
|
)
|
(2.30
|
)
|
|||||||||
(1.84
|
)
|
(1.86
|
)
|
(0.59
|
)
|
(0.27
|
)
|
(2.39
|
)
|
|||||||||
$
|
10.06
|
$
|
10.92
|
$
|
14.35
|
$
|
10.21
|
$
|
10.54
|
|||||||||
9.48
|
%
|
-12.76
|
%
|
48.00
|
%
|
-0.75
|
%
|
7.84
|
%
|
|||||||||
$
|
112.89
|
$
|
115.15
|
$
|
143.11
|
$
|
103.11
|
$
|
117.62
|
|||||||||
1.28
|
%
|
1.30
|
%
|
1.29
|
%
|
1.31
|
%
|
1.31
|
%
|
|||||||||
1.28
|
%
|
1.30
|
%
|
1.29
|
%
|
1.31
|
%(4)
|
1.29
|
%
|
|||||||||
1.10
|
%
|
0.76
|
%
|
0.69
|
%
|
0.93
|
%
|
1.24
|
%
|
|||||||||
1.10
|
%
|
0.76
|
%
|
0.69
|
%
|
0.93
|
%
|
1.26
|
%
|
|||||||||
53
|
%
|
76
|
%
|
68
|
%
|
62
|
%
|
57
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
10.18
|
||
Income from investment operations:
|
||||
Net investment income(1)
|
0.07
|
|||
Net realized and unrealized gains (losses) on investments
|
2.03
|
|||
Total from investment operations
|
2.10
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.14
|
)
|
||
Dividends from net realized gains
|
(0.31
|
)
|
||
Total distributions
|
(0.45
|
)
|
||
Net asset value, end of period
|
$
|
11.83
|
||
TOTAL RETURN
|
21.06
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
18.15
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement/recoupment
|
1.00
|
%(3)
|
||
After expense reimbursement/recoupment
|
1.00
|
%(3)
|
||
Ratio of net investment income to average net assets:
|
||||
Before expense reimbursement/recoupment
|
1.24
|
%(3)
|
||
After expense reimbursement/recoupment
|
1.24
|
%(3)
|
||
Portfolio turnover rate(5)
|
55
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
The Fund had an expense limitation agreement in place through November 30, 2019.
|
(5)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
11.05
|
$
|
14.51
|
$
|
10.33
|
$
|
10.65
|
$
|
12.38
|
|||||||||
0.14
|
0.13
|
0.12
|
0.13
|
0.16
|
||||||||||||||
0.89
|
(1.68
|
)
|
4.68
|
(0.15
|
)
|
0.56
|
||||||||||||
1.03
|
(1.55
|
)
|
4.80
|
(0.02
|
)
|
0.72
|
||||||||||||
(0.12
|
)
|
(0.11
|
)
|
(0.13
|
)
|
(0.17
|
)
|
(0.12
|
)
|
|||||||||
(1.78
|
)
|
(1.80
|
)
|
(0.49
|
)
|
(0.13
|
)
|
(2.33
|
)
|
|||||||||
(1.90
|
)
|
(1.91
|
)
|
(0.62
|
)
|
(0.30
|
)
|
(2.45
|
)
|
|||||||||
$
|
10.18
|
$
|
11.05
|
$
|
14.51
|
$
|
10.33
|
$
|
10.65
|
|||||||||
9.85
|
%
|
-12.52
|
%
|
48.30
|
%
|
-0.40
|
%
|
8.12
|
%
|
|||||||||
$
|
15.77
|
$
|
14.80
|
$
|
18.39
|
$
|
12.60
|
$
|
18.42
|
|||||||||
1.00
|
%
|
0.99
|
%
|
1.04
|
%
|
1.01
|
%
|
1.00
|
%
|
|||||||||
1.00
|
%
|
0.99
|
%
|
1.04
|
%
|
1.01
|
%(4)
|
0.98
|
%
|
|||||||||
1.37
|
%
|
1.08
|
%
|
0.91
|
%
|
1.23
|
%
|
1.56
|
%
|
|||||||||
1.37
|
%
|
1.08
|
%
|
0.91
|
%
|
1.23
|
%
|
1.58
|
%
|
|||||||||
53
|
%
|
76
|
%
|
68
|
%
|
62
|
%
|
57
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash
sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains
distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund
for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or
decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of
the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to
a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared
and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption
price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that the
Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven
calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds and
Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight key
information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and available for
delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
HENNESSY FUNDS
|
1-800-966-4354
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of
Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not
considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023,
and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that are not
active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit risk curves,
default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable inputs
are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, exchange-traded funds, closed-end mutual funds, partnerships, rights, and real estate
investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on which the securities are listed.
Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for which a last-quoted
sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in Level 1 of the
fair value hierarchy.
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending NAV
provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S. government
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing
service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may
incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally
classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as of
the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below.
Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
130,596,135
|
|||
Gross tax unrealized appreciation
|
$
|
13,428,574
|
|||
Gross tax unrealized depreciation
|
(15,340,499
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
(1,911,925
|
)
|
||
Undistributed ordinary income
|
$
|
1,525,599
|
|||
Undistributed long-term capital gains
|
3,841,330
|
||||
Total distributable earnings
|
$
|
5,366,929
|
|||
Other accumulated gain/(loss)
|
$
|
—
|
|||
Total accumulated gain/(loss)
|
$
|
3,455,004
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2024
|
October 31, 2023
|
||||||||
Ordinary income(1)
|
$
|
1,525,599
|
$
|
1,161,564
|
|||||
Long-term capital gains
|
3,841,345
|
20,711,181
|
|||||||
Total distributions
|
$
|
5,366,944
|
$
|
21,872,745
|
|||||
(1) Ordinary income includes short-term capital gains.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS/EXPENSE EXAMPLE
|
HENNESSY FUNDS
|
1-800-966-4354
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,209.60
|
$6.98
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.55
|
$6.37
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,210.60
|
$5.50
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.89
|
$5.02
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.27% for Investor Class shares or 1.00% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 182/366 days (to reflect the half-year period).
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE — GO PAPERLESS WITH EDELIVERY
|
![]() |
![]() |
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help the Board
assess each such factor;
|
|
(3)
|
A summary of the advisory agreement;
|
|
(4)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor provides
high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the
Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of the Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as appropriate),
conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance providers for fidelity bond,
D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers, and maintains books and
records.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services
to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor
participates in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor
compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight
personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to various
indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The Trustees concluded that
the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the funds included in the Morningstar categories for purposes of the materials considered at the meeting. The
Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are reasonable and
warranted continuation of the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the Fund
are variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party platform fees increase as a fund’s assets grow.
|
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor has put into
managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by way of
example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any such products and
services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the Advisor from its relationship
with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are merely supplemental to the Advisor’s own
efforts in the performance of its duties under the advisory agreement.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Go Paperless with eDelivery
|
26
|
|
Board Approval of Investment Advisory Agreement
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
||
Months(1)
|
Year
|
Years
|
Years
|
||
Hennessy Cornerstone Value Fund –
|
|||||
Investor Class (HFCVX)
|
14.18%
|
8.05%
|
8.62%
|
7.77%
|
|
Hennessy Cornerstone Value Fund –
|
|||||
Institutional Class (HICVX)
|
14.30%
|
8.29%
|
8.83%
|
7.99%
|
|
Russell 1000® Value Index
|
18.42%
|
13.42%
|
8.60%
|
8.43%
|
|
S&P 500® Index
|
20.98%
|
22.66%
|
13.19%
|
12.41%
|
(1)
|
Periods of less than one year are not annualized.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2024
(Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Cenovus Energy, Inc.
|
2.49%
|
Wells Fargo & Co.
|
2.33%
|
Exxon Mobil Corp.
|
2.31%
|
RTX Corp.
|
2.29%
|
Citigroup, Inc.
|
2.26%
|
Suncor Energy, Inc.
|
2.25%
|
Canadian Natural Resources Ltd.
|
2.24%
|
Shell PLC – ADR
|
2.18%
|
JPMorgan Chase & Co.
|
2.17%
|
BP PLC – ADR
|
2.16%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 99.11%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Communication Services – 7.25%
|
||||||||||||
AT&T, Inc.
|
321,660
|
$
|
5,432,837
|
2.00
|
%
|
|||||||
BCE, Inc.
|
128,300
|
4,214,655
|
1.55
|
%
|
||||||||
Comcast Corp., Class A
|
120,700
|
4,599,877
|
1.70
|
%
|
||||||||
Verizon Communications, Inc.
|
137,800
|
5,441,722
|
2.00
|
%
|
||||||||
19,689,091
|
7.25
|
%
|
||||||||||
Consumer Discretionary – 3.83%
|
||||||||||||
Ford Motor Co.
|
445,800
|
5,416,470
|
2.00
|
%
|
||||||||
Starbucks Corp.
|
56,200
|
4,973,138
|
1.83
|
%
|
||||||||
10,389,608
|
3.83
|
%
|
||||||||||
Consumer Staples – 19.63%
|
||||||||||||
Altria Group, Inc.
|
125,500
|
5,498,155
|
2.03
|
%
|
||||||||
British American Tobacco PLC – ADR
|
172,300
|
5,069,066
|
1.87
|
%
|
||||||||
The Coca-Cola Co.
|
87,300
|
5,392,521
|
1.99
|
%
|
||||||||
Kenvue, Inc.
|
238,100
|
4,481,042
|
1.65
|
%
|
||||||||
Keurig Dr Pepper, Inc.
|
163,400
|
5,506,580
|
2.03
|
%
|
||||||||
The Kraft Heinz Co.
|
138,900
|
5,362,929
|
1.98
|
%
|
||||||||
PepsiCo, Inc.
|
31,400
|
5,523,574
|
2.03
|
%
|
||||||||
Philip Morris International, Inc.
|
54,900
|
5,212,206
|
1.92
|
%
|
||||||||
The Procter & Gamble Co.
|
34,700
|
5,663,040
|
2.09
|
%
|
||||||||
Unilever PLC – ADR
|
107,000
|
5,547,950
|
2.04
|
%
|
||||||||
53,257,063
|
19.63
|
%
|
||||||||||
Energy – 23.62%
|
||||||||||||
Baker Hughes Co.
|
167,500
|
5,463,850
|
2.01
|
%
|
||||||||
BP PLC – ADR
|
150,800
|
5,846,516
|
2.16
|
%
|
||||||||
Canadian Natural Resources Ltd.
|
80,300
|
6,088,346
|
2.24
|
%
|
||||||||
Cenovus Energy, Inc.
|
328,600
|
6,756,016
|
2.49
|
%
|
||||||||
Chevron Corp.
|
35,975
|
5,801,688
|
2.14
|
%
|
||||||||
Equinor ASA – ADR
|
173,900
|
4,624,001
|
1.70
|
%
|
||||||||
Exxon Mobil Corp.
|
52,910
|
6,257,666
|
2.31
|
%
|
||||||||
Petroleo Brasileiro SA – ADR
|
321,300
|
5,452,461
|
2.01
|
%
|
||||||||
Shell PLC – ADR
|
82,600
|
5,919,116
|
2.18
|
%
|
||||||||
Suncor Energy, Inc.
|
159,800
|
6,102,762
|
2.25
|
%
|
||||||||
TotalEnergies SE – ADR
|
79,900
|
5,790,353
|
2.13
|
%
|
||||||||
64,102,775
|
23.62
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Financials – 18.82%
|
||||||||||||
Bank of America Corp.
|
157,500
|
$
|
5,829,075
|
2.15
|
%
|
|||||||
Citigroup, Inc.
|
100,200
|
6,145,266
|
2.26
|
%
|
||||||||
HSBC Holdings PLC – ADR
|
132,400
|
5,769,992
|
2.13
|
%
|
||||||||
JPMorgan Chase & Co.
|
30,700
|
5,886,418
|
2.17
|
%
|
||||||||
Manulife Financial Corp.
|
243,100
|
5,669,092
|
2.09
|
%
|
||||||||
Morgan Stanley
|
57,700
|
5,241,468
|
1.93
|
%
|
||||||||
Royal Bank of Canada
|
52,400
|
5,073,892
|
1.87
|
%
|
||||||||
The Toronto-Dominion Bank
|
86,600
|
5,137,112
|
1.89
|
%
|
||||||||
Wells Fargo & Co.
|
106,500
|
6,317,580
|
2.33
|
%
|
||||||||
51,069,895
|
18.82
|
%
|
||||||||||
Health Care – 16.06%
|
||||||||||||
AbbVie, Inc.
|
31,900
|
5,188,216
|
1.91
|
%
|
||||||||
Bristol-Myers Squibb Co.
|
104,000
|
4,569,760
|
1.68
|
%
|
||||||||
CVS Health Corp.
|
66,100
|
4,475,631
|
1.65
|
%
|
||||||||
Gilead Sciences, Inc.
|
61,100
|
3,983,720
|
1.47
|
%
|
||||||||
GSK PLC – ADR
|
131,660
|
5,455,990
|
2.01
|
%
|
||||||||
Johnson & Johnson
|
32,400
|
4,684,716
|
1.73
|
%
|
||||||||
Medtronic PLC
|
59,900
|
4,806,376
|
1.77
|
%
|
||||||||
Merck & Co., Inc.
|
44,100
|
5,698,602
|
2.10
|
%
|
||||||||
Pfizer, Inc.
|
183,800
|
4,708,956
|
1.74
|
%
|
||||||||
43,571,967
|
16.06
|
%
|
||||||||||
Industrials – 2.29%
|
||||||||||||
RTX Corp.
|
61,200
|
6,213,024
|
2.29
|
%
|
||||||||
Information Technology – 7.61%
|
||||||||||||
Cisco Systems, Inc.
|
103,500
|
4,862,430
|
1.79
|
%
|
||||||||
HP, Inc.
|
174,000
|
4,887,660
|
1.80
|
%
|
||||||||
International Business Machines Corp.
|
32,200
|
5,351,640
|
1.97
|
%
|
||||||||
Texas Instruments, Inc.
|
31,500
|
5,557,230
|
2.05
|
%
|
||||||||
20,658,960
|
7.61
|
%
|
||||||||||
Total Common Stocks
|
||||||||||||
(Cost $227,791,928)
|
268,952,383
|
99.11
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 0.69%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Money Market Funds – 0.69%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (a)
|
1,888,591
|
$
|
1,888,591
|
0.69
|
%
|
|||||||
Total Short-Term Investments
|
||||||||||||
(Cost $1,888,591)
|
1,888,591
|
0.69
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $229,680,519) – 99.80%
|
270,840,974
|
99.80
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.20%
|
532,431
|
0.20
|
%
|
|||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
271,373,405
|
100.00
|
%
|
(a)
|
The rate listed is the fund’s seven-day yield as of April 30, 2024.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
19,689,091
|
$
|
—
|
$
|
—
|
$
|
19,689,091
|
||||||||
Consumer Discretionary
|
10,389,608
|
—
|
—
|
10,389,608
|
||||||||||||
Consumer Staples
|
53,257,063
|
—
|
—
|
53,257,063
|
||||||||||||
Energy
|
64,102,775
|
—
|
—
|
64,102,775
|
||||||||||||
Financials
|
51,069,895
|
—
|
—
|
51,069,895
|
||||||||||||
Health Care
|
43,571,967
|
—
|
—
|
43,571,967
|
||||||||||||
Industrials
|
6,213,024
|
—
|
—
|
6,213,024
|
||||||||||||
Information Technology
|
20,658,960
|
—
|
—
|
20,658,960
|
||||||||||||
Total Common Stocks
|
$
|
268,952,383
|
$
|
—
|
$
|
—
|
$
|
268,952,383
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
1,888,591
|
$
|
—
|
$
|
—
|
$
|
1,888,591
|
||||||||
Total Short-Term Investments
|
$
|
1,888,591
|
$
|
—
|
$
|
—
|
$
|
1,888,591
|
||||||||
Total Investments
|
$
|
270,840,974
|
$
|
—
|
$
|
—
|
$
|
270,840,974
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2024 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $229,680,519)
|
$
|
270,840,974
|
||
Dividends and interest receivable
|
730,796
|
|||
Dividend tax reclaim receivable
|
81,139
|
|||
Receivable for fund shares sold
|
1,605
|
|||
Prepaid expenses and other assets
|
24,999
|
|||
Total assets
|
271,679,513
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
324
|
|||
Payable to advisor
|
165,564
|
|||
Payable to administrator
|
42,640
|
|||
Payable to auditor
|
11,280
|
|||
Accrued distribution fees
|
37,130
|
|||
Accrued service fees
|
21,754
|
|||
Accrued trustees fees
|
5,775
|
|||
Accrued expenses and other payables
|
21,641
|
|||
Total liabilities
|
306,108
|
|||
NET ASSETS
|
$
|
271,373,405
|
||
NET ASSETS CONSIST OF:
|
||||
Capital stock
|
$
|
226,186,508
|
||
Total distributable earnings
|
45,186,897
|
|||
Total net assets
|
$
|
271,373,405
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
263,864,872
|
||
Shares issued and outstanding
|
13,190,392
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
20.00
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
7,508,533
|
||
Shares issued and outstanding
|
374,597
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
20.04
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
5,976,009
|
||
Interest income
|
75,493
|
|||
Total investment income
|
6,051,502
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
988,443
|
|||
Distribution fees – Investor Class (See Note 5)
|
194,610
|
|||
Service fees – Investor Class (See Note 5)
|
129,740
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
125,077
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
90,818
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
3,264
|
|||
Federal and state registration fees
|
17,484
|
|||
Trustees’ fees and expenses
|
12,912
|
|||
Audit fees
|
11,284
|
|||
Compliance expense (See Note 5)
|
9,574
|
|||
Reports to shareholders
|
8,920
|
|||
Interest expense (See Note 7)
|
4,425
|
|||
Legal fees
|
2,930
|
|||
Other expenses
|
27,734
|
|||
Total expenses
|
1,627,215
|
|||
NET INVESTMENT INCOME
|
$
|
4,424,287
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
6,384,133
|
||
Net change in unrealized appreciation/depreciation on investments
|
24,351,979
|
|||
Net gain on investments
|
30,736,112
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
35,160,399
|
(1)
|
Net of foreign taxes withheld and issuance fees of $280,856.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2024
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2023
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
4,424,287
|
$
|
9,448,170
|
||||
Net realized gain (loss) on investments
|
6,384,133
|
(3,834,975
|
)
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
24,351,979
|
(8,473,514
|
)
|
|||||
Net increase (decrease) in net assets
|
||||||||
resulting from operations
|
35,160,399
|
(2,860,319
|
)
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(9,186,043
|
)
|
(26,252,846
|
)
|
||||
Distributable earnings – Institutional Class
|
(284,175
|
)
|
(2,313,856
|
)
|
||||
Total distributions
|
(9,470,218
|
)
|
(28,566,702
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
1,104,247
|
11,286,745
|
||||||
Proceeds from shares subscribed – Institutional Class
|
579,486
|
6,698,572
|
||||||
Dividends reinvested – Investor Class
|
8,633,177
|
24,939,854
|
||||||
Dividends reinvested – Institutional Class
|
258,511
|
2,247,245
|
||||||
Cost of shares redeemed – Investor Class
|
(17,213,205
|
)
|
(29,291,239
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(1,577,915
|
)
|
(23,714,925
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(8,215,699
|
)
|
(7,833,748
|
)
|
||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
17,474,482
|
(39,260,769
|
)
|
|||||
NET ASSETS:
|
||||||||
Beginning of period
|
253,898,923
|
293,159,692
|
||||||
End of period
|
$
|
271,373,405
|
$
|
253,898,923
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
56,730
|
577,984
|
||||||
Shares sold – Institutional Class
|
30,163
|
332,692
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
446,390
|
1,290,673
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
13,353
|
116,262
|
||||||
Shares redeemed – Investor Class
|
(892,426
|
)
|
(1,532,736
|
)
|
||||
Shares redeemed – Institutional Class
|
(81,726
|
)
|
(1,233,563
|
)
|
||||
Net decrease in shares outstanding
|
(427,516
|
)
|
(448,688
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
18.14
|
||
Income from investment operations:
|
||||
Net investment income(1)
|
0.32
|
|||
Net realized and unrealized gains (losses) on investments
|
2.23
|
|||
Total from investment operations
|
2.55
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.69
|
)
|
||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
(0.69
|
)
|
||
Net asset value, end of period
|
$
|
20.00
|
||
TOTAL RETURN
|
14.18
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
263.86
|
||
Ratio of expenses to average net assets
|
1.23
|
%(3)
|
||
Ratio of net investment income to average net assets
|
3.31
|
%(3)
|
||
Portfolio turnover rate(4)
|
22
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
20.30
|
$
|
19.59
|
$
|
13.69
|
$
|
17.43
|
$
|
19.29
|
|||||||||
0.63
|
0.55
|
0.44
|
0.41
|
0.47
|
||||||||||||||
(0.84
|
)
|
1.10
|
5.87
|
(3.01
|
)
|
0.30
|
||||||||||||
(0.21
|
)
|
1.65
|
6.31
|
(2.60
|
)
|
0.77
|
||||||||||||
(0.50
|
)
|
(0.51
|
)
|
(0.41
|
)
|
(0.47
|
)
|
(0.41
|
)
|
|||||||||
(1.45
|
)
|
(0.43
|
)
|
—
|
(0.67
|
)
|
(2.22
|
)
|
||||||||||
(1.95
|
)
|
(0.94
|
)
|
(0.41
|
)
|
(1.14
|
)
|
(2.63
|
)
|
|||||||||
$
|
18.14
|
$
|
20.30
|
$
|
19.59
|
$
|
13.69
|
$
|
17.43
|
|||||||||
-1.45
|
%
|
8.68
|
%
|
46.82
|
%
|
-16.22
|
%
|
5.22
|
%
|
|||||||||
$
|
246.40
|
$
|
268.81
|
$
|
254.23
|
$
|
189.60
|
$
|
253.95
|
|||||||||
1.23
|
%
|
1.23
|
%
|
1.23
|
%
|
1.30
|
%
|
1.23
|
%
|
|||||||||
3.31
|
%
|
2.74
|
%
|
2.43
|
%
|
2.71
|
%
|
2.75
|
%
|
|||||||||
31
|
%
|
36
|
%
|
41
|
%
|
32
|
%
|
27
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
18.17
|
||
Income from investment operations:
|
||||
Net investment income(1)
|
0.34
|
|||
Net realized and unrealized gains (losses) on investments
|
2.23
|
|||
Total from investment operations
|
2.57
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.70
|
)
|
||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
(0.70
|
)
|
||
Net asset value, end of period
|
$
|
20.04
|
||
TOTAL RETURN
|
14.30
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
7.51
|
||
Ratio of expenses to average net assets:
|
0.99
|
%(3)
|
||
Ratio of net investment income to average net assets:
|
3.55
|
%(3)
|
||
Portfolio turnover rate(4)
|
22
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
20.34
|
$
|
19.63
|
$
|
13.71
|
$
|
17.45
|
$
|
19.33
|
|||||||||
0.67
|
0.58
|
0.48
|
0.44
|
0.50
|
||||||||||||||
(0.84
|
)
|
1.12
|
5.88
|
(3.01
|
)
|
0.29
|
||||||||||||
(0.17
|
)
|
1.70
|
6.36
|
(2.57
|
)
|
0.79
|
||||||||||||
(0.55
|
)
|
(0.56
|
)
|
(0.44
|
)
|
(0.49
|
)
|
(0.45
|
)
|
|||||||||
(1.45
|
)
|
(0.43
|
)
|
—
|
(0.68
|
)
|
(2.22
|
)
|
||||||||||
(2.00
|
)
|
(0.99
|
)
|
(0.44
|
)
|
(1.17
|
)
|
(2.67
|
)
|
|||||||||
$
|
18.17
|
$
|
20.34
|
$
|
19.63
|
$
|
13.71
|
$
|
17.45
|
|||||||||
-1.26
|
%
|
8.92
|
%
|
47.19
|
%
|
-16.06
|
%
|
5.37
|
%
|
|||||||||
$
|
7.50
|
$
|
24.35
|
$
|
5.50
|
$
|
4.29
|
$
|
6.44
|
|||||||||
1.06
|
%
|
1.00
|
%
|
0.99
|
%
|
1.08
|
%
|
1.08
|
%
|
|||||||||
3.48
|
%
|
2.92
|
%
|
2.67
|
%
|
2.94
|
%
|
2.92
|
%
|
|||||||||
31
|
%
|
36
|
%
|
41
|
%
|
32
|
%
|
27
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash
sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains
distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund
for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and
Delaware.
|
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or
decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value
of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses
attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are
declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that
the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven
calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds and
Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight key
information. The amendments also will require that funds tag information in a structured data format. In addition, the
|
HENNESSY FUNDS
|
1-800-966-4354
|
rule amendments will require that certain more in-depth information be made available online and available for delivery free of charge to investors on request. The amendments became effective January 24,
2023. There is an 18-month transition period after the effective date of the amendment.
|
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of
Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not
considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023,
and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that are not
active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit risk curves,
default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable inputs
are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual funds,
partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary
exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on
a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not
applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV because most foreign markets close well before such
time. The earlier close of most foreign markets gives rise to the possibility that significant
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
events, including broad market moves, may have occurred in the interim. In certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the
security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an
entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending
NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may
consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate
observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified
in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as
of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described
below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
237,059,447
|
|||
Gross tax unrealized appreciation
|
$
|
35,165,236
|
|||
Gross tax unrealized depreciation
|
(19,114,767
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
16,050,469
|
|||
Undistributed ordinary income
|
$
|
7,752,370
|
|||
Undistributed long-term capital gains
|
—
|
||||
Total distributable earnings
|
$
|
7,752,370
|
|||
Other accumulated gain/(loss)
|
$
|
(4,306,123
|
)
|
||
Total accumulated gain/(loss)
|
$
|
19,496,716
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2024
|
October 31, 2023
|
||||||||
Ordinary income(1)
|
$
|
9,470,218
|
$
|
7,801,294
|
|||||
Long-term capital gains
|
—
|
20,765,408
|
|||||||
Total distributions
|
$
|
9,470,218
|
$
|
28,566,702
|
|||||
(1) Ordinary income includes short-term capital gains.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,141.80
|
$6.55
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.75
|
$6.17
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,143.00
|
$5.27
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.94
|
$4.97
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.23% for Investor Class shares or 0.99% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 182/366 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help the Board
assess each such factor;
|
|
(3)
|
A summary of the advisory agreement;
|
|
(4)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor provides
high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to
the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of the Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as appropriate),
conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance providers for fidelity bond,
D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers, and maintains books and
records.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services
to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor
participates in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor
compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight
personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to various
indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The Trustees concluded
that the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the funds included in the Morningstar categories for purposes of the materials considered at the meeting.
The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are reasonable and
warranted continuation of the advisory agreement.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the Fund
are variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party platform fees increase as a fund’s assets grow.
|
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor has put into
managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by way of
example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any such products
and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the Advisor from its
relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are merely supplemental to
the Advisor’s own efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Statement of Cash Flows
|
12
|
|
Financial Highlights
|
14
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
25
|
|
Availability of Quarterly Portfolio Schedule
|
25
|
|
Federal Tax Distribution Information
|
25
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
25
|
|
Go Paperless with eDelivery
|
25
|
|
Board Approval of Investment Advisory Agreement
|
26
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
||
Months(1)
|
Year
|
Years
|
Years
|
||
Hennessy Total Return
|
|||||
Fund (HDOGX)
|
9.98%
|
7.74%
|
3.83%
|
5.51%
|
|
75/25 Blended DJIA/Treasury Index
|
12.34%
|
11.43%
|
8.02%
|
8.84%
|
|
Dow Jones Industrial Average
|
15.58%
|
13.25%
|
9.61%
|
11.10%
|
(1)
|
Periods of less than one year are not annualized.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2024 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
U.S. Treasury Bill, 5.215%, 07/23/2024
|
30.06%
|
U.S. Treasury Bill, 5.285%, 06/13/2024
|
24.19%
|
U.S. Treasury Bill, 5.280%, 05/09/2024
|
18.24%
|
Dow, Inc.
|
7.42%
|
Chevron Corp.
|
7.30%
|
The Coca-Cola Co.
|
7.13%
|
Verizon Communications, Inc.
|
6.94%
|
3M Co.
|
6.85%
|
International Business Machines Corp.
|
6.68%
|
Amgen, Inc.
|
6.23%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 67.83%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Communication Services – 6.94%
|
||||||||||||
Verizon Communications, Inc.
|
86,600
|
$
|
3,419,834
|
6.94
|
%
|
|||||||
Consumer Staples – 12.49%
|
||||||||||||
The Coca-Cola Co.
|
56,900
|
3,514,713
|
7.13
|
%
|
||||||||
Walgreens Boots Alliance, Inc.
|
149,000
|
2,641,770
|
5.36
|
%
|
||||||||
6,156,483
|
12.49
|
%
|
||||||||||
Energy – 7.30%
|
||||||||||||
Chevron Corp.
|
22,300
|
3,596,321
|
7.30
|
%
|
||||||||
Financials – 4.76%
|
||||||||||||
The Goldman Sachs Group, Inc.
|
5,500
|
2,346,905
|
4.76
|
%
|
||||||||
Health Care – 11.74%
|
||||||||||||
Amgen, Inc.
|
11,200
|
3,068,128
|
6.23
|
%
|
||||||||
Johnson & Johnson
|
18,800
|
2,718,292
|
5.51
|
%
|
||||||||
5,786,420
|
11.74
|
%
|
||||||||||
Industrials – 6.85%
|
||||||||||||
3M Co.
|
35,000
|
3,377,850
|
6.85
|
%
|
||||||||
Information Technology – 10.33%
|
||||||||||||
Cisco Systems, Inc.
|
38,300
|
1,799,334
|
3.65
|
%
|
||||||||
International Business Machines Corp.
|
19,800
|
3,290,760
|
6.68
|
%
|
||||||||
5,090,094
|
10.33
|
%
|
||||||||||
Materials – 7.42%
|
||||||||||||
Dow, Inc.
|
64,300
|
3,658,670
|
7.42
|
%
|
||||||||
Total Common Stocks
|
||||||||||||
(Cost $33,176,228)
|
33,432,577
|
67.83
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 76.31%
|
Number of Shares/
|
% of
|
||||||||||
Par Amount
|
Value
|
Net Assets
|
||||||||||
Money Market Funds – 3.82%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (a)
|
1,881,837
|
$
|
1,881,837
|
3.82
|
%
|
|||||||
U.S. Treasury Bills – 72.49%
|
||||||||||||
5.280%, 05/09/2024 (b)(c)
|
9,000,000
|
8,989,570
|
18.24
|
%
|
||||||||
5.285%, 06/13/2024 (b)(c)
|
12,000,000
|
11,925,037
|
24.19
|
%
|
||||||||
5.215%, 07/23/2024 (b)(c)
|
15,000,000
|
14,818,386
|
30.06
|
%
|
||||||||
35,732,993
|
72.49
|
%
|
||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $37,616,957)
|
37,614,830
|
76.31
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $70,793,185) – 144.14%
|
71,047,407
|
144.14
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (44.14)%
|
(21,755,552
|
)
|
(44.14
|
)%
|
||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
49,291,855
|
100.00
|
%
|
(a)
|
The rate listed is the fund’s seven-day yield as of April 30, 2024.
|
(b)
|
The rate listed is the discount rate at issue.
|
(c)
|
All or a portion of this security is pledged as collateral for securities sold subject to repurchase. The aggregate fair value of the collateral is $23,821,990.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
3,419,834
|
$
|
—
|
$
|
—
|
$
|
3,419,834
|
||||||||
Consumer Staples
|
6,156,483
|
—
|
—
|
6,156,483
|
||||||||||||
Energy
|
3,596,321
|
—
|
—
|
3,596,321
|
||||||||||||
Financials
|
2,346,905
|
—
|
—
|
2,346,905
|
||||||||||||
Health Care
|
5,786,420
|
—
|
—
|
5,786,420
|
||||||||||||
Industrials
|
3,377,850
|
—
|
—
|
3,377,850
|
||||||||||||
Information Technology
|
5,090,094
|
—
|
—
|
5,090,094
|
||||||||||||
Materials
|
3,658,670
|
—
|
—
|
3,658,670
|
||||||||||||
Total Common Stocks
|
$
|
33,432,577
|
$
|
—
|
$
|
—
|
$
|
33,432,577
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
1,881,837
|
$
|
—
|
$
|
—
|
$
|
1,881,837
|
||||||||
U.S. Treasury Bills
|
—
|
35,732,993
|
—
|
35,732,993
|
||||||||||||
Total Short-Term Investments
|
$
|
1,881,837
|
$
|
35,732,993
|
$
|
—
|
$
|
37,614,830
|
||||||||
Total Investments
|
$
|
35,314,414
|
$
|
35,732,993
|
$
|
—
|
$
|
71,047,407
|
HENNESSY FUNDS
|
1-800-966-4354
|
Principal
|
Maturity
|
Maturity
|
||||||||||||
Face Value
|
Counterparty
|
Rate
|
Trade Date
|
Date
|
Amount
|
|||||||||
$
|
5,397,000
|
Jefferies LLC
|
5.55%
|
|
2/8/24
|
5/9/24
|
$
|
5,471,883
|
||||||
7,196,000
|
Jefferies LLC
|
5.55%
|
|
3/14/24
|
6/13/24
|
7,295,845
|
||||||||
8,995,000
|
Jefferies LLC
|
5.55%
|
|
4/11/24
|
7/23/24
|
9,136,446
|
||||||||
$
|
21,588,000
|
$
|
21,904,174
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2024 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $70,793,185)
|
$
|
71,047,407
|
||
Dividends and interest receivable
|
66,456
|
|||
Prepaid expenses and other assets
|
9,136
|
|||
Total assets
|
71,122,999
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
25,723
|
|||
Payable to advisor
|
24,442
|
|||
Payable to administrator
|
9,203
|
|||
Payable to auditor
|
11,280
|
|||
Accrued distribution fees
|
8,110
|
|||
Accrued service fees
|
4,074
|
|||
Reverse repurchase agreements
|
21,588,000
|
|||
Accrued interest payable
|
146,716
|
|||
Accrued trustees fees
|
5,367
|
|||
Accrued expenses and other payables
|
8,229
|
|||
Total liabilities
|
21,831,144
|
|||
NET ASSETS
|
$
|
49,291,855
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
46,772,771
|
||
Total distributable earnings
|
2,519,084
|
|||
Total net assets
|
$
|
49,291,855
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
49,291,855
|
||
Shares issued and outstanding
|
3,792,790
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
13.00
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
762,731
|
||
Interest income
|
967,840
|
|||
Total investment income
|
1,730,571
|
|||
EXPENSES:
|
||||
Interest expense (See Notes 7 and 9)
|
594,779
|
|||
Investment advisory fees (See Note 5)
|
149,001
|
|||
Distribution fees – Investor Class (See Note 5)
|
37,250
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
28,121
|
|||
Service fees – Investor Class (See Note 5)
|
24,834
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
17,383
|
|||
Audit fees
|
11,284
|
|||
Trustees’ fees and expenses
|
11,012
|
|||
Federal and state registration fees
|
10,636
|
|||
Compliance expense (See Note 5)
|
9,574
|
|||
Reports to shareholders
|
4,818
|
|||
Legal fees
|
730
|
|||
Other expenses
|
4,818
|
|||
Total expenses
|
904,240
|
|||
NET INVESTMENT INCOME
|
$
|
826,331
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
2,239,641
|
||
Net change in unrealized appreciation/depreciation on investments
|
1,599,930
|
|||
Net gain on investments
|
3,839,571
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
4,665,902
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2024
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2023
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
826,331
|
$
|
1,594,586
|
||||
Net realized gain on investments
|
2,239,641
|
2,437,331
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
1,599,930
|
(3,681,426
|
)
|
|||||
Net increase in net assets resulting from operations
|
4,665,902
|
350,491
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(2,868,401
|
)
|
(4,133,781
|
)
|
||||
Total distributions
|
(2,868,401
|
)
|
(4,133,781
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
96,428
|
4,112,285
|
||||||
Dividends reinvested – Investor Class
|
2,727,481
|
3,946,628
|
||||||
Cost of shares redeemed – Investor Class
|
(2,872,856
|
)
|
(10,088,636
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(48,947
|
)
|
(2,029,723
|
)
|
||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
1,748,554
|
(5,813,013
|
)
|
|||||
NET ASSETS:
|
||||||||
Beginning of period
|
47,543,301
|
53,356,314
|
||||||
End of period
|
$
|
49,291,855
|
$
|
47,543,301
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
7,367
|
308,055
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
211,857
|
299,644
|
||||||
Shares redeemed – Investor Class
|
(219,464
|
)
|
(774,401
|
)
|
||||
Net decrease in shares outstanding
|
(240
|
)
|
(166,702
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Cash Flows for the six months ended April 30, 2024 (Unaudited)
|
Cash flows from operating activities:
|
||||
Net increase in net assets from operations
|
$
|
4,665,902
|
||
Adjustments to reconcile net increase in net assets resulting
|
||||
from operations to net cash provided by operating activities:
|
||||
Payments to purchase securities
|
(9,779,712
|
)
|
||
Proceeds from sale of securities
|
12,833,545
|
|||
Net sale of short term investments
|
(1,872,496
|
)
|
||
Realized gain on investments in securities
|
(2,239,641
|
)
|
||
Net accretion of discount on securities
|
(924,203
|
)
|
||
Change in unrealized appreciation/depreciation on investments in securities
|
(1,599,930
|
)
|
||
(Increases) decreases in operating assets:
|
||||
Decrease in dividends and interest receivable
|
5,191
|
|||
Decrease in prepaid expenses and other assets
|
3,202
|
|||
Increases (decreases) in operating liabilities:
|
||||
Increase in payable to advisor
|
69
|
|||
Decrease in payable to administrator
|
(274
|
)
|
||
Increase in payable for distribution fees
|
304
|
|||
Increase in payable for service fees
|
12
|
|||
Increase in accrued interest payable
|
11,004
|
|||
Decrease in accrued audit fees
|
(11,466
|
)
|
||
Decrease in accrued trustee fees
|
(446
|
)
|
||
Increase in other accrued expenses and payables
|
1,533
|
|||
Net cash provided by operating securities
|
1,092,594
|
|||
Cash flows from financing activities:
|
||||
Increase in reverse repurchase agreements
|
1,799,000
|
|||
Proceeds on shares sold
|
96,459
|
|||
Payment on shares redeemed
|
(2,847,133
|
)
|
||
Distributions paid in cash, net of reinvestments
|
(140,920
|
)
|
||
Net cash used for financing activities
|
(1,092,594
|
)
|
||
Net increase in cash
|
—
|
|||
Cash:
|
||||
Beginning balance
|
—
|
|||
Ending balance
|
$
|
—
|
||
Supplemental information:
|
||||
Non-cash financing activities not included herein, consisting
|
||||
of dividend reinvestment of dividends and distributions
|
$
|
2,727,481
|
||
Cash paid for interest
|
$
|
583,775
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF CASH FLOWS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
12.53
|
||
Income from investment operations:
|
||||
Net investment income(1)
|
0.22
|
|||
Net realized and unrealized gains (losses) on investments
|
1.02
|
|||
Total from investment operations
|
1.24
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.23
|
)
|
||
Dividends from net realized gains
|
(0.54
|
)
|
||
Total distributions
|
(0.77
|
)
|
||
Net asset value, end of period
|
$
|
13.00
|
||
TOTAL RETURN
|
9.98
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
49.29
|
||
Ratio of expenses, including interest expense, to average net assets
|
3.64
|
%(3)
|
||
Ratio of net investment income to average net assets
|
3.33
|
%(3)
|
||
Portfolio turnover rate
|
28
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not Annualized.
|
(3)
|
Annualized.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
13.47
|
$
|
13.54
|
$
|
11.97
|
$
|
13.98
|
$
|
13.57
|
|||||||||
0.40
|
0.22
|
0.20
|
0.27
|
0.24
|
||||||||||||||
(0.30
|
)
|
(0.07
|
)
|
2.33
|
(1.99
|
)
|
0.81
|
|||||||||||
0.10
|
0.15
|
2.53
|
(1.72
|
)
|
1.05
|
|||||||||||||
(0.38
|
)
|
(0.22
|
)
|
(0.20
|
)
|
(0.29
|
)
|
(0.24
|
)
|
|||||||||
(0.66
|
)
|
—
|
(0.76
|
)
|
—
|
(0.40
|
)
|
|||||||||||
(1.04
|
)
|
(0.22
|
)
|
(0.96
|
)
|
(0.29
|
)
|
(0.64
|
)
|
|||||||||
$
|
12.53
|
$
|
13.47
|
$
|
13.54
|
$
|
11.97
|
$
|
13.98
|
|||||||||
0.53
|
%
|
1.12
|
%
|
21.72
|
%
|
-12.36
|
%
|
7.93
|
%
|
|||||||||
$
|
47.54
|
$
|
53.36
|
$
|
54.45
|
$
|
50.67
|
$
|
72.94
|
|||||||||
3.37
|
%
|
1.77
|
%
|
1.35
|
%
|
1.73
|
%
|
2.31
|
%
|
|||||||||
3.05
|
%
|
1.62
|
%
|
1.52
|
%
|
2.05
|
%
|
1.74
|
%
|
|||||||||
36
|
%
|
24
|
%
|
19
|
%
|
39
|
%
|
30
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of
wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book
purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net
realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the
Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
amortization of premium and accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to
interest income over the life of a security with a corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security.
Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and
certain shareholder service fees.
|
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of
the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Reverse Repurchase Agreements – Transactions involving reverse repurchase agreements are treated as collateralized financing transactions and are recorded at their contracted resell or repurchase amounts,
which approximates fair value. Upon entering into a reverse repurchase agreement transaction, the Fund establishes a segregated account in which it maintains liquid assets in an amount at least equal to the repurchase price marked
to market daily (including accrued interest), and the Fund subsequently monitors the account to ensure that it maintains such equivalent value. Interest on reverse repurchase agreements is included in interest payable.
|
As of April 30, 2024, securities with a fair value of $23,821,990, which are included in investments in securities in the Statement of
Assets and Liabilities, were pledged to collateralize reverse repurchase agreements.
|
|
j).
|
Offsetting Assets and Liabilities – The Fund follows the financial reporting rules regarding offsetting assets and liabilities and related netting arrangements to enable users of its financial statements
to understand the effect of those arrangements on its financial position. Reverse repurchase transactions are entered into by the Fund under Master Repurchase Agreements (“MRAs”) that permit the Fund, under certain circumstances,
including an event of default (such as bankruptcy or insolvency), to offset payables under the MRA with collateral held with the counterparty and create one single net payment from the Fund. Upon a bankruptcy or insolvency of the
MRA
|
HENNESSY FUNDS
|
1-800-966-4354
|
counterparty, the Fund is considered an unsecured creditor with respect to excess collateral and, as such, the return of excess collateral may be delayed. In the event the buyer of securities under an MRA
files for bankruptcy or becomes insolvent, the Fund’s use of the proceeds of the MRA may be restricted while the other party, or its trustee or receiver, determines whether or not to enforce the Fund’s obligation to repurchase the
securities. For additional information regarding the offsetting of assets and liabilities as of April 30, 2024, please refer to the table in Note 9.
|
|
k).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that
the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven
calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
l).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds and
Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight key
information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and available for
delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement
of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore,
is not considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December
15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that are
not active for identical or similar instruments, and model-derived valuations in which all
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit risk curves, default rates, and similar data).
|
||
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable
inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, exchange-traded funds, closed-end mutual funds, partnerships, rights, and real
estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on which the securities are
listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for which a
last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in
Level 1 of the fair value hierarchy.
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending
NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may
consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate
observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally
classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values
as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as
described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
68,876,602
|
|||
Gross tax unrealized appreciation
|
$
|
4,317,858
|
|||
Gross tax unrealized depreciation
|
(5,729,490
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
(1,411,632
|
)
|
||
Undistributed ordinary income
|
$
|
124,312
|
|||
Undistributed long-term capital gains
|
2,008,903
|
||||
Total distributable earnings
|
$
|
2,133,215
|
|||
Other accumulated gain/(loss)
|
$
|
—
|
|||
Total accumulated gain/(loss)
|
$
|
721,583
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2024
|
October 31, 2023
|
||||||||
Ordinary income(1)
|
$
|
861,937
|
$
|
1,508,864
|
|||||
Long-term capital gains
|
2,006,464
|
2,624,917
|
|||||||
Total distributions
|
$
|
2,868,401
|
$
|
4,133,781
|
|||||
(1) Ordinary income includes short-term capital gains.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Maturity Date
|
Amount
|
Interest Rate
|
||
May 9, 2024
|
$5,397,000
|
5.55%
|
||
June 13, 2024
|
$7,196,000
|
5.55%
|
||
July 23, 2024
|
$8,995,000
|
5.55%
|
Gross
|
Net
|
Gross Amounts Not
Offset in the Statement
of Assets and Liabilities
|
|||||||||||||||||||||
Amounts
|
Amounts
|
||||||||||||||||||||||
Offset
|
Presented
|
||||||||||||||||||||||
Gross
|
in the
|
in the
|
|||||||||||||||||||||
Amounts of
|
Statement of
|
Statement of
|
Collateral
|
||||||||||||||||||||
Recognized
|
Assets and
|
Assets and
|
Financial
|
Pledged
|
Net
|
||||||||||||||||||
Liabilities
|
Liabilities
|
Liabilities
|
Instruments
|
(Received)
|
Amount
|
||||||||||||||||||
$
|
21,588,000
|
$
|
—
|
$
|
21,588,000
|
$
|
21,588,000
|
$
|
—
|
$
|
—
|
||||||||||||
$
|
21,588,000
|
$
|
—
|
$
|
21,588,000
|
$
|
21,588,000
|
$
|
—
|
$
|
—
|
HENNESSY FUNDS
|
1-800-966-4354
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,099.80
|
$19.00
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,006.76
|
$18.16
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 3.64%, multiplied by the average account value over the period, multiplied by 182/366 days (to reflect the half-year period).
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE — GO PAPERLESS WITH EDELIVERY
|
![]() |
![]() |
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help the
Board assess each such factor;
|
|
(3)
|
A summary of the advisory agreement;
|
|
(4)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor provides
high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to
the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of the Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as
appropriate), conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance providers
for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers, and
maintains books and records.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal
services to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor
participates in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor
compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight
personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to
various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The Trustees
concluded that the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the funds included in the Morningstar categories for purposes of the materials considered at the meeting.
The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are reasonable and
warranted continuation of the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the
Fund are variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party platform fees increase as a fund’s assets grow.
|
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor has put into
managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by way of
example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any such products
and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the Advisor from its
relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are merely supplemental to
the Advisor’s own efforts in the performance of its duties under the advisory agreement.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Expense Example
|
28
|
|
Proxy Voting Policy and Proxy Voting Records
|
30
|
|
Availability of Quarterly Portfolio Schedule
|
30
|
|
Federal Tax Distribution Information
|
30
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
30
|
|
Go Paperless with eDelivery
|
30
|
|
Board Approval of Investment Advisory Agreements
|
31
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
||
Months(1)
|
Year
|
Years
|
Years
|
||
Hennessy Equity and Income Fund –
|
|||||
Investor Class (HEIFX)
|
10.68%
|
7.50%
|
5.17%
|
5.61%
|
|
Hennessy Equity and Income Fund –
|
|||||
Institutional Class (HEIIX)
|
10.85%
|
7.92%
|
5.54%
|
6.00%
|
|
S&P 500® Index
|
20.98%
|
22.66%
|
13.19%
|
12.41%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2024
(Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Alphabet, Inc., Class C
|
4.82%
|
Berkshire Hathaway, Inc., Class B
|
4.76%
|
Apple, Inc.
|
3.65%
|
The Progressive Corp.
|
3.41%
|
BlackRock, Inc.
|
3.02%
|
Air Products and Chemicals Inc.
|
2.92%
|
Visa, Inc., Class A
|
2.88%
|
Fiserv, Inc.
|
2.68%
|
Martin Marietta Materials, Inc.
|
2.66%
|
Norfolk Southern Corp.
|
2.64%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 68.31%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Communication Services – 4.82%
|
||||||||||||
Alphabet, Inc., Class C (a)
|
18,757
|
$
|
3,088,152
|
4.82
|
%
|
|||||||
Consumer Discretionary – 8.97%
|
||||||||||||
CarMax, Inc. (a)
|
9,713
|
660,193
|
1.03
|
%
|
||||||||
Lowe’s Companies, Inc.
|
3,962
|
903,296
|
1.41
|
%
|
||||||||
O’Reilly Automotive, Inc. (a)
|
1,355
|
1,372,967
|
2.14
|
%
|
||||||||
Starbucks Corp.
|
14,272
|
1,262,929
|
1.97
|
%
|
||||||||
The Home Depot, Inc.
|
4,624
|
1,545,434
|
2.42
|
%
|
||||||||
5,744,819
|
8.97
|
%
|
||||||||||
Consumer Staples – 5.70%
|
||||||||||||
Altria Group, Inc.
|
27,810
|
1,218,356
|
1.90
|
%
|
||||||||
Church & Dwight Co., Inc.
|
12,899
|
1,391,673
|
2.17
|
%
|
||||||||
Nestlé S.A. – ADR
|
10,366
|
1,042,820
|
1.63
|
%
|
||||||||
3,652,849
|
5.70
|
%
|
||||||||||
Energy – 2.03%
|
||||||||||||
Chevron Corp.
|
8,075
|
1,302,255
|
2.03
|
%
|
||||||||
Financials – 19.38%
|
||||||||||||
Berkshire Hathaway, Inc., Class B (a)
|
7,684
|
3,048,473
|
4.76
|
%
|
||||||||
BlackRock, Inc.
|
2,563
|
1,934,142
|
3.02
|
%
|
||||||||
Fiserv, Inc. (a)
|
11,234
|
1,715,095
|
2.68
|
%
|
||||||||
The Charles Schwab Corp.
|
22,741
|
1,681,697
|
2.63
|
%
|
||||||||
The Progressive Corp.
|
10,503
|
2,187,250
|
3.41
|
%
|
||||||||
Visa, Inc., Class A
|
6,861
|
1,842,933
|
2.88
|
%
|
||||||||
12,409,590
|
19.38
|
%
|
||||||||||
Health Care – 2.24%
|
||||||||||||
Johnson & Johnson
|
6,402
|
925,665
|
1.45
|
%
|
||||||||
Pfizer, Inc.
|
19,668
|
503,894
|
0.79
|
%
|
||||||||
1,429,559
|
2.24
|
%
|
||||||||||
Industrials – 8.87%
|
||||||||||||
FedEx Corp.
|
5,492
|
1,437,696
|
2.24
|
%
|
||||||||
Norfolk Southern Corp.
|
7,344
|
1,691,470
|
2.64
|
%
|
||||||||
Old Dominion Freight Line, Inc.
|
5,463
|
992,682
|
1.55
|
%
|
||||||||
Republic Services, Inc.
|
8,148
|
1,561,972
|
2.44
|
%
|
||||||||
5,683,820
|
8.87
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number of Shares/
|
% of
|
||||||||||
Par Amount
|
Value
|
Net Assets
|
||||||||||
Information Technology – 7.28%
|
||||||||||||
Apple, Inc.
|
13,715
|
$
|
2,336,076
|
3.65
|
%
|
|||||||
Cisco Systems, Inc.
|
18,152
|
852,781
|
1.33
|
%
|
||||||||
Texas Instruments, Inc.
|
8,332
|
1,469,931
|
2.30
|
%
|
||||||||
4,658,788
|
7.28
|
%
|
||||||||||
Materials – 9.02%
|
||||||||||||
Air Products and Chemicals, Inc.
|
7,920
|
1,871,814
|
2.92
|
%
|
||||||||
Albemarle Corp.
|
6,064
|
729,560
|
1.14
|
%
|
||||||||
Martin Marietta Materials, Inc.
|
2,907
|
1,706,612
|
2.66
|
%
|
||||||||
NewMarket Corp.
|
2,791
|
1,470,634
|
2.30
|
%
|
||||||||
5,778,620
|
9.02
|
%
|
||||||||||
Total Common Stocks
|
||||||||||||
(Cost $24,817,116)
|
43,748,452
|
68.31
|
%
|
|||||||||
CORPORATE BONDS – 12.90%
|
||||||||||||
Communication Services – 1.42%
|
||||||||||||
AT&T, Inc., 4.250%, 3/1/2027
|
550,000
|
534,180
|
0.84
|
%
|
||||||||
Comcast Corp., 4.650%, 2/15/2033
|
250,000
|
236,727
|
0.37
|
%
|
||||||||
T-Mobile USA, Inc., 3.875%, 4/15/2030
|
150,000
|
137,263
|
0.21
|
%
|
||||||||
908,170
|
1.42
|
%
|
||||||||||
Consumer Discretionary – 1.01%
|
||||||||||||
Lowe’s Companies, Inc., 2.625%, 4/1/2031
|
325,000
|
272,418
|
0.43
|
%
|
||||||||
Starbucks Corp., 3.500%, 3/1/2028
|
400,000
|
375,005
|
0.58
|
%
|
||||||||
647,423
|
1.01
|
%
|
||||||||||
Energy – 0.61%
|
||||||||||||
The Williams Companies, Inc., 2.600%, 3/15/2031
|
475,000
|
393,328
|
0.61
|
%
|
||||||||
Financials – 5.70%
|
||||||||||||
Aflac, Inc., 3.600%, 4/1/2030
|
300,000
|
272,987
|
0.43
|
%
|
||||||||
Bank of America Corp., 2.299% to 07/21/2031 then
|
||||||||||||
SOFR + 1.220%, 07/21/2032 (b)
|
575,000
|
458,581
|
0.72
|
%
|
||||||||
Huntington Bancshares, Inc.
|
||||||||||||
4.000%, 5/15/2025
|
365,000
|
358,054
|
0.56
|
%
|
||||||||
2.550%, 2/4/2030
|
525,000
|
437,774
|
0.68
|
%
|
||||||||
JPMorgan Chase & Co., 2.069% to 06/01/2028 then
|
||||||||||||
SOFR + 1.015%, 06/01/2029 (b)
|
325,000
|
284,089
|
0.44
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
CORPORATE BONDS
|
% of
|
|||||||||||
Par Amount
|
Value
|
Net Assets
|
||||||||||
Financials (Continued)
|
||||||||||||
Morgan Stanley
|
||||||||||||
1.593% to 05/04/2026 then SOFR + 0.879%, 05/04/2027 (b)
|
295,000
|
$
|
272,049
|
0.42
|
%
|
|||||||
2.239% to 07/21/2031 then SOFR + 1.178%, 07/21/2032 (b)
|
330,000
|
262,457
|
0.41
|
%
|
||||||||
PayPal Holdings, Inc., 2.850%, 10/1/2029
|
375,000
|
332,995
|
0.52
|
%
|
||||||||
Prudential Financial, Inc., 3.878%, 3/27/2028
|
260,000
|
247,118
|
0.39
|
%
|
||||||||
Regions Financial Corp., 1.800%, 8/12/2028
|
325,000
|
276,267
|
0.43
|
%
|
||||||||
State Street Corp., 4.821% to 01/26/2033 then
|
||||||||||||
SOFR + 1.567%, 01/26/2034 (b)
|
175,000
|
165,156
|
0.26
|
%
|
||||||||
The Goldman Sachs Group, Inc., 4.223% to 05/01/2028 then
|
||||||||||||
3 Month CME Term SOFR + 1.563%, 05/01/2029 (b)
|
300,000
|
284,634
|
0.44
|
%
|
||||||||
3,652,161
|
5.70
|
%
|
||||||||||
Health Care – 1.58%
|
||||||||||||
Edwards Lifesciences Corp., 4.300%, 6/15/2028
|
700,000
|
671,856
|
1.05
|
%
|
||||||||
Regeneron Pharmaceuticals, Inc., 1.750%, 9/15/2030
|
425,000
|
339,319
|
0.53
|
%
|
||||||||
1,011,175
|
1.58
|
%
|
||||||||||
Industrials – 1.03%
|
||||||||||||
General Electric Co., 3.625%, 5/1/2030
|
380,000
|
339,243
|
0.53
|
%
|
||||||||
The Boeing Co., 2.196%, 2/4/2026
|
225,000
|
209,915
|
0.33
|
%
|
||||||||
The Timken Co., 6.875%, 5/8/2028
|
110,000
|
111,050
|
0.17
|
%
|
||||||||
660,208
|
1.03
|
%
|
||||||||||
Information Technology – 1.55%
|
||||||||||||
Autodesk, Inc., 2.850%, 1/15/2030
|
675,000
|
588,371
|
0.92
|
%
|
||||||||
Broadcom, Inc., 4.110%, 9/15/2028
|
425,000
|
403,249
|
0.63
|
%
|
||||||||
991,620
|
1.55
|
%
|
||||||||||
Total Corporate Bonds
|
||||||||||||
(Cost $9,319,990)
|
8,264,085
|
12.90
|
%
|
|||||||||
MORTGAGE-BACKED SECURITIES – 2.89%
|
||||||||||||
Federal Agency Mortgage-Backed Obligations – 2.89%
|
||||||||||||
Fannie Mae Pool
|
||||||||||||
3.000%, AU4405, 10/1/2043
|
764,049
|
656,785
|
1.04
|
%
|
||||||||
3.500%, AB4300, 1/1/2042
|
136,187
|
122,284
|
0.19
|
%
|
||||||||
6.000%, 928831, 10/1/2037
|
71,738
|
71,799
|
0.11
|
%
|
||||||||
Fannie Mae REMICS
|
||||||||||||
Series 2013-52, 1.250%, 6/25/2043
|
35,263
|
28,044
|
0.04
|
%
|
||||||||
Series 2012-16, 2.000%, 11/25/2041
|
31,910
|
27,408
|
0.04
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
MORTGAGE-BACKED SECURITIES
|
% of
|
|||||||||||
Par Amount
|
Value
|
Net Assets
|
||||||||||
Federal Agency Mortgage-Backed Obligations (Continued)
|
||||||||||||
Freddie Mac Gold Pool
|
||||||||||||
5.500%, G02922, 4/1/2037
|
26,206
|
$
|
26,133
|
0.04
|
%
|
|||||||
3.000%, Q08238, 5/1/2042
|
410,518
|
354,414
|
0.55
|
%
|
||||||||
3.000%, Q11129, 9/1/2042
|
496,823
|
430,475
|
0.67
|
%
|
||||||||
Freddie Mac REMICS
|
||||||||||||
Series 4146, 1.500%, 10/15/2042
|
7,383
|
7,105
|
0.01
|
%
|
||||||||
Series 4309, 2.000%, 10/15/2043
|
27,286
|
24,269
|
0.04
|
%
|
||||||||
Series 3870, 2.750%, 1/15/2041
|
7,571
|
7,269
|
0.01
|
%
|
||||||||
Series 4322, 3.000%, 5/15/2043
|
35,553
|
33,991
|
0.05
|
%
|
||||||||
Government National Mortgage Association,
|
||||||||||||
Series 2013-24, 1.750%, 2/16/2043
|
73,413
|
61,782
|
0.10
|
%
|
||||||||
Total Mortgage-Backed Securities
|
||||||||||||
(Cost $2,127,075)
|
1,851,758
|
2.89
|
%
|
|||||||||
U.S. TREASURY OBLIGATIONS – 14.26%
|
||||||||||||
U.S. Treasury Notes – 14.26%
|
||||||||||||
0.625%, 03/31/2027
|
450,000
|
398,566
|
0.62
|
%
|
||||||||
0.750%, 04/30/2026
|
1,000,000
|
919,199
|
1.44
|
%
|
||||||||
1.250%, 12/31/2026
|
625,000
|
568,347
|
0.89
|
%
|
||||||||
1.625%, 05/15/2031
|
350,000
|
286,378
|
0.45
|
%
|
||||||||
1.875%, 07/31/2026
|
1,550,000
|
1,448,403
|
2.26
|
%
|
||||||||
2.750%, 08/15/2032
|
300,000
|
260,098
|
0.41
|
%
|
||||||||
3.000%, 10/31/2025
|
450,000
|
436,131
|
0.68
|
%
|
||||||||
3.375%, 05/15/2033
|
200,000
|
180,723
|
0.28
|
%
|
||||||||
3.500%, 02/15/2033
|
225,000
|
205,743
|
0.32
|
%
|
||||||||
3.625%, 05/15/2026
|
350,000
|
340,525
|
0.53
|
%
|
||||||||
4.000%, 01/31/2029
|
225,000
|
217,964
|
0.34
|
%
|
||||||||
4.000%, 02/15/2034
|
400,000
|
378,719
|
0.59
|
%
|
||||||||
4.125%, 10/31/2027
|
400,000
|
390,781
|
0.61
|
%
|
||||||||
4.125%, 09/30/2027
|
275,000
|
268,850
|
0.42
|
%
|
||||||||
4.125%, 11/15/2032
|
500,000
|
479,990
|
0.75
|
%
|
||||||||
4.375%, 11/30/2028
|
550,000
|
541,546
|
0.85
|
%
|
||||||||
4.500%, 11/15/2033
|
275,000
|
270,939
|
0.42
|
%
|
||||||||
4.625%, 11/15/2026
|
500,000
|
496,152
|
0.77
|
%
|
||||||||
4.875%, 11/30/2025
|
1,050,000
|
1,045,612
|
1.63
|
%
|
||||||||
Total U.S. Treasury Obligations
|
||||||||||||
(Cost $9,585,203)
|
9,134,666
|
14.26
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 1.45%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Money Market Funds – 1.45%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (c)
|
927,922
|
$
|
927,922
|
1.45
|
%
|
|||||||
Total Short-Term Investments
|
||||||||||||
(Cost $927,922)
|
927,922
|
1.45
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $46,777,306) – 99.81%
|
63,926,883
|
99.81
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.19%
|
118,687
|
0.19
|
%
|
|||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
64,045,570
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
Variable rate security; rate disclosed is the rate as of April 30, 2024.
|
(c)
|
The rate listed is the fund’s seven-day yield as of April 30, 2024.
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
3,088,152
|
$
|
—
|
$
|
—
|
$
|
3,088,152
|
||||||||
Consumer Discretionary
|
5,744,819
|
—
|
—
|
5,744,819
|
||||||||||||
Consumer Staples
|
3,652,849
|
—
|
—
|
3,652,849
|
||||||||||||
Energy
|
1,302,255
|
—
|
—
|
1,302,255
|
||||||||||||
Financials
|
12,409,590
|
—
|
—
|
12,409,590
|
||||||||||||
Health Care
|
1,429,559
|
—
|
—
|
1,429,559
|
||||||||||||
Industrials
|
5,683,820
|
—
|
—
|
5,683,820
|
||||||||||||
Information Technology
|
4,658,788
|
—
|
—
|
4,658,788
|
||||||||||||
Materials
|
5,778,620
|
—
|
—
|
5,778,620
|
||||||||||||
Total Common Stocks
|
$
|
43,748,452
|
$
|
—
|
$
|
—
|
$
|
43,748,452
|
||||||||
Corporate Bonds
|
||||||||||||||||
Communication Services
|
$
|
—
|
$
|
908,170
|
$
|
—
|
$
|
908,170
|
||||||||
Consumer Discretionary
|
—
|
647,423
|
—
|
647,423
|
||||||||||||
Energy
|
—
|
393,328
|
—
|
393,328
|
||||||||||||
Financials
|
—
|
3,652,161
|
—
|
3,652,161
|
||||||||||||
Health Care
|
—
|
1,011,175
|
—
|
1,011,175
|
||||||||||||
Industrials
|
—
|
660,208
|
—
|
660,208
|
||||||||||||
Information Technology
|
—
|
991,620
|
—
|
991,620
|
||||||||||||
Total Corporate Bonds
|
$
|
—
|
$
|
8,264,085
|
$
|
—
|
$
|
8,264,085
|
||||||||
Mortgage-Backed Securities
|
||||||||||||||||
Federal Agency Mortgage-Backed Obligations
|
$
|
—
|
$
|
1,851,758
|
$
|
—
|
$
|
1,851,758
|
||||||||
Total Mortgage-Backed Securities
|
$
|
—
|
$
|
1,851,758
|
$
|
—
|
$
|
1,851,758
|
||||||||
U.S. Treasury Obligations
|
||||||||||||||||
U.S. Treasury Notes
|
$
|
—
|
$
|
9,134,666
|
$
|
—
|
$
|
9,134,666
|
||||||||
Total U.S. Treasury Obligations
|
$
|
—
|
$
|
9,134,666
|
$
|
—
|
$
|
9,134,666
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
927,922
|
$
|
—
|
$
|
—
|
$
|
927,922
|
||||||||
Total Short-Term Investments
|
$
|
927,922
|
$
|
—
|
$
|
—
|
$
|
927,922
|
||||||||
Total Investments
|
$
|
44,676,374
|
$
|
19,250,509
|
$
|
—
|
$
|
63,926,883
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2024 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $46,777,306)
|
$
|
63,926,883
|
||
Dividends and interest receivable
|
240,972
|
|||
Receivable for fund shares sold
|
1,650
|
|||
Prepaid expenses and other assets
|
20,032
|
|||
Total assets
|
64,189,537
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
44,886
|
|||
Payable to advisor
|
43,469
|
|||
Payable to administrator
|
11,337
|
|||
Payable to auditor
|
11,286
|
|||
Accrued distribution fees
|
6,559
|
|||
Accrued service fees
|
2,773
|
|||
Accrued trustees fees
|
5,452
|
|||
Accrued expenses and other payables
|
18,205
|
|||
Total liabilities
|
143,967
|
|||
NET ASSETS
|
$
|
64,045,570
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
43,145,454
|
||
Total distributable earnings
|
20,900,116
|
|||
Total net assets
|
$
|
64,045,570
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
33,054,799
|
||
Shares issued and outstanding
|
2,309,989
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
14.31
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
30,990,771
|
||
Shares issued and outstanding
|
2,308,724
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
13.42
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
403,074
|
||
Interest income
|
339,729
|
|||
Total investment income
|
742,803
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
273,830
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
35,928
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
15,147
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
36,630
|
|||
Distribution fees – Investor Class (See Note 5)
|
26,155
|
|||
Service fees – Investor Class (See Note 5)
|
17,437
|
|||
Federal and state registration fees
|
15,566
|
|||
Audit fees
|
11,284
|
|||
Trustees’ fees and expenses
|
11,194
|
|||
Compliance expense (See Note 5)
|
9,574
|
|||
Reports to shareholders
|
6,238
|
|||
Legal fees
|
1,010
|
|||
Other expenses
|
7,010
|
|||
Total expenses
|
467,003
|
|||
NET INVESTMENT INCOME
|
$
|
275,800
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments:
|
$
|
3,925,534
|
||
Net change in unrealized appreciation/depreciation on investments:
|
3,013,628
|
|||
Net gain on investments
|
6,939,162
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
7,214,962
|
(1)
|
Net of foreign taxes withheld of $5,333.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2024
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2023
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
275,800
|
$
|
740,773
|
||||
Net realized gain on investments
|
3,925,534
|
6,577,550
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
3,013,628
|
(3,501,366
|
)
|
|||||
Net increase in net assets resulting from operations
|
7,214,962
|
3,816,957
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(2,998,760
|
)
|
(1,298,637
|
)
|
||||
Distributable earnings – Institutional Class
|
(2,924,394
|
)
|
(1,743,953
|
)
|
||||
Total distributions
|
(5,923,154
|
)
|
(3,042,590
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
190,905
|
316,740
|
||||||
Proceeds from shares subscribed – Institutional Class
|
1,316,014
|
1,100,458
|
||||||
Dividends reinvested – Investor Class
|
2,897,606
|
1,260,827
|
||||||
Dividends reinvested – Institutional Class
|
2,472,133
|
1,285,409
|
||||||
Cost of shares redeemed – Investor Class
|
(4,939,492
|
)
|
(6,701,151
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(8,183,882
|
)
|
(15,950,410
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(6,246,716
|
)
|
(18,688,127
|
)
|
||||
TOTAL DECREASE IN NET ASSETS
|
(4,954,908
|
)
|
(17,913,760
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of period
|
69,000,478
|
86,914,238
|
||||||
End of period
|
$
|
64,045,570
|
$
|
69,000,478
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
13,292
|
22,144
|
||||||
Shares sold – Institutional Class
|
98,482
|
81,665
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
209,532
|
88,230
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
190,132
|
95,776
|
||||||
Shares redeemed – Investor Class
|
(345,569
|
)
|
(462,960
|
)
|
||||
Shares redeemed – Institutional Class
|
(604,233
|
)
|
(1,168,441
|
)
|
||||
Net decrease in shares outstanding
|
(438,364
|
)
|
(1,343,586
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
14.10
|
||
Income from investment operations:
|
||||
Net investment income(1)
|
0.05
|
|||
Net realized and unrealized gains (losses) on investments
|
1.41
|
|||
Total from investment operations
|
1.46
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.04
|
)
|
||
Dividends from net realized gains
|
(1.21
|
)
|
||
Total distributions
|
(1.25
|
)
|
||
Net asset value, end of period
|
$
|
14.31
|
||
TOTAL RETURN
|
10.68
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
33.05
|
||
Ratio of expenses to average net assets
|
1.54
|
%(3)
|
||
Ratio of net investment income to average net assets
|
0.63
|
%(3)
|
||
Portfolio turnover rate(4)
|
8
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
14.06
|
$
|
17.26
|
$
|
15.12
|
$
|
15.72
|
$
|
15.82
|
|||||||||
0.10
|
0.08
|
0.09
|
0.16
|
0.18
|
||||||||||||||
0.42
|
(2.09
|
)
|
3.01
|
0.40
|
1.02
|
|||||||||||||
0.52
|
(2.01
|
)
|
3.10
|
0.56
|
1.20
|
|||||||||||||
(0.10
|
)
|
(0.08
|
)
|
(0.10
|
)
|
(0.16
|
)
|
(0.17
|
)
|
|||||||||
(0.38
|
)
|
(1.11
|
)
|
(0.86
|
)
|
(1.00
|
)
|
(1.13
|
)
|
|||||||||
(0.48
|
)
|
(1.19
|
)
|
(0.96
|
)
|
(1.16
|
)
|
(1.30
|
)
|
|||||||||
$
|
14.10
|
$
|
14.06
|
$
|
17.26
|
$
|
15.12
|
$
|
15.72
|
|||||||||
3.67
|
%
|
-12.60
|
%
|
21.24
|
%
|
3.74
|
%
|
8.39
|
%
|
|||||||||
$
|
34.29
|
$
|
39.17
|
$
|
53.97
|
$
|
51.29
|
$
|
93.51
|
|||||||||
1.52
|
%
|
1.51
|
%
|
1.49
|
%
|
1.49
|
%
|
1.46
|
%
|
|||||||||
0.71
|
%
|
0.53
|
%
|
0.54
|
%
|
1.08
|
%
|
1.16
|
%
|
|||||||||
11
|
%
|
15
|
%
|
26
|
%
|
22
|
%
|
16
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
13.23
|
||
Income from investment operations:
|
||||
Net investment income(1)
|
0.07
|
|||
Net realized and unrealized gains (losses) on investments
|
1.32
|
|||
Total from investment operations
|
1.39
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.06
|
)
|
||
Dividends from net realized gains
|
(1.14
|
)
|
||
Total distributions
|
(1.20
|
)
|
||
Net asset value, end of period
|
$
|
13.42
|
||
TOTAL RETURN
|
10.85
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
30.99
|
||
Ratio of expenses to average net assets
|
1.18
|
%(3)
|
||
Ratio of net investment income to average net assets
|
0.99
|
%(3)
|
||
Portfolio turnover rate(4)
|
8
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
13.21
|
$
|
16.22
|
$
|
14.22
|
$
|
14.80
|
$
|
14.93
|
|||||||||
0.15
|
0.13
|
0.14
|
0.20
|
0.22
|
||||||||||||||
0.38
|
(1.97
|
)
|
2.83
|
0.38
|
0.96
|
|||||||||||||
0.53
|
(1.84
|
)
|
2.97
|
0.58
|
1.18
|
|||||||||||||
(0.15
|
)
|
(0.13
|
)
|
(0.16
|
)
|
(0.22
|
)
|
(0.24
|
)
|
|||||||||
(0.36
|
)
|
(1.04
|
)
|
(0.81
|
)
|
(0.94
|
)
|
(1.07
|
)
|
|||||||||
(0.51
|
)
|
(1.17
|
)
|
(0.97
|
)
|
(1.16
|
)
|
(1.31
|
)
|
|||||||||
$
|
13.23
|
$
|
13.21
|
$
|
16.22
|
$
|
14.22
|
$
|
14.80
|
|||||||||
3.99
|
%
|
-12.25
|
%
|
21.68
|
%
|
4.16
|
%
|
8.76
|
%
|
|||||||||
$
|
34.71
|
$
|
47.74
|
$
|
66.06
|
$
|
61.75
|
$
|
80.40
|
|||||||||
1.15
|
%
|
1.13
|
%
|
1.12
|
%
|
1.12
|
%
|
1.09
|
%
|
|||||||||
1.08
|
%
|
0.90
|
%
|
0.91
|
%
|
1.44
|
%
|
1.53
|
%
|
|||||||||
11
|
%
|
15
|
%
|
26
|
%
|
22
|
%
|
16
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with
the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and
realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the
treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains
for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits,
including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the
Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion
of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding
increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at
the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than
expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of
the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
REIT Equity Securities – Distributions received from real estate investment trusts (“REITs”) may be classified as dividends, capital gains, or return of capital. Investments in REITs may require the Fund
to accrue and distribute income not yet received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that
it otherwise would have continued to hold. At other times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings. If the Fund distributes these amounts, these distributions could
constitute a return of capital to Fund shareholders for U.S. federal income tax purposes. Dividends received by the Fund from a REIT generally do not constitute qualified dividend income and do not qualify for the
dividends-received deduction.
