Item 1. Reports to Stockholders.

ANNUAL REPORT

OCTOBER 31, 2016

HENNESSY CORNERSTONE

GROWTH FUND

Investor Class HFCGX

Institutional Class HICGX

hennessyfunds.com | 1-800-966-4354

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CONTENTS

Contents

Letter to Shareholders	2
Performance Overview	4
Financial Statements
Schedule of Investments	7
Statement of Assets and Liabilities	12
Statement of Operations	13
Statements of Changes in Net Assets	15
Financial Highlights	16
Notes to the Financial Statements	20
Report of Independent Registered Public Accounting Firm	28
Trustees and Officers of the Fund	29
Expense Example	32
Proxy Voting	34
Quarterly Filings on Form N-Q	34
Householding	34
Privacy Policy	35

HENNESSY FUNDS

1-800-966-4354

December 2016

Dear Hennessy Funds Shareholder:

Over the past year investors here in the U.S. and around the world have weathered a great deal of turmoil, especially in the political arena. Foremost, the bitterly divisive and all-consuming U.S. Presidential election, with its unanticipated outcome, is finally behind us. While the equity markets were jittery at first, they now appear more comfortable with the prospect of a Trump presidency and seem to be looking forward to diminished government regulation and intervention.

The Brexit vote in the U.K. cast a shadow over the European Union’s future. There remains uncertainty over the details and timing of the break and the economic consequences for both Britain and Europe, but early signs suggest the impact on growth in Britain will not be as severe as initially feared.

Additionally, uncertainty over whether the Federal Reserve would raise short-term interest rates has hung over the economy for well over a year now. The effects that higher rates could have on growth, the strength of the U.S. Dollar, corporate profits and loan supply and demand seem to have weighed heavily on investors, causing paralysis and money to remain on the sidelines of the market.

Despite all these concerns, U.S. equity markets have pushed higher, with both the Dow Jones Industrial Average and S&P 500 Index posting returns of approximately 5% during the twelve-month period ended October 31, 2016. The U.S. economy has continued to grow at a respectable annual rate of about 2%, and corporate profits have started to move higher. Today, as of mid-December, bond and Treasury yields have risen a bit from record lows just this summer, and the bond market is finishing the year on slightly rocky footing. Bond yields are still very low relative to historical averages, while the prospective PE multiples for the Dow Jones Industrial Average and S&P 500 Index are just above long-term averages at 18.0x and 18.9x, respectively. We believe that equity valuations could go considerably higher and still be at appropriate levels relative to bond yields. And, while we do expect the Fed to raise interest rates in the coming year, we believe that inflation will stay under control, so that short-term interest rates will not have to rise too fast or too far.

As I reflect over the past twelve months, what I realize is that many of the worries this year are not new. For the past several years, American businesses have operated in an environment characterized by highly partisan politics, mounting regulations, uncertainty over interest rates, and a lack of clarity regarding taxes and healthcare costs. Despite all these headwinds, U.S. corporations have been incredibly resilient and found ways to impress investors. If the newly elected administration follows through on campaign promises of reigning in regulation, lowering taxes for corporations and individuals, or reforming healthcare to drive down costs, then companies, which are already lean, should be able to post higher profits. And, that growth should lead to more jobs and a stronger economy, potentially creating a very positive cycle going forward.

With the bull market in U.S. equities entering its ninth year, many believe the economy is due for a recession and the market is due for a downturn. But, the euphoria that usually accompanies a peak in the market is absent. Since the recovery began after the financial crisis, I have found myself pondering the bull run of 1982 to 2000, powered, in part, by a significant increase in valuations. I believe today’s market displays the fundamentals to sustain a similarly strong and lengthy bull market. Meanwhile, companies are largely profitable and many corporate balance sheets are cash-rich, with

HENNESSYFUNDS.COM

LETTER TO SHAREHOLDERS

relatively little debt. Unemployment is low and real wages are rising, helping to drive consumption. We are hopeful that these factors will provide support for positive market returns in the year to come.

Thank you for your continued confidence and investment in our funds. If you have any questions or would like to speak with us directly, please don’t hesitate to call us at (800) 966-4354.

Best regards,

Neil J. Hennessy

President and Chief Investment Officer

Past performance does not guarantee future results.

Mutual fund investing involves risk. Principal loss is possible.

Opinions expressed are those of Neil Hennessy and are subject to change, are not guaranteed and should not be considered investment advice.

The Dow Jones Industrial Average and S&P 500 Index are unmanaged indices commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is calculated by dividing a company’s market price per share by its earnings per share.

HENNESSY FUNDS

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Performance Overview (Unaudited)

CHANGE IN VALUE OF $10,000 INVESTMENT

This graph illustrates the performance of an initial investment of $10,000 made in the Fund ten years ago and assumes the reinvestment of dividends.

AVERAGE ANNUAL TOTAL RETURN FOR PERIODS ENDED OCTOBER 31, 2016

	One	Five	Ten
	Year	Years	Years
Hennessy Cornerstone Growth Fund –
Investor Class (HFCGX)	-5.00%	13.77%	2.10%
Hennessy Cornerstone Growth Fund –
Institutional Class (HICGX)⁽¹⁾	-4.69%	14.10%	2.37%
Russell 2000^® Index	4.11%	11.51%	5.96%
S&P 500 Index	4.51%	13.57%	6.70%

Expense ratios: 1.31% (Investor Class); 1.00% (Institutional Class)

Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by visiting hennessyfunds.com.

The expense ratios presented are from the most recent prospectus.

⁽¹⁾	The inception date of Institutional Class shares is March 3, 2008. 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.

PERFORMANCE NARRATIVE

Portfolio Managers Neil J. Hennessy and Brian E. Peery

Performance:

For the twelve-month period ended October 31, 2016, the Investor Class of the Hennessy Cornerstone Growth Fund returned -5.00%, underperforming both the Russell 2000^® Index and the S&P 500 Index, which returned 4.11% and 4.51% for the same period, respectively.

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PERFORMANCE OVERVIEW

The Fund’s underperformance relative to its benchmark was almost entirely due to stock selection. Within the Consumer Staples sector, our holdings in three food stocks, Amira Nature Foods Ltd., Ingles Markets, Inc. and John B. Sanfilippo & Son, Inc., all contributed significantly to the underperformance over the period. Investments in the Consumer Discretionary sector also performed poorly, with Vista Outdoor, Inc. and Movado Group, Inc. adding to the underperformance. We continue to hold Amira Nature Foods, Vista Outdoor and Movado Group in the portfolio, but have sold Ingles Markets and John B. Sanfilippo & Son.

Portfolio Strategy:

We believe that the Fund’s investment strategy, which seeks companies that are reporting growth in earnings, whose stock prices are showing positive relative strength, but that still trade on low price-to-sales ratios, offers investors true “growth at a reasonable price.” Limiting the Fund’s portfolio to 50 stocks produces a relatively concentrated portfolio, where individual stock performance can influence the performance of the portfolio as a whole. We believe this stock selection approach has served us well over time, and we wholeheartedly support utilizing this methodology when investing.

Market Outlook:

Over the twelve-month period ended October 31, 2016, U.S. equities produced moderate, positive returns. The period was once again marked by a great deal of volatility, with major market indices dropping more than 10% at one point early in the year before recovering all of their losses. Throughout this period, there have been concerns about interest rates, commodity prices, economic growth (both domestic and international) and the U.S. Presidential election. Many, if not all, of these concerns still exist in the marketplace today, but we have reasons to be hopeful for the year to come.

First, while corporate profits have been on a gentle slide downwards since the fourth quarter of 2014, market analysts are now forecasting a return to growth in profits in the fourth quarter of this year. We believe these forecasts have a good chance of being proved correct. Second, mergers and acquisitions have been strong and steady this year and we believe such activity will continue next year, helping drive revenue and earnings for the acquiring companies. Third, we do not believe the majority of stocks are expensive at this point, though many are probably fairly valued. The Dow Jones Industrial Average and the S&P 500 Index have forward PE ratios of roughly 18x and 19x, respectively, close to long-term averages although slightly higher than six months ago. Corporate balance sheets appear to be in excellent shape, and while executives have shown some reluctance to increase capital spending beyond maintenance levels this cycle, we believe companies outside of the Energy sector will eventually start investing for expansion. Overall, we believe the basic fundamentals of the market are attractive, and we continue to be optimistic about the possibility of further moderate market advances over the course of next year.

Investment Outlook:

We continue to believe that there are good investment opportunities among small- and mid-cap stocks. Many investors gravitated away from smaller stocks last year as they sought safety in larger, more well-established businesses in a year of much political uncertainty. Many of these smaller companies have purely domestic businesses, which are benefiting from steady, albeit slow, economic growth at home, low inflation and low energy prices. With consumer debt levels falling and wage growth finally starting to accelerate, we are expecting a good year for domestically oriented small and mid-cap stocks. We believe that investors will also begin to favor smaller stocks as valuations of larger capitalization stocks continue to rise, leaving small and mid-cap stocks looking attractive on a relative basis.

HENNESSY FUNDS

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We remain pleased with the positioning of the portfolio, which remains overweight in cyclical stocks, which generally fare better in a period of economic expansion, and domestically oriented stocks that we believe are reasonably valued and appear poised for growth. Relative to the Fund’s benchmarks, the portfolio remains overweight in both the Consumer Discretionary and Industrial sectors and we think that these areas of the market offer great growth potential in 2017.

_______________

Opinions expressed are those of the Portfolio Managers as of the date written and are subject to change, are not guaranteed, and should not be considered investment advice or an indication of trading intent.

The Russell 2000^® Index is an index commonly used to measure the performance of U.S. small-capitalization stocks. The S&P 500 Index and Dow Jones Industrial Average are unmanaged indices commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

The Fund invests in small and medium capitalized companies, which may have limited liquidity and greater price volatility than large capitalization companies. Investments in foreign securities may involve political, economic and currency risks, greater volatility and differences in accounting methods. The Fund’s formula-based strategy may cause the Fund to buy or sell securities at times when it may not be advantageous. Please see the Fund’s prospectus for a more complete discussion of these and other risks.

References to specific securities should not be considered a recommendation to buy or sell any security. Fund holdings and sector allocations are subject to change. Please refer to the Schedule of Investments included in this report for additional portfolio information.

Earnings growth is not a measure of the Fund’s future performance. Price-to-sales ratio is a tool for calculating a stock’s valuation relative to other companies. It is calculated by dividing a stock’s current price by its revenue per share. PE, or price to earnings, is calculated by dividing a company’s market price per share by its earnings per share.

HENNESSYFUNDS.COM

PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as of October 31, 2016

HENNESSY CORNERSTONE GROWTH FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING CASH/CASH EQUIVALENTS)	% NET ASSETS

Insperity, Inc.	2.97%

John Bean Technologies Corp.	2.85%

Itron, Inc.	2.54%

Burlington Stores, Inc.	2.51%

Ingredion, Inc.	2.43%

NeoPhotonics Corp.	2.40%

Astec Industries, Inc.	2.39%

Brady Corp., Class A	2.38%

UGI Corp.	2.35%

Superior Industries International, Inc.	2.33%

Note: For presentation purposes, the Fund has grouped some of the industry categories. For purposes of categorizing securities for compliance with Section 8(b)(1) of the Investment Company Act of 1940, as amended, the Fund uses more specific industry classifications.

HENNESSY FUNDS

1-800-966-4354

COMMON STOCKS – 97.80%	Number				% of
	of Shares		Value		Net Assets
Consumer Discretionary – 22.04%
BJ’s Restaurants, Inc. (a)		89,600	$	3,234,560		1.54	%
Burlington Stores, Inc. (a)		70,400		5,275,776		2.51	%
Dollar General Corp.		53,200		3,675,588		1.75	%
Genesco, Inc. (a)		59,800		3,217,240		1.53	%
Genuine Parts Co.		43,800		3,967,842		1.89	%
Movado Group, Inc.		135,200		2,981,160		1.42	%
Omnicom Group, Inc.		50,700		4,046,874		1.92	%
Potbelly Corp. (a)		314,600		4,105,530		1.95	%
Superior Industries International, Inc.		199,900		4,897,550		2.33	%
Target Corp.		50,300		3,457,119		1.64	%
The Children’s Place, Inc.		57,900		4,397,505		2.09	%
Vista Outdoor, Inc. (a)		80,100		3,097,467		1.47	%
				46,354,211		22.04	%

Consumer Staples – 10.84%
Amira Nature Foods, Ltd. (a)(b)		310,100		2,431,184		1.15	%
Dean Foods Co.		204,700		3,737,822		1.78	%
Ingredion, Inc.		39,000		5,115,630		2.43	%
John B. Sanfilippo & Son, Inc.		56,700		2,873,556		1.37	%
Post Holdings, Inc. (a)		56,800		4,329,864		2.06	%
Tyson Foods, Inc., Class A		61,000		4,321,850		2.05	%
				22,809,906		10.84	%

Financials – 3.69%
The Progressive Corp.		123,700		3,897,787		1.85	%
United Fire Group, Inc.		97,900		3,869,008		1.84	%
				7,766,795		3.69	%

Health Care – 6.95%
Henry Schein, Inc. (a)		23,900		3,565,880		1.70	%
Owens & Minor, Inc.		100,200		3,251,490		1.55	%
Triple-S Management Corp., Class B (a)(b)		150,600		3,114,408		1.48	%
UnitedHealth Group, Inc.		33,100		4,678,023		2.22	%
				14,609,801		6.95	%

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS

COMMON STOCKS	Number				% of
	of Shares		Value		Net Assets
Industrials – 26.31%
Air Transport Services Group, Inc. (a)		341,800	$	4,522,014		2.15	%
Astec Industries, Inc.		90,900		5,032,224		2.39	%
Brady Corp., Class A		151,100		5,001,410		2.38	%
Briggs & Stratton Corp.		185,600		3,455,872		1.64	%
C.H. Robinson Worldwide, Inc.		56,500		3,848,780		1.83	%
Hawaiian Holdings, Inc. (a)		91,800		4,133,295		1.97	%
Huntington Ingalls Industries, Inc.		30,100		4,856,936		2.31	%
Insperity, Inc.		83,100		6,249,120		2.97	%
Insteel Industries, Inc.		150,800		4,056,520		1.93	%
John Bean Technologies Corp.		75,100		5,996,735		2.85	%
Kaman Corp.		89,900		3,925,034		1.87	%
Watsco, Inc.		31,000		4,255,990		2.02	%
				55,333,930		26.31	%

Information Technology – 15.44%
Arrow Electronics, Inc. (a)		69,100		4,223,392		2.01	%
Convergys Corp.		153,100		4,470,520		2.12	%
Itron, Inc. (a)		99,100		5,341,490		2.54	%
NeoPhotonics Corp. (a)		360,200		5,042,800		2.40	%
Orbotech, Ltd. (a)(b)		174,300		4,775,820		2.27	%
SYNNEX Corp.		42,000		4,306,680		2.05	%
Tech Data Corp. (a)		56,100		4,320,822		2.05	%
				32,481,524		15.44	%

Materials – 8.15%
Avery Dennison Corp.		60,600		4,229,274		2.01	%
Bemis Co., Inc.		80,500		3,921,960		1.86	%
Reliance Steel & Aluminum Co.		64,800		4,456,944		2.12	%
Sonoco Products Co.		90,300		4,541,187		2.16	%
				17,149,365		8.15	%

Utilities – 4.38%
Exelon Corp.		125,400		4,272,378		2.03	%
UGI Corp.		106,800		4,943,772		2.35	%
				9,216,150		4.38	%

Total Common Stocks
(Cost $198,765,034)				205,721,682		97.80	%

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

RIGHTS – 0.00%	Number					% of
	of Shares		Value			Net Assets
Health Care – 0.00%
Forest Laboratories, Inc. (a)(c)		5,500	$	275			0.00	%

Total Rights
(Cost $0)				275			0.00	%

SHORT-TERM INVESTMENTS – 2.46%

Money Market Funds – 2.46%
Fidelity Government Portfolio,
Institutional Class, 0.27% (d)		5,179,813		5,179,813			2.46	%

Total Short-Term Investments
(Cost $5,179,813)				5,179,813			2.46	%

Total Investments
(Cost $203,944,847) – 100.26%				210,901,770			100.26	%
Liabilities in Excess
of Other Assets – (0.26)%				(546,091	)		(0.26	)%

TOTAL NET ASSETS – 100.00%			$	210,355,679			100.00	%

Percentages are stated as a percent of net assets.

(a)	Non-income producing security.
(b)	U.S. traded security of a foreign corporation.
(c)	Security is fair valued in good faith.
(d)	The rate listed is the fund’s 7-day yield as of October 31, 2016.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS

Summary of Fair Value Exposure at October 31, 2016

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2016 (see Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3			Total
Consumer Discretionary	$	46,354,211	$	—	$	—		$	46,354,211
Consumer Staples		22,809,906		—		—			22,809,906
Financials		7,766,795		—		—			7,766,795
Health Care		14,609,801		—		—			14,609,801
Industrials		55,333,930		—		—			55,333,930
Information Technology		32,481,524		—		—			32,481,524
Materials		17,149,365		—		—			17,149,365
Utilities		9,216,150		—		—			9,216,150
Total Common Stocks	$	205,721,682	$	—	$	—		$	205,721,682
Rights
Health Care	$	—	$	—	$	275	*	$	275
Total Rights	$	—	$	—	$	275		$	275
Short-Term Investments
Money Market Funds	$	5,179,813	$	—	$	—		$	5,179,813
Total Short-Term Investments	$	5,179,813	$	—	$	—		$	5,179,813
Total Investments	$	210,901,495	$	—	$	275		$	210,901,770

*	Acquired as partial consideration in an acquisition of an issuer whose securities were held by the Fund immediately prior to such acquisition.

Transfers between levels are recognized at the end of the reporting period. During the year ended October 31, 2016, the Fund recognized no transfers between levels.

Level 3 Reconciliation Disclosure

Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.

	Rights
Balance as of October 31, 2015	$	275
Accrued discounts/premiums		—
Realized gain (loss)		—
Change in unrealized appreciation (depreciation)		—
Purchases		—
(Sales)		—
Transfer in and/or out of Level 3		—
Balance as of October 31, 2016	$	275

Change in unrealized appreciation/depreciation during the period for
Level 3 investments held at October 31, 2016	$	—

The Level 3 investments as of October 31, 2016, represented 0.00% of net assets and did not warrant a disclosure of significant unobservable valuation inputs.

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

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Financial Statements

Statement of Assets and Liabilities as of October 31, 2016

ASSETS:
Investments in securities, at value (cost $203,944,847)	$	210,901,770
Dividends and interest receivable		622
Receivable for fund shares sold		4,801
Prepaid expenses and other assets		30,672
Total Assets		210,937,865

LIABILITIES:
Payable for fund shares redeemed		223,869
Payable to advisor		135,746
Payable to administrator		36,812
Payable to auditor		27,579
Accrued distribution fees		71,609
Accrued service fees		16,088
Accrued trustees fees		3,872
Accrued expenses and other payables		66,611
Total Liabilities		582,186
NET ASSETS	$	210,355,679

NET ASSETS CONSIST OF:
Capital stock	$	310,276,652
Accumulated net investment loss		(180,958	)
Accumulated net realized loss on investments		(106,696,938	)
Unrealized net appreciation on investments		6,956,923
Total Net Assets	$	210,355,679

NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	184,614,311
Shares issued and outstanding		9,725,748
Net asset value, offering price and redemption price per share	$	18.98

Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	25,741,368
Shares issued and outstanding		1,322,800
Net asset value, offering price and redemption price per share	$	19.46

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS

Financial Statements

Statement of Operations for the year ended October 31, 2016

INVESTMENT INCOME:
Dividend income	$	2,803,007
Interest income		12,462
Total investment income		2,815,469

EXPENSES:
Investment advisory fees (See Note 5)		1,839,205
Sub-transfer agent expenses – Investor Class (See Note 5)		363,691
Sub-transfer agent expenses – Institutional Class (See Note 5)		24,712
Distribution fees – Investor Class (See Note 5)		324,967
Administration, fund accounting, custody and transfer agent fees (See Note 5)		242,477
Service fees – Investor Class (See Note 5)		216,645
Audit fees		28,766
Federal and state registration fees		27,330
Reports to shareholders		25,751
Compliance expense (See Note 5)		23,709
Trustees’ fees and expenses		15,948
Interest expense (See Note 7)		5,265
Legal fees		2,743
Other expenses		20,367
Total expenses		3,161,576
NET INVESTMENT LOSS	$	(346,107	)

REALIZED AND UNREALIZED LOSSES:
Net realized loss on investments	$	(8,409,990	)
Net change in unrealized appreciation on investments		(5,945,754	)
Net loss on investments		(14,355,744	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(14,701,851	)

The accompanying notes are an integral part of these financial statements.

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STATEMENTS OF CHANGES IN NET ASSETS

Financial Statements

Statements of Changes in Net Assets

	Year Ended			Year Ended
	October 31, 2016			October 31, 2015
OPERATIONS:
Net investment income (loss)	$	(346,107	)	$	926,445
Net realized gain (loss) on investments		(8,409,990	)		50,172,808
Net change in unrealized appreciation on investments		(5,945,754	)		(32,171,870	)
Net increase (decrease) in net
assets resulting from operations		(14,701,851	)		18,927,383

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Investor Class		(255,352	)		—
Institutional Class		(98,941	)		—
Total distributions		(354,293	)		—

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		23,250,634			52,930,420
Proceeds from shares subscribed – Institutional Class		4,485,262			31,992,911
Dividends reinvested – Investor Class		249,654			—
Dividends reinvested – Institutional Class		93,766			—
Cost of shares redeemed – Investor Class		(74,707,125	)		(48,171,421	)
Cost of shares redeemed – Institutional Class		(15,664,076	)		(21,201,209	)
Net increase (decrease) in net assets derived
from capital share transactions		(62,291,885	)		15,550,701
TOTAL INCREASE (DECREASE) IN NET ASSETS		(77,348,029	)		34,478,084

NET ASSETS:
Beginning of year		287,703,708			253,225,624
End of year	$	210,355,679		$	287,703,708
Undistributed net investment
income (loss), end of year	$	(180,958	)	$	354,293

CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		1,215,295			2,691,286
Shares sold – Institutional Class		231,105			1,609,045
Shares issued to holders as
reinvestment of dividends – Investor Class		12,816			—
Shares issued to holders as reinvestment
of dividends – Institutional Class		4,710			—
Shares redeemed – Investor Class		(3,937,410	)		(2,447,997	)
Shares redeemed – Institutional Class		(816,510	)		(1,044,452	)
Net increase (decrease) in shares outstanding		(3,289,994	)		807,882

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

Financial Statements

Financial Highlights

For an Investor Class share outstanding throughout each year

PER SHARE DATA:

Net asset value, beginning of year

Income from investment operations:

Net investment income (loss)

Net realized and unrealized gains (losses) on investments

Total from investment operations

Less distributions:

Dividends from net investment income

Total distributions

Net asset value, end of year

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of year (millions)

Ratio of expenses to average net assets

Ratio of net investment income (loss) to average net assets

Portfolio turnover rate⁽¹⁾

⁽¹⁾	Portfolio turnover is calculated on the basis of the Fund as a whole.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2016			2015			2014			2013			2012

$	20.00		$	18.68		$	15.65		$	12.38		$	9.97


	(0.02	)		0.06			(0.04	)		(0.11	)		(0.07	)
	(0.98	)		1.26			3.07			3.38			2.48
	(1.00	)		1.32			3.03			3.27			2.41


	(0.02	)		—			—			—			—
	(0.02	)		—			—			—			—
$	18.98		$	20.00		$	18.68		$	15.65		$	12.38

	(5.00	)%		7.07	%		19.36	%		26.41	%		24.17	%


$	184.61		$	248.74		$	227.68		$	220.83		$	265.60
	1.32	%		1.15	%		1.23	%		1.29	%		1.34	%
	(0.18	)%		0.30	%		(0.17	)%		(0.26	)%		(0.66	)%
	97	%		102	%		84	%		105	%		90	%

The accompanying notes are an integral part of these financial statements.

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Financial Statements

Financial Highlights

For an Institutional Class share outstanding throughout each year

PER SHARE DATA:

Net asset value, beginning of year

Income from investment operations:

Net investment income (loss)

Net realized and unrealized gains (losses) on investments

Total from investment operations

Less distributions:

Dividends from net investment income

Total distributions

Net asset value, end of year

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of year (millions)

Ratio of expenses to average net assets:

Before expense reimbursement

After expense reimbursement

Ratio of net investment income (loss) to average net assets:

Before expense reimbursement

After expense reimbursement

Portfolio turnover rate⁽¹⁾

⁽¹⁾	Portfolio turnover is calculated on the basis of the Fund as a whole.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Year Ended October 31,
2016			2015			2014			2013			2012

$	20.47		$	19.08		$	15.94		$	12.57		$	10.09


	0.17			0.03			0.06			0.01			(0.04	)
	(1.13	)		1.36			3.08			3.36			2.52
	(0.96	)		1.39			3.14			3.37			2.48


	(0.05	)		—			—			—			—
	(0.05	)		—			—			—			—
$	19.46		$	20.47		$	19.08		$	15.94		$	12.57

	(4.69	)%		7.29	%		19.70	%		26.81	%		24.58	%


$	25.74		$	38.96		$	25.54		$	26.23		$	37.11

	0.98	%		0.99	%		1.03	%		1.11	%		1.11	%
	0.98	%		0.99	%		0.98	%		0.98	%		0.98	%

	0.14	%		0.51	%		0.03	%		(0.01	)%		(0.51	)%
	0.14	%		0.51	%		0.08	%		0.12	%		(0.38	)%
	97	%		102	%		84	%		105	%		90	%

The accompanying notes are an integral part of these financial statements.

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Financial Statements

Notes to the Financial Statements October 31, 2016

1). ORGANIZATION

The Hennessy Cornerstone Growth Fund (the “Fund”) is a series of Hennessy Funds Trust (the “Trust”), which was organized as a Delaware statutory trust on September 17, 1992. The Fund is an open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund is a successor to a fund with the same name (the “Predecessor Fund”) that was a series of Hennessy Mutual Funds, Inc., a Maryland corporation, pursuant to a reorganization that took place after the close of business on February 28, 2014. Prior to February 28, 2014, the Fund had no investment operations. As a result of the reorganization, holders of Investor Class shares of the Predecessor Fund received Investor Class shares of the Fund (the Investor Class shares of the Fund are the successor to the accounting and performance information of the corresponding shares of the Predecessor Fund), and holders of Institutional Class shares of the Predecessor Fund received Institutional Class shares of the Fund (the Institutional Class shares of the Fund are the successor to the accounting and performance information of the corresponding shares of the Predecessor Fund). The investment objective of the Fund is long-term growth of capital. The Fund is a diversified fund.

The Fund offers Investor Class and Institutional Class shares. Each class of shares differs principally in its respective administration, 12b-1 distribution and service, shareholder servicing, and transfer agent expenses (there are no sales charges). Each class has identical rights to earnings, assets, and voting privileges, except for class-specific expenses and exclusive rights to vote on matters affecting only an individual class.

As an investment company, the Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 “Financial Services—Investment Companies.”

2). SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of the financial statements. These policies conform with U.S. generally accepted accounting principles (“GAAP”).

a).	Investment Valuation – All investments in securities are recorded at their estimated fair value, as described in Note 3.

b).	Federal Income Taxes – No provision for federal income taxes or excise taxes has been made since 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. Net investment income or loss and realized gains and losses for federal income tax purposes may differ from that reported on the financial statements because of temporary book 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.

	Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax regulations, permanent differences

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

between book and tax basis for reporting for the fiscal year ended October 31, 2016, have been identified and appropriately reclassified on the Statement of Assets and Liabilities. The adjustments are as follows:

Undistributed	Accumulated
Net Investment	Net Realized
Income/(Loss)	Gain/(Loss)	Paid-in Capital
$165,149	$1,040,214	$(1,205,363)

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 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. The Fund is charged for those expenses that are directly attributable to the 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 or losses on investments are allocated to each class of shares based on its respective 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 gain or loss realized from the investment transactions by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted/amortized over the life of the respective security.

g).	Use of Estimates – The preparation of financial statements in conformity 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 and 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 the sum of the value of the securities held by the Fund, plus cash or other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for the Fund, rounded to the nearest cent. The Fund’s shares will not be 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, if any, are converted into U.S. dollars using the spot market rate of exchange at the time of valuation. Purchases and sales of investments and income are translated into U.S. dollars using the spot market rate of exchange prevailing on the respective dates of such transactions. The Fund does not isolate the portion of the results of operations resulting from

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	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 or 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).	Forward Contracts – The Fund may enter into forward currency contracts to reduce its exposure to changes in foreign currency exchange rates on its foreign holdings and to lock in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in foreign currencies. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing of such contract is included in net realized gain or loss from foreign currency transactions. During the fiscal year ended October 31, 2016, the Fund did not enter into any forward contracts.

k).	Repurchase Agreements – The Fund may enter into repurchase agreements with member banks or security dealers of the Federal Reserve Board whom the investment advisor deems creditworthy. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates.

	Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. Provisions of the repurchase agreements ensure that the market value of the collateral, including accrued interest thereon, is sufficient to cover the repurchase amount in the event of default of the counterparty. If the counterparty defaults and the value of the collateral declines or if the counterparty enters an insolvency proceeding, realization of the collateral by the Fund may be delayed or limited. During the fiscal year ended October 31, 2016, the Fund did not enter into any repurchase agreements.

l).	New Accounting Pronouncements – In May 2015, the FASB issued ASU No. 2015-07 “Disclosure for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent).” The amendments in ASU No. 2015-07 remove the requirement to categorize within the fair value hierarchy investments measured at NAV and require the disclosure of sufficient information to reconcile the fair value of the remaining assets categorized within the fair value hierarchy to the financial statements. The amendments in ASU No. 2015-07 are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Management has reviewed the requirements and believes the adoption of ASU 2015-07 will not have a material impact on the Fund’s financial statements and related disclosures.

3). SECURITIES VALUATION

The Fund follows authoritative fair valuation accounting standards that establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value and a discussion in changes in valuation techniques and related inputs during the period. These inputs are summarized in the three broad levels listed below:

	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 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

		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.

Following is a description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis.

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 will generally be 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”) will generally be 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 will generally be 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 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., weather-related events) 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 registered investment companies (e.g., mutual funds) are generally priced at the ending NAV provided by the applicable registered investment company’s service agent and will be 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.

HENNESSY FUNDS

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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 market hierarchy depending on the inputs used and market activity levels for specific securities.

The Board of Trustees of the Fund (the “Board”) has adopted fair value pricing procedures that are followed when a price for a security is not readily available or if a significant event has occurred that indicates the closing price of a security no longer represents the true value of that security. Fair value pricing determinations are made in good faith in accordance with these procedures. There are numerous criteria that will be given consideration in determining a fair value of a security, such as the trading volume of a security and markets, the value of other like securities, and news events with direct bearing to a security or markets. Fair value pricing results in an estimated price for a security that reflects the amount the Fund might reasonably expect to receive in a current sale. Depending on the relative significance of the valuation inputs, these securities may be classified in either Level 2 or Level 3 of the fair value hierarchy.

The fair valuation of foreign securities may be determined with the assistance of a pricing service using correlations between the movement of prices of such securities and indices of domestic securities and other appropriate indicators, such as closing market prices of relevant American Depositary Receipts or futures contracts. The effect of using fair value pricing is that the Fund’s NAV will reflect the affected portfolio securities’ value as determined by the Board or its designee instead of being determined by the market. Using a fair value pricing methodology to price foreign securities may result in a value that is different from a foreign security’s most recent closing price and from the prices used by other investment companies to calculate their NAVs and are generally considered Level 2 prices in the fair valuation hierarchy. Because the Fund may invest in foreign securities, the value of the Fund’s portfolio securities may change on days when you will not be able to purchase or redeem your shares.

The Board has delegated day-to-day valuation matters to a Valuation Committee comprised of one or more representatives from Hennessy Advisors, Inc., the Fund’s investment advisor. The function of the Valuation Committee is to value securities where current and reliable market quotations are not readily available. All actions taken by the Valuation Committee are reviewed by the Board.

The Fund has performed an analysis of all existing investments to determine the significance and character of all inputs to their fair value determination. Various inputs are used in determining the value of the Fund’s investments. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Details related to the fair valuation hierarchy of the Fund’s securities as of October 31, 2016, are included in the Fund’s Schedule of Investments.

4). INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during the fiscal year ended October 31, 2016, were $235,715,965 and $290,154,139, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during the fiscal year ended October 31, 2016.

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

Hennessy Fund complies with Rule 17a-7 of the Investment Company Act of 1940. For the fiscal year ended October 31, 2016, the Fund did not engage in purchases and sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940.

5). INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Hennessy Advisors, Inc. (the “Advisor”) is the investment advisor of the Fund. The Advisor provides the Fund with investment management services under an Investment Advisory Agreement. The Advisor furnishes all investment advice, office space, facilities, and provides most of the personnel needed by the Fund. As compensation for its services, the Advisor is entitled to a monthly fee from the Fund. The fee is based upon the average daily net assets of the Fund at the annual rate of 0.74%. The net investment advisory fees payable by the Fund as of October 31, 2016, were $135,746.

In the past, the Advisor had contractually agreed to waive its fees and absorb expenses to the extent that the total annual operating expenses exceeded 0.98% of the Fund’s net assets for Institutional Class shares of the Fund (excluding all federal, state and local taxes, interest, brokerage commissions, acquired fund fees and expenses and other costs incurred in connection with the purchase and sale of securities and extraordinary items). The expense limitation agreement was terminated by the Board as of February 28, 2015.

For a period of three years after the year in which the Advisor waived or reimbursed expenses, the Advisor may seek reimbursement from the Fund to the extent that total annual fund operating expenses are less than the expense limitation that was in effect at the time the Advisor waived or reimbursed expenses. As of October 31, 2016, cumulative expenses subject to potential recovery under the aforementioned conditions were $1,023 for Institutional Class shares, which will expire on October 31, 2018.

The Board has approved a Shareholder Servicing Agreement for Investor Class shares of the Fund, which was instituted to compensate the Advisor for the non-investment management services it provides to the Fund. The Shareholder Servicing Agreement provides for a monthly fee paid to the Advisor at an annual rate of 0.10% of the average daily net assets of the Fund attributable to Investor Class shares. Shareholder service fees payable by the Fund as of October 31, 2016, were $16,088.

The Fund has adopted a plan pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended, that authorizes payments in connection with the distribution of the Fund’s shares at an annual rate of up to 0.25% of the Fund’s average daily net assets attributable to Investor Class shares. Even though the authorized rate is up to 0.25%, the Fund has only used up to 0.15% of its average daily net assets attributable to Investor Class shares for such purpose since the plan was implemented on November 1, 2015. Amounts paid under the plan may be spent on any activities or expenses primarily intended to result in the sale of shares, including, but not limited to, advertising, shareholder account servicing, the printing and mailing of prospectuses to other than current shareholders, the printing and mailing of sales literature, and compensation for sales and marketing activities or to financial institutions and others, such as dealers and distributors.

The Fund has entered into agreements with various brokers, dealers, and financial intermediaries in connection with the sale of shares of the Fund. The agreements provide for periodic payments by the Fund to the brokers, dealers, and financial intermediaries for providing certain shareholder maintenance services (sub-transfer agent expenses). These shareholder services include the pre-processing and quality control of new accounts, shareholder correspondence, answering customer inquiries regarding account status, and facilitating shareholder telephone transactions. Fees paid by the

HENNESSY FUNDS

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Fund to various brokers, dealers, and financial intermediaries during the fiscal year ended October 31, 2016, were $388,403.

U.S. Bancorp Fund Services, LLC (“USBFS”) provides the Fund with administrative, fund accounting, and transfer agent services, and necessary office equipment. As administrator, USBFS is responsible for activities such as (i) preparing various federal and state regulatory filings, reports, and returns for the Fund, (ii) preparing reports and materials to be supplied to the Board, (iii) monitoring the activities of the Fund’s custodian, transfer agent, and accountants, and (iv) coordinating the preparation and payment of the Fund’s expenses and reviewing the Fund’s expense accruals. Fees paid to USBFS during the fiscal year ended October 31, 2016, were $242,477.

U.S. Bank, N.A., an affiliate of USBFS, serves as the Fund’s custodian. Quasar Distributors, LLC acts as the Fund’s principal underwriter in a continuous public offering of the Fund’s shares. Quasar Distributors, LLC is an affiliate of USBFS and U.S. Bank, N.A.

The officers of the Fund are affiliated with the Advisor. Such officers, with the exception of the Chief Compliance Officer and the Senior Compliance Officer, receive no compensation from the Fund for serving in their respective roles. The Fund, along with the other Hennessy Funds, makes reimbursement payments, on an equal basis, to the Advisor for a portion of the salary and benefits associated with the office of the Chief Compliance Officer and for all of the salary and benefits associated with the office of the Senior Compliance Officer. Such amounts are included on the Statement of Operations.

6). GUARANTEES AND INDEMNIFICATIONS

Under the Hennessy Funds’ organizational documents, their officers and trustees are indemnified by the Hennessy Funds against certain liabilities arising out of the performance of their duties to the Hennessy Funds. Additionally, in the normal course of business, the Hennessy Funds enter into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. Currently, the Fund expects the risk of loss to be remote.

7). LINE OF CREDIT

The Fund has an uncommitted line of credit with the Hennessy Funds in the amount of the lesser of (i) $100,000,000 or (ii) 33.33% of each Hennessy Fund’s net assets, or 30% for the Hennessy Gas Utility Fund and 10% for the Hennessy Balanced Fund, intended to provide short-term financing, if necessary, subject to certain restrictions, in connection with shareholder redemptions. The credit facility is with the Hennessy Funds’ custodian bank, U.S. Bank, N.A. Borrowings under this arrangement bear interest at the bank’s prime rate and are secured by all of the Fund’s assets (as to its own borrowings only). During the fiscal year ended October 31, 2016, the Fund had an outstanding average daily balance and a weighted average interest rate of $152,383 and 3.47%, respectively. The maximum amount outstanding for the Fund during the period was $6,290,000. At October 31, 2016, the Fund did not have any borrowings outstanding under the line of credit.

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

8). FEDERAL TAX INFORMATION

As of October 31, 2016, the components of accumulated earnings (losses) for income tax purposes were as follows:

Cost of investments for tax purposes	$	203,944,847
Gross tax unrealized appreciation	$	18,628,329
Gross tax unrealized depreciation		(11,671,406	)
Net tax unrealized appreciation	$	6,956,923
Undistributed ordinary income	$	—
Undistributed long-term capital gains		—
Total distributable earnings	$	—
Other accumulated loss	$	(106,877,896	)
Total accumulated loss	$	(99,920,973	)

The difference between book-basis unrealized appreciation/depreciation (as shown in the Statement of Assets and Liabilities) and tax-basis unrealized appreciation/depreciation (as shown above) is attributable primarily to wash sales and partnership adjustments.

At October 31, 2016, the Fund had capital loss carryforwards that expire as follows:

$97,943,326	October 31, 2017
$8,753,612	Indefinite ST

Capital losses sustained in the fiscal year ended October 31, 2012, and in future taxable years will not expire and may be carried over by the Fund without limitation; however, they will retain the character of the original loss. Furthermore, any loss incurred during those taxable years will be required to be utilized prior to the losses incurred in taxable years prior to 2012. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital losses, irrespective of the character of the original loss.

At October 31, 2016, the Fund deferred on a tax basis, a post-December late year ordinary loss deferral of $180,958.

During the fiscal years ended October 31, 2016 and 2015, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2016		October 31, 2015
Ordinary income⁽¹⁾	$	354,293	$	—
Long-term capital gain		—		—
	$	354,293	$	—

⁽¹⁾ Ordinary income includes short-term gain or loss.

9). EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2016, through the date of issuance of the Fund’s financial statements. Management has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.

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Report of Independent Registered Public Accounting Firm

The Board of Trustees of Hennessy Funds Trust

and the Shareholders of the Hennessy Cornerstone Growth Fund:

We have audited the accompanying statement of assets and liabilities of the Hennessy Cornerstone Growth Fund (the Fund), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2016, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the five year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Fund as of October 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the five year period then ended, in conformity with U.S. generally accepted accounting principles.

Chicago, Illinois

December 22, 2016

HENNESSYFUNDS.COM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS

Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Fund are managed under the direction of the Board of Trustees of the Trust, and the Board of Trustees elects the Officers of the Trust. Beginning in March 2015, the Board of Trustees has from time to time appointed advisers (“Advisers “) to the Board of Trustees, with the intention of having qualified individuals serve in an advisory capacity in order to garner experience in the mutual fund and asset management industry and be considered as potential Trustees in the future. There are currently three Advisers to the Board of Trustees: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board and act as non-voting participants. Information pertaining to the Trustees, Advisers, and the Officers of the Trust is set forth below. The Trustees and Officers serve until their successors are duly elected and qualified or until their earlier death, resignation, or removal. Each of the Trustees oversees 16 Hennessy Funds. Unless otherwise indicated, the address of all persons listed below is 7250 Redwood Boulevard, Suite 200, Novato, CA 94945. The Fund’s Statement of Additional Information includes more information about the persons listed below and is available, without charge, upon request by calling 1-800-966-4354.

			Other
			Directorships
			Held Outside
Name, (Year of Birth),			of Fund
and Position Held	Start Date	Principal Occupation(s)	Complex During
with the Trust	of Service	During Past Five Years	Past Five Years⁽¹⁾

Disinterested Trustees and Advisers

J. Dennis DeSousa	January 1996	Mr. DeSousa is a real estate investor.	None.
(1936)
Trustee

Robert T. Doyle	January 1996	Mr. Doyle has been the Sheriff of	None.
(1947)		Marin County, California since 1996.
Trustee

Gerald P. Richardson	May 2004	Mr. Richardson is an independent	None.
(1945)		consultant in the securities industry.
Trustee

Brian Alexander	March 2015	Mr. Alexander has been employed	None.
(1981)		by Sutter Health Novato Community
Adviser to the Board		Hospital since 2012, first as an
		Assistant Administrator and then,
		beginning in 2013, as the Chief
		Administrative Officer. From 2011
		through 2012, Mr. Alexander was
		employed by Sutter Health West Bay
		Region as the Regional Director of
		Strategic Decision Support. Prior to
		that, in 2011, he served as the
		Director of Managed Care
		Contracting and also the Director of
		Compensation, Benefits, and
		Compliance for the Rehabilitation
		Institute of Chicago.