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things,
that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions
in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
HENNESSY FUNDS
|
1-800-966-4354
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds
and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight
key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and available
for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to
Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring
the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods
within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets
that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds,
credit risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable
inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual funds,
partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary
exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
reported. Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these
securities are actively traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund
calculates its NAV because most foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the
interim. In certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of
the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global
development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the
ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may
consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may
incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are
generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term
debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the
values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined
as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
55,103,252
|
|||
Gross tax unrealized appreciation
|
$
|
18,175,094
|
|||
Gross tax unrealized depreciation
|
(4,253,750
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
13,921,344
|
|||
Undistributed ordinary income
|
$
|
14,821
|
|||
Undistributed long-term capital gains
|
5,672,143
|
||||
Total distributable earnings
|
$
|
5,686,964
|
|||
Other accumulated gain/(loss)
|
$
|
—
|
|||
Total accumulated gain/(loss)
|
$
|
19,608,308
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2024
|
October 31, 2023
|
||||||||
Ordinary income(1)
|
$
|
250,991
|
$
|
743,879
|
|||||
Long-term capital gains
|
5,672,163
|
2,298,711
|
|||||||
Total distributions
|
$
|
5,923,154
|
$
|
3,042,590
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,106.80
|
$8.07
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,017.21
|
$7.72
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,108.50
|
$6.19
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.00
|
$5.92
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.54% for Investor Class shares or 1.18% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 182/366 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory and sub-advisory agreements and the relevant factors
for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory and sub-advisory agreements and also referenced the documents that had been
provided to help the Board assess each such factor;
|
|
(3)
|
Summaries of the advisory and sub-advisory agreements;
|
|
(4)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the Sub-Advisors and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund;
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale;
|
|
(9)
|
A completed questionnaire from each Sub-Advisor;
|
|
(10)
|
Summaries of each Sub-Advisor’s questionnaire and relevant information from such Sub-Advisor’s Form ADV;
|
|
(11)
|
Financial information for the holding company of each Sub-Advisor; and
|
|
(12)
|
Each Sub-Advisor’s Code of Ethics.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The nature and quality of the advisory services provided by the Advisor and the Sub-Advisors;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor and the Sub-Advisors;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor and the Sub-Advisors from serving as an investment advisor to the Fund (other than the advisory and sub-advisory fees).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor
provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services
provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and
regulations.
|
(a)
|
The Advisor oversees the Sub-Advisors for the Fund, and the Sub-Advisors act as the portfolio managers for the Fund by providing portfolio management services.
|
||
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of the Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Sub-Advisors and the Fund’s other service providers (including their
codes of ethics, as appropriate), conducts on-site visits to the Sub-Advisors and the Fund’s other service providers, as feasible, monitors incidents of abusive trading
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages
regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers, and maintains books and records.
|
|||
(f)
|
The Advisor oversees the selection and continued employment of each Sub-Advisor, reviews the Fund’s investment performance, and monitors each Sub-Advisor’s adherence to the Fund’s investment objectives,
policies, and restrictions.
|
||
(g)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal
services to the Fund.
|
||
(h)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(i)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(j)
|
For each annual report of the Fund, the Advisor reviews the written summaries prepared by the Sub-Advisors of the Fund’s performance during the most recent 12-month period.
|
||
(k)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor
participates in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor
compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(l)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading
oversight personnel, as well as management executives.
|
||
(m)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(n)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees considered the services identified below that are provided by each Sub-Advisor. Based on this review and an assessment of each Sub-Advisor’s performance, the Trustees concluded that each
Sub-Advisor provides high-quality services to the Fund. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the Fund by each Sub-Advisor and that the
nature and extent of the services provided by each Sub-Advisor were appropriate to assure that the Fund’s portfolio aligns properly with its investment objective and principal investment strategies.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(a)
|
Each Sub-Advisor acts as the portfolio manager for the Fund. In this capacity, each Sub-Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and
restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio; and
|
|||
(iii)
|
manages proxy voting for the Fund.
|
(b)
|
Each Sub-Advisor ensures that its compliance program includes policies and procedures relevant to the Fund and the Sub-Advisor’s duties as a portfolio manager to the Fund.
|
||
(c)
|
For each annual report of the Fund, each Sub-Advisor prepares a written summary of the Fund’s performance (with respect to the equity allocation or the fixed income allocation, as applicable) during the
most recent 12-month period.
|
||
(d)
|
Each Sub-Advisor provides a quarterly compliance certification to the Board regarding trading and allocation practices, supervisory matters, the Sub-Advisor’s compliance program (including its code of
ethics), compliance with the Fund’s policies, and general firm updates.
|
(3)
|
Trustees considered the distinction between the services performed by the Advisor and the Sub-Advisors. The Trustees noted that the management of the Fund, including the oversight of the Sub-Advisors,
involves more comprehensive and substantive duties than the duties of the Sub-Advisors. Specifically, the Trustees considered the lists of Advisor services previously identified and concluded that the services performed by the
Advisor for the Fund require a higher level of service and oversight than the services performed by the Sub-Advisors. Based on this determination, the Trustees concluded that the differential in advisory fees between the Advisor
and the Sub-Advisors is reasonable.
|
|
(4)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to
various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor and the Sub-Advisors manage the Fund in a manner materially consistent with its stated investment objective and
style. The Trustees concluded that the performance of the Fund over various periods warranted the continuation of the advisory and sub-advisory agreements.
|
|
(5)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of
the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the funds included in the Morningstar categories for purposes of the materials considered at the
meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are
reasonable and warranted continuation of the advisory and sub-advisory agreements.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(6)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the
Fund are variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party platform fees and sub-advisory fees increase
as a fund’s assets grow.
|
|
(7)
|
The Trustees considered the profitability of the Advisor and the Sub-Advisors, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and revenues that
the Advisor has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor and the Sub-Advisors are reasonable and not excessive when compared to profitability guidelines set forth in
relevant court cases.
|
|
(8)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(9)
|
The Trustees considered any benefits to the Advisor and the Sub-Advisors from serving as an advisor to the Fund (other than the advisory and sub-advisory fees). The Trustees noted that the Advisor and
the Sub-Advisors may derive ancillary benefits from, by way of example, their association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio
trades for the Fund. The Trustees determined that any such products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded
that any additional benefits realized by the Advisor and the Sub-Advisors from their relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ findings that (i) the research, analytical,
statistical, and other information and services provided by brokers are merely supplemental to the Advisor’s and the Sub-Advisors’ own efforts in the performance of their duties under the advisory and sub-advisory agreements and
(ii) although the Sub-Advisors could derive benefits from the conversion of Fund shareholders into separate account clients, the Fund also could benefit from potential institutional shareholders who might choose to invest in the
Fund.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
8
|
|
Statement of Operations
|
9
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
14
|
|
Expense Example
|
21
|
|
Proxy Voting Policy and Proxy Voting Records
|
22
|
|
Availability of Quarterly Portfolio Schedule
|
22
|
|
Federal Tax Distribution Information
|
22
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
22
|
|
Go Paperless with eDelivery
|
22
|
|
Board Approval of Investment Advisory Agreement
|
23
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
||
Months(1)
|
Year
|
Years
|
Years
|
||
Hennessy Balanced Fund (HBFBX)
|
6.68%
|
5.43%
|
2.37%
|
3.62%
|
|
50/50 Blended DJIA/Treasury Index
|
8.98%
|
9.02%
|
6.03%
|
6.40%
|
|
Dow Jones Industrial Average
|
15.58%
|
13.25%
|
9.61%
|
11.10%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2024 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
U.S. Treasury Bill, 4.935%, 11/29/2024
|
29.39%
|
U.S. Treasury Bill, 5.285%, 06/13/2024
|
9.51%
|
U.S. Treasury Bill, 4.570%, 01/23/2025
|
8.44%
|
Dow, Inc.
|
5.08%
|
Chevron Corp.
|
5.08%
|
The Coca-Cola Co.
|
5.02%
|
3M Co.
|
4.92%
|
Verizon Communications, Inc.
|
4.82%
|
International Business Machines Corp.
|
4.70%
|
Amgen, Inc.
|
4.59%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 48.24%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Communication Services – 4.82%
|
||||||||||||
Verizon Communications, Inc.
|
15,300
|
$
|
604,197
|
4.82
|
%
|
|||||||
Consumer Staples – 9.15%
|
||||||||||||
The Coca-Cola Co.
|
10,200
|
630,054
|
5.02
|
%
|
||||||||
Walgreens Boots Alliance, Inc.
|
29,250
|
518,603
|
4.13
|
%
|
||||||||
1,148,657
|
9.15
|
%
|
||||||||||
Energy – 5.08%
|
||||||||||||
Chevron Corp.
|
3,950
|
637,016
|
5.08
|
%
|
||||||||
Financials – 3.91%
|
||||||||||||
The Goldman Sachs Group, Inc.
|
1,150
|
490,717
|
3.91
|
%
|
||||||||
Health Care – 7.36%
|
||||||||||||
Amgen, Inc.
|
2,100
|
575,274
|
4.59
|
%
|
||||||||
Johnson & Johnson
|
2,400
|
347,016
|
2.77
|
%
|
||||||||
922,290
|
7.36
|
%
|
||||||||||
Industrials – 4.92%
|
||||||||||||
3M Co.
|
6,400
|
617,664
|
4.92
|
%
|
||||||||
Information Technology – 7.92%
|
||||||||||||
Cisco Systems, Inc.
|
8,600
|
404,028
|
3.22
|
%
|
||||||||
International Business Machines Corp.
|
3,550
|
590,010
|
4.70
|
%
|
||||||||
994,038
|
7.92
|
%
|
||||||||||
Materials – 5.08%
|
||||||||||||
Dow, Inc.
|
11,200
|
637,280
|
5.08
|
%
|
||||||||
Total Common Stocks
|
||||||||||||
(Cost $5,946,927)
|
6,051,859
|
48.24
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 52.16%
|
Number of Shares/
|
% of
|
||||||||||
Par Amount
|
Value
|
Net Assets
|
||||||||||
Money Market Funds – 0.84%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (a)
|
105,743
|
$
|
105,743
|
0.84
|
%
|
|||||||
U.S. Treasury Bills – 51.32%
|
||||||||||||
5.280%, 05/16/2024 (b)
|
500,000
|
499,023
|
3.98
|
%
|
||||||||
5.285%, 06/13/2024 (b)
|
1,200,000
|
1,192,934
|
9.51
|
%
|
||||||||
4.935%, 11/29/2024 (b)
|
3,800,000
|
3,685,984
|
29.39
|
%
|
||||||||
4.570%, 01/23/2025 (b)
|
1,100,000
|
1,059,374
|
8.44
|
%
|
||||||||
6,437,315
|
51.32
|
%
|
||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $6,555,820)
|
6,543,058
|
52.16
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $12,502,747) – 100.40%
|
12,594,917
|
100.40
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.40)%
|
(50,473
|
)
|
(0.40
|
)%
|
||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
12,544,444
|
100.00
|
%
|
(a)
|
The rate listed is the fund’s seven-day yield as of April 30, 2024.
|
(b)
|
The rate listed is the discount rate at issue.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
604,197
|
$
|
—
|
$
|
—
|
$
|
604,197
|
||||||||
Consumer Staples
|
1,148,657
|
—
|
—
|
1,148,657
|
||||||||||||
Energy
|
637,016
|
—
|
—
|
637,016
|
||||||||||||
Financials
|
490,717
|
—
|
—
|
490,717
|
||||||||||||
Health Care
|
922,290
|
—
|
—
|
922,290
|
||||||||||||
Industrials
|
617,664
|
—
|
—
|
617,664
|
||||||||||||
Information Technology
|
994,038
|
—
|
—
|
994,038
|
||||||||||||
Materials
|
637,280
|
—
|
—
|
637,280
|
||||||||||||
Total Common Stocks
|
$
|
6,051,859
|
$
|
—
|
$
|
—
|
$
|
6,051,859
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
105,743
|
$
|
—
|
$
|
—
|
$
|
105,743
|
||||||||
U.S. Treasury Bills
|
—
|
6,437,315
|
—
|
6,437,315
|
||||||||||||
Total Short-Term Investments
|
$
|
105,743
|
$
|
6,437,315
|
$
|
—
|
$
|
6,543,058
|
||||||||
Total Investments
|
$
|
6,157,602
|
$
|
6,437,315
|
$
|
—
|
$
|
12,594,917
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Assets and Liabilities as of April 30, 2024(Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $12,502,747)
|
$
|
12,594,917
|
||
Dividends and interest receivable
|
10,347
|
|||
Receivable for securities sold
|
102,721
|
|||
Prepaid expenses and other assets
|
15,204
|
|||
Total assets
|
12,723,189
|
|||
LIABILITIES:
|
||||
Payable for securities purchased
|
146,230
|
|||
Payable to auditor
|
11,280
|
|||
Payable to advisor
|
6,203
|
|||
Accrued trustees fees
|
5,307
|
|||
Payable to administrator
|
3,786
|
|||
Accrued distribution fees
|
1,700
|
|||
Accrued service fees
|
1,034
|
|||
Payable for fund shares redeemed
|
100
|
|||
Accrued expenses and other payables
|
3,105
|
|||
Total liabilities
|
178,745
|
|||
NET ASSETS
|
$
|
12,544,444
|
||
NET ASSETS CONSIST OF:
|
||||
Capital stock
|
$
|
12,170,920
|
||
Total distributable earnings
|
373,524
|
|||
Total net assets
|
$
|
12,544,444
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
12,544,444
|
||
Shares issued and outstanding
|
1,073,219
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
11.69
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
147,202
|
||
Interest income
|
174,590
|
|||
Total investment income
|
321,792
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
41,538
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
12,110
|
|||
Audit fees
|
11,284
|
|||
Trustees’ fees and expenses
|
10,732
|
|||
Distribution fees – Investor Class (See Note 5)
|
10,384
|
|||
Compliance expense (See Note 5)
|
9,574
|
|||
Federal and state registration fees
|
9,312
|
|||
Service fees – Investor Class (See Note 5)
|
6,923
|
|||
Reports to shareholders
|
3,004
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
2,462
|
|||
Interest expense (See Note 7)
|
1,767
|
|||
Legal fees
|
280
|
|||
Other expenses
|
2,360
|
|||
Total expenses
|
121,730
|
|||
NET INVESTMENT INCOME
|
$
|
200,062
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
282,286
|
||
Net change in unrealized appreciation/depreciation on investments
|
392,813
|
|||
Net gain on investments
|
675,099
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
875,161
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2024
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2023
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
200,062
|
$
|
281,960
|
||||
Net realized gain on investments
|
282,286
|
24,850
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
392,813
|
(338,727
|
)
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
875,161
|
(31,917
|
)
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(215,319
|
)
|
(743,448
|
)
|
||||
Total distributions
|
(215,319
|
)
|
(743,448
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
4,458,732
|
1,168,635
|
||||||
Dividends reinvested – Investor Class
|
208,550
|
729,717
|
||||||
Cost of shares redeemed – Investor Class
|
(5,074,429
|
)
|
(1,723,755
|
)
|
||||
Net increase (decrease) in net assets
|
||||||||
derived from capital share transactions
|
(407,147
|
)
|
174,597
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
252,695
|
(600,768
|
)
|
|||||
NET ASSETS:
|
||||||||
Beginning of period
|
12,291,749
|
12,892,517
|
||||||
End of period
|
$
|
12,544,444
|
$
|
12,291,749
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
380,164
|
102,839
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
17,635
|
63,200
|
||||||
Shares redeemed – Investor Class
|
(430,419
|
)
|
(150,502
|
)
|
||||
Net increase (decrease) in shares outstanding
|
(32,620
|
)
|
15,537
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
11.12
|
||
Income from investment operations:
|
||||
Net investment income(1)
|
0.17
|
|||
Net realized and unrealized gains (losses) on investments
|
0.57
|
|||
Total from investment operations
|
0.74
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.16
|
)
|
||
Dividends from net realized gains
|
(0.01
|
)
|
||
Total distributions
|
(0.17
|
)
|
||
Net asset value, end of period
|
$
|
11.69
|
||
TOTAL RETURN
|
6.68
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
12.54
|
||
Ratio of expenses to average net assets
|
1.76
|
%(3)
|
||
Ratio of net investment income to average net assets
|
2.89
|
%(3)
|
||
Portfolio turnover rate
|
49
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
11.82
|
$
|
12.39
|
$
|
10.84
|
$
|
12.38
|
$
|
12.34
|
|||||||||
0.26
|
0.06
|
0.02
|
0.12
|
0.13
|
||||||||||||||
(0.27
|
)
|
(0.15
|
)
|
1.56
|
(1.04
|
)
|
0.59
|
|||||||||||
(0.01
|
)
|
(0.09
|
)
|
1.58
|
(0.92
|
)
|
0.72
|
|||||||||||
(0.25
|
)
|
(0.05
|
)
|
(0.03
|
)
|
(0.12
|
)
|
(0.13
|
)
|
|||||||||
(0.44
|
)
|
(0.43
|
)
|
—
|
(0.50
|
)
|
(0.55
|
)
|
||||||||||
(0.69
|
)
|
(0.48
|
)
|
(0.03
|
)
|
(0.62
|
)
|
(0.68
|
)
|
|||||||||
$
|
11.12
|
$
|
11.82
|
$
|
12.39
|
$
|
10.84
|
$
|
12.38
|
|||||||||
-0.22
|
%
|
-0.70
|
%
|
14.62
|
%
|
-7.84
|
%
|
6.05
|
%
|
|||||||||
$
|
12.29
|
$
|
12.89
|
$
|
13.53
|
$
|
11.99
|
$
|
12.30
|
|||||||||
1.84
|
%
|
1.80
|
%
|
1.85
|
%
|
1.89
|
%
|
1.88
|
%
|
|||||||||
2.26
|
%
|
0.49
|
%
|
0.17
|
%
|
1.05
|
%
|
1.04
|
%
|
|||||||||
22
|
%
|
29
|
%
|
31
|
%
|
42
|
%
|
52
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with
the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and
realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the
treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized
gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and
profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of
the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
amortization of premium and accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to
interest income over the life of a security with a corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the
security. Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory,
administration, and certain shareholder service fees.
|
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if
any, are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost
of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things,
that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions
in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds
and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight
key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and
available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value
Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual
|
HENNESSY FUNDS
|
1-800-966-4354
|
restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring the fair value. The amendments also
require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that
are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit
risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable
inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, exchange-traded funds, closed-end mutual funds, partnerships, rights, and real
estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on which the securities
are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for
which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are
classified in Level 1 of the fair value hierarchy.
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the
ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may
consider recently executed
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may
incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are
generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term
debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the
values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be
determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
12,638,263
|
|||
Gross tax unrealized appreciation
|
$
|
698,724
|
|||
Gross tax unrealized depreciation
|
(1,022,592
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
(323,868
|
)
|
||
Undistributed ordinary income
|
$
|
24,233
|
|||
Undistributed long-term capital gains
|
13,317
|
||||
Total distributable earnings
|
$
|
37,550
|
|||
Other accumulated gain/(loss)
|
$
|
—
|
|||
Total accumulated gain/(loss)
|
$
|
(286,318
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2024
|
October 31, 2023
|
||||||||
Ordinary income(1)
|
$
|
201,995
|
$
|
265,250
|
|||||
Long-term capital gains
|
13,324
|
478,198
|
|||||||
Total distributions
|
$
|
215,319
|
$
|
743,448
|
|||||
(1) Ordinary income includes short-term capital gains.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS /EXPENSE EXAMPLE
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,066.80
|
$9.04
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,016.11
|
$8.82
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.76%, multiplied by the average account value over the period, multiplied by 182/366 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help the
Board assess each such factor;
|
|
(3)
|
A summary of the advisory agreement;
|
|
(4)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor
provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services
provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and
regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and
restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of the Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as
appropriate), conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance
providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service
providers, and maintains books and records.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal
services to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor
participates in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor
compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading
oversight personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to
various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The Trustees
concluded that the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of
the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the funds included in the Morningstar categories for purposes of the materials considered at the
meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are
reasonable and warranted continuation of the advisory agreement.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the
Fund are variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party platform fees increase as a fund’s assets
grow.
|
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor has put
into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by way
of example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any such
products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the Advisor
from its relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are merely
supplemental to the Advisor’s own efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Go Paperless with eDelivery
|
26
|
|
Board Approval of Investment Advisory Agreement
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
||
Months(1)
|
Year
|
Years
|
Years
|
||
Hennessy Energy Transition Fund –
|
|||||
Investor Class (HNRGX)
|
10.20%
|
21.65%
|
11.93%
|
3.23%
|
|
Hennessy Energy Transition Fund –
|
|||||
Institutional Class (HNRIX)
|
10.41%
|
22.09%
|
12.27%
|
3.52%
|
|
S&P 500® Energy Index
|
11.66%
|
13.04%
|
12.67%
|
4.13%
|
|
S&P 500® Index
|
20.98%
|
22.66%
|
13.19%
|
12.41%
|
Expense ratios:
|
Gross 2.42%, Net 2.27%(2) (Investor Class);
|
Gross 2.08%, Net 1.93%(2) (Institutional Class)
|
(1)
|
Periods of less than one year are not annualized.
|
(2)
|
Certain service provider expenses will be voluntarily waived through July 31, 2025, at which time the arrangement will automatically terminate. In addition, the arrangement will not apply at any time
the Fund’s net assets exceed $125 million.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30,
2024 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% TOTAL ASSETS
|
ConocoPhillips
|
5.93%
|
Antero Resources Corp.
|
5.91%
|
Canadian Natural Resources Ltd.
|
5.83%
|
Freeport-McMoRan, Inc.
|
5.67%
|
EOG Resources, Inc.
|
5.62%
|
Pioneer Natural Resources Co.
|
5.44%
|
Chevron Corp.
|
5.42%
|
Diamondback Energy, Inc.
|
5.40%
|
Suncor Energy, Inc.
|
5.29%
|
NextEra Energy, Inc.
|
5.05%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 99.63%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Downstream – 6.67%
|
||||||||||||
Phillips 66
|
3,500
|
$
|
501,235
|
3.28
|
%
|
|||||||
Valero Energy Corp.
|
3,250
|
519,578
|
3.39
|
%
|
||||||||
1,020,813
|
6.67
|
%
|
||||||||||
Exploration & Production – 51.74%
|
||||||||||||
Antero Resources Corp. (a)
|
26,700
|
908,067
|
5.93
|
%
|
||||||||
Canadian Natural Resources Ltd.
|
11,800
|
894,676
|
5.84
|
%
|
||||||||
Comstock Resources, Inc.
|
47,000
|
472,820
|
3.09
|
%
|
||||||||
ConocoPhillips
|
7,245
|
910,117
|
5.94
|
%
|
||||||||
Diamondback Energy, Inc.
|
4,120
|
828,656
|
5.41
|
%
|
||||||||
EOG Resources, Inc.
|
6,530
|
862,809
|
5.64
|
%
|
||||||||
EQT Corp.
|
17,600
|
705,584
|
4.61
|
%
|
||||||||
Marathon Oil Corp.
|
25,800
|
692,730
|
4.53
|
%
|
||||||||
Pioneer Natural Resources Co.
|
3,100
|
834,892
|
5.45
|
%
|
||||||||
Suncor Energy, Inc.
|
21,260
|
811,919
|
5.30
|
%
|
||||||||
7,922,270
|
51.74
|
%
|
||||||||||
Integrated – 6.20%
|
||||||||||||
Chevron Corp.
|
5,157
|
831,669
|
5.43
|
%
|
||||||||
Exxon Mobil Corp.
|
1,000
|
118,270
|
0.77
|
%
|
||||||||
949,939
|
6.20
|
%
|
||||||||||
Midstream – 5.05%
|
||||||||||||
Cheniere Energy, Inc.
|
4,900
|
773,318
|
5.05
|
%
|
||||||||
Oil Services – 19.23%
|
||||||||||||
Halliburton Co.
|
16,650
|
623,875
|
4.07
|
%
|
||||||||
NOV, Inc.
|
19,500
|
360,555
|
2.36
|
%
|
||||||||
Schlumberger NV
|
9,310
|
442,039
|
2.89
|
%
|
||||||||
Solaris Oilfield Infrastructure, Inc., Class A
|
82,920
|
730,525
|
4.77
|
%
|
||||||||
TechnipFMC PLC
|
17,840
|
457,061
|
2.99
|
%
|
||||||||
Tenaris SA – ADR
|
10,000
|
329,900
|
2.15
|
%
|
||||||||
2,943,955
|
19.23
|
%
|
||||||||||
Utility – 10.74%
|
||||||||||||
Freeport-McMoRan, Inc.
|
17,420
|
869,955
|
5.68
|
%
|
||||||||
NextEra Energy, Inc.
|
11,570
|
774,843
|
5.06
|
%
|
||||||||
1,644,798
|
10.74
|
%
|
||||||||||
Total Common Stocks
|
||||||||||||
(Cost $9,661,656)
|
15,255,093
|
99.63
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 0.10%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Money Market Funds – 0.10%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (b)
|
15,689
|
$
|
15,689
|
0.10
|
%
|
|||||||
Total Short-Term Investments
|
||||||||||||
(Cost $15,689)
|
15,689
|
0.10
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $9,677,345) – 99.73%
|
15,270,782
|
99.73
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.27%
|
41,190
|
0.27
|
%
|
|||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
15,311,972
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of April 30, 2024.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Downstream
|
$
|
1,020,813
|
$
|
—
|
$
|
—
|
$
|
1,020,813
|
||||||||
Exploration & Production
|
7,922,270
|
—
|
—
|
7,922,270
|
||||||||||||
Integrated
|
949,939
|
—
|
—
|
949,939
|
||||||||||||
Midstream
|
773,318
|
—
|
—
|
773,318
|
||||||||||||
Oil Services
|
2,943,955
|
—
|
—
|
2,943,955
|
||||||||||||
Utility
|
1,644,798
|
—
|
—
|
1,644,798
|
||||||||||||
Total Common Stocks
|
$
|
15,255,093
|
$
|
—
|
$
|
—
|
$
|
15,255,093
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
15,689
|
$
|
—
|
$
|
—
|
$
|
15,689
|
||||||||
Total Short-Term Investments
|
$
|
15,689
|
$
|
—
|
$
|
—
|
$
|
15,689
|
||||||||
Total Investments
|
$
|
15,270,782
|
$
|
—
|
$
|
—
|
$
|
15,270,782
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2024 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $9,677,345)
|
$
|
15,270,782
|
||
Dividends and interest receivable
|
2,882
|
|||
Receivable for fund shares sold
|
15,961
|
|||
Receivable for securities sold
|
46,725
|
|||
Prepaid expenses and other assets
|
19,305
|
|||
Total assets
|
15,355,655
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
69
|
|||
Payable to advisor
|
15,991
|
|||
Payable to auditor
|
11,649
|
|||
Accrued distribution fees
|
1,861
|
|||
Accrued service fees
|
634
|
|||
Accrued trustees fees
|
5,310
|
|||
Accrued expenses and other payables
|
8,169
|
|||
Total liabilities
|
43,683
|
|||
NET ASSETS
|
$
|
15,311,972
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
46,975,122
|
||
Accumulated deficit
|
(31,663,150
|
)
|
||
Total net assets
|
$
|
15,311,972
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
7,573,902
|
||
Shares issued and outstanding
|
283,797
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
26.69
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
7,738,070
|
||
Shares issued and outstanding
|
284,000
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
27.25
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
257,982
|
||
Interest income
|
5,270
|
|||
Total investment income
|
263,252
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
99,008
|
|||
Federal and state registration fees
|
15,222
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
13,288
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
7,962
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
4,951
|
|||
Audit fees
|
11,648
|
|||
Trustees’ fees and expenses
|
10,738
|
|||
Compliance expense (See Note 5)
|
9,574
|
|||
Distribution fees – Investor Class (See Note 5)
|
5,785
|
|||
Reports to shareholders
|
4,436
|
|||
Service fees – Investor Class (See Note 5)
|
3,857
|
|||
Interest expense (See Note 7)
|
3,411
|
|||
Legal fees
|
450
|
|||
Other expenses
|
3,276
|
|||
Total expenses before waiver
|
193,606
|
|||
Service provider expense waiver (See Note 5)
|
(13,288
|
)
|
||
Net expenses
|
180,318
|
|||
NET INVESTMENT INCOME
|
$
|
82,934
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
1,833,523
|
||
Net change in unrealized appreciation/depreciation on investments
|
(760,330
|
)
|
||
Net gain on investments
|
1,073,193
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
1,156,127
|
(1)
|
Net of foreign taxes withheld of $6,724.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2024
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2023
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
82,934
|
$
|
190,297
|
||||
Net realized gain on investments
|
1,833,523
|
1,977,506
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(760,330
|
)
|
(2,314,370
|
)
|
||||
Net increase (decrease) in
|
||||||||
net assets resulting from operations
|
1,156,127
|
(146,567
|
)
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
—
|
(51,574
|
)
|
|||||
Distributable earnings – Institutional Class
|
—
|
(87,195
|
)
|
|||||
Total distributions
|
—
|
(138,769
|
)
|
|||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
413,419
|
3,946,163
|
||||||
Proceeds from shares subscribed – Institutional Class
|
593,426
|
2,359,407
|
||||||
Dividends reinvested – Investor Class
|
—
|
47,756
|
||||||
Dividends reinvested – Institutional Class
|
—
|
86,765
|
||||||
Cost of shares redeemed – Investor Class
|
(2,459,851
|
)
|
(5,037,219
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(4,788,455
|
)
|
(4,259,986
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(6,241,461
|
)
|
(2,857,114
|
)
|
||||
TOTAL DECREASE IN NET ASSETS
|
(5,085,334
|
)
|
(3,142,450
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of period
|
20,397,306
|
23,539,756
|
||||||
End of period
|
$
|
15,311,972
|
$
|
20,397,306
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
16,576
|
166,878
|
||||||
Shares sold – Institutional Class
|
24,480
|
100,869
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
—
|
2,122
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
—
|
3,794
|
||||||
Shares redeemed – Investor Class
|
(102,952
|
)
|
(221,723
|
)
|
||||
Shares redeemed – Institutional Class
|
(203,680
|
)
|
(183,343
|
)
|
||||
Net decrease in shares outstanding
|
(265,576
|
)
|
(131,403
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
24.22
|
||
Income from investment operations:
|
||||
Net investment income (loss)(1)
|
0.09
|
|||
Net realized and unrealized gains (losses) on investments
|
2.38
|
|||
Total from investment operations
|
2.47
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
—
|
|||
Total distributions
|
—
|
|||
Net asset value, end of period
|
$
|
26.69
|
||
TOTAL RETURN
|
10.20
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
7.57
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement
|
2.62
|
%(3)
|
||
After expense reimbursement
|
2.45
|
%(3)(4)
|
||
Ratio of net investment income (loss) to average net assets:
|
||||
Before expense reimbursement
|
0.59
|
%(3)
|
||
After expense reimbursement
|
0.76
|
%(3)
|
||
Portfolio turnover rate(6)
|
3
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Certain service provider expenses were voluntarily waived during the fiscal period.
|
(5)
|
The Fund had an expense limitation agreement in place through October 25, 2020.
|
(6)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
24.15
|
$
|
18.31
|
$
|
8.74
|
$
|
14.08
|
$
|
18.32
|
|||||||||
0.17
|
0.16
|
0.06
|
0.04
|
(0.07
|
)
|
|||||||||||||
0.02
|
7.74
|
9.51
|
(5.38
|
)
|
(4.17
|
)
|
||||||||||||
0.19
|
7.90
|
9.57
|
(5.34
|
)
|
(4.24
|
)
|
||||||||||||
(0.12
|
)
|
(2.06
|
)
|
—
|
—
|
—
|
||||||||||||
(0.12
|
)
|
(2.06
|
)
|
—
|
—
|
—
|
||||||||||||
$
|
24.22
|
$
|
24.15
|
$
|
18.31
|
$
|
8.74
|
$
|
14.08
|
|||||||||
0.81
|
%
|
49.24
|
%
|
109.50
|
%
|
-37.93
|
%
|
-23.14
|
%
|
|||||||||
$
|
8.96
|
$
|
10.21
|
$
|
6.80
|
$
|
2.50
|
$
|
6.83
|
|||||||||
2.42
|
%
|
2.42
|
%
|
2.96
|
%
|
2.59
|
%
|
1.97
|
%
|
|||||||||
2.27
|
%(4)
|
2.25
|
%(4)
|
2.74
|
%(4)
|
2.03
|
%(4)(5)
|
1.97
|
%
|
|||||||||
0.59
|
%
|
0.64
|
%
|
0.16
|
%
|
(0.18
|
)%
|
(0.46
|
)%
|
|||||||||
0.74
|
%
|
0.81
|
%
|
0.38
|
%
|
0.38
|
%
|
(0.46
|
)%
|
|||||||||
28
|
%
|
31
|
%
|
74
|
%
|
73
|
%
|
87
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
24.68
|
||
Income from investment operations:
|
||||
Net investment income (loss)(1)
|
0.16
|
|||
Net realized and unrealized gains (losses) on investments
|
2.41
|
|||
Total from investment operations
|
2.57
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
—
|
|||
Total distributions
|
—
|
|||
Net asset value, end of period
|
$
|
27.25
|
||
TOTAL RETURN
|
10.41
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
7.74
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement
|
2.28
|
%(3)
|
||
After expense reimbursement
|
2.11
|
%(3)(4)
|
||
Ratio of net investment income (loss) to average net assets:
|
||||
Before expense reimbursement
|
1.15
|
%(3)
|
||
After expense reimbursement
|
1.32
|
%(3)
|
||
Portfolio turnover rate(6)
|
3
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Certain service provider expenses were voluntarily waived during the fiscal period.
|
(5)
|
The Fund had an expense limitation agreement in place through October 25, 2020.
|
(6)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
24.59
|
$
|
18.60
|
$
|
8.85
|
$
|
14.26
|
$
|
18.50
|
|||||||||
0.25
|
0.23
|
0.07
|
0.12
|
(0.02
|
)
|
|||||||||||||
0.02
|
7.87
|
9.68
|
(5.50
|
)
|
(4.22
|
)
|
||||||||||||
0.27
|
8.10
|
9.75
|
(5.38
|
)
|
(4.24
|
)
|
||||||||||||
(0.18
|
)
|
(2.11
|
)
|
—
|
(0.03
|
)
|
—
|
|||||||||||
(0.18
|
)
|
(2.11
|
)
|
—
|
(0.03
|
)
|
—
|
|||||||||||
$
|
24.68
|
$
|
24.59
|
$
|
18.60
|
$
|
8.85
|
$
|
14.26
|
|||||||||
1.14
|
%
|
49.71
|
%
|
110.17
|
%
|
-37.80
|
%
|
-22.92
|
%
|
|||||||||
$
|
11.43
|
$
|
13.33
|
$
|
9.45
|
$
|
3.82
|
$
|
44.37
|
|||||||||
2.08
|
%
|
2.09
|
%
|
2.61
|
%
|
2.01
|
%
|
1.66
|
%
|
|||||||||
1.93
|
%(4)
|
1.92
|
%(4)
|
2.39
|
%(4)
|
1.77
|
%(4)(5)
|
1.66
|
%
|
|||||||||
0.92
|
%
|
0.96
|
%
|
0.22
|
%
|
0.79
|
%
|
(0.12
|
)%
|
|||||||||
1.07
|
%
|
1.13
|
%
|
0.44
|
%
|
1.03
|
%
|
(0.12
|
)%
|
|||||||||
28
|
%
|
31
|
%
|
74
|
%
|
73
|
%
|
87
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply
with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment
income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily
the result of the treatment of wash sales for tax reporting purposes and investments in companies organized as partnerships for tax purposes. The Fund recognizes interest and penalties related to income tax benefits, if any,
in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The
Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income
tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of
the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal
and Delaware.
|
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as
investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets. Distributions received
from the Fund’s investments in master limited partnerships (“MLPs”) generally consist of ordinary income, capital gains, and return of capital. The Fund records investment income on the ex-date of the distributions. For
financial statement purposes, the Fund uses return of capital and income estimates to allocate the dividend income received. Such estimates are based on historical information available from the MLPs and other industry
sources. These estimates may subsequently be revised based on information received from the MLPs after their tax reporting periods are concluded, as the actual character of these distributions is not known until after the
fiscal year end of the Fund.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original
cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Partnership Accounting Policy – To the extent the Fund receives distributions from underlying partnerships in which it invests, the Fund records its pro rata share of income/loss and capital
gains/losses and accordingly adjusts the cost basis of the underlying partnerships for return of capital.
|
HENNESSY FUNDS
|
1-800-966-4354
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market
conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual
Funds and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that
highlight key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online
and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to
Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in
measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and
interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that
are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds,
credit risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable
inputs are unavailable.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
14,577,040
|
|||
Gross tax unrealized appreciation
|
$
|
6,659,122
|
|||
Gross tax unrealized depreciation
|
(794,763
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
5,864,359
|
|||
Undistributed ordinary income
|
$
|
—
|
|||
Undistributed long-term capital gains
|
—
|
||||
Total distributable earnings
|
$
|
—
|
|||
Other accumulated gain/(loss)
|
$
|
(38,683,636
|
)
|
||
Total accumulated gain/(loss)
|
$
|
(32,819,277
|
)
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2024
|
October 31, 2023
|
||||||||
Ordinary income(1)
|
$
|
—
|
$
|
138,769
|
|||||
Long-term capital gains
|
—
|
—
|
|||||||
Total distributions
|
$
|
—
|
$
|
138,769
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,102.00
|
$12.80
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,012.68
|
$12.26
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,104.10
|
$11.04
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,014.37
|
$10.57
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 2.45% for Investor Class shares or 2.11% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 182/366 days (to reflect the half-year period
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for
consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help
the Board assess each such factor;
|
|
(3)
|
A summary of the advisory agreement;
|
|
(4)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor
provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory
services provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules,
and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and
restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of the Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as
appropriate), conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance
providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service
providers, and maintains books and records.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal
services to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The
Advisor participates in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The
Advisor compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading
oversight personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to
various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The
Trustees concluded that the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part
of the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the funds included in the Morningstar categories for purposes of the materials considered at
the meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they
are reasonable and warranted continuation of the advisory agreement.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage
the Fund are variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party platform fees increase as a fund’s
assets grow.