HENNESSY FUNDS

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			Other
			Directorships
			Held Outside
Name, (Year of Birth),			of Fund
and Position Held	Start Date	Principal Occupation(s)	Complex During
with the Trust	of Service	During Past Five Years	Past Five Years⁽¹⁾

Doug Franklin	March 2016	Mr. Franklin is a retired insurance	None.
(1964)		industry executive. From 1987
Adviser to the Board		through 2015, he was employed by
		the Allianz-Fireman’s Fund Insurance
		Company in various positions,
		including as its Chief Actuary and
		Chief Risk Officer.

Claire Knoles	December 2015	Ms. Knoles is a founder of Kiosk and	None.
(1974)		has served as its Chief Operating
Adviser to the Board		Officer since 2004. Kiosk is a full
		service marketing agency with
		offices in the San Francisco Bay
		Area, Toronto, and Liverpool, UK.

Interested Trustee⁽²⁾

Neil J. Hennessy	January 1996 as	Mr. Hennessy has been employed by	Hennessy
(1956)	a Trustee and	Hennessy Advisors, Inc. since 1989	Advisors, Inc.
Trustee, Chairman of	June 2008 as	and currently serves as its President,
the Board, Chief	an Officer	Chairman and Chief Executive Officer.
Investment Officer,
Portfolio Manager,
and President

Name, (Year of Birth),
and Position Held	Start Date	Principal Occupation(s)
with the Trust	of Service	During Past Five Years

Officers

Teresa M. Nilsen	January 1996	Ms. Nilsen has been employed by Hennessy Advisors, Inc.
(1966)		since 1989 and currently serves as its Executive Vice President,
Executive Vice President		Chief Operations Officer, Chief Financial Officer, and Secretary.
and Treasurer

Daniel B. Steadman	March 2000	Mr. Steadman has been employed by Hennessy Advisors, Inc.
(1956)		since 2000 and currently serves as its Executive Vice President
Executive Vice President		and Chief Compliance Officer.
and Secretary

Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)		as its General Counsel since June 2013. She previously served
Senior Vice President and		as in-house counsel to Carlson Capital, L.P., an SEC-registered
Chief Compliance Officer		investment advisor to several private funds, from
		February 2010 to May 2013.

Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013. Mr. Carlson was previously a co-founder
Senior Vice President and		and principal of Trivium Consultants, LLC from February 2011
Head of Distribution		through November 2013.

HENNESSYFUNDS.COM

TRUSTEES AND OFFICERS OF THE FUND

Name, (Year of Birth),
and Position Held	Start Date	Principal Occupation(s)
with the Trust	of Service	During Past Five Years

David Ellison	October 2012	Mr. Ellison has been employed by Hennessy Advisors, Inc. since
(1958)⁽³⁾		October 2012. He has served as a Portfolio Manager of the
Senior Vice President and		Hennessy Small Cap Financial Fund, the Hennessy Large Cap
Portfolio Manager		Financial Fund, and the Hennessy Technology Fund since
		inception. Prior to that, Mr. Ellison served as Director, CIO and
		President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.

Brian Peery	March 2003 as	Mr. Peery has been employed by Hennessy Advisors, Inc. since
(1969)	an Officer and	2002. He has served as a Portfolio Manager of the Hennessy
Senior Vice President and	February 2011	Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
Portfolio Manager	as a Co-Portfolio	30 Fund, the Hennessy Cornerstone Large Growth Fund, the
	Manager or	Hennessy Cornerstone Value Fund, the Hennessy Total Return
	Portfolio Manager	Fund, and the Hennessy Balanced Fund since October 2014.
		He served as Co-Portfolio Manager of the same funds from
		February 2011 through September 2014. Mr. Peery has also
		served as a Portfolio Manager of the Hennessy Gas Utility Fund
		since February 2015.

Winsor (Skip) Aylesworth	October 2012	Mr. Aylesworth has been employed by Hennessy Advisors, Inc.
(1947)⁽³⁾		since October 2012. He has served as a Portfolio Manager of
Vice President and		the Hennessy Gas Utility Fund since 1998 and as a Portfolio
Portfolio Manager		Manager of the Hennessy Technology Fund since inception.
		Prior to that, Mr. Aylesworth served as Executive Vice President
		of FBR Fund Advisers, Inc. from 1999 to October 2012.

Ryan Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)⁽⁴⁾		October 2012. He has served as a Portfolio Manager of the
Vice President and		Hennessy Gas Utility Fund, the Hennessy Small Cap Financial
Portfolio Manager		Fund, and the Hennessy Large Cap Financial Fund since
		October 2014. He served as Co-Portfolio Manager of the same
		funds from March 2013 through September 2014, and as a
		Portfolio Analyst for the Hennessy Funds from October 2012
		through February 2013. Prior to that, Mr. Kelley served as
		Portfolio Manager of FBR Fund Advisers, Inc. from
		January 2008 to October 2012.

⁽¹⁾	Messrs. DeSousa, Doyle, Hennessy, and Richardson previously served on the Board of Directors of Hennessy Mutual Funds, Inc. (“HMFI”), The Hennessy Funds, Inc. (“HFI”), and Hennessy SPARX Funds Trust (“HSFT”). Pursuant to an internal reorganization effective as of February 28, 2014, the series of HFMI, HFI, and HSFT were reorganized into corresponding series of Hennessy Funds Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
⁽²⁾	Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Hennessy Funds.
⁽³⁾	The address of these officers is 101 Federal Street, Suite 1900, Boston, MA 02110.
⁽⁴⁾	The address of this officer is 1340 Environ Way, Suite 305, Chapel Hill, NC 27517.

HENNESSY FUNDS

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Expense Example (Unaudited)

October 31, 2016

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from May 1, 2016, through October 31, 2016.

Actual Expenses

The first line of the table below under the “Investor Class” and “Institutional Class” headings provides information about actual account values and actual expenses. Although the Fund charges no sales loads or transaction fees, you will be assessed fees for outgoing wire transfers, returned checks and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Fund’s transfer agent. If you request that a redemption be made by wire transfer, currently a $15 fee is charged by the Fund’s transfer agent. IRA accounts will be charged a $15 annual maintenance fee. The example below includes, but is not limited to, management fees, shareholder servicing fees, fund accounting, custody, and transfer agent fees. However, the example below does not include portfolio trading commissions and related expenses, and other extraordinary expenses as determined under generally accepted accounting principles. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line of the table under the “Investor Class” and “Institutional Class” headings in the column entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below under the “Investor Class” and “Institutional Class” headings provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), or exchange fees. Therefore, the second line of the table under the “Investor Class” and “Institutional Class” headings is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

HENNESSYFUNDS.COM

EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period⁽¹⁾
	Account Value	Account Value	May 1, 2016 –
	May 1, 2016	October 31, 2016	October 31, 2016
Investor Class
Actual	$1,000.00	$1,022.10	$6.71
Hypothetical (5% return before expenses)	$1,000.00	$1,018.50	$6.70

Institutional Class
Actual	$1,000.00	$1,024.20	$4.99
Hypothetical (5% return before expenses)	$1,000.00	$1,020.21	$4.98

⁽¹⁾	Expenses are equal to the Fund’s annualized expense ratio of 1.32% for Investor Class shares or 0.98% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/366 days (to reflect one-half year period).

HENNESSY FUNDS

1-800-966-4354

How to Obtain a Copy of the Fund’s

Proxy Voting Policy and Proxy Voting Records

A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge: (1) by calling 1-800-966-4354; (2) on the Hennessy Funds’ website at hennessyfunds.com/proxy-voting/policy.fs; or (3) on the U.S. Securities and Exchange Commission’s website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at hennessyfunds.com/proxy-voting/vote.fs and the SEC’s website at www.sec.gov no later than August 31 for the prior 12 months ending June 30.

Quarterly Filings on Form N-Q

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q will be available on the SEC’s website at www.sec.gov. The Fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Information included in the Fund’s N-Q will also be available upon request by calling 1-800-966-4354.

Federal Tax Distribution Information

(Unaudited)

For the fiscal year ended October 31, 2016, certain dividends paid by the Fund may be subject to a maximum tax rate of 23.8%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The percentage of dividends declared from ordinary income designated as qualified dividend income was 100%.

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for the fiscal year ended October 31, 2016, was 100%.

The percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under Section 871(k)(2)(C) of the Internal Revenue Code of 1986, as amended, for the Fund was 0%.

Householding

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of most financial reports and prospectuses to shareholders who share an address, even if the accounts are registered under different names. This process, known as “householding,” does not apply to account statements. You may, of course, request an individual copy of a prospectus or financial report at any time. If you would like to receive separate mailings, please call the Administrator at 1-800-261-6950 or 1-414-765-4124 and we will begin individual delivery within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact them directly to request individual delivery.

HENNESSYFUNDS.COM

PROXY VOTING — PRIVACY POLICY

We collect the following non-public personal information about you:

	•	information we receive from you on or in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income, and date of birth; and
	•	information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payment history, parties to transactions, cost basis information, and other financial information.

We do not disclose any non-public personal information about our current or former shareholders to non-affiliated third parties, except as permitted by law. For example, we are permitted by law to disclose all of the information we collect, as described above, to our Transfer Agent to process your transactions. Furthermore, we restrict access to your non-public personal information to those persons who require such information to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with federal standards to guard your non-public personal information.

In the event that you hold shares of the Fund through a financial intermediary, including, but not limited to, a broker-dealer, bank or trust company, the privacy policy of your financial intermediary would govern how your non-public personal information would be shared with non-affiliated third parties.

HENNESSY FUNDS

1-800-966-4354

(This Page Intentionally Left Blank.)

For information, questions or assistance, please call

The Hennessy Funds

1-800-966-4354 or 1-415-899-1555

INVESTMENT ADVISOR

Hennessy Advisors, Inc.

7250 Redwood Blvd., Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Dr., Suite 302

Milwaukee, Wisconsin 53212

TRUSTEES

Neil J. Hennessy

Robert T. Doyle

J. Dennis DeSousa

Gerald P. Richardson

COUNSEL

Foley & Lardner LLP

777 East Wisconsin Avenue

Milwaukee, Wisconsin 53202-5306

INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

KPMG LLP

200 East Randolph Street

Chicago, Illinois 60601

DISTRIBUTOR

Quasar Distributors, LLC

615 East Michigan Street

Milwaukee, Wisconsin 53202

hennessyfunds.com | 1-800-966-4354

This report has been prepared for shareholders and may be distributed to

others only if preceded or accompanied by a current prospectus.

ANNUAL REPORT

OCTOBER 31, 2016

HENNESSY CORNERSTONE

LARGE GROWTH FUND

Investor Class HFLGX

Institutional Class HILGX

hennessyfunds.com | 1-800-966-4354

(This Page Intentionally Left Blank.)

CONTENTS

Contents

Letter to Shareholders			2
Performance Overview			4
Financial Statements
Schedule of Investments			7
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
Report of Independent Registered Public Accounting Firm			26
Trustees and Officers of the Fund			27
Expense Example			30
Proxy Voting			32
Quarterly Filings on Form N-Q			32
Federal Tax Distribution Information			32
Householding			32
Privacy Policy			33

HENNESSY FUNDS

1-800-966-4354

December 2016

Dear Hennessy Funds Shareholder:

HENNESSYFUNDS.COM

LETTER TO SHAREHOLDERS

Thank you for your continued confidence and investment in our funds. If you have any questions or would like to speak with us directly, please don’t hesitate to call us at (800) 966-4354.

Best regards,

Neil J. Hennessy

President and Chief Investment Officer

Past performance does not guarantee future results.

Mutual fund investing involves risk. Principal loss is possible.

Opinions expressed are those of Neil Hennessy and are subject to change, are not guaranteed and should not be considered investment advice.

The Dow Jones Industrial Average and S&P 500 Index are unmanaged indices commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is calculated by dividing a company’s market price per share by its earnings per share.

HENNESSY FUNDS

1-800-966-4354

Performance Overview (Unaudited)

CHANGE IN VALUE OF $10,000 INVESTMENT

This graph illustrates the performance of an initial investment of $10,000 made in the Fund on its inception date and assumes the reinvestment of dividends.

AVERAGE ANNUAL TOTAL RETURN FOR PERIODS ENDED OCTOBER 31, 2016

			Since
	One	Five	Inception
	Year	Years	(3/20/09)
Hennessy Cornerstone Large Growth Fund –
Investor Class (HFLGX)	2.63%	11.35%	16.46%
Hennessy Cornerstone Large Growth Fund –
Institutional Class (HILGX)	2.92%	11.59%	16.74%
Russell 1000^® Index	4.26%	13.51%	16.93%
S&P 500 Index	4.51%	13.57%	16.74%

Expense ratios: 1.24% (Investor Class); 0.99% (Institutional Class)

The expense ratios presented are from the most recent prospectus.

PERFORMANCE NARRATIVE

Portfolio Managers Neil J. Hennessy and Brian E. Peery

Performance:

For the twelve-month period ended October 31, 2016, the Investor Class of the Hennessy Cornerstone Large Growth Fund returned 2.63%, underperforming both the Russell 1000^® Index and the S&P 500 Index, which returned 4.26% and 4.51% for the same period, respectively.

HENNESSYFUNDS.COM

PERFORMANCE OVERVIEW

On a sector basis, the Fund’s overweight position in the Industrial Sector aided overall performance, as did its underweight positions in the Healthcare and Consumer Staples sectors. However, these positive contributions were offset by the Fund’s overweight position in retailers, including Bed, Bath & Beyond, Inc. and Macy’s, Inc., which hurt the Fund’s relative performance. Many retailers are struggling with slow growth in demand and increased competition from internet shopping. Airline stocks in the portfolio, which include JetBlue Airways Corp, Southwest Airlines Co., Alaska Air Group, Inc., and Delta Air Lines, Inc., also hampered the portfolio’s overall performance. The Fund continues to hold all of the stocks mentioned.

Portfolio Strategy:

The Fund’s investment strategy is based on identifying large and well-established companies that trade at below average price-to-cash flow ratios. The Fund also seeks to invest only in what it deems to be higher-quality businesses and thus focuses on companies with high returns on total capital.

Market Outlook:

Investment Outlook:

We are confident that there continue to be good investment opportunities in the large-cap space. While we believe higher interest rates may lead to an even stronger U.S. Dollar and difficulties for exporters, large-cap companies with more domestically focused businesses are benefiting from steady economic growth at home, low inflation and low energy prices. With consumer debt levels falling and wage growth finally starting to accelerate, we are expecting a good year for consumer-based companies. We remain pleased with the positioning of the portfolio, which includes a large number of companies that are domestically focused and that we believe are reasonably valued and appear poised for growth. Relative to the Fund’s benchmarks, the portfolio remains overweight in both the Consumer Discretionary and Industrial sectors, and we think that these areas of the market offer great growth potential in 2017.

HENNESSY FUNDS

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_______________

The Russell 1000^® Index is commonly used to measure the performance of large-capitalization U.S. stocks. The S&P 500 Index and Dow Jones Industrial Average are unmanaged indices commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

The Fund may invest in medium capitalized companies, which may have more limited liquidity and greater price volatility than large capitalization companies. The Fund’s formula-based strategy may cause the Fund to buy or sell securities at times when it may not be advantageous. Please see the Fund’s prospectus for a more complete discussion of these and other risks.

Earnings growth is not a measure of the Fund’s future performance. PE, or price to earnings, is calculated by dividing a company’s market price per share by its earnings per share. Price-to-cash flow ratio is a stock valuation measure calculated by dividing a company’s cash flow per share into its current stock price.

HENNESSYFUNDS.COM

PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as of October 31, 2016

HENNESSY CORNERSTONE LARGE GROWTH FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING CASH/CASH EQUIVALENTS)	% NET ASSETS

QUALCOMM, Inc.	2.76%

Cummins, Inc.	2.57%

Harley-Davidson, Inc.	2.57%

Best Buy Co., Inc.	2.53%

Caterpillar, Inc.	2.40%

FedEx Corp.	2.39%

Las Vegas Sands Corp.	2.37%

Baxter International, Inc.	2.34%

Parker-Hannifin Corp.	2.28%

Union Pacific Corp.	2.20%

HENNESSY FUNDS

1-800-966-4354

COMMON STOCKS – 99.05%	Number				% of
	of Shares		Value		Net Assets
Consumer Discretionary – 24.92%
Bed Bath & Beyond, Inc.		41,800	$	1,689,556		1.69	%
Best Buy Co., Inc.		65,000		2,529,150		2.53	%
Darden Restaurants, Inc.		27,700		1,794,683		1.79	%
Harley-Davidson, Inc.		45,000		2,565,900		2.57	%
Kohl’s Corp.		36,500		1,596,875		1.60	%
Las Vegas Sands Corp.		40,900		2,367,292		2.37	%
Macy’s, Inc.		44,300		1,616,507		1.62	%
Nordstrom, Inc.		36,500		1,898,000		1.90	%
Ralph Lauren Corp.		16,000		1,569,600		1.57	%
Target Corp.		24,700		1,697,631		1.70	%
The Gap, Inc.		73,000		2,014,070		2.01	%
Tiffany & Co.		28,500		2,092,470		2.09	%
Viacom, Inc.		39,300		1,476,108		1.48	%
				24,907,842		24.92	%

Consumer Staples – 5.07%
The Kroger Co.		46,300		1,434,374		1.44	%
Wal-Mart Stores, Inc.		27,300		1,911,546		1.91	%
Whole Foods Market, Inc.		60,700		1,717,203		1.72	%
				5,063,123		5.07	%

Energy – 5.28%
Marathon Petroleum Corp.		43,600		1,900,524		1.90	%
Tesoro Corp.		20,900		1,775,873		1.78	%
Valero Energy Corp.		27,100		1,605,404		1.60	%
				5,281,801		5.28	%

Financials – 3.57%
Franklin Resources, Inc.		52,600		1,770,516		1.77	%
The Progressive Corp.		57,000		1,796,070		1.80	%
				3,566,586		3.57	%

Health Care – 5.79%
Baxter International, Inc.		49,100		2,336,669		2.34	%
Gilead Sciences, Inc.		20,000		1,472,600		1.47	%
HCA Holdings, Inc. (a)		25,900		1,982,127		1.98	%
				5,791,396		5.79	%

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS

COMMON STOCKS	Number				% of
	of Shares		Value		Net Assets
Industrials – 37.26%
Alaska Air Group, Inc.		25,500	$	1,841,610		1.84	%
American Airlines Group, Inc.		45,900		1,863,540		1.86	%
Caterpillar, Inc.		28,700		2,395,302		2.40	%
Cummins, Inc.		20,100		2,569,182		2.57	%
Deere & Co.		23,400		2,066,220		2.07	%
Delta Air Lines, Inc.		40,600		1,695,862		1.70	%
Dover Corp.		30,900		2,066,901		2.07	%
Emerson Electric Co.		39,300		1,991,724		1.99	%
FedEx Corp.		13,700		2,388,184		2.39	%
General Dynamics Corp.		13,600		2,050,064		2.05	%
JetBlue Airways Corp. (a)		87,900		1,536,492		1.54	%
PACCAR, Inc.		37,000		2,032,040		2.03	%
Parker-Hannifin Corp.		18,600		2,283,150		2.28	%
Southwest Airlines Co.		48,400		1,938,420		1.94	%
The Boeing Co.		14,800		2,107,964		2.11	%
Union Pacific Corp.		25,000		2,204,500		2.20	%
United Continental Holdings, Inc. (a)		38,000		2,136,740		2.14	%
United Technologies Corp.		20,300		2,074,660		2.08	%
				37,242,555		37.26	%

Information Technology – 13.36%
Apple, Inc.		18,650		2,117,521		2.12	%
eBay, Inc. (a)		75,700		2,158,207		2.16	%
Intel Corp.		58,500		2,039,895		2.04	%
International Business Machines Corp.		14,300		2,197,767		2.20	%
QUALCOMM, Inc.		40,200		2,762,544		2.76	%
Skyworks Solutions, Inc.		27,000		2,077,380		2.08	%
				13,353,314		13.36	%

Materials – 2.08%
Praxair, Inc.		17,800		2,083,668		2.08	%

Telecommunication Services – 1.72%
Verizon Communications, Inc.		35,700		1,717,170		1.72	%

Total Common Stocks
(Cost $91,866,661)				99,007,455		99.05	%

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

SHORT-TERM INVESTMENTS – 1.10%	Number					% of
	of Shares		Value			Net Assets
Money Market Funds – 1.10%
Fidelity Government Portfolio, Institutional Class, 0.27% (b)		1,104,589	$	1,104,589			1.10	%

Total Short-Term Investments
(Cost $1,104,589)				1,104,589			1.10	%

Total Investments
(Cost $92,971,250) – 100.15%				100,112,044			100.15	%
Liabilities in Excess
of Other Assets – (0.15)%				(145,637	)		(0.15	)%

TOTAL NET ASSETS – 100.00%			$	99,966,407			100.00	%

Percentages are stated as a percent of net assets.

(a)	Non-income producing security.
(b)	The rate listed is the fund’s 7-day yield as of October 31, 2016.

Summary of Fair Value Exposure at October 31, 2016

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2016 (see Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Consumer Discretionary	$	24,907,842	$	—	$	—	$	24,907,842
Consumer Staples		5,063,123		—		—		5,063,123
Energy		5,281,801		—		—		5,281,801
Financials		3,566,586		—		—		3,566,586
Health Care		5,791,396		—		—		5,791,396
Industrials		37,242,555		—		—		37,242,555
Information Technology		13,353,314		—		—		13,353,314
Materials		2,083,668		—		—		2,083,668
Telecommunication Services		1,717,170		—		—		1,717,170
Total Common Stocks	$	99,007,455	$	—	$	—	$	99,007,455
Short-Term Investments
Money Market Funds	$	1,104,589	$	—	$	—	$	1,104,589
Total Short-Term Investments	$	1,104,589	$	—	$	—	$	1,104,589
Total Investments	$	100,112,044	$	—	$	—	$	100,112,044

Transfers between levels are recognized at the end of the reporting period. During the year ended October 31, 2016, the Fund recognized no transfers between levels.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES

Financial Statements

Statement of Assets and Liabilities as of October 31, 2016

ASSETS:
Investments in securities, at value (cost $92,971,250)	$	100,112,044
Dividends and interest receivable		82,878
Receivable for fund shares sold		572
Prepaid expenses and other assets		16,097
Total Assets		100,211,591

LIABILITIES:
Payable for fund shares redeemed		24,275
Payable to advisor		62,796
Payable to administrator		16,487
Payable to auditor		21,280
Accrued distribution fees		84,845
Accrued service fees		7,442
Accrued trustees fees		3,898
Accrued expenses and other payables		24,161
Total Liabilities		245,184
NET ASSETS	$	99,966,407

NET ASSETS CONSIST OF:
Capital stock	$	96,254,709
Accumulated net investment income		1,258,527
Accumulated net realized loss on investments		(4,687,623	)
Unrealized net appreciation on investments		7,140,794
Total Net Assets	$	99,966,407

NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	87,728,399
Shares issued and outstanding		8,542,207
Net asset value, offering price and redemption price per share	$	10.27

Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	12,238,008
Shares issued and outstanding		1,180,401
Net asset value, offering price and redemption price per share	$	10.37

The accompanying notes are an integral part of these financial statements.

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Financial Statements

Statement of Operations for the year ended October 31, 2016

INVESTMENT INCOME:
Dividend income	$	2,483,487
Interest income		5,789
Total investment income		2,489,276

EXPENSES:
Investment advisory fees (See Note 5)		744,336
Distribution fees – Investor Class (See Note 5)		132,283
Administration, fund accounting, custody and transfer agent fees (See Note 5)		98,085
Service fees – Investor Class (See Note 5)		88,189
Sub-transfer agent expenses – Investor Class (See Note 5)		42,576
Sub-transfer agent expenses – Institutional Class (See Note 5)		6,257
Federal and state registration fees		30,392
Compliance expense (See Note 5)		23,710
Audit fees		21,772
Reports to shareholders		16,094
Trustees’ fees and expenses		15,403
Legal fees		790
Interest expense (See Note 7)		276
Other expenses		10,539
Total expenses		1,230,702
NET INVESTMENT INCOME	$	1,258,574

REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized loss on investments	$	(4,660,170	)
Net change in unrealized appreciation on investments		5,641,171
Net gain on investments		981,001
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,239,575

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS

Financial Statements

Statements of Changes in Net Assets

	Year Ended			Year Ended
	October 31, 2016			October 31, 2015
OPERATIONS:
Net investment income	$	1,258,574		$	1,652,828
Net realized gain (loss) on investments		(4,660,170	)		23,691,496
Net change in unrealized
appreciation (depreciation) on investments		5,641,171			(23,789,596	)
Net increase in net assets resulting from operations		2,239,575			1,554,728

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Investor Class		(1,432,337	)		(1,131,289	)
Institutional Class		(220,462	)		(182,392	)
Net realized gains
Investor Class		(19,800,250	)		(15,515,006	)
Institutional Class		(2,853,456	)		(2,199,959	)
Total distributions		(24,306,505	)		(19,028,646	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		3,720,536			10,488,951
Proceeds from shares subscribed – Institutional Class		414,799			1,162,873
Dividends reinvested – Investor Class		20,149,648			15,613,606
Dividends reinvested – Institutional Class		2,974,276			2,276,330
Cost of shares redeemed – Investor Class		(15,493,334	)		(17,679,567	)
Cost of shares redeemed – Institutional Class		(2,192,433	)		(2,316,917	)
Net increase in net assets derived from
capital share transactions		9,573,492			9,545,276
TOTAL DECREASE IN NET ASSETS		(12,493,438	)		(7,928,641	)

NET ASSETS:
Beginning of year		112,459,845			120,388,486
End of year	$	99,966,407		$	112,459,845
Undistributed net investment income, end of year	$	1,258,527		$	1,652,799

CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		366,149			772,173
Shares sold – Institutional Class		40,906			84,750
Shares issued to holders as reinvestment
of dividends – Investor Class		2,044,705			1,169,440
Shares issued to holders as reinvestment
of dividends – Institutional Class		299,398			168,993
Shares redeemed – Investor Class		(1,461,302	)		(1,307,953	)
Shares redeemed – Institutional Class		(214,449	)		(171,821	)
Net increase in shares outstanding		1,075,407			715,582

The accompanying notes are an integral part of these financial statements.

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Financial Statements

Financial Highlights

For an Investor Class share outstanding throughout each year

PER SHARE DATA:

Net asset value, beginning of year

Income from investment operations:

Net investment income

Net realized and unrealized gains on investments

Total from investment operations

Less distributions:

Dividends from net investment income

Dividends from net realized gains

Total distributions

Net asset value, end of year

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of year (millions)

Ratio of expenses to average net assets

Ratio of net investment income to average net assets

Portfolio turnover rate⁽¹⁾

⁽¹⁾	Portfolio turnover is calculated on the basis of the Fund as a whole.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2016			2015			2014			2013			2012

$	12.99		$	15.16		$	13.56		$	10.77		$	12.37


	0.09			0.17			0.15			0.14			0.13
	0.08			0.04			2.28			2.77			0.80
	0.17			0.21			2.43			2.91			0.93


	(0.16	)		(0.14	)		(0.15	)		(0.10	)		(0.07	)
	(2.73	)		(2.24	)		(0.68	)		(0.02	)		(2.46	)
	(2.89	)		(2.38	)		(0.83	)		(0.12	)		(2.53	)
$	10.27		$	12.99		$	15.16		$	13.56		$	10.77

	2.63	%		1.11	%		18.73	%		27.32	%		9.14	%


$	87.73		$	98.64		$	105.51		$	88.77		$	75.83
	1.25	%		1.09	%		1.15	%		1.19	%		1.27	%
	1.22	%		1.37	%		1.12	%		1.10	%		1.35	%
	53	%		79	%		57	%		73	%		0	%

The accompanying notes are an integral part of these financial statements.

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Financial Statements

Financial Highlights

For an Institutional Class share outstanding throughout each year

PER SHARE DATA:

Net asset value, beginning of year

Income from investment operations:

Net investment income

Net realized and unrealized gains on investments

Total from investment operations

Less distributions:

Dividends from net investment income

Dividends from net realized gains

Total distributions

Net asset value, end of year

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of year (millions)

Ratio of expenses to average net assets:

Before expense reimbursement

After expense reimbursement

Ratio of net investment income to average net assets:

Before expense reimbursement

After expense reimbursement

Portfolio turnover rate⁽¹⁾

⁽¹⁾	Portfolio turnover is calculated on the basis of the Fund as a whole.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Year Ended October 31,
2016			2015			2014			2013			2012

$	13.10		$	15.30		$	13.68		$	10.85		$	12.44


	0.13			0.20			0.17			0.09			0.07
	0.07			0.02			2.30			2.88			0.89
	0.20			0.22			2.47			2.97			0.96


	(0.17	)		(0.16	)		(0.17	)		(0.12	)		(0.09	)
	(2.76	)		(2.26	)		(0.68	)		(0.02	)		(2.46	)
	(2.93	)		(2.42	)		(0.85	)		(0.14	)		(2.55	)
$	10.37		$	13.10		$	15.30		$	13.68		$	10.85

	2.92	%		1.19	%		18.96	%		27.63	%		9.43	%


$	12.24		$	13.82		$	14.88		$	16.19		$	33.94

	1.01	%		0.99	%		1.06	%		1.10	%		1.41	%
	1.01	%		0.99	%		0.98	%		0.98	%		0.98	%

	1.47	%		1.47	%		1.21	%		1.38	%		6.44	%
	1.47	%		1.47	%		1.30	%		1.50	%		6.87	%
	53	%		79	%		57	%		73	%		0	%

The accompanying notes are an integral part of these financial statements.

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Financial Statements

Notes to the Financial Statements October 31, 2016

1). ORGANIZATION

The Hennessy Cornerstone Large Growth Fund (the “Fund”) is a series of Hennessy Funds Trust (the “Trust”), which was organized as a Delaware statutory trust on September 17, 1992. The Fund is an open-end management investment company registered under the Investment Company Act of 1940, as amended. The investment objective of the Fund is long-term growth of capital. The Fund is a diversified fund.

2). SIGNIFICANT ACCOUNTING POLICIES

a).	Investment Valuation – All investments in securities are recorded at their estimated fair value, as described in Note 3.

b).	Federal Income Taxes – No provision for federal income taxes or excise taxes has been made since 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. Net investment income or loss and realized gains and losses for federal income tax purposes may differ from that reported on the financial statements because of temporary book 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.

	Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax regulations, permanent differences between book and tax basis for reporting for the fiscal year ended October 31, 2016, have been identified and appropriately reclassified on the Statement of Assets and Liabilities. The adjustments are as follows:

Undistributed	Accumulated
Net Investment	Net Realized
Income/(Loss)	Gain/(Loss)	Paid-in Capital
$(47)	$1,015,300	$(1,015,253)

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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 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. The Fund is charged for those expenses that are directly attributable to the 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 or losses on investments are allocated to each class of shares based on its respective 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 gain or loss realized from the investment transactions by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted/amortized over the life of the respective security.

g).	Use of Estimates – The preparation of financial statements in conformity 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 and 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 the sum of the value of the securities held by the Fund, plus cash or other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for the Fund, rounded to the nearest cent. The Fund’s shares will not be 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).	Repurchase Agreements – The Fund may enter into repurchase agreements with member banks or security dealers of the Federal Reserve Board whom the investment advisor deems creditworthy. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates.

	Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. Provisions of the repurchase agreements ensure that the market value of the collateral, including accrued interest thereon, is sufficient to cover the repurchase amount in the event of default of the counterparty. If the counterparty defaults and the value of the collateral declines or if the counterparty enters an insolvency proceeding, realization of the collateral by the Fund may be delayed or limited. During the fiscal year ended October 31, 2016, the Fund did not enter into any repurchase agreements.

j).	Derivatives – The Fund may invest in, or enter into, derivatives, such as options, futures contracts, options on futures contracts, and swaps, for a variety of reasons, including to

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	hedge certain risks, to provide a substitute for purchasing or selling particular securities, or to increase potential income gain. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives may allow the Fund to increase or decrease the level of risk to which the Fund is exposed more quickly and efficiently than transactions in other types of instruments. The main purpose of utilizing derivative instruments is for hedging purposes.

	The Fund follows the financial accounting reporting rules as required by the Derivatives and Hedging Topic of the FASB Accounting Standards Codification. Under such rules, the Fund is required to include enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivatives instruments affect an entity’s results of operations and financial position. During the fiscal year ended October 31, 2016, the Fund did not hold any derivative instruments.

k).	New Accounting Pronouncements – In May 2015, the FASB issued ASU No. 2015-07 “Disclosure for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent).” The amendments in ASU No. 2015-07 remove the requirement to categorize within the fair value hierarchy investments measured at NAV and require the disclosure of sufficient information to reconcile the fair value of the remaining assets categorized within the fair value hierarchy to the financial statements. The amendments in ASU No. 2015-07 are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Management has reviewed the requirements and believes the adoption of ASU 2015-07 will not have a material impact on the Fund’s financial statements and related disclosures.

3). SECURITIES VALUATION

	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 (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.

Following is a description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis.

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

price is readily available will generally be 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”) will generally be 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 will generally be 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.

Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above. 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 exceeded 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 market hierarchy depending on the inputs used and market activity levels for specific securities.

The Fund has performed an analysis of all existing investments to determine the significance and character of all inputs to their fair value determination. Various inputs

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are used in determining the value of the Fund’s investments. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Details related to the fair valuation hierarchy of the Fund’s securities as of October 31, 2016, are included in the Fund’s Schedule of Investments.

4). INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during the fiscal year ended October 31, 2016, were $52,445,861 and $63,166,264, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during the fiscal year ended October 31, 2016.

The Fund is permitted to purchase or sell securities from or to another fund in the Hennessy Funds family of funds (the “Hennessy Funds”) under specified conditions outlined in procedures adopted by the Board of Trustees. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another Hennessy Fund complies with Rule 17a-7 of the Investment Company Act of 1940. For the fiscal year ended October 31, 2016, the Fund did not engage in purchases and sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940.

5). INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES

For a period of three years after the year in which the Advisor waived or reimbursed expenses, the Advisor may seek reimbursement from the Fund to the extent that total annual fund operating expenses are less than the expense limitation that was in effect at the time the Advisor waived or reimbursed expenses. As of October 31, 2016, cumulative expenses subject to potential recovery under the aforementioned conditions were $238 for Institutional Class shares, which will expire on October 31, 2018.

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

up to 0.25%, the Fund has only used up to 0.15% of its average daily net assets attributable to Investor Class shares for such purpose since the plan was implemented on November 1, 2015. Amounts paid under the plan may be spent on any activities or expenses primarily intended to result in the sale of shares, including, but not limited to, advertising, shareholder account servicing, the printing and mailing of prospectuses to other than current shareholders, the printing and mailing of sales literature, and compensation for sales and marketing activities or to financial institutions and others, such as dealers and distributors.

6). GUARANTEES AND INDEMNIFICATIONS

7). LINE OF CREDIT

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restrictions, in connection with shareholder redemptions. The credit facility is with the Hennessy Funds’ custodian bank, U.S. Bank, N.A. Borrowings under this arrangement bear interest at the bank’s prime rate and are secured by all of the Fund’s assets (as to its own borrowings only). During the fiscal year ended October 31, 2016, the Fund had an outstanding average daily balance and a weighted average interest rate of $10,464 and 3.47%, respectively. The maximum amount outstanding for the Fund during the period was $1,291,000. At October 31, 2016, the Fund did not have any borrowings outstanding under the line of credit.

8). FEDERAL TAX INFORMATION

As of October 31, 2016, the components of accumulated earnings (losses) for income tax purposes were as follows:

Cost of investments for tax purposes	$	92,974,941
Gross tax unrealized appreciation	$	13,252,735
Gross tax unrealized depreciation		(6,115,632	)
Net tax unrealized appreciation	$	7,137,103
Undistributed ordinary income	$	1,258,527
Undistributed long-term capital gains		—
Total distributable earnings	$	1,258,527
Other accumulated loss	$	(4,683,932	)
Total accumulated gain	$	3,711,698

At October 31, 2016, the Fund had capital loss carryforwards that expire as follows:

$846,889	Indefinite ST
$3,837,043	Indefinite LT

At October 31, 2016, the Fund did not defer, on a tax basis, any post-December late year ordinary loss deferrals.

During the fiscal years ended October 31, 2016 and 2015, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2016		October 31, 2015
Ordinary income⁽¹⁾	$	1,652,846	$	1,313,681
Long-term capital gain		22,653,659		17,714,965
	$	24,306,505	$	19,028,646

⁽¹⁾ Ordinary income includes short-term gain or loss.

8). EVENTS SUBSEQUENT TO YEAR END

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NOTES TO THE FINANCIAL STATEMENTS

(This Page Intentionally Left Blank.)

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Report of Independent Registered Public Accounting Firm

The Board of Trustees of Hennessy Funds Trust

and Shareholders of the Hennessy Cornerstone Large Growth Fund:

We have audited the accompanying statement of assets and liabilities of the Hennessy Cornerstone Large Growth Fund (the Fund), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2016, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the five year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

Chicago, Illinois

December 22, 2016

HENNESSYFUNDS.COM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS

Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Fund are managed under the direction of the Board of Trustees of the Trust, and the Board of Trustees elects the Officers of the Trust. Beginning in March 2015, the Board of Trustees has from time to time appointed advisers (“Advisers”) to the Board of Trustees, with the intention of having qualified individuals serve in an advisory capacity in order to garner experience in the mutual fund and asset management industry and be considered as potential Trustees in the future. There are currently three Advisers to the Board of Trustees: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board and act as non-voting participants. Information pertaining to the Trustees, Advisers, and the Officers of the Trust is set forth below. The Trustees and Officers serve until their successors are duly elected and qualified or until their earlier death, resignation, or removal. Each of the Trustees oversees 16 Hennessy Funds. Unless otherwise indicated, the address of all persons listed below is 7250 Redwood Boulevard, Suite 200, Novato, CA 94945. The Fund’s Statement of Additional Information includes more information about the persons listed below and is available, without charge, upon request by calling 1-800-966-4354.

			Other
			Directorships
			Held Outside
Name, (Year of Birth),			of Fund
and Position Held	Start Date	Principal Occupation(s)	Complex During
with the Trust	of Service	During Past Five Years	Past Five Years⁽¹⁾

Disinterested Trustees and Advisers

J. Dennis DeSousa	January 1996	Mr. DeSousa is a real estate investor.	None.
(1936)
Trustee

Robert T. Doyle	January 1996	Mr. Doyle has been the Sheriff of	None.
(1947)		Marin County, California since 1996.
Trustee

Gerald P. Richardson	May 2004	Mr. Richardson is an independent	None.
(1945)		consultant in the securities industry.
Trustee

Brian Alexander	March 2015	Mr. Alexander has been employed	None.
(1981)		by Sutter Health Novato Community
Adviser to the Board		Hospital since 2012, first as an
		Assistant Administrator and then,
		beginning in 2013, as the Chief
		Administrative Officer. From 2011
		through 2012, Mr. Alexander was
		employed by Sutter Health West Bay
		Region as the Regional Director of
		Strategic Decision Support. Prior to
		that, in 2011, he served as the
		Director of Managed Care
		Contracting and also the Director of
		Compensation, Benefits, and
		Compliance for the Rehabilitation
		Institute of Chicago.

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			Other
			Directorships
			Held Outside
Name, (Year of Birth),			of Fund
and Position Held	Start Date	Principal Occupation(s)	Complex During
with the Trust	of Service	During Past Five Years	Past Five Years⁽¹⁾

Doug Franklin	March 2016	Mr. Franklin is a retired insurance	None.
(1964)		industry executive. From 1987
Adviser to the Board		through 2015, he was employed by
		the Allianz-Fireman’s Fund Insurance
		Company in various positions,
		including as its Chief Actuary and
		Chief Risk Officer.

Claire Knoles	December 2015	Ms. Knoles is a founder of Kiosk and	None.
(1974)		has served as its Chief Operating
Adviser to the Board		Officer since 2004. Kiosk is a full
		service marketing agency with
		offices in the San Francisco Bay
		Area, Toronto, and Liverpool, UK.

Interested Trustee⁽²⁾

Neil J. Hennessy	January 1996 as	Mr. Hennessy has been employed by	Hennessy
(1956)	a Trustee and	Hennessy Advisors, Inc. since 1989	Advisors, Inc.
Trustee, Chairman of	June 2008 as	and currently serves as its President,
the Board, Chief	an Officer	Chairman and Chief Executive Officer.
Investment Officer,
Portfolio Manager,
and President

Name, (Year of Birth),
and Position Held	Start Date	Principal Occupation(s)
with the Trust	of Service	During Past Five Years

Officers

Teresa M. Nilsen	January 1996	Ms. Nilsen has been employed by Hennessy Advisors, Inc.
(1966)		since 1989 and currently serves as its Executive Vice President,
Executive Vice President		Chief Operations Officer, Chief Financial Officer, and Secretary.
and Treasurer

Daniel B. Steadman	March 2000	Mr. Steadman has been employed by Hennessy Advisors, Inc.
(1956)		since 2000 and currently serves as its Executive Vice President
Executive Vice President		and Chief Compliance Officer.
and Secretary

Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)		as its General Counsel since June 2013. She previously served
Senior Vice President and		as in-house counsel to Carlson Capital, L.P., an SEC-registered
Chief Compliance Officer		investment advisor to several private funds, from
		February 2010 to May 2013.

Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013. Mr. Carlson was previously a co-founder
Senior Vice President and		and principal of Trivium Consultants, LLC from February 2011
Head of Distribution		through November 2013.

HENNESSYFUNDS.COM

TRUSTEES AND OFFICERS OF THE FUND

Name, (Year of Birth),
and Position Held	Start Date	Principal Occupation(s)
with the Trust	of Service	During Past Five Years

David Ellison	October 2012	Mr. Ellison has been employed by Hennessy Advisors, Inc. since
(1958)⁽³⁾		October 2012. He has served as a Portfolio Manager of the
Senior Vice President and		Hennessy Small Cap Financial Fund, the Hennessy Large Cap
Portfolio Manager		Financial Fund, and the Hennessy Technology Fund since
		inception. Prior to that, Mr. Ellison served as Director, CIO and
		President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.

Brian Peery	March 2003 as	Mr. Peery has been employed by Hennessy Advisors, Inc. since
(1969)	an Officer and	2002. He has served as a Portfolio Manager of the Hennessy
Senior Vice President and	February 2011	Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
Portfolio Manager	as a Co-Portfolio	30 Fund, the Hennessy Cornerstone Large Growth Fund, the
	Manager or	Hennessy Cornerstone Value Fund, the Hennessy Total Return
	Portfolio Manager	Fund, and the Hennessy Balanced Fund since October 2014.
		He served as Co-Portfolio Manager of the same funds from
		February 2011 through September 2014. Mr. Peery has also
		served as a Portfolio Manager of the Hennessy Gas Utility Fund
		since February 2015.

Winsor (Skip) Aylesworth	October 2012	Mr. Aylesworth has been employed by Hennessy Advisors, Inc.
(1947)⁽³⁾		since October 2012. He has served as a Portfolio Manager of
Vice President and		the Hennessy Gas Utility Fund since 1998 and as a Portfolio
Portfolio Manager		Manager of the Hennessy Technology Fund since inception.
		Prior to that, Mr. Aylesworth served as Executive Vice President
		of FBR Fund Advisers, Inc. from 1999 to October 2012.

Ryan Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)⁽⁴⁾		October 2012. He has served as a Portfolio Manager of the
Vice President and		Hennessy Gas Utility Fund, the Hennessy Small Cap Financial
Portfolio Manager		Fund, and the Hennessy Large Cap Financial Fund since
		October 2014. He served as Co-Portfolio Manager of the same
		funds from March 2013 through September 2014, and as a
		Portfolio Analyst for the Hennessy Funds from October 2012
		through February 2013. Prior to that, Mr. Kelley served as
		Portfolio Manager of FBR Fund Advisers, Inc. from
		January 2008 to October 2012.

⁽¹⁾	Messrs. DeSousa, Doyle, Hennessy, and Richardson previously served on the Board of Directors of Hennessy Mutual Funds, Inc. (“HMFI”), The Hennessy Funds, Inc. (“HFI”), and Hennessy SPARX Funds Trust (“HSFT”). Pursuant to an internal reorganization effective as of February 28, 2014, the series of HFMI, HFI, and HSFT were reorganized into corresponding series of Hennessy Funds Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
⁽²⁾	Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Hennessy Funds.
⁽³⁾	The address of these officers is 101 Federal Street, Suite 1900, Boston, MA 02110.
⁽⁴⁾	The address of this officer is 1340 Environ Way, Suite 305, Chapel Hill, NC 27517.

HENNESSY FUNDS

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Expense Example (Unaudited)

October 31, 2016

Actual Expenses

Hypothetical Example for Comparison Purposes

HENNESSYFUNDS.COM

EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period⁽¹⁾
	Account Value	Account Value	May 1, 2016 –
	May 1, 2016	October 31, 2016	October 31, 2016
Investor Class
Actual	$1,000.00	$1,043.70	$6.47
Hypothetical (5% return before expenses)	$1,000.00	$1,018.80	$6.39

Institutional Class
Actual	$1,000.00	$1,045.40	$5.24
Hypothetical (5% return before expenses)	$1,000.00	$1,020.01	$5.18

⁽¹⁾	Expenses are equal to the Fund’s annualized expense ratio of 1.26% for Investor Class shares or 1.02% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/366 days (to reflect one-half year period).

HENNESSY FUNDS

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How to Obtain a Copy of the Fund’s

Proxy Voting Policy and Proxy Voting Records

Quarterly Filings on Form N-Q

Federal Tax Distribution Information

(Unaudited)

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for the fiscal year ended October 31, 2016, was 100%.

Householding

HENNESSYFUNDS.COM

PROXY VOTING — PRIVACY POLICY

We collect the following non-public personal information about you:

	•	information we receive from you on or in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income, and date of birth; and

	•	information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payment history, parties to transactions, cost basis information, and other financial information.

HENNESSY FUNDS

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For information, questions or assistance, please call

The Hennessy Funds

1-800-966-4354 or 1-415-899-1555

INVESTMENT ADVISOR

Hennessy Advisors, Inc.

7250 Redwood Blvd., Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Dr., Suite 302

Milwaukee, Wisconsin 53212

TRUSTEES

Neil J. Hennessy

Robert T. Doyle

J. Dennis DeSousa

Gerald P. Richardson

COUNSEL

Foley & Lardner LLP

777 East Wisconsin Avenue

Milwaukee, Wisconsin 53202-5306

INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

KPMG LLP

200 East Randolph Street

Chicago, Illinois 60601

DISTRIBUTOR

Quasar Distributors, LLC

615 East Michigan Street

Milwaukee, Wisconsin 53202

hennessyfunds.com | 1-800-966-4354

This report has been prepared for shareholders and may be distributed to

others only if preceded or accompanied by a current prospectus.

ANNUAL REPORT

OCTOBER 31, 2016

HENNESSY CORNERSTONE

VALUE FUND

Investor Class HFCVX

Institutional Class HICVX

hennessyfunds.com | 1-800-966-4354

(This Page Intentionally Left Blank.)

CONTENTS

Contents

Letter to Shareholders			2
Performance Overview			4
Financial Statements
Schedule of Investments			7
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
Report of Independent Registered Public Accounting Firm			26
Trustees and Officers of the Fund			27
Expense Example			30
Proxy Voting			32
Quarterly Filings on Form N-Q			32
Federal Tax Distribution Information			32
Householding			32
Privacy Policy			33

HENNESSY FUNDS

1-800-966-4354

December 2016

Dear Hennessy Funds Shareholder:

HENNESSYFUNDS.COM

LETTER TO SHAREHOLDERS

Thank you for your continued confidence and investment in our funds. If you have any questions or would like to speak with us directly, please don’t hesitate to call us at (800) 966-4354.

Best regards,

Neil J. Hennessy

President and Chief Investment Officer

Past performance does not guarantee future results.

Mutual fund investing involves risk. Principal loss is possible.

Opinions expressed are those of Neil Hennessy and are subject to change, are not guaranteed and should not be considered investment advice.

The Dow Jones Industrial Average and S&P 500 Index are unmanaged indices commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is calculated by dividing a company’s market price per share by its earnings per share.

HENNESSY FUNDS

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Performance Overview (Unaudited)

CHANGE IN VALUE OF $10,000 INVESTMENT

This graph illustrates the performance of an initial investment of $10,000 made in the Fund ten years ago and assumes the reinvestment of dividends.

AVERAGE ANNUAL TOTAL RETURN FOR PERIODS ENDED OCTOBER 31, 2016

	One	Five	Ten
	Year	Years	Years
Hennessy Cornerstone Value Fund –
Investor Class (HFCVX)	6.41%	10.27%	4.91%
Hennessy Cornerstone Value Fund –
Institutional Class (HICVX)⁽¹⁾	6.72%	10.50%	5.13%
Russell 1000^® Value Index	6.37%	13.31%	5.35%
S&P 500 Index	4.51%	13.57%	6.70%

Expense ratios: 1.25% (Investor Class); 1.00% (Institutional Class)

The expense ratios presented are from the most recent prospectus.

⁽¹⁾	The inception date of Institutional Class shares is March 3, 2008. 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.

PERFORMANCE NARRATIVE

Portfolio Managers Neil J. Hennessy and Brian E. Peery

Performance:

For the twelve-month period ended October 31, 2016, the Investor Class of the Hennessy Cornerstone Value Fund returned 6.41%, outperforming both the Russell 1000^® Value Index and the S&P 500 Index, which returned 6.37% and 4.51% for the same period, respectively.

HENNESSYFUNDS.COM

PERFORMANCE OVERVIEW

The Fund outperformed its primary benchmark as a result of both sector allocation and stock selection. From an allocation perspective, the portfolio’s overweight position in Consumer Staples companies accounted for nearly all of the sector-related outperformance. We also had smaller positive allocation contributions from Financials, Materials, Information Technology and Telecom Services. Partially offsetting these gains was the Fund’s zero allocation to Utilities, a sector that performed well over the year. On a stock specific basis, Archer-Daniels-Midland Company and three Canadian Banks, Bank of Nova Scotia, Toronto Dominion Bank and Royal Bank of Canada, all performed particularly well. The Fund’s investments in the Energy Sector, principally Marathon Oil Corporation, Exxon Mobil Corporation and National Oilwell Varco, however, hurt overall performance. While oil prices have rebounded recently, concern over dividend payments and a difficult operating environment have kept the equity prices of many Energy stocks relatively depressed. The Fund continues to hold all the stocks mentioned.

Portfolio Strategy:

The Fund’s investment strategy is to identify large, widely-held stocks with strong operating cash flow. The Fund then selects the companies it believes are best able to pay and maintain a relatively high dividend yield. Limiting the Fund’s portfolio to 50 stocks produces a relatively concentrated portfolio, where individual stock performance can influence the performance of the portfolio as a whole.

Market Outlook:

Investment Outlook:

The overall performance of large, dividend-paying stocks this year has been impressive, and these stocks have outperformed most other segments of the market. While there is some concern that after such a long period of outperformance valuations are becoming stretched, we are still finding that some of what we believe to be the highest quality companies in the U.S. are trading at attractive valuations. Going into next year, we think large-cap Industrial, Materials, Energy and Consumer stocks should continue to perform

HENNESSY FUNDS

1-800-966-4354

well. We think the portfolio is very well positioned for the coming year, and that the Fund is an attractive vehicle which seeks to provide investors with both yield and capital appreciation while investing in what are, in our opinion, large, well-funded, well-managed companies with attractive dividend yields.

_______________

The Russell 1000^® Value Index is an unmanaged index commonly used to measure the performance of U.S. large-capitalization value stocks. The S&P 500 Index and Dow Jones Industrial Average are unmanaged indices commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

The Fund may invest in medium capitalized companies, which may have more limited liquidity and greater price volatility than large capitalization companies. Investments in foreign securities may involve political, economic and currency risks, greater volatility and differences in accounting methods. The Fund’s formula-based strategy may cause the Fund to buy or sell securities at times when it may not be advantageous. Please see the Fund’s prospectus for a more complete discussion of these and other risks.

Operating cash flow is a measure of the amount of cash generated by a company’s normal business operations. Dividend yield is calculated as the annual dividends paid by a company divided by the price of a share of their stock. PE, or price to earnings, is calculated by dividing a company’s market price per share by its earnings per share.

HENNESSYFUNDS.COM

PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as of October 31, 2016

HENNESSY CORNERSTONE VALUE FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING CASH/CASH EQUIVALENTS)	% NET ASSETS

HP, Inc.	2.49%

QUALCOMM, Inc.	2.46%

Marathon Petroleum Corp.	2.29%

Bank of Nova Scotia	2.27%

Archer Daniels Midland Co.	2.26%

Prudential Financial, Inc.	2.21%

International Paper Co.	2.20%

Suncor Energy, Inc.	2.17%

Las Vegas Sands Corp.	2.17%

Caterpillar, Inc.	2.15%

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COMMON STOCKS – 96.05%	Number				% of
	of Shares		Value		Net Assets
Consumer Discretionary – 11.26%
Ford Motor Co.		181,600	$	2,131,984		1.66	%
General Motors Co.		76,100		2,404,760		1.87	%
Las Vegas Sands Corp.		48,100		2,784,028		2.17	%
The Gap, Inc.		87,500		2,414,125		1.88	%
Thomson Reuters Corp. (b)		60,900		2,400,069		1.87	%
Viacom, Inc.		62,100		2,332,476		1.81	%
				14,467,442		11.26	%

Consumer Staples – 9.77%
Altria Group, Inc.		36,900		2,439,828		1.90	%
Archer Daniels Midland Co.		66,700		2,906,119		2.26	%
Philip Morris International, Inc.		24,400		2,353,136		1.83	%
Procter & Gamble Co.		27,000		2,343,600		1.83	%
Reynolds American, Inc.		45,500		2,506,140		1.95	%
				12,548,823		9.77	%

Energy – 13.77%
California Resources Corp. (a)		4		41		0.00	%
Chevron Corp.		25,200		2,639,700		2.06	%
Exxon Mobil Corp.		27,200		2,266,304		1.77	%
Marathon Petroleum Corp.		67,600		2,946,684		2.29	%
National Oilwell Varco, Inc.		76,500		2,455,650		1.91	%
Occidental Petroleum Corp.		31,500		2,296,665		1.79	%
Suncor Energy, Inc. (b)		92,900		2,788,858		2.17	%
Valero Energy Corp.		38,600		2,286,664		1.78	%
				17,680,566		13.77	%

Financials – 14.65%
Bank of Montreal (b)		40,900		2,601,240		2.03	%
Bank of Nova Scotia (b)		54,300		2,919,168		2.27	%
Manulife Financial Corp. (b)		170,700		2,471,736		1.92	%
MetLife, Inc.		56,700		2,662,632		2.07	%
Prudential Financial, Inc.		33,400		2,831,986		2.21	%
Royal Bank of Canada (b)		43,100		2,692,888		2.10	%
Toronto-Dominion Bank (b)		58,100		2,636,578		2.05	%
				18,816,228		14.65	%

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS

COMMON STOCKS	Number				% of
	of Shares		Value		Net Assets
Health Care – 5.63%
AbbVie, Inc.		40,500	$	2,259,090		1.76	%
Merck & Co., Inc.		44,000		2,583,680		2.01	%
Pfizer, Inc.		75,200		2,384,592		1.86	%
				7,227,362		5.63	%

Industrials – 11.71%
Caterpillar, Inc.		33,100		2,762,526		2.15	%
Eaton Corp. PLC (b)		39,800		2,538,046		1.98	%
Emerson Electric Co.		46,600		2,361,688		1.84	%
General Electric Co.		75,900		2,208,690		1.72	%
The Boeing Co.		19,100		2,720,413		2.12	%
United Parcel Service, Inc.		22,700		2,446,152		1.90	%
				15,037,515		11.71	%

Information Technology – 12.98%
Cisco Systems, Inc.		84,200		2,583,256		2.01	%
HP, Inc.		221,000		3,202,290		2.49	%
Intel Corp.		75,600		2,636,172		2.05	%
International Business Machines Corp.		17,700		2,720,313		2.12	%
QUALCOMM, Inc.		46,000		3,161,120		2.46	%
Xerox Corp.		242,400		2,368,248		1.85	%
				16,671,399		12.98	%

Materials – 7.50%
International Paper Co.		62,600		2,818,878		2.20	%
LyondellBasell Industries NV (b)		28,200		2,243,310		1.75	%
The Dow Chemical Co.		46,400		2,496,784		1.94	%
The Mosaic Co.		88,000		2,070,640		1.61	%
				9,629,612		7.50	%

Telecommunication Services – 8.78%
AT&T, Inc.		60,800		2,236,832		1.74	%
BCE, Inc. (b)		52,600		2,390,144		1.86	%
CenturyLink, Inc.		74,900		1,990,842		1.55	%
Rogers Communications, Inc. (b)		62,700		2,522,421		1.97	%
Verizon Communications, Inc.		44,300		2,130,830		1.66	%
				11,271,069		8.78	%

Total Common Stocks
(Cost $107,932,923)				123,350,016		96.05	%

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

SHORT-TERM INVESTMENTS – 3.98%	Number					% of
	of Shares		Value			Net Assets
Money Market Funds – 3.98%
Fidelity Government Portfolio, Institutional Class, 0.27% (c)		5,104,550	$	5,104,550			3.98	%

Total Short-Term Investments
(Cost $5,104,550)				5,104,550			3.98	%

Total Investments
(Cost $113,037,473) – 100.03%				128,454,566			100.03	%

Liabilities in Excess
of Other Assets – (0.03)%				(41,220	)		(0.03	)%

TOTAL NET ASSETS – 100.00%			$	128,413,346			100.00	%

Percentages are stated as a percent of net assets.

(a)	Non-income producing security.
(b)	U.S. traded security of a foreign corporation.
(c)	The rate listed is the fund’s 7-day yield as of October 31, 2016.

Summary of Fair Value Exposure at October 31, 2016

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2016 (see Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Consumer Discretionary	$	14,467,442	$	—	$	—	$	14,467,442
Consumer Staples		12,548,823		—		—		12,548,823
Energy		17,680,566		—		—		17,680,566
Financials		18,816,228		—		—		18,816,228
Health Care		7,227,362		—		—		7,227,362
Industrials		15,037,515		—		—		15,037,515
Information Technology		16,671,399		—		—		16,671,399
Materials		9,629,612		—		—		9,629,612
Telecommunication Services		11,271,069		—		—		11,271,069
Total Common Stocks	$	123,350,016	$	—	$	—	$	123,350,016
Short-Term Investments
Money Market Funds	$	5,104,550	$	—	$	—	$	5,104,550
Total Short-Term Investments	$	5,104,550	$	—	$	—	$	5,104,550
Total Investments	$	128,454,566	$	—	$	—	$	128,454,566

Transfers between levels are recognized at the end of the reporting period. During the year ended October 31, 2016, the Fund recognized no transfers between levels.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES

Financial Statements

Statement of Assets and Liabilities as of October 31, 2016

ASSETS:
Investments in securities, at value (cost $113,037,473)	$	128,454,566
Dividends and interest receivable		234,109
Receivable for fund shares sold		602
Prepaid expenses and other assets		21,546
Total Assets		128,710,823

LIABILITIES:
Payable for securities purchased		20,252
Payable for fund shares redeemed		1,423
Payable to advisor		81,026
Payable to administrator		21,816
Payable to auditor		24,380
Accrued distribution fees		107,221
Accrued service fees		10,788
Accrued trustees fees		3,898
Accrued expenses and other payables		26,673
Total Liabilities		297,477
NET ASSETS	$	128,413,346

NET ASSETS CONSIST OF:
Capital stock	$	113,778,905
Accumulated net investment income		2,433,078
Accumulated net realized loss on investments		(3,215,495	)
Unrealized net appreciation on investments		15,416,858
Total Net Assets	$	128,413,346

NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	126,532,210
Shares issued and outstanding		6,892,092
Net asset value, offering price and redemption price per share	$	18.36

Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	1,881,136
Shares issued and outstanding		102,229
Net asset value, offering price and redemption price per share	$	18.40

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

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Financial Statements

Statement of Operations for the year ended October 31, 2016

INVESTMENT INCOME:
Dividend income⁽¹⁾	$	4,531,943
Interest income		7,458
Total investment income		4,539,401

EXPENSES:
Investment advisory fees (See Note 5)		937,669
Distribution fees – Investor Class (See Note 5)		187,302
Service fees – Investor Class (See Note 5)		124,868
Administration, fund accounting, custody and transfer agent fees (See Note 5)		123,534
Sub-transfer agent expenses – Investor Class (See Note 5)		88,926
Sub-transfer agent expenses – Institutional Class (See Note 5)		322
Federal and state registration fees		25,638
Audit fees		25,166
Compliance expense (See Note 5)		23,709
Reports to shareholders		16,120
Trustees’ fees and expenses		15,360
Legal fees		378
Interest expense (See Note 7)		14
Other expenses		12,262
Total expenses		1,581,268
NET INVESTMENT INCOME	$	2,958,133

REALIZED AND UNREALIZED GAINS:
Net realized gain on investments	$	1,221,525
Net change in unrealized appreciation on investments		3,724,830
Net gain on investments		4,946,355
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	7,904,488

⁽¹⁾	Net of foreign taxes withheld and issuance fees of $134,128.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS

Financial Statements

Statements of Changes in Net Assets

	Year Ended			Year Ended
	October 31, 2016			October 31, 2015
OPERATIONS:
Net investment income	$	2,958,133		$	3,327,853
Net realized gain on investments		1,221,525			19,281,025
Net change in unrealized appreciation (depreciation)
on investments		3,724,830			(25,214,358	)
Net increase (decrease) in net assets
resulting from operations		7,904,488			(2,605,480	)

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Investor Class		(3,068,445	)		(3,147,811	)
Institutional Class		(41,663	)		(257,598	)
Total distributions		(3,110,108	)		(3,405,409	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		1,543,678			2,074,393
Proceeds from shares subscribed – Institutional Class		427,866			1,559,641
Dividends reinvested – Investor Class		2,748,595			2,823,170
Dividends reinvested – Institutional Class		26,592			243,110
Cost of shares redeemed – Investor Class		(12,330,203	)		(14,508,452	)
Cost of shares redeemed – Institutional Class		(410,243	)		(10,255,757	)
Net decrease in net assets derived
from capital share transactions		(7,993,715	)		(18,063,895	)
TOTAL DECREASE IN NET ASSETS		(3,199,335	)		(24,074,784	)

NET ASSETS:
Beginning of year		131,612,681			155,687,465
End of year	$	128,413,346		$	131,612,681
Undistributed net investment income, end of year	$	2,433,078		$	2,587,361

CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		88,366			115,014
Shares sold – Institutional Class		24,407			88,261
Shares issued to holders as reinvestment
of dividends – Investor Class		162,543			155,034
Shares issued to holders as reinvestment
of dividends – Institutional Class		1,573			13,365
Shares redeemed – Investor Class		(701,433	)		(807,635	)
Shares redeemed – Institutional Class		(22,974	)		(580,726	)
Net decrease in shares outstanding		(447,518	)		(1,016,687	)

The accompanying notes are an integral part of these financial statements.

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Financial Statements

Financial Highlights

For an Investor Class share outstanding throughout each year

PER SHARE DATA:

Net asset value, beginning of year

Income from investment operations:

Net investment income

Net realized and unrealized gains (losses) on investments

Total from investment operations

Less distributions:

Dividends from net investment income

Total distributions

Net asset value, end of year

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of year (millions)

Ratio of expenses to average net assets

Ratio of net investment income to average net assets

Portfolio turnover rate⁽¹⁾

⁽¹⁾	Portfolio turnover is calculated on the basis of the Fund as a whole.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2016			2015			2014			2013			2012

$	17.69		$	18.41		$	16.90		$	14.02		$	12.84


	0.43			0.44			0.39			0.42			0.37
	0.67			(0.75	)		1.55			2.84			1.23
	1.10			(0.31	)		1.94			3.26			1.60


	(0.43	)		(0.41	)		(0.43	)		(0.38	)		(0.42	)
	(0.43	)		(0.41	)		(0.43	)		(0.38	)		(0.42	)
$	18.36		$	17.69		$	18.41		$	16.90		$	14.02

	6.41	%		(1.77	)%		11.69	%		23.84	%		12.79	%


$	126.53		$	129.86		$	145.04		$	138.94		$	124.99
	1.25	%		1.09	%		1.17	%		1.22	%		1.26	%
	2.33	%		2.32	%		2.18	%		2.60	%		2.67	%
	36	%		46	%		34	%		41	%		47	%

The accompanying notes are an integral part of these financial statements.

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Financial Statements

Financial Highlights

For an Institutional Class share outstanding throughout each year

PER SHARE DATA:

Net asset value, beginning of year

Income from investment operations:

Net investment income

Net realized and unrealized gains (losses) on investments

Total from investment operations

Less distributions:

Dividends from net investment income

Total distributions

Net asset value, end of year

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of year (millions)

Ratio of expenses to average net assets:

Before expense reimbursement

After expense rei mbursement

Ratio of net investment income to average net assets:

Before expense reimbursement

After expense reimbursement

Portfolio Turnover⁽¹⁾

⁽¹⁾	Portfolio turnover is calculated on the basis of the Fund as a whole.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Year Ended October 31,
2016			2015			2014			2013			2012

$	17.67		$	18.41		$	16.92		$	14.04		$	12.86


	0.48			0.53			0.59			0.50			0.45
	0.67			(0.83	)		1.37			2.80			1.19
	1.15			(0.30	)		1.96			3.30			1.64


	(0.42	)		(0.44	)		(0.47	)		(0.42	)		(0.46	)
	(0.42	)		(0.44	)		(0.47	)		(0.42	)		(0.46	)
$	18.40		$	17.67		$	18.41		$	16.92		$	14.04

	6.72	%		(1.72	)%		11.82	%		24.13	%		13.13	%


$	1.88		$	1.75		$	10.65		$	4.09		$	2.53

	0.95	%		1.00	%		1.03	%		1.10	%		1.20	%
	0.95	%		1.00	%		0.98	%		0.98	%		0.98	%

	2.63	%		2.43	%		2.30	%		2.64	%		2.72	%
	2.63	%		2.43	%		2.35	%		2.76	%		2.94	%
	36	%		46	%		34	%		41	%		47	%

The accompanying notes are an integral part of these financial statements.

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Financial Statements

Notes to the Financial Statements October 31, 2016

1). ORGANIZATION

The Hennessy Cornerstone Value Fund (the “Fund”) is a series of Hennessy Funds Trust (the “Trust”), which was organized as a Delaware statutory trust on September 17, 1992. The Fund is an open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund is a successor to a fund with the same name (the “Predecessor Fund”) that was a series of Hennessy Mutual Funds, Inc., a Maryland corporation, pursuant to a reorganization that took place after the close of business on February 28, 2014. Prior to February 28, 2014, the Fund had no investment operations. As a result of the reorganization, holders of Investor Class shares of the Predecessor Fund received Investor Class shares of the Fund (the Investor Class shares of the Fund are the successor to the accounting and performance information of the corresponding shares of the Predecessor Fund), and holders of Institutional Class shares of the Predecessor Fund received Institutional Class shares of the Fund (the Institutional Class shares of the Fund are the successor to the accounting and performance information of the corresponding shares of the Predecessor Fund). The investment objective of the Fund is total return, consisting of capital appreciation and current income. The Fund is a diversified fund.

2). SIGNIFICANT ACCOUNTING POLICIES

a).	Investment Valuation – All investments in securities are recorded at their estimated fair value, as described in Note 3.

b).	Federal Income Taxes – No provision for federal income taxes or excise taxes has been made since 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. Net investment income or loss and realized gains and losses for federal income tax purposes may differ from that reported on the financial statements because of temporary book 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.

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NOTES TO THE FINANCIAL STATEMENTS

Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax regulations, permanent differences between book and tax basis for reporting for the fiscal year ended October 31, 2016, have been identified and appropriately reclassified on the Statement of Assets and Liabilities. The adjustments are as follows:

Undistributed	Accumulated
Net Investment	Net Realized
Income/(Loss)	Gain/(Loss)	Paid-in Capital
$(2,308)	$2,308	$—

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 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. The Fund is charged for those expenses that are directly attributable to the 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 or losses on investments are allocated to each class of shares based on its respective 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 gain or loss realized from the investment transactions by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted/amortized over the life of the respective security.

g).	Use of Estimates – The preparation of financial statements in conformity 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 and 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 the sum of the value of the securities held by the Fund, plus cash or other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for the Fund, rounded to the nearest cent. The Fund’s shares will not be 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, if any, are converted into U.S. dollars using the spot market rate of exchange at the time of valuation. Purchases and sales of investments and income are translated into U.S. dollars using the spot market rate of exchange prevailing on the respective dates of

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	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 or 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).	Forward Contracts – The Fund may enter into forward currency contracts to reduce its exposure to changes in foreign currency exchange rates on its foreign holdings and to lock in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in foreign currencies. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing of such contract is included in net realized gain or loss from foreign currency transactions. During the fiscal year ended October 31, 2016, the Fund did not enter into any forward contracts.

k).	Repurchase Agreements – The Fund may enter into repurchase agreements with member banks or security dealers of the Federal Reserve Board whom the investment advisor deems creditworthy. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates.

	Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. Provisions of the repurchase agreements ensure that the market value of the collateral, including accrued interest thereon, is sufficient to cover the repurchase amount in the event of default of the counterparty. If the counterparty defaults and the value of the collateral declines or if the counterparty enters an insolvency proceeding, realization of the collateral by the Fund may be delayed or limited. During the fiscal year ended October 31, 2016, the Fund did not enter into any repurchase agreements.

l).	Derivatives – The Fund may invest in, or enter into, derivatives, such as options, futures contracts, options on futures contracts, and swaps, for a variety of reasons, including to hedge certain risks, to provide a substitute for purchasing or selling particular securities, or to increase potential income gain. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives may allow the Fund to increase or decrease the level of risk to which the Fund is exposed more quickly and efficiently than transactions in other types of instruments. The main purpose of utilizing derivative instruments is for hedging purposes.

	The Fund follows the financial accounting reporting rules as required by the Derivatives and Hedging Topic of the FASB Accounting Standards Codification. Under such rules, the Fund is required to include enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivatives instruments affect an entity’s results of operations and financial position. During the fiscal year ended October 31, 2016, the Fund did not hold any derivative instruments.

m).	New Accounting Pronouncements – In May 2015, the FASB issued ASU No. 2015-07 “Disclosure for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent).” The amendments in ASU No. 2015-07 remove the

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NOTES TO THE FINANCIAL STATEMENTS

requirement to categorize within the fair value hierarchy investments measured at NAV and require the disclosure of sufficient information to reconcile the fair value of the remaining assets categorized within the fair value hierarchy to the financial statements. The amendments in ASU No. 2015-07 are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Management has reviewed the requirements and believes the adoption of ASU 2015-07 will not have a material impact on the Fund’s financial statements and related disclosures.

3). SECURITIES VALUATION

	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 (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.

Following is a description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis.

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HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

current and reliable market quotations are not readily available. All actions taken by the Valuation Committee are reviewed by the Board.

4). INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during the fiscal year ended October 31, 2016, were $44,110,949 and $55,625,456, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during the fiscal year ended October 31, 2016.

5). INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES

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6). GUARANTEES AND INDEMNIFICATIONS

7). LINE OF CREDIT

The Fund has an uncommitted line of credit with the other Hennessy Funds in the amount of the lesser of (i) $100,000,000 or (ii) 33.33% of each Hennessy Fund’s net assets, or 30% for the Hennessy Gas Utility Fund and 10% for the Hennessy Balanced Fund, intended to provide short-term financing, if necessary, subject to certain restrictions, in connection with shareholder redemptions. The credit facility is with the Hennessy Funds’ custodian bank, U.S. Bank, N.A. Borrowings under this arrangement bear interest at the bank’s prime rate and are secured by all of the Fund’s assets (as to its own borrowings only). During the fiscal year ended October 31, 2016, the Fund had an outstanding average daily balance and a weighted average interest rate of $4,254 and 3.47%, respectively. The maximum amount outstanding for the Fund during the period was $244,000. At October 31, 2016, the Fund did not have any borrowings outstanding under the line of credit.

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

8). FEDERAL TAX INFORMATION

As of October 31, 2016, the components of accumulated earnings (losses) for income tax purposes were as follows:

Cost of investments for tax purposes	$	113,352,695
Gross tax unrealized appreciation	$	19,322,753
Gross tax unrealized depreciation		(4,220,882	)
Net tax unrealized appreciation	$	15,101,871
Undistributed ordinary income	$	2,433,078
Undistributed long-term capital gains		—
Total distributable earnings	$	2,433,078
Other accumulated loss	$	(2,900,508	)
Total accumulated gain	$	14,634,441

At October 31, 2016, the Fund had capital loss carryforwards of $2,900,273 that expire on October 31, 2017.

During the fiscal year ended October 31, 2016, the capital loss carryforwards utilized for the Fund were $1,094,478.

At October 31, 2016, the Fund did not defer, on a tax basis, any post-December late year ordinary loss deferrals.

During the fiscal years ended October 31, 2016 and 2015, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2016		October 31, 2015
Ordinary income⁽¹⁾	$	3,110,108	$	3,405,409
Long-term capital gain		—		—
	$	3,110,108	$	3,405,409

⁽¹⁾ Ordinary income includes short-term gain or loss.

9). EVENTS SUBSEQUENT TO YEAR END

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Report of Independent Registered Public Accounting Firm

The Board of Trustees of Hennessy Funds Trust

and Shareholders of the Hennessy Cornerstone Value Fund:

We have audited the accompanying statement of assets and liabilities of the Hennessy Cornerstone Value Fund (the Fund), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2016, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the five year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

Chicago, Illinois

December 22, 2016

HENNESSYFUNDS.COM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS

Trustees and Officers of the Fund (Unaudited)

			Other
			Directorships
			Held Outside
Name, (Year of Birth),			of Fund
and Position Held	Start Date	Principal Occupation(s)	Complex During
with the Trust	of Service	During Past Five Years	Past Five Years⁽¹⁾

Disinterested Trustees and Advisers

J. Dennis DeSousa	January 1996	Mr. DeSousa is a real estate investor.	None.
(1936)
Trustee

Robert T. Doyle	January 1996	Mr. Doyle has been the Sheriff of	None.
(1947)		Marin County, California since 1996.
Trustee

Gerald P. Richardson	May 2004	Mr. Richardson is an independent	None.
(1945)		consultant in the securities industry.
Trustee

Brian Alexander	March 2015	Mr. Alexander has been employed	None.
(1981)		by Sutter Health Novato Community
Adviser to the Board		Hospital since 2012, first as an
		Assistant Administrator and then,
		beginning in 2013, as the Chief
		Administrative Officer. From 2011
		through 2012, Mr. Alexander was
		employed by Sutter Health West Bay
		Region as the Regional Director of
		Strategic Decision Support. Prior to
		that, in 2011, he served as the
		Director of Managed Care
		Contracting and also the Director of
		Compensation, Benefits, and
		Compliance for the Rehabilitation
		Institute of Chicago.

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			Other
			Directorships
			Held Outside
Name, (Year of Birth),			of Fund
and Position Held	Start Date	Principal Occupation(s)	Complex During
with the Trust	of Service	During Past Five Years	Past Five Years⁽¹⁾

Doug Franklin	March 2016	Mr. Franklin is a retired insurance	None.
(1964)		industry executive. From 1987
Adviser to the Board		through 2015, he was employed by
		the Allianz-Fireman’s Fund Insurance
		Company in various positions,
		including as its Chief Actuary and
		Chief Risk Officer.

Claire Knoles	December 2015	Ms. Knoles is a founder of Kiosk and	None.
(1974)		has served as its Chief Operating
Adviser to the Board		Officer since 2004. Kiosk is a full
		service marketing agency with
		offices in the San Francisco Bay
		Area, Toronto, and Liverpool, UK.

Interested Trustee⁽²⁾

Neil J. Hennessy	January 1996 as	Mr. Hennessy has been employed by	Hennessy
(1956)	a Trustee and	Hennessy Advisors, Inc. since 1989	Advisors, Inc.
Trustee, Chairman of	June 2008 as	and currently serves as its President,
the Board, Chief	an Officer	Chairman and Chief Executive Officer.
Investment Officer,
Portfolio Manager,
and President

Name, (Year of Birth),
and Position Held	Start Date	Principal Occupation(s)
with the Trust	of Service	During Past Five Years

Officers

Teresa M. Nilsen	January 1996	Ms. Nilsen has been employed by Hennessy Advisors, Inc.
(1966)		since 1989 and currently serves as its Executive Vice President,
Executive Vice President		Chief Operations Officer, Chief Financial Officer, and Secretary.
and Treasurer

Daniel B. Steadman	March 2000	Mr. Steadman has been employed by Hennessy Advisors, Inc.
(1956)		since 2000 and currently serves as its Executive Vice President
Executive Vice President		and Chief Compliance Officer.
and Secretary

Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)		as its General Counsel since June 2013. She previously served
Senior Vice President and		as in-house counsel to Carlson Capital, L.P., an SEC-registered
Chief Compliance Officer		investment advisor to several private funds, from
		February 2010 to May 2013.

Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013. Mr. Carlson was previously a co-founder
Senior Vice President and		and principal of Trivium Consultants, LLC from February 2011
Head of Distribution		through November 2013.

HENNESSYFUNDS.COM

TRUSTEES AND OFFICERS OF THE FUND

Name, (Year of Birth),
and Position Held	Start Date	Principal Occupation(s)
with the Trust	of Service	During Past Five Years

David Ellison	October 2012	Mr. Ellison has been employed by Hennessy Advisors, Inc. since
(1958)⁽³⁾		October 2012. He has served as a Portfolio Manager of the
Senior Vice President and		Hennessy Small Cap Financial Fund, the Hennessy Large Cap
Portfolio Manager		Financial Fund, and the Hennessy Technology Fund since
		inception. Prior to that, Mr. Ellison served as Director, CIO and
		President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.

Brian Peery	March 2003 as	Mr. Peery has been employed by Hennessy Advisors, Inc. since
(1969)	an Officer and	2002. He has served as a Portfolio Manager of the Hennessy
Senior Vice President and	February 2011	Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
Portfolio Manager	as a Co-Portfolio	30 Fund, the Hennessy Cornerstone Large Growth Fund, the
	Manager or	Hennessy Cornerstone Value Fund, the Hennessy Total Return
	Portfolio Manager	Fund, and the Hennessy Balanced Fund since October 2014.
		He served as Co-Portfolio Manager of the same funds from
		February 2011 through September 2014. Mr. Peery has also
		served as a Portfolio Manager of the Hennessy Gas Utility Fund
		since February 2015.

Winsor (Skip) Aylesworth	October 2012	Mr. Aylesworth has been employed by Hennessy Advisors, Inc.
(1947)⁽³⁾		since October 2012. He has served as a Portfolio Manager of
Vice President and		the Hennessy Gas Utility Fund since 1998 and as a Portfolio
Portfolio Manager		Manager of the Hennessy Technology Fund since inception.
		Prior to that, Mr. Aylesworth served as Executive Vice President
		of FBR Fund Advisers, Inc. from 1999 to October 2012.

Ryan Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)⁽⁴⁾		October 2012. He has served as a Portfolio Manager of the
Vice President and		Hennessy Gas Utility Fund, the Hennessy Small Cap Financial
Portfolio Manager		Fund, and the Hennessy Large Cap Financial Fund since
		October 2014. He served as Co-Portfolio Manager of the same
		funds from March 2013 through September 2014, and as a
		Portfolio Analyst for the Hennessy Funds from October 2012
		through February 2013. Prior to that, Mr. Kelley served as
		Portfolio Manager of FBR Fund Advisers, Inc. from
		January 2008 to October 2012.

⁽¹⁾	Messrs. DeSousa, Doyle, Hennessy, and Richardson previously served on the Board of Directors of Hennessy Mutual Funds, Inc. (“HMFI”), The Hennessy Funds, Inc. (“HFI”), and Hennessy SPARX Funds Trust (“HSFT”). Pursuant to an internal reorganization effective as of February 28, 2014, the series of HFMI, HFI, and HSFT were reorganized into corresponding series of Hennessy Funds Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
⁽²⁾	Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Hennessy Funds.
⁽³⁾	The address of these officers is 101 Federal Street, Suite 1900, Boston, MA 02110.
⁽⁴⁾	The address of this officer is 1340 Environ Way, Suite 305, Chapel Hill, NC 27517.

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Expense Example (Unaudited)

October 31, 2016

Actual Expenses

Hypothetical Example for Comparison Purposes

HENNESSYFUNDS.COM

EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period⁽¹⁾
	Account Value	Account Value	May 1, 2016 –
	May 1, 2016	October 31, 2016	October 31, 2016
Investor Class
Actual	$1,000.00	$1,033.20	$6.39
Hypothetical (5% return before expenses)	$1,000.00	$1,018.85	$6.34

Institutional Class
Actual	$1,000.00	$1,034.90	$5.01
Hypothetical (5% return before expenses)	$1,000.00	$1,020.21	$4.98

⁽¹⁾	Expenses are equal to the Fund’s annualized expense ratio of 1.25% for Investor Class shares or 0.98% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/366 days (to reflect one-half year period).

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How to Obtain a Copy of the Fund’s

Proxy Voting Policy and Proxy Voting Records

Quarterly Filings on Form N-Q

Federal Tax Distribution Information

(Unaudited)

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for the fiscal year ended October 31, 2016, was 100%.

Householding

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PROXY VOTING — PRIVACY POLICY

We collect the following non-public personal information about you:

	•	information we receive from you on or in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income, and date of birth; and
	•	information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payment history, parties to transactions, cost basis information, and other financial information.

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For information, questions or assistance, please call

The Hennessy Funds

1-800-966-4354 or 1-415-899-1555

INVESTMENT ADVISOR

Hennessy Advisors, Inc.

7250 Redwood Blvd., Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Dr., Suite 302

Milwaukee, Wisconsin 53212

TRUSTEES

Neil J. Hennessy

Robert T. Doyle

J. Dennis DeSousa

Gerald P. Richardson

COUNSEL

Foley & Lardner LLP

777 East Wisconsin Avenue

Milwaukee, Wisconsin 53202-5306

INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

KPMG LLP

200 East Randolph Street

Chicago, Illinois 60601

DISTRIBUTOR

Quasar Distributors, LLC

615 East Michigan Street

Milwaukee, Wisconsin 53202

hennessyfunds.com | 1-800-966-4354

This report has been prepared for shareholders and may be distributed to

others only if preceded or accompanied by a current prospectus.

ANNUAL REPORT

OCTOBER 31, 2016

HENNESSY LARGE VALUE FUND

Investor Class HLVFX

Institutional Class HLVIX

hennessyfunds.com | 1-800-966-4354

(This Page Intentionally Left Blank.)

CONTENTS

Contents

Letter to Shareholders			2
Performance Overview			4
Financial Statements
Schedule of Investments			7
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
Report of Independent Registered Public Accounting Firm			28
Trustees and Officers of the Fund			29
Expense Example			32
Proxy Voting			34
Quarterly Filings on Form N-Q			34
Federal Tax Distribution Information			34
Householding			34
Privacy Policy			35

HENNESSY FUNDS

1-800-966-4354

December 2016

Dear Hennessy Funds Shareholder:

HENNESSYFUNDS.COM

LETTER TO SHAREHOLDERS

Thank you for your continued confidence and investment in our funds. If you have any questions or would like to speak with us directly, please don’t hesitate to call us at (800) 966-4354.

Best regards,

Neil J. Hennessy

President and Chief Investment Officer

Past performance does not guarantee future results.

Mutual fund investing involves risk. Principal loss is possible.

Opinions expressed are those of Neil Hennessy and are subject to change, are not guaranteed and should not be considered investment advice.