|
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor has put
into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by
way of example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any
such products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the
Advisor from its relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are
merely supplemental to the Advisor’s own efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
26
|
|
Proxy Voting Policy and Proxy Voting Records
|
28
|
|
Availability of Quarterly Portfolio Schedule
|
28
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
28
|
|
Go Paperless with eDelivery
|
28
|
|
Board Approval of Investment Advisory Agreement
|
29
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
||
Months(1)
|
Year
|
Years
|
Years
|
||
Hennessy Midstream Fund –
|
|||||
Investor Class (HMSFX)
|
15.91%
|
31.24%
|
9.34%
|
2.27%
|
|
Hennessy Midstream Fund –
|
|||||
Institutional Class (HMSIX)
|
15.95%
|
31.46%
|
9.58%
|
2.51%
|
|
Alerian US Midstream Energy Index
|
18.96%
|
31.28%
|
13.07%
|
5.16%
|
|
S&P 500® Index
|
20.98%
|
22.66%
|
13.19%
|
12.41%
|
Expense ratios:
|
Gross 2.03%, Net 1.78%(2)(3) (Investor Class);
|
Gross 1.65%, Net 1.53%(2)(3) (Institutional Class)
|
(1)
|
Periods of less than one year are not annualized.
|
(2)
|
The Fund’s investment advisor has contractually agreed to limit expenses until February 28, 2025.
|
(3)
|
Certain service provider expenses will be voluntarily waived through July 31, 2025, at which time the arrangement will automatically terminate. In addition, the arrangement will not apply at any
time the Fund’s net assets exceed $125 million.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30,
2024 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% TOTAL ASSETS
|
Energy Transfer LP
|
14.37%
|
Enterprise Products Partners LP
|
11.67%
|
Plains All American Pipeline LP
|
11.19%
|
MPLX LP
|
9.97%
|
Antero Midstream Corp.
|
7.48%
|
ONEOK, Inc.
|
7.45%
|
Equitrans Midstream Corp.
|
7.15%
|
Western Midstream Partners LP
|
6.42%
|
The Williams Companies, Inc.
|
5.50%
|
Kinder Morgan, Inc.
|
3.61%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 43.25%
|
Number of
|
% of
|
||||||||||
Shares
|
Value
|
Net Assets
|
||||||||||
Gathering & Processing – 20.55%
|
||||||||||||
Antero Midstream Corp.
|
346,600
|
$
|
4,796,944
|
7.77
|
%
|
|||||||
EnLink Midstream LLC
|
109,000
|
1,495,480
|
2.42
|
%
|
||||||||
Equitrans Midstream Corp.
|
338,500
|
4,579,905
|
7.42
|
%
|
||||||||
Targa Resources Corp.
|
15,900
|
1,813,554
|
2.94
|
%
|
||||||||
12,685,883
|
20.55
|
%
|
||||||||||
Natural Gas/NGL Transportation – 20.70%
|
||||||||||||
DT Midstream, Inc.
|
19,800
|
1,231,560
|
2.00
|
%
|
||||||||
Kinder Morgan, Inc.
|
126,690
|
2,315,893
|
3.75
|
%
|
||||||||
ONEOK, Inc.
|
60,345
|
4,774,496
|
7.74
|
%
|
||||||||
TC Energy Corp.
|
60,000
|
2,151,000
|
3.49
|
%
|
||||||||
The Williams Companies, Inc.
|
91,952
|
3,527,279
|
5.72
|
%
|
||||||||
14,000,228
|
20.70
|
%
|
||||||||||
Total Common Stocks
|
||||||||||||
(Cost $15,492,926)
|
26,686,111
|
43.25
|
%
|
|||||||||
PARTNERSHIPS & TRUSTS – 58.01%
|
||||||||||||
Crude Oil and Refined Products – 21.99%
|
||||||||||||
MPLX LP
|
152,949
|
6,393,268
|
10.36
|
%
|
||||||||
Plains All American Pipeline LP
|
416,426
|
7,175,020
|
11.63
|
%
|
||||||||
13,568,288
|
21.99
|
%
|
||||||||||
Gathering & Processing – 6.67%
|
||||||||||||
Western Midstream Partners LP
|
120,700
|
4,115,870
|
6.67
|
%
|
||||||||
Natural Gas/NGL Transportation – 29.35%
|
||||||||||||
Cheniere Energy Partners LP
|
29,300
|
1,419,585
|
2.30
|
%
|
||||||||
Energy Transfer LP
|
585,500
|
9,209,915
|
14.93
|
%
|
||||||||
Enterprise Products Partners LP
|
266,400
|
7,480,512
|
12.12
|
%
|
||||||||
18,110,012
|
29.35
|
%
|
||||||||||
Total Partnerships & Trusts
|
||||||||||||
(Cost $17,466,543)
|
35,794,170
|
58.01
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 1.50%
|
Number of
|
% of
|
||||||||||
Shares
|
Value
|
Net Assets
|
||||||||||
Money Market Funds – 1.50%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (a)
|
923,648
|
$
|
923,648
|
1.50
|
%
|
|||||||
Total Short-Term Investments
|
||||||||||||
(Cost $923,648)
|
923,648
|
1.50
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $33,883,117) – 102.76%
|
63,403,929
|
102.76
|
%
|
|||||||||
Liabilities in Excess of Other Assets - (2.76)%
|
(1,698,505
|
)
|
(2.76
|
)%
|
||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
61,705,424
|
100.00
|
%
|
(a)
|
The rate listed is the fund’s seven-day yield as of April 30, 2024.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Gathering & Processing
|
$
|
12,685,883
|
$
|
—
|
$
|
—
|
$
|
12,685,883
|
||||||||
Natural Gas/NGL Transportation
|
14,000,228
|
—
|
—
|
14,000,228
|
||||||||||||
Total Common Stocks
|
$
|
26,686,111
|
$
|
—
|
$
|
—
|
$
|
26,686,111
|
||||||||
Partnerships & Trusts
|
||||||||||||||||
Crude Oil and Refined Products
|
$
|
13,568,288
|
$
|
—
|
$
|
—
|
$
|
13,568,288
|
||||||||
Gathering & Processing
|
4,115,870
|
—
|
—
|
4,115,870
|
||||||||||||
Natural Gas/NGL Transportation
|
18,110,012
|
—
|
—
|
18,110,012
|
||||||||||||
Total Partnerships & Trusts
|
$
|
35,794,170
|
$
|
—
|
$
|
—
|
$
|
35,794,170
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
923,648
|
$
|
—
|
$
|
—
|
$
|
923,648
|
||||||||
Total Short-Term Investments
|
$
|
923,648
|
$
|
—
|
$
|
—
|
$
|
923,648
|
||||||||
Total Investments
|
$
|
63,403,929
|
$
|
—
|
$
|
—
|
$
|
63,403,929
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2024 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $33,883,117)
|
$
|
63,403,929
|
||
Dividends and interest receivable
|
117,126
|
|||
Receivable for fund shares sold
|
89,911
|
|||
Return of capital receivable
|
462,393
|
|||
Prepaid expenses and other assets
|
20,862
|
|||
Total assets
|
64,094,221
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
387,048
|
|||
Payable to advisor
|
60,258
|
|||
Payable to auditor
|
20,564
|
|||
Accrued distribution fees
|
2,926
|
|||
Accrued service fees
|
1,684
|
|||
Accrued trustees fees
|
5,158
|
|||
Deferred income tax
|
1,898,871
|
|||
Accrued expenses and other payables
|
12,288
|
|||
Total liabilities
|
2,388,797
|
|||
NET ASSETS
|
$
|
61,705,424
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
57,038,129
|
||
Total distributable earnings
|
4,667,295
|
|||
Total net assets
|
$
|
61,705,424
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
19,651,058
|
||
Shares issued and outstanding
|
1,775,079
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
11.07
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
42,054,366
|
||
Shares issued and outstanding
|
3,641,379
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
11.55
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Distributions received from master limited partnerships
|
$
|
1,171,138
|
||
Return of capital on distributions received
|
(1,171,138
|
)
|
||
Dividend income(1)
|
536,434
|
|||
Interest income
|
28,410
|
|||
Total investment income
|
564,844
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
318,641
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
22,285
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
17,879
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
31,940
|
|||
Audit fees
|
20,566
|
|||
Federal and state registration fees
|
16,404
|
|||
Distribution fees – Investor Class (See Note 5)
|
13,652
|
|||
Trustees’ fees and expenses
|
11,010
|
|||
Compliance expense (See Note 5)
|
9,574
|
|||
Service fees – Investor Class (See Note 5)
|
9,101
|
|||
Reports to shareholders
|
6,866
|
|||
Legal fees
|
644
|
|||
Income tax expense
|
—
|
|||
Other expenses
|
5,576
|
|||
Total expenses before waivers and reimbursements
|
484,138
|
|||
Service provider expense waiver (See Note 5)
|
(31,940
|
)
|
||
Expense reimbursement by advisor – Investor Class (See Note 5)
|
(8,082
|
)
|
||
Expense reimbursement by advisor – Institutional Class (See Note 5)
|
13,145
|
|||
Net expenses
|
457,261
|
|||
NET INVESTMENT INCOME
|
$
|
107,583
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
38,397
|
||
Net change in unrealized appreciation/depreciation on investments
|
10,300,662
|
|||
Deferred income tax
|
(1,898,871
|
)
|
||
Net gain on investments
|
8,440,188
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
8,547,771
|
(1)
|
Net of foreign taxes withheld of $12,554.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2024
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2023
|
|||||||
OPERATIONS:
|
||||||||
Net investment income (loss)
|
$
|
107,583
|
$
|
(36,118
|
)
|
|||
Net realized gain on investments
|
38,397
|
4,940,132
|
||||||
Net change in unrealized
|
||||||||
appreciation/deprecation on investments
|
8,401,791
|
2,693,911
|
||||||
Net increase in net assets resulting from operations
|
8,547,771
|
7,597,925
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM:
|
||||||||
Distributable earnings – Investor Class
|
—
|
(1,196,626
|
)
|
|||||
Return of capital – Investor Class
|
(885,544
|
)
|
(266,609
|
)
|
||||
Distributable earnings – Institutional Class
|
—
|
(2,875,616
|
)
|
|||||
Return of capital – Institutional Class
|
(1,838,722
|
)
|
(640,689
|
)
|
||||
Total distributions
|
(2,724,266
|
)
|
(4,979,540
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
3,259,761
|
6,315,025
|
||||||
Proceeds from shares subscribed – Institutional Class
|
1,827,085
|
6,346,640
|
||||||
Dividends reinvested – Investor Class
|
640,963
|
1,090,514
|
||||||
Dividends reinvested – Institutional Class
|
1,733,144
|
3,298,865
|
||||||
Cost of shares redeemed – Investor Class
|
(2,812,373
|
)
|
(2,904,969
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(3,014,464
|
)
|
(7,050,850
|
)
|
||||
Net increase in net assets derived
|
||||||||
from capital share transactions
|
1,634,116
|
7,095,225
|
||||||
TOTAL INCREASE IN NET ASSETS
|
7,457,621
|
9,713,610
|
||||||
NET ASSETS:
|
||||||||
Beginning of period
|
54,247,803
|
44,534,193
|
||||||
End of period
|
$
|
61,705,424
|
$
|
54,247,803
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
304,073
|
662,994
|
||||||
Shares sold – Institutional Class
|
164,920
|
637,501
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
60,397
|
114,390
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
156,586
|
334,274
|
||||||
Shares redeemed – Investor Class
|
(265,036
|
)
|
(299,262
|
)
|
||||
Shares redeemed – Institutional Class
|
(273,186
|
)
|
(716,204
|
)
|
||||
Net increase in shares outstanding
|
147,754
|
733,693
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
10.02
|
||
Income from investment operations:
|
||||
Net investment income (loss)(1)(2)
|
0.01
|
|||
Net realized and unrealized gains (losses) on investments
|
1.55
|
|||
Total from investment operations
|
1.56
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
—
|
|||
Dividends from return of capital
|
(0.51
|
)
|
||
Total distributions
|
(0.51
|
)
|
||
Net asset value, end of period
|
$
|
11.07
|
||
TOTAL RETURN
|
15.91
|
%(3)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
19.65
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement
|
1.95
|
%(4)
|
||
After expense reimbursement
|
1.75
|
%(4)(5)
|
||
Ratio of net investment income (loss) to average net assets:
|
||||
Before expense reimbursement(2)
|
0.01
|
%(4)
|
||
After expense reimbursement(2)
|
0.21
|
%(4)
|
||
Portfolio turnover rate(6)
|
0
|
%(3)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Includes current and deferred tax benefit/expense from net investment income/loss only.
|
(3)
|
Not annualized.
|
(4)
|
Annualized.
|
(5)
|
Certain service provider expenses were voluntarily waived during the fiscal period.
|
(6)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
9.58
|
$
|
8.66
|
$
|
5.55
|
$
|
10.90
|
$
|
12.66
|
|||||||||
(0.02
|
)
|
(0.07
|
)
|
(0.07
|
)
|
(0.10
|
)
|
(0.10
|
)
|
|||||||||
1.49
|
2.02
|
4.21
|
(4.22
|
)
|
(0.63
|
)
|
||||||||||||
1.47
|
1.95
|
4.14
|
(4.32
|
)
|
(0.73
|
)
|
||||||||||||
(0.84
|
)
|
(0.06
|
)
|
—
|
—
|
—
|
||||||||||||
(0.19
|
)
|
(0.97
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
|||||||||
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
|||||||||
$
|
10.02
|
$
|
9.58
|
$
|
8.66
|
$
|
5.55
|
$
|
10.90
|
|||||||||
16.39
|
%
|
24.03
|
%
|
78.41
|
%
|
-42.13
|
%
|
-6.28
|
%
|
|||||||||
$
|
16.79
|
$
|
11.47
|
$
|
6.72
|
$
|
3.81
|
$
|
9.20
|
|||||||||
2.03
|
%
|
2.05
|
%
|
2.11
|
%
|
2.12
|
%
|
1.89
|
%
|
|||||||||
1.78
|
%(5)
|
1.76
|
%(5)
|
1.76
|
%(5)
|
1.76
|
%(5)
|
1.76
|
%
|
|||||||||
(0.50
|
)%
|
(1.08
|
)%
|
(1.26
|
)%
|
(1.63
|
)%
|
(0.92
|
)%
|
|||||||||
(0.25
|
)%
|
(0.79
|
)%
|
(0.91
|
)%
|
(1.27
|
)%
|
(0.79
|
)%
|
|||||||||
16
|
%
|
33
|
%
|
40
|
%
|
53
|
%
|
41
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
10.43
|
||
Income from investment operations:
|
||||
Net investment income (loss)(1)(2)
|
0.02
|
|||
Net realized and unrealized gains (losses) on investments
|
1.61
|
|||
Total from investment operations
|
1.63
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
—
|
|||
Dividends from return of capital
|
(0.51
|
)
|
||
Total distributions
|
(0.51
|
)
|
||
Net asset value, end of period
|
$
|
11.55
|
||
TOTAL RETURN
|
15.95
|
%(4)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
42.05
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement
|
1.54
|
%(5)
|
||
After expense reimbursement
|
1.50
|
%(5)(6)
|
||
Ratio of net investment income (loss) to average net assets:
|
||||
Before expense reimbursement(2)
|
0.41
|
%(5)
|
||
After expense reimbursement(2)
|
0.45
|
%(5)
|
||
Portfolio turnover rate(7)
|
0
|
%(4)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Includes current and deferred tax benefit/expense from net investment income/loss only.
|
(3)
|
Amount is between $(0.005) and $0.005.
|
(4)
|
Not annualized.
|
(5)
|
Annualized.
|
(6)
|
Certain service provider expenses were voluntarily waived during the fiscal period.
|
(7)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
9.91
|
$
|
8.90
|
$
|
5.68
|
$
|
11.09
|
$
|
12.83
|
|||||||||
(0.00
|
)(3)
|
(0.05
|
)
|
(0.05
|
)
|
(0.10
|
)
|
(0.09
|
)
|
|||||||||
1.55
|
2.09
|
4.30
|
(4.28
|
)
|
(0.62
|
)
|
||||||||||||
1.55
|
2.04
|
4.25
|
(4.38
|
)
|
(0.71
|
)
|
||||||||||||
(0.84
|
)
|
(0.06
|
)
|
—
|
—
|
—
|
||||||||||||
(0.19
|
)
|
(0.97
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
|||||||||
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
|||||||||
$
|
10.43
|
$
|
9.91
|
$
|
8.90
|
$
|
5.68
|
$
|
11.09
|
|||||||||
16.67
|
%
|
24.41
|
%
|
78.57
|
%
|
-41.93
|
%
|
-6.10
|
%
|
|||||||||
$
|
37.46
|
$
|
33.06
|
$
|
30.45
|
$
|
18.33
|
$
|
31.78
|
|||||||||
1.65
|
%
|
1.69
|
%
|
1.74
|
%
|
1.79
|
%
|
1.56
|
%
|
|||||||||
1.53
|
%(6)
|
1.51
|
%(6)
|
1.51
|
%(6)
|
1.51
|
%(6)
|
1.51
|
%
|
|||||||||
(0.12
|
)%
|
(0.71
|
)%
|
(0.89
|
)%
|
(1.55
|
)%
|
(0.76
|
)%
|
|||||||||
(0.00
|
)%(3)
|
(0.53
|
)%
|
(0.66
|
)%
|
(1.27
|
)%
|
(0.71
|
)%
|
|||||||||
16
|
%
|
33
|
%
|
40
|
%
|
53
|
%
|
41
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund is taxed as a corporation and is obligated to pay U.S. federal and state income tax on its taxable income. Currently, the maximum marginal regular federal income tax
rate for a corporation is 21%. The Fund invests a substantial portion of its assets in master limited partnerships (“MLPs”), which are treated as partnerships for federal income tax purposes. As a limited partner in MLPs,
the Fund reports its allocable share of each MLP’s taxable income in computing its own taxable income.
|
The Fund includes any tax expense or benefit in the Statement of Operations based on the component of income or gains/losses
to which such expense or benefit relates. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the carrying
amount of assets and liabilities for income tax purposes. The Fund recognizes a valuation allowance if, based on the weight of available evidence, it is more likely than not that the Fund will not realize some portion or all
of the deferred income tax assets. As of April 30, 2024, the Fund determined a valuation allowance was not required.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns
of the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund files U.S. federal income tax returns and various state income tax returns.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as
investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets. Distributions received
from the Fund’s investments in MLPs generally consist of ordinary income, capital gains, and return of capital. The Fund records investment income on the ex-date of the distributions. For financial statement purposes, the
Fund uses return of capital and income estimates to allocate the dividend income received. Such estimates are based on historical information available from the MLPs and other industry sources. These estimates may
subsequently be revised based on information received from the MLPs after their tax reporting periods are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Fund.
|
e).
|
Distributions to Shareholders – The Fund typically makes cash distributions to its shareholders quarterly at the beginning of the months of March, June, September, and December. Due to the tax
treatment of the Fund’s allocations and distributions from MLPs, a significant portion of the Fund’s distributions to shareholders typically is treated as return of capital to shareholders for U.S. federal income tax
purposes (i.e., as distributions in excess of the Fund’s current and accumulated earnings and profits as described below). However, no assurance can be given in this regard; just as the Fund’s corporate income tax liability
can fluctuate materially from year to year, the extent to which the Fund is able to make return-of-capital distributions also can vary materially from year to year depending on a number of different factors, including the
composition of the Fund’s portfolio, the level of allocations of net income and other tax items for the Fund from its underlying MLP investments, the length of time the Fund has owned the MLP equity securities in its
portfolio, and the extent to which the Fund disposes of MLP equity securities during a particular year, including to meet Fund shareholder redemption requests as necessary.
|
In general, a distribution constitutes a return of capital to a shareholder rather than a dividend to the extent such
distribution exceeds the Fund’s current and accumulated earnings and profits. The portion of any distribution treated as a return of capital constitutes a tax-free return of capital to the extent of a shareholder’s cost
basis in Fund
|
HENNESSY FUNDS
|
1-800-966-4354
|
shares and thereafter generally is taxable to the shareholder as a capital gain. A return-of-capital distribution also reduces the shareholder’s cost basis in Fund shares (but not below zero). A
lower cost basis means that a shareholder recognizes more gain or less loss when the shareholder eventually sells Fund shares, which increases the shareholder’s tax liability.
|
|
The Fund attempts to maintain a stable distribution rate and therefore may distribute more or less than the actual amount of
cash it receives from its investments in a particular period. Any undistributed cash would be available to supplement future distributions, and until distributed would increase the Fund’s net asset value (“NAV”).
Correspondingly, such amounts, once distributed, decrease the Fund’s NAV. In addition, the Fund may opt not to make distributions in quarters in which the Fund believes that a distribution could cause adverse tax
consequences to shareholders, including when the Fund believes that a distribution may not constitute a tax-free return of capital, as described above.
|
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original
cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The NAV per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption
price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Partnership Accounting Policy – To the extent the Fund receives distributions from underlying partnerships in which it invests, the Fund records its pro rata share of income/loss and capital
gains/losses and accordingly adjusts the cost basis of the underlying partnerships for return of capital.
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current
market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual
Funds and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that
highlight key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available
online and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.
The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring the fair value. The
amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those
fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets
that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment
speeds, credit risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when
observable inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual
funds, partnerships, rights, MLPs, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported
by the primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price
reported. Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively
traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV
because most foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In
certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected
|
HENNESSY FUNDS
|
1-800-966-4354
|
by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire
market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the
ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and
U.S. government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing
service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the
model may incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These
securities are generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities.
Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60
days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value
would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Fiscal Year
|
Fiscal Year
|
Fiscal Year
|
Fiscal Year
|
|||
2024
|
2025
|
2026
|
2027
|
Total
|
||
Investor Class
|
$6,093
|
$13,391
|
$19,218
|
$8,082
|
$46,784
|
|
Institutional Class
|
$6,462
|
$11,840
|
$ 2,585
|
$ 0
|
$20,887
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
29,083,290
|
|||
Gross tax unrealized appreciation
|
$
|
34,320,639
|
|||
Gross tax unrealized depreciation
|
—
|
||||
Net tax unrealized appreciation/(depreciation)
|
$
|
34,320,639
|
Deferred tax assets (liabilities):
|
|||||
Net operating losses
|
$
|
726,120
|
|||
Capital loss
|
3,517,775
|
||||
Unrealized (gain) loss on investments
|
(6,142,766
|
)
|
|||
Total deferred tax assets, net
|
(1,898,871
|
)
|
|||
Valuation allowance
|
—
|
||||
Net
|
$
|
(1,878,871
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Amount
|
Expiration
|
||||
$
|
8,971,423
|
10/31/2024
|
|||
7,178,863
|
10/31/2025
|
||||
27,418
|
10/31/2029
|
Amount
|
Expiration
|
||||
$
|
3,296,533
|
Indefinite
|
Tax expense (benefit) at statutory rates
|
$
|
2,193,795
|
|||
State income tax expense, net of federal benefit
|
107,493
|
||||
Tax expense (benefit) on permanent items(1)
|
(34,207
|
)
|
|||
Tax expense (benefit) on expired carryforwards
|
—
|
||||
Tax expense (benefit) due to change in effective state rates
|
—
|
||||
Total current tax expense (benefit)
|
—
|
||||
Change in valuation allowance
|
(368,210
|
)
|
|||
Total tax expense
|
$
|
1,898,871
|
|||
(1) Permanent items consist of dividends-received deductions.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2024
|
October 31, 2023
|
||||||||
Ordinary income(1)
|
$
|
—
|
$
|
4,072,242
|
|||||
Long-term capital gains
|
—
|
—
|
|||||||
Return of capital
|
2,724,266
|
907,298
|
|||||||
Total distributions
|
$
|
2,724,266
|
$
|
4,979,540
|
|||||
(1) Ordinary income includes short-term capital gains.
|
Return of Capital
|
|||
Investor Class
|
$0.2575
|
||
Institutional Class
|
$0.2575
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,159.10
|
$9.39
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,016.16
|
$8.77
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,159.50
|
$8.05
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,017.40
|
$7.52
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.75% for Investor Class shares or 1.50% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 182/366 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for
consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help
the Board assess each such factor;
|
|
(3)
|
A summary of the advisory agreement;
|
|
(4)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor
provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory
services provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws,
rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and
restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of the Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as
appropriate), conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance
providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by
service providers, and maintains books and records.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and
legal services to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The
Advisor participates in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee.
The Advisor compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading
oversight personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund
to various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The
Trustees concluded that the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As
part of the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the funds included in the Morningstar categories for purposes of the materials
considered at the meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and
concluded that they are reasonable and warranted continuation of the advisory agreement.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage
the Fund are variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party platform fees increase as a fund’s
assets grow.
|
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor has
put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by
way of example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that
any such products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by
the Advisor from its relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by
brokers are merely supplemental to the Advisor’s own efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Go Paperless with eDelivery
|
26
|
|
Board Approval of Investment Advisory Agreement
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
||
Months(1)
|
Year
|
Years
|
Years
|
||
Hennessy Gas Utility Fund –
|
|||||
Investor Class (GASFX)
|
10.23%
|
1.63%
|
4.61%
|
5.05%
|
|
Hennessy Gas Utility Fund –
|
|||||
Institutional Class (HGASX)(2)
|
10.36%
|
1.89%
|
4.93%
|
5.29%
|
|
AGA Stock Index
|
10.86%
|
2.41%
|
5.71%
|
6.23%
|
|
S&P 500® Index
|
20.98%
|
22.66%
|
13.19%
|
12.41%
|
(1)
|
Periods of less than one year are not annualized.
|
(2)
|
The inception date of Institutional Class shares is March 1, 2017. Performance shown prior to the inception of Institutional Class shares reflects the performance of Investor Class shares and
includes expenses that are not applicable to, and are higher than, those of Institutional Class shares.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April
30, 2024 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
EQT Corp.
|
5.33%
|
Sempra
|
5.00%
|
The Southern Co.
|
4.99%
|
Enbridge, Inc.
|
4.99%
|
Atmos Energy Corp.
|
4.97%
|
ONEOK, Inc.
|
4.91%
|
TC Energy Corp.
|
4.81%
|
Kinder Morgan, Inc.
|
4.80%
|
Cheniere Energy, Inc.
|
4.75%
|
Berkshire Hathaway, Inc., Class A
|
4.74%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 99.18%
|
Number of
|
% of
|
||||||||||
Shares
|
Value
|
Net Assets
|
||||||||||
Energy – 31.74%
|
||||||||||||
Cheniere Energy, Inc.
|
129,317
|
$
|
20,408,809
|
4.75
|
%
|
|||||||
DT Midstream, Inc.
|
144,500
|
8,987,900
|
2.09
|
%
|
||||||||
Enbridge, Inc.
|
603,765
|
21,457,808
|
4.99
|
%
|
||||||||
EQT Corp.
|
571,900
|
22,927,471
|
5.33
|
%
|
||||||||
Kinder Morgan, Inc.
|
1,129,101
|
20,639,966
|
4.80
|
%
|
||||||||
ONEOK, Inc.
|
267,100
|
21,132,952
|
4.91
|
%
|
||||||||
TC Energy Corp.
|
577,300
|
20,696,205
|
4.81
|
%
|
||||||||
Tellurian, Inc. (a)
|
625,190
|
268,895
|
0.06
|
%
|
||||||||
136,520,006
|
31.74
|
%
|
||||||||||
Financials – 4.74%
|
||||||||||||
Berkshire Hathaway, Inc., Class A (a)
|
34
|
20,383,000
|
4.74
|
%
|
||||||||
Industrials – 1.02%
|
||||||||||||
MDU Resources Group, Inc.
|
177,607
|
4,386,893
|
1.02
|
%
|
||||||||
Utilities – 61.68%
|
||||||||||||
Algonquin Power & Utilities Corp.
|
104,264
|
637,053
|
0.15
|
%
|
||||||||
ALLETE, Inc.
|
375
|
22,208
|
0.01
|
%
|
||||||||
Alliant Energy Corp.
|
31,850
|
1,586,130
|
0.37
|
%
|
||||||||
Ameren Corp.
|
42,740
|
3,157,204
|
0.73
|
%
|
||||||||
Atmos Energy Corp.
|
181,486
|
21,397,199
|
4.97
|
%
|
||||||||
Avangrid, Inc.
|
83,700
|
3,057,561
|
0.71
|
%
|
||||||||
Avista Corp.
|
25,172
|
905,689
|
0.21
|
%
|
||||||||
Black Hills Corp.
|
60,947
|
3,345,990
|
0.78
|
%
|
||||||||
CenterPoint Energy, Inc.
|
439,728
|
12,813,674
|
2.98
|
%
|
||||||||
Chesapeake Utilities Corp.
|
26,258
|
2,779,934
|
0.65
|
%
|
||||||||
CMS Energy Corp.
|
166,898
|
10,115,688
|
2.35
|
%
|
||||||||
Consolidated Edison, Inc.
|
123,036
|
11,614,598
|
2.70
|
%
|
||||||||
Dominion Energy, Inc.
|
289,277
|
14,747,342
|
3.43
|
%
|
||||||||
DTE Energy Co.
|
52,304
|
5,770,177
|
1.34
|
%
|
||||||||
Duke Energy Corp.
|
104,487
|
10,266,893
|
2.39
|
%
|
||||||||
Entergy Corp.
|
3,360
|
358,411
|
0.08
|
%
|
||||||||
Essential Utilities, Inc.
|
170,300
|
6,229,574
|
1.45
|
%
|
||||||||
Exelon Corp.
|
147,331
|
5,536,699
|
1.29
|
%
|
||||||||
Fortis, Inc.
|
119,276
|
4,686,354
|
1.09
|
%
|
||||||||
MGE Energy, Inc.
|
9,879
|
773,723
|
0.18
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number of
|
% of
|
||||||||||
Shares
|
Value
|
Net Assets
|
||||||||||
Utilities (Continued)
|
||||||||||||
National Fuel Gas Co.
|
82,524
|
$
|
4,382,024
|
1.02
|
%
|
|||||||
National Grid PLC – ADR
|
153,344
|
10,220,378
|
2.37
|
%
|
||||||||
New Jersey Resources Corp.
|
121,834
|
5,322,927
|
1.24
|
%
|
||||||||
NiSource, Inc.
|
424,081
|
11,814,897
|
2.75
|
%
|
||||||||
Northwest Natural Holding Co.
|
53,103
|
2,025,879
|
0.47
|
%
|
||||||||
Northwestern Energy Group, Inc.
|
18,298
|
922,951
|
0.21
|
%
|
||||||||
ONE Gas, Inc.
|
87,175
|
5,624,531
|
1.31
|
%
|
||||||||
PG&E Corp.
|
832,949
|
14,251,757
|
3.31
|
%
|
||||||||
PPL Corp.
|
116,019
|
3,185,882
|
0.74
|
%
|
||||||||
Public Service Enterprise Group, Inc.
|
170,890
|
11,805,081
|
2.74
|
%
|
||||||||
RGC Resources, Inc.
|
15,654
|
322,785
|
0.08
|
%
|
||||||||
Sempra
|
300,580
|
21,530,546
|
5.00
|
%
|
||||||||
Southwest Gas Holdings, Inc.
|
73,617
|
5,493,301
|
1.28
|
%
|
||||||||
Spire, Inc.
|
58,891
|
3,638,875
|
0.85
|
%
|
||||||||
The Southern Co.
|
292,300
|
21,484,051
|
4.99
|
%
|
||||||||
UGI Corp.
|
90,952
|
2,324,733
|
0.54
|
%
|
||||||||
Unitil Corp.
|
15,698
|
799,656
|
0.19
|
%
|
||||||||
WEC Energy Group, Inc.
|
177,140
|
14,638,850
|
3.40
|
%
|
||||||||
Xcel Energy, Inc.