The Dow Jones Industrial Average and S&P 500 Index are unmanaged indices commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is calculated by dividing a company’s market price per share by its earnings per share.

HENNESSY FUNDS

1-800-966-4354

Performance Overview (Unaudited)

CHANGE IN VALUE OF $10,000 INVESTMENT

This graph illustrates the performance of an initial investment of $10,000 made in the Fund ten years ago and assumes the reinvestment of dividends.

AVERAGE ANNUAL TOTAL RETURN FOR PERIODS ENDED OCTOBER 31, 2016

	One	Five	Ten
	Year	Years	Years
Hennessy Large Value Fund –
Investor Class (HLVFX)	0.11%	11.15%	4.27%
Hennessy Large Value Fund –
Institutional Class (HLVIX)⁽¹⁾	0.21%	11.45%	4.51%
Russell 1000^® Value Index	6.37%	13.31%	5.35%
S&P 500 Index	4.51%	13.57%	6.70%

Expense ratios: 1.35% (Investor Class); 1.18% (Institutional Class)

Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Current performance of the Fund may be lower or higher than the performance quoted. Performance for periods prior to March 20, 2009 reflects the performance of the Tamarack Value Fund, the predecessor to the Hennessy Large Value Fund. Performance data current to the most recent month end may be obtained by visiting hennessyfunds.com.

The expense ratios presented are from the most recent prospectus.

⁽¹⁾	The inception date of Institutional Class shares is March 20, 2009. 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

HENNESSYFUNDS.COM

PERFORMANCE OVERVIEW

PERFORMANCE NARRATIVE

Portfolio Managers Stuart A. Lippe, Barbara S. Browning, CFA, and Adam D. Scheiner, CFA

RBC Global Asset Management (U.S.) Inc. (sub-advisor)

Performance:

For the twelve-month period ended October 31, 2016, the Investor Class of the Hennessy Large Value Fund returned 0.11%, underperforming both the Russell 1000^® Value Index and the S&P 500 Index, which returned 6.37% and 4.51%, respectively, for the same period.

The Fund’s relative underperformance was due primarily to adverse stock selection in the Financials, Energy, and Information Technology sectors. Performance due to sector allocation decisions was moderately negative, although by design the Fund’s sector neutral mandate limits the impact of sector-weighting decisions. Nevertheless, the negative effect of the slight overweight position in the Utilities sector, as well as the moderate underweight position in the Telecommunication Services sector, detracted from returns.

Within the Financials sector, Affiliated Managers Group, Inc. and Morgan Stanley were the worst performers. After strong stock performance at the beginning of the year, AMG’s stock fell due to concerns about asset management trends globally and fears over economic growth following the Brexit vote late in the second quarter. Morgan Stanley fell in sympathy with weakness in the banking sector. The Fund continues to hold Affiliated Managers Group, but has since liquidated Morgan Stanley. Stock selection within the Energy sector was also a significant detractor from the Fund’s relative performance. FMC Technologies, Inc., an oilfield services and equipment company, was the largest detractor from performance within the sector as investors realized that the long term outlook for offshore and international drilling has deteriorated. The Fund has since liquidated FMC Technologies.

Our stock selection within the Information Technology sector also negatively impacted performance. Ciena Corp, a provider of network and communication infrastructure, was a weak performer. Although the company operates in an attractive growth market, management missteps caused revenues to fall. The Fund has since liquidated Ciena Corp.

Investment Outlook:

We remain confident in our stock selection-driven process and our ability to find stocks that have the potential to outperform regardless of the market environment. While investment decisions are the result of bottom-up stock selection and our sector-neutral mandate limits the impact of sector allocation decisions, there are a number of industry-based themes that we believe could drive performance of the Fund over the coming year.

Within the Consumer Staples sector, we have several investments in food products companies that we hope will benefit from positive trends within the industry. With regards to Technology, we continue to favor companies exposed to the secular growth areas of mobile content, cloud computing and software. We continue to look for attractively valued opportunities in these areas. We are overweight semiconductors as we look for exposure to the Internet of Things (IoT). Essentially, the IoT is the idea of everyday things becoming “connected” or “smart.” This transition is occurring primarily in autos through infotainment offerings, safety features and fuel efficiency mechanisms, which all require integrated circuits and sensors to communicate, measure and process data. Finally, within Industrials, we are overweight aerospace and defense due to good fundamentals in a slow growth environment.

_______________

HENNESSY FUNDS

1-800-966-4354

The Russell 1000^® Value Index is an unmanaged index commonly used to measure the performance of U.S. large-capitalization value stocks. The S&P 500 Index is an unmanaged index commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

The Fund may invest in medium-capitalization companies, which may have more limited liquidity and greater price volatility than large-capitalization companies. Please see the Fund’s prospectus for a more complete discussion of these and other risks.

HENNESSYFUNDS.COM

PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as of October 31, 2016

HENNESSY LARGE VALUE FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING CASH/CASH EQUIVALENTS)	% NET ASSETS

Johnson & Johnson	4.33%

Exxon Mobil Corp.	2.96%

NextEra Energy, Inc.	2.62%

DTE Energy Co.	2.56%

American Electric Power, Inc.	2.48%

Citigroup, Inc.	2.35%

Bank of America Corp.	2.27%

Cisco Systems, Inc.	2.09%

Procter & Gamble Co.	1.98%

Pioneer Natural Resources Co.	1.88%

HENNESSY FUNDS

1-800-966-4354

COMMON STOCKS – 94.72%	Number				% of
	of Shares		Value		Net Assets
Consumer Discretionary – 5.22%
Ford Motor Co.		111,935	$	1,314,117		0.99	%
L Brands, Inc.		11,450		826,575		0.62	%
Macy’s, Inc.		32,170		1,173,883		0.89	%
Newell Brands, Inc.		20,430		981,049		0.74	%
Signet Jewelers, Ltd. (b)		10,820		879,233		0.66	%
Time Warner, Inc.		19,600		1,744,204		1.32	%
				6,919,061		5.22	%

Consumer Staples – 8.40%
ConAgra Foods, Inc.		30,590		1,473,826		1.11	%
Ingredion, Inc.		9,670		1,268,414		0.96	%
Mondelez International, Inc.		45,800		2,058,252		1.55	%
PepsiCo, Inc.		11,540		1,237,088		0.93	%
Procter & Gamble Co.		30,235		2,624,398		1.98	%
Reynolds American, Inc.		18,140		999,151		0.76	%
Tyson Foods, Inc., Class A		20,700		1,466,595		1.11	%
				11,127,724		8.40	%

Energy – 11.97%
Anadarko Petroleum Corp.		21,150		1,257,156		0.95	%
Chevron Corp.		12,295		1,287,901		0.97	%
ConocoPhillips		53,110		2,307,629		1.74	%
Exxon Mobil Corp.		47,130		3,926,872		2.96	%
Helmerich & Payne, Inc.		9,400		593,234		0.45	%
Marathon Oil Corp.		119,705		1,577,712		1.19	%
Occidental Petroleum Corp.		22,580		1,646,308		1.24	%
Pioneer Natural Resources Co.		13,890		2,486,588		1.88	%
Valero Energy Corp.		13,175		780,487		0.59	%
				15,863,887		11.97	%

Financials – 22.71%
Affiliated Managers Group, Inc. (a)		11,493		1,524,661		1.15	%
Allstate Corp.		23,062		1,565,910		1.18	%
American International Group, Inc.		29,835		1,840,819		1.39	%
Bank of America Corp.		182,671		3,014,072		2.27	%
BlackRock, Inc.		4,530		1,545,817		1.17	%
Chubb, Ltd. (b)		18,140		2,303,780		1.74	%

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS

COMMON STOCKS	Number				% of
	of Shares		Value		Net Assets
Financials (Continued)
Citigroup, Inc.		63,495	$	3,120,779		2.35	%
CME Group, Inc.		14,578		1,459,258		1.10	%
First Republic Bank		18,215		1,355,742		1.02	%
JPMorgan Chase & Co.		35,125		2,432,758		1.84	%
KeyCorp		51,290		724,215		0.55	%
Prudential Financial, Inc.		18,057		1,531,053		1.16	%
SunTrust Banks, Inc.		48,664		2,201,073		1.66	%
Synchrony Financial		69,515		1,987,434		1.50	%
The Goldman Sachs Group, Inc.		9,966		1,776,340		1.34	%
Wells Fargo & Co.		37,293		1,715,851		1.29	%
				30,099,562		22.71	%

Health Care – 11.89%
Aetna, Inc.		14,742		1,582,554		1.19	%
Allergan PLC (a)(b)		2,570		536,976		0.40	%
Jazz Pharmaceuticals PLC (a)(b)		6,800		744,396		0.56	%
Johnson & Johnson		49,460		5,736,865		4.33	%
Medtronic PLC (b)		30,225		2,479,055		1.87	%
Merck & Co., Inc.		20,110		1,180,859		0.89	%
Pfizer, Inc.		42,925		1,361,152		1.03	%
Thermo Fisher Scientific, Inc.		14,580		2,143,697		1.62	%
				15,765,554		11.89	%

Industrials – 10.51%
CSX Corp.		70,400		2,147,904		1.62	%
FedEx Corp.		7,132		1,243,250		0.94	%
Flowserve Corp.		7,622		322,792		0.24	%
General Electric Co.		73,554		2,140,421		1.62	%
Honeywell International, Inc.		13,540		1,485,067		1.12	%
Ingersoll-Rand PLC (b)		25,943		1,745,705		1.32	%
Pentair PLC (b)		11,593		639,122		0.48	%
Raytheon Co.		10,700		1,461,727		1.10	%
Southwest Airlines Co.		38,708		1,550,255		1.17	%
United Technologies Corp.		11,650		1,190,630		0.90	%
				13,926,873		10.51	%

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

COMMON STOCKS	Number				% of
	of Shares		Value		Net Assets
Information Technology – 11.09%
Broadcom, Ltd. (b)		13,650	$	2,324,322		1.75	%
Cisco Systems, Inc.		90,460		2,775,313		2.09	%
Citrix Systems, Inc. (a)		12,340		1,046,432		0.79	%
Fidelity National Information Services, Inc.		11,150		824,208		0.62	%
LAM Research Corp.		11,735		1,136,652		0.86	%
Microsemi Corp. (a)		17,130		721,687		0.55	%
Oracle Corp.		50,120		1,925,610		1.45	%
Skyworks Solutions, Inc.		14,455		1,112,168		0.84	%
Total System Services, Inc.		19,850		990,118		0.75	%
Western Digital Corp.		31,556		1,844,133		1.39	%
				14,700,643		11.09	%

Materials – 3.21%
Albemarle Corp.		14,430		1,205,627		0.91	%
Ball Corp.		8,490		654,324		0.49	%
PPG Industries, Inc.		13,870		1,291,713		0.97	%
WestRock Co.		23,975		1,107,405		0.84	%
				4,259,069		3.21	%

Telecommunication Services – 2.06%
AT&T, Inc.		36,300		1,335,477		1.01	%
T- Mobile US, Inc. (a)		27,970		1,390,948		1.05	%
				2,726,425		2.06	%

Utilities – 7.66%
American Electric Power, Inc.		50,790		3,293,223		2.48	%
DTE Energy Co.		35,285		3,387,713		2.56	%
NextEra Energy, Inc.		27,170		3,477,760		2.62	%
				10,158,696		7.66	%

Total Common Stocks
(Cost $108,177,400)				125,547,494		94.72	%

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS

REITS – 4.79%	Number					% of
	of Shares		Value			Net Assets
Financials – 4.79%
AvalonBay Communities, Inc.		9,344	$	1,599,506			1.21	%
Kilroy Realty Corp.		26,437		1,898,970			1.43	%
Simon Property Group, Inc.		8,032		1,493,631			1.13	%
Ventas, Inc.		19,970		1,352,967			1.02	%
				6,345,074			4.79	%

Total REITS
(Cost $6,127,403)				6,345,074			4.79	%


SHORT-TERM INVESTMENTS – 0.96%

Money Market Funds – 0.96%
Fidelity Government Portfolio, Institutional Class, 0.27% (c)		1,267,959		1,267,959			0.96	%

Total Short-Term Investments
(Cost $1,267,959)				1,267,959			0.96	%

Total Investments
(Cost $115,572,762) – 100.47%				133,160,527			100.47	%
Liabilities in
Excess of Other Assets – (0.47)%				(618,586	)		(0.47	)%

TOTAL NET ASSETS – 100.00%			$	132,541,941			100.00	%

Percentages are stated as a percent of net assets.

REIT – Real Estate Investment Trust

(a)	Non-income producing security.
(b)	U.S. traded security of a foreign corporation.
(c)	The rate listed is the fund’s 7-day yield as of October 31, 2016.

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

Summary of Fair Value Exposure at October 31, 2016

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2016 (see Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Consumer Discretionary	$	6,919,061	$	—	$	—	$	6,919,061
Consumer Staples		11,127,724		—		—		11,127,724
Energy		15,863,887		—		—		15,863,887
Financials		30,099,562		—		—		30,099,562
Health Care		15,765,554		—		—		15,765,554
Industrials		13,926,873		—		—		13,926,873
Information Technology		14,700,643		—		—		14,700,643
Materials		4,259,069		—		—		4,259,069
Telecommunication Services		2,726,425		—		—		2,726,425
Utilities		10,158,696		—		—		10,158,696
Total Common Stocks	$	125,547,494	$	—	$	—	$	125,547,494
REITS
Financials	$	6,345,074	$	—	$	—	$	6,345,074
Total REITS	$	6,345,074	$	—	$	—	$	6,345,074
Short-Term Investments
Money Market Funds	$	1,267,959	$	—	$	—	$	1,267,959
Total Short-Term Investments	$	1,267,959	$	—	$	—	$	1,267,959
Total Investments	$	133,160,527	$	—	$	—	$	133,160,527

Transfers between levels are recognized at the end of the reporting period. During the year ended October 31, 2016, the Fund recognized no transfers between levels.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES

Financial Statements

Statement of Assets and Liabilities as of October 31, 2016

ASSETS:
Investments in securities, at value (cost $115,572,762)	$	133,160,527
Dividends and interest receivable		101,404
Receivable for fund shares sold		7,153
Receivable for securities sold		1,682,610
Prepaid expenses and other assets		14,310
Total Assets		134,966,004

LIABILITIES:
Payable for securities purchased		2,019,778
Payable for fund shares redeemed		101,548
Payable to advisor		96,283
Payable to administrator		22,080
Payable to auditor		23,381
Accrued distribution fees		116,697
Accrued service fees		11,085
Accrued trustees fees		3,897
Accrued expenses and other payables		29,314
Total Liabilities		2,424,063
NET ASSETS	$	132,541,941

NET ASSETS CONSIST OF:
Capital stock	$	112,060,513
Accumulated net investment income		978,600
Accumulated net realized gain on investments		1,915,063
Unrealized net appreciation on investments		17,587,765
Total Net Assets	$	132,541,941

NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	129,683,391
Shares issued and outstanding		4,221,633
Net asset value, offering price and redemption price per share	$	30.72

Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	2,858,550
Shares issued and outstanding		92,822
Net asset value, offering price and redemption price per share	$	30.80

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

Financial Statements

Statement of Operations for the year ended October 31, 2016

INVESTMENT INCOME:
Dividend income	$	3,210,869
Interest income		2,056
Total investment income		3,212,925

EXPENSES:
Investment advisory fees (See Note 5)		1,136,994
Distribution fees – Investor Class (See Note 5)		197,935
Service fees – Investor Class (See Note 5)		131,956
Administration, fund accounting, custody and transfer agent fees (See Note 5)		130,436
Sub-transfer agent expenses – Investor Class (See Note 5)		99,712
Sub-transfer agent expenses – Institutional Class (See Note 5)		4,188
Federal and state registration fees		27,311
Audit fees		24,104
Compliance expense (See Note 5)		23,709
Reports to shareholders		20,274
Trustees’ fees and expenses		15,481
Legal fees		504
Other expenses		12,374
Total expenses		1,824,978
NET INVESTMENT INCOME	$	1,387,947

REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on investments	$	2,564,142
Net change in unrealized depreciation on investments		(4,107,054	)
Net loss on investments		(1,542,912	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(154,965	)

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS

Financial Statements

Statements of Changes in Net Assets

	Year Ended			Year Ended
	October 31, 2016			October 31, 2015
OPERATIONS:
Net investment income	$	1,387,947		$	1,340,808
Net realized gain on investments		2,564,142			10,907,367
Net change in unrealized depreciation on investments		(4,107,054	)		(9,429,582	)
Net increase (decrease) in net
assets resulting from operations		(154,965	)		2,818,593

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Investor Class		(1,379,214	)		(1,223,834	)
Institutional Class		(18,326	)		(4,422	)
Net realized gains
Investor Class		(11,104,771	)		(6,143,232	)
Institutional Class		(125,019	)		(16,453	)
Total distributions		(12,627,330	)		(7,387,941	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		890,995			1,694,661
Proceeds from shares subscribed – Institutional Class		2,536,101			963,669
Dividends reinvested – Investor Class		12,006,353			7,104,575
Dividends reinvested – Institutional Class		140,185			20,495
Cost of shares redeemed – Investor Class		(12,544,355	)		(13,521,759	)
Cost of shares redeemed – Institutional Class		(962,439	)		(82,147	)
Net increase (decrease) in net assets derived from
capital share transactions		2,066,840			(3,820,506	)
TOTAL DECREASE IN NET ASSETS		(10,715,455	)		(8,389,854	)

NET ASSETS:
Beginning of year		143,257,396			151,647,250
End of year	$	132,541,941		$	143,257,396
Undistributed net investment income, end of year	$	978,600		$	1,020,438

CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		29,586			49,427
Shares sold – Institutional Class		81,884			28,858
Shares issued to holders as reinvestment
of dividends – Investor Class		397,477			208,039
Shares issued to holders as reinvestment
of dividends – Institutional Class		4,626			598
Shares redeemed – Investor Class		(414,867	)		(395,518	)
Shares redeemed – Institutional Class		(32,144	)		(2,406	)
Net increase (decrease) in shares outstanding		66,562			(111,002	)

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

Financial Statements

Financial Highlights

For an Investor Class share outstanding throughout each year

PER SHARE DATA:

Net asset value, beginning of year

Income from investment operations:

Net investment income

Net realized and unrealized gains (losses) on investments

Total from investment operations

Less distributions:

Dividends from net investment income

Dividends from net realized gains

Total distributions

Net asset value, end of year

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of year (millions)

Ratio of expenses to average net assets

Ratio of net investment income to average net assets

Portfolio turnover rate⁽¹⁾

⁽¹⁾	Portfolio turnover is calculated on the basis of the Fund as a whole.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2016			2015			2014			2013			2012

$	33.72		$	34.79		$	30.70		$	24.71		$	21.47


	0.30			0.30			0.28			0.28			0.28
	(0.34	)		0.32			4.06			6.00			3.14
	(0.04	)		0.62			4.34			6.28			3.42


	(0.31	)		(0.27	)		(0.25	)		(0.29	)		(0.18	)
	(2.65	)		(1.42	)		—			—			—
	(2.96	)		(1.69	)		(0.25	)		(0.29	)		(0.18	)
$	30.72		$	33.72		$	34.79		$	30.70		$	24.71

	0.11	%		1.77	%		14.20	%		25.64	%		16.07	%


$	129.68		$	141.96		$	151.25		$	143.48		$	125.00
	1.37	%		1.20	%		1.28	%		1.33	%		1.40	%
	1.04	%		0.90	%		0.80	%		0.98	%		1.16	%
	80	%		85	%		85	%		91	%		111	%

The accompanying notes are an integral part of these financial statements.

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Financial Statements

Financial Highlights

For an Institutional Class share outstanding throughout each year

PER SHARE DATA:

Net asset value, beginning of year

Income from investment operations:

Net investment income

Net realized and unrealized gains (losses) on investments

Total from investment operations

Less distributions:

Dividends from net investment income

Dividends from net realized gains

Total distributions

Net asset value, end of year

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of year (millions)

Ratio of expenses to average net assets:

Before expense reimbursement

After expense reimbursement

Ratio of net investment income to average net assets:

Before expense reimbursement

After expense reimbursement

Portfolio turnover rate⁽¹⁾

⁽¹⁾	Portfolio turnover is calculated on the basis of the Fund as a whole.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Year Ended October 31,
2016			2015			2014			2013			2012

$	33.82		$	34.94		$	30.83		$	24.83		$	21.56


	0.33			0.23			0.34			0.49			0.39
	(0.34	)		0.44			4.11			5.90			3.15
	(0.01	)		0.67			4.45			6.39			3.54


	(0.35	)		(0.36	)		(0.34	)		(0.39	)		(0.27	)
	(2.66	)		(1.43	)		—			—			—
	(3.01	)		(1.79	)		(0.34	)		(0.39	)		(0.27	)
$	30.80		$	33.82		$	34.94		$	30.83		$	24.83

	0.21	%		1.89	%		14.55	%		26.08	%		16.58	%


$	2.86		$	1.30		$	0.40		$	0.34		$	0.06

	1.28	%		1.18	%		1.18	%		1.14	%		1.22	%
	1.28	%		1.15	%		0.98	%		0.98	%		0.98	%

	1.07	%		0.83	%		0.91	%		1.07	%		1.29	%
	1.07	%		0.86	%		1.11	%		1.23	%		1.53	%
	80	%		85	%		85	%		91	%		111	%

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

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Financial Statements

Notes to the Financial Statements October 31, 2016

1). ORGANIZATION

The Hennessy Large Value Fund (the “Fund”) is a series of Hennessy Funds Trust (the “Trust”), which was organized as a Delaware statutory trust on September 17, 1992. The Fund is an open-end management investment company registered under the Investment Company Act of 1940, as amended. The investment objective of the Fund is long-term growth of capital and current income. The Fund is a diversified fund.

2). SIGNIFICANT ACCOUNTING POLICIES

a).	Investment Valuation – All investments in securities are recorded at their estimated fair value, as described in Note 3.

b).	Federal Income Taxes – No provision for federal income taxes or excise taxes has not been made since 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. Net investment income or loss and realized gains and losses for federal income tax purposes may differ from that reported on the financial statements because of temporary book 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.

	Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax regulations, permanent differences between book and tax basis for reporting for the fiscal year ended October 31, 2016, have been identified and appropriately reclassified on the Statement of Assets and Liabilities. The adjustments are as follows:

Undistributed	Accumulated
Net Investment	Net Realized
Income/(Loss)	Gain/(Loss)	Paid-in Capital
$(32,245)	$32,245	$—

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 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. The Fund is charged for those expenses that are directly attributable to the 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 or losses on investments are allocated to each class of shares based on its respective 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 gain or loss realized from the investment transactions by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted/amortized over the life of the respective security.

g).	Use of Estimates – The preparation of financial statements in conformity 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 and 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 the sum of the value of the securities held by the Fund, plus cash or other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for the Fund, rounded to the nearest cent. The Fund’s shares will not be 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, if any, are converted into U.S. dollars using the spot market rate of exchange at the time of valuation. Purchases and sales of investments and income are translated into U.S. dollars using the spot market rate of exchange 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 or 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).	Forward Contracts – The Fund may enter into forward currency contracts to reduce its exposure to changes in foreign currency exchange rates on its foreign holdings and to lock in the U.S. dollar cost of firm purchase and sale commitments for

HENNESSY FUNDS

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	securities denominated in foreign currencies. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing of such contract is included in net realized gain or loss from foreign currency transactions. During the fiscal year ended October 31, 2016, the Fund did not enter into any forward contracts.

k).	Repurchase Agreements – The Fund may enter into repurchase agreements with member banks or security dealers of the Federal Reserve Board whom the investment advisor deems creditworthy. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates.

	Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. Provisions of the repurchase agreements ensure that the market value of the collateral, including accrued interest thereon, is sufficient to cover the repurchase amount in the event of default of the counterparty. If the counterparty defaults and the value of the collateral declines or if the counterparty enters an insolvency proceeding, realization of the collateral by the Fund may be delayed or limited. During the fiscal year ended October 31, 2016, the Fund did not enter into any repurchase agreements.

l).	Derivatives – The Fund may invest in, or enter into, derivatives, such as options, futures contracts, options on futures contracts, and swaps, for a variety of reasons, including to hedge certain risks, to provide a substitute for purchasing or selling particular securities, or to increase potential income gain. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives may allow the Fund to increase or decrease the level of risk to which the Fund is exposed more quickly and efficiently than transactions in other types of instruments. The main purpose of utilizing derivative instruments is for hedging purposes.

	The Fund follows the financial accounting reporting rules as required by the Derivatives and Hedging Topic of the FASB Accounting Standards Codification. Under such rules, the Fund is required to include enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivatives instruments affect an entity’s results of operations and financial position. During the fiscal year ended October 31, 2016, the Fund did not hold any derivative instruments.

m).	New Accounting Pronouncements – In May 2015, the FASB issued ASU No. 2015-07 “Disclosure for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent).” The amendments in ASU No. 2015-07 remove the requirement to categorize within the fair value hierarchy investments measured at NAV and require the disclosure of sufficient information to reconcile the fair value of the remaining assets categorized within the fair value hierarchy to the financial statements. The amendments in ASU No. 2015-07 are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Management has reviewed the requirements and believes the adoption of ASU 2015-07 will not have a material impact on the Fund’s financial statements and related disclosures.

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

3). SECURITIES VALUATION

	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 (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.

Following is a description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis.

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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.

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

4). INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during the fiscal year ended October 31, 2016, were $106,837,633 and $115,650,296, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during the fiscal year ended October 31, 2016.

5). INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Hennessy Advisors, Inc. (the “Advisor”) is the investment advisor of the Fund. The Advisor provides the Fund with investment management services under an Investment Advisory Agreement. The Advisor furnishes all investment advice, office space, facilities, and provides most of the personnel needed by the Fund. As compensation for its services, the Advisor is entitled to a monthly fee from the Fund. The fee is based upon the average daily net assets of the Fund at the annual rate of 0.85%. The net investment advisory fees payable by the Fund as of October 31, 2016, were $96,283.

The Advisor has delegated the day-to-day management of the Fund to a sub-advisor, RBC Global Asset Management (U.S.) Inc. The Advisor pays the sub-advisor fees from its own assets and these fees are not an additional expense of the Fund. For the most recent fiscal year, the Advisor (not the Fund) paid a sub-advisory fee, based upon the daily net assets of the Fund, at the rate of 0.35%.

For a period of three years after the year in which the Advisor waived or reimbursed expenses, the Advisor may seek reimbursement from the Fund to the extent that total annual fund operating expenses are less than the expense limitation that was in effect at the time the Advisor waived or reimbursed expenses. As of October 31, 2016, cumulative expenses subject to potential recovery under the aforementioned conditions were $153 for Institutional Class shares, of which $9 will expire on October 31, 2017, and $144 will expire on October 31, 2018.

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daily net assets attributable to Investor Class shares. Even though the authorized rate is up to 0.25%, the Fund has only used up to 0.15% of its average daily net assets attributable to Investor Class shares for such purpose since the plan was implemented on November 1, 2015. Amounts paid under the plan may be spent on any activities or expenses primarily intended to result in the sale of shares, including, but not limited to, advertising, shareholder account servicing, the printing and mailing of prospectuses to other than current shareholders, the printing and mailing of sales literature, and compensation for sales and marketing activities or to financial institutions and others, such as dealers and distributors.

6). GUARANTEES AND INDEMNIFICATIONS

7). LINE OF CREDIT

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

Fund, intended to provide short-term financing, if necessary, subject to certain restrictions, in connection with shareholder redemptions. The credit facility is with the Hennessy Funds’ custodian bank, U.S. Bank, N.A. Borrowings under this arrangement bear interest at the bank’s prime rate and are secured by all of the Fund’s assets (as to its own borrowings only). During the fiscal year ended October 31, 2016, the Fund did not have any borrowings outstanding under the line of credit.

8). FEDERAL TAX INFORMATION

As of October 31, 2016, the components of accumulated earnings (losses) for income tax purposes were as follows:

Cost of investments for tax purposes	$	117,141,865
Gross tax unrealized appreciation	$	20,864,823
Gross tax unrealized depreciation		(4,846,161	)
Net tax unrealized appreciation	$	16,018,662
Undistributed ordinary income	$	978,600
Undistributed long-term capital gains		3,484,166
Total distributable earnings	$	4,462,766
Other accumulated loss	$	—
Total accumulated gain	$	20,481,428

At October 31, 2016, the Fund had no tax basis capital losses to offset future capital gains.

At October 31, 2016, the Fund did not defer, on a tax basis, any post-December late year ordinary loss deferrals.

During the fiscal years ended October 31, 2016 and 2015, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2016		October 31, 2015
Ordinary income⁽¹⁾	$	2,222,426	$	1,228,256
Long-term capital gain		10,404,904		6,159,685
	$	12,627,330	$	7,387,941

⁽¹⁾ Ordinary income includes short-term gain or loss.

9). EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2016, through the date of issuance of the Fund’s financial statements. Other than as disclosed below, management has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.

On December 7, 2016, capital gains were declared and paid to shareholders of record as of December 6, 2016, as follows:

	Long-term
	Amount Per Share
Investor Class	$0.81510
Institutional Class	$0.81676

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Report of Independent Registered Public Accounting Firm

The Board of Trustees of Hennessy Funds Trust

and Shareholders of the Hennessy Large Value Fund:

We have audited the accompanying statement of assets and liabilities of the Hennessy Large Value Fund (the Fund), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2016, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the five year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

Chicago, Illinois

December 22, 2016

HENNESSYFUNDS.COM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS

Trustees and Officers of the Fund (Unaudited)

			Other
			Directorships
			Held Outside
Name, (Year of Birth),			of Fund
and Position Held	Start Date	Principal Occupation(s)	Complex During
with the Trust	of Service	During Past Five Years	Past Five Years⁽¹⁾

Disinterested Trustees and Advisers

J. Dennis DeSousa	January 1996	Mr. DeSousa is a real estate investor.	None.
(1936)
Trustee

Robert T. Doyle	January 1996	Mr. Doyle has been the Sheriff of	None.
(1947)		Marin County, California since 1996.
Trustee

Gerald P. Richardson	May 2004	Mr. Richardson is an independent	None.
(1945)		consultant in the securities industry.
Trustee

Brian Alexander	March 2015	Mr. Alexander has been employed	None.
(1981)		by Sutter Health Novato Community
Adviser to the Board		Hospital since 2012, first as an
		Assistant Administrator and then,
		beginning in 2013, as the Chief
		Administrative Officer. From 2011
		through 2012, Mr. Alexander was
		employed by Sutter Health West Bay
		Region as the Regional Director of
		Strategic Decision Support. Prior to
		that, in 2011, he served as the
		Director of Managed Care
		Contracting and also the Director of
		Compensation, Benefits, and
		Compliance for the Rehabilitation
		Institute of Chicago.

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			Other
			Directorships
			Held Outside
Name, (Year of Birth),			of Fund
and Position Held	Start Date	Principal Occupation(s)	Complex During
with the Trust	of Service	During Past Five Years	Past Five Years⁽¹⁾

Doug Franklin	March 2016	Mr. Franklin is a retired insurance	None.
(1964)		industry executive. From 1987
Adviser to the Board		through 2015, he was employed by
		the Allianz-Fireman’s Fund Insurance
		Company in various positions,
		including as its Chief Actuary and
		Chief Risk Officer.

Claire Knoles	December 2015	Ms. Knoles is a founder of Kiosk and	None.
(1974)		has served as its Chief Operating
Adviser to the Board		Officer since 2004. Kiosk is a full
		service marketing agency with
		offices in the San Francisco Bay
		Area, Toronto, and Liverpool, UK.

Interested Trustee⁽²⁾

Neil J. Hennessy	January 1996 as	Mr. Hennessy has been employed by	Hennessy
(1956)	a Trustee and	Hennessy Advisors, Inc. since 1989	Advisors, Inc.
Trustee, Chairman of	June 2008 as	and currently serves as its President,
the Board, Chief	an Officer	Chairman and Chief Executive Officer.
Investment Officer,
Portfolio Manager,
and President

Name, (Year of Birth),
and Position Held	Start Date	Principal Occupation(s)
with the Trust	of Service	During Past Five Years

Officers

Teresa M. Nilsen	January 1996	Ms. Nilsen has been employed by Hennessy Advisors, Inc.
(1966)		since 1989 and currently serves as its Executive Vice President,
Executive Vice President		Chief Operations Officer, Chief Financial Officer, and Secretary.
and Treasurer

Daniel B. Steadman	March 2000	Mr. Steadman has been employed by Hennessy Advisors, Inc.
(1956)		since 2000 and currently serves as its Executive Vice President
Executive Vice President		and Chief Compliance Officer.
and Secretary

Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)		as its General Counsel since June 2013. She previously served
Senior Vice President and		as in-house counsel to Carlson Capital, L.P., an SEC-registered
Chief Compliance Officer		investment advisor to several private funds, from
		February 2010 to May 2013.

Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013. Mr. Carlson was previously a co-founder
Senior Vice President and		and principal of Trivium Consultants, LLC from February 2011
Head of Distribution		through November 2013.

HENNESSYFUNDS.COM

TRUSTEES AND OFFICERS OF THE FUND

Name, (Year of Birth),
and Position Held	Start Date	Principal Occupation(s)
with the Trust	of Service	During Past Five Years

David Ellison	October 2012	Mr. Ellison has been employed by Hennessy Advisors, Inc. since
(1958)⁽³⁾		October 2012. He has served as a Portfolio Manager of the
Senior Vice President and		Hennessy Small Cap Financial Fund, the Hennessy Large Cap
Portfolio Manager		Financial Fund, and the Hennessy Technology Fund since
		inception. Prior to that, Mr. Ellison served as Director, CIO and
		President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.

Brian Peery	March 2003 as	Mr. Peery has been employed by Hennessy Advisors, Inc. since
(1969)	an Officer and	2002. He has served as a Portfolio Manager of the Hennessy
Senior Vice President and	February 2011	Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
Portfolio Manager	as a Co-Portfolio	30 Fund, the Hennessy Cornerstone Large Growth Fund, the
	Manager or	Hennessy Cornerstone Value Fund, the Hennessy Total Return
	Portfolio Manager	Fund, and the Hennessy Balanced Fund since October 2014.
		He served as Co-Portfolio Manager of the same funds from
		February 2011 through September 2014. Mr. Peery has also
		served as a Portfolio Manager of the Hennessy Gas Utility Fund
		since February 2015.

Winsor (Skip) Aylesworth	October 2012	Mr. Aylesworth has been employed by Hennessy Advisors, Inc.
(1947)⁽³⁾		since October 2012. He has served as a Portfolio Manager of
Vice President and		the Hennessy Gas Utility Fund since 1998 and as a Portfolio
Portfolio Manager		Manager of the Hennessy Technology Fund since inception.
		Prior to that, Mr. Aylesworth served as Executive Vice President
		of FBR Fund Advisers, Inc. from 1999 to October 2012.

Ryan Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)⁽⁴⁾		October 2012. He has served as a Portfolio Manager of the
Vice President and		Hennessy Gas Utility Fund, the Hennessy Small Cap Financial
Portfolio Manager		Fund, and the Hennessy Large Cap Financial Fund since
		October 2014. He served as Co-Portfolio Manager of the same
		funds from March 2013 through September 2014, and as a
		Portfolio Analyst for the Hennessy Funds from October 2012
		through February 2013. Prior to that, Mr. Kelley served as
		Portfolio Manager of FBR Fund Advisers, Inc. from
		January 2008 to October 2012.

_______________

⁽¹⁾	Messrs. DeSousa, Doyle, Hennessy, and Richardson previously served on the Board of Directors of Hennessy Mutual Funds, Inc. (“HMFI”), The Hennessy Funds, Inc. (“HFI”), and Hennessy SPARX Funds Trust (“HSFT”). Pursuant to an internal reorganization effective as of February 28, 2014, the series of HFMI, HFI, and HSFT were reorganized into corresponding series of Hennessy Funds Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
⁽²⁾	Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Hennessy Funds.
⁽³⁾	The address of these officers is 101 Federal Street, Suite 1900, Boston, MA 02110.
⁽⁴⁾	The address of this officer is 1340 Environ Way, Suite 305, Chapel Hill, NC 27517.

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Expense Example (Unaudited)

October 31, 2016

Actual Expenses

Hypothetical Example for Comparison Purposes

HENNESSYFUNDS.COM

EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period⁽¹⁾
	Account Value	Account Value	May 1, 2016 –
	May 1, 2016	October 31, 2016	October 31, 2016
Investor Class
Actual	$1,000.00	$1,026.10	$6.93
Hypothetical (5% return before expenses)	$1,000.00	$1,018.30	$6.90

Institutional Class
Actual	$1,000.00	$1,026.70	$6.57
Hypothetical (5% return before expenses)	$1,000.00	$1,018.65	$6.55

⁽¹⁾	Expenses are equal to the Fund’s annualized expense ratio of 1.36% for Investor Class shares or 1.29% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/366 days (to reflect one-half year period).

HENNESSY FUNDS

1-800-966-4354

How to Obtain a Copy of the Fund’s

Proxy Voting Policy and Proxy Voting Records

Quarterly Filings on Form N-Q

Federal Tax Distribution Information

(Unaudited)

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for the fiscal year ended October 31, 2016, was 100%.

Householding

HENNESSYFUNDS.COM

PROXY VOTING — PRIVACY POLICY

We collect the following non-public personal information about you:

	•	information we receive from you on or in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income, and date of birth; and
	•	information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payment history, parties to transactions, cost basis information, and other financial information.

HENNESSY FUNDS

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(This Page Intentionally Left Blank.)

For information, questions or assistance, please call

The Hennessy Funds

1-800-966-4354 or 1-415-899-1555

INVESTMENT ADVISOR

Hennessy Advisors, Inc.

7250 Redwood Blvd., Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Dr., Suite 302

Milwaukee, Wisconsin 53212

TRUSTEES

Neil J. Hennessy

Robert T. Doyle

J. Dennis DeSousa

Gerald P. Richardson

COUNSEL

Foley & Lardner LLP

777 East Wisconsin Avenue

Milwaukee, Wisconsin 53202-5306

INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

KPMG LLP

200 East Randolph Street

Chicago, Illinois 60601

DISTRIBUTOR

Quasar Distributors, LLC

615 East Michigan Street

Milwaukee, Wisconsin 53202

hennessyfunds.com | 1-800-966-4354

This report has been prepared for shareholders and may be distributed to

others only if preceded or accompanied by a current prospectus.

ANNUAL REPORT

OCTOBER 31, 2016

HENNESSY TOTAL RETURN FUND

Investor Class HDOGX

hennessyfunds.com | 1-800-966-4354

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CONTENTS

Contents

Letter to Shareholders			2
Performance Overview			4
Financial Statements
Schedule of Investments			7
Statement of Assets and Liabilities			11
Statement of Operations			12
Statements of Changes in Net Assets			13
Statement of Cash Flows			14
Financial Highlights			16
Notes to the Financial Statements			18
Report of Independent Registered Public Accounting Firm			26
Trustees and Officers of the Fund			27
Expense Example			30
Proxy Voting			32
Quarterly Filings on Form N-Q			32
Federal Tax Distribution Information			32
Householding			32
Privacy Policy			33

HENNESSY FUNDS

1-800-966-4354

December 2016

Dear Hennessy Funds Shareholder:

HENNESSYFUNDS.COM

LETTER TO SHAREHOLDERS

Thank you for your continued confidence and investment in our funds. If you have any questions or would like to speak with us directly, please don’t hesitate to call us at (800) 966-4354.

Best regards,

Neil J. Hennessy

President and Chief Investment Officer

Past performance does not guarantee future results.

Mutual fund investing involves risk. Principal loss is possible.

Opinions expressed are those of Neil Hennessy and are subject to change, are not guaranteed and should not be considered investment advice.

The Dow Jones Industrial Average and S&P 500 Index are unmanaged indices commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is calculated by dividing a company’s market price per share by its earnings per share.

HENNESSY FUNDS

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Performance Overview (Unaudited)

CHANGE IN VALUE OF $10,000 INVESTMENT

This graph illustrates the performance of an initial investment of $10,000 made in the Fund ten years ago and assumes the reinvestment of dividends.

AVERAGE ANNUAL TOTAL RETURN FOR PERIODS ENDED OCTOBER 31, 2016

	One	Five	Ten
	Year	Years	Years
Hennessy Total
Return Fund (HDOGX)	8.20%	8.68%	4.36%
75/25 Blended DJIA/Treasury Index*	4.26%	8.65%	5.59%
Dow Jones Industrial Average	5.49%	11.50%	6.93%

Expense ratio: 1.28%

The expense ratio presented is from the most recent prospectus.

*	The 75/25 Blended DJIA/Treasury Index consists of 75% common stocks represented by the Dow Jones Industrial Average and 25% short-duration Treasury securities represented by the BofA Merrill Lynch 90-day U.S. Treasury Bill Index.

PERFORMANCE NARRATIVE

Portfolio Managers Neil J. Hennessy and Brian E. Peery

Performance:

For the twelve-month period ended October 31, 2016, the Hennessy Total Return Fund returned 8.20%, outperforming both the 75/25 Blended DJIA/Treasury Index* and the Dow Jones Industrial Average, which returned 4.26% and 5.49% for the same period, respectively.

The Fund outperformed its primary benchmark, the 75/25 Blended DJIA/Treasury Index,* as a result of both sector allocation and stock selection. Two of the largest

HENNESSYFUNDS.COM

PERFORMANCE OVERVIEW

contributors to the Fund’s relative outperformance were The Boeing Company and Caterpillar, Inc. Pfizer, Inc. was the largest detractor from overall performance. From a sector perspective, an overweight position in the Energy sector as oil prices rebounded, and an underweight position in the Financials sector, aided performance. The Fund continues to hold Boeing, Caterpillar and Pfizer. Good returns from the equity investments in the portfolio more than offset a negative relative contribution from the Government Securities portion of the portfolio.