|
106,299
|
5,711,445
|
1.33
|
%
|
||||||||
265,302,650
|
61.68
|
%
|
||||||||||
Total Common Stocks
|
||||||||||||
(Cost $218,676,941)
|
426,592,549
|
99.18
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 0.77%
|
Number of
|
% of
|
||||||||||
Shares
|
Value
|
Net Assets
|
||||||||||
Money Market Funds – 0.77%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (b)
|
3,334,842
|
$
|
3,334,842
|
0.77
|
%
|
|||||||
Total Short-Term Investments
|
||||||||||||
(Cost $3,334,842)
|
3,334,842
|
0.77
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $222,011,783) – 99.95%
|
429,927,391
|
99.95
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.05%
|
209,279
|
0.05
|
%
|
|||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
430,136,670
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of April 30, 2024.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Energy
|
$
|
136,520,006
|
$
|
—
|
$
|
—
|
$
|
136,520,006
|
||||||||
Financials
|
20,383,000
|
—
|
—
|
20,383,000
|
||||||||||||
Industrials
|
4,386,893
|
—
|
—
|
4,386,893
|
||||||||||||
Utilities
|
265,302,650
|
—
|
—
|
265,302,650
|
||||||||||||
Total Common Stocks
|
$
|
426,592,549
|
$
|
—
|
$
|
—
|
$
|
426,592,549
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
3,334,842
|
$
|
—
|
$
|
—
|
$
|
3,334,842
|
||||||||
Total Short-Term Investments
|
$
|
3,334,842
|
$
|
—
|
$
|
—
|
$
|
3,334,842
|
||||||||
Total Investments
|
$
|
429,927,391
|
$
|
—
|
$
|
—
|
$
|
429,927,391
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2024 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $222,011,783)
|
$
|
429,927,391
|
||
Dividends and interest receivable
|
672,736
|
|||
Receivable for fund shares sold
|
27,975
|
|||
Return of capital receivable
|
84,617
|
|||
Prepaid expenses and other assets
|
33,495
|
|||
Total assets
|
430,746,214
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
193,766
|
|||
Payable to advisor
|
140,094
|
|||
Payable to sub-transfer agents
|
64,465
|
|||
Payable to administrator
|
73,599
|
|||
Payable to auditor
|
11,280
|
|||
Accrued distribution fees
|
62,006
|
|||
Accrued service fees
|
31,338
|
|||
Accrued trustees fees
|
6,581
|
|||
Accrued expenses and other payables
|
26,415
|
|||
Total liabilities
|
609,544
|
|||
NET ASSETS
|
$
|
430,136,670
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
232,077,952
|
||
Total distributable earnings
|
198,058,718
|
|||
Total net assets
|
$
|
430,136,670
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
384,991,222
|
||
Shares issued and outstanding
|
16,294,620
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
23.63
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
45,145,448
|
||
Shares issued and outstanding
|
1,915,886
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
23.56
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
7,273,943
|
||
Interest income
|
42,008
|
|||
Total investment income
|
7,315,951
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
873,918
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
308,579
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
28,254
|
|||
Distribution fees – Investor Class (See Note 5)
|
289,293
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
198,478
|
|||
Service fees – Investor Class (See Note 5)
|
192,862
|
|||
Interest expense (See Note 7)
|
22,291
|
|||
Reports to shareholders
|
20,186
|
|||
Federal and state registration fees
|
18,586
|
|||
Trustees’ fees and expenses
|
14,710
|
|||
Audit fees
|
11,284
|
|||
Compliance expense (See Note 5)
|
9,574
|
|||
Legal fees
|
4,930
|
|||
Other expenses
|
120,774
|
|||
Total expenses
|
2,113,719
|
|||
NET INVESTMENT INCOME
|
$
|
5,202,232
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
13,905,511
|
||
Net change in unrealized appreciation/depreciation on investments
|
23,983,703
|
|||
Net gain on investments
|
37,889,214
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
43,091,446
|
(1)
|
Net of foreign taxes withheld and issuance fees of $262,277.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2024
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2023
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
5,202,232
|
$
|
11,286,812
|
||||
Net realized gain on investments
|
13,905,511
|
20,986,535
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
23,983,703
|
(54,552,818
|
)
|
|||||
Net increase (decrease) in
|
||||||||
net assets resulting from operations
|
43,091,446
|
(22,279,471
|
)
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(20,219,712
|
)
|
(38,297,319
|
)
|
||||
Distributable earnings – Institutional Class
|
(3,012,346
|
)
|
(6,775,915
|
)
|
||||
Total distributions
|
(23,232,058
|
)
|
(45,073,234
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
2,856,500
|
8,286,887
|
||||||
Proceeds from shares subscribed – Institutional Class
|
4,297,099
|
13,926,472
|
||||||
Dividends reinvested – Investor Class
|
19,007,223
|
36,097,085
|
||||||
Dividends reinvested – Institutional Class
|
2,892,941
|
6,392,644
|
||||||
Cost of shares redeemed – Investor Class
|
(38,856,353
|
)
|
(61,097,011
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(21,042,236
|
)
|
(48,130,570
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(30,844,826
|
)
|
(44,524,493
|
)
|
||||
TOTAL DECREASE IN NET ASSETS
|
(10,985,438
|
)
|
(111,877,198
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of period
|
441,122,108
|
552,999,306
|
||||||
End of period
|
$
|
430,136,670
|
$
|
441,122,108
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
124,324
|
335,314
|
||||||
Shares sold – Institutional Class
|
188,697
|
578,892
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
825,027
|
1,467,946
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
125,940
|
260,586
|
||||||
Shares redeemed – Investor Class
|
(1,688,246
|
)
|
(2,499,516
|
)
|
||||
Shares redeemed – Institutional Class
|
(920,268
|
)
|
(1,939,801
|
)
|
||||
Net decrease in shares outstanding
|
(1,344,526
|
)
|
(1,796,579
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
22.57
|
||
Income from investment operations:
|
||||
Net investment income(1)
|
0.27
|
|||
Net realized and unrealized gains (losses) on investments
|
2.00
|
|||
Total from investment operations
|
2.27
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.27
|
)
|
||
Dividends from net realized gains
|
(0.94
|
)
|
||
Total distributions
|
(1.21
|
)
|
||
Net asset value, end of period
|
$
|
23.63
|
||
TOTAL RETURN
|
10.23
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
384.99
|
||
Ratio of expenses to average net assets
|
1.00
|
%(3)
|
||
Ratio of net investment income to average net assets
|
2.34
|
%(3)
|
||
Portfolio turnover rate(4)
|
4
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
25.91
|
$
|
26.09
|
$
|
24.08
|
$
|
29.64
|
$
|
28.68
|
|||||||||
0.54
|
0.50
|
0.52
|
0.58
|
0.56
|
||||||||||||||
(1.70
|
)
|
1.98
|
4.00
|
(4.14
|
)
|
3.50
|
||||||||||||
(1.16
|
)
|
2.48
|
4.52
|
(3.56
|
)
|
4.06
|
||||||||||||
(0.53
|
)
|
(0.50
|
)
|
(0.57
|
)
|
(0.56
|
)
|
(0.62
|
)
|
|||||||||
(1.65
|
)
|
(2.16
|
)
|
(1.94
|
)
|
(1.44
|
)
|
(2.48
|
)
|
|||||||||
(2.18
|
)
|
(2.66
|
)
|
(2.51
|
)
|
(2.00
|
)
|
(3.10
|
)
|
|||||||||
$
|
22.57
|
$
|
25.91
|
$
|
26.09
|
$
|
24.08
|
$
|
29.64
|
|||||||||
-5.01
|
%
|
10.14
|
%
|
19.91
|
%
|
-12.49
|
%
|
15.28
|
%
|
|||||||||
$
|
384.37
|
$
|
459.41
|
$
|
457.31
|
$
|
483.56
|
$
|
764.10
|
|||||||||
1.00
|
%
|
1.00
|
%
|
1.00
|
%
|
1.02
|
%
|
1.00
|
%
|
|||||||||
2.21
|
%
|
1.88
|
%
|
2.06
|
%
|
2.24
|
%
|
1.98
|
%
|
|||||||||
12
|
%
|
31
|
%
|
15
|
%
|
16
|
%
|
12
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
22.51
|
||
Income from investment operations:
|
||||
Net investment income(1)
|
0.31
|
|||
Net realized and unrealized gains (losses) on investments
|
1.98
|
|||
Total from investment operations
|
2.29
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.30
|
)
|
||
Dividends from net realized gains
|
(0.94
|
)
|
||
Total distributions
|
(1.24
|
)
|
||
Net asset value, end of period
|
$
|
23.56
|
||
TOTAL RETURN
|
10.36
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
45.15
|
||
Ratio of expenses to average net assets
|
0.70
|
%(3)
|
||
Ratio of net investment income to average net assets
|
2.67
|
%(3)
|
||
Portfolio turnover rate(4)
|
4
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
25.84
|
$
|
26.01
|
$
|
24.01
|
$
|
29.56
|
$
|
28.65
|
|||||||||
0.62
|
0.57
|
0.59
|
0.66
|
0.64
|
||||||||||||||
(1.70
|
)
|
1.99
|
3.99
|
(4.13
|
)
|
3.50
|
||||||||||||
(1.08
|
)
|
2.56
|
4.58
|
(3.47
|
)
|
4.14
|
||||||||||||
(0.60
|
)
|
(0.58
|
)
|
(0.65
|
)
|
(0.64
|
)
|
(0.73
|
)
|
|||||||||
(1.65
|
)
|
(2.15
|
)
|
(1.93
|
)
|
(1.44
|
)
|
(2.50
|
)
|
|||||||||
(2.25
|
)
|
(2.73
|
)
|
(2.58
|
)
|
(2.08
|
)
|
(3.23
|
)
|
|||||||||
$
|
22.51
|
$
|
25.84
|
$
|
26.01
|
$
|
24.01
|
$
|
29.56
|
|||||||||
-4.74
|
%
|
10.53
|
%
|
20.29
|
%
|
-12.22
|
%
|
15.63
|
%
|
|||||||||
$
|
56.75
|
$
|
93.58
|
$
|
63.06
|
$
|
66.46
|
$
|
107.18
|
|||||||||
0.71
|
%
|
0.68
|
%
|
0.69
|
%
|
0.70
|
%
|
0.69
|
%
|
|||||||||
2.52
|
%
|
2.13
|
%
|
2.35
|
%
|
2.57
|
%
|
2.25
|
%
|
|||||||||
12
|
%
|
31
|
%
|
15
|
%
|
16
|
%
|
12
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise
comply with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net
investment income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences
are primarily the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax
expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting
for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns
of the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as
investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains,
if any, are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original
cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all
liabilities (including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading.
The offering and redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current
market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual
Funds and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports
that highlight key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made
available online and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
HENNESSY FUNDS
|
1-800-966-4354
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale
Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring the fair
value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods
within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets
that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment
speeds, credit risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when
observable inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual
funds, partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by
the primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price
reported. Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively
traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV
because most foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In
certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire
market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at
the ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and
U.S. government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing
service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the
model may incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These
securities are generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities.
Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds
60 days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair
value would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific
securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
280,951,523
|
|||
Gross tax unrealized appreciation
|
$
|
205,117,524
|
|||
Gross tax unrealized depreciation
|
(45,212,687
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
159,904,837
|
|||
Undistributed ordinary income
|
$
|
276,605
|
|||
Undistributed long-term capital gains
|
18,017,888
|
||||
Total distributable earnings
|
$
|
18,294,493
|
|||
Other accumulated gain/(loss)
|
$
|
—
|
|||
Total accumulated gain/(loss)
|
$
|
178,199,330
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2024
|
October 31, 2023
|
||||||||
Ordinary income(1)
|
$
|
5,214,045
|
$
|
13,981,342
|
|||||
Long-term capital gains
|
18,018,013
|
31,091,892
|
|||||||
Total distributions
|
$
|
23,232,058
|
$
|
45,073,234
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,102.30
|
$5.23
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.89
|
$5.02
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,103.60
|
$3.66
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,021.38
|
$3.52
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.00% for Investor Class shares or 0.70% for Institutional Class shares, as applicable, multiplied by the average account value over
the period, multiplied by 182/366 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for
consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to
help the Board assess each such factor;
|
|
(3)
|
A summary of the advisory agreement;
|
|
(4)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the
Advisor provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the
advisory services provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable
laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and
restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of the Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as
appropriate), conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance
providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by
service providers, and maintains books and records.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and
legal services to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The
Advisor participates in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee.
The Advisor compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading
oversight personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund
to various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The
Trustees concluded that the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As
part of the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the funds included in the Morningstar categories for purposes of the materials
considered at the meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and
concluded that they are reasonable and warranted continuation of the advisory agreement.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to
manage the Fund are variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party platform fees increase as a
fund’s assets grow.
|
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor has
put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from,
by way of example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined
that any such products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits
realized by the Advisor from its relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services
provided by brokers are merely supplemental to the Advisor’s own efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Go Paperless with eDelivery
|
26
|
|
Board Approval of Investment Advisory Agreements
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
![]() |
Masakazu Takeda
|
Takenari Okumura
|
Portfolio Manager,
|
Portfolio Manager,
|
Hennessy Japan Fund;
|
Hennessy Japan Small Cap Fund;
|
Fund Manager
|
Fund Manager
|
SPARX Asset Management Co., Ltd.
|
SPARX Asset Management Co., Ltd.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
||
Months(1)
|
Year
|
Years
|
Years
|
||
Hennessy Japan Fund –
|
|||||
Investor Class (HJPNX)
|
23.37%
|
25.30%
|
3.91%
|
8.45%
|
|
Hennessy Japan Fund –
|
|||||
Institutional Class (HJPIX)
|
23.62%
|
25.80%
|
4.31%
|
8.84%
|
|
Russell/Nomura Total Market™ Index
|
17.94%
|
17.79%
|
6.39%
|
6.88%
|
|
Tokyo Stock Price Index (TOPIX)
|
18.50%
|
18.00%
|
6.27%
|
6.74%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April
30, 2024 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Hitachi Ltd.
|
7.48%
|
Mitsubishi Corp.
|
7.09%
|
Tokyo Electron Ltd.
|
5.59%
|
MS&AD Insurance Group Holdings, Inc.
|
5.45%
|
Tokio Marine Holdings, Inc.
|
5.40%
|
Recruit Holdings Co. Ltd.
|
5.28%
|
Mitsubishi UFJ Financial Group, Inc.
|
5.15%
|
Shin-Etsu Chemical Co. Ltd.
|
5.01%
|
ORIX Corp.
|
4.99%
|
Seven & i Holdings Co. Ltd.
|
4.82%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 97.50%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Communication Services – 1.21%
|
||||||||||||
Nippon Telegraph & Telephone Corp.
|
4,299,700
|
$
|
4,642,225
|
1.21
|
%
|
|||||||
Consumer Discretionary – 8.65%
|
||||||||||||
Asics Corp.
|
133,100
|
5,704,979
|
1.49
|
%
|
||||||||
Fast Retailing Co. Ltd.
|
49,100
|
12,838,131
|
3.34
|
%
|
||||||||
Sony Group Corp.
|
177,400
|
14,662,353
|
3.82
|
%
|
||||||||
33,205,463
|
8.65
|
%
|
||||||||||
Consumer Staples – 9.19%
|
||||||||||||
Rohto Pharmaceutical Co. Ltd.
|
603,200
|
11,768,696
|
3.06
|
%
|
||||||||
Seven & i Holdings Co. Ltd.
|
1,431,000
|
18,490,238
|
4.82
|
%
|
||||||||
Unicharm Corp.
|
169,000
|
5,021,523
|
1.31
|
%
|
||||||||
35,280,457
|
9.19
|
%
|
||||||||||
Financials – 28.35%
|
||||||||||||
Japan Exchange Group, Inc.
|
421,100
|
9,862,383
|
2.57
|
%
|
||||||||
Mitsubishi UFJ Financial Group, Inc.
|
1,983,200
|
19,755,363
|
5.15
|
%
|
||||||||
MS&AD Insurance Group Holdings, Inc.
|
1,162,800
|
20,906,034
|
5.45
|
%
|
||||||||
ORIX Corp.
|
935,700
|
19,149,490
|
4.99
|
%
|
||||||||
Sompo Holdings, Inc.
|
928,900
|
18,383,053
|
4.79
|
%
|
||||||||
Tokio Marine Holdings, Inc.
|
655,900
|
20,730,635
|
5.40
|
%
|
||||||||
108,786,958
|
28.35
|
%
|
||||||||||
Health Care – 4.66%
|
||||||||||||
Hoya Corp.
|
12,000
|
1,391,278
|
0.36
|
%
|
||||||||
Olympus Corp.
|
700,200
|
9,753,592
|
2.54
|
%
|
||||||||
Santen Pharmaceutical Co. Ltd.
|
611,700
|
5,908,464
|
1.54
|
%
|
||||||||
Terumo Corp.
|
50,400
|
854,992
|
0.22
|
%
|
||||||||
17,908,326
|
4.66
|
%
|
||||||||||
Industrials – 24.19%
|
||||||||||||
Daikin Industries, Ltd.
|
122,000
|
16,651,942
|
4.34
|
%
|
||||||||
Hitachi Ltd.
|
311,100
|
28,702,303
|
7.48
|
%
|
||||||||
Mitsubishi Corp.
|
1,189,400
|
27,201,080
|
7.09
|
%
|
||||||||
Recruit Holdings Co. Ltd.
|
470,600
|
20,267,499
|
5.28
|
%
|
||||||||
92,822,824
|
24.19
|
%
|
||||||||||
Information Technology – 13.92%
|
||||||||||||
Keyence Corp.
|
21,300
|
9,367,098
|
2.44
|
%
|
||||||||
Renesas Electronics Corp.
|
867,500
|
14,084,515
|
3.67
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Information Technology (Continued)
|
||||||||||||
Socionext, Inc.
|
292,200
|
$
|
8,542,653
|
2.22
|
%
|
|||||||
Tokyo Electron Ltd.
|
97,800
|
21,452,031
|
5.59
|
%
|
||||||||
53,446,297
|
13.92
|
%
|
||||||||||
Materials – 7.33%
|
||||||||||||
Nissan Chemical Corp.
|
260,900
|
8,893,606
|
2.32
|
%
|
||||||||
Shin-Etsu Chemical Co. Ltd.
|
496,800
|
19,230,601
|
5.01
|
%
|
||||||||
28,124,207
|
7.33
|
%
|
||||||||||
Total Common Stocks
|
||||||||||||
(Cost $262,206,114)
|
374,216,757
|
97.50
|
%
|
|||||||||
SHORT-TERM INVESTMENTS – 1.76%
|
||||||||||||
Money Market Funds – 1.76%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (a)
|
6,770,485
|
6,770,485
|
1.76
|
%
|
||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $6,770,485)
|
6,770,485
|
1.76
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $268,976,599) – 99.26%
|
380,987,242
|
99.26
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.74%
|
2,854,290
|
0.74
|
%
|
|||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
383,841,532
|
100.00
|
%
|
(a)
|
The rate listed is the fund’s seven-day yield as of April 30, 2024.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
—
|
$
|
4,642,225
|
$
|
—
|
$
|
4,642,225
|
||||||||
Consumer Discretionary
|
—
|
33,205,463
|
—
|
33,205,463
|
||||||||||||
Consumer Staples
|
—
|
35,280,457
|
—
|
35,280,457
|
||||||||||||
Financials
|
—
|
108,786,958
|
—
|
108,786,958
|
||||||||||||
Health Care
|
—
|
17,908,326
|
—
|
17,908,326
|
||||||||||||
Industrials
|
—
|
92,822,824
|
—
|
92,822,824
|
||||||||||||
Information Technology
|
—
|
53,446,297
|
—
|
53,446,297
|
||||||||||||
Materials
|
—
|
28,124,207
|
—
|
28,124,207
|
||||||||||||
Total Common Stocks
|
$
|
—
|
$
|
374,216,757
|
$
|
—
|
$
|
374,216,757
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
6,770,485
|
$
|
—
|
$
|
—
|
$
|
6,770,485
|
||||||||
Total Short-Term Investments
|
$
|
6,770,485
|
$
|
—
|
$
|
—
|
$
|
6,770,485
|
||||||||
Total Investments
|
$
|
6,770,485
|
$
|
374,216,757
|
$
|
—
|
$
|
380,987,242
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2024 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $268,976,599)
|
$
|
380,987,242
|
||
Dividends and interest receivable
|
2,931,541
|
|||
Receivable for fund shares sold
|
453,718
|
|||
Prepaid expenses and other assets
|
31,443
|
|||
Total assets
|
384,403,944
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
194,532
|
|||
Payable to advisor
|
257,062
|
|||
Payable to administrator
|
62,956
|
|||
Payable to auditor
|
11,284
|
|||
Accrued distribution fees
|
9,479
|
|||
Accrued service fees
|
4,576
|
|||
Accrued trustees fees
|
4,654
|
|||
Accrued expenses and other payables
|
17,869
|
|||
Total liabilities
|
562,412
|
|||
NET ASSETS
|
$
|
383,841,532
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
266,554,121
|
||
Total distributable earnings
|
117,287,411
|
|||
Total net assets
|
$
|
383,841,532
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
52,465,910
|
||
Shares issued and outstanding
|
1,290,089
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
40.67
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
331,375,622
|
||
Shares issued and outstanding
|
7,833,499
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
42.30
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
3,207,600
|
||
Interest income
|
252,008
|
|||
Total investment income
|
3,459,608
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
1,395,595
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
111,389
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
55,335
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
160,538
|
|||
Distribution fees – Investor Class (See Note 5)
|
38,453
|
|||
Federal and state registration fees
|
27,524
|
|||
Service fees – Investor Class (See Note 5)
|
25,635
|
|||
Reports to shareholders
|
15,464
|
|||
Trustees’ fees and expenses
|
13,380
|
|||
Audit fees
|
11,284
|
|||
Compliance expense (See Note 5)
|
9,574
|
|||
Legal fees
|
3,086
|
|||
Interest expense (See Note 7)
|
2
|
|||
Other expenses
|
26,680
|
|||
Total expenses
|
1,893,939
|
|||
NET INVESTMENT INCOME
|
$
|
1,565,669
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
5,485,317
|
||
Net change in unrealized appreciation/depreciation on investments
|
61,999,524
|
|||
Net gain on investments
|
67,484,841
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
69,050,510
|
(1)
|
Net of foreign taxes withheld of $356,399.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2024
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2023
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
1,565,669
|
$
|
2,318,825
|
||||
Net realized gain on investments
|
5,485,317
|
42,400,692
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
61,999,524
|
6,442,668
|
||||||
Net increase in net assets resulting from operations
|
69,050,510
|
51,162,185
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(2,789,944
|
)
|
—
|
|||||
Distributable earnings – Institutional Class
|
(14,520,668
|
)
|
—
|
|||||
Total distributions
|
(17,310,612
|
)
|
—
|
|||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
9,882,585
|
20,718,473
|
||||||
Proceeds from shares subscribed – Institutional Class
|
81,899,506
|
125,835,127
|
||||||
Dividends reinvested – Investor Class
|
2,698,448
|
—
|
||||||
Dividends reinvested – Institutional Class
|
14,281,682
|
—
|
||||||
Cost of shares redeemed – Investor Class
|
(13,077,161
|
)
|
(21,606,576
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(42,632,396
|
)
|
(211,849,600
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
53,052,664
|
(86,902,576
|
)
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
104,792,562
|
(35,740,391
|
)
|
|||||
NET ASSETS:
|
||||||||
Beginning of period
|
279,048,970
|
314,789,361
|
||||||
End of period
|
$
|
383,841,532
|
$
|
279,048,970
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
245,587
|
585,760
|
||||||
Shares sold – Institutional Class
|
2,070,859
|
3,442,909
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
76,012
|
—
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
387,353
|
—
|
||||||
Shares redeemed – Investor Class
|
(335,042
|
)
|
(626,166
|
)
|
||||
Shares redeemed – Institutional Class
|
(1,051,605
|
)
|
(6,060,158
|
)
|
||||
Net increase (decrease) in shares outstanding
|
1,393,164
|
(2,657,655
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
34.99
|
||
Income from investment operations:
|
||||
Net investment income (loss)(1)
|
0.10
|
|||
Net realized and unrealized gains (losses) on investments
|
7.76
|
|||
Total from investment operations
|
7.86
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
—
|
|||
Dividends from net realized gains
|
(2.18
|
)
|
||
Total distributions
|
(2.18
|
)
|
||
Net asset value, end of period
|
$
|
40.67
|
||
TOTAL RETURN
|
23.37
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
52.47
|
||
Ratio of expenses to average net assets
|
1.42
|
%(3)
|
||
Ratio of net investment income (loss) to average net assets
|
0.52
|
%(3)
|
||
Portfolio turnover rate(4)
|
6
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
29.43
|
$
|
47.78
|
$
|
42.79
|
$
|
37.17
|
$
|
33.63
|
|||||||||
0.23
|
(0.11
|
)
|
(0.23
|
)
|
(0.14
|
)
|
0.05
|
|||||||||||
5.33
|
(17.83
|
)
|
5.22
|
5.81
|
3.50
|
|||||||||||||
5.56
|
(17.94
|
)
|
4.99
|
5.67
|
3.55
|
|||||||||||||
—
|
(0.41
|
)
|
—
|
(0.02
|
)
|
(0.01
|
)
|
|||||||||||
—
|
—
|
—
|
(0.03
|
)
|
—
|
|||||||||||||
—
|
(0.41
|
)
|
—
|
(0.05
|
)
|
(0.01
|
)
|
|||||||||||
$
|
34.99
|
$
|
29.43
|
$
|
47.78
|
$
|
42.79
|
$
|
37.17
|
|||||||||
18.89
|
%
|
-37.86
|
%
|
11.66
|
%
|
15.27
|
%
|
10.60
|
%
|
|||||||||
$
|
45.61
|
$
|
39.55
|
$
|
86.11
|
$
|
142.30
|
$
|
87.22
|
|||||||||
1.44
|
%
|
1.44
|
%
|
1.43
|
%
|
1.43
|
%
|
1.43
|
%
|
|||||||||
0.65
|
%
|
(0.30
|
)%
|
(0.49
|
)%
|
(0.37
|
)%
|
0.14
|
%
|
|||||||||
57
|
%
|
21
|
%
|
16
|
%
|
23
|
%
|
9
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
36.32
|
||
Income from investment operations:
|
||||
Net investment income (loss)(1)
|
0.19
|
|||
Net realized and unrealized gains (losses) on investments
|
8.05
|
|||
Total from investment operations
|
8.24
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
—
|
|||
Dividends from net realized gains
|
(2.26
|
)
|
||
Total distributions
|
(2.26
|
)
|
||
Net asset value, end of period
|
$
|
42.30
|
||
TOTAL RETURN
|
23.62
|
%(3)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
331.38
|
||
Ratio of expenses to average net assets
|
1.03
|
%(4)
|
||
Ratio of net investment income (loss) to average net assets
|
0.96
|
%(4)
|
||
Portfolio turnover rate(5)
|
6
|
%(3)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Not annualized.
|
(4)
|
Annualized.
|
(5)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
30.43
|
$
|
49.54
|
$
|
44.19
|
$
|
38.37
|
$
|
34.67
|
|||||||||
0.30
|
0.02
|
(0.03
|
)
|
0.02
|
0.21
|
|||||||||||||
5.59
|
(18.39
|
)
|
5.38
|
5.99
|
3.60
|
|||||||||||||
5.89
|
(18.37
|
)
|
5.35
|
6.01
|
3.81
|
|||||||||||||
—
|
(0.74
|
)
|
(0.00
|
)(2)
|
(0.16
|
)
|
(0.11
|
)
|
||||||||||
—
|
—
|
—
|
(0.03
|
)
|
—
|
|||||||||||||
—
|
(0.74
|
)
|
(0.00
|
)(2)
|
(0.19
|
)
|
(0.11
|
)
|
||||||||||
$
|
36.32
|
$
|
30.43
|
$
|
49.54
|
$
|
44.19
|
$
|
38.37
|
|||||||||
19.36
|
%
|
-37.63
|
%
|
12.11
|
%
|
15.72
|
%
|
11.02
|
%
|
|||||||||
$
|
233.44
|
$
|
275.24
|
$
|
727.47
|
$
|
608.11
|
$
|
611.41
|
|||||||||
1.04
|
%
|
1.05
|
%
|
1.04
|
%
|
1.04
|
%
|
1.03
|
%
|
|||||||||
0.84
|
%
|
0.04
|
%
|
(0.07
|
)%
|
0.04
|
%
|
0.59
|
%
|
|||||||||
57
|
%
|
21
|
%
|
16
|
%
|
23
|
%
|
9
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise
comply with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net
investment income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences
are primarily the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax
expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting
for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax
returns of the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax
liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized
as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service
fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if
any, are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the
original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all
liabilities (including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading.
The offering and redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Foreign Currency – Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market exchange rate at the time of valuation. Purchases and sales of
investments and income are translated into U.S. dollars using the spot market exchange rate prevailing on the respective dates of such transactions. The Fund does not isolate the portion of the results of operations
resulting from fluctuations in foreign exchange rates on investments from fluctuations resulting from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized
gain/loss on investments. Foreign investments present additional risks due to currency fluctuations, economic and political factors, lower liquidity, government regulations, differences in accounting standards, and other
factors.
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current
market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
HENNESSY FUNDS
|
1-800-966-4354
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for
Mutual Funds and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder
reports that highlight key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be
made available online and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value
Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity
security and, therefore, is not considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for
fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in
markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates,
prepayment speeds, credit risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when
observable inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual
funds, partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported
by the primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for which a last-quoted sales price is not readily
available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value
hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV because most foreign markets close well before such time. The earlier close of most foreign markets
gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In certain circumstances, it may be determined that a foreign security needs to be fair valued
because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates
its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor
expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at
the ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and
U.S. government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing
service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition,
the model may incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations.
These securities are generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities.
Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment
exceeds 60 days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the
security’s fair value would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for
specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
226,792,994
|
|||
Gross tax unrealized appreciation
|
$
|
60,153,235
|
|||
Gross tax unrealized depreciation
|
(11,916,315
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
48,236,920
|
|||
Undistributed ordinary income
|
$
|
—
|
|||
Undistributed long-term capital gains
|
17,310,593
|
||||
Total distributable earnings
|
$
|
17,310,593
|
|||
Other accumulated gain/(loss)
|
$
|
—
|
|||
Total accumulated gain/(loss)
|
$
|
65,547,513
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2024
|
October 31, 2023
|
||||||||
Ordinary income(1)
|
$
|
—
|
$
|
—
|
|||||
Long-term capital gains
|
17,310,612
|
—
|
|||||||
Total distributions
|
$
|
17,310,612
|
$
|
—
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,233.70
|
$7.89
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,017.80
|
$7.12
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,236.20
|
$5.73
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.74
|
$5.17
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.42% for Investor Class shares or 1.03% for Institutional Class shares, as applicable, multiplied by the average account value over
the period, multiplied by 182/366 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory and sub-advisory agreements and the relevant
factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory and sub-advisory agreements and also referenced the documents that had
been provided to help the Board assess each such factor;
|
|
(3)
|
Summaries of the advisory and sub-advisory agreements;
|
|
(4)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the Sub-Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund;
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale;
|
|
(9)
|
A completed questionnaire from the Sub-Advisor;
|
|
(10)
|
A summary of the Sub-Advisor’s responses to the questionnaire, as well as relevant information from the Sub-Advisor’s Form ADV and the certifications submitted by the Sub-Advisor each quarter;
|
|
(11)
|
Financial information of the Sub-Advisor and its parent company; and
|
|
(12)
|
The Sub-Advisor’s Code of Ethics.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The nature and quality of the advisory services provided by the Advisor and the Sub-Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor and the Sub-Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor and the Sub-Advisor from serving as an investment advisor to the Fund (other than the advisory and sub-advisory fees).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the
Advisor provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the
advisory services provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with
applicable laws, rules, and regulations.
|
(a)
|
The Advisor oversees the Sub-Advisor for the Fund, and the Sub-Advisor acts as the portfolio manager for the Fund by providing portfolio management services.
|
||
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Sub-Advisor and the Fund’s other service providers (including
their codes of ethics, as appropriate), conducts on-site visits to the Sub-Advisor and the Fund’s other service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals,
payments, and fixed expense ratios, evaluates insurance providers for fidelity bond, D&O/E&O
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers,
and maintains books and records.
|
|||
(f)
|
The Advisor oversees the selection and continued employment of the Sub-Advisor, reviews the Fund’s investment performance, and monitors the Sub-Advisor’s adherence to the Fund’s investment
objectives, policies, and restrictions.
|
||
(g)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and
legal services to the Fund.
|
||
(h)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(i)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(j)
|
For each annual report of the Fund, the Advisor reviews the written summary prepared by the Sub-Advisor of the Fund’s performance during the most recent 12-month period.
|
||
(k)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The
Advisor participates in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction
fee. The Advisor compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(l)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and
trading oversight personnel, as well as management executives.
|
||
(m)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(n)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees considered the services identified below that are provided by the Sub-Advisor. Based on this review and an assessment of the Sub-Advisor’s performance, the Trustees concluded that
the Sub-Advisor provides high-quality services to the Fund. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the Fund by the Sub-Advisor and
that the nature and extent of the services provided by the Sub-Advisor were appropriate to assure that the Fund’s portfolio aligns properly with its investment objective and principal investment strategies.
|
(a)
|
The Sub-Advisor acts as the portfolio manager for the Fund. In this capacity, the Sub-Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and
restrictions;
|
HENNESSY FUNDS
|
1-800-966-4354
|
(ii)
|
seeks best execution for the Fund’s portfolio; and
|
|||
(iii)
|
manages proxy voting for the Fund.
|
(b)
|
The Sub-Advisor ensures that its compliance program includes policies and procedures relevant to the Fund and the Sub-Advisor’s duties as a portfolio manager to the Fund.
|
||
(c)
|
For each annual report of the Fund, the Sub-Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(d)
|
The Sub-Advisor provides a quarterly compliance certification to the Board regarding trading and allocation practices, supervisory matters, the Sub-Advisor’s compliance program (including its
code of ethics), compliance with the Fund’s policies, and general firm updates.
|
(3)
|
Trustees considered the distinction between the services performed by the Advisor and the Sub-Advisor. The Trustees noted that the management of the Fund, including the oversight of the
Sub-Advisor, involves more comprehensive and substantive duties than the duties of the Sub-Advisor. Specifically, the Trustees considered the lists of Advisor services previously identified and concluded that the
services performed by the Advisor for the Fund require a higher level of service and oversight than the services performed by the Sub-Advisor. Based on this determination, the Trustees concluded that the differential in
advisory fees between the Advisor and the Sub-Advisor is reasonable.
|
|
(4)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the
Fund to various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor and the Sub-Advisor manage the Fund in a manner materially consistent with its stated
investment objective and style. The Trustees concluded that the performance of the Fund over various periods warranted the continuation of the advisory and sub-advisory agreements.
|
|
(5)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As
part of the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the funds included in the Morningstar categories for purposes of the materials
considered at the meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and
concluded that they are reasonable and warranted continuation of the advisory and sub-advisory agreements.
|
|
(6)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to
manage the Fund are variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party platform fees and
sub-advisory fees increase as a fund’s assets grow.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(7)
|
The Trustees considered the profitability of the Advisor and the Sub-Advisor, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and
revenues that the Advisor has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor and the Sub-Advisor are reasonable and not excessive when compared to profitability
guidelines set forth in relevant court cases.
|
|
(8)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(9)
|
The Trustees considered any benefits to the Advisor and the Sub-Advisor from serving as an advisor to the Fund (other than the advisory and sub-advisory fees). The Trustees noted that the
Advisor and the Sub-Advisor may derive ancillary benefits from, by way of example, their association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers
that execute portfolio trades for the Fund. The Trustees determined that any such products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment
decision-making process. The Trustees concluded that any additional benefits realized by the Advisor and the Sub-Advisor from their relationship with the Fund were reasonable, which was based on, among other things, the
Trustees’ findings that (i) the research, analytical, statistical, and other information and services provided by brokers are merely supplemental to the Advisor’s and the Sub-Advisor’s own efforts in the performance of
their duties under the advisory and sub-advisory agreements and (ii) although the Sub-Advisor could derive benefits from the conversion of Fund shareholders into separate account clients, the Fund also could benefit from
potential institutional shareholders who might choose to invest in the Fund.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
11
|
|
Statement of Operations
|
12
|
|
Statements of Changes in Net Assets
|
13
|
|
Financial Highlights
|
14
|
|
Notes to the Financial Statements
|
18
|
|
Expense Example
|
28
|
|
Proxy Voting Policy and Proxy Voting Records
|
30
|
|
Availability of Quarterly Portfolio Schedule
|
30
|
|
Federal Tax Distribution Information
|
30
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
30
|
|
Go Paperless with eDelivery
|
31
|
|
Board Approval of Investment Advisory Agreements
|
32
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
![]() |
Masakazu Takeda
|
Takenari Okumura
|
Portfolio Manager,
|
Portfolio Manager,
|
Hennessy Japan Fund;
|
Hennessy Japan Small Cap Fund;
|
Fund Manager
|
Fund Manager
|
SPARX Asset Management Co., Ltd.
|
SPARX Asset Management Co., Ltd.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
||
Months(1)
|
Year
|
Years
|
Years
|
||
Hennessy Japan Small Cap Fund –
|
|||||
Investor Class (HJPSX)
|
13.04%
|
9.04%
|
3.35%
|
7.96%
|
|
Hennessy Japan Small Cap Fund –
|
|||||
Institutional Class (HJSIX)(2)
|
13.26%
|
9.50%
|
3.75%
|
8.31%
|
|
Russell/Nomura Small Cap™ Index
|
11.78%
|
9.00%
|
2.64%
|
5.74%
|
|
Tokyo Stock Price Index (TOPIX)
|
18.50%
|
18.00%
|
6.27%
|
6.74%
|
(1)
|
Periods of less than one year are not annualized.
|
(2)
|
The inception date of Institutional Class shares is June 15, 2015. Performance shown prior to the inception of Institutional Class shares reflects the performance of Investor Class shares and
includes expenses that are not applicable to, and are higher than, those of Institutional Class shares.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April
30, 2024 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Daihen Corp.
|
3.32%
|
Tokyo Ohka Kogyo Co. Ltd.
|
2.43%
|
Towa Corp.
|
2.31%
|
Takasago Thermal Engineering Co. Ltd.
|
2.24%
|
Musashino Bank Ltd.
|
2.16%
|
Amada Co. Ltd.
|
2.09%
|
Integrated Design & Engineering Holdings Co. Ltd.
|
2.09%
|
Tsukishima Holdings Co. Ltd.
|
2.06%
|
Asia Pile Holdings Corp.
|
2.04%
|
NEC Networks & System Integration Corp.
|
2.01%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 95.33%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Communication Services – 0.82%
|
||||||||||||
Macromill, Inc.
|
200,000
|
$
|
932,441
|
0.82
|
%
|
|||||||
Consumer Discretionary – 12.81%
|
||||||||||||
Aeon Fantasy Co. Ltd.
|
90,400
|
1,270,024
|
1.12
|
%
|
||||||||
J. Front Retailing Co. Ltd.
|
206,800
|
1,800,989
|
1.58
|
%
|
||||||||
Koshidaka Holdings Co. Ltd.
|
185,900
|
1,017,003
|
0.89
|
%
|
||||||||
Musashi Seimitsu Industry Co. Ltd.
|
175,400
|
1,858,603
|
1.63
|
%
|
||||||||
Nojima Corp.
|
97,200
|
1,161,342
|
1.02
|
%
|
||||||||
Onward Holdings Co. Ltd.
|
446,200
|
1,717,547
|
1.51
|
%
|
||||||||
Saizeriya Co. Ltd.
|
59,800
|
2,019,294
|
1.77
|
%
|
||||||||
Topre Corp.
|
110,900
|
1,790,112
|
1.57
|
%
|
||||||||
Treasure Factory Co. Ltd.
|
188,000
|
1,954,870
|
1.72
|
%
|
||||||||
14,589,784
|
12.81
|
%
|
||||||||||
Consumer Staples – 5.88%
|
||||||||||||
Ariake Japan Co. Ltd.
|
54,000
|
1,759,515
|
1.55
|
%
|
||||||||
Cosmos Pharmaceutical Corp.
|
21,800
|
2,011,159
|
1.77
|
%
|
||||||||
Nishimoto Co. Ltd.
|
49,000
|
1,809,785
|
1.59
|
%
|
||||||||
Warabeya Nichiyo Holdings Co. Ltd.
|
72,900
|
1,109,421
|
0.97
|
%
|
||||||||
6,689,880
|
5.88
|
%
|
||||||||||
Energy – 0.63%
|
||||||||||||
Iwatani Corp.
|
12,700
|
721,138
|
0.63
|
%
|
||||||||
Financials – 3.93%
|
||||||||||||
Musashino Bank Ltd.
|
125,600
|
2,459,415
|
2.16
|
%
|
||||||||
Nishi-Nippon Financial Holdings, Inc.
|
159,000
|
2,010,150
|
1.77
|
%
|
||||||||
4,469,565
|
3.93
|
%
|
||||||||||
Health Care – 4.90%
|
||||||||||||
Nihon Kohden Corp.
|
81,300
|
2,210,421
|
1.94
|
%
|
||||||||
PeptiDream, Inc. (a)
|
134,900
|
1,718,928
|
1.51
|
%
|
||||||||
Ship Healthcare Holdings, Inc.
|
111,100
|
1,652,937
|
1.45
|
%
|
||||||||
5,582,286
|
4.90
|
%
|
||||||||||
Industrials – 39.54%
|
||||||||||||
Amada Co. Ltd.