Portfolio Strategy:

The Fund invests approximately 75% of its assets in the “Dogs of the Dow,” the 10 highest dividend-yielding Dow stocks, and 25% of its assets in U.S. Treasuries. As a result of this “blended” strategy, the Fund may be expected to underperform equities in periods when markets rise and outperform in periods when markets fall. The Fund is designed to allow investors to gain exposure to the equity market while maintaining a percentage of their investment in fixed income securities. We believe the Fund is well positioned for the more conservative investor, as the equity portion of the portfolio is invested in what we would deem to be high-quality companies, each with a historically high dividend yield. The relatively short duration of the 25% weighting of U.S. Treasuries in the portfolio (all less than one year) may allow us the ability to roll into higher-yielding Treasuries in the event yields rise.

Market Outlook:

First, while corporate profits have been on a gentle slide downwards since the fourth quarter of 2014, market analysts are now forecasting a return to growth in profits in the fourth quarter of this year. We believe these forecasts have a good chance of being proved correct. Second, mergers and acquisitions have been strong and steady this year, and we believe such activity will continue next year, helping drive revenue and earnings for the acquiring companies. Third, we do not believe the majority of stocks are expensive at this point, though many are probably fairly valued. The Dow Jones Industrial Average and the S&P 500 Index have forward PE ratios of roughly 18x and 19x, respectively, close to long-term averages, although slightly higher than six months ago. Corporate balance sheets appear to be in excellent shape, and while executives have shown some reluctance to increase capital spending beyond maintenance levels this cycle, we believe companies outside of the Energy sector will eventually start investing for expansion. Overall, we believe the basic fundamentals of the market are attractive, and we continue to be optimistic about the possibility of further moderate market advances over the course of next year.

We believe the balance between risk and reward afforded by the Fund’s stock selection and asset allocation policies provides conservative investors with a compelling way to participate in the market longer term while maintaining a lower risk profile.

_______________

*	The 75/25 Blended DJIA/Treasury Index consists of 75% common stocks represented by the Dow Jones Industrial Average and 25% short-duration Treasury securities represented by the BofA Merrill Lynch 90-day U.S. Treasury Bill Index.

HENNESSY FUNDS

1-800-966-4354

The S&P 500 Index and Dow Jones Industrial Average are unmanaged indices commonly used to measure the performance of U.S. stocks. The BofA Merrill Lynch 90-day U.S. Treasury Bill Index is an unmanaged index of Treasury securities maturing in 90 days. One cannot invest directly in an index.

The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund, making it more exposed to individual stock volatility than a diversified fund. The Fund’s formula-based strategy may cause the Fund to buy or sell securities at times when it may not be advantageous. Please see the Fund’s prospectus for a more complete discussion of these and other risks.

Dividend yield is calculated as the annual dividends paid by a company divided by its market price per share. PE, or price to earnings, is calculated by dividing a company’s market price per share by its earnings per share.

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PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as of October 31, 2016

HENNESSY TOTAL RETURN FUND

(% of Net Assets)

TOP TEN HOLDINGS	% NET ASSETS

U.S. Treasury Bill, 0.240%, 11/25/2016	25.03%

U.S. Treasury Bill, 0.360%, 01/12/2017	25.02%

U.S. Treasury Bill, 0.305%, 12/22/2016	21.46%

Cisco Systems, Inc.	7.04%

Chevron Corp.	6.90%

Caterpillar, Inc.	6.71%

International Business Machines Corp.	6.59%

Exxon Mobil Corp.	6.49%

Pfizer, Inc.	6.48%

Verizon Communications, Inc.	6.32%

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COMMON STOCKS – 67.55%	Number				% of
	of Shares		Value		Net Assets
Consumer Discretionary – 3.19%
McDonald’s Corp.		23,800	$	2,679,166		3.19	%

Consumer Staples – 6.82%
Procter & Gamble Co.		23,000		1,996,400		2.38	%
The Coca-Cola Co.		67,500		2,862,000		3.41	%
Wal-Mart Stores, Inc.		12,300		861,246		1.03	%
				5,719,646		6.82	%

Energy – 13.39%
Chevron Corp.		55,300		5,792,675		6.90	%
Exxon Mobil Corp.		65,300		5,440,796		6.49	%
				11,233,471		13.39	%

Health Care – 9.60%
Merck & Co., Inc.		44,600		2,618,912		3.12	%
Pfizer, Inc.		171,200		5,428,752		6.48	%
				8,047,664		9.60	%

Industrials – 13.20%
Caterpillar, Inc.		67,400		5,625,204		6.71	%
General Electric Co.		57,800		1,681,980		2.01	%
The Boeing Co.		26,400		3,760,152		4.48	%
				11,067,336		13.20	%

Information Technology – 15.03%
Cisco Systems, Inc.		192,400		5,902,832		7.04	%
Intel Corp.		33,600		1,171,632		1.40	%
International Business Machines Corp.		36,000		5,532,840		6.59	%
				12,607,304		15.03	%

Telecommunication Services – 6.32%
Verizon Communications, Inc.		110,200		5,300,620		6.32	%

Total Common Stocks
(Cost $51,960,615)				56,655,207		67.55	%

The accompanying notes are an integral part of these financial statements.

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SCHEDULE OF INVESTMENTS

SHORT-TERM INVESTMENTS – 72.41%	Number of Shares/					% of
	Par Amount		Value			Net Assets
Money Market Funds – 0.90%
Fidelity Government Portfolio, Institutional Class, 0.27% (a)		750,819	$	750,819			0.90	%

U.S. Treasury Bills (c) – 71.51%
0.240%, 11/25/2016 (b)		21,000,000		20,996,395			25.03	%
0.305%, 12/22/2016 (b)		18,000,000		17,995,665			21.46	%
0.360%, 01/12/2017 (b)		21,000,000		20,989,122			25.02	%

				59,981,182			71.51	%

Total Short-Term Investments
(Cost $60,731,119)				60,732,001			72.41	%

Total Investments
(Cost $112,691,734) – 139.96%				117,387,208			139.96	%
Liabilities in Excess
of Other Assets – (39.96)%				(33,517,235	)		(39.96	)%

TOTAL NET ASSETS – 100.00%			$	83,869,973			100.00	%

Percentages are stated as a percent of net assets.

(a)	The rate listed is the fund’s 7-day yield as of October 31, 2016.
(b)	The rate listed is discount rate at issue.
(c)	Collateral or partial collateral for securities sold subject to repurchase.

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

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Summary of Fair Value Exposure at October 31, 2016

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2016 (see Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Consumer Discretionary	$	2,679,166	$	—	$	—	$	2,679,166
Consumer Staples		5,719,646		—		—		5,719,646
Energy		11,233,471		—		—		11,233,471
Health Care		8,047,664		—		—		8,047,664
Industrials		11,067,336		—		—		11,067,336
Information Technology		12,607,304		—		—		12,607,304
Telecommunication Services		5,300,620		—		—		5,300,620
Total Common Stocks	$	56,655,207	$	—	$	—	$	56,655,207
Short-Term Investments
Money Market Funds	$	750,819	$	—	$	—	$	750,819
U.S. Treasury Bills		—		59,981,182		—		59,981,182
Total Short-Term Investments	$	750,819	$	59,981,182	$	—	$	60,732,001
Total Investments	$	57,406,026	$	59,981,182	$	—	$	117,387,208

Transfers between levels are recognized at the end of the reporting period. During the year ended October 31, 2016, the Fund recognized no transfers between levels.

Schedule of Reverse Repurchase Agreements

					Principal	Maturity	Maturity
Face Value		Counterparty	Rate		Trade Date	Date	Amount
$	12,593,000	Jefferies LLC		0.75%	8/19/16	11/25/16	$	12,618,711
	10,794,000	Jefferies LLC		0.75%	9/23/16	12/22/16		10,814,239
	12,593,000	Jefferies LLC		0.75%	10/21/16	1/12/17		12,614,775
$	35,980,000						$	36,047,725

As of October 31, 2016, the fair value of securities held as collateral for reverse repurchase agreements was $59,981,182 as noted on the Schedule of Investments.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES

Financial Statements

Statement of Assets and Liabilities as of October 31, 2016

ASSETS:
Investments in securities, at value (cost $112,691,734)	$	117,387,208
Dividends and interest receivable		156,847
Receivable for fund shares sold		51,509
Receivable for securities sold		2,553,727
Prepaid expenses and other assets		10,227
Total Assets		120,159,518

LIABILITIES:
Payable for fund shares redeemed		82,339
Payable to advisor		45,072
Payable to administrator		15,016
Payable to auditor		22,381
Accrued distribution fees		64,686
Accrued service fees		7,512
Reverse repurchase agreements		35,980,000
Accrued interest payable		30,537
Accrued trustees fees		3,898
Accrued expenses and other payables		38,104
Total Liabilities		36,289,545
NET ASSETS	$	83,869,973

NET ASSETS CONSIST OF:
Capital stock	$	74,751,785
Accumulated net investment income		96,662
Accumulated net realized gain on investments		4,326,052
Unrealized net appreciation on investments		4,695,474
Total Net Assets	$	83,869,973

NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	83,869,973
Shares issued and outstanding		6,061,249
Net asset value, offering price and redemption price per share	$	13.84

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

Financial Statements

Statement of Operations for the year ended October 31, 2016

INVESTMENT INCOME:
Dividend income	$	1,887,300
Interest income		113,258
Total investment income		2,000,558

EXPENSES:
Investment advisory fees (See Note 5)		452,740
Interest expense (See Notes 7 and 9)		206,647
Distribution fees – Investor Class (See Note 5)		113,185
Service fees – Investor Class (See Note 5)		75,457
Administration, fund accounting, custody and transfer agent fees (See Note 5)		73,531
Sub-transfer agent expenses – Investor Class (See Note 5)		59,736
Compliance expense (See Note 5)		23,710
Audit fees		23,042
Federal and state registration fees		17,620
Trustees’ fees and expenses		15,999
Reports to shareholders		13,562
Legal fees		252
Other expenses		7,858
Total expenses		1,083,339
NET INVESTMENT INCOME	$	917,219

REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on investments	$	4,429,880
Net change in unrealized appreciation on investments		(36,877	)
Net gain on investments		4,393,003
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	5,310,222

The accompanying notes are an integral part of these financial statements.

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STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS

Financial Statements

Statements of Changes in Net Assets

	Year Ended			Year Ended
	October 31, 2016			October 31, 2015
OPERATIONS:
Net investment income	$	917,219		$	1,074,164
Net realized gain on investments		4,429,880			5,969,412
Net change in unrealized appreciation on investments		(36,877	)		(6,270,901	)
Net increase in net assets resulting from operations		5,310,222			772,675

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income – Investor Class		(921,292	)		(1,084,818	)
Net realized gains – Investor Class		(5,932,910	)		(5,767,007	)
Total distributions		(6,854,202	)		(6,851,825	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		25,999,315			2,980,355
Dividends reinvested – Investor Class		6,430,792			6,420,583
Cost of shares redeemed – Investor Class		(16,432,231	)		(17,800,502	)
Net increase (decrease) in net assets derived
from capital share transactions		15,997,876			(8,399,564	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		14,453,896			(14,478,714	)

NET ASSETS:
Beginning of year		69,416,077			83,894,791
End of year	$	83,869,973		$	69,416,077
Undistributed net investment income, end of year	$	96,662		$	100,735

CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		1,870,317			203,884
Shares issued to holders as reinvestment
of dividends – Investor Class		498,039			448,889
Shares redeemed – Investor Class		(1,198,857	)		(1,254,599	)
Net increase (decrease) in shares outstanding		1,169,499			(601,826	)

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

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Financial Statements

Statement of Cash Flows for the year ended October 31, 2016

Cash flows from operating activities:
Net increase in net assets from operations	$	5,310,222
Adjustments to reconcile net increase in net assets from
operations to net cash provided by operating activities:
Payments to purchase securities		(26,886,584	)
Proceeds from sale of securities		23,136,722
(Purchase) sale of short term investments, net		(11,766,484	)
Realized gain on investments in securities		(4,429,880	)
Net accretion of discount on securities		(105,371	)
Change in unrealized appreciation on investments in securities		36,877
(Increases) decreases in operating assets:
Decrease in dividends and interest receivable		3,186
Increase in receivable for securities sold		(2,553,727	)
Increase in prepaid expenses and other assets		(788	)
Increases (decreases) in operating liabilities:
Increase in payable to advisor		10,190
Increase in payable to administrator		3,593
Increase in accrued distribution fees		380
Increase in accrued service fees		1,698
Increase in accrued interest payable		19,108
Increase in accrued audit fees		781
Increase in accrued trustee fees		2,238
Decrease in other accrued expenses and payables		(5,196	)
Net cash used in operating activities		(17,223,035	)

Cash flows from financing activities:
Increase in reverse repurchase agreements		8,095,500
Proceeds from shares sold		25,948,535
Payment on shares redeemed		(16,397,590	)
Distributions paid in cash, net of reinvestments		(423,410	)
Net cash provided by financing activities		17,223,035
Net increase in cash		—

Cash:
Beginning balance		—
Ending balance	$	—

Supplemental information:
Non-cash financing activities not included herein consists
of dividend reinvestment of dividends and distributions	$	6,430,792
Proceeds from securities litigation		8,739

Cash paid for interest	$	187,539

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

STATEMENT OF CASH FLOWS

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HENNESSY FUNDS

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Financial Statements

Financial Highlights

For an Investor Class share outstanding throughout each year

PER SHARE DATA:

Net asset value, beginning of year

Income from investment operations:

Net investment income

Net realized and unrealized gains (losses) on investments

Total from investment operations

Less distributions:

Dividends from net investment income

Dividends from net realized gains

Total distributions

Net asset value, end of year

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of year (millions)

Ratio of expenses to average net assets

Ratio of net investment income to average net assets

Portfolio turnover rate

The accompanying notes are an integral part of these financial statements.

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FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2016			2015			2014			2013			2012

$	14.19		$	15.27		$	14.30		$	12.64		$	11.47


	0.16			0.20			0.20			0.16			0.18
	0.88			(0.02	)		0.96			1.66			1.17
	1.04			0.18			1.16			1.82			1.35


	(0.16	)		(0.20	)		(0.19	)		(0.16	)		(0.18	)
	(1.23	)		(1.06	)		—			—			—
	(1.39	)		(1.26	)		(0.19	)		(0.16	)		(0.18	)
$	13.84		$	14.19		$	15.27		$	14.30		$	12.64

	8.20	%		1.22	%		8.15	%		14.49	%		11.78	%


$	83.87		$	69.42		$	83.89		$	90.24		$	77.67
	1.44	%		1.28	%		1.34	%		1.37	%		1.37	%
	1.22	%		1.40	%		1.31	%		1.16	%		1.44	%
	44	%		27	%		23	%		31	%		22	%

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

Financial Statements

Notes to the Financial Statements October 31, 2016

1). ORGANIZATION

The Hennessy Total Return Fund (the “Fund”) is a series of Hennessy Funds Trust (the “Trust”), which was organized as a Delaware statutory trust on September 17, 1992. The Fund is an open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund is a successor to a fund with the same name (the “Predecessor Fund”) that was a series of The Hennessy Funds, Inc., a Maryland corporation, pursuant to a reorganization that took place after the close of business on February 28, 2014. Prior to February 28, 2014, the Fund had no investment operations. As a result of the reorganization, holders of Investor Class shares of the Predecessor Fund received Investor Class shares of the Fund (the Investor Class shares of the Fund are the successor to the accounting and performance information of the corresponding shares of the Predecessor Fund). The investment objective of the Fund is total return, consisting of capital appreciation and current income. The Fund is a non-diversified fund and offers Investor Class shares.

2). SIGNIFICANT ACCOUNTING POLICIES

a).	Investment Valuation – All investments in securities are recorded at their estimated fair value, as described in Note 3.

b).	Federal Income Taxes – No provision for federal income taxes or excise taxes has been made since 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. Net investment income or loss and realized gains and losses for federal income tax purposes may differ from that reported on the financial statements because of temporary book 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.

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 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.

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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. The Fund is charged for those expenses that are directly attributable to the 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 on a calendar quarter basis. 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 gain or loss realized from the investment transactions by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted/amortized over the life of the respective security.

g).	Use of Estimates – The preparation of financial statements in conformity 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 and 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 the sum of the value of the securities held by the Fund, plus cash or other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for the Fund, rounded to the nearest cent. The Fund’s shares will not be 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).	Repurchase Agreements – The Fund may enter into repurchase agreements with member banks or security dealers of the Federal Reserve Board whom the investment advisor deems creditworthy. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates.

	Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. Provisions of the repurchase agreements ensure that the market value of the collateral, including accrued interest thereon, is sufficient to cover the repurchase amount in the event of default of the counterparty. If the counterparty defaults and the value of the collateral declines or if the counterparty enters an insolvency proceeding, realization of the collateral by the Fund may be delayed or limited.

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 (“MRA”) 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 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 agreement may be restricted while the other party, or its trustee or receiver, determines whether or not to enforce the Fund’s obligation

HENNESSY FUNDS

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	to repurchase the securities. For additional information regarding the offsetting of assets and liabilities at October 31, 2016, please reference the table in Note 9.

k).	New Accounting Pronouncements – In May 2015, the FASB issued ASU No. 2015-07 “Disclosure for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent).” The amendments in ASU No. 2015-07 remove the requirement to categorize within the fair value hierarchy investments measured at NAV and require the disclosure of sufficient information to reconcile the fair value of the remaining assets categorized within the fair value hierarchy to the financial statements. The amendments in ASU No. 2015-07 are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Management has reviewed the requirements and believes the adoption of ASU 2015-07 will not have a material impact on the Fund’s financial statements and related disclosures.

3). SECURITIES VALUATION

	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 (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.

Following is a description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis.

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 will generally be 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”) will generally be 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 will generally be 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.

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

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.

The Board of Trustees of the Fund (the “Board”) has adopted fair value pricing procedures that are followed when a price for a security is not readily available or if a significant event has occurred that indicates the closing price of a security no longer represents the true value of that security. Fair value pricing determinations are made in good faith in accordance with these procedures. There are numerous criteria that will be given consideration in determining a fair value of a security such as the trading volume of a security and markets, the value of other like securities, and news events with direct bearing to a security or markets. Fair value pricing results in an estimated price for a security that reflects the amount the Fund might reasonably expect to receive in a current sale. Depending on the relative significance of the valuation inputs, these securities may be classified in either Level 2 or Level 3 of the fair value hierarchy.

4). INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during the fiscal year ended October 31, 2016, were $26,886,584 and $23,127,983, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during the fiscal year ended October 31, 2016.

HENNESSY FUNDS

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5). INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Hennessy Advisors, Inc. (the “Advisor”) is the investment advisor of the Fund. The Advisor provides the Fund with investment management services under an Investment Advisory Agreement. The Advisor furnishes all investment advice, office space, facilities, and provides most of the personnel needed by the Fund. As compensation for its services, the Advisor is entitled to a monthly fee from the Fund. The fee is based upon the average daily net assets of the Fund at the annual rate of 0.60%. The net investment advisory fees payable by the Fund as of October 31, 2016, were $45,072.

The Board has approved a Shareholder Servicing Agreement for the Fund, which was instituted to compensate the Advisor for the non-investment management services it provides to the Fund. The Shareholder Servicing Agreement provides for a monthly fee paid to the Advisor at an annual rate of 0.10% of the average daily net assets of the Fund. Shareholder service fees payable by the Fund as of October 31, 2016, were $7,512.

The Fund has adopted a plan pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended, that authorizes payments in connection with the distribution of the Fund’s shares at an annual rate of up to 0.25% of the Fund’s average daily net assets, although the Fund is currently only using up to 0.15% of its average daily net assets for such purpose. Amounts paid under the plan may be spent on any activities or expenses primarily intended to result in the sale of shares, including, but not limited to, advertising, shareholder account servicing, the printing and mailing of prospectuses to other than current shareholders, the printing and mailing of sales literature, and compensation for sales and marketing activities or to financial institutions and others, such as dealers and distributors.

U.S. Bancorp Fund Services, LLC (“USBFS”) provides the Fund with administrative, fund accounting, and transfer agent services and necessary office equipment. As administrator, USBFS is responsible for activities such as (i) preparing various federal and state regulatory filings, reports, and returns for the Fund, (ii) preparing reports and materials to be supplied to the Board, (iii) monitoring the activities of the Fund’s custodian, transfer agent, and accountants, and (iv) coordinating the preparation and payment of the Fund’s expenses and reviewing the Fund’s expense accruals. Fees paid to USBFS during the fiscal year ended October 31, 2016, were $73,531.

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

6). GUARANTEES AND INDEMNIFICATIONS

7). LINE OF CREDIT

The Fund has an uncommitted line of credit with the other Hennessy Funds in the amount of the lesser of (i) $100,000,000 or (ii) 33.33% of each Hennessy Fund’s net assets, or 30% for the Hennessy Gas Utility Fund and 10% for the Hennessy Balanced Fund, intended to provide short-term financing, if necessary, subject to certain restrictions, in connection with shareholder redemptions. The credit facility is with the Hennessy Funds’ custodian bank, U.S. Bank, N.A. Borrowings under this arrangement bear interest at the bank’s prime rate and are secured by all of the Fund’s assets (as to its own borrowings only). During the fiscal year ended October 31, 2016, the Fund had an outstanding average daily balance and a weighted average interest rate of $13,795 and 3.47%, respectively. The maximum amount outstanding for the Fund during the period was $1,299,000. At October 31, 2016, the Fund did not have any borrowings outstanding under the line of credit.

8). FEDERAL TAX INFORMATION

As of October 31, 2016, the components of accumulated earnings (losses) for income tax purposes were as follows:

Cost of investments for tax purposes	$	112,794,423
Gross tax unrealized appreciation	$	5,664,482
Gross tax unrealized depreciation		(1,071,697	)
Net tax unrealized appreciation	$	4,592,785
Undistributed ordinary income	$	142,034
Undistributed long-term capital gains		4,383,369
Total distributable earnings	$	4,525,403
Other accumulated loss	$	—
Total accumulated gain	$	9,118,188

At October 31, 2016, the Fund had no tax basis capital losses to offset future capital gains.

At October 31, 2016, the Fund did not defer, on a tax basis, any post-December late year ordinary loss deferrals.

HENNESSY FUNDS

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During the fiscal years ended October 31, 2016 and 2015, the tax character of distributions paid by the Fund was as follows:

		Year Ended			Year Ended
	October 31, 2016			October 31, 2015
Ordinary income⁽¹⁾		$	1,010,164		$	1,084,818
Long-term capital gain			5,844,038			5,767,007
		$	6,854,202		$	6,851,825

⁽¹⁾ Ordinary income includes short-term gain or loss.

9). REVERSE REPURCHASE AGREEMENTS

The Fund may enter into reverse repurchase agreements with the same parties with whom it may enter into repurchase agreements. Under a reverse repurchase agreement, the Fund sells securities and agrees to repurchase them at a mutually agreed upon date and price. Reverse repurchase agreements are regarded as a form of secured borrowing by the Fund. Securities sold under reverse repurchase agreements are reflected as a liability on the Statement of Assets and Liabilities. Interest payments made are recorded as a component of interest expense on the Statement of Operations.

For the fiscal year ended October 31, 2016, the average daily balance and average interest rate in effect for reverse repurchase agreements were $29,774,433 and 0.681%, respectively. Below is information about the scheduled maturity date, amount, and interest rate for outstanding reverse repurchase agreements as of October 31, 2016:

Maturity Date	Amount	Interest Rate
November 25, 2016	$12,593,000	0.75%
December 22, 2016	$10,794,000	0.75%
January 12, 2017	$12,593,000	0.75%

Outstanding reverse repurchase agreements at October 31, 2016, were equal to 42.90% of the Fund’s net assets.

Below is information about instruments and transactions eligible for offset in the Statement of Assets and Liabilities, on both a gross and net basis, as well as instruments and transactions subject to an agreement similar to a master netting arrangement:

		Gross	Net
		Amounts	Amounts
		Offset	Presented	Gross Amounts Not
		in the	in the	Offset in the Statement
	Gross	Statement	Statement	of Assets and Liabilities
	Amounts of	of	of		Collateral
	Recognized	Assets and	Assets and	Financial	Pledged	Net
Description	Liabilities	Liabilities	Liabilities	Instruments	(Received)	Amount
Reverse
Repurchase
Agreements	$35,980,000	$—	$35,980,000	$35,980,000	$—	$—
	$35,980,000	$—	$35,980,000	$35,980,000	$—	$—

For additional information, please reference the “Offsetting Assets and Liabilities” section in Note 2.

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

10). EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2016, through the date of issuance of the Fund’s financial statements. Other than as disclosed below, management has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.

On December 7, 2016, capital gains were declared and paid to shareholders of record as of December 6, 2016, as follows:

	Amount Per Share
	Long-term		Short-term
Investor Class	$	0.64969	$	0.00673

HENNESSY FUNDS

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Report of Independent Registered Public Accounting Firm

The Board of Trustees of Hennessy Funds Trust

and Shareholders of the Hennessy Total Return Fund:

We have audited the accompanying statement of assets and liabilities of the Hennessy Total Return Fund (the Fund), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2016, and the related statement of operations and cash flows for the year then ended, the statements of changes in net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the five year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Fund as of October 31, 2016, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the five year period then ended, in conformity with U.S. generally accepted accounting principles.

Chicago, Illinois

December 22, 2016

HENNESSYFUNDS.COM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS

Trustees and Officers of the Fund (Unaudited)

			Other
			Directorships
			Held Outside
Name, (Year of Birth),			of Fund
and Position Held	Start Date	Principal Occupation(s)	Complex During
with the Trust	of Service	During Past Five Years	Past Five Years⁽¹⁾

Disinterested Trustees and Advisers

J. Dennis DeSousa	January 1996	Mr. DeSousa is a real estate investor.	None.
(1936)
Trustee

Robert T. Doyle	January 1996	Mr. Doyle has been the Sheriff of	None.
(1947)		Marin County, California since 1996.
Trustee

Gerald P. Richardson	May 2004	Mr. Richardson is an independent	None.
(1945)		consultant in the securities industry.
Trustee

Brian Alexander	March 2015	Mr. Alexander has been employed	None.
(1981)		by Sutter Health Novato Community
Adviser to the Board		Hospital since 2012, first as an
		Assistant Administrator and then,
		beginning in 2013, as the Chief
		Administrative Officer. From 2011
		through 2012, Mr. Alexander was
		employed by Sutter Health West Bay
		Region as the Regional Director of
		Strategic Decision Support. Prior to
		that, in 2011, he served as the
		Director of Managed Care
		Contracting and also the Director of
		Compensation, Benefits, and
		Compliance for the Rehabilitation
		Institute of Chicago.

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			Other
			Directorships
			Held Outside
Name, (Year of Birth),			of Fund
and Position Held	Start Date	Principal Occupation(s)	Complex During
with the Trust	of Service	During Past Five Years	Past Five Years⁽¹⁾

Doug Franklin	March 2016	Mr. Franklin is a retired insurance	None.
(1964)		industry executive. From 1987
Adviser to the Board		through 2015, he was employed by
		the Allianz-Fireman’s Fund Insurance
		Company in various positions,
		including as its Chief Actuary and
		Chief Risk Officer.

Claire Knoles	December 2015	Ms. Knoles is a founder of Kiosk and	None.
(1974)		has served as its Chief Operating
Adviser to the Board		Officer since 2004. Kiosk is a full
		service marketing agency with
		offices in the San Francisco Bay
		Area, Toronto, and Liverpool, UK.

Interested Trustee⁽²⁾

Neil J. Hennessy	January 1996 as	Mr. Hennessy has been employed by	Hennessy
(1956)	a Trustee and	Hennessy Advisors, Inc. since 1989	Advisors, Inc.
Trustee, Chairman of	June 2008 as	and currently serves as its President,
the Board, Chief	an Officer	Chairman and Chief Executive Officer.
Investment Officer,
Portfolio Manager,
and President

Name, (Year of Birth),
and Position Held	Start Date	Principal Occupation(s)
with the Trust	of Service	During Past Five Years

Officers

Teresa M. Nilsen	January 1996	Ms. Nilsen has been employed by Hennessy Advisors, Inc.
(1966)		since 1989 and currently serves as its Executive Vice President,
Executive Vice President		Chief Operations Officer, Chief Financial Officer, and Secretary.
and Treasurer

Daniel B. Steadman	March 2000	Mr. Steadman has been employed by Hennessy Advisors, Inc.
(1956)		since 2000 and currently serves as its Executive Vice President
Executive Vice President		and Chief Compliance Officer.
and Secretary

Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)		as its General Counsel since June 2013. She previously served
Senior Vice President and		as in-house counsel to Carlson Capital, L.P., an SEC-registered
Chief Compliance Officer		investment advisor to several private funds, from
		February 2010 to May 2013.

Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013. Mr. Carlson was previously a co-founder
Senior Vice President and		and principal of Trivium Consultants, LLC from February 2011
Head of Distribution		through November 2013.

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TRUSTEES AND OFFICERS OF THE FUND

Name, (Year of Birth),
and Position Held	Start Date	Principal Occupation(s)
with the Trust	of Service	During Past Five Years

David Ellison	October 2012	Mr. Ellison has been employed by Hennessy Advisors, Inc. since
(1958)⁽³⁾		October 2012. He has served as a Portfolio Manager of the
Senior Vice President and		Hennessy Small Cap Financial Fund, the Hennessy Large Cap
Portfolio Manager		Financial Fund, and the Hennessy Technology Fund since
		inception. Prior to that, Mr. Ellison served as Director, CIO and
		President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.

Brian Peery	March 2003 as	Mr. Peery has been employed by Hennessy Advisors, Inc. since
(1969)	an Officer and	2002. He has served as a Portfolio Manager of the Hennessy
Senior Vice President and	February 2011	Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
Portfolio Manager	as a Co-Portfolio	30 Fund, the Hennessy Cornerstone Large Growth Fund, the
	Manager or	Hennessy Cornerstone Value Fund, the Hennessy Total Return
	Portfolio Manager	Fund, and the Hennessy Balanced Fund since October 2014.
		He served as Co-Portfolio Manager of the same funds from
		February 2011 through September 2014. Mr. Peery has also
		served as a Portfolio Manager of the Hennessy Gas Utility Fund
		since February 2015.

Winsor (Skip) Aylesworth	October 2012	Mr. Aylesworth has been employed by Hennessy Advisors, Inc.
(1947)⁽³⁾		since October 2012. He has served as a Portfolio Manager of
Vice President and		the Hennessy Gas Utility Fund since 1998 and as a Portfolio
Portfolio Manager		Manager of the Hennessy Technology Fund since inception.
		Prior to that, Mr. Aylesworth served as Executive Vice President
		of FBR Fund Advisers, Inc. from 1999 to October 2012.

Ryan Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)⁽⁴⁾		October 2012. He has served as a Portfolio Manager of the
Vice President and		Hennessy Gas Utility Fund, the Hennessy Small Cap Financial
Portfolio Manager		Fund, and the Hennessy Large Cap Financial Fund since
		October 2014. He served as Co-Portfolio Manager of the same
		funds from March 2013 through September 2014, and as a
		Portfolio Analyst for the Hennessy Funds from October 2012
		through February 2013. Prior to that, Mr. Kelley served as
		Portfolio Manager of FBR Fund Advisers, Inc. from
		January 2008 to October 2012.

⁽¹⁾	Messrs. DeSousa, Doyle, Hennessy, and Richardson previously served on the Board of Directors of Hennessy Mutual Funds, Inc. (“HMFI”), The Hennessy Funds, Inc. (“HFI”), and Hennessy SPARX Funds Trust (“HSFT”). Pursuant to an internal reorganization effective as of February 28, 2014, the series of HFMI, HFI, and HSFT were reorganized into corresponding series of Hennessy Funds Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
⁽²⁾	Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Hennessy Funds.
⁽³⁾	The address of these officers is 101 Federal Street, Suite 1900, Boston, MA 02110.
⁽⁴⁾	The address of this officer is 1340 Environ Way, Suite 305, Chapel Hill, NC 27517.

HENNESSY FUNDS

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Expense Example (Unaudited)

October 31, 2016

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. Although the Fund charges no sales loads or transaction fees, you will be assessed fees for outgoing wire transfers, returned checks and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Fund’s transfer agent. If you request that a redemption be made by wire transfer, currently a $15 fee is charged by the Fund’s transfer agent. IRA accounts will be charged a $15 annual maintenance fee. The example below includes, but is not limited to, management fees, shareholder servicing fees, fund accounting, custody, and transfer agent fees. However, the example below does not include portfolio trading commissions and related expenses, and other extraordinary expenses as determined under generally accepted accounting principles. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line of the table under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

HENNESSYFUNDS.COM

EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period⁽¹⁾
	Account Value	Account Value	May 1, 2016 –
	May 1, 2016	October 31, 2016	October 31, 2016
Investor Class
Actual	$1,000.00	$1,025.20	$7.38
Hypothetical (5% return before expenses)	$1,000.00	$1,017.85	$7.35

⁽¹⁾	Expenses are equal to the Fund’s annualized expense ratio of 1.45%, multiplied by the average account value over the period, multiplied by 184/366 days (to reflect one-half year period).

HENNESSY FUNDS

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How to Obtain a Copy of the Fund’s

Proxy Voting Policy and Proxy Voting Records

Quarterly Filings on Form N-Q

Federal Tax Distribution Information

(Unaudited)

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for the fiscal year ended October 31, 2016, was 100%.

Householding

HENNESSYFUNDS.COM

PROXY VOTING — PRIVACY POLICY

We collect the following non-public personal information about you:

	•	information we receive from you on or in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income, and date of birth; and

	•	information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payment history, parties to transactions, cost basis information, and other financial information.

HENNESSY FUNDS

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For information, questions or assistance, please call

The Hennessy Funds

1-800-966-4354 or 1-415-899-1555

INVESTMENT ADVISOR

Hennessy Advisors, Inc.

7250 Redwood Blvd., Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Dr., Suite 302

Milwaukee, Wisconsin 53212

TRUSTEES

Neil J. Hennessy

Robert T. Doyle

J. Dennis DeSousa

Gerald P. Richardson

COUNSEL

Foley & Lardner LLP

777 East Wisconsin Avenue

Milwaukee, Wisconsin 53202-5306

INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

KPMG LLP

200 East Randolph Street

Chicago, Illinois 60601

DISTRIBUTOR

Quasar Distributors, LLC

615 East Michigan Street

Milwaukee, Wisconsin 53202

hennessyfunds.com | 1-800-966-4354

This report has been prepared for shareholders and may be distributed to

others only if preceded or accompanied by a current prospectus.

ANNUAL REPORT

OCTOBER 31, 2016

HENNESSY EQUITY AND

INCOME FUND

Investor Class HEIFX

Institutional Class HEIIX

hennessyfunds.com | 1-800-966-4354

(This Page Intentionally Left Blank.)

CONTENTS

Contents

Letter to Shareholders			2
Performance Overview			4
Financial Statements
Schedule of Investments			7
Statement of Assets and Liabilities			18
Statement of Operations			19
Statements of Changes in Net Assets			21
Financial Highlights			22
Notes to the Financial Statements			26
Report of Independent Registered Public Accounting Firm			34
Trustees and Officers of the Fund			35
Expense Example			38
Proxy Voting			40
Quarterly Filings on Form N-Q			40
Federal Tax Distribution Information			40
Householding			40
Privacy Policy			41

HENNESSY FUNDS

1-800-966-4354

December 2016

Dear Hennessy Funds Shareholder:

HENNESSYFUNDS.COM

LETTER TO SHAREHOLDERS

Thank you for your continued confidence and investment in our funds. If you have any questions or would like to speak with us directly, please don’t hesitate to call us at (800) 966-4354.

Best regards,

Neil J. Hennessy

President and Chief Investment Officer

Past performance does not guarantee future results.

Mutual fund investing involves risk. Principal loss is possible.

Opinions expressed are those of Neil Hennessy and are subject to change, are not guaranteed and should not be considered investment advice.

The Dow Jones Industrial Average and S&P 500 Index are unmanaged indices commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is calculated by dividing a company’s market price per share by its earnings per share.

HENNESSY FUNDS

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Performance Overview (Unaudited)

CHANGE IN VALUE OF $10,000 INVESTMENT

This graph illustrates the performance of an initial investment of $10,000 made in the Fund ten years ago and assumes the reinvestment of dividends.

AVERAGE ANNUAL TOTAL RETURN FOR PERIODS ENDED OCTOBER 31, 2016

	One	Five	Ten
	Year	Years	Years
Hennessy Equity and Income Fund –
Investor Class (HEIFX)	-0.12%	6.92%	5.89%
Hennessy Equity and Income Fund –
Institutional Class (HEIIX)	0.30%	7.23%	6.17%
Blended Balanced Index⁽¹⁾	4.10%	9.07%	5.95%
S&P 500 Index	4.51%	13.57%	6.70%

Expense ratios: 1.43% (Investor Class); 1.09% (Institutional Class)

The expense ratios presented are from the most recent prospectus.

⁽¹⁾	The Blended Balanced Index consists of 60% common stocks represented by the S&P 500 Index and 40% bonds represented by the Bloomberg Barclays Intermediate U.S. Government/Credit Index.

PERFORMANCE NARRATIVE

Portfolio Managers for Equity Allocation: Stephen M. Goddard, CFA (Lead Portfolio Manager), Jonathan T. Moody, CFA, J. Brian Campbell, CFA, and Mark E. DeVaul, CFA, CPA

The London Company of Virginia, LLC (sub-advisor)

Portfolio Managers for Fixed Income Portion: Gary B. Cloud, CFA, and Peter G. Greig, CFA

Financial Counselors, Inc. (sub-advisor)

HENNESSYFUNDS.COM

LETTER TO SHAREHOLDERSPERFORMANCE OVERVIEW

Performance:

For the twelve-month period ended October 31, 2016, the Investor Class of the Hennessy Equity and Income Fund returned -0.12%, underperforming the Blended Balanced Index* and the S&P 500 Index, which returned 4.10% and 4.51% for the same period, respectively.

Equities: Stock selection accounted for the most of the relative underperformance of the equity allocation of the Fund over the twelve-month period, while sector allocation also had a slightly negative impact. At the sector level, an underweight position in Information Technology and an overweight position in Consumer Discretionary both had a negative impact on relative performance. This underperformance was partially offset by the positive impact of an underweight position in Healthcare and an overweight position in Industrials.

On an individual stock level, the top contributors to the performance of the equity allocation of the Fund for the twelve-month period were Apple, Inc., Altria Group, Inc., Norfolk Southern Corporation, Deere & Company, and Dollar Tree Inc. The top detractors from performance were CarMax Inc., Bristol Myers Squibb Company, Carnival Corporation, Progressive Corporation, and Mosaic Company. All of the stocks mentioned are still owned in the portfolio.

Fixed Income: The overweight position in investment grade corporate credit was the largest contributor to the performance of the fixed income allocation of the Fund over the twelve-month period. Issue selection drove most of this performance. The income and aging from these higher-yielding investment grade securities exceeded the amount represented in the benchmark. The Fund’s slight exposure to preferred stocks and high-yield credit securities, or junk bonds, was another positive factor aiding performance. Effective duration was the largest detractor from overall performance compared to the benchmark. Portfolio convexity and volatility were neutral contributors to overall performance.

Portfolio Strategy:

The Fund seeks a balanced portfolio of 60% equities and 40% fixed income, with the goal of maintaining broad market exposure with lower volatility. Our bottom-up equity selection strategy seeks companies with strong returns on capital and the flexibility to enhance shareholder value by using their balance sheets. The fixed income allocation of the portfolio focuses on high-quality domestic corporate, agency and government bonds.

Investment Outlook:

Equities: Based on recent economic news, it appears that the US economy is continuing to grow at a low, single-digit rate. The labor market remains buoyant while the housing market and the manufacturing sector are improving. While interest rates may move slightly higher over the next few months, we believe rates will remain low relative to historical averages for quite some time. Low rates should be a positive for the equity market. Nonetheless, we note that the U.S. economy is now entering its eighth year of continuous expansion and in our opinion, equity markets are not as cheap as they were a few years ago based on traditional metrics. Fortunately, we are still finding what we believe to be high-conviction investment ideas with a focus on limiting downside risk in each holding.

Our strategy is to focus on stocks from a bottom-up point of view. We seek to own companies with strong returns on capital and flexibility to enhance shareholder value using their balance sheet. Low interest rates and relatively high equity risk premiums enable companies to increase shareholder value by adjusting their capital structures. We expect investors to reward companies that wisely deploy capital by using it to pay for higher dividends, finance share repurchases at attractive prices, and make sensible

HENNESSY FUNDS

1-800-966-4354

acquisitions. We believe our more conservative portfolio is well positioned for a slow-growth environment that should reward more efficient capital allocation.

Fixed Income: In our opinion, the last few months may have marked the beginning of a slow change in central bank monetary policy worldwide. It might be too soon to ring the death knell for quantitative easing, but it is possible that progress towards even lower negative interest rates in Japan, Europe and Switzerland has been halted. Part of the reasoning behind this change in policy is the realization by many central bankers that negative interest rates can cause more harm than expected to the business models of financial intermediaries such as banks and insurance companies, while their macroeconomic benefit has not materialized as hoped.

Over the last twelve months, we have also witnessed a further reduction in consensus expectations among Federal Reserve Bank members regarding the timing and magnitude of rate increases over the next few years. Publications from the Federal Reserve now indicate that members expect two rate hikes in 2017 and three in 2018. For the first time in this lengthy rate-hiking cycle, both Federal Reserve Bank members and market participants see a fairly similar pathway forward for the level of short-term interest rates. This is significant because harmony between the Federal Reserve and market expectations reduces the possibility of surprises for the markets and a potential policy error.

As we look forward, prospects for economic growth remain subdued. Unanticipated election results in the United States and Europe coupled with a nationalist and populist electoral surge hurt prospects for trade liberalization and economic cooperation. Brexit negotiations with the European Union next year will add to political and economic uncertainty. Conflict in the Middle East, South China Sea disputes and potential terrorism events, all contribute to the unsettled political and social environment around the world. Overall, we expect to see modest rate movements in either direction as economic and political events dictate trading levels.

_______________

*	The Blended Balanced Index consists of 60% common stocks represented by the S&P 500 Index and 40% bonds represented by the Bloomberg Barclays Intermediate U.S. Government/Credit Index.

The S&P 500 Index is an unmanaged index commonly used to measure the performance of U.S. stocks. The Bloomberg Barclays Capital Intermediate U.S. Government/Credit Index is an unmanaged index commonly used to measure the performance of U.S. bonds. One cannot invest directly in an index.

Investments in debt securities typically decrease in value when interest rates rise. The risk is greater for longer-term debt securities. Investments by the Fund in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities. Investments in Asset-Backed and Mortgage-Backed securities include additional risks that investors should be aware of including credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. Investments in foreign securities may involve political, economic and currency risks, greater volatility and differences in accounting methods. The Fund may experience higher fees due to investments in pooled investment vehicles (including ETFs). Please see the Fund’s prospectus for a more complete discussion of these and other risks.

Dividend payout ratio is calculated as a company’s yearly dividend per share divided by its earnings per share. Return on capital is a profitability ratio that measures the return that an investment generates for capital contributors, i.e. bondholders and stockholders, and it indicates how effective a company is at turning capital into profits.

HENNESSYFUNDS.COM

PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as of October 31, 2016

HENNESSY EQUITY AND INCOME FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING CASH/CASH EQUIVALENTS)	% NET ASSETS

Berkshire Hathaway, Inc., Class B	4.25%

Edgewell Personal Care Co.	2.96%

Dollar Tree, Inc.	2.91%

Carnival Corp.	2.76%

Apple, Inc.	2.68%

Altria Group, Inc.	2.67%

Visa, Inc., Class A	2.49%

General Dynamics Corp.	2.43%

Eli Lilly & Co.	2.34%

CarMax, Inc.	2.32%

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COMMON STOCKS – 59.71%	Number				% of
	of Shares		Value		Net Assets
Consumer Discretionary – 13.28%
CarMax, Inc. (a)		154,299	$	7,705,692		2.32	%
Carnival Corp. (b)		186,820		9,172,862		2.76	%
Dollar Tree, Inc. (a)		127,700		9,647,735		2.91	%
Lowe’s Companies, Inc.		71,666		4,776,539		1.44	%
NIKE, Inc., Class B		122,400		6,142,032		1.85	%
O’Reilly Automotive, Inc. (a)		25,070		6,629,511		2.00	%
				44,074,371		13.28	%

Consumer Staples – 6.99%
Altria Group, Inc.		134,177		8,871,783		2.67	%
Edgewell Personal Care Co. (a)		130,232		9,819,493		2.96	%
The Coca-Cola Co.		106,161		4,501,226		1.36	%
				23,192,502		6.99	%

Energy – 1.57%
Chevron Corp.		49,691		5,205,132		1.57	%

Financials – 13.89%
Alleghany Corp. (a)		13,960		7,206,292		2.17	%
Bank of America Corp.		158,499		2,615,233		0.79	%
Berkshire Hathaway, Inc., Class B (a)		97,679		14,095,080		4.25	%
BlackRock, Inc.		22,038		7,520,247		2.26	%
The Progressive Corp.		230,540		7,264,315		2.19	%
Wells Fargo & Co.		160,803		7,398,546		2.23	%
				46,099,713		13.89	%

Health Care – 3.78%
Bristol-Myers Squibb Co.		94,133		4,792,311		1.44	%
Eli Lilly & Co.		105,220		7,769,445		2.34	%
				12,561,756		3.78	%

Industrials – 9.36%
Deere & Co.		69,410		6,128,903		1.85	%
FedEx Corp.		25,578		4,458,757		1.34	%
General Dynamics Corp.		53,450		8,057,053		2.43	%
General Electric Co.		198,670		5,781,297		1.74	%
Norfolk Southern Corp.		71,470		6,646,710		2.00	%
				31,072,720		9.36	%

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS

COMMON STOCKS	Number				% of
	of Shares		Value		Net Assets
Information Technology – 6.87%
Apple, Inc.		78,540	$	8,917,431		2.68	%
Cisco Systems, Inc.		183,706		5,636,100		1.70	%
Visa, Inc., Class A		100,176		8,265,522		2.49	%
				22,819,053		6.87	%

Materials – 2.79%
NewMarket Corp.		17,940		7,192,326		2.17	%
The Mosaic Co.		87,840		2,066,875		0.62	%
				9,259,201		2.79	%

Telecommunication Services – 1.18%
Verizon Communications, Inc.		81,538		3,921,978		1.18	%

Total Common Stocks
(Cost $183,658,167)				198,206,426		59.71	%

PREFERRED STOCKS – 2.29%

Consumer Staples – 0.10%
CHS, Inc., Series 4, 7.500%, 01/21/2025		10,960		320,580		0.10	%

Financials – 2.19%
Aegon N.V., 6.375%, 11/30/2016 (b)		3,070		78,162		0.02	%
Ares Management LP, Series A, 7.000%, 06/30/2021		3,059		79,320		0.02	%
Banc of California, Inc., Series E, 7.000%, 03/15/2021		3,075		76,567		0.02	%
Bank of America Corp.
Series EE, 6.000%, 04/25/2021		5,015		130,390		0.04	%
Series, W, 6.625%, 09/09/2019		3,540		96,536		0.03	%
BB&T Corp., Series F, 5.200%, 11/01/2017		13,715		348,224		0.11	%
Capital One Financial Corp.
Series F, 6.200%, 12/01/2020		6,805		181,625		0.05	%
Series G, 5.200%, 12/01/2021		7,360		182,749		0.06	%
Citigroup, Inc.
Series S, 6.300%, 02/12/2021		5,805		153,891		0.05	%
Series C, 5.800%, 04/22/2018		5,820		147,304		0.04	%
Discover Financial Services, Series B, 6.500%, 12/01/2017		13,190		345,446		0.10	%
Fannie Mae Preferred, Series S, 8.250%, 12/31/2020 (a)		10,600		41,764		0.01	%
First Republic Bank
Series G, 5.500%, 03/30/2021		5,025		131,303		0.04	%
Series F, 5.700%, 06/30/2020		4,800		132,000		0.04	%
Huntington Bancshares, Inc., Series D, 6.250%, 04/15/2021		9,510		254,488		0.08	%

The accompanying notes are an integral part of these financial statements.

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PREFERRED STOCKS	Number				% of
	of Shares		Value		Net Assets
Financials (Continued)
IBERIABANK Corp., Series A, 6.625%, 08/01/2025		3,090	$	83,399		0.03	%
ING Groep N.V., 6.125%, 01/15/2017 (b)		3,185		81,186		0.02	%
JPMorgan Chase & Co., Series Bb, 6.150%, 09/01/2020		13,430		358,178		0.11	%
Legg Mason, Inc., 5.450%, 09/15/2021 (a)		6,570		163,527		0.05	%
MetLife, Inc., Series A, 4.000%, 11/30/2016		13,860		350,797		0.11	%
Morgan Stanley, Series I, 6.375%, 10/15/2024		11,470		316,572		0.10	%
National General Holdings Corp., Series C, 7.500%, 07/15/2021		7,890		202,300		0.06	%
Northern Trust Corp., Series C, 5.850%, 10/01/2019		13,015		350,234		0.11	%
PNC Financial Services Group, Inc., Series Q, 5.375%, 12/01/2017		13,430		340,988		0.10	%
Regions Financial Corp.
Series B, 6.375%, 09/15/2024		6,650		191,320		0.06	%
Series A, 6.375%, 12/15/2017		6,790		176,404		0.05	%
State Street Corp.
Series D, 5.900%, 03/15/2024		6,350		178,118		0.05	%
Series G, 5.300%, 03/15/2026		6,600		176,682		0.05	%
SunTrust Banks, Inc., Series E, 5.875%, 03/15/2018		13,540		351,092		0.11	%
The Allstate Corp., Series E, 6.625%, 04/15/2019		12,395		336,648		0.10	%
The Charles Schwab Corp.
Series C, 6.000%, 12/01/2020		6,765		187,052		0.06	%
Series A, 5.950%, 06/01/2021		6,910		187,054		0.06	%
The Goldman Sachs Group, Inc.
Series D, 4.000%, 11/30/2016		4,175		93,603		0.03	%
Series N, 6.300%, 05/10/2021		4,300		114,638		0.03	%
U.S. Bancorp, Series H, 5.150%, 07/01/2018 (d)		4,465		115,733		0.03	%
Validus Holdings, Ltd., Series A, 5.875%, 06/15/2021 (b)		7,935		201,152		0.06	%
Wells Fargo & Co.
Series V, 6.000%, 12/15/2020		6,555		170,954		0.05	%
Series X, 5.500%, 09/15/2021		7,000		178,150		0.05	%

				7,285,550		2.19	%

Total Preferred Stocks
(Cost $7,609,118)				7,606,130		2.29	%

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS

REITS – 0.29%	Par				% of
	Amount		Value		Net Assets
Financials – 0.29%
Apollo Commercial Real Estate Finance, Inc.		28,000	$	473,760		0.14	%
Chimera Investment Corp.		19,000		297,730		0.09	%
Monmouth Real Estate Investment Corp., Series C, 6.125%, 09/15/2021 (a)		3,300		86,559		0.02	%
Public Storage, Series D, 4.950%, 07/20/2021		4,900		120,540		0.04	%
				978,589		0.29	%

Total REITS
(Cost $945,318)				978,589		0.29	%

CORPORATE BONDS – 26.35%

Consumer Discretionary – 0.32%
Amazon.com, Inc., 3.300%, 12/05/2021		1,000,000		1,061,038		0.32	%

Consumer Staples – 1.04%
Anheuser-Busch InBev Worldwide, Inc., 7.750%, 01/15/2019		150,000		169,662		0.05	%
CVS Health Corp.
1.900%, 07/20/2018		1,300,000		1,310,574		0.40	%
2.250%, 12/05/2018		500,000		507,143		0.15	%
4.125%, 05/15/2021		1,000,000		1,083,883		0.33	%
Wal-Mart Stores, Inc., 5.000%, 10/25/2040		300,000		363,230		0.11	%
				3,434,492		1.04	%

Energy – 1.38%
Canadian Natural Resources Ltd., 3.900%, 02/01/2025 (b)		1,000,000		1,021,755		0.31	%
Chevron Corp., 2.355%, 12/05/2022		790,000		795,946		0.24	%
Encana Corp., 3.900%, 11/15/2021 (b)		1,600,000		1,622,880		0.49	%
National Oilwell Varco, Inc., 2.600%, 12/01/2022		1,200,000		1,133,082		0.34	%
				4,573,663		1.38	%

Financials – 14.33%
American Express Co., 6.150%, 08/28/2017		1,550,000		1,610,903		0.49	%
American International Group, Inc., 4.875%, 06/01/2022		1,600,000		1,789,050		0.54	%
Associates Corporation of North America, 6.950%, 11/01/2018		300,000		329,710		0.10	%
Bank of New York Mellon Corp., 1.969%, 06/20/2017		500,000		502,900		0.15	%
BB&T Corp., 2.300%, 10/15/2018		1,000,000		1,015,589		0.31	%
BlackRock, Inc., 3.500%, 03/18/2024		1,000,000		1,076,802		0.32	%
Boston Properties, Inc., 5.875%, 10/15/2019		700,000		775,651		0.23	%
Capital One Financial Corp., 4.750%, 07/15/2021		1,500,000		1,656,333		0.50	%
Capital One NA, 2.250%, 09/13/2021		500,000		497,780		0.15	%

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

CORPORATE BONDS	Par				% of
	Amount		Value		Net Assets
Financials (Continued)
Comerica, Inc., 2.125%, 05/23/2019		500,000	$	503,627		0.15	%
Diamond 1 Finance Corp. / Diamond 2
Finance Corp., 5.450%, 06/15/2023 (e)		1,220,000		1,308,228		0.40	%
Discover Financial Services, 5.200%, 04/27/2022		900,000		995,744		0.30	%
Fifth Third Bancorp
1.350%, 06/01/2017		1,000,000		1,001,008		0.30	%
2.375%, 04/25/2019		1,775,000		1,804,110		0.54	%
First Niagara Financial Group, Inc., 6.750%, 03/19/2020		590,000		677,206		0.20	%
Ford Motor Credit Co. LLC, 3.000%, 06/12/2017		1,750,000		1,767,199		0.53	%
Franklin Resources, Inc., 1.375%, 09/15/2017		1,080,000		1,082,724		0.33	%
General Electric Capital Corp.
1.625%, 04/02/2018		500,000		502,348		0.15	%
5.625%, 05/01/2018		550,000		586,523		0.18	%
6.000%, 08/07/2019		1,610,000		1,808,490		0.54	%
JPMorgan Chase & Co., 6.000%, 01/15/2018		1,000,000		1,052,995		0.32	%
KeyCorp
2.300%, 12/13/2018		2,600,000		2,634,996		0.79	%
5.100%, 03/24/2021		950,000		1,065,592		0.32	%
Lazard Group, 6.850%, 06/15/2017		56,000		57,619		0.02	%
Lincoln National Corp., 6.250%, 02/15/2020		780,000		877,633		0.26	%
Merrill Lynch & Company, Inc., 6.875%, 04/25/2018		955,000		1,027,716		0.31	%
MetLife, Inc., Series A, 6.817%, 08/15/2018		100,000		109,221		0.03	%
Morgan Stanley
5.500%, 07/28/2021		2,333,000		2,651,020		0.80	%
6.625%, 04/01/2018		750,000		801,041		0.24	%
PNC Financial Services Group, Inc., 1.600%, 06/01/2018		1,000,000		1,002,589		0.30	%
Qwest Capital Funding, Inc., 6.500%, 11/15/2018		700,000		743,750		0.22	%
Raymond James Financial, Inc.
3.625%, 09/15/2026		1,500,000		1,518,287		0.46	%
5.625%, 04/01/2024		700,000		798,332		0.24	%
Royal Bank of Canada, 2.200%, 07/27/2018 (b)		1,000,000		1,012,824		0.31	%
Schlumberger Investment SA, 3.650%, 12/01/2023 (b)		1,265,000		1,354,341		0.41	%
SunTrust Banks, Inc., 6.000%, 09/11/2017		250,000		259,511		0.08	%
Synchrony Financial, 3.750%, 08/15/2021		1,200,000		1,260,386		0.38	%
The Bear Stearns Companies, Inc., 6.400%, 10/02/2017		1,350,000		1,411,223		0.43	%
The Goldman Sachs Group, Inc.
5.375%, 03/15/2020		1,100,000		1,215,389		0.37	%
6.000%, 06/15/2020		1,500,000		1,696,045		0.51	%
The Hartford Financial Services Group, Inc., 5.375%, 03/15/2017		300,000		304,242		0.09	%

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS

CORPORATE BONDS	Par				% of
	Amount		Value		Net Assets
Financials (Continued)
Wachovia Corp., 5.750%, 06/15/2017		850,000	$	872,971		0.26	%
Wells Fargo & Co.
2.550%, 12/07/2020		1,000,000		1,018,049		0.31	%
5.625%, 12/11/2017		1,000,000		1,046,130		0.31	%
Westpac Banking Corp., 4.875%, 11/19/2019 (b)		450,000		489,357		0.15	%
				47,573,184		14.33	%

Health Care – 2.95%
Agilent Technologies, Inc., 5.000%, 07/15/2020		650,000		719,084		0.22	%
Amgen, Inc.
3.450%, 10/01/2020		1,000,000		1,055,487		0.32	%
3.625%, 05/22/2024		1,500,000		1,579,027		0.48	%
Celgene Corp.
2.300%, 08/15/2018		1,000,000		1,012,902		0.30	%
3.625%, 05/15/2024		1,600,000		1,651,378		0.50	%
Express Scripts Holding Co.
1.250%, 06/02/2017		500,000		500,236		0.15	%
2.250%, 06/15/2019		1,250,000		1,265,876		0.38	%
3.500%, 06/15/2024		700,000		723,808		0.22	%
GlaxoSmithKline Capital, Inc., 1.500%, 05/08/2017 (b)		500,000		501,314		0.15	%
Zoetis, Inc., 3.250%, 02/01/2023		750,000		767,447		0.23	%
				9,776,559		2.95	%

Information Technology – 1.51%
Alphabet, Inc., 1.998%, 08/15/2026		550,000		531,424		0.16	%
Apple, Inc., 4.500%, 02/23/2036		250,000		279,211		0.08	%
Applied Materials, Inc., 4.300%, 06/15/2021		300,000		331,568		0.10	%
Corning, Inc.
1.500%, 05/08/2018		390,000		389,880		0.12	%
6.625%, 05/15/2019		695,000		774,493		0.23	%
6.850%, 03/01/2029		275,000		348,388		0.11	%
eBay, Inc., 3.250%, 10/15/2020		1,000,000		1,036,785		0.31	%
Juniper Networks, Inc., 4.600%, 03/15/2021		1,000,000		1,078,555		0.33	%
Oracle Corp., 2.650%, 07/15/2026		250,000		246,921		0.07	%
				5,017,225		1.51	%

Manufacturing – 0.42%
Teva Pharmaceutical Financial Co. BV, 2.950%, 12/18/2022 (b)		1,380,000		1,397,401		0.42	%

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

CORPORATE BONDS	Par				% of
	Amount		Value		Net Assets
Materials – 2.09%
Alcoa, Inc., 6.150%, 08/15/2020		625,000	$	684,963		0.21	%
AngloGold Ashanti Holdings PLC, 5.125%, 08/01/2022 (b)		1,000,000		1,026,797		0.31	%
Goldcorp, Inc. (b)
2.125%, 03/15/2018		1,250,000		1,253,191		0.38	%
3.625%, 06/09/2021		750,000		783,553		0.23	%
Newmont Mining Corp., 3.500%, 03/15/2022		1,000,000		1,058,120		0.32	%
Rio Tinto Finance USA Ltd., 3.750%, 06/15/2025 (b)		1,000,000		1,066,962		0.32	%
The Dow Chemical Co., 4.250%, 11/15/2020		1,000,000		1,078,742		0.32	%
				6,952,328		2.09	%

Telecommunication Services – 2.31%
AT&T, Inc.
3.000%, 02/15/2022		1,000,000		1,015,394		0.31	%
5.350%, 09/01/2040		200,000		210,988		0.06	%
5.500%, 02/01/2018		1,600,000		1,677,149		0.51	%
5.800%, 02/15/2019		800,000		869,499		0.26	%
CenturyLink, Inc., 5.150%, 06/15/2017		400,000		407,500		0.12	%
Deutsche Telekom AG, 6.000%, 07/08/2019 (b)		1,160,000		1,289,608		0.39	%
Verizon Communications, Inc., 2.450%, 11/01/2022		1,200,000		1,201,663		0.36	%
Vodafone Group PLC, 1.500%, 02/19/2018 (b)		1,000,000		998,930		0.30	%
				7,670,731		2.31	%

Total Corporate Bonds
(Cost $85,318,970)				87,456,621		26.35	%

MORTGAGE BACKED SECURITIES – 4.85%
Federal Home Loan Mortgage Corp.
1.500%, 10/15/2042		147,167		146,152		0.04	%
2.000%, 10/15/2043		149,852		149,995		0.05	%
2.500%, 08/15/2040		534,900		543,007		0.16	%
2.750%, 01/15/2041		123,702		125,810		0.04	%
3.000%, 09/15/2039		478,080		490,766		0.15	%
3.000%, 05/15/2043		470,668		486,999		0.15	%
3.000%, 05/01/2042		1,169,004		1,207,068		0.36	%
3.000%, 09/01/2042		2,224,878		2,297,272		0.69	%
5.000%, 05/01/2020		49,746		52,329		0.02	%
5.500%, 04/01/2037		111,162		127,533		0.04	%
Federal National Mortgage Association
1.250%, 06/25/2043		273,422		263,704		0.08	%
1.500%, 08/10/2021		1,000,000		989,879		0.30	%
1.500%, 03/30/2026		1,200,000		1,198,138		0.36	%
1.500%, 04/18/2028		1,000,000		996,616		0.30	%
2.000%, 11/25/2040		245,230		245,881		0.07	%

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS

MORTGAGE BACKED SECURITIES – 4.85%	Par				% of
	Amount		Value		Net Assets
Federal National Mortgage Association (Continued)
2.000%, 11/25/2041		168,270	$	169,129		0.05	%
2.250%, 03/25/2039		178,393		181,379		0.06	%
3.000%, 10/01/2043		3,235,047		3,337,960		1.00	%
3.500%, 01/01/2042		663,287		699,368		0.21	%
4.000%, 10/01/2041		891,038		957,994		0.29	%
4.000%, 12/01/2041		765,521		822,887		0.25	%
4.500%, 08/01/2020		57,259		59,450		0.02	%
6.000%, 10/01/2037		135,923		155,991		0.04	%
Government National Mortgage Association, 1.750%, 02/16/2043		406,470		402,931		0.12	%

Total Mortgage Backed Securities
(Cost $15,819,471)				16,108,238		4.85	%

U.S. TREASURY OBLIGATIONS – 3.98%

U.S. Treasury Bonds – 1.01%
U.S. Treasury Bonds, 3.625%, 02/15/2044		2,750,000		3,342,914		1.00	%
U.S. Treasury Inflation Index Bond, 0.125%, 07/15/2022		26,184		26,802		0.01	%
				3,369,716		1.01	%

U.S. Treasury Notes – 2.97%
U.S. Treasury Notes
1.625%, 02/15/2026		4,500,000		4,426,259		1.33	%
2.125%, 05/15/2025		1,350,000		1,388,311		0.42	%
3.250%, 03/31/2017		4,000,000		4,046,800		1.22	%
				9,861,370		2.97	%

Total U.S. Treasury Obligations
(Cost $12,880,510)				13,231,086		3.98	%

U.S. GOVERNMENT AGENCY ISSUES – 0.56%

Finance and Insurance – 0.56%
Federal Home Loan Banks
1.250%, 10/17/2031		1,250,000		1,231,888		0.37	%
5.750%, 06/15/2037		600,000		613,607		0.19	%

Total U.S. Government Agency Issues
(Cost $1,925,418)				1,845,495		0.56	%

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

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INVESTMENT COMPANIES (EXCLUDING	Number				% of
MONEY MARKET FUNDS) – 0.79%	of Shares		Value		Net Assets

Apollo Investment Corp.		30,000	$	177,300		0.05	%
Ares Capital Corp.		16,000		244,800		0.08	%
FS Investment Corp.		78,000		748,800		0.23	%
Guggenheim Credit Allocation Fund		34,000		736,780		0.22	%
OHA Investment Corp.		8,000		22,880		0.01	%
SPDR Barclays Capital High Yield Bond		1,000		36,260		0.01	%
SPDR Barclays Short Term High Yield		4,000		109,920		0.03	%
Vanguard High-Yield Corporate Fund		89,820		526,346		0.16	%

Total Investment Companies (Excluding
Money Market Funds)
(Cost $2,587,215)				2,603,086		0.79	%

SHORT-TERM INVESTMENTS – 0.43%

Money Market Funds – 0.43%
Fidelity Government Portfolio, Institutional Class, 0.27% (c)		1,441,985		1,441,985		0.43	%

Total Short-Term Investments
(Cost $1,441,985)				1,441,985		0.43	%

Total Investments
(Cost $312,186,172) – 99.25%				329,477,656		99.25	%
Other Assets in Excess of Liabilities – 0.75%				2,479,995		0.75	%

TOTAL NET ASSETS – 100.00%			$	331,957,651		100.00	%

Percentages are stated as a percent of net assets.

REIT – Real Estate Investment Trust

(a)	Non-income producing security.
(b)	U.S. traded security of a foreign corporation.
(c)	The rate listed is the fund’s 7-day yield as of October 31, 2016.
(d)	Investment in affiliated security. Quasar Distributors, LLC, which serves as the Fund’s distributor, is a subsidiary of U.S. Bancorp. Details of transactions with this affiliated company for the year ended October 31, 2016, are as follows:

Issuer	U.S. Bancorp
Beginning Cost	$	269,800
Purchase Cost	$	172,068
Sales Cost	$	(327,061	)
Ending Cost	$	114,807
Dividend Income	$	13,049
Realized Gains	$	21,601
Shares		4,465
Market Value	$	115,733

(e)	144A security.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS

Summary of Fair Value Exposure at October 31, 2016

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2016 (see Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Consumer Discretionary	$	44,074,371	$	—	$	—	$	44,074,371
Consumer Staples		23,192,502		—		—		23,192,502
Energy		5,205,132		—		—		5,205,132
Financials		46,099,713		—		—		46,099,713
Health Care		12,561,756		—		—		12,561,756
Industrials		31,072,720		—		—		31,072,720
Information Technology		22,819,053		—		—		22,819,053
Materials		9,259,201		—		—		9,259,201
Telecommunication Services		3,921,978		—		—		3,921,978
Total Common Stocks	$	198,206,426	$	—	$	—	$	198,206,426
Preferred Stocks
Consumer Staples	$	320,580	$	—	$	—	$	320,580
Financials		7,285,550		—		—		7,285,550
Total Preferred Stocks	$	7,606,130	$	—	$	—	$	7,606,130
REITS
Financials	$	978,589	$	—	$	—	$	978,589
Total REITS	$	978,589	$	—	$	—	$	978,589
Corporate Bonds
Consumer Discretionary	$	—	$	1,061,038	$	—	$	1,061,038
Consumer Staples		—		3,434,492		—		3,434,492
Energy		—		4,573,663		—		4,573,663
Financials		—		47,573,184		—		47,573,184
Health Care		—		9,776,559		—		9,776,559
Information Technology		—		5,017,225		—		5,017,225
Manufacturing		—		1,397,401		—		1,397,401
Materials		—		6,952,328		—		6,952,328
Telecommunication Services		—		7,670,731		—		7,670,731
Total Corporate Bonds	$	—	$	87,456,621	$	—	$	87,456,621
Mortgage Backed Securities	$	—	$	16,108,238	$	—	$	16,108,238
U.S. Treasury Obligations
U.S. Treasury Bonds	$	—	$	3,369,716	$	—	$	3,369,716
U.S. Treasury Notes		—		9,861,370		—		9,861,370
Total U.S. Treasury Obligations	$	—	$	13,231,086	$	—	$	13,231,086
U.S. Government Agency Issues	$	—	$	1,845,495	$	—	$	1,845,495
Investment Companies (Excluding
Money Market Funds)	$	2,603,086	$	—	$	—	$	2,603,086
Short-Term Investments
Money Market Funds	$	1,441,985	$	—	$	—	$	1,441,985
Total Short-Term Investments	$	1,441,985	$	—	$	—	$	1,441,985
Total Investments	$	210,836,216	$	118,641,440	$	—	$	329,477,656

Transfers between levels are recognized at the end of the reporting period. During the year ended October 31, 2016, the Fund recognized no transfers between levels.

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

Financial Statements

Statement of Assets and Liabilities as of October 31, 2016

ASSETS:
Investments in securities, at value (cost $312,071,365)	$	329,361,923
Investments in affiliated securities, at value (cost $114,807)		115,733
Total Investments in securities, at value (cost $312,186,172)		329,477,656
Cash		1,211
Dividends and interest receivable		1,247,161
Receivable for fund shares sold		70,511
Receivable for securities sold		2,271,106
Prepaid expenses and other assets		28,295
Total Assets		333,095,940

LIABILITIES:
Payable for fund shares redeemed		430,835
Payable to advisor		232,075
Payable to administrator		60,016
Payable to auditor		20,698
Accrued distribution fees		34,812
Accrued service fees		17,643
Loan Payable		258,000
Accrued interest payable		237
Accrued trustees fees		3,901
Accrued expenses and other payables		80,072
Total Liabilities		1,138,289
NET ASSETS	$	331,957,651

NET ASSETS CONSIST OF:
Capital stock	$	288,045,574
Accumulated net investment income		129,004
Accumulated net realized gain on investments		26,491,589
Unrealized net appreciation on investments		17,291,484
Total Net Assets	$	331,957,651

NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	202,043,410
Shares issued and outstanding		12,942,600
Net asset value, offering price and redemption price per share	$	15.61

Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	129,914,241
Shares issued and outstanding		8,802,224
Net asset value, offering price and redemption price per share	$	14.76

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS

Financial Statements

Statement of Operations for the year ended October 31, 2016

INVESTMENT INCOME:
Dividend income	$	5,476,967
Dividend income from affiliated securities		13,049
Interest income		3,498,634
Total investment income		8,988,650

EXPENSES:
Investment advisory fees (See Note 5)		3,171,157
Sub-transfer agent expenses – Investor Class (See Note 5)		577,083
Sub-transfer agent expenses – Institutional Class (See Note 5)		131,012
Administration, fund accounting, custody and transfer agent fees (See Note 5)		386,741
Distribution fees – Investor Class (See Note 5)		370,133
Service fees – Investor Class (See Note 5)		246,755
Federal and state registration fees		43,947
Reports to shareholders		36,202
Compliance expense (See Note 5)		23,709
Audit fees		20,699
Trustees’ fees and expenses		16,581
Interest expense (See Note 7)		6,447
Legal fees		5,017
Other expenses		38,363
Total expenses		5,073,846
NET INVESTMENT INCOME	$	3,914,804

REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on:
Unaffiliated investments	$	26,622,366
Affiliated investments		21,601
Net change in unrealized appreciation on investments		(30,923,043	)
Net loss on investments		(4,279,076	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(364,272	)

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

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(This Page Intentionally Left Blank.)

HENNESSYFUNDS.COM

STATEMENTS OF CHANGES IN NET ASSETS

Financial Statements

Statements of Changes in Net Assets

	Year Ended			Year Ended
	October 31, 2016			October 31, 2015
OPERATIONS:
Net investment income	$	3,914,804		$	4,479,495
Net realized gain on investments		26,643,967			10,940,484
Net change in unrealized appreciation on investments		(30,923,043	)		(11,492,039	)
Net increase (decrease) in net assets
resulting from operations		(364,272	)		3,927,940

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income – Investor Class		(2,087,209	)		(2,652,418	)
Net investment income – Institutional Class		(1,972,744	)		(1,838,359	)
Net realized gains – Investor Class		(6,952,737	)		(11,372,184	)
Net realized gains – Institutional Class		(3,988,610	)		(4,128,029	)
Total distributions		(15,001,300	)		(19,990,990	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		30,705,146			135,379,984
Proceeds from shares subscribed – Institutional Class		27,173,057			108,112,772
Dividends reinvested – Investor Class		8,885,747			13,787,702
Dividends reinvested – Institutional Class		4,372,535			4,360,249
Cost of shares redeemed – Investor Class		(120,741,346	)		(129,944,959	)
Cost of shares redeemed – Institutional Class		(64,754,302	)		(40,503,901	)
Net increase (decrease) in net assets derived
from capital share transactions		(114,359,163	)		91,191,847
TOTAL INCREASE (DECREASE) IN NET ASSETS		(129,724,735	)		75,128,797

NET ASSETS:
Beginning of year		461,682,386			386,553,589
End of year	$	331,957,651		$	461,682,386
Undistributed net investment income, end of year	$	129,004		$	243,451

CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		1,962,156			8,189,500
Shares sold – Institutional Class		1,843,177			6,931,570
Shares issued to holders as reinvestment
of dividends – Investor Class		567,440			839,879
Shares issued to holders as reinvestment
of dividends – Institutional Class		294,768			281,456
Shares redeemed – Investor Class		(7,724,036	)		(7,942,623	)
Shares redeemed – Institutional Class		(4,386,391	)		(2,624,280	)
Net increase (decrease) in shares outstanding		(7,442,886	)		5,675,502

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

Financial Statements

Financial Highlights

For an Investor Class share outstanding throughout each year

PER SHARE DATA:

Net asset value, beginning of year

Income from investment operations:

Net investment income

Net realized and unrealized gains (losses) on investments

Total from investment operations

Less distributions:

Dividends from net investment income

Dividends from net realized gains

Total distributions

Net asset value, end of year

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of year (millions)

Ratio of expenses to average net assets:

Before expense reimbursement

After expense reimbursement

Ratio of net investment income to average net assets:

Before expense reimbursement

After expense reimbursement

Portfolio turnover rate⁽¹⁾

⁽¹⁾	Portfolio turnover is calculated on the basis of the Fund as a whole.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2016			2015			2014			2013			2012

$	16.15		$	16.68		$	15.77		$	13.96		$	12.99


	0.14			0.13			0.16			0.23			0.18
	(0.16	)		0.11			1.41			1.81			0.99
	(0.02	)		0.24			1.57			2.04			1.17


	(0.13	)		(0.13	)		(0.16	)		(0.23	)		(0.20	)
	(0.39	)		(0.64	)		(0.50	)		—			—
	(0.52	)		(0.77	)		(0.66	)		(0.23	)		(0.20	)
$	15.61		$	16.15		$	16.68		$	15.77		$	13.96

	(0.12	)%		1.43	%		10.28	%		14.72	%		9.01	%


$	202.04		$	292.84		$	284.45		$	233.25		$	196.92

	1.43	%		1.38	%		1.33	%		1.36	%		1.33	%
	1.43	%		1.38	%		1.33	%		1.33	%		1.24	%

	0.84	%		0.83	%		1.01	%		1.51	%		1.37	%
	0.84	%		0.83	%		1.01	%		1.54	%		1.46	%
	24	%		39	%		28	%		52	%		34	%

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

Financial Statements

Financial Highlights

For an Institutional Class share outstanding throughout each year

PER SHARE DATA:

Net asset value, beginning of year

Income from investment operations:

Net investment income

Net realized and unrealized gains (losses) on investments

Total from investment operations

Less distributions:

Dividends from net investment income

Dividends from net realized gains

Total distributions

Net asset value, end of year

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of year (millions)

Ratio of expenses to average net assets:

Before expense reimbursement

After expense reimbursement

Ratio of net investment income to average net assets:

Before expense reimbursement

After expense reimbursement

Portfolio turnover rate⁽¹⁾

⁽¹⁾	Portfolio turnover is calculated on the basis of the Fund as a whole.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Year Ended October 31,
2016			2015			2014			2013			2012

$	15.28		$	15.80		$	14.97		$	13.29		$	12.38


	0.18			0.19			0.20			0.25			0.22
	(0.13	)		0.09			1.33			1.72			0.92
	0.05			0.28			1.53			1.97			1.14


	(0.20	)		(0.19	)		(0.20	)		(0.29	)		(0.23	)
	(0.37	)		(0.61	)		(0.50	)		—			—
	(0.57	)		(0.80	)		(0.70	)		(0.29	)		(0.23	)
$	14.76		$	15.28		$	15.80		$	14.97		$	13.29

	0.30	%		1.75	%		10.60	%		14.99	%		9.23	%


$	129.91		$	168.84		$	102.10		$	85.12		$	108.49

	1.03	%		1.04	%		1.05	%		1.06	%		1.06	%
	1.03	%		1.04	%		1.05	%		1.06	%		0.99	%

	1.23	%		1.18	%		1.29	%		1.95	%		1.68	%
	1.23	%		1.18	%		1.29	%		1.95	%		1.75	%
	24	%		39	%		28	%		52	%		34	%

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

Financial Statements

Notes to the Financial Statements October 31, 2016

1). ORGANIZATION

The Hennessy Equity and Income Fund (the “Fund”) is a series of Hennessy Funds Trust (the “Trust”), which was organized as a Delaware statutory trust on September 17, 1992. The Fund is an open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund is a successor to the FBR Balanced Fund (the “Predecessor FBR Fund”), a series of The FBR Funds, a Delaware statutory trust, pursuant to a reorganization that took place after the close of business on October 26, 2012. Prior to October 26, 2012, the Fund had no investment operations. As a result of the reorganization, holders of Investor Class shares of the Predecessor FBR Fund received Investor Class shares of the Fund (the Investor Class shares of the Fund are the successor to the accounting and performance information of the corresponding shares of the Predecessor FBR Fund), and holders of Institutional Class shares of the Predecessor FBR Fund received Institutional Class shares of the Fund (the Institutional Class shares of the Fund are the successor to the accounting and performance information of the corresponding shares of the Predecessor FBR Fund). The investment objective of the Fund is long-term capital growth and current income. The Fund is a diversified fund.

2). SIGNIFICANT ACCOUNTING POLICIES

a).	Investment Valuation – All investments in securities are recorded at their estimated fair value, as described in Note 3.

b).	Federal Income Taxes – No provision for federal income taxes or excise taxes has been made since 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. Net investment income or loss and realized gains and losses for federal income tax purposes may differ from that reported on the financial statements because of temporary book 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.

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

Undistributed	Accumulated
Net Investment	Net Realized
Income/(Loss)	Gain/(Loss)	Paid-in Capital
$30,702	$(30,702)	$—

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 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. The Fund is charged for those expenses that are directly attributable to the 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 or losses on investments are allocated to each class of shares based on its respective net assets.

e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid on a calendar quarter basis. 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 gain or loss realized from the investment transactions by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted/amortized over the life of the respective security.

g).	Use of Estimates – The preparation of financial statements in conformity 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 and 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 the sum of the value of the securities held by the Fund, plus cash or other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for the Fund, rounded to the nearest cent. The Fund’s shares will not be 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, if any, are converted into U.S. dollars using the spot market rate of exchange at the time of valuation. Purchases and sales of investments and income are translated into U.S. dollars using the spot market rate of exchange prevailing on the respective dates of

HENNESSY FUNDS

1-800-966-4354

	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 or 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).	Forward Contracts – The Fund may enter into forward currency contracts to reduce its exposure to changes in foreign currency exchange rates on its foreign holdings and to lock in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in foreign currencies. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing of such contract is included in net realized gain or loss from foreign currency transactions. During the fiscal year ended October 31, 2016, the Fund did not enter into any forward contracts.

k).	Repurchase Agreements – The Fund may enter into repurchase agreements with member banks or security dealers of the Federal Reserve Board whom the investment advisor deems creditworthy. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates.

	Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. Provisions of the repurchase agreements ensure that the market value of the collateral, including accrued interest thereon, is sufficient to cover the repurchase amount in the event of default of the counterparty. If the counterpartys defaults and the value of the collateral declines or if the counterparty enters an insolvency proceeding, realization of the collateral by the Fund may be delayed or limited. During the fiscal year ended October 31, 2016, the Fund did not enter into any repurchase agreements.

l).	Derivatives – The Fund may invest in, or enter into, derivatives, such as options, futures contracts, options on futures contracts, and swaps, for a variety of reasons, including to hedge certain risks, to provide a substitute for purchasing or selling particular securities, or to increase potential income gain. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives may allow the Fund to increase or decrease the level of risk to which the Fund is exposed more quickly and efficiently than transactions in other types of instruments. The main purpose of utilizing derivative instruments is for hedging purposes.

	The Fund follows the financial accounting reporting rules as required by the Derivatives and Hedging Topic of the FASB Accounting Standards Codification. Under such rules, the Fund is required to include enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivatives instruments affect an entity’s results of operations and financial position. During the fiscal year ended October 31, 2016, the Fund did not hold any derivative instruments.

m).	New Accounting Pronouncements – In May 2015, the FASB issued ASU No. 2015-07 “Disclosure for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent).” The amendments in ASU No. 2015-07 remove the

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

3). SECURITIES VALUATION

	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 (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.

Following is a description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis.

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HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

current and reliable market quotations are not readily available. All actions taken by the Valuation Committee are reviewed by the Board.

4). INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during the fiscal year ended October 31, 2016, were $77,676,758 and $172,399,183, respectively.

Purchases and sales/maturities of long-term U.S. government securities for the Fund during the fiscal year ended October 31, 2016, were $17,344,648 and $44,614,515, respectively.

5). INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Hennessy Advisors, Inc. (the “Advisor”) is the investment advisor of the Fund. The Advisor provides the Fund with investment management services under an Investment Advisory Agreement. The Advisor furnishes all investment advice, office space, facilities, and provides most of the personnel needed by the Fund. As compensation for its services, the Advisor is entitled to a monthly fee from the Fund. The fee is based upon the average daily net assets of the Fund at the annual rate of 0.80%. The net investment advisory fees payable by the Fund as of October 31, 2016, were $232,075.

The Advisor has delegated the day-to-day management of the equity allocation of the Fund to The London Company of Virginia, LLC, and has delegated the day-to-day management of the fixed income allocation of the Fund to Financial Counselors, Inc. The Advisor pays the sub-advisor fees from its own assets and these fees are not an additional expense of the Fund. For the most recent fiscal year, the Advisor (not the Fund) paid a sub-advisory fee, based upon the daily net assets of the Fund, at the rate of 0.33% for the equity allocation and 0.27% for the fixed income allocation.

The Board has approved a Shareholder Servicing Agreement for Investor Class shares of the Fund, effective as of March 1, 2015, which was instituted to compensate the Advisor for the non-investment management services it provides to the Fund. The Shareholder Servicing Agreement provides for a monthly fee paid to the Advisor at an annual rate of 0.10% of the average daily net assets of the Fund attributable to Investor Class shares. Shareholder service fees payable by the Fund as of October 31, 2016, were $17,643.

HENNESSY FUNDS

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attributable to Investor Class shares for such purpose since March 1, 2015. Amounts paid under the plan may be spent on any activities or expenses primarily intended to result in the sale of shares, including, but not limited to, advertising, shareholder account servicing, the printing and mailing of prospectuses to other than current shareholders, the printing and mailing of sales literature, and compensation for sales and marketing activities or to financial institutions and others, such as dealers and distributors.

6). GUARANTEES AND INDEMNIFICATIONS

7). LINE OF CREDIT

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

bear interest at the bank’s prime rate and are secured by all of the Fund’s assets (as to its own borrowings only). During the fiscal year ended October 31, 2016, the Fund had an outstanding average daily balance and a weighted average interest rate of $179,954 and 3.47%, respectively. The maximum amount outstanding for the Fund during the period was $13,622,000. At October 31, 2016, the Fund had borrowings of $258,000 outstanding under the line of credit.

8). FEDERAL TAX INFORMATION

As of October 31, 2016, the components of accumulated earnings (losses) for income tax purposes were as follows:

Cost of investments for tax purposes	$	312,244,344
Gross tax unrealized appreciation	$	26,058,387
Gross tax unrealized depreciation		(8,825,075	)
Net tax unrealized appreciation	$	17,233,312
Undistributed ordinary income	$	129,004
Undistributed long-term capital gains	$	26,549,761
Total distributable earnings	$	26,678,765
Other accumulated loss	$	—
Total accumulated gain	$	43,912,077

At October 31, 2016, the Fund had no tax basis capital losses to offset future capital gains.

At October 31, 2016, the Fund did not defer, on a tax basis, any late year ordinary losses.