|
218,300
|
2,384,288
|
2.09
|
%
|
||||||||
Creek & River Co. Ltd.
|
96,300
|
1,010,950
|
0.89
|
%
|
||||||||
Daihen Corp.
|
62,200
|
3,780,975
|
3.32
|
%
|
||||||||
Furukawa Co. Ltd.
|
89,500
|
1,134,522
|
1.00
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Industrials (Continued)
|
||||||||||||
Gakujo Co. Ltd.
|
112,500
|
$
|
1,241,581
|
1.09
|
%
|
|||||||
Hanwa Co. Ltd.
|
34,500
|
1,327,436
|
1.17
|
%
|
||||||||
Integrated Design & Engineering Holdings Co. Ltd.
|
80,100
|
2,376,468
|
2.09
|
%
|
||||||||
Kanamoto Co. Ltd.
|
60,700
|
1,020,913
|
0.90
|
%
|
||||||||
Keihan Holdings Co. Ltd.
|
78,400
|
1,639,711
|
1.44
|
%
|
||||||||
Kyudenko Corp.
|
53,100
|
2,203,856
|
1.94
|
%
|
||||||||
Mitsubishi Logisnext Co. Ltd.
|
183,000
|
1,804,858
|
1.59
|
%
|
||||||||
Nabtesco Corp.
|
88,200
|
1,454,590
|
1.28
|
%
|
||||||||
Nichiha Corp.
|
71,700
|
1,671,835
|
1.47
|
%
|
||||||||
Nissei ASB Machine Co. Ltd.
|
54,700
|
1,798,124
|
1.58
|
%
|
||||||||
Nittoku Co. Ltd.
|
80,200
|
990,032
|
0.87
|
%
|
||||||||
Penta-Ocean Construction Co. Ltd.
|
331,900
|
1,665,640
|
1.46
|
%
|
||||||||
Raksul, Inc. (a)
|
147,200
|
833,657
|
0.73
|
%
|
||||||||
SBS Holdings, Inc.
|
96,200
|
1,658,255
|
1.46
|
%
|
||||||||
Tadano Ltd.
|
278,400
|
2,234,012
|
1.96
|
%
|
||||||||
Takasago Thermal Engineering Co. Ltd.
|
76,200
|
2,554,540
|
2.24
|
%
|
||||||||
Tanseisha Co. Ltd.
|
299,900
|
1,674,307
|
1.47
|
%
|
||||||||
Tocalo Co. Ltd.
|
137,900
|
1,589,035
|
1.39
|
%
|
||||||||
TRE Holdings Corp.
|
212,700
|
1,711,927
|
1.50
|
%
|
||||||||
Trusco Nakayama Corp.
|
77,200
|
1,277,067
|
1.12
|
%
|
||||||||
Tsubakimoto Chain Co.
|
47,300
|
1,628,445
|
1.43
|
%
|
||||||||
Tsukishima Holdings Co. Ltd.
|
251,200
|
2,344,769
|
2.06
|
%
|
||||||||
45,011,793
|
39.54
|
%
|
||||||||||
Information Technology – 14.05%
|
||||||||||||
Canon Marketing Japan, Inc.
|
41,600
|
1,143,058
|
1.00
|
%
|
||||||||
Computer Engineering & Consulting Ltd.
|
55,100
|
634,188
|
0.56
|
%
|
||||||||
Future Corp.
|
161,900
|
1,633,306
|
1.44
|
%
|
||||||||
Macnica Holdings, Inc.
|
25,300
|
1,115,554
|
0.98
|
%
|
||||||||
Mimaki Engineering Co., Ltd.
|
285,200
|
2,223,334
|
1.95
|
%
|
||||||||
NEC Networks & System Integration Corp.
|
137,900
|
2,290,802
|
2.01
|
%
|
||||||||
Nippon Signal Company Ltd.
|
207,400
|
1,342,676
|
1.18
|
%
|
||||||||
SIIX Corp.
|
186,400
|
1,921,646
|
1.69
|
%
|
||||||||
Towa Corp.
|
45,700
|
2,631,890
|
2.31
|
%
|
||||||||
WingArc1st, Inc.
|
62,500
|
1,058,527
|
0.93
|
%
|
||||||||
15,994,981
|
14.05
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Materials – 8.16%
|
||||||||||||
Asia Pile Holdings Corp.
|
434,900
|
$
|
2,323,608
|
2.04
|
%
|
|||||||
Daicel Corp.
|
97,300
|
903,732
|
0.80
|
%
|
||||||||
Maeda Kosen Co. Ltd.
|
92,700
|
2,028,730
|
1.78
|
%
|
||||||||
Tokyo Ohka Kogyo Co. Ltd.
|
104,400
|
2,768,510
|
2.43
|
%
|
||||||||
Toyobo Co. Ltd.
|
178,200
|
1,264,563
|
1.11
|
%
|
||||||||
9,289,143
|
8.16
|
%
|
||||||||||
Real Estate – 4.03%
|
||||||||||||
Relo Group, Inc.
|
173,900
|
1,511,644
|
1.33
|
%
|
||||||||
Star Mica Holdings Co. Ltd.
|
214,200
|
866,746
|
0.76
|
%
|
||||||||
Tosei Corp.
|
141,900
|
2,215,332
|
1.94
|
%
|
||||||||
4,593,722
|
4.03
|
%
|
||||||||||
Utilities – 0.58%
|
||||||||||||
EF-ON Inc.
|
244,900
|
662,702
|
0.58
|
%
|
||||||||
Total Common Stocks
|
||||||||||||
(Cost $97,673,134)
|
108,537,435
|
95.33
|
%
|
|||||||||
SHORT-TERM INVESTMENTS – 4.16%
|
||||||||||||
Money Market Funds – 4.16%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (b)
|
4,739,665
|
4,739,665
|
4.16
|
%
|
||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $4,739,665)
|
4,739,665
|
4.16
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $102,412,799) – 99.50%
|
113,277,100
|
99.50
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.51%
|
574,665
|
0.51
|
%
|
|||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
113,851,765
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of April 30, 2024.
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
—
|
$
|
932,441
|
$
|
—
|
$
|
932,441
|
||||||||
Consumer Discretionary
|
—
|
14,589,784
|
—
|
14,589,784
|
||||||||||||
Consumer Staples
|
2,011,159
|
4,678,721
|
—
|
6,689,880
|
||||||||||||
Energy
|
—
|
721,138
|
—
|
721,138
|
||||||||||||
Financials
|
—
|
4,469,565
|
—
|
4,469,565
|
||||||||||||
Health Care
|
—
|
5,582,286
|
—
|
5,582,286
|
||||||||||||
Industrials
|
—
|
45,011,793
|
—
|
45,011,793
|
||||||||||||
Information Technology
|
—
|
15,994,981
|
—
|
15,994,981
|
||||||||||||
Materials
|
—
|
9,289,143
|
—
|
9,289,143
|
||||||||||||
Real Estate
|
—
|
4,593,722
|
—
|
4,593,722
|
||||||||||||
Utilities
|
—
|
662,702
|
—
|
662,702
|
||||||||||||
Total Common Stocks
|
$
|
2,011,159
|
$
|
106,526,276
|
$
|
—
|
$
|
108,537,435
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
4,739,665
|
$
|
—
|
$
|
—
|
$
|
4,739,665
|
||||||||
Total Short-Term Investments
|
$
|
4,739,665
|
$
|
—
|
$
|
—
|
$
|
4,739,665
|
||||||||
Total Investments
|
$
|
6,750,824
|
$
|
106,526,276
|
$
|
—
|
$
|
113,277,100
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2024 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $102,412,799)
|
$
|
113,277,100
|
||
Dividends and interest receivable
|
942,053
|
|||
Receivable for fund shares sold
|
101,928
|
|||
Dividend tax reclaim receivable
|
57,039
|
|||
Prepaid expenses and other assets
|
19,031
|
|||
Total assets
|
114,397,151
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
31,053
|
|||
Payable for securities purchased
|
378,950
|
|||
Payable to advisor
|
76,781
|
|||
Payable to administrator
|
19,241
|
|||
Payable to auditor
|
11,280
|
|||
Accrued distribution fees
|
5,432
|
|||
Accrued service fees
|
2,768
|
|||
Accrued trustees fees
|
5,288
|
|||
Accrued expenses and other payables
|
14,593
|
|||
Total liabilities
|
545,386
|
|||
NET ASSETS
|
$
|
113,851,765
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
104,471,701
|
||
Total distributable earnings
|
9,380,064
|
|||
Total net assets
|
$
|
113,851,765
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
32,986,804
|
||
Shares issued and outstanding
|
1,996,451
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
16.52
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
80,864,961
|
||
Shares issued and outstanding
|
4,963,688
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
16.29
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
1,318,587
|
||
Interest income
|
168,416
|
|||
Total investment income
|
1,487,003
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
444,849
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
39,363
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
36,846
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
55,628
|
|||
Distribution fees – Investor Class (See Note 5)
|
25,083
|
|||
Federal and state registration fees
|
20,878
|
|||
Service fees – Investor Class (See Note 5)
|
16,722
|
|||
Trustees’ fees and expenses
|
11,466
|
|||
Audit fees
|
11,284
|
|||
Compliance expense (See Note 5)
|
9,574
|
|||
Reports to shareholders
|
7,828
|
|||
Legal fees
|
1,386
|
|||
Other expenses
|
11,634
|
|||
Total expenses
|
692,541
|
|||
NET INVESTMENT INCOME
|
$
|
794,462
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized loss on investments
|
$
|
(460,037
|
)
|
|
Net change in unrealized appreciation/depreciation on investments
|
12,896,454
|
|||
Net gain on investments
|
12,436,417
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
13,230,879
|
(1)
|
Net of foreign taxes withheld of $146,168.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2024
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2023
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
794,462
|
$
|
1,329,033
|
||||
Net realized gain (loss) on investments
|
(460,037
|
)
|
207,238
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
12,896,454
|
9,306,806
|
||||||
Net increase in net assets resulting from operations
|
13,230,879
|
10,843,077
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(297,604
|
)
|
(198,569
|
)
|
||||
Distributable earnings – Institutional Class
|
(914,493
|
)
|
(658,423
|
)
|
||||
Total distributions
|
(1,212,097
|
)
|
(856,992
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
2,825,352
|
5,265,277
|
||||||
Proceeds from shares subscribed – Institutional Class
|
12,805,839
|
44,132,157
|
||||||
Dividends reinvested – Investor Class
|
288,648
|
191,702
|
||||||
Dividends reinvested – Institutional Class
|
907,721
|
641,326
|
||||||
Cost of shares redeemed – Investor Class
|
(6,474,346
|
)
|
(7,954,407
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(12,064,954
|
)
|
(27,597,536
|
)
|
||||
Net increase (decrease) in net assets
|
||||||||
derived from capital share transactions
|
(1,711,740
|
)
|
14,678,519
|
|||||
TOTAL INCREASE IN NET ASSETS
|
10,307,042
|
24,664,604
|
||||||
NET ASSETS:
|
||||||||
Beginning of period
|
103,544,723
|
78,880,119
|
||||||
End of period
|
$
|
113,851,765
|
$
|
103,544,723
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
171,611
|
350,407
|
||||||
Shares sold – Institutional Class
|
797,359
|
3,029,428
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
17,774
|
13,791
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
56,733
|
46,881
|
||||||
Shares redeemed – Investor Class
|
(401,249
|
)
|
(538,838
|
)
|
||||
Shares redeemed – Institutional Class
|
(765,212
|
)
|
(1,876,510
|
)
|
||||
Net increase (decrease) in shares outstanding
|
(122,984
|
)
|
1,025,159
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
14.74
|
||
Income from investment operations:
|
||||
Net investment income(1)
|
0.09
|
|||
Net realized and unrealized gains (losses) on investments
|
1.83
|
|||
Total from investment operations
|
1.92
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.14
|
)
|
||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
(0.14
|
)
|
||
Net asset value, end of period
|
$
|
16.52
|
||
TOTAL RETURN
|
13.04
|
%(3)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
32.99
|
||
Ratio of expenses to average net assets
|
1.52
|
%(4)
|
||
Ratio of net investment income to average net assets
|
1.08
|
%(4)
|
||
Portfolio turnover rate(5)
|
19
|
%(3)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Not annualized.
|
(4)
|
Annualized.
|
(5)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
13.10
|
$
|
18.12
|
$
|
15.73
|
$
|
15.43
|
$
|
14.99
|
|||||||||
0.14
|
0.12
|
0.03
|
0.01
|
0.03
|
||||||||||||||
1.58
|
(5.07
|
)
|
2.40
|
0.50
|
0.88
|
|||||||||||||
1.72
|
(4.95
|
)
|
2.43
|
0.51
|
0.91
|
|||||||||||||
(0.08
|
)
|
(0.00
|
)(2)
|
(0.04
|
)
|
(0.21
|
)
|
—
|
||||||||||
—
|
(0.07
|
)
|
—
|
—
|
(0.47
|
)
|
||||||||||||
(0.08
|
)
|
(0.07
|
)
|
(0.04
|
)
|
(0.21
|
)
|
(0.47
|
)
|
|||||||||
$
|
14.74
|
$
|
13.10
|
$
|
18.12
|
$
|
15.73
|
$
|
15.43
|
|||||||||
13.22
|
%
|
-27.41
|
%
|
15.46
|
%
|
3.27
|
%
|
6.30
|
%
|
|||||||||
$
|
32.56
|
$
|
31.23
|
$
|
46.15
|
$
|
46.41
|
$
|
66.30
|
|||||||||
1.51
|
%
|
1.57
|
%
|
1.53
|
%
|
1.55
|
%
|
1.52
|
%
|
|||||||||
0.97
|
%
|
0.83
|
%
|
0.16
|
%
|
0.09
|
%
|
0.23
|
%
|
|||||||||
32
|
%
|
45
|
%
|
24
|
%
|
17
|
%
|
21
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
14.56
|
||
Income from investment operations:
|
||||
Net investment income(1)
|
0.13
|
|||
Net realized and unrealized gains (losses) on investments
|
1.80
|
|||
Total from investment operations
|
1.93
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.20
|
)
|
||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
(0.20
|
)
|
||
Net asset value, end of period
|
$
|
16.29
|
||
TOTAL RETURN
|
13.26
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
80.86
|
||
Ratio of expenses to average net assets
|
1.13
|
%(3)
|
||
Ratio of net investment income to average net assets
|
1.58
|
%(3)
|
||
Portfolio turnover rate(4)
|
19
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
12.97
|
$
|
17.94
|
$
|
15.58
|
$
|
15.28
|
$
|
14.83
|
|||||||||
0.21
|
0.18
|
0.11
|
0.07
|
0.09
|
||||||||||||||
1.54
|
(4.99
|
)
|
2.37
|
0.50
|
0.86
|
|||||||||||||
1.75
|
(4.81
|
)
|
2.48
|
0.57
|
0.95
|
|||||||||||||
(0.16
|
)
|
(0.09
|
)
|
(0.12
|
)
|
(0.27
|
)
|
(0.04
|
)
|
|||||||||
—
|
(0.07
|
)
|
—
|
—
|
(0.46
|
)
|
||||||||||||
(0.16
|
)
|
(0.16
|
)
|
(0.12
|
)
|
(0.27
|
)
|
(0.50
|
)
|
|||||||||
$
|
14.56
|
$
|
12.97
|
$
|
17.94
|
$
|
15.58
|
$
|
15.28
|
|||||||||
13.60
|
%
|
-27.05
|
%
|
15.90
|
%
|
3.69
|
%
|
6.73
|
%
|
|||||||||
$
|
70.99
|
$
|
47.65
|
$
|
66.58
|
$
|
34.58
|
$
|
63.78
|
|||||||||
1.11
|
%
|
1.17
|
%
|
1.13
|
%
|
1.13
|
%
|
1.12
|
%
|
|||||||||
1.44
|
%
|
1.22
|
%
|
0.63
|
%
|
0.45
|
%
|
0.61
|
%
|
|||||||||
32
|
%
|
45
|
%
|
24
|
%
|
17
|
%
|
21
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise
comply with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net
investment income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary
differences are primarily the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an
income tax expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize
equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax
purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax
returns of the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no
tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with
a corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are
recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain
shareholder service fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net
assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if
any, are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the
original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all
liabilities (including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for
trading. The offering and redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Foreign Currency – Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market exchange rate at the time of valuation. Purchases and sales of
investments and income are translated into U.S. dollars using the spot market exchange rate prevailing on the respective dates of such transactions. The Fund does not isolate the portion of the results of operations
resulting from fluctuations in foreign exchange rates on investments from fluctuations resulting from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized
gain/loss on investments. Foreign investments present additional risks due to currency fluctuations, economic and political factors, lower liquidity, government regulations, differences in accounting standards, and
other factors.
|
j).
|
REIT Equity Securities – Distributions received from real estate investment trusts (“REITs”) may be classified as dividends, capital gains, or return of capital. Investments in REITs may
require the Fund to accrue and distribute income not yet received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities in its portfolio (including when it is not
advantageous to do so) that it otherwise would have continued to hold. At other
|
HENNESSY FUNDS
|
1-800-966-4354
|
times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings. If the Fund distributes these amounts, these distributions could constitute a return of
capital to Fund shareholders for U.S. federal income tax purposes. Dividends received by the Fund from a REIT generally do not constitute qualified dividend income and do not qualify for the dividends-received
deduction.
|
|
k).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among
other things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in
current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
l).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for
Mutual Funds and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder
reports that highlight key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be
made available online and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the
amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject
to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not
considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after
December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in
markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates,
prepayment speeds, credit risk curves, default rates, and similar data).
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when
observable inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end
mutual funds, partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as
reported by the primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last
sales price reported. Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these
securities are actively traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the
Fund calculates its NAV because most foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have
occurred in the interim. In certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events
occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a
weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced
at the ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries,
and U.S. government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The
pricing service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In
addition, the model may incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer
quotations. These securities are generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities.
Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment
exceeds 60 days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would
|
HENNESSY FUNDS
|
1-800-966-4354
|
be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below. Short-term securities are generally
classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
105,018,160
|
|||
Gross tax unrealized appreciation
|
$
|
12,719,525
|
|||
Gross tax unrealized depreciation
|
(15,360,514
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
(2,640,989
|
)
|
||
Undistributed ordinary income
|
$
|
1,194,105
|
|||
Undistributed long-term capital gains
|
—
|
||||
Total distributable earnings
|
$
|
1,194,105
|
|||
Other accumulated gain/(loss)
|
$
|
(1,191,834
|
)
|
||
Total accumulated gain/(loss)
|
$
|
(2,638,718
|
)
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2024
|
October 31, 2023
|
||||||||
Ordinary income(1)
|
$
|
1,212,097
|
$
|
856,992
|
|||||
Long-term capital gains
|
—
|
—
|
|||||||
Total distributions
|
$
|
1,212,097
|
$
|
856,992
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,130.40
|
$8.05
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,017.30
|
$7.62
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,132.60
|
$5.99
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.24
|
$5.67
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.52% for Investor Class shares or 1.13% for Institutional Class shares, as applicable, multiplied by the average account value
over the period, multiplied by 182/366 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
Country
|
Gross Foreign Income
|
Foreign Tax Paid
|
|
Japan
|
$2,572,534
|
$257,562
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — GO PAPERLESS WITH EDELIVERY
|
![]() |
![]() |
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory and sub-advisory agreements and the
relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory and sub-advisory agreements and also referenced the documents that
had been provided to help the Board assess each such factor;
|
|
(3)
|
Summaries of the advisory and sub-advisory agreements;
|
|
(4)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the Sub-Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund;
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale;
|
|
(9)
|
A completed questionnaire from the Sub-Advisor;
|
|
(10)
|
A summary of the Sub-Advisor’s responses to the questionnaire, as well as relevant information from the Sub-Advisor’s Form ADV and the certifications submitted by the Sub-Advisor each
quarter;
|
|
(11)
|
Financial information of the Sub-Advisor and its parent company; and
|
|
(12)
|
The Sub-Advisor’s Code of Ethics.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(1)
|
The nature and quality of the advisory services provided by the Advisor and the Sub-Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor and the Sub-Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor and the Sub-Advisor from serving as an investment advisor to the Fund (other than the advisory and sub-advisory fees).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the
Advisor provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the
advisory services provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with
applicable laws, rules, and regulations.
|
(a)
|
The Advisor oversees the Sub-Advisor for the Fund, and the Sub-Advisor acts as the portfolio manager for the Fund by providing portfolio management services.
|
||
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Sub-Advisor and the Fund’s other service providers
(including their codes of ethics, as appropriate), conducts on-site visits to the Sub-Advisor and the Fund’s other service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense
accruals, payments, and fixed expense ratios, evaluates insurance providers for fidelity bond, D&O/E&O
|
HENNESSY FUNDS
|
1-800-966-4354
|
insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers,
and maintains books and records.
|
|||
(f)
|
The Advisor oversees the selection and continued employment of the Sub-Advisor, reviews the Fund’s investment performance, and monitors the Sub-Advisor’s adherence to the Fund’s investment
objectives, policies, and restrictions.
|
||
(g)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology,
and legal services to the Fund.
|
||
(h)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(i)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(j)
|
For each annual report of the Fund, the Advisor reviews the written summary prepared by the Sub-Advisor of the Fund’s performance during the most recent 12-month period.
|
||
(k)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing.
The Advisor participates in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a
transaction fee. The Advisor compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(l)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and
trading oversight personnel, as well as management executives.
|
||
(m)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(n)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees considered the services identified below that are provided by the Sub-Advisor. Based on this review and an assessment of the Sub-Advisor’s performance, the Trustees concluded
that the Sub-Advisor provides high-quality services to the Fund. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the Fund by the
Sub-Advisor and that the nature and extent of the services provided by the Sub-Advisor were appropriate to assure that the Fund’s portfolio aligns properly with its investment objective and principal investment
strategies.
|
(a)
|
The Sub-Advisor acts as the portfolio manager for the Fund. In this capacity, the Sub-Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and
restrictions;
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(ii)
|
seeks best execution for the Fund’s portfolio; and
|
|||
(iii)
|
manages proxy voting for the Fund.
|
(b)
|
The Sub-Advisor ensures that its compliance program includes policies and procedures relevant to the Fund and the Sub-Advisor’s duties as a portfolio manager to the Fund.
|
||
(c)
|
For each annual report of the Fund, the Sub-Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(d)
|
The Sub-Advisor provides a quarterly compliance certification to the Board regarding trading and allocation practices, supervisory matters, the Sub-Advisor’s compliance program (including its
code of ethics), compliance with the Fund’s policies, and general firm updates.
|
(3)
|
Trustees considered the distinction between the services performed by the Advisor and the Sub-Advisor. The Trustees noted that the management of the Fund, including the oversight of the
Sub-Advisor, involves more comprehensive and substantive duties than the duties of the Sub-Advisor. Specifically, the Trustees considered the lists of Advisor services previously identified and concluded that the
services performed by the Advisor for the Fund require a higher level of service and oversight than the services performed by the Sub-Advisor. Based on this determination, the Trustees concluded that the differential
in advisory fees between the Advisor and the Sub-Advisor is reasonable.
|
|
(4)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the
Fund to various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor and the Sub-Advisor manage the Fund in a manner materially consistent with its stated
investment objective and style. The Trustees concluded that the performance of the Fund over various periods warranted the continuation of the advisory and sub-advisory agreements.
|
|
(5)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar.
As part of the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the funds included in the Morningstar categories for purposes of the
materials considered at the meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other
comparable funds and concluded that they are reasonable and warranted continuation of the advisory and sub-advisory agreements.
|
|
(6)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to
manage the Fund are variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party platform fees and
sub-advisory fees increase as a fund’s assets grow.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(7)
|
The Trustees considered the profitability of the Advisor and the Sub-Advisor, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and
revenues that the Advisor has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor and the Sub-Advisor are reasonable and not excessive when compared to profitability
guidelines set forth in relevant court cases.
|
|
(8)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(9)
|
The Trustees considered any benefits to the Advisor and the Sub-Advisor from serving as an advisor to the Fund (other than the advisory and sub-advisory fees). The Trustees noted that the
Advisor and the Sub-Advisor may derive ancillary benefits from, by way of example, their association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers
that execute portfolio trades for the Fund. The Trustees determined that any such products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment
decision-making process. The Trustees concluded that any additional benefits realized by the Advisor and the Sub-Advisor from their relationship with the Fund were reasonable, which was based on, among other things,
the Trustees’ findings that (i) the research, analytical, statistical, and other information and services provided by brokers are merely supplemental to the Advisor’s and the Sub-Advisor’s own efforts in the
performance of their duties under the advisory and sub-advisory agreements and (ii) although the Sub-Advisor could derive benefits from the conversion of Fund shareholders into separate account clients, the Fund also
could benefit from potential institutional shareholders who might choose to invest in the Fund.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Go Paperless with eDelivery
|
26
|
|
Board Approval of Investment Advisory Agreement
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
||
Months(1)
|
Year
|
Years
|
Years
|
||
Hennessy Large Cap Financial Fund –
|
|||||
Investor Class (HLFNX)
|
31.35%
|
24.89%
|
3.91%
|
6.39%
|
|
Hennessy Large Cap Financial Fund –
|
|||||
Institutional Class (HILFX)(2)
|
31.60%
|
25.32%
|
4.26%
|
6.73%
|
|
Russell 1000® Index Financials
|
26.89%
|
27.34%
|
12.30%
|
12.33%
|
|
Russell 1000® Index
|
21.17%
|
22.82%
|
12.87%
|
12.14%
|
(1)
|
Periods of less than one year are not annualized.
|
(2)
|
The inception date of Institutional Class shares is June 15, 2015. Performance shown prior to the inception of Institutional Class shares reflects the performance of Investor Class shares
and includes expenses that are not applicable to, and are higher than, those of Institutional Class shares.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April
30, 2024 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Bank of America Corp.
|
6.05%
|
Mastercard, Inc., Class A
|
5.90%
|
Visa, Inc., Class A
|
5.76%
|
JPMorgan Chase & Co.
|
5.57%
|
M&T Bank Corp.
|
5.51%
|
Wells Fargo & Co.
|
5.39%
|
Citigroup, Inc.
|
5.35%
|
PayPal Holdings, Inc.
|
5.31%
|
First Citizens BancShares, Inc., Class A
|
4.90%
|
The PNC Financial Services Group, Inc.
|
4.45%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 98.29%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Financials – 98.29%
|
||||||||||||
Bank of America Corp.
|
45,000
|
$
|
1,665,450
|
6.05
|
%
|
|||||||
Berkshire Hathaway, Inc., Class B (a)
|
3,000
|
1,190,190
|
4.32
|
%
|
||||||||
Capital One Financial Corp.
|
6,500
|
932,295
|
3.39
|
%
|
||||||||
Citigroup, Inc.
|
24,000
|
1,471,920
|
5.35
|
%
|
||||||||
Citizens Financial Group, Inc.
|
29,000
|
989,190
|
3.59
|
%
|
||||||||
Coinbase Global, Inc., Class A (a)
|
5,500
|
1,121,615
|
4.08
|
%
|
||||||||
Comerica, Inc.
|
2,000
|
100,340
|
0.36
|
%
|
||||||||
Fifth Third Bancorp
|
21,000
|
765,660
|
2.78
|
%
|
||||||||
First Citizens BancShares, Inc., Class A
|
800
|
1,349,408
|
4.90
|
%
|
||||||||
JPMorgan Chase & Co.
|
8,000
|
1,533,920
|
5.57
|
%
|
||||||||
KeyCorp
|
79,000
|
1,144,710
|
4.16
|
%
|
||||||||
M&T Bank Corp.
|
10,500
|
1,516,095
|
5.51
|
%
|
||||||||
Mastercard, Inc., Class A
|
3,600
|
1,624,320
|
5.90
|
%
|
||||||||
Morgan Stanley
|
13,000
|
1,180,920
|
4.29
|
%
|
||||||||
PayPal Holdings, Inc. (a)
|
21,500
|
1,460,280
|
5.31
|
%
|
||||||||
Synchrony Financial
|
18,000
|
791,640
|
2.88
|
%
|
||||||||
The Charles Schwab Corp.
|
11,000
|
813,450
|
2.96
|
%
|
||||||||
The Goldman Sachs Group, Inc.
|
2,000
|
853,420
|
3.10
|
%
|
||||||||
The PNC Financial Services Group, Inc.
|
8,000
|
1,226,080
|
4.45
|
%
|
||||||||
Truist Financial Corp.
|
18,000
|
675,900
|
2.46
|
%
|
||||||||
U.S. Bancorp
|
14,000
|
568,820
|
2.07
|
%
|
||||||||
Visa, Inc., Class A
|
5,900
|
1,584,799
|
5.76
|
%
|
||||||||
Webster Financial Corp.
|
23,000
|
1,008,090
|
3.66
|
%
|
||||||||
Wells Fargo & Co.
|
25,000
|
1,483,000
|
5.39
|
%
|
||||||||
27,051,512
|
98.29
|
%
|
||||||||||
Total Common Stocks
|
||||||||||||
(Cost $18,674,220)
|
27,051,512
|
98.29
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 2.16%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Money Market Funds – 2.16%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (b)
|
595,168
|
$
|
595,168
|
2.16
|
%
|
|||||||
Total Short-Term Investments
|
||||||||||||
(Cost $595,168)
|
595,168
|
2.16
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $19,269,388) – 100.45%
|
27,646,680
|
100.45
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.45)%
|
(123,346
|
)
|
(0.45
|
)%
|
||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
27,523,334
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of April 30, 2024.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Financials
|
$
|
27,051,512
|
$
|
—
|
$
|
—
|
$
|
27,051,512
|
||||||||
Total Common Stocks
|
$
|
27,051,512
|
$
|
—
|
$
|
—
|
$
|
27,051,512
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
595,168
|
$
|
—
|
$
|
—
|
$
|
595,168
|
||||||||
Total Short-Term Investments
|
$
|
595,168
|
$
|
—
|
$
|
—
|
$
|
595,168
|
||||||||
Total Investments
|
$
|
27,646,680
|
$
|
—
|
$
|
—
|
$
|
27,646,680
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2024 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $19,269,388)
|
$
|
27,646,680
|
||
Dividends and interest receivable
|
32,280
|
|||
Receivable for fund shares sold
|
10
|
|||
Prepaid expenses and other assets
|
18,554
|
|||
Total assets
|
27,697,524
|
|||
LIABILITIES:
|
||||
Payable for securities purchased
|
115,149
|
|||
Payable to advisor
|
20,634
|
|||
Payable to administrator
|
6,072
|
|||
Payable to auditor
|
11,280
|
|||
Accrued distribution fees
|
3,152
|
|||
Accrued service fees
|
1,635
|
|||
Accrued trustees fees
|
5,369
|
|||
Accrued expenses and other payables
|
10,899
|
|||
Total liabilities
|
174,190
|
|||
NET ASSETS
|
$
|
27,523,334
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
23,384,052
|
||
Total distributable earnings
|
4,139,282
|
|||
Total net assets
|
$
|
27,523,334
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
19,626,045
|
||
Shares issued and outstanding
|
818,326
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
23.98
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
7,897,289
|
||
Shares issued and outstanding
|
326,065
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
24.22
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
458,678
|
||
Interest income
|
7,592
|
|||
Total investment income
|
466,270
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
129,533
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
18,101
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
6,707
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
18,881
|
|||
Federal and state registration fees
|
15,422
|
|||
Distribution fees – Investor Class (See Note 5)
|
14,600
|
|||
Audit fees
|
11,284
|
|||
Trustees’ fees and expenses
|
10,830
|
|||
Service fees – Investor Class (See Note 5)
|
9,733
|
|||
Compliance expense (See Note 5)
|
9,574
|
|||
Reports to shareholders
|
4,970
|
|||
Interest expense (See Note 7)
|
2,877
|
|||
Legal fees
|
542
|
|||
Other expenses
|
5,098
|
|||
Total expenses
|
258,152
|
|||
NET INVESTMENT INCOME
|
$
|
208,118
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments:
|
$
|
412,622
|
||
Net change in unrealized appreciation/deprecation on investments:
|
7,489,575
|
|||
Net gain on investments
|
7,902,197
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
8,110,315
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2024
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2023
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
208,118
|
$
|
673,763
|
||||
Net realized gain (loss) on investments
|
412,622
|
(3,665,381
|
)
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
7,489,575
|
(4,861,309
|
)
|
|||||
Net increase (decrease) in net assets
|
||||||||
resulting from operations
|
8,110,315
|
(7,852,927
|
)
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(343,966
|
)
|
(1,558,247
|
)
|
||||
Distributable earnings – Institutional Class
|
(181,936
|
)
|
(1,514,267
|
)
|
||||
Total distributions
|
(525,902
|
)
|
(3,072,514
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
584,729
|
760,547
|
||||||
Proceeds from shares subscribed – Institutional Class
|
201,690
|
1,148,806
|
||||||
Dividends reinvested – Investor Class
|
334,785
|
1,514,582
|
||||||
Dividends reinvested – Institutional Class
|
176,363
|
1,483,154
|
||||||
Cost of shares redeemed – Investor Class
|
(2,935,184
|
)
|
(3,144,689
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(7,879,055
|
)
|
(7,157,957
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(9,516,672
|
)
|
(5,395,557
|
)
|
||||
TOTAL DECREASE IN NET ASSETS
|
(1,932,259
|
)
|
(16,320,998
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of period
|
29,455,593
|
45,776,591
|
||||||
End of period
|
$
|
27,523,334
|
$
|
29,455,593
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
24,963
|
38,167
|
||||||
Shares sold – Institutional Class
|
8,806
|
54,558
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
14,468
|
66,892
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
7,556
|
64,811
|
||||||
Shares redeemed – Investor Class
|
(130,265
|
)
|
(148,352
|
)
|
||||
Shares redeemed – Institutional Class
|
(360,570
|
)
|
(331,352
|
)
|
||||
Net decrease in shares outstanding
|
(435,042
|
)
|
(255,276
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
18.57
|
||
Income from investment operations:
|
||||
Net investment income (loss)(1)
|
0.14
|
|||
Net realized and unrealized gains (losses) on investments
|
5.67
|
|||
Total from investment operations
|
5.81
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.40
|
)
|
||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
(0.40
|
)
|
||
Net asset value, end of period
|
$
|
23.98
|
||
TOTAL RETURN
|
31.35
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
19.63
|
||
Ratio of expenses to average net assets
|
1.89
|
%(3)
|
||
Ratio of net investment income (loss) to average net assets
|
1.26
|
%(3)
|
||
Portfolio turnover rate(4)
|
27
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
24.80
|
$
|
35.32
|
$
|
22.33
|
$
|
22.63
|
$
|
21.43
|
|||||||||
0.35
|
0.15
|
(0.15
|
)
|
(0.05
|
)
|
(0.05
|
)
|
|||||||||||
(4.92
|
)
|
(9.02
|
)
|
13.14
|
(0.25
|
)
|
1.84
|
|||||||||||
(4.57
|
)
|
(8.87
|
)
|
12.99
|
(0.30
|
)
|
1.79
|
|||||||||||
(0.13
|
)
|
—
|
—
|
—
|
—
|
|||||||||||||
(1.53
|
)
|
(1.65
|
)
|
—
|
—
|
(0.59
|
)
|
|||||||||||
(1.66
|
)
|
(1.65
|
)
|
—
|
—
|
(0.59
|
)
|
|||||||||||
$
|
18.57
|
$
|
24.80
|
$
|
35.32
|
$
|
22.33
|
$
|
22.63
|
|||||||||
-19.62
|
%
|
-26.22
|
%
|
58.17
|
%
|
-1.33
|
%
|
8.75
|
%
|
|||||||||
$
|
16.88
|
$
|
23.63
|
$
|
36.42
|
$
|
22.51
|
$
|
23.63
|
|||||||||
1.79
|
%
|
1.69
|
%
|
1.68
|
%
|
1.75
|
%
|
1.82
|
%
|
|||||||||
1.64
|
%
|
0.55
|
%
|
(0.47
|
)%
|
(0.21
|
)%
|
(0.23
|
)%
|
|||||||||
114
|
%
|
78
|
%
|
62
|
%
|
88
|
%
|
83
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
18.76
|
||
Income from investment operations:
|
||||
Net investment income (loss)(1)
|
0.21
|
|||
Net realized and unrealized gains (losses) on investments
|
5.70
|
|||
Total from investment operations
|
5.91
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.45
|
)
|
||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
(0.45
|
)
|
||
Net asset value, end of period
|
$
|
24.22
|
||
TOTAL RETURN
|
31.60
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
7.90
|
||
Ratio of expenses to average net assets
|
1.59
|
%(3)
|
||
Ratio of net investment income (loss) to average net assets
|
1.83
|
%(3)
|
||
Portfolio turnover rate(4)
|
27
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
25.11
|
$
|
35.63
|
$
|
22.44
|
$
|
22.68
|
$
|
21.39
|
|||||||||
0.43
|
0.25
|
(0.03
|
)
|
0.02
|
0.01
|
|||||||||||||
(4.99
|
)
|
(9.10
|
)
|
13.22
|
(0.26
|
)
|
1.87
|
|||||||||||
(4.56
|
)
|
(8.85
|
)
|
13.19
|
(0.24
|
)
|
1.88
|
|||||||||||
(0.24
|
)
|
—
|
—
|
—
|
—
|
|||||||||||||
(1.55
|
)
|
(1.67
|
)
|
—
|
—
|
(0.59
|
)
|
|||||||||||
(1.79
|
)
|
(1.67
|
)
|
—
|
—
|
(0.59
|
)
|
|||||||||||
$
|
18.76
|
$
|
25.11
|
$
|
35.63
|
$
|
22.44
|
$
|
22.68
|
|||||||||
-19.41
|
%
|
-25.95
|
%
|
58.78
|
%
|
-1.06
|
%
|
9.16
|
%
|
|||||||||
$
|
12.58
|
$
|
22.15
|
$
|
35.06
|
$
|
21.15
|
$
|
21.97
|
|||||||||
1.46
|
%
|
1.33
|
%
|
1.32
|
%
|
1.45
|
%
|
1.43
|
%
|
|||||||||
1.99
|
%
|
0.89
|
%
|
(0.11
|
)%
|
0.08
|
%
|
0.05
|
%
|
|||||||||
114
|
%
|
78
|
%
|
62
|
%
|
88
|
%
|
83
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise
comply with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net
investment income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary
differences are primarily the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an
income tax expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize
equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax
purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax
returns of the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no
tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium
and accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a
security with a corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash
dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and
certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such
class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains,
if any, are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the
original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all
liabilities (including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for
trading. The offering and redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among
other things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in
current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for
Mutual Funds and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging
shareholder reports that highlight key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth
information be made available online and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective
date of the amendment.
|
HENNESSY FUNDS
|
1-800-966-4354
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair
Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the
equity security and, therefore, is not considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is
effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in
markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates,
prepayment speeds, credit risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when
observable inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end
mutual funds, partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as
reported by the primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last
sales price reported. Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these
securities are actively traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time
the Fund calculates its NAV because most foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may
have occurred in the interim. In certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an
entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are
priced at the ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries,
and U.S. government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The
pricing service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In
addition, the model may incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer
quotations. These securities are generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities.
Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment
exceeds 60 days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the
security’s fair value would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels
for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
30,980,881
|
|||
Gross tax unrealized appreciation
|
$
|
4,621,781
|
|||
Gross tax unrealized depreciation
|
(5,961,253
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
(1,339,472
|
)
|
||
Undistributed ordinary income
|
$
|
462,310
|
|||
Undistributed long-term capital gains
|
—
|
||||
Total distributable earnings
|
$
|
462,310
|
|||
Other accumulated gain/(loss)
|
$
|
(2,567,969
|
)
|
||
Total accumulated gain/(loss)
|
$
|
(3,445,131
|
)
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2024
|
October 31, 2023
|
||||||||
Ordinary income(1)
|
$
|
525,902
|
$
|
338,619
|
|||||
Long-term capital gains
|
—
|
2,733,895
|
|||||||
Total distributions
|
$
|
525,902
|
$
|
3,072,514
|
|||||
(1) Ordinary income includes short-term capital gains.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,313.50
|
$10.87
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,015.47
|
$ 9.47
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,316.00
|
$ 9.16
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,016.96
|
$ 7.97
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.89% for Investor Class shares or 1.59% for Institutional Class shares, as applicable, multiplied by the average account value
over the period, multiplied by 182/366 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for
consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided
to help the Board assess each such factor;
|
|
(3)
|
A summary of the advisory agreement;
|
|
(4)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the
Advisor provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of
the advisory services provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with
applicable laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies,
and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of the Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of
ethics, as appropriate), conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios,
evaluates insurance providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training,
reviews reports provided by service providers, and maintains books and records.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology,
and legal services to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing.
The Advisor participates in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a
transaction fee. The Advisor compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and
trading oversight personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and
education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of
the Fund to various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective
and style. The Trustees concluded that the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from
Morningstar. As part of the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the funds included in the Morningstar categories for purposes
of the materials considered at the meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other
comparable funds and concluded that they are reasonable and warranted continuation of the advisory agreement.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred
to manage the Fund are variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party platform fees
increase as a fund’s assets grow.
|
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and revenues that the
Advisor has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant
court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits
from, by way of example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees
determined that any such products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional
benefits realized by the Advisor from its relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information
and services provided by brokers are merely supplemental to the Advisor’s own efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Go Paperless with eDelivery
|
26
|
|
Board Approval of Investment Advisory Agreement
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
||
Months(1)
|
Year
|
Years
|
Years
|
||
Hennessy Small Cap Financial Fund –
|
|||||
Investor Class (HSFNX)
|
13.23%
|
13.34%
|
4.40%
|
6.08%
|
|
Hennessy Small Cap Financial Fund –
|
|||||
Institutional Class (HISFX)
|
13.45%
|
13.73%
|
4.75%
|
6.47%
|
|
Russell 2000® Index Financials
|
17.48%
|
16.73%
|
3.44%
|
6.68%
|
|
Russell 2000® Index
|
19.66%
|
13.32%
|
5.83%
|
7.22%
|
(1)
|
Periods of less than one year are not annualized.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2024 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
OceanFirst Financial Corp.
|
4.95%
|
Banc of California, Inc.
|
4.91%
|
BankUnited, Inc.
|
4.90%
|
Associated Banc-Corp.
|
4.71%
|
WaFd, Inc.
|
4.54%
|
HomeTrust Bancshares, Inc.
|
4.51%
|
Brookline Bancorp, Inc.
|
4.24%
|
Eastern Bankshares, Inc.
|
4.21%
|
Banner Corp.
|
4.18%
|
Pacific Premier Bancorp, Inc.
|
4.12%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 94.65%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Financials – 94.65%
|
||||||||||||
Associated Banc-Corp.
|
140,000
|
$
|
2,949,800
|
4.71
|
%
|
|||||||
Banc of California, Inc.
|
225,000
|
3,080,250
|
4.91
|
%
|
||||||||
BankUnited, Inc.
|
115,000
|
3,073,950
|
4.90
|
%
|
||||||||
Banner Corp.
|
60,000
|
2,617,800
|
4.18
|
%
|
||||||||
Brookline Bancorp, Inc.
|
320,000
|
2,656,000
|
4.24
|
%
|
||||||||
Columbia Banking System, Inc.
|
55,000
|
1,034,550
|
1.65
|
%
|
||||||||
ConnectOne Bancorp, Inc.
|
58,000
|
1,038,780
|
1.66
|
%
|
||||||||
Dime Community Bancshares, Inc.
|
50,000
|
910,000
|
1.45
|
%
|
||||||||
Eastern Bankshares, Inc.
|
210,000
|
2,637,600
|
4.21
|
%
|
||||||||
First BanCorp.
|
80,000
|
1,380,000
|
2.20
|
%
|
||||||||
Flushing Financial Corp.
|
110,000
|
1,212,200
|
1.93
|
%
|
||||||||
Hancock Whitney Corp.
|
50,000
|
2,269,500
|
3.62
|
%
|
||||||||
HomeStreet, Inc.
|
165,000
|
2,021,250
|
3.23
|
%
|
||||||||
HomeTrust Bancshares, Inc.
|
110,000
|
2,827,000
|
4.51
|
%
|
||||||||
Independent Bank Corp.
|
36,000
|
1,808,640
|
2.89
|
%
|
||||||||
Lakeland Bancorp, Inc.
|
175,000
|
2,133,250
|
3.40
|
%
|
||||||||
Midland States Bancorp, Inc.
|
87,500
|
1,916,250
|
3.06
|
%
|
||||||||
NB Bancorp, Inc. (a)
|
160,000
|
2,339,200
|
3.73
|
%
|
||||||||
Northeast Community Bancorp, Inc.
|
65,000
|
1,025,700
|
1.64
|
%
|
||||||||
OceanFirst Financial Corp.
|
210,000
|
3,099,600
|
4.95
|
%
|
||||||||
Old National Bancorp
|
115,000
|
1,902,100
|
3.03
|
%
|
||||||||
Orange County Bancorp, Inc.
|
30,809
|
1,331,257
|
2.12
|
%
|
||||||||
Pacific Premier Bancorp, Inc.
|
120,000
|
2,580,000
|
4.12
|
%
|
||||||||
Southern California Bancorp (a)
|
119,000
|
1,664,810
|
2.66
|
%
|
||||||||
Texas Capital Bancshares, Inc. (a)
|
25,000
|
1,435,000
|
2.29
|
%
|
||||||||
The Hingham Institution for Savings
|
5,500
|
928,950
|
1.48
|
%
|
||||||||
UMB Financial Corp.
|
8,000
|
637,280
|
1.02
|
%
|
||||||||
WaFd, Inc.
|
105,000
|
2,844,450
|
4.54
|
%
|
||||||||
Western New England Bancorp, Inc.
|
416,000
|
2,512,640
|
4.01
|
%
|
||||||||
Wintrust Financial Corp.
|
15,000
|
1,449,600
|
2.31
|
%
|
||||||||
59,317,407
|
94.65
|
%
|
||||||||||
Total Common Stocks
|
||||||||||||
(Cost $54,334,063)
|
59,317,407
|
94.65
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 5.52%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Money Market Funds – 5.52%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (b)
|
3,192,170
|
$
|
3,192,170
|
5.09
|
%
|
|||||||
First American Treasury Obligations Fund – Class X, 5.213% (b)
|
267,623
|
267,623
|
0.43
|
%
|
||||||||
3,459,793
|
5.52
|
%
|
||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $3,459,793)
|
3,459,793
|
5.52
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $57,793,856) – 100.17%
|
62,777,200
|
100.17
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.17)%
|
(109,196
|
)
|
(0.17
|
)%
|
||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
62,668,004
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of April 30, 2024.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Financials
|
$
|
59,317,407
|
$
|
—
|
$
|
—
|
$
|
59,317,407
|
||||||||
Total Common Stocks
|
$
|
59,317,407
|
$
|
—
|
$
|
—
|
$
|
59,317,407
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
3,459,793
|
$
|
—
|
$
|
—
|
$
|
3,459,793
|
||||||||
Total Short-Term Investments
|
$
|
3,459,793
|
$
|
—
|
$
|
—
|
$
|
3,459,793
|
||||||||
Total Investments
|
$
|
62,777,200
|
$
|
—
|
$
|
—
|
$
|
62,777,200
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2024 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $57,793,856)
|
$
|
62,777,200
|
||
Dividends and interest receivable
|
74,406
|
|||
Receivable for fund shares sold
|
2,051
|
|||
Receivable for securities sold
|
900,508
|
|||
Prepaid expenses and other assets
|
21,447
|
|||
Total assets
|
63,775,612
|
|||
LIABILITIES:
|
||||
Payable for securities purchased
|
918,623
|
|||
Payable for fund shares redeemed
|
82,829
|
|||
Payable to advisor
|
47,544
|
|||
Payable to administrator
|
11,446
|
|||
Payable to auditor
|
11,288
|
|||
Accrued distribution fees
|
9,622
|
|||
Accrued service fees
|
4,748
|
|||
Accrued trustees fees
|
5,610
|
|||
Accrued expenses and other payables
|
15,898
|
|||
Total liabilities
|
1,107,608
|
|||
NET ASSETS
|
$
|
62,668,004
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
57,788,473
|
||
Total distributable earnings
|
4,879,531
|
|||
Total net assets
|
$
|
62,668,004
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
56,412,556
|
||
Shares issued and outstanding
|
2,558,023
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
22.05
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
6,255,448
|
||
Shares issued and outstanding
|
498,379
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
12.55
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
1,221,411
|
||
Interest income
|
82,362
|
|||
Total investment income
|
1,303,773
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
313,496
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
60,094
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
4,042
|
|||
Distribution fees – Investor Class (See Note 5)
|
46,816
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
37,074
|
|||
Service fees – Investor Class (See Note 5)
|
31,211
|
|||
Federal and state registration fees
|
16,882
|
|||
Audit fees
|
11,284
|
|||
Trustees’ fees and expenses
|
11,274
|
|||
Compliance expense (See Note 5)
|
9,574
|
|||
Reports to shareholders
|
6,620
|
|||
Legal fees
|
1,004
|
|||
Other expenses
|
8,820
|
|||
Total expenses
|
558,191
|
|||
NET INVESTMENT INCOME
|
$
|
745,582
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
2,235,040
|
||
Net change in unrealized appreciation/depreciation on investments
|
5,588,494
|
|||
Net gain on investments
|
7,823,534
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
8,569,116
|
(1)
|
Net of foreign taxes withheld of $4,308.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2024
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2023
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
745,582
|
$
|
1,551,087
|
||||
Net realized gain on investments
|
2,235,040
|
2,691,655
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
5,588,494
|
(28,455,053
|
)
|
|||||
Net increase (decrease) in net assets
|
||||||||
resulting from operations
|
8,569,116
|
(24,212,311
|
)
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(3,164,215
|
)
|
(7,452,661
|
)
|
||||
Distributable earnings – Institutional Class
|
(528,957
|
)
|
(1,876,496
|
)
|
||||
Total distributions
|
(3,693,172
|
)
|
(9,329,157
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
2,903,768
|
2,129,827
|
||||||
Proceeds from shares subscribed – Institutional Class
|
234,886
|
2,747,009
|
||||||
Dividends reinvested – Investor Class
|
3,082,419
|
7,283,862
|
||||||
Dividends reinvested – Institutional Class
|
492,770
|
1,825,197
|
||||||
Cost of shares redeemed – Investor Class
|
(8,514,051
|
)
|
(20,718,495
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(1,883,517
|
)
|
(11,825,149
|
)
|
||||
Net decrease in net assets
|
||||||||
derived from capital share transactions
|
(3,683,725
|
)
|
(18,557,749
|
)
|
||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
1,192,219
|
(52,099,217
|
)
|
|||||
NET ASSETS:
|
||||||||
Beginning of period
|
61,475,785
|
113,575,002
|
||||||
End of period
|
$
|
62,668,004
|
$
|
61,475,785
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
118,000
|
86,638
|
||||||
Shares sold – Institutional Class
|
16,840
|
172,929
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
124,439
|
274,193
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
34,257
|
118,272
|
||||||
Shares redeemed – Investor Class
|
(358,818
|
)
|
(855,557
|
)
|
||||
Shares redeemed – Institutional Class
|
(134,087
|
)
|
(879,954
|
)
|
||||
Net decrease in shares outstanding
|
(199,369
|
)
|
(1,083,479
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
20.42
|
||
Income from investment operations:
|
||||
Net investment income(1)
|
0.25
|
|||
Net realized and unrealized gains (losses) on investments
|
2.57
|
|||
Total from investment operations
|
2.82
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.48
|
)
|
||
Dividends from net realized gains
|
(0.71
|
)
|
||
Total distributions
|
(1.19
|
)
|
||
Net asset value, end of period
|
$
|
22.05
|
||
TOTAL RETURN
|
13.23
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
56.41
|
||
Ratio of expenses to average net assets
|
1.64
|
%(3)
|
||
Ratio of net investment income to average net assets
|
2.10
|
%(3)
|
||
Portfolio turnover rate(4)
|
32
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
29.47
|
$
|
31.52
|
$
|
17.46
|
$
|
21.60
|
$
|
21.96
|
|||||||||
0.43
|
0.22
|
0.25
|
0.16
|
0.10
|
||||||||||||||
(7.13
|
)
|
(1.96
|
)
|
14.01
|
(3.55
|
)
|
0.93
|
|||||||||||
(6.70
|
)
|
(1.74
|
)
|
14.26
|
(3.39
|
)
|
1.03
|
|||||||||||
(0.19
|
)
|
(0.22
|
)
|
(0.20
|
)
|
(0.09
|
)
|
(0.07
|
)
|
|||||||||
(2.16
|
)
|
(0.09
|
)
|
—
|
(0.66
|
)
|
(1.32
|
)
|
||||||||||
(2.35
|
)
|
(0.31
|
)
|
(0.20
|
)
|
(0.75
|
)
|
(1.39
|
)
|
|||||||||
$
|
20.42
|
$
|
29.47
|
$
|
31.52
|
$
|
17.46
|
$
|
21.60
|
|||||||||
-24.53
|
%
|
-5.60
|
%
|
82.20
|
%
|
-16.37
|
%
|
5.27
|
%
|
|||||||||
$
|
54.60
|
$
|
93.40
|
$
|
140.03
|
$
|
54.96
|
$
|
89.36
|
|||||||||
1.62
|
%
|
1.59
|
%
|
1.58
|
%
|
1.65
|
%
|
1.58
|
%
|
|||||||||
1.83
|
%
|
0.72
|
%
|
0.90
|
%
|
0.96
|
%
|
0.47
|
%
|
|||||||||
72
|
%
|
27
|
%
|
28
|
%
|
75
|
%
|
46
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
11.82
|
||
Income from investment operations:
|
||||
Net investment income(1)
|
0.17
|
|||
Net realized and unrealized gains (losses) on investments
|
1.53
|
|||
Total from investment operations
|
1.70
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.56
|
)
|
||
Dividends from net realized gains
|
(0.41
|
)
|
||
Total distributions
|
(0.97
|
)
|
||
Net asset value, end of period
|
$
|
12.55
|
||
TOTAL RETURN
|
13.45
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
6.26
|
||
Ratio of expenses to average net assets
|
1.31
|
%(3)
|
||
Ratio of net investment income to average net assets
|
2.50
|
%(3)
|
||
Portfolio turnover rate(4)
|
32
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
17.24
|
$
|
18.57
|
$
|
10.37
|
$
|
12.92
|
$
|
13.28
|
|||||||||
0.30
|
0.20
|
0.21
|
0.13
|
0.10
|
||||||||||||||
(4.14
|
)
|
(1.14
|
)
|
8.26
|
(2.10
|
)
|
0.54
|
|||||||||||
(3.84
|
)
|
(0.94
|
)
|
8.47
|
(1.97
|
)
|
0.64
|
|||||||||||
(0.31
|
)
|
(0.34
|
)
|
(0.27
|
)
|
(0.19
|
)
|
(0.18
|
)
|
|||||||||
(1.27
|
)
|
(0.05
|
)
|
—
|
(0.39
|
)
|
(0.82
|
)
|
||||||||||
(1.58
|
)
|
(0.39
|
)
|
(0.27
|
)
|
(0.58
|
)
|
(1.00
|
)
|
|||||||||
$
|
11.82
|
$
|
17.24
|
$
|
18.57
|
$
|
10.37
|
$
|
12.92
|
|||||||||
-24.32
|
%
|
-5.21
|
%
|
82.88
|
%
|
-16.05
|
%
|
5.57
|
%
|
|||||||||
$
|
6.87
|
$
|
20.17
|
$
|
32.08
|
$
|
10.61
|
$
|
20.74
|
|||||||||
1.29
|
%
|
1.22
|
%
|
1.20
|
%
|
1.29
|
%
|
1.23
|
%
|
|||||||||
2.13
|
%
|
1.13
|
%
|
1.31
|
%
|
1.27
|
%
|
0.84
|
%
|
|||||||||
72
|
%
|
27
|
%
|
28
|
%
|
75
|
%
|
46
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and
otherwise comply with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise
taxes. Net investment income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences.
Temporary differences are primarily the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of
Operations as an income tax expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund
may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for
income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax
returns of the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and
no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium
and accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a
security with a corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash
dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration,
and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on
such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital
gains, if any, are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the
original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those
estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all
liabilities (including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for
trading. The offering and redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among
other things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund
in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for
Mutual Funds and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging
shareholder reports that highlight key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth
information be made available online and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective
date of the amendment.
|
HENNESSY FUNDS
|
1-800-966-4354
|
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. |
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in
markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates,
prepayment speeds, credit risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information)
when observable inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end
mutual funds, partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price
as reported by the primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the
last sales price reported. Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent
these securities are actively traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the
same time the Fund calculates its NAV because most foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim. In certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been
materially affected
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an
entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are
priced at the ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S.
Treasuries, and U.S. government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based
techniques. The pricing service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating
to the issuer. In addition, the model may incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued
primarily using dealer quotations. These securities are generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity
securities. Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt
investment exceeds 60 days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in
which case the security’s fair value would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market
activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
64,777,154
|
|||
Gross tax unrealized appreciation
|
$
|
7,591,484
|
|||
Gross tax unrealized depreciation
|
(10,505,804
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
(2,914,320
|
)
|
||
Undistributed ordinary income
|
$
|
807,532
|
|||
Undistributed long-term capital gains
|
2,110,375
|
||||
Total distributable earnings
|
$
|
2,917,907
|
|||
Other accumulated gain/(loss)
|
$
|
—
|
|||
Total accumulated gain/(loss)
|
$
|
3,587
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2024
|
October 31, 2023
|
||||||||
Ordinary income(1)
|
$
|
1,582,796
|
$
|
995,722
|
|||||
Long-term capital gains
|
2,110,376
|
8,333,435
|
|||||||
Total distributions
|
$
|
3,693,172
|
$
|
9,329,157
|
|||||
(1) Ordinary income includes short-term capital gains.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,132.30
|
$8.69
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,016.71
|
$8.22
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,134.50
|
$6.95
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.35
|
$6.57
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.64% for Investor Class shares or 1.31% for Institutional Class shares, as applicable, multiplied by the average account
value over the period, multiplied by 182/366 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for
consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been
provided to help the Board assess each such factor;
|
|
(3)
|
A summary of the advisory agreement;
|
|
(4)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that
the Advisor provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and
quality of the advisory services provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in
compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies,
and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of the Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of
ethics, as appropriate), conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios,
evaluates insurance providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training,
reviews reports provided by service providers, and maintains books and records.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information
technology, and legal services to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and
Pershing. The Advisor participates in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without
paying a transaction fee. The Advisor compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and
trading oversight personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and
education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of
the Fund to various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment
objective and style. The Trustees concluded that the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from
Morningstar. As part of the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the funds included in the Morningstar categories for
purposes of the materials considered at the meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense
ratios of other comparable funds and concluded that they are reasonable and warranted continuation of the advisory agreement.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred
to manage the Fund are variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party platform fees
increase as a fund’s assets grow.
|
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and revenues that the
Advisor has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant
court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits
from, by way of example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees
determined that any such products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any
additional benefits realized by the Advisor from its relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other
information and services provided by brokers are merely supplemental to the Advisor’s own efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
26
|
|
Proxy Voting Policy and Proxy Voting Records
|
28
|
|
Availability of Quarterly Portfolio Schedule
|
28
|
|
Federal Tax Distribution Information
|
28
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
28
|
|
Go Paperless with eDelivery
|
28
|
|
Board Approval of Investment Advisory Agreement
|
29
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
||
Months(1)
|
Year
|
Years
|
Years
|
||
Hennessy Technology Fund –
|
|||||
Investor Class (HTECX)
|
20.37%
|
28.64%
|
10.53%
|
11.25%
|
|
Hennessy Technology Fund –
|
|||||
Institutional Class (HTCIX)
|
20.54%
|
28.97%
|
10.82%
|
11.56%
|
|
Nasdaq Composite Index
|
22.31%
|
29.08%
|
15.07%
|
15.44%
|
|
S&P 500® Index
|
20.98%
|
22.66%
|
13.19%
|
12.41%
|
Expense ratios:
|
Gross 3.17%, Net 1.23%(2)(3) (Investor Class);
|
Gross 2.85%, Net 0.98%(2)(3) (Institutional Class)
|
(1)
|
Periods of less than one year are not annualized.
|
(2)
|
The Fund’s investment advisor has contractually agreed to limit expenses until February 28, 2025.
|
(3)
|
Certain service provider expenses will be voluntarily waived through July 31, 2025, at which time the arrangement will automatically terminate. In addition, the arrangement will not
apply at any time the Fund’s net assets exceed $125 million.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2024 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Palo Alto Networks, Inc.
|
1.78%
|
Bentley Systems, Inc., Class B
|
1.73%
|
NXP Semiconductors NV
|
1.72%
|
Texas Instruments, Inc.
|
1.71%
|
Vishay Intertechnology, Inc.
|
1.70%
|
Arlo Technologies, Inc.
|
1.69%
|
Methode Electronics, Inc.
|
1.68%
|
CommVault Systems, Inc.
|
1.68%
|
Microchip Technology, Inc.
|
1.67%
|
Apple, Inc.
|
1.66%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 93.60%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Communication Services – 3.00%
|
||||||||||||
Meta Platforms, Inc., Class A
|
238
|
$
|
102,380
|
1.38
|
%
|
|||||||
Shutterstock, Inc.
|
2,831
|
120,912
|
1.62
|
%
|
||||||||
223,292
|
3.00
|
%
|
||||||||||
Information Technology – 90.60%
|
||||||||||||
Adobe, Inc. (a)
|
247
|
114,319
|
1.53
|
%
|
||||||||
Apple, Inc.
|
725
|
123,489
|
1.66
|
%
|
||||||||
Applied Materials, Inc.
|
591
|
117,402
|
1.57
|
%
|
||||||||
Arlo Technologies, Inc. (a)
|
10,197
|
126,239
|
1.69
|
%
|
||||||||
Arrow Electronics, Inc. (a)
|
965
|
123,202
|
1.65
|
%
|
||||||||
ASE Technology Holding Co. Ltd. – ADR
|
11,062
|
111,062
|
1.49
|
%
|
||||||||
ASML Holding NV
|
126
|
109,931
|
1.47
|
%
|
||||||||
Atlassian Corp., Class A (a)
|
629
|
108,377
|
1.45
|
%
|
||||||||
Autodesk, Inc. (a)
|
496
|
105,574
|
1.42
|
%
|
||||||||
Avnet, Inc.
|
2,496
|
121,980
|
1.64
|
%
|
||||||||
Axcelis Technologies, Inc. (a)
|
1,151
|
119,152
|
1.60
|
%
|
||||||||
Bentley Systems, Inc., Class B
|
2,459
|
129,171
|
1.73
|
%
|
||||||||
Broadcom, Inc.
|
89
|
115,724
|
1.55
|
%
|
||||||||
Cadence Design Systems, Inc. (a)
|
392
|
108,047
|
1.45
|
%
|
||||||||
CDW Corp.
|
475
|
114,884
|
1.54
|
%
|
||||||||
Cellebrite DI Ltd. (a)
|
11,062
|
119,580
|
1.60
|
%
|
||||||||
Check Point Software Technologies Ltd. (a)
|
741
|
110,720
|
1.49
|
%
|
||||||||
Clear Secure, Inc., Class A
|
6,340
|
110,760
|
1.49
|
%
|
||||||||
CommVault Systems, Inc. (a)
|
1,223
|
125,321
|
1.68
|
%
|
||||||||
Crowdstrike Holdings, Inc., Class A (a)
|
385
|
112,628
|
1.51
|
%
|
||||||||
DXC Technology Co. (a)
|
5,845
|
113,919
|
1.53
|
%
|
||||||||
Enphase Energy, Inc. (a)
|
978
|
106,367
|
1.43
|
%
|
||||||||
ePlus, Inc. (a)
|
1,606
|
123,469
|
1.66
|
%
|
||||||||
Extreme Networks, Inc. (a)
|
10,630
|
119,056
|
1.60
|
%
|
||||||||
Flex Ltd. (a)
|
4,192
|
120,101
|
1.61
|
%
|
||||||||
Fortinet, Inc. (a)
|
1,712
|
108,164
|
1.45
|
%
|
||||||||
Gartner, Inc. (a)
|
263
|
108,511
|
1.46
|
%
|
||||||||
Hackett Group, Inc.
|
5,059
|
109,730
|
1.47
|
%
|
||||||||
Hewlett Packard Enterprise Co.
|
6,579
|
111,843
|
1.50
|
%
|
||||||||
Infosys Ltd. – ADR
|
6,911
|
115,483
|
1.55
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Information Technology (Continued)
|
||||||||||||
International Business Machines Corp.
|
644
|
$
|
107,033
|
1.44
|
%
|
|||||||
Jabil, Inc.
|
906
|
106,328
|
1.43
|
%
|
||||||||
KLA Corp.
|
177
|
122,004
|
1.64
|
%
|
||||||||
Lam Research Corp.
|
125
|
111,801
|
1.50
|
%
|
||||||||
Logitech International SA
|
1,385
|
108,570
|
1.46
|
%
|
||||||||
Methode Electronics, Inc.
|
10,303
|
125,594
|
1.68
|
%
|
||||||||
Microchip Technology, Inc.
|
1,354
|
124,541
|
1.67
|
%
|
||||||||
Microsoft Corp.
|
291
|
113,295
|
1.52
|
%
|
||||||||
Motorola Solutions, Inc.
|
361
|
122,433
|
1.64
|
%
|
||||||||
NetApp, Inc.
|
1,150
|
117,542
|
1.58
|
%
|
||||||||
NVIDIA Corp.
|
138
|
119,235
|
1.60
|
%
|
||||||||
NXP Semiconductors NV
|
502
|
128,607
|
1.72
|
%
|
||||||||
Oracle Corp.
|
974
|
110,792
|
1.49
|
%
|
||||||||
Palo Alto Networks, Inc. (a)
|
457
|
132,937
|
1.78
|
%
|
||||||||
Pure Storage, Inc., Class A (a)
|
2,295
|
115,668
|
1.55
|
%
|
||||||||
QUALCOMM, Inc.
|
707
|
117,256
|
1.57
|
%
|
||||||||
Qualys, Inc. (a)
|
741
|
121,457
|
1.63
|
%
|
||||||||
Sanmina Corp. (a)
|
2,017
|
122,371
|
1.64
|
%
|
||||||||
ServiceNow, Inc. (a)
|
160
|
110,933
|
1.49
|
%
|
||||||||
STMicroelectronics NV
|
2,873
|
113,656
|
1.52
|
%
|
||||||||
Super Micro Computer, Inc. (a)
|
120
|
103,056
|
1.38
|
%
|
||||||||
Telefonaktiebolaget LM Ericsson – ADR
|
23,103
|
115,977
|
1.55
|
%
|
||||||||
Teradata Corp. (a)
|
3,187
|
118,238
|
1.59
|
%
|
||||||||
Texas Instruments, Inc.
|
721
|
127,199
|
1.71
|
%
|
||||||||
United Microelectronics Corp. – ADR
|
15,070
|
116,039
|
1.56
|
%
|
||||||||
Vishay Intertechnology, Inc.
|
5,480
|
126,807
|
1.70
|
%
|
||||||||
Vontier Corp.
|
2,852
|
115,877
|
1.55
|
%
|
||||||||
Zscaler, Inc. (a)
|
665
|
115,005
|
1.54
|
%
|
||||||||
6,754,456
|
90.60
|
%
|
||||||||||
Total Common Stocks
|
||||||||||||
(Cost $5,629,989)
|
6,977,748
|
93.60
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 6.37%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Money Market Funds – 6.37%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (b)
|
379,958
|
$
|
379,958
|
5.10
|
%
|
|||||||
First American Treasury Obligations Fund – Class X, 5.213% (b)
|
94,554
|
94,554
|
1.27
|
%
|
||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $474,512)
|
474,512
|
6.37
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $6,104,501) – 99.97%
|
7,452,260
|
99.97
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.03%
|
2,623
|
0.03
|
%
|
|||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
7,454,883
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of April 30, 2024.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
223,292
|
$
|
—
|
$
|
—
|
$
|
223,292
|
||||||||
Information Technology
|
6,754,456
|
—
|
—
|
6,754,456
|
||||||||||||
Total Common Stocks
|
$
|
6,977,748
|
$
|
—
|
$
|
—
|
$
|
6,977,748
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
474,512
|
$
|
—
|
$
|
—
|
$
|
474,512
|
||||||||
Total Short-Term Investments
|
$
|
474,512
|
$
|
—
|
$
|
—
|
$
|
474,512
|
||||||||
Total Investments
|
$
|
7,452,260
|
$
|
—
|
$
|
—
|
$
|
7,452,260
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2024 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $6,104,501)
|
$
|
7,452,260
|
||
Dividends and interest receivable
|
1,604
|
|||
Receivable for securities sold
|
525
|
|||
Prepaid expenses and other assets
|
19,410
|
|||
Due from advisor
|
3,007
|
|||
Total assets
|
7,476,806
|
|||
LIABILITIES:
|
||||
Payable to auditor
|
11,290
|
|||
Accrued distribution fees
|
916
|
|||
Accrued service fees
|
410
|
|||
Accrued trustees fees
|
5,191
|
|||
Accrued expenses and other payables
|
4,116
|
|||
Total liabilities
|
21,923
|
|||
NET ASSETS
|
$
|
7,454,883
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
6,397,420
|
||
Total distributable earnings
|
1,057,463
|
|||
Total net assets
|
$
|
7,454,883
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
4,950,535
|
||
Shares issued and outstanding
|
242,792
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
20.39
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
2,504,348
|
||
Shares issued and outstanding
|
119,223
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
21.01
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
29,227
|
||
Interest income
|
4,802
|
|||
Total investment income
|
34,029
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
27,350
|
|||
Federal and state registration fees
|
14,500
|
|||
Audit fees
|
11,284
|
|||
Trustees’ fees and expenses
|
10,562
|
|||
Compliance expense (See Note 5)
|
9,574
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
9,528
|
|||
Distribution fees – Investor Class (See Note 5)
|
3,746
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
2,637
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
663
|
|||
Reports to shareholders
|
3,270
|
|||
Service fees – Investor Class (See Note 5)
|
2,497
|
|||
Interest expense (See Note 7)
|
307
|
|||
Legal fees
|
274
|
|||
Other expenses
|
2,372
|
|||
Total expenses before waivers and reimbursements
|
98,564
|
|||
Service provider expense waiver (See Note 5)
|
(9,528
|
)
|
||
Expense reimbursement from advisor – Investor Class
|
(31,658
|
)
|
||
Expense reimbursement from advisor – Institutional Class
|
(14,608
|
)
|
||
Net expenses
|
42,770
|
|||
NET INVESTMENT LOSS
|
$
|
(8,741
|
)
|
|
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
579,908
|
||
Net change in unrealized appreciation/depreciation on investments
|
741,604
|
|||
Net gain on investments
|
1,321,512
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
1,312,771
|
(1)
|
Net of foreign taxes withheld and issuance fees of $1,535.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2024
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2023
|
|||||||
OPERATIONS:
|
||||||||
Net investment loss
|
$
|
(8,741
|
)
|
$
|
(737
|
)
|
||
Net realized gain on investments
|
579,908
|
42,670
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
741,604
|
724,024
|
||||||
Net increase in net assets resulting from operations
|
1,312,771
|
765,957
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
—
|
(2,801
|
)
|
|||||
Distributable earnings – Institutional Class
|
—
|
(6,430
|
)
|
|||||
Total distributions
|
—
|
(9,231
|
)
|
|||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
234,720
|
371,996
|
||||||
Proceeds from shares subscribed – Institutional Class
|
551,357
|
522,804
|
||||||
Dividends reinvested – Investor Class
|
—
|
2,743
|
||||||
Dividends reinvested – Institutional Class
|
—
|
6,429
|
||||||
Cost of shares redeemed – Investor Class
|
(528,070
|
)
|
(569,642
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(461,688
|
)
|
(121,520
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
(203,681
|
)
|
212,810
|
|||||
TOTAL INCREASE IN NET ASSETS
|
1,109,090
|
969,536
|
||||||
NET ASSETS:
|
||||||||
Beginning of period
|
6,345,793
|
5,376,257
|
||||||
End of period
|
$
|
7,454,883
|
$
|
6,345,793
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
12,063
|
21,312
|
||||||
Shares sold – Institutional Class
|
27,312
|
29,720
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
—
|
189
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
—
|
433
|
||||||
Shares redeemed – Investor Class
|
(26,249
|
)
|
(33,810
|
)
|
||||
Shares redeemed – Institutional Class
|
(22,355
|
)
|
(6,780
|
)
|
||||
Net increase (decrease) in shares outstanding
|
(9,229
|
)
|
11,064
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
16.94
|
||
Income from investment operations:
|
||||
Net investment income (loss)(1)
|
(0.03
|
)
|
||
Net realized and unrealized gains (losses) on investments
|
3.48
|
|||
Total from investment operations
|
3.45
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
—
|
|||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
—
|
|||
Net asset value, end of period
|
$
|
20.39
|
||
TOTAL RETURN
|
20.37
|
%(3)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
4.95
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement
|
2.76
|
%(4)
|
||
After expense reimbursement
|
1.24
|
%(4)(5)
|
||
Ratio of net investment income (loss) to average net assets:
|
||||
Before expense reimbursement
|
(1.84
|
)%(4)
|
||
After expense reimbursement
|
(0.32
|
)%(4)
|
||
Portfolio turnover rate(6)
|
40
|
%(3)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Not annualized.
|
(4)
|
Annualized.
|
(5)
|
Certain service provider expenses were voluntarily waived during the fiscal period.
|
(6)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
14.81
|
$
|
26.89
|
$
|
20.50
|
$
|
18.90
|
$
|
18.04
|
|||||||||
(0.01
|
)
|
0.00
|
(2)
|
(0.02
|
)
|
0.02
|
(0.03
|
)
|
||||||||||
2.15
|
(5.38
|
)
|
8.82
|
2.10
|
3.15
|
|||||||||||||
2.14
|
(5.38
|
)
|
8.80
|
2.12
|
3.12
|
|||||||||||||
(0.01
|
)
|
—
|
(0.04
|
)
|
—
|
—
|
||||||||||||
—
|
(6.70
|
)
|
(2.37
|
)
|
(0.52
|
)
|
(2.26
|
)
|
||||||||||
(0.01
|
)
|
(6.70
|
)
|
(2.41
|
)
|
(0.52
|
)
|
(2.26
|
)
|
|||||||||
$
|
16.94
|
$
|
14.81
|
$
|
26.89
|
$
|
20.50
|
$
|
18.90
|
|||||||||
14.47
|
%
|
-26.44
|
%
|
45.11
|
%
|
11.42
|
%
|
20.47
|
%
|
|||||||||
$
|
4.35
|
$
|
3.99
|
$
|
6.06
|
$
|
4.26
|
$
|
3.89
|
|||||||||
3.17
|
%
|
3.06
|
%
|
2.79
|
%
|
3.45
|
%
|
3.84
|
%
|
|||||||||
1.23
|
%(5)
|
1.23
|
%(5)
|
1.23
|
%(5)
|
1.23
|
%(5)
|
1.23
|
%
|
|||||||||
(2.02
|
)%
|
(1.81
|
)%
|
(1.64
|
)%
|
(2.12
|
)%
|
(2.80
|
)%
|
|||||||||
(0.08
|
)%
|
0.02
|
%
|
(0.08
|
)%
|
0.10
|
%
|
(0.19
|
)%
|
|||||||||
101
|
%
|
151
|
%
|
200
|
%
|
192
|
%
|
185
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
17.43
|
||
Income from investment operations:
|
||||
Net investment income (loss)(1)
|
(0.01
|
)
|
||
Net realized and unrealized gains (losses) on investments
|
3.59
|
|||
Total from investment operations
|
3.58
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
—
|
|||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
—
|
|||
Net asset value, end of period
|
$
|
21.01
|
||
TOTAL RETURN
|
20.54
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
2.50
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement
|
2.46
|
%(3)
|
||
After expense reimbursement
|
0.99
|
%(3)(4)
|
||
Ratio of net investment income (loss) to average net assets:
|
||||
Before expense reimbursement
|
(1.54
|
)%(3)
|
||
After expense reimbursement
|
(0.07
|
)%(3)
|
||
Portfolio turnover rate(5)
|
40
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Certain service provider expenses were voluntarily waived during the fiscal period.
|
(5)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
15.26
|
$
|
27.65
|
$
|
21.08
|
$
|
19.40
|
$
|
18.47
|
|||||||||
0.03
|
0.05
|
0.05
|
0.07
|
0.01
|
||||||||||||||
2.21
|
(5.55
|
)
|
9.06
|
2.15
|
3.23
|
|||||||||||||
2.24
|
(5.50
|
)
|
9.11
|
2.22
|
3.24
|
|||||||||||||
(0.07
|
)
|
—
|
(0.11
|
)
|
(0.01
|
)
|
—
|
|||||||||||
—
|
(6.89
|
)
|
(2.43
|
)
|
(0.53
|
)
|
(2.31
|
)
|
||||||||||
(0.07
|
)
|
(6.89
|
)
|
(2.54
|
)
|
(0.54
|
)
|
(2.31
|
)
|
|||||||||
$
|
17.43
|
$
|
15.26
|
$
|
27.65
|
$
|
21.08
|
$
|
19.40
|
|||||||||
14.77
|
%
|
-26.28
|
%
|
45.49
|
%
|
11.67
|
%
|
20.77
|
%
|
|||||||||
$
|
1.99
|
$
|
1.39
|
$
|
2.06
|
$
|
1.47
|
$
|
1.34
|
|||||||||
2.85
|
%
|
2.73
|
%
|
2.44
|
%
|
3.08
|
%
|
3.47
|
%
|
|||||||||
0.98
|
%(4)
|
0.98
|
%(4)
|
0.98
|
%(4)
|
0.98
|
%(4)
|
0.98
|
%
|
|||||||||
(1.70
|
)%
|
(1.48
|
)%
|
(1.29
|
)%
|
(1.74
|
)%
|
(2.43
|
)%
|
|||||||||
0.17
|
%
|
0.27
|
%
|
0.17
|
%
|
0.36
|
%
|
0.06
|
%
|
|||||||||
101
|
%
|
151
|
%
|
200
|
%
|
192
|
%
|
185
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and
otherwise comply with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise
taxes. Net investment income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences.