During the fiscal years ended October 31, 2016 and 2015, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2016		October 31, 2015
Ordinary income⁽¹⁾	$	4,059,953	$	4,605,202
Long-term capital gain		10,941,347		15,385,788
	$	15,001,300	$	19,990,990

⁽¹⁾ Ordinary income includes short-term gain or loss.

9). EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2016, through the date of issuance of the Fund’s financial statements. Other than as disclosed below, management has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.

On December 7, 2016, capital gains were declared and paid to shareholders of record as of December 6, 2016, as follows:

	Long-term
	Amount Per Share
Investor Class	$1.33654
Institutional Class	$1.26622

HENNESSY FUNDS

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Report of Independent Registered Public Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the Shareholders of the Hennessy Equity and Income Fund

Novato, CA

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of the Hennessy Equity and Income Fund (the “Fund”), a series of Hennessy Funds Trust, as of October 31, 2016, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2016, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Hennessy Equity and Income Fund as of October 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 22, 2016

HENNESSYFUNDS.COM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS

Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Fund are managed under the direction of the Board of Trustees of the Trust, and the Board of Trustees elects the Officers of the Trust. Beginning in March 2015, the Board of Trustees has from time to time appointed advisers (“Advisers”) to the Board of Trustees, with the intention of having qualified individuals serve in an advisory capacity in order to garner experience in the mutual fund and asset management industry and be considered as potential Trustees in the future. There are currently three Advisers to the Board of Trustees: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board and act as non-voting participants. Information pertaining to the Trustees, Advisers, and the Officers of the Trust is set forth below. The Trustees and Officers serve until their successors are duly elected and qualified or until their earlier death, resignation, or removal. Each of the Trustees oversees 16 Hennessy Funds. Unless otherwise indicated, the address of all persons listed below is 7250 Redwood Boulevard, Suite 200, Novato, CA 94945. The Fund’s Statement of Additional Information includes more information about the persons listed below and is available, without charge, upon request by calling 1-800-966-4354.

			Other
			Directorships
			Held Outside
Name, (Year of Birth),			of Fund
and Position Held	Start Date	Principal Occupation(s)	Complex During
with the Trust	of Service	During Past Five Years	Past Five Years⁽¹⁾

Disinterested Trustees and Advisers

J. Dennis DeSousa	January 1996	Mr. DeSousa is a real estate investor.	None.
(1936)
Trustee

Robert T. Doyle	January 1996	Mr. Doyle has been the Sheriff of	None.
(1947)		Marin County, California since 1996.
Trustee

Gerald P. Richardson	May 2004	Mr. Richardson is an independent	None.
(1945)		consultant in the securities industry.
Trustee

Brian Alexander	March 2015	Mr. Alexander has been employed	None.
(1981)		by Sutter Health Novato Community
Adviser to the Board		Hospital since 2012, first as an
		Assistant Administrator and then,
		beginning in 2013, as the Chief
		Administrative Officer. From 2011
		through 2012, Mr. Alexander was
		employed by Sutter Health West Bay
		Region as the Regional Director of
		Strategic Decision Support. Prior to
		that, in 2011, he served as the
		Director of Managed Care
		Contracting and also the Director of
		Compensation, Benefits, and
		Compliance for the Rehabilitation
		Institute of Chicago.

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			Other
			Directorships
			Held Outside
Name, (Year of Birth),			of Fund
and Position Held	Start Date	Principal Occupation(s)	Complex During
with the Trust	of Service	During Past Five Years	Past Five Years⁽¹⁾

Doug Franklin	March 2016	Mr. Franklin is a retired insurance	None.
(1964)		industry executive. From 1987
Adviser to the Board		through 2015, he was employed by
		the Allianz-Fireman’s Fund Insurance
		Company in various positions,
		including as its Chief Actuary and
		Chief Risk Officer.

Claire Knoles	December 2015	Ms. Knoles is a founder of Kiosk and	None.
(1974)		has served as its Chief Operating
Adviser to the Board		Officer since 2004. Kiosk is a full
		service marketing agency with
		offices in the San Francisco Bay
		Area, Toronto, and Liverpool, UK.

Interested Trustee⁽²⁾

Neil J. Hennessy	January 1996 as	Mr. Hennessy has been employed by	Hennessy
(1956)	a Trustee and	Hennessy Advisors, Inc. since 1989	Advisors, Inc.
Trustee, Chairman of	June 2008 as	and currently serves as its President,
the Board, Chief	an Officer	Chairman and Chief Executive Officer.
Investment Officer,
Portfolio Manager,
and President

Name, (Year of Birth),
and Position Held	Start Date	Principal Occupation(s)
with the Trust	of Service	During Past Five Years

Officers

Teresa M. Nilsen	January 1996	Ms. Nilsen has been employed by Hennessy Advisors, Inc.
(1966)		since 1989 and currently serves as its Executive Vice President,
Executive Vice President		Chief Operations Officer, Chief Financial Officer, and Secretary.
and Treasurer

Daniel B. Steadman	March 2000	Mr. Steadman has been employed by Hennessy Advisors, Inc.
(1956)		since 2000 and currently serves as its Executive Vice President
Executive Vice President		and Chief Compliance Officer.
and Secretary

Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)		as its General Counsel since June 2013. She previously served
Senior Vice President and		as in-house counsel to Carlson Capital, L.P., an SEC-registered
Chief Compliance Officer		investment advisor to several private funds, from
		February 2010 to May 2013.

Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013. Mr. Carlson was previously a co-founder
Senior Vice President and		and principal of Trivium Consultants, LLC from February 2011
Head of Distribution		through November 2013.

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TRUSTEES AND OFFICERS OF THE FUND

Name, (Year of Birth),
and Position Held	Start Date	Principal Occupation(s)
with the Trust	of Service	During Past Five Years

David Ellison	October 2012	Mr. Ellison has been employed by Hennessy Advisors, Inc. since
(1958)⁽³⁾		October 2012. He has served as a Portfolio Manager of the
Senior Vice President and		Hennessy Small Cap Financial Fund, the Hennessy Large Cap
Portfolio Manager		Financial Fund, and the Hennessy Technology Fund since
		inception. Prior to that, Mr. Ellison served as Director, CIO and
		President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.

Brian Peery	March 2003 as	Mr. Peery has been employed by Hennessy Advisors, Inc. since
(1969)	an Officer and	2002. He has served as a Portfolio Manager of the Hennessy
Senior Vice President and	February 2011	Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
Portfolio Manager	as a Co-Portfolio	30 Fund, the Hennessy Cornerstone Large Growth Fund, the
	Manager or	Hennessy Cornerstone Value Fund, the Hennessy Total Return
	Portfolio Manager	Fund, and the Hennessy Balanced Fund since October 2014.
		He served as Co-Portfolio Manager of the same funds from
		February 2011 through September 2014. Mr. Peery has also
		served as a Portfolio Manager of the Hennessy Gas Utility Fund
		since February 2015.

Winsor (Skip) Aylesworth	October 2012	Mr. Aylesworth has been employed by Hennessy Advisors, Inc.
(1947)⁽³⁾		since October 2012. He has served as a Portfolio Manager of
Vice President and		the Hennessy Gas Utility Fund since 1998 and as a Portfolio
Portfolio Manager		Manager of the Hennessy Technology Fund since inception.
		Prior to that, Mr. Aylesworth served as Executive Vice President
		of FBR Fund Advisers, Inc. from 1999 to October 2012.

Ryan Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)⁽⁴⁾		October 2012. He has served as a Portfolio Manager of the
Vice President and		Hennessy Gas Utility Fund, the Hennessy Small Cap Financial
Portfolio Manager		Fund, and the Hennessy Large Cap Financial Fund since
		October 2014. He served as Co-Portfolio Manager of the same
		funds from March 2013 through September 2014, and as a
		Portfolio Analyst for the Hennessy Funds from October 2012
		through February 2013. Prior to that, Mr. Kelley served as
		Portfolio Manager of FBR Fund Advisers, Inc. from
		January 2008 to October 2012.

_______________

⁽¹⁾	Messrs. DeSousa, Doyle, Hennessy, and Richardson previously served on the Board of Directors of Hennessy Mutual Funds, Inc. (“HMFI”), The Hennessy Funds, Inc. (“HFI”), and Hennessy SPARX Funds Trust (“HSFT”). Pursuant to an internal reorganization effective as of February 28, 2014, the series of HFMI, HFI, and HSFT were reorganized into corresponding series of Hennessy Funds Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
⁽²⁾	Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Hennessy Funds.
⁽³⁾	The address of these officers is 101 Federal Street, Suite 1900, Boston, MA 02110.
⁽⁴⁾	The address of this officer is 1340 Environ Way, Suite 305, Chapel Hill, NC 27517.

HENNESSY FUNDS

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Expense Example (Unaudited)

October 31, 2016

Actual Expenses

Hypothetical Example for Comparison Purposes

HENNESSYFUNDS.COM

EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period⁽¹⁾
	Account Value	Account Value	May 1, 2016 –
	May 1, 2016	October 31, 2016	October 31, 2016
Investor Class
Actual	$1,000.00	$ 995.60	$7.07
Hypothetical (5% return before expenses)	$1,000.00	$1,018.15	$7.15

Institutional Class
Actual	$1,000.00	$ 998.30	$5.07
Hypothetical (5% return before expenses)	$1,000.00	$1,020.06	$5.13

⁽¹⁾	Expenses are equal to the Fund’s annualized expense ratio of 1.41% for Investor Class shares or 1.01% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/366 days (to reflect one-half year period).

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How to Obtain a Copy of the Fund’s

Proxy Voting Policy and Proxy Voting Records

Quarterly Filings on Form N-Q

Federal Tax Distribution Information

(Unaudited)

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for the fiscal year ended October 31, 2016, was 100%.

Householding

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PROXY VOTING — PRIVACY POLICY

We collect the following non-public personal information about you:

	•	information we receive from you on or in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income, and date of birth; and
	•	information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payment history, parties to transactions, cost basis information, and other financial information.

HENNESSY FUNDS

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For information, questions or assistance, please call

The Hennessy Funds

1-800-966-4354 or 1-415-899-1555

INVESTMENT ADVISOR

Hennessy Advisors, Inc.

7250 Redwood Blvd., Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Dr., Suite 302

Milwaukee, Wisconsin 53212

TRUSTEES

Neil J. Hennessy

Robert T. Doyle

J. Dennis DeSousa

Gerald P. Richardson

COUNSEL

Foley & Lardner LLP

777 East Wisconsin Avenue

Milwaukee, Wisconsin 53202-5306

INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

Tait, Weller & Baker LLP

1818 Market Street, Suite 2400

Philadelphia, Pennsylvania 19103

DISTRIBUTOR

Quasar Distributors, LLC

615 East Michigan Street

Milwaukee, Wisconsin 53202

hennessyfunds.com | 1-800-966-4354

This report has been prepared for shareholders and may be distributed to

others only if preceded or accompanied by a current prospectus.

ANNUAL REPORT

OCTOBER 31, 2016

HENNESSY BALANCED

FUND

Investor Class HBFBX

hennessyfunds.com | 1-800-966-4354

(This Page Intentionally Left Blank.)

CONTENTS

Contents

Letter to Shareholders			2
Performance Overview			4
Financial Statements
Schedule of Investments			7
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			16
Report of Independent Registered Public Accounting Firm			24
Trustees and Officers of the Fund			25
Expense Example			28
Proxy Voting			30
Quarterly Filings on Form N-Q			30
Federal Tax Distribution Information			30
Householding			30
Privacy Policy			31

HENNESSY FUNDS

1-800-966-4354

December 2016

Dear Hennessy Funds Shareholder:

HENNESSYFUNDS.COM

LETTER TO SHAREHOLDERS

Thank you for your continued confidence and investment in our funds. If you have any questions or would like to speak with us directly, please don’t hesitate to call us at (800) 966-4354.

Best regards,

Neil J. Hennessy

President and Chief Investment Officer

Past performance does not guarantee future results.

Mutual fund investing involves risk. Principal loss is possible.

Opinions expressed are those of Neil Hennessy and are subject to change, are not guaranteed and should not be considered investment advice.

The Dow Jones Industrial Average and S&P 500 Index are unmanaged indices commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is calculated by dividing a company’s market price per share by its earnings per share.

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Performance Overview (Unaudited)

CHANGE IN VALUE OF $10,000 INVESTMENT

This graph illustrates the performance of an initial investment of $10,000 made in the Fund ten years ago and assumes the reinvestment of dividends.

AVERAGE ANNUAL TOTAL RETURN FOR PERIODS ENDED OCTOBER 31, 2016

	One	Five	Ten
	Year	Years	Years
Hennessy Balanced Fund (HBFBX)	5.20%	5.05%	3.19%
50/50 Blended DJIA/Treasury Index*	3.14%	5.91%	4.45%
Dow Jones Industrial Average	5.49%	11.50%	6.93%

Expense ratio: 1.68%

The expense ratio presented is from the most recent prospectus.

*	The 50/50 Blended DJIA/Treasury Index consists of 50% common stocks represented by the Dow Jones Industrial Average and 50% short-duration Treasury securities represented by the BofA Merrill Lynch 1-year U.S. Treasury Note Index.

PERFORMANCE NARRATIVE

Portfolio Managers Neil J. Hennessy and Brian E. Peery

Performance:

For the twelve-month period ended October 31, 2016, the Hennessy Balanced Fund returned 5.20%, outperforming the 50/50 Blended DJIA/Treasury Index*, which returned 3.14%, but underperforming the Dow Jones Industrial Average, which returned 5.49%, for the same period.

The Fund outperformed its primary benchmark, the 50/50 Blended DJIA/Treasury Index,* as a result of both sector allocation and stock selection. Two of the largest contributors to the Fund’s relative outperformance were The Boeing Company and

HENNESSYFUNDS.COM

PERFORMANCE OVERVIEW

McDonald’s Corporation. Pfizer, Inc. was the largest detractor to overall performance. From a sector perspective, an overweight position in the Energy sector as oil prices rebounded, and underweight positions in the Financials and Consumer Discretionary sectors, aided performance. The Fund continues to hold Boeing, McDonald’s and Pfizer. Stronger returns from the equity investments in the portfolio more than offset a negative relative contribution from the Government Securities portion of the portfolio as compared to the Fund’s primary benchmark.

Portfolio Strategy:

The Fund invests approximately 50% of its assets in the “Dogs of the Dow,” the 10 highest dividend-yielding Dow stocks, and 50% of its assets in U.S. Treasuries. As a result of this “balanced” strategy, the Fund may be expected to underperform equities in periods when markets rise and outperform in periods when markets fall. The Fund is designed to allow investors to gain some exposure to the equity market while maintaining a significant share of their investment in fixed income securities. We believe the Fund is well positioned for the more conservative investor, as the equity portion of the portfolio is invested in what we would deem to be high-quality companies, each with a historically high dividend yield. The relatively short duration of the 50% weighting of U.S. Treasuries in the portfolio (all less than one year) may allow us the ability to roll into higher yielding Treasuries in the event yields rise.

Market Outlook:

First, while corporate profits have been on a gentle slide downwards since the fourth quarter of 2014, market analysts are now forecasting a return to growth in profits in the fourth quarter of this year. We believe these forecasts have a good chance of being proved correct. Second, mergers and acquisitions have been strong and steady this year, and we believe such activity will continue next year, helping drive revenue and earnings for the acquiring companies. Third, we do not believe the majority of stocks are expensive at this point, though many are probably fairly valued. The Dow Jones Industrial Average and the S&P 500 Index have forward PE ratios of roughly 18x and 19x, respectively, close to long-term averages, although slightly higher than six months ago. Corporate balance sheets appear to be in excellent shape, and while executives have shown some reluctance to increase capital spending beyond maintenance levels this cycle, we believe companies outside of the Energy sector will eventually start investing for expansion. Overall, we believe the basic fundamentals of the market are attractive, and we continue to be optimistic about the possibility of further moderate market advances over the course of next year.

_______________

*	The 50/50 Blended DJIA/Treasury Index consists of 50% common stocks represented by the Dow Jones Industrial Average and 50% short duration Treasury securities represented by the BofA Merrill Lynch 1-Year U.S. Treasury Note Index.

HENNESSY FUNDS

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The S&P 500 Index and Dow Jones Industrial Average are unmanaged indices commonly used to measure the performance of U.S. stocks. The BofA Merrill Lynch 1-Year U.S. Treasury Note Index is an unmanaged index comprised of Treasury securities maturing in approximately one year. One cannot invest directly in an index.

HENNESSYFUNDS.COM

PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as of October 31, 2016

HENNESSY BALANCED FUND

(% of Net Assets)

TOP TEN HOLDINGS	% NET ASSETS

U.S. Treasury Bill, 0.350%, 02/02/2017	8.27%

U.S. Treasury Bill, 0.480%, 03/02/2017	8.27%

U.S. Treasury Bill, 0.420%, 03/30/2017	8.26%

U.S. Treasury Bill, 0.685%, 05/25/2017	8.26%

U.S. Treasury Bill, 0.560%, 06/22/2017	8.25%

The Boeing Co.	5.60%

Caterpillar, Inc.	5.60%

International Business Machines Corp.	5.35%

Chevron Corp.	5.29%

Cisco Systems, Inc.	5.09%

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COMMON STOCKS – 53.18%	Number				% of
	of Shares		Value		Net Assets
Consumer Discretionary – 2.47%
McDonald’s Corp.		2,650	$	298,311		2.47	%

Consumer Staples – 3.13%
Procter & Gamble Co.		400		34,720		0.29	%
The Coca-Cola Co.		7,200		305,280		2.52	%
Wal-Mart Stores, Inc.		550		38,511		0.32	%
				378,511		3.13	%

Energy – 10.29%
Chevron Corp.		6,100		638,975		5.29	%
Exxon Mobil Corp.		7,250		604,070		5.00	%
				1,243,045		10.29	%

Health Care – 8.10%
Merck & Co., Inc.		6,550		384,616		3.18	%
Pfizer, Inc.		18,750		594,563		4.92	%
				979,179		8.10	%

Industrials – 11.20%
Caterpillar, Inc.		8,100		676,026		5.60	%
The Boeing Co.		4,750		676,542		5.60	%
				1,352,568		11.20	%

Information Technology – 13.41%
Cisco Systems, Inc.		20,050		615,134		5.09	%
Intel Corp.		10,300		359,161		2.97	%
International Business Machines Corp.		4,200		645,498		5.35	%
				1,619,793		13.41	%

Telecommunication Services – 4.58%
Verizon Communications, Inc.		11,500		553,150		4.58	%

Total Common Stocks
(Cost $5,806,728)				6,424,557		53.18	%

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS

SHORT-TERM INVESTMENTS – 47.28%	Number of Shares/					% of
	Par Amount		Value			Net Assets
Money Market Funds – 1.85%
Fidelity Government Portfolio, Institutional Class, 0.27% (a)		222,976	$	222,976			1.85	%

U.S. Treasury Bills – 45.43%
0.350%, 02/02/2017 (b)		1,000,000		999,130			8.27	%
0.480%, 03/02/2017 (b)		1,000,000		998,840			8.27	%
0.420%, 03/30/2017 (b)		1,000,000		998,397			8.26	%
0.685%, 05/25/2017 (b)		1,000,000		997,338			8.26	%
0.560%, 06/22/2017 (b)		1,000,000		996,821			8.25	%
0.550%, 07/20/2017 (b)		500,000		498,069			4.12	%
				5,488,595			45.43	%

Total Short-Term Investments
(Cost $5,707,925)				5,711,571			47.28	%

Total Investments
(Cost $11,514,653) – 100.46%				12,136,128			100.46	%

Liabilities in Excess
of Other Assets – (0.46)%				(55,837	)		(0.46	)%

TOTAL NET ASSETS – 100.00%			$	12,080,291			100.00	%

Percentages are stated as a percent of net assets.

(a)	The rate listed is the fund’s 7-day yield as of October 31, 2016.
(b)	The rate listed is discount rate at issue.

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

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Summary of Fair Value Exposure at October 31, 2016

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2016 (see Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Consumer Discretionary	$	298,311	$	—	$	—	$	298,311
Consumer Staples		378,511		—		—		378,511
Energy		1,243,045		—		—		1,243,045
Health Care		979,179		—		—		979,179
Industrials		1,352,568		—		—		1,352,568
Information Technology		1,619,793		—		—		1,619,793
Telecommunication Services		553,150		—		—		553,150
Total Common Stocks	$	6,424,557	$	—	$	—	$	6,424,557
Short-Term Investments
Money Market Funds	$	222,976	$	—	$	—	$	222,976
U.S. Treasury Bills		—		5,488,595		—		5,488,595
Total Short-Term Investments	$	222,976	$	5,488,595	$	—	$	5,711,571
Total Investments	$	6,647,533	$	5,488,595	$	—	$	12,136,128

Transfers between levels are recognized at the end of the reporting period. During the year ended October 31, 2016, the Fund recognized no transfers between levels.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES

Financial Statements

Statement of Assets and Liabilities as of October 31, 2016

ASSETS:
Investments in securities, at value (cost $11,514,653)	$	12,136,128
Dividends and interest receivable		13,215
Prepaid expenses and other assets		9,048
Total Assets		12,158,391

LIABILITIES:
Payable to advisor		6,234
Payable to administrator		2,208
Payable to auditor		19,601
Accrued distribution fees		33,092
Accrued service fees		1,039
Accrued trustees fees		3,898
Accrued expenses and other payables		12,028
Total Liabilities		78,100
NET ASSETS	$	12,080,291

NET ASSETS CONSIST OF:
Capital stock	$	10,629,708
Accumulated net realized gain on investments		829,108
Unrealized net appreciation on investments		621,475
Total Net Assets	$	12,080,291

NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	12,080,291
Shares issued and outstanding		952,703
Net asset value, offering price and redemption price per share	$	12.68

The accompanying notes are an integral part of these financial statements.

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Financial Statements

Statement of Operations for the year ended October 31, 2016

INVESTMENT INCOME:
Dividend income	$	250,772
Interest income		30,459
Total investment income		281,231

EXPENSES:
Investment advisory fees (See Note 5)		83,934
Compliance expense (See Note 5)		23,709
Distribution fees – Investor Class (See Note 5)		20,984
Audit fees		20,030
Federal and state registration fees		16,100
Trustees’ fees and expenses		15,806
Service fees – Investor Class (See Note 5)		13,989
Administration, fund accounting, custody and transfer agent fees (See Note 5)		13,627
Sub-transfer agent expenses – Investor Class (See Note 5)		13,539
Reports to shareholders		7,327
Interest expense (See Note 7)		1,325
Legal fees		62
Other expenses		4,181
Net expenses		234,613
NET INVESTMENT INCOME	$	46,618

REALIZED AND UNREALIZED GAINS:
Net realized gain on investments	$	843,528
Net change in unrealized appreciation on investments		21,866
Net gain on investments		865,394
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	912,012

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS

Financial Statements

Statements of Changes in Net Assets

	Year Ended			Year Ended
	October 31, 2016			October 31, 2015
OPERATIONS:
Net investment income	$	46,618		$	24,074
Net realized gain on investments		843,528			250,576
Net change in unrealized
appreciation (depreciation) on investments		21,866			(265,259	)
Net increase in net assets resulting from operations		912,012			9,391

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income – Investor Class		(50,622	)		(30,298	)
Net realized gains – Investor Class		(254,142	)		(571,934	)
Total distributions		(304,764	)		(602,232	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		6,936,800			450,977
Dividends reinvested – Investor Class		299,526			589,193
Cost of shares redeemed – Investor Class		(7,390,889	)		(1,362,738	)
Net decrease in net assets derived
from capital share transactions		(154,563	)		(322,568	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		452,685			(915,409	)

NET ASSETS:
Beginning of year		11,627,606			12,543,015
End of year	$	12,080,291		$	11,627,606
Undistributed net investment
income, end of year	$	—		$	1,890

CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		574,534			36,214
Shares issued to holders as reinvestment of dividends –
Investor Class		24,799			47,227
Shares redeemed – Investor Class		(586,933	)		(109,315	)
Net increase (decrease) in shares outstanding		12,400			(25,874	)

The accompanying notes are an integral part of these financial statements.

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Financial Statements

Financial Highlights

For an Investor Class share outstanding throughout each year

PER SHARE DATA:

Net asset value, beginning of year

Income from investment operations:

Net investment income

Net realized and unrealized gains (losses) on investments

Total from investment operations

Less distributions:

Dividends from net investment income

Dividends from net realized gains

Total distributions

Net asset value, end of year

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of year (millions)

Ratio of expenses to average net assets

Ratio of net investment income to average net assets

Portfolio turnover rate

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2016			2015			2014			2013			2012

$	12.37		$	12.98		$	12.90		$	11.88		$	11.13


	0.04			0.03			0.02			0.02			0.04
	0.58			(0.01	)		0.51			1.02			0.75
	0.62			0.02			0.53			1.04			0.79


	(0.04	)		(0.03	)		(0.01	)		(0.02	)		(0.04	)
	(0.27	)		(0.60	)		(0.44	)		—			—
	(0.31	)		(0.63	)		(0.45	)		(0.02	)		(0.04	)
$	12.68		$	12.37		$	12.98		$	12.90		$	11.88

	5.20	%		0.11	%		4.26	%		8.77	%		7.13	%


$	12.08		$	11.63		$	12.54		$	12.21		$	25.17
	1.68	%		1.68	%		1.75	%		1.75	%		1.54	%
	0.33	%		0.20	%		0.17	%		0.14	%		0.34	%
	51	%		34	%		23	%		22	%		17	%

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

Financial Statements

Notes to the Financial Statements October 31, 2016

1). ORGANIZATION

The Hennessy Balanced Fund (the “Fund”) is a series of Hennessy Funds Trust (the “Trust”), which was organized as a Delaware statutory trust on September 17, 1992. The Fund is an open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund is a successor to a fund with the same name (the “Predecessor Fund”) that was a series of The Hennessy Funds, Inc., a Maryland corporation, pursuant to a reorganization that took place after the close of business on February 28, 2014. Prior to February 28, 2014, the Fund had no investment operations. As a result of the reorganization, holders of Investor Class shares of the Predecessor Fund received Investor Class shares of the Fund (the Investor Class shares of the Fund are the successor to the accounting and performance information of the Predecessor Fund). The investment objective of the Fund is a combination of capital appreciation and current income. The Fund is a non-diversified fund and offers Investor Class shares.

2). SIGNIFICANT ACCOUNTING POLICIES

a).	Investment Valuation – All investments in securities are recorded at their estimated fair value, as described in Note 3.

b).	Federal Income Taxes – No provision for federal income taxes or excise taxes has been made since 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. Net investment income or loss and realized gains and losses for federal income tax purposes may differ from that reported on the financial statements because of temporary book 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.

	Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax regulations, permanent differences between book and tax basis for reporting for the fiscal year ended October 31, 2016, have been identified and appropriately reclassified on the Statement of Assets and Liabilities. The adjustments are as follows:

Undistributed	Accumulated
Net Investment	Net Realized
Income/(Loss)	Gain/(Loss)	Paid-in Capital
$2,114	$(2,114)	$—

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 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. The Fund is charged for those expenses that are directly attributable to the 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 on a calendar quarter basis. 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 gain or loss realized from the investment transactions by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted/amortized over the life of the respective security.

g).	Use of Estimates – The preparation of financial statements in conformity 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 and 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 the sum of the value of the securities held by the Fund, plus cash or other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for the Fund, rounded to the nearest cent. The Fund’s shares will not be 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).	Repurchase Agreements – The Fund may enter into repurchase agreements with member banks or security dealers of the Federal Reserve Board whom the investment advisor deems creditworthy. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates.

	Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. Provisions of the repurchase agreements ensure that the market value of the collateral, including accrued interest thereon, is sufficient to cover the repurchase amount in the event of default of the counterparty. If the counterparty defaults and the value of the collateral declines or if the counterparty enters an insolvency proceeding, realization of the collateral by the Fund may be delayed or limited. During the fiscal year ended October 31, 2016, the Fund did not enter into any repurchase agreements.

j).	New Accounting Pronouncements – In May 2015, the FASB issued ASU No. 2015-07 “Disclosure for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent).” The amendments in ASU No. 2015-07 remove the requirement to categorize within the fair value hierarchy investments measured at NAV

HENNESSY FUNDS

1-800-966-4354

and require the disclosure of sufficient information to reconcile the fair value of the remaining assets categorized within the fair value hierarchy to the financial statements. The amendments in ASU No. 2015-07 are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Management has reviewed the requirements and believes the adoption of ASU 2015-07 will not have a material impact on the Fund’s financial statements and related disclosures.

3). SECURITIES VALUATION

	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 (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.

Following is a description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis.

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

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.

The Board of Trustees of the Fund (the “Board”) has adopted fair value pricing procedures that are followed when a price for a security is not readily available or if a significant event has occurred that indicates the closing price of a security no longer represents the true value of that security. Fair value pricing determinations are made in good faith in accordance with these procedures. There are numerous criteria that will be given consideration in determining a fair value of a security such as the trading volume of a security and markets, the value of other like securities, and news events with direct bearing to a security or markets. Fair value pricing results in an estimated price for a security that reflects the amount the Fund might reasonably expect to receive in a current sale. Depending on the relative significance of the valuation inputs, these securities may be classified in either Level 2 or Level 3 of the fair value hierarchy.

4). INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during the fiscal year ended October 31, 2016, were $3,639,046 and $3,947,953, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during the fiscal year ended October 31, 2016.

HENNESSY FUNDS

1-800-966-4354

5). INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Hennessy Advisors, Inc. (the “Advisor”) is the investment advisor of the Fund. The Advisor provides the Fund with investment management services under an Investment Advisory Agreement. The Advisor furnishes all investment advice, office space, facilities, and provides most of the personnel needed by the Fund. As compensation for its services, the Advisor is entitled to a monthly fee from the Fund. The fee is based upon the average daily net assets of the Fund at the annual rate of 0.60%. The net investment advisory fees payable by the Fund as of October 31, 2016, were $6,234.

The Fund has adopted a plan pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended, that authorizes payments in connection with the distribution of the Fund’s shares at an annual rate of up to 0.25% of the Fund’s average daily net assets, although the Fund is currently only using up to 0.15% of its average daily net assets for such purpose. Amounts paid under the plan may be spent on any activities or expenses primarily intended to result in the sale of shares, including, but not limited to, advertising, shareholder account servicing, the printing and mailing of prospectuses to other than current shareholders, the printing and mailing of sales literature, and compensation for sales and marketing activities or to financial institutions and others, such as dealers and distributors.

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

Compliance Officer and for all of the salary and benefits associated with the office of the Senior Compliance Officer. Such amounts are included on the Statement of Operations.

6). GUARANTEES AND INDEMNIFICATIONS

7). LINE OF CREDIT

The Fund has an uncommitted line of credit with the other Hennessy Funds in the amount of the lesser of (i) $100,000,000 or (ii) 33.33% of each Hennessy Fund’s net assets, or 30% for the Hennessy Gas Utility Fund and 10% for the Fund, intended to provide short-term financing, if necessary, subject to certain restrictions, in connection with shareholder redemptions. The credit facility is with the Hennessy Funds’ custodian bank, U.S. Bank, N.A. Borrowings under this arrangement bear interest at the bank’s prime rate and are secured by all of the Fund’s assets (as to its own borrowings only). During the fiscal year ended October 31, 2016, the Fund had an outstanding average daily balance and a weighted average interest rate of $36,541 and 3.47%, respectively. The maximum amount outstanding for the Fund during the period was $1,600,000. At October 31, 2016, the Fund did not have any borrowings outstanding under the line of credit.

8). FEDERAL TAX INFORMATION

As of October 31, 2016, the components of accumulated earnings (losses) for income tax purposes were as follows:

Cost of investments for tax purposes	$	11,530,781
Gross tax unrealized appreciation	$	667,411
Gross tax unrealized depreciation		(62,064	)
Net tax unrealized appreciation	$	605,347
Undistributed ordinary income	$	43,032
Undistributed long-term capital gains		802,204
Total distributable earnings	$	845,236
Other accumulated loss	$	—
Total accumulated gain	$	1,450,583

At October 31, 2016, the Fund had no tax basis capital losses to offset future capital gains.

At October 31, 2016, the Fund did not defer, on a tax basis, any post-December late year ordinary loss deferrals.

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During the fiscal years ended October 31, 2016 and 2015, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2016		October 31, 2015
Ordinary income⁽¹⁾	$	66,296	$	39,518
Long-term capital gain		238,468		562,714
	$	304,764	$	602,232

⁽¹⁾ Ordinary income includes short-term gain or loss.

9). EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2016, through the date of issuance of the Fund’s financial statements. Other than as disclosed below, management has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.

On December 7, 2016, capital gains were declared and paid to shareholders of record as of December 6, 2016, as follows:

	Amount Per Share
	Long-term		Short-term
Investor Class	$	0.85723	$	0.04599

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

(This Page Intentionally Left Blank.)

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Report of Independent Registered Public Accounting Firm

The Board of Trustees of Hennessy Funds Trust

and Shareholders of the Hennessy Balanced Fund:

We have audited the accompanying statement of assets and liabilities of the Hennessy Balanced Fund (the Fund), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2016, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the five year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

Chicago, Illinois

December 22, 2016

HENNESSYFUNDS.COM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS

Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Fund are managed under the direction of the Board of Trustees of the Trust, and the Board of Trustees elects the Officers of the Trust. Beginning in March 2015, the Board of Trustees has from time to time appointed advisers (“Advisers”) to the Board of Trustees, with the intention of having qualified individuals serve in an advisory capacity in order to garner experience in the mutual fund and asset management industry and be considered as potential Trustees in the future. There are currently three Advisers to the Board of Trustees: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board and act as non-voting participants. Information pertaining to the Trustees, Advisers, and the Officers of the Trust is set forth below. The Trustees and Officers serve until their successors are duly elected and qualified or until their earlier death, resignation, or removal. Each of the Trustees oversees 16 Hennessy Funds. Unless otherwise indicated, the address of all persons listed below is 7250 Redwood Boulevard, Suite 200, Novato, CA 94945. The Fund’s Statement of Additional Information includes more information about the persons listed below and is available, without charge, upon request by calling 1-800-966-4354.

			Other
			Directorships
			Held Outside
Name, (Year of Birth),			of Fund
and Position Held	Start Date	Principal Occupation(s)	Complex During
with the Trust	of Service	During Past Five Years	Past Five Years⁽¹⁾

Disinterested Trustees and Advisers

J. Dennis DeSousa	January 1996	Mr. DeSousa is a real estate investor.	None.
(1936)
Trustee

Robert T. Doyle	January 1996	Mr. Doyle has been the Sheriff of	None.
(1947)		Marin County, California since 1996.
Trustee

Gerald P. Richardson	May 2004	Mr. Richardson is an independent	None.
(1945)		consultant in the securities industry.
Trustee

Brian Alexander	March 2015	Mr. Alexander has been employed	None.
(1981)		by Sutter Health Novato Community
Adviser to the Board		Hospital since 2012, first as an
		Assistant Administrator and then,
		beginning in 2013, as the Chief
		Administrative Officer. From 2011
		through 2012, Mr. Alexander was
		employed by Sutter Health West Bay
		Region as the Regional Director of
		Strategic Decision Support. Prior to
		that, in 2011, he served as the
		Director of Managed Care
		Contracting and also the Director of
		Compensation, Benefits, and
		Compliance for the Rehabilitation
		Institute of Chicago.

HENNESSY FUNDS

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			Other
			Directorships
			Held Outside
Name, (Year of Birth),			of Fund
and Position Held	Start Date	Principal Occupation(s)	Complex During
with the Trust	of Service	During Past Five Years	Past Five Years⁽¹⁾

Doug Franklin	March 2016	Mr. Franklin is a retired insurance	None.
(1964)		industry executive. From 1987
Adviser to the Board		through 2015, he was employed by
		the Allianz-Fireman’s Fund Insurance
		Company in various positions,
		including as its Chief Actuary and
		Chief Risk Officer.

Claire Knoles	December 2015	Ms. Knoles is a founder of Kiosk and	None.
(1974)		has served as its Chief Operating
Adviser to the Board		Officer since 2004. Kiosk is a full
		service marketing agency with
		offices in the San Francisco Bay
		Area, Toronto, and Liverpool, UK.

Interested Trustee⁽²⁾

Neil J. Hennessy	January 1996 as	Mr. Hennessy has been employed by	Hennessy
(1956)	a Trustee and	Hennessy Advisors, Inc. since 1989	Advisors, Inc.
Trustee, Chairman of	June 2008 as	and currently serves as its President,
the Board, Chief	an Officer	Chairman and Chief Executive Officer.
Investment Officer,
Portfolio Manager,
and President

Name, (Year of Birth),
and Position Held	Start Date	Principal Occupation(s)
with the Trust	of Service	During Past Five Years

Officers

Teresa M. Nilsen	January 1996	Ms. Nilsen has been employed by Hennessy Advisors, Inc.
(1966)		since 1989 and currently serves as its Executive Vice President,
Executive Vice President		Chief Operations Officer, Chief Financial Officer, and Secretary.
and Treasurer

Daniel B. Steadman	March 2000	Mr. Steadman has been employed by Hennessy Advisors, Inc.
(1956)		since 2000 and currently serves as its Executive Vice President
Executive Vice President		and Chief Compliance Officer.
and Secretary

Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)		as its General Counsel since June 2013. She previously served
Senior Vice President and		as in-house counsel to Carlson Capital, L.P., an SEC-registered
Chief Compliance Officer		investment advisor to several private funds, from
		February 2010 to May 2013.

Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013. Mr. Carlson was previously a co-founder
Senior Vice President and		and principal of Trivium Consultants, LLC from February 2011
Head of Distribution		through November 2013.

HENNESSYFUNDS.COM

TRUSTEES AND OFFICERS OF THE FUND

Name, (Year of Birth),
and Position Held	Start Date	Principal Occupation(s)
with the Trust	of Service	During Past Five Years

David Ellison	October 2012	Mr. Ellison has been employed by Hennessy Advisors, Inc. since
(1958)⁽³⁾		October 2012. He has served as a Portfolio Manager of the
Senior Vice President and		Hennessy Small Cap Financial Fund, the Hennessy Large Cap
Portfolio Manager		Financial Fund, and the Hennessy Technology Fund since
		inception. Prior to that, Mr. Ellison served as Director, CIO and
		President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.

Brian Peery	March 2003 as	Mr. Peery has been employed by Hennessy Advisors, Inc. since
(1969)	an Officer and	2002. He has served as a Portfolio Manager of the Hennessy
Senior Vice President and	February 2011	Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
Portfolio Manager	as a Co-Portfolio	30 Fund, the Hennessy Cornerstone Large Growth Fund, the
	Manager or	Hennessy Cornerstone Value Fund, the Hennessy Total Return
	Portfolio Manager	Fund, and the Hennessy Balanced Fund since October 2014.
		He served as Co-Portfolio Manager of the same funds from
		February 2011 through September 2014. Mr. Peery has also
		served as a Portfolio Manager of the Hennessy Gas Utility Fund
		since February 2015.

Winsor (Skip) Aylesworth	October 2012	Mr. Aylesworth has been employed by Hennessy Advisors, Inc.
(1947)⁽³⁾		since October 2012. He has served as a Portfolio Manager of
Vice President and		the Hennessy Gas Utility Fund since 1998 and as a Portfolio
Portfolio Manager		Manager of the Hennessy Technology Fund since inception.
		Prior to that, Mr. Aylesworth served as Executive Vice President
		of FBR Fund Advisers, Inc. from 1999 to October 2012.

Ryan Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)⁽⁴⁾		October 2012. He has served as a Portfolio Manager of the
Vice President and		Hennessy Gas Utility Fund, the Hennessy Small Cap Financial
Portfolio Manager		Fund, and the Hennessy Large Cap Financial Fund since
		October 2014. He served as Co-Portfolio Manager of the same
		funds from March 2013 through September 2014, and as a
		Portfolio Analyst for the Hennessy Funds from October 2012
		through February 2013. Prior to that, Mr. Kelley served as
		Portfolio Manager of FBR Fund Advisers, Inc. from
		January 2008 to October 2012.

_______________

⁽¹⁾	Messrs. DeSousa, Doyle, Hennessy, and Richardson previously served on the Board of Directors of Hennessy Mutual Funds, Inc. (“HMFI”), The Hennessy Funds, Inc. (“HFI”), and Hennessy SPARX Funds Trust (“HSFT”). Pursuant to an internal reorganization effective as of February 28, 2014, the series of HFMI, HFI, and HSFT were reorganized into corresponding series of Hennessy Funds Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
⁽²⁾	Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Hennessy Funds.
⁽³⁾	The address of these officers is 101 Federal Street, Suite 1900, Boston, MA 02110.
⁽⁴⁾	The address of this officer is 1340 Environ Way, Suite 305, Chapel Hill, NC 27517.

HENNESSY FUNDS

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Expense Example (Unaudited)

October 31, 2016

Actual Expenses

Hypothetical Example for Comparison Purposes

HENNESSYFUNDS.COM

EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period⁽¹⁾
	Account Value	Account Value	May 1, 2016 –
	May 1, 2016	October 31, 2016	October 31, 2016
Investor Class
Actual	$1,000.00	$1,018.40	$8.73
Hypothetical (5% return before expenses)	$1,000.00	$1,016.49	$8.72

⁽¹⁾	Expenses are equal to the Fund’s annualized expense ratio of 1.72% multiplied by the average account value over the period, multiplied by 184/366 days (to reflect one-half year period).

HENNESSY FUNDS

1-800-966-4354

How to Obtain a Copy of the Fund’s

Proxy Voting Policy and Proxy Voting Records

Quarterly Filings on Form N-Q

Federal Tax Distribution Information

(Unaudited)

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for the fiscal year ended October 31, 2016, was 100%.

Householding

HENNESSYFUNDS.COM

PROXY VOTING — PRIVACY POLICY

We collect the following non-public personal information about you:

	•	information we receive from you on or in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income, and date of birth; and

	•	information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payment history, parties to transactions, cost basis information, and other financial information.

HENNESSY FUNDS

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(This Page Intentionally Left Blank.)

For information, questions or assistance, please call

The Hennessy Funds

1-800-966-4354 or 1-415-899-1555

INVESTMENT ADVISOR

Hennessy Advisors, Inc.

7250 Redwood Blvd., Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Dr., Suite 302

Milwaukee, Wisconsin 53212

TRUSTEES

Neil J. Hennessy

Robert T. Doyle

J. Dennis DeSousa

Gerald P. Richardson

COUNSEL

Foley & Lardner LLP

777 East Wisconsin Avenue

Milwaukee, Wisconsin 53202-5306

INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

KPMG LLP

200 East Randolph Street

Chicago, Illinois 60601

DISTRIBUTOR

Quasar Distributors, LLC

615 East Michigan Street

Milwaukee, Wisconsin 53202

hennessyfunds.com | 1-800-966-4354

This report has been prepared for shareholders and may be distributed to

others only if preceded or accompanied by a current prospectus.

ANNUAL REPORT

OCTOBER 31, 2016

HENNESSY CORE BOND FUND

Investor Class HCBFX

Institutional Class HCBIX

hennessyfunds.com | 1-800-966-4354

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CONTENTS

Contents

Letter to Shareholders			2
Performance Overview			4
Financial Statements
Schedule of Investments			6
Statement of Assets and Liabilities			12
Statement of Operations			13
Statements of Changes in Net Assets			14
Financial Highlights			16
Notes to the Financial Statements			20
Report of Independent Registered Public Accounting Firm			30
Trustees and Officers of the Fund			31
Expense Example			34
Proxy Voting			36
Quarterly Filings on Form N-Q			36
Federal Tax Distribution Information			36
Householding			36
Privacy Policy			37

HENNESSY FUNDS

1-800-966-4354

December 2016

Dear Hennessy Funds Shareholder:

HENNESSYFUNDS.COM

LETTER TO SHAREHOLDERS

Thank you for your continued confidence and investment in our funds. If you have any questions or would like to speak with us directly, please don’t hesitate to call us at (800) 966-4354.

Best regards,

Neil J. Hennessy

President and Chief Investment Officer

Past performance does not guarantee future results.

Mutual fund investing involves risk. Principal loss is possible.

Opinions expressed are those of Neil Hennessy and are subject to change, are not guaranteed and should not be considered investment advice.

The Dow Jones Industrial Average and S&P 500 Index are unmanaged indices commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is calculated by dividing a company’s market price per share by its earnings per share.

HENNESSY FUNDS

1-800-966-4354

Performance Overview (Unaudited)

CHANGE IN VALUE OF $10,000 INVESTMENT

This graph illustrates the performance of an initial investment of $10,000 made in the Fund ten years ago and assumes the reinvestment of dividends.

AVERAGE ANNUAL TOTAL RETURN FOR PERIODS ENDED OCTOBER 31, 2016

	One	Five	Ten
	Year	Years	Years
Hennessy Core Bond Fund –
Investor Class (HCBFX)	-0.28%	1.64%	3.57%
Hennessy Core Bond Fund –
Institutional Class (HCBIX)	0.23%	1.96%	3.86%
Bloomberg Barclays Intermediate
U.S. Government/Credit Index	3.19%	2.30%	4.07%

Expense ratios: 3.20% (Investor Class); 2.83% (Institutional Class)

The expense ratios presented are from the most recent prospectus.

PERFORMANCE NARRATIVE

Portfolio Managers Gary B. Cloud, CFA, and Peter G. Greig, CFA

Financial Counselors, Inc. (sub-advisor)

Performance:

For the twelve-month period ended October 31, 2016, the Investor Class of the Hennessy Core Bond Fund returned -0.28%, underperforming the Bloomberg Barclays Intermediate U.S. Government/Credit Index, which returned 3.19% for the same period.

HENNESSYFUNDS.COM

PERFORMANCE OVERVIEW

The overweight position in investment grade corporate credit was the largest contributor to the Fund’s performance over the past twelve months. Issue selection drove most of this performance. The income and aging from these higher-yielding investment grade securities exceeded the amount represented in the benchmark. The Fund’s slight exposure to preferred stocks and high-yield credit securities, or junk bonds, was another positive factor adding to performance. Effective duration was the largest detractor to overall performance compared to the benchmark. Portfolio convexity and volatility were neutral contributors to overall performance.

Investment Outlook:

In our opinion, the last few months may have marked the beginning of a slow change in central bank monetary policy worldwide. It might be too soon to ring the death knell for quantitative easing, but it is possible that progress towards even lower negative interest rates in Japan, Europe and Switzerland has been halted. Part of the reasoning behind this change in policy is the realization by many central bankers that negative interest rates can cause more harm than expected to the business models of financial intermediaries like banks and insurance companies, while their macroeconomic benefit has not been as apparent as hoped.

As we look forward, prospects for economic growth remain subdued. Unanticipated election results in the United States and Europe coupled with a nationalist and populist electoral surge hurt prospects for trade liberalization and economic cooperation. Brexit negotiations with the European Union next year will add to political and economic uncertainty. Conflict in the Middle East, South China Sea disputes and potential terrorism events, all contribute to the unsettling political and social environment around the world. Overall, we expect to see modest rate movements in either direction as economic and political events dictate trading levels.

_______________

The Bloomberg Barclays Intermediate U.S. Government/Credit Index is an unmanaged index commonly used to measure the performance of U.S. bonds. One cannot invest directly in an index.

HENNESSY FUNDS

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Financial Statements

Schedule of Investments as of October 31, 2016

HENNESSY CORE BOND FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING CASH/CASH EQUIVALENTS)	% NET ASSETS

U.S. Treasury Note, 1.625%, 04/30/2019	7.70%

Federal National Mortgage Association, 3.000%, 08/01/2042	7.35%

U.S. Treasury Note, 1.625%, 02/15/2026	5.76%

Ford Motor Credit Co. LLC, 3.000%, 06/12/2017	5.51%

The Hartford Financial Services Group, Inc., 5.375%, 03/15/2017	5.39%

Discover Financial Services, 5.200%, 04/27/2022	5.15%

Agilent Technologies, Inc., 5.000%, 07/15/2020	5.15%

Associates Corporation of North America, 6.950%, 11/01/2018	5.11%

YUM! Brands, Inc., 5.300%, 09/15/2019	5.03%

U.S. Treasury Note, 2.750%, 02/15/2024	3.29%

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS

PREFERRED STOCKS – 8.90%	Number of Shares/				% of
	Par Amount		Value		Net Assets
Consumer Staples – 0.33%
CHS, Inc., Series 4, 7.500%, 01/21/2025		430	$	12,578		0.33	%

Financials – 8.57%
Aegon N.V., 6.375%, 11/30/2016 (b)		125		3,182		0.08	%
Ares Management LP, Series A, 7.000%, 06/30/2021		124		3,215		0.09	%
Banc of California, Inc., Series E, 7.000%, 03/15/2021		125		3,112		0.08	%
Bank of America Corp.
Series EE, 6.000%, 04/25/2021		200		5,200		0.14	%
Series W, 6.625%, 09/09/2019		145		3,954		0.10	%
BB&T Corp., Series F, 5.200%, 11/01/2017		555		14,091		0.37	%
Capital One Financial Corp.
Series F, 6.200%, 12/01/2020		275		7,340		0.20	%
Series G, 5.200%, 12/01/2021 (a)		295		7,325		0.19	%
Citigroup, Inc.
Series C, 5.800%, 04/22/2018		235		5,948		0.16	%
Series S, 6.300%, 02/12/2021		235		6,230		0.17	%
Discover Financial Services, Series B, 6.500%, 12/01/2017		510		13,357		0.35	%
Fannie Mae Preferred, Series S, 8.250%, 12/31/2020 (a)		7,900		31,126		0.83	%
First Republic Bank
Series F, 5.700%, 06/30/2020		195		5,362		0.14	%
Series G, 5.500%, 03/30/2021		200		5,226		0.14	%
Huntington Bancshares, Inc., Series D, 6.250%, 04/15/2021		385		10,303		0.27	%
IBERIABANK Corp., Series A, 6.625%, 08/01/2025		125		3,374		0.09	%
ING Groep N.V., 6.125%, 01/15/2017 (b)		130		3,314		0.09	%
JPMorgan Chase & Co., Series Bb, 6.150%, 09/01/2020		535		14,268		0.38	%
Legg Mason, Inc., 5.45%, 09/15/2021 (a)		265		6,596		0.18	%
MetLife, Inc., Series A, 4.000%, 11/30/2016		550		13,920		0.37	%
Morgan Stanley, Series I, 6.375%, 10/15/2024		460		12,696		0.34	%
National General Holdings Corp., Series C, 7.500%, 07/15/2021		320		8,205		0.22	%
Northern Trust Corp., Series C, 5.850%, 10/01/2019		525		14,128		0.38	%
PNC Financial Services Group, Inc., Series Q, 5.375%, 12/01/2017		540		13,711		0.36	%
Regions Financial Corp.
Series B, 6.375%, 09/15/2024		265		7,624		0.20	%
Series A, 6.375%, 12/15/2017		275		7,144		0.19	%
State Street Corp.
Series G, 5.350%, 03/15/2026		265		7,094		0.19	%
Series D, 5.900%, 03/15/2024		255		7,153		0.19	%
SunTrust Banks, Inc., Series E, 5.875%, 03/15/2018		535		13,872		0.37	%
The Allstate Corp., Series E, 6.625%, 04/15/2019		500		13,580		0.36	%

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

PREFERRED STOCKS	Number of Shares/				% of
	Par Amount		Value		Net Assets
Financials (Continued)
The Charles Schwab Corp.
Series C, 6.000%, 12/01/2020		275	$	7,604		0.20	%
Series A, 5.950%, 06/01/2021		280		7,580		0.20	%
The Goldman Sachs Group, Inc.
Series D, 4.000%, 11/30/2016		170		3,811		0.10	%
Series N, 6.300%, 05/10/2021		180		4,799		0.13	%
U.S. Bancorp, Series H, 5.150%, 07/01/2018 (d)		180		4,666		0.12	%
Validus Holdings, Ltd., Series A, 5.875%, 06/15/2021 (b)		320		8,112		0.22	%
Wells Fargo & Co.
Series V, 6.000%, 12/15/2020		270		7,042		0.19	%
Series X, 5.500%, 09/15/2021		275		6,999		0.19	%
				322,263		8.57	%

Total Preferred Stocks
(Cost $491,455)				334,841		8.90	%

REITS – 2.91%

Financials – 2.91%
Apollo Commercial Real Estate Finance, Inc.		6,000		101,520		2.70	%
Monmouth Real Estate Investment Corp., Series C, 6.125%, 09/15/2021 (a)		140		3,672		0.10	%
Public Storage, Series D, 4.950%, 07/20/2021		175		4,305		0.11	%

Total REITS
(Cost $107,211)				109,497		2.91	%

CORPORATE BONDS – 54.92%

Consumer Discretionary – 9.15%
Amazon.com, Inc., 2.500%, 11/29/2022		75,000		76,613		2.04	%
Time Warner, Inc., 3.400%, 06/15/2022		75,000		78,326		2.08	%
YUM! Brands, Inc., 5.300%, 09/15/2019		175,000		189,219		5.03	%
				344,158		9.15	%

Energy – 1.63%
National Oilwell Varco, Inc., 2.600%, 12/01/2022		65,000		61,375		1.63	%

Financials – 32.30%
Associates Corporation of North America, 6.950%, 11/01/2018		175,000		192,331		5.11	%
Diamond 1 Finance Corp. /
Diamond 2 Finance Corp., 5.450%, 06/15/2023 (e)		50,000		53,616		1.42	%
Discover Financial Services, 5.200%, 04/27/2022		175,000		193,617		5.15	%
Ford Motor Credit Co. LLC, 3.000%, 06/12/2017		205,000		207,015		5.51	%

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS

CORPORATE BONDS	Number of Shares/				% of
	Par Amount		Value		Net Assets
Financials (Continued)
Kimco Realty Corp., 2.800%, 10/01/2026		70,000	$	68,559		1.82	%
Lazard Group, 6.850%, 06/15/2017		37,000		38,070		1.01	%
Merrill Lynch Co., Inc., 6.400%, 08/28/2017		70,000		72,826		1.94	%
Raymond James Financial, Inc., 3.625%, 09/15/2026		50,000		50,609		1.35	%
The Goldman Sachs Group, Inc., 6.000%, 06/15/2020		70,000		79,149		2.11	%
The Hartford Financial Services Group, Inc., 5.375%, 03/15/2017		200,000		202,828		5.39	%
Wells Fargo & Co., 2.550%, 12/07/2020		55,000		55,993		1.49	%
				1,214,613		32.30	%

Health Care – 7.89%
Agilent Technologies, Inc., 5.000%, 07/15/2020		175,000		193,600		5.15	%
Celgene Corp., 3.625%, 05/15/2024		100,000		103,211		2.74	%
				296,811		7.89	%

Telecommunication Services – 3.95%
AT&T, Inc., 5.500%, 02/01/2018		70,000		73,375		1.95	%
Verizon Communications, Inc., 2.450%, 11/01/2022		75,000		75,104		2.00	%
				148,479		3.95	%

Total Corporate Bonds
(Cost $2,009,304)				2,065,436		54.92	%

MORTGAGE BACKED SECURITIES – 7.35%

Federal National Mortgage Association, 3.000%, 08/01/2042		267,814		276,424		7.35	%

Total Mortgage Backed Securities
(Cost $274,306)				276,424		7.35	%

U.S. TREASURY OBLIGATIONS – 24.57%

U.S. Treasury Notes – 24.57%
U.S. Treasury Notes
1.500%, 08/31/2018		90,000		91,051		2.42	%
1.625%, 02/15/2026		220,000		216,395		5.76	%
1.625%, 04/30/2019		285,000		289,815		7.70	%
2.125%, 05/15/2025		105,000		107,980		2.87	%
2.500%, 08/15/2023		50,000		52,894		1.41	%
2.625%, 11/15/2020		40,000		42,217		1.12	%
2.750%, 02/15/2024		115,000		123,780		3.29	%
				924,132		24.57	%

Total U.S. Treasury Obligations
(Cost $926,094)				924,132		24.57	%

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

SHORT-TERM INVESTMENTS – 1.33%	Number				% of
	of Shares		Value		Net Assets
Money Market Funds – 1.33%
Fidelity Government Portfolio, Institutional Class, 0.27% (c)		49,912	$	49,912		1.33	%

Total Short-Term Investments
(Cost $49,912)				49,912		1.33	%

Total Investments
(Cost $3,858,282) – 99.98%				3,760,242		99.98	%
Other Assets in
Excess of Liabilities – 0.02%				627		0.02	%

TOTAL NET ASSETS – 100.00%			$	3,760,869		100.00	%

Percentages are stated as a percent of net assets.

REIT – Real Estate Investment Trust

(a)	Non-income producing security.
(b)	U.S. traded security of a foreign corporation.
(c)	The rate listed is the fund’s 7-day yield as of October 31, 2016.
(d)	Investment in affiliated security. Quasar Distributors, LLC, which serves as the Fund’s distributor, is a subsidiary of U.S. Bancorp. Details of transactions with this affiliated company for the year ended October 31, 2016, are as follows:

Issuer	U.S. Bancorp
Beginning Cost	$	13,348
Purchase Cost	$	4,628
Sales Cost	$	(13,348	)
Ending Cost	$	4,628
Dividend Income	$	526
Realized Gain	$	729
Shares		180
Market Value	$	4,666

(e)	144A security.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

SCHEDULE OF INVESTMENTS

Summary of Fair Value Exposure at October 31, 2016

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2016 (see Note 3 in the accompanying notes to the financial statements):

Preferred Stocks	Level 1		Level 2		Level 3		Total
Consumer Staples	$	12,578	$	—	$	—	$	12,578
Financials		322,263		—		—		322,263
Total Preferred Stocks	$	334,841	$	—	$	—	$	334,841
REITS
Financials	$	109,497	$	—	$	—	$	109,497
Total REITS	$	109,497	$	—	$	—	$	109,497
Corporate Bonds
Consumer Discretionary	$	—	$	344,158	$	—	$	344,158
Energy		—		61,375		—		61,375
Financials		—		1,214,613		—		1,214,613
Health Care		—		296,811		—		296,811
Telecommunication Services		—		148,479		—		148,479
Total Corporate Bonds	$	—	$	2,065,436	$	—	$	2,065,436
Mortgage Backed Securities	$	—	$	276,424	$	—	$	276,424
U.S. Treasury Obligations
U.S. Treasury Notes	$	—	$	924,132	$	—	$	924,132
Total U.S. Treasury Obligations	$	—	$	924,132	$	—	$	924,132
Short-Term Investments
Money Market Funds	$	49,912	$	—	$	—	$	49,912
Total Short-Term Investments	$	49,912	$	—	$	—	$	49,912
Total Investments	$	494,250	$	3,265,992	$	—	$	3,760,242

Transfers between levels are recognized at the end of the reporting period. During the year ended October 31, 2016, the Fund recognized no transfers between levels.

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

Financial Statements

Statement of Assets and Liabilities as of October 31, 2016

ASSETS:
Investments in securities, at value (cost $3,853,654)	$	3,755,576
Investments in affiliated securities, at value (cost $4,628)		4,666
Total Investments in securities, at value (cost $3,858,282)		3,760,242
Dividends and interest receivable		30,219
Prepaid expenses and other assets		16,525
Total Assets		3,806,986

LIABILITIES:
Payable for fund shares redeemed		2,096
Payable to advisor		2,593
Payable to administrator		753
Payable to auditor		20,698
Accrued distribution fees		4,394
Accrued service fees		138
Accrued trustees fees		4,254
Accrued expenses and other payables		11,191
Total Liabilities		46,117
NET ASSETS	$	3,760,869

NET ASSETS CONSIST OF:
Capital stock	$	3,902,033
Accumulated net investment loss		(15,263	)
Accumulated net realized loss on investments		(27,861	)
Unrealized net depreciation on investments		(98,040	)
Total Net Assets	$	3,760,869

NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	1,575,305
Shares issued and outstanding		215,718
Net asset value, offering price and redemption price per share	$	7.30

Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	2,185,564
Shares issued and outstanding		338,960
Net asset value, offering price and redemption price per share	$	6.45

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS

Financial Statements

Statement of Operations for the year ended October 31, 2016

INVESTMENT INCOME:
Dividend income	$	32,887
Dividend income from affiliated securities		526
Interest income		97,321
Total investment income		130,734

EXPENSES:
Investment advisory fees (See Note 5)		32,840
Federal and state registration fees		27,800
Compliance expense (See Note 5)		23,709
Audit fees		20,741
Trustees’ fees and expenses		15,385
Reports to shareholders		7,972
Administration, fund accounting, custody and transfer agent fees (See Note 5)		4,004
Sub-transfer agent expenses – Investor Class (See Note 5)		2,972
Distribution fees – Investor Class (See Note 5)		2,598
Service fees – Investor Class (See Note 5)		1,732
Other expenses		3,952
Total expenses		143,705
NET INVESTMENT LOSS	$	(12,971	)

REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain (loss) on:
Unaffiliated investments	$	(27,812	)
Affiliated investments		729
Net change in unrealized depreciation on investments		36,873
Net gain on investments		9,790
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(3,181	)

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

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Financial Statements

Statements of Changes in Net Assets

	Year Ended			Year Ended
	October 31, 2016			October 31, 2015
OPERATIONS:
Net investment income (loss)	$	(12,971	)	$	52,926
Net realized gain (loss) on investments		(27,083	)		51,572
Net change in unrealized appreciation (depreciation)
on investments		36,873			(121,931	)
Net decrease in net assets resulting from operations		(3,181	)		(17,433	)

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Investor Class		(715	)		(24,771	)
Institutional Class		(2,869	)		(30,102	)
Net realized gains
Investor Class		(19,448	)		(37,403	)
Institutional Class		(29,843	)		(30,800	)
Total distributions		(52,875	)		(123,076	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		497,984			435,393
Proceeds from shares subscribed – Institutional Class		735,742			1,039,343
Dividends reinvested – Investor Class		18,154			56,956
Dividends reinvested – Institutional Class		25,941			60,107
Cost of shares redeemed – Investor Class		(783,650	)		(1,369,633	)
Cost of shares redeemed – Institutional Class		(937,786	)		(924,976	)
Net decrease in net assets derived
from capital share transactions		(443,615	)		(702,810	)
TOTAL DECREASE IN NET ASSETS		(499,671	)		(843,319	)

NET ASSETS:
Beginning of year		4,260,540			5,103,859
End of year	$	3,760,869		$	4,260,540
Undistributed net investment loss, end of year	$	(15,263	)	$	—

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

STATEMENTS OF CHANGES IN NET ASSETS

Statements of Changes in Net Assets – Continued

	Year Ended			Year Ended
	October 31, 2016			October 31, 2015
CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		68,119			58,095
Shares sold – Institutional Class		113,634			157,489
Shares issued to holders as reinvestment
of dividends – Investor Class		2,491			7,586
Shares issued to holders as reinvestment
of dividends – Institutional Class		4,048			9,104
Shares redeemed – Investor Class		(107,149	)		(183,613	)
Shares redeemed – Institutional Class		(146,141	)		(140,907	)
Net decrease in shares outstanding		(64,998	)		(92,246	)

The accompanying notes are an integral part of these financial statements.

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Financial Statements

Financial Highlights

For an Investor Class share outstanding throughout each year

PER SHARE DATA:

Net asset value, beginning of year

Income from investment operations:

Net investment income (loss)

Net realized and unrealized gains (losses) on investments

Total from investment operations

Less distributions:

Dividends from net investment income

Dividends from net realized gains

Total distributions

Net asset value, end of year

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of year (millions)

Ratio of expenses to average net assets:

Before expense reimbursement

After expense reimbursement

Ratio of net investment income (loss) to average net assets:

Before expense reimbursement

After expense reimbursement

Portfolio turnover rate⁽²⁾

⁽¹⁾	Amount is less than $(0.01).
⁽²⁾	Portfolio turnover is calculated on the basis of the Fund as a whole.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2016			2015			2014			2013			2012

$	7.40		$	7.61		$	9.56		$	9.97		$	9.56


	(0.04	)		0.06			0.17			0.27			0.28
	0.02			(0.10	)		(0.06	)		(0.23	)		0.41
	(0.02	)		(0.04	)		0.11			0.04			0.69


	(0.00	)⁽¹⁾		(0.07	)		(0.18	)		(0.27	)		(0.20	)
	(0.08	)		(0.10	)		(1.88	)		(0.18	)		(0.08	)
	(0.08	)		(0.17	)		(2.06	)		(0.45	)		(0.28	)
$	7.30		$	7.40		$	7.61		$	9.56		$	9.97

	(0.28	)%		(0.50	)%		1.41	%		0.41	%		7.38	%


$	1.58		$	1.87		$	2.82		$	3.02		$	3.57

	3.74	%		3.16	%		2.85	%		2.26	%		2.12	%
	3.74	%		2.52	%		1.30	%		1.30	%		1.30	%

	(0.56	)%		0.32	%		0.74	%		1.70	%		2.01	%
	(0.56	)%		0.96	%		2.29	%		2.66	%		2.83	%
	65	%		50	%		54	%		74	%		75	%

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

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Financial Statements

Financial Highlights

For an Institutional Class share outstanding throughout each year

PER SHARE DATA:

Net asset value, beginning of year

Income from investment operations:

Net investment income (loss)

Net realized and unrealized gains (losses) on investments

Total from investment operations

Less distributions:

Dividends from net investment income

Dividends from net realized gains

Total distributions

Net asset value, end of year

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of year (millions)

Ratio of expenses to average net assets:

Before expense reimbursement

After expense reimbursement

Ratio of net investment income (loss) to average net assets:

Before expense reimbursement

After expense reimbursement

Portfolio turnover rate⁽¹⁾

⁽¹⁾	Portfolio turnover is calculated on the basis of the Fund as a whole.

The accompanying notes are an integral part of these financial statements.

HENNESSYFUNDS.COM

FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Year Ended October 31,
2016			2015			2014			2013			2012

$	6.51		$	6.69		$	8.65		$	9.06		$	8.77


	(0.01	)		0.09			0.16			0.19			0.27
	0.03			(0.09	)		(0.06	)		(0.13	)		0.38
	0.02			—			0.10			0.06			0.65


	(0.01	)		(0.09	)		(0.18	)		(0.29	)		(0.28	)
	(0.07	)		(0.09	)		(1.88	)		(0.18	)		(0.08	)
	(0.08	)		(0.18	)		(2.06	)		(0.47	)		(0.36	)
$	6.45		$	6.51		$	6.69		$	8.65		$	9.06

	0.23	%		(0.06	)%		1.53	%		0.69	%		7.63	%


$	2.19		$	2.39		$	2.29		$	3.38		$	33.34

	3.32	%		2.79	%		2.53	%		1.67	%		1.31	%
	3.32	%		2.25	%		1.05	%		1.05	%		1.05	%

	(0.14	)%		0.66	%		1.06	%		2.28	%		2.74	%
	(0.14	)%		1.20	%		2.54	%		2.90	%		3.00	%
	65	%		50	%		54	%		74	%		75	%

The accompanying notes are an integral part of these financial statements.

HENNESSY FUNDS

1-800-966-4354

Financial Statements

Notes to the Financial Statements October 31, 2016

1). ORGANIZATION

The Hennessy Core Bond Fund (the “Fund”) is a series of Hennessy Funds Trust (the “Trust”), which was organized as a Delaware statutory trust on September 17, 1992. The Fund is an open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund is a successor to the FBR Core Bond Fund (the “Predecessor FBR Fund”), a series of The FBR Funds, a Delaware statutory trust, pursuant to a reorganization that took place after the close of business on October 26, 2012. Prior to October 26, 2012, the Fund had no investment operations. As a result of the reorganization, holders of Investor Class shares of the Predecessor FBR Fund received Investor Class shares of the Fund (the Investor Class shares of the Fund are the successor to the accounting and performance information of the corresponding shares of the Predecessor FBR Fund), and holders of Institutional Class shares of the Predecessor FBR Fund received Institutional Class shares of the Fund (the Institutional Class shares of the Fund are the successor to the accounting and performance information of the corresponding shares of the Predecessor FBR Fund). The investment objective of the Fund is current income with capital growth as a secondary objective. The Fund is a diversified fund.

2). SIGNIFICANT ACCOUNTING POLICIES

a).	Investment Valuation – All investments in securities are recorded at their estimated fair value, as described in Note 3.

b).	Federal Income Taxes – No provision for federal income taxes or excise taxes has been made since 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. Net investment income or loss and realized gains and losses for federal income tax purposes may differ from that reported on the financial statements because of temporary book 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.

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

Undistributed	Accumulated
Net Investment	Net Realized
Income/(Loss)	Gain/(Loss)	Paid-in Capital
$1,292	$(769)	$(523)

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 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. The Fund is charged for those expenses that are directly attributable to the 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 or losses on investments are allocated to each class of shares based on its respective net assets.

e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid monthly. 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 gain or loss realized from the investment transactions by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted/amortized over the life of the respective security.

g).	Use of Estimates – The preparation of financial statements in conformity 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 and 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 the sum of the value of the securities held by the Fund, plus cash or other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for the Fund, rounded to the nearest cent. The Fund’s shares will not be 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, if any, are converted into U.S. dollars using the spot market rate of exchange at the time of valuation. Purchases and sales of investments and income are translated into U.S. dollars using the spot market rate of exchange prevailing on the respective dates of

HENNESSY FUNDS

1-800-966-4354

	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 or 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).	Forward Contracts – The Fund may enter into forward currency contracts to reduce its exposure to changes in foreign currency exchange rates on its foreign holdings and to lock in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in foreign currencies. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing of such contract is included in net realized gain or loss from foreign currency transactions. During the fiscal year ended October 31, 2016, the Fund did not enter into any forward contracts.

k).	Repurchase Agreements – The Fund may enter into repurchase agreements with member banks or security dealers of the Federal Reserve Board whom the investment advisor deems creditworthy. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates.

	Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. Provisions of the repurchase agreements ensure that the market value of the collateral, including accrued interest thereon, is sufficient to cover the repurchase amount in the event of default of the counterparty. If the counterparty defaults and the value of the collateral declines or if the counterparty enters an insolvency proceeding, realization of the collateral by the Fund may be delayed or limited. During the fiscal year ended October 31, 2016, the Fund did not enter into any repurchase agreements.

l).	Derivatives – The Fund may invest in, or enter into, derivatives, such as options, futures contracts, options on futures contracts, and swaps, for a variety of reasons, including to hedge certain risks, to provide a substitute for purchasing or selling particular securities, or to increase potential income gain. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives may allow the Fund to increase or decrease the level of risk to which the Fund is exposed more quickly and efficiently than transactions in other types of instruments. The main purpose of utilizing derivative instruments is for hedging purposes.

	The Fund follows the financial accounting reporting rules as required by the Derivatives and Hedging Topic of the FASB Accounting Standards Codification. Under such rules, the Fund is required to include enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivatives instruments affect an entity’s results of operations and financial position. During the fiscal year ended October 31, 2016, the Fund did not hold any derivative instruments.

m).	New Accounting Pronouncements – In May 2015, the FASB issued ASU No. 2015-07 “Disclosure for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent).” The amendments in ASU No. 2015-07 remove the

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

3). SECURITIES VALUATION

	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 (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.

Following is a description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis.

HENNESSY FUNDS

1-800-966-4354

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

current and reliable market quotations are not readily available. All actions taken by the Valuation Committee are reviewed by the Board.

4). INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during the fiscal year ended October 31, 2016 were $622,835 and $977,562, respectively.

Purchases and sales/maturities of long-term U.S. government securities for the Fund during the fiscal year ended October 31, 2016, were $1,978,160 and $2,090,277, respectively.

5). INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Hennessy Advisors, Inc. (the “Advisor”) is the investment advisor of the Fund. The Advisor provides the Fund with investment management services under an Investment Advisory Agreement. The Advisor furnishes all investment advice, office space, facilities, and provides most of the personnel needed by the Fund. As compensation for its services, the Advisor is entitled to a monthly fee from the Fund. The fee is based upon the average daily net assets of the Fund at the annual rate of 0.80%. The net investment advisory fees payable by the Fund as of October 31, 2016, were $2,593.

The Advisor has delegated the day-to-day management of the Fund to a sub-advisor, Financial Counselors, Inc. The Advisor pays the sub-advisor fees from its own assets and these fees are not an additional expense of the Fund. For the most recent fiscal year, the Advisor (not the Fund) paid a sub-advisory fee, based upon the daily net assets of the Fund, at the rate of 0.15%, as the sub-advisor voluntarily agreed to reduce its sub-advisory fee to 0.15% of the Fund’s average daily net assets for the most recent fiscal year.

In the past, the Advisor had contractually agreed to limit the total annual operating expenses of the Fund to 1.05% of the Fund’s net assets for both Investor Class shares and Institutional Class shares of the Fund (excluding interest, taxes, brokerage commissions, dividend expenses, 12b-1 fees, acquired fund fees and expenses, extraordinary legal expenses, or any other extraordinary expenses). The expense limitation agreement for the Fund expired as of February 28, 2015.

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	October 31,	October 31,
	2017	2018	Total
Investor Class	$46,263	$16,047	$62,310
Institutional Class	$42,715	$13,084	$55,799

The Fund has adopted a plan pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended, that authorizes payments in connection with the distribution of the Fund’s shares at an annual rate of up to 0.25% of the Fund’s average daily net assets attributable to Investor Class shares. Even though the authorized rate is up to 0.25%, the Fund has only used up to 0.15% of its average daily net assets attributable to Investor Class shares for such purpose since March 1, 2015. Amounts paid under the plan may be spent on any activities or expenses primarily intended to result in the sale of shares, including, but not limited to, advertising, shareholder account servicing, the printing and mailing of prospectuses to other than current shareholders, the printing and mailing of sales literature, and compensation for sales and marketing activities or to financial institutions and others, such as dealers and distributors.

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

6). GUARANTEES AND INDEMNIFICATIONS

7). LINE OF CREDIT

The Fund has an uncommitted line of credit with the other Hennessy Funds in the amount of the lesser of (i) $100,000,000 or (ii) 33.33% of each Hennessy Fund’s net assets, or 30% for the Hennessy Gas Utility Fund and 10% for the Hennessy Balanced Fund, intended to provide short-term financing, if necessary, subject to certain restrictions, in connection with shareholder redemptions. The credit facility is with the Hennessy Funds’ custodian bank, U.S. Bank, N.A. Borrowings under this arrangement bear interest at the bank’s prime rate and are secured by all of the Fund’s assets (as to its own borrowings only). During the fiscal year ended October 31, 2016, the Fund did not have any borrowings outstanding under the line of credit.

8). FEDERAL TAX INFORMATION

As of October 31, 2016, the components of accumulated earnings (losses) for income tax purposes were as follows:

Cost of investments for tax purposes	$	3,858,512
Gross tax unrealized appreciation	$	79,202
Gross tax unrealized depreciation		(177,472	)
Net tax unrealized appreciation	$	(98,270	)
Undistributed ordinary income	$	—
Undistributed long-term capital gains		—
Total distributable earnings	$	—
Other accumulated loss	$	(42,894	)
Total accumulated loss	$	(141,164	)

At October 31, 2016, the Fund had capital loss carryforwards that expire as follows:

$11,619	Indefinite ST
$16,012	Indefinite LT

At October 31, 2016, the Fund deferred on a tax basis, a late year ordinary loss of $15,263.

During the fiscal years ended October 31, 2016 and 2015, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2016		October 31, 2015
Ordinary income⁽¹⁾	$	5,416	$	54,190
Long-term capital gain		46,936		68,886
Return of capital		523		—
	$	52,875	$	123,076

⁽¹⁾ Ordinary income includes short-term gain or loss.

HENNESSY FUNDS

1-800-966-4354

9). EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2016, through the date of issuance of the Fund’s financial statements. Other than as disclosed below, management has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.

On December 2, 2016, the Board determined that it is in the best interests of the shareholders of the Fund to liquidate the Fund. The liquidation of the Fund is expected to be effective on or about Friday, February 17, 2017, or at such other time as may be authorized by the Board.

Shareholders of the Fund may redeem their shares at any time prior to the liquidation date. If a shareholder has not redeemed his or her shares as of the liquidation date, the shareholder’s account will be automatically redeemed and proceeds will be sent to the shareholder at his or her address of record. Liquidation proceeds will be paid in cash for the redeemed shares at their net asset value.

All expenses of the liquidation of the Fund will be borne by the Advisor.

HENNESSYFUNDS.COM

NOTES TO THE FINANCIAL STATEMENTS

(This Page Intentionally Left Blank.)

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Report of Independent Registered Public Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the Shareholders of the Hennessy Core Bond Fund

Novato, CA

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of the Hennessy Core Bond Fund (the “Fund”), a series of Hennessy Funds Trust, as of October 31, 2016, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Hennessy Core Bond Fund as of October 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 22, 2016

HENNESSYFUNDS.COM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS

Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Fund are managed under the direction of the Board of Trustees of the Trust, and the Board of Trustees elects the Officers of the Trust. Beginning in March 2015, the Board of Trustees has from time to time appointed advisers (“Advisers”) to the Board of Trustees, with the intention of having qualified individuals serve in an advisory capacity in order to garner experience in the mutual fund and asset management industry and be considered as potential Trustees in the future. There are currently three Advisers to the Board of Trustees: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board and act as non-voting participants. Information pertaining to the Trustees, Advisers, and the Officers of the Trust is set forth below. The Trustees and Officers serve until their successors are duly elected and qualified or until their earlier death, resignation, or removal. Each of the Trustees oversees 16 Hennessy Funds. Unless otherwise indicated, the address of all persons listed below is 7250 Redwood Boulevard, Suite 200, Novato, CA 94945. The Fund’s Statement of Additional Information includes more information about the persons listed below and is available, without charge, upon request by calling 1-800-966-4354.

			Other
			Directorships
			Held Outside
Name, (Year of Birth),			of Fund
and Position Held	Start Date	Principal Occupation(s)	Complex During
with the Trust	of Service	During Past Five Years	Past Five Years⁽¹⁾

Disinterested Trustees and Advisers

J. Dennis DeSousa	January 1996	Mr. DeSousa is a real estate investor.	None.
(1936)
Trustee

Robert T. Doyle	January 1996	Mr. Doyle has been the Sheriff of	None.
(1947)		Marin County, California since 1996.
Trustee

Gerald P. Richardson	May 2004	Mr. Richardson is an independent	None.
(1945)		consultant in the securities industry.
Trustee

Brian Alexander	March 2015	Mr. Alexander has been employed	None.
(1981)		by Sutter Health Novato Community
Adviser to the Board		Hospital since 2012, first as an
		Assistant Administrator and then,
		beginning in 2013, as the Chief
		Administrative Officer. From 2011
		through 2012, Mr. Alexander was
		employed by Sutter Health West Bay
		Region as the Regional Director of
		Strategic Decision Support. Prior to
		that, in 2011, he served as the
		Director of Managed Care
		Contracting and also the Director of
		Compensation, Benefits, and
		Compliance for the Rehabilitation
		Institute of Chicago.

HENNESSY FUNDS

1-800-966-4354

			Other
			Directorships
			Held Outside
Name, (Year of Birth),			of Fund
and Position Held	Start Date	Principal Occupation(s)	Complex During
with the Trust	of Service	During Past Five Years	Past Five Years⁽¹⁾

Doug Franklin	March 2016	Mr. Franklin is a retired insurance	None.
(1964)		industry executive. From 1987
Adviser to the Board		through 2015, he was employed by
		the Allianz-Fireman’s Fund Insurance
		Company in various positions,
		including as its Chief Actuary and
		Chief Risk Officer.

Claire Knoles	December 2015	Ms. Knoles is a founder of Kiosk and	None.
(1974)		has served as its Chief Operating
Adviser to the Board		Officer since 2004. Kiosk is a full
		service marketing agency with
		offices in the San Francisco Bay
		Area, Toronto, and Liverpool, UK.

Interested Trustee⁽²⁾

Neil J. Hennessy	January 1996 as	Mr. Hennessy has been employed by	Hennessy
(1956)	a Trustee and	Hennessy Advisors, Inc. since 1989	Advisors, Inc.
Trustee, Chairman of	June 2008 as	and currently serves as its President,
the Board, Chief	an Officer	Chairman and Chief Executive Officer.
Investment Officer,
Portfolio Manager,
and President

Name, (Year of Birth),
and Position Held	Start Date	Principal Occupation(s)
with the Trust	of Service	During Past Five Years

Officers

Teresa M. Nilsen	January 1996	Ms. Nilsen has been employed by Hennessy Advisors, Inc.
(1966)		since 1989 and currently serves as its Executive Vice President,
Executive Vice President		Chief Operations Officer, Chief Financial Officer, and Secretary.
and Treasurer

Daniel B. Steadman	March 2000	Mr. Steadman has been employed by Hennessy Advisors, Inc.
(1956)		since 2000 and currently serves as its Executive Vice President
Executive Vice President		and Chief Compliance Officer.
and Secretary

Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)		as its General Counsel since June 2013. She previously served
Senior Vice President and		as in-house counsel to Carlson Capital, L.P., an SEC-registered
Chief Compliance Officer		investment advisor to several private funds, from
		February 2010 to May 2013.

Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013. Mr. Carlson was previously a co-founder
Senior Vice President and		and principal of Trivium Consultants, LLC from February 2011
Head of Distribution		through November 2013.

HENNESSYFUNDS.COM

TRUSTEES AND OFFICERS OF THE FUND

Name, (Year of Birth),
and Position Held	Start Date	Principal Occupation(s)
with the Trust	of Service	During Past Five Years

David Ellison	October 2012	Mr. Ellison has been employed by Hennessy Advisors, Inc. since
(1958)⁽³⁾		October 2012. He has served as a Portfolio Manager of the
Senior Vice President and		Hennessy Small Cap Financial Fund, the Hennessy Large Cap
Portfolio Manager		Financial Fund, and the Hennessy Technology Fund since
		inception. Prior to that, Mr. Ellison served as Director, CIO and
		President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.

Brian Peery	March 2003 as	Mr. Peery has been employed by Hennessy Advisors, Inc. since
(1969)	an Officer and	2002. He has served as a Portfolio Manager of the Hennessy
Senior Vice President and	February 2011	Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
Portfolio Manager	as a Co-Portfolio	30 Fund, the Hennessy Cornerstone Large Growth Fund, the
	Manager or	Hennessy Cornerstone Value Fund, the Hennessy Total Return
	Portfolio Manager	Fund, and the Hennessy Balanced Fund since October 2014.
		He served as Co-Portfolio Manager of the same funds from
		February 2011 through September 2014. Mr. Peery has also
		served as a Portfolio Manager of the Hennessy Gas Utility Fund
		since February 2015.

Winsor (Skip) Aylesworth	October 2012	Mr. Aylesworth has been employed by Hennessy Advisors, Inc.
(1947)⁽³⁾		since October 2012. He has served as a Portfolio Manager of
Vice President and		the Hennessy Gas Utility Fund since 1998 and as a Portfolio
Portfolio Manager		Manager of the Hennessy Technology Fund since inception.
		Prior to that, Mr. Aylesworth served as Executive Vice President
		of FBR Fund Advisers, Inc. from 1999 to October 2012.

Ryan Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)⁽⁴⁾		October 2012. He has served as a Portfolio Manager of the
Vice President and		Hennessy Gas Utility Fund, the Hennessy Small Cap Financial
Portfolio Manager		Fund, and the Hennessy Large Cap Financial Fund since
		October 2014. He served as Co-Portfolio Manager of the same
		funds from March 2013 through September 2014, and as a
		Portfolio Analyst for the Hennessy Funds from October 2012
		through February 2013. Prior to that, Mr. Kelley served as
		Portfolio Manager of FBR Fund Advisers, Inc. from
		January 2008 to October 2012.

_______________

⁽¹⁾	Messrs. DeSousa, Doyle, Hennessy, and Richardson previously served on the Board of Directors of Hennessy Mutual Funds, Inc. (“HMFI”), The Hennessy Funds, Inc. (“HFI”), and Hennessy SPARX Funds Trust (“HSFT”). Pursuant to an internal reorganization effective as of February 28, 2014, the series of HFMI, HFI, and HSFT were reorganized into corresponding series of Hennessy Funds Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
⁽²⁾	Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Hennessy Funds.
⁽³⁾	The address of these officers is 101 Federal Street, Suite