Temporary differences are primarily the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of
Operations as an income tax expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund
may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction
for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The
tax returns of the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net
assets and no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal
and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of
premium and accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life
of a security with a corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other
non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory,
administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class
of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital
gains, if any, are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing
the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from
those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus
all liabilities (including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed
for trading. The offering and redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires,
among other things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by
the Fund in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports
for Mutual Funds and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging
shareholder reports that highlight key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more
in-depth information be made available online and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the
effective date of the amendment.
|
HENNESSY FUNDS
|
1-800-966-4354
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820):
Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of
account of the equity security and, therefore, is not considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale
restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices
in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest
rates, prepayment speeds, credit risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information)
when observable inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds,
closed-end mutual funds, partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last
sales price as reported by the primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may
differ from the last sales price reported. Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices.
To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not
valued at the same time the Fund calculates its NAV because most foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events,
including broad market moves, may have occurred in the interim. In certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security
might have been materially affected
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an
entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are
priced at the ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S.
Treasuries, and U.S. government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based
techniques. The pricing service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data
relating to the issuer. In addition, the model may incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are
valued primarily using dealer quotations. These securities are generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity
securities. Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term
debt investment exceeds 60 days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer,
in which case the security’s fair value would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and
market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Fiscal Year
|
Fiscal Year
|
Fiscal Year
|
Fiscal Year
|
||||||||||||||||||
2024
|
2025
|
2026
|
2027
|
Total
|
|||||||||||||||||
Investor Class
|
$
|
38,479
|
$
|
73,628
|
$
|
72,197
|
$
|
31,658
|
$
|
215,962
|
|||||||||||
Institutional Class
|
$
|
11,944
|
$
|
23,122
|
$
|
25,964
|
$
|
14,608
|
$
|
75,638
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
5,762,718
|
|||
Gross tax unrealized appreciation
|
$
|
961,825
|
|||
Gross tax unrealized depreciation
|
(369,255
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
592,570
|
|||
Undistributed ordinary income
|
$
|
—
|
|||
Undistributed long-term capital gains
|
—
|
||||
Total distributable earnings
|
$
|
—
|
|||
Other accumulated gain/(loss)
|
$
|
(847,878
|
)
|
||
Total accumulated gain/(loss)
|
$
|
(255,308
|
)
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2024
|
October 31, 2023
|
||||||||
Ordinary income(1)
|
$
|
—
|
$
|
9,231
|
|||||
Long-term capital gains
|
—
|
—
|
|||||||
Total distributions
|
$
|
—
|
$
|
9,231
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,203.70
|
$6.79
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.70
|
$6.22
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,205.40
|
$5.43
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.94
|
$4.97
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.24% for Investor Class shares or 0.99% for Institutional Class shares, as applicable, multiplied by the average account
value over the period, multiplied by 182/366 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors
for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been
provided to help the Board assess each such factor;
|
|
(3)
|
A summary of the advisory agreement;
|
|
(4)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that
the Advisor provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and
quality of the advisory services provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in
compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives,
policies, and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of the Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of
ethics, as appropriate), conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios,
evaluates insurance providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training,
reviews reports provided by service providers, and maintains books and records.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information
technology, and legal services to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and
Pershing. The Advisor participates in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without
paying a transaction fee. The Advisor compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative,
and trading oversight personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and
education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance
of the Fund to various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment
objective and style. The Trustees concluded that the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from
Morningstar. As part of the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the funds included in the Morningstar categories for
purposes of the materials considered at the meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense
ratios of other comparable funds and concluded that they are reasonable and warranted continuation of the advisory agreement.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses
incurred to manage the Fund are variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party
platform fees increase as a fund’s assets grow.
|
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and revenues that the
Advisor has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in
relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary
benefits from, by way of example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund.
The Trustees determined that any such products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded
that any additional benefits realized by the Advisor from its relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical,
and other information and services provided by brokers are merely supplemental to the Advisor’s own efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
14
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
25
|
|
Availability of Quarterly Portfolio Schedule
|
25
|
|
Federal Tax Distribution Information
|
25
|
|
Premium/Discount Information
|
25
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Board Approval of Investment Advisory Agreements
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
Since
|
||||
Six
|
One
|
Inception
|
||
Months(1)
|
Year
|
(3/15/21)
|
||
Hennessy Stance ESG ETF –
|
||||
(STNC) – NAV(2)
|
20.81%
|
8.29%
|
5.13%
|
|
Hennessy Stance ESG ETF –
|
||||
(STNC) – Market Price(2)
|
20.85%
|
8.39%
|
5.15%
|
|
S&P 500® Index
|
20.98%
|
22.66%
|
9.59%
|
(1)
|
Periods of less than one year are not annualized.
|
(2)
|
Fund performance is shown based on both a net asset value (“NAV”) and market price basis. The Fund’s per share NAV is the value of one share of the Fund. NAV is calculated by taking the
Fund’s total assets (including the fair value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV return is based on the NAV of the Fund, and the market price
return is based on the market price per share of the Fund. The price used to calculate market price return is determined using the official closing price of the primary stock exchange (generally, 4:00 p.m.
Eastern time) and may not represent the returns you would receive if shares were traded at other times. NAV and market price returns assume that dividends and capital gain distributions have been reinvested in
the Fund at NAV and market price, respectively.
|
(3)
|
The Fund’s investment advisor has contractually agreed to limit expenses until February 28, 2025.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2024 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Chipotle Mexican Grill, Inc.
|
3.96%
|
Tyson Foods, Inc., Class A
|
3.76%
|
McDonald’s Corp.
|
3.75%
|
Apple, Inc.
|
3.69%
|
Capital One Financial Corp.
|
3.65%
|
The Cigna Group
|
3.60%
|
Cencora, Inc.
|
3.58%
|
AT&T, Inc.
|
3.57%
|
Sysco Corp.
|
3.54%
|
The TJX Companies, Inc.
|
3.53%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 99.53%
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Communication Services – 6.88%
|
||||||||||||
AT&T, Inc.
|
236,795
|
$
|
3,999,468
|
3.57
|
%
|
|||||||
The Walt Disney Co.
|
33,408
|
3,711,629
|
3.31
|
%
|
||||||||
7,711,097
|
6.88
|
%
|
||||||||||
Consumer Discretionary – 20.04%
|
||||||||||||
Chipotle Mexican Grill, Inc. (a)
|
1,407
|
4,445,557
|
3.96
|
%
|
||||||||
Hilton Worldwide Holdings, Inc.
|
15,146
|
2,988,003
|
2.66
|
%
|
||||||||
McDonald’s Corp.
|
15,420
|
4,210,277
|
3.75
|
%
|
||||||||
NIKE, Inc., Class B
|
23,816
|
2,197,264
|
1.96
|
%
|
||||||||
Starbucks Corp.
|
39,818
|
3,523,495
|
3.14
|
%
|
||||||||
The Home Depot, Inc.
|
3,483
|
1,164,088
|
1.04
|
%
|
||||||||
The TJX Companies, Inc.
|
42,104
|
3,961,565
|
3.53
|
%
|
||||||||
22,490,249
|
20.04
|
%
|
||||||||||
Consumer Staples – 7.30%
|
||||||||||||
Sysco Corp.
|
53,337
|
3,964,006
|
3.54
|
%
|
||||||||
Tyson Foods, Inc., Class A
|
69,603
|
4,221,422
|
3.76
|
%
|
||||||||
8,185,428
|
7.30
|
%
|
||||||||||
Financials – 17.81%
|
||||||||||||
Capital One Financial Corp.
|
28,559
|
4,096,217
|
3.65
|
%
|
||||||||
Citigroup, Inc.
|
5,685
|
348,661
|
0.31
|
%
|
||||||||
Mastercard, Inc., Class A
|
8,574
|
3,868,589
|
3.45
|
%
|
||||||||
Nasdaq, Inc.
|
66,144
|
3,958,719
|
3.53
|
%
|
||||||||
The Bank of New York Mellon Corp.
|
5,988
|
338,262
|
0.30
|
%
|
||||||||
The Travelers Companies, Inc.
|
17,615
|
3,737,198
|
3.33
|
%
|
||||||||
W.R. Berkley Corp.
|
47,207
|
3,633,523
|
3.24
|
%
|
||||||||
19,981,169
|
17.81
|
%
|
||||||||||
Health Care – 17.04%
|
||||||||||||
AbbVie, Inc.
|
24,160
|
3,929,382
|
3.50
|
%
|
||||||||
Cencora, Inc.
|
16,806
|
4,017,474
|
3.58
|
%
|
||||||||
Laboratory Corp. of America Holdings
|
16,154
|
3,252,931
|
2.90
|
%
|
||||||||
Regeneron Pharmaceuticals, Inc. (a)
|
4,362
|
3,885,059
|
3.46
|
%
|
||||||||
The Cigna Group
|
11,286
|
4,029,553
|
3.60
|
%
|
||||||||
19,114,399
|
17.04
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
of Shares
|
Value
|
Net Assets
|
||||||||||
Industrials – 14.80%
|
||||||||||||
A O Smith Corp.
|
46,809
|
$
|
3,877,658
|
3.46
|
%
|
|||||||
Cintas Corp.
|
1,854
|
1,220,562
|
1.09
|
%
|
||||||||
CSX Corp.
|
113,607
|
3,774,025
|
3.36
|
%
|
||||||||
Emerson Electric Co.
|
35,421
|
3,817,675
|
3.40
|
%
|
||||||||
Paychex, Inc.
|
32,982
|
3,918,591
|
3.49
|
%
|
||||||||
16,608,511
|
14.80
|
%
|
||||||||||
Information Technology – 13.02%
|
||||||||||||
Accenture PLC, Class A
|
9,203
|
2,769,275
|
2.47
|
%
|
||||||||
Advanced Micro Devices, Inc. (a)
|
2,034
|
322,145
|
0.29
|
%
|
||||||||
Apple, Inc.
|
24,301
|
4,139,190
|
3.69
|
%
|
||||||||
Cognizant Technology Solutions Corp., Class A
|
55,219
|
3,626,784
|
3.23
|
%
|
||||||||
Microsoft Corp.
|
9,627
|
3,748,080
|
3.34
|
%
|
||||||||
14,605,474
|
13.02
|
%
|
||||||||||
Materials – 2.64%
|
||||||||||||
Newmont Corp.
|
30,902
|
1,255,857
|
1.12
|
%
|
||||||||
The Sherwin-Williams Co.
|
5,672
|
1,699,388
|
1.52
|
%
|
||||||||
2,955,245
|
2.64
|
%
|
||||||||||
Total Common Stocks
|
||||||||||||
(Cost $114,270,021)
|
111,651,572
|
99.53
|
%
|
|||||||||
SHORT-TERM INVESTMENTS – 0.44%
|
||||||||||||
Money Market Funds – 0.44%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.227% (b)
|
491,228
|
491,228
|
0.44
|
%
|
||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $491,228)
|
491,228
|
0.44
|
%
|
|||||||||
Total Investments
|
||||||||||||
(Cost $114,761,249) – 99.97%
|
112,142,800
|
99.97
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.03%
|
27,542
|
0.03
|
%
|
|||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
112,170,342
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of April 30, 2024.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
7,711,097
|
$
|
—
|
$
|
—
|
$
|
7,711,097
|
||||||||
Consumer Discretionary
|
22,490,249
|
—
|
—
|
22,490,249
|
||||||||||||
Consumer Staples
|
8,185,428
|
—
|
—
|
8,185,428
|
||||||||||||
Financials
|
19,981,169
|
—
|
—
|
19,981,169
|
||||||||||||
Health Care
|
19,114,399
|
—
|
—
|
19,114,399
|
||||||||||||
Industrials
|
16,608,511
|
—
|
—
|
16,608,511
|
||||||||||||
Information Technology
|
14,605,474
|
—
|
—
|
14,605,474
|
||||||||||||
Materials
|
2,955,245
|
—
|
—
|
2,955,245
|
||||||||||||
Total Common Stocks
|
$
|
111,651,572
|
$
|
—
|
$
|
—
|
$
|
111,651,572
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
491,228
|
$
|
—
|
$
|
—
|
$
|
491,228
|
||||||||
Total Short-Term Investments
|
$
|
491,228
|
$
|
—
|
$
|
—
|
$
|
491,228
|
||||||||
Total Investments
|
$
|
112,142,800
|
$
|
—
|
$
|
—
|
$
|
112,142,800
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2024 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $114,761,249)
|
$
|
112,142,800
|
||
Dividends and interest receivable
|
157,364
|
|||
Receivable for securities sold
|
867,122
|
|||
Total assets
|
113,167,286
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
868,158
|
|||
Payable to advisor
|
81,379
|
|||
Accrued expenses and other payables
|
47,407
|
|||
Total liabilities
|
996,944
|
|||
NET ASSETS
|
$
|
112,170,342
|
||
NET ASSETS CONSIST OF:
|
||||
Par Value
|
$
|
3,876
|
||
Capital stock
|
94,418,136
|
|||
Total distributable earnings
|
17,748,330
|
|||
Total net assets
|
$
|
112,170,342
|
||
NET ASSETS:
|
||||
Shares authorized ($0.001 par value)
|
100,000,000
|
|||
Net assets applicable to outstanding shares
|
$
|
112,170,342
|
||
Shares issued and outstanding
|
3,876,142
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
28.94
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2024 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
516,963
|
||
Total investment income
|
516,963
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
384,220
|
|||
Total expenses before waivers
|
384,220
|
|||
Expense reimbursement from advisor
|
(40,444
|
)
|
||
Net expenses
|
343,776
|
|||
NET INVESTMENT INCOME
|
$
|
173,187
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized loss on investments
|
$
|
(171,587
|
)
|
|
Net realized gain from redemption in-kind
|
28,465,788
|
|||
Net change in unrealized appreciation/depreciation on investments
|
(18,921,211
|
)
|
||
Net gain on investments
|
9,372,990
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
9,546,177
|
(1)
|
Net of foreign taxes and issuance fees withheld of $825.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
Two-Month
|
|||||||||||
April 30, 2024
|
Period Ended
|
Year Ended
|
||||||||||
(Unaudited)
|
October 31, 2023(1)
|
August 31, 2023
|
||||||||||
OPERATIONS:
|
||||||||||||
Net investment income (loss)
|
$
|
173,187
|
$
|
(404
|
)
|
$
|
118,013
|
|||||
Net realized gain (loss) on investments
|
28,294,201
|
(2,637,379
|
)
|
2,948,962
|
||||||||
Net change in unrealized
|
||||||||||||
appreciation/depreciation on investments
|
(18,921,211
|
)
|
(1,930,821
|
)
|
454,119
|
|||||||
Net increase (decrease) in net assets
|
||||||||||||
resulting from operations
|
9,546,177
|
(4,568,604
|
)
|
3,521,094
|
||||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||||||
Distributable earnings
|
(50,006
|
)
|
—
|
(247,449
|
)
|
|||||||
Total distributions
|
(50,006
|
)
|
—
|
(247,449
|
)
|
|||||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||||||
Proceeds from shares issued
|
||||||||||||
in the Reorganization (See Note 10)
|
71,656,846
|
—
|
—
|
|||||||||
Proceeds from shares subscribed
|
143,715,569
|
596,298
|
4,008,931
|
|||||||||
Cost of shares redeemed
|
(153,093,397
|
)
|
(938,382
|
)
|
(4,506,305
|
)
|
||||||
Net increase (decrease) in net assets
|
||||||||||||
derived from capital share transactions
|
62,279,018
|
(342,084
|
)
|
(497,374
|
)
|
|||||||
TOTAL INCREASE
|
||||||||||||
(DECREASE) IN NET ASSETS
|
71,775,189
|
(4,910,688
|
)
|
2,776,271
|
||||||||
NET ASSETS:
|
||||||||||||
Beginning of period
|
40,395,153
|
45,305,841
|
42,529,570
|
|||||||||
End of period
|
$
|
112,170,342
|
$
|
40,395,153
|
$
|
45,305,841
|
||||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||||||
Shares issued in the Reorganization
|
2,506,142
|
—
|
—
|
|||||||||
Shares sold
|
4,960,000
|
25,000
|
155,000
|
|||||||||
Shares redeemed
|
(5,275,000
|
)
|
(35,000
|
)
|
(175,000
|
)
|
||||||
Net increase (decrease)
|
||||||||||||
in shares outstanding
|
2,191,142
|
(10,000
|
)
|
(20,000
|
)
|
(1)
|
The period ended October 31, 2023, consists of 2 months due to the Fund’s fiscal year end change from August 31 to October 31, effective October 8, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2024
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
23.97
|
||
Income from investment operations:
|
||||
Net investment income (loss)(2)
|
0.06
|
|||
Net realized and unrealized gains (losses) on investments
|
4.93
|
|||
Total from investment operations
|
4.99
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.02
|
)
|
||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
(0.02
|
)
|
||
Net asset value, end of period
|
$
|
28.94
|
||
Market value, end of period
|
$
|
28.95
|
||
TOTAL RETURN ON NET ASSET VALUE(4)
|
20.81
|
%(6)
|
||
TOTAL RETURN ON MARKET PRICE(5)
|
20.85
|
%(6)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
112.17
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement
|
0.95
|
%(7)
|
||
After expense reimbursement
|
0.85
|
%(7)
|
||
Ratio of net investment income (loss) to average net assets:
|
||||
Before expense reimbursement
|
0.33
|
%(7)
|
||
After expense reimbursement
|
0.43
|
%(7)
|
||
Portfolio turnover rate(8)
|
145
|
%(6)(9)
|
(1)
|
Inception date of the Fund was March 15, 2021.
|
(2)
|
Calculated using the average shares outstanding method.
|
(3)
|
Amount is between $(0.005) and $0.005.
|
(4)
|
Total investment return/(loss) on net asset value is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes
reinvestments of dividends and distributions, if any.
|
(5)
|
Total investment return/(loss) on market price is calculated assuming an initial investment made at the market price on the first day of the period, reinvestment of dividends and
distributions at market price during the period, and redemption at market price on the last day of the period.
|
(6)
|
Not annualized.
|
(7)
|
Annualized.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS
|
Two-Month
|
|||||||||||||||
Period Ended
|
Period Ended
|
||||||||||||||
October 31,
|
Year Ended August 31,
|
August 31,
|
|||||||||||||
2023
|
2023
|
2022
|
2021(1)
|
||||||||||||
$
|
26.73
|
$
|
24.80
|
$
|
27.82
|
$
|
25.00
|
||||||||
(0.00
|
)(3)
|
0.07
|
0.20
|
0.02
|
|||||||||||
(2.76
|
)
|
2.01
|
(3.10
|
)
|
2.80
|
||||||||||
(2.76
|
)
|
2.08
|
(2.90
|
)
|
2.82
|
||||||||||
—
|
(0.15
|
)
|
(0.10
|
)
|
—
|
||||||||||
—
|
—
|
(0.02
|
)
|
—
|
|||||||||||
—
|
(0.15
|
)
|
(0.12
|
)
|
—
|
||||||||||
$
|
23.97
|
$
|
26.73
|
$
|
24.80
|
$
|
27.82
|
||||||||
$
|
23.98
|
$
|
26.74
|
$
|
24.83
|
$
|
27.91
|
||||||||
-10.31
|
%(6)
|
8.39
|
%
|
-10.50
|
%
|
11.23
|
%(6)
|
||||||||
-10.34
|
%(6)
|
8.32
|
%
|
-10.63
|
%
|
11.56
|
%(6)
|
||||||||
$
|
40.40
|
$
|
45.31
|
$
|
42.53
|
$
|
37.29
|
||||||||
0.95
|
%(7)
|
0.95
|
%
|
0.95
|
%
|
0.95
|
%(7)
|
||||||||
0.85
|
%(7)
|
0.85
|
%
|
0.85
|
%
|
0.85
|
%(7)
|
||||||||
(0.11
|
)%(7)
|
0.17
|
%
|
0.64
|
%
|
0.09
|
%(7)
|
||||||||
(0.01
|
)%(7)
|
0.27
|
%
|
0.74
|
%
|
0.19
|
%(7)
|
||||||||
62
|
%(6)
|
274
|
%
|
290
|
%
|
180
|
%(6)
|
(8)
|
Excludes effect of in-kind transfers.
|
(9)
|
The cost of purchases and proceeds from sales of securities that were incurred to realign the CCM Small/Mid-Cap Impact Value Fund and CCM Core Impact Equity Fund portfolios subsequent
to November 10, 2023 and February 23, 2024, the reorganization dates, respectively, are excluded from the portfolio turnover rate calculation. See Note 10 of the Notes to Financial Statements for further
information regarding this reorganization. If such amounts had not been excluded, the portfolio turnover rate would have been 173% for the period ended April 30, 2024.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2024 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and
otherwise comply with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise
taxes. Net investment income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences.
Temporary differences are primarily the result of the treatment of partnership income and wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any,
in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax
purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the
dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The
tax returns of the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions
taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of
premium and accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life
of a security with a corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other
non-cash dividends are recognized as investment income at the fair value of the property received. Expenses and fees, including investment advisory fees, are accrued daily and taken into account for the purpose
of determining the net asset value (“NAV”) of the Fund. As discussed further in Note 5, most expenses of the Fund are paid by Hennessy Advisors, Inc. (the “Advisor”) under a unitary fee arrangement.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital
gains, if any, are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost
of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from
those estimates.
|
h).
|
Share Valuation – The NAV per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires,
among other things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by
the Fund in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports
for Mutual Funds and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging
shareholder reports that highlight key information. The amendments also will require that funds tag information in a structured data format. In addition, the
|
HENNESSY FUNDS
|
1-800-966-4354
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rule amendments will require that certain more in-depth information be made available online and available for delivery free of charge to investors on request. The amendments became
effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities
Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is
not considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years
beginning after December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices
in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest
rates, prepayment speeds, credit risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information)
when observable inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange- traded funds, and
real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on
which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities
traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and
valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV
because most foreign markets close well before such time. The earlier close of most foreign markets gives rise to the
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
possibility that significant events, including broad market moves, may have occurred in the interim. In certain circumstances, it may be determined that a foreign security needs to be
fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time
the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to
have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are
priced at the ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S.
Treasuries, and U.S. government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based
techniques. The pricing service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data
relating to the issuer. In addition, the model may incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are
valued primarily using dealer quotations. These securities are generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity
securities. Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term
debt investment exceeds 60 days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer,
in which case the security’s fair value would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and
market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
August 31,
|
October 31,
|
Fiscal Year
|
|||
2026
|
2026
|
2027
|
Total
|
||
$30,660
|
$7,067
|
$40,444
|
$78,171
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
42,691,300
|
|||
Gross tax unrealized appreciation
|
$
|
542,957
|
|||
Gross tax unrealized depreciation
|
(2,835,290
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
(2,292,333
|
)
|
||
Undistributed ordinary income
|
$
|
50,006
|
|||
Undistributed long-term capital gains
|
—
|
||||
Total distributable earnings
|
$
|
50,006
|
|||
Other accumulated gain/(loss)
|
$
|
(4,188,055
|
)
|
||
Total accumulated gain/(loss)
|
$
|
(6,430,382
|
)
|
Six Months Ended
|
Two-Month Period Ended
|
Year Ended
|
|||||||||||
April 30, 2024
|
October 31, 2023
|
August 31, 2023
|
|||||||||||
Ordinary income(1)
|
$
|
50,006
|
$
|
—
|
$
|
247,449
|
|||||||
Long-term capital gains
|
—
|
—
|
—
|
||||||||||
Total distributions
|
$
|
50,006
|
$
|
—
|
$
|
247,449
|
|||||||
(1) Ordinary income includes short-term capital gains.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Shares Issued to
|
||||||
Predecessor
|
Shareholders of
|
Fund
|
Combined
|
Tax Status
|
||
Fund Net Assets
|
Predecessor Fund
|
Net Assets
|
Net Assets
|
of Transfer
|
||
$42,147,609(1)
|
1,670,000
|
$0
|
$42,147,609
|
Non-taxable
|
(1)
|
Includes accumulated net investment income, accumulated realized gains, and unrealized appreciation in the amounts of $14,189, $5,465,299, and $2,059,710, respectively.
|
Shares Issued
|
Shares
|
||||||
CCM Small/
|
to Shareholders
|
Issued to
|
|||||
Mid-Cap
|
of CCM Small/
|
CCM Core
|
Shareholders
|
||||
Impact
|
Mid-Cap
|
Impact
|
of CCM Core
|
||||
Value Fund
|
Impact
|
Equity Fund
|
Impact
|
Fund
|
Combined
|
Tax Status
|
|
Net Assets
|
Value Fund
|
Net Assets
|
Equity Fund
|
Net Assets
|
Net Assets
|
of Transfer
|
|
$12,436,393(1)
|
490,155
|
$59,220,453(2)
|
2,015,987
|
$113,981,010
|
$173,221,575
|
Non-taxable
|
(1)
|
Includes accumulated net investment loss, accumulated realized losses, and unrealized appreciation in the amounts of $(129,972), $(3,067,772), and $1,219,276, respectively.
|
(2)
|
Includes accumulated net investment loss, accumulated realized losses, and unrealized appreciation in the amounts of $(454,376), $(242,945), and $17,358,330, respectively.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
(Unaudited)
|
|||||
Net investment loss
|
$
|
(411,161
|
)
|
||
Net realized gain on investments
|
34,986,877
|
||||
Net change in unrealized
|
|||||
appreciation/depreciation on investments
|
(343,605
|
)
|
|||
Net increase in net assets resulting from operations
|
$
|
34,232,111
|
HENNESSY FUNDS
|
1-800-966-4354
|
Beginning
|
Ending
|
||
Account Value
|
Account Value
|
Expenses Paid
|
|
November 1, 2023
|
April 30, 2024
|
During Period(1)
|
|
Actual
|
$1,000.00
|
$1,208.10
|
$4.67
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,020.64
|
$4.27
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 0.85%, multiplied by the average account value over the period, multiplied by 182/366 days (to reflect the half-year
period).
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE — PREMIUM/DISCOUNT INFORMATION
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
IMPORTANT NOTICE/BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory and sub-advisory agreements and the
relevant factors for consideration;
|
|
(2)
|
A memorandum from outside legal counsel regarding the Board’s oversight responsibilities with respect to the Fund as an exchange-traded fund;
|
|
(3)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory and sub-advisory agreements and also referenced the documents
that had been provided to help the Board assess each such factor;
|
|
(4)
|
Summaries of the advisory and sub-advisory agreements;
|
|
(5)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q, which included information about the Advisor’s profitability;
|
|
(6)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(7)
|
A description of the range of services provided by the Advisor and the sub-advisors to the Fund and the distinction between the Advisor-provided services and the sub-advisor-provided
services;
|
|
(8)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund;
|
|
(9)
|
A memorandum from the Advisor regarding economies of scale;
|
|
(10)
|
A completed questionnaire from the Sub-Advisor;
|
|
(11)
|
A summary of the Sub-Advisor’s responses to the questionnaire, as well as relevant information from the Sub-Advisor’s Form ADV and the certifications submitted by the Sub-Advisor each
quarter;
|
|
(12)
|
Financial information of the Sub-Advisor; and
|
|
(13)
|
The Sub-Advisor’s Code of Ethics.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The nature and quality of the advisory services provided by the Advisor and the Sub-Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor and the Sub-Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor and the Sub-Advisor from serving as an investment advisor to the Fund (other than the advisory and sub-advisory fees).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that
the Advisor provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and
quality of the advisory services provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in
compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor oversees the Sub-Advisor for the Fund, and the Sub-Advisor acts as the portfolio manager for the Fund by providing portfolio management services.
|
||
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of the Fund.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Sub-Advisor and the Fund’s other service providers,
conducts on-site visits to the Sub-Advisor and the Fund’s other service providers as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios,
evaluates insurance providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training,
reviews reports provided by service providers, and maintains books and records.
|
||
(f)
|
The Advisor oversees the selection and continued employment of the Sub-Advisor, reviews the Fund’s investment performance, and monitors the Sub-Advisor’s adherence to the Fund’s
investment objectives, policies, and restrictions.
|
||
(g)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information
technology, and legal services to the Fund.
|
||
(h)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(i)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(j)
|
For each annual report of the Fund, the Advisor reviews the written summary prepared by the Sub-Advisor of the Fund’s performance during the most recent 12-month period.
|
||
(k)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and
Pershing. The Advisor participates in no-transaction fee (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without
paying a transaction fee. The Advisor compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(l)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff such as legal, marketing, national accounts, distribution, sales, administrative,
and trading oversight personnel, as well as management executives.
|
||
(m)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(n)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and
education.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(2)
|
The Trustees considered the services identified below that are provided by the Sub-Advisor. Based on this review and an assessment of the Sub-Advisor’s performance, the Trustees
concluded that the Sub-Advisor provides high-quality services to the Fund. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the Fund
by the Sub-Advisor and that the nature and extent of the services provided by the Sub-Advisor were appropriate to assure that the Fund’s portfolio aligns properly with its investment objective and principal
investment strategies.
|
(a)
|
The Sub-Advisor acts as the portfolio manager for the Fund. In this capacity, the Sub-Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives,
policies, and restrictions; and
|
|||
(ii)
|
manages proxy voting for the Fund.
|
(b)
|
The Sub-Advisor ensures that its compliance program includes policies and procedures relevant to the Fund and the Sub-Advisor’s duties as a portfolio manager to the Fund.
|
||
(c)
|
For each annual report of the Fund, the Sub-Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(d)
|
The Sub-Advisor provides a quarterly compliance certification to the Board regarding trading and allocation practices, supervisory matters, the Sub-Advisor’s compliance program
(including its code of ethics), compliance with the Fund’s policies, and general firm updates.
|
(3)
|
The Trustees considered the distinction between the services performed by the Advisor and the Sub-Advisor. The Trustees noted that the management of the Fund, including the oversight of
the Sub-Advisor, involves more comprehensive and substantive duties than the duties of the Sub-Advisor. Specifically, the Trustees considered the lists of Advisor services previously identified and concluded that
the services performed by the Advisor for the Fund require a higher level of service and oversight than the services performed by the Sub-Advisor. Based on this determination, the Trustees concluded that the
differential in advisory fees between the Advisor and the Sub-Advisor is reasonable.
|
|
(4)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance
of the Fund to various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor and the Sub-Advisor manage the Fund in a manner materially consistent with its
stated investment objective and style. The Trustees concluded that the performance of the Fund over various periods warranted the continuation of the advisory and sub-advisory agreements.
|
|
(5)
|
The Trustees reviewed the unitary fee for the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
the funds included in the Morningstar categories for purposes of the materials considered at the meeting. The Trustees determined that the unitary fee of the Fund falls within a
reasonable range of fees of other comparable funds and concluded that they are reasonable and warranted continuation of the advisory and sub-advisory agreements.
|
||
(6)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses
incurred to manage the Fund are variable asset-based fees, so the Advisor does not realize material economies of scale relating to these expenses as the assets of the Fund increase. For example, third-party
platform fees and sub-advisory fees increase as a fund’s assets grow.
|
|
(7)
|
The Trustees considered the profitability of the Advisor and the Sub-Advisor, including the impact of platform fees on the Advisor’s profitability, and also considered the resources and
revenues that the Advisor has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor and the Sub-Advisor are reasonable and not excessive when compared to
profitability guidelines set forth in relevant court cases.
|
|
(8)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(9)
|
The Trustees considered any benefits to the Advisor and the Sub-Advisor from serving as an advisor to the Fund (other than the advisory and sub-advisory fees). They concluded that any
such benefits were expected to be minimal.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(b)
|
|
✓ |
Request a paper copy of a specific shareholder report, free of charge.
|
✓ |
Elect to receive shareholder reports and other communications (including quarterly statements, annual tax statements, and prospectuses) electronically delivered to your email.
|
Note: You may also elect eDelivery by accessing your account online at www.hennessyfunds.com/account
|
|
![]() |
![]() |
|
(a)
|
The Schedules of Investments are included as part of the reports to shareholders filed under Item 1 of this Form.
|
(b)
|
Not applicable.
|
(a)
|
The registrant’s principal executive officer and principal financial officer have reviewed the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a
date within 90 days of the filing date of this report, as required by Rule 30a‑3(b) under the Act and Rules 13a-15(b) or 15d‑15(b) under the Exchange Act. Based on their review, such officers have concluded that the disclosure controls
and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized, and reported and made known to them by others within the registrant and by the
registrant’s service providers.
|
(b)
|
There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over financial reporting.
|
(a)
|
(1) Code of ethics, or amendments thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing of an
exhibit. Not applicable.
|
By: /s/Neil J. Hennessy
Neil J. Hennessy, President and Principal Executive Officer
|
Date: July 8, 2024
|
By: /s/Teresa M. Nilsen
Teresa M. Nilsen, Treasurer and Principal Financial Officer |
Date: July 8, 2024
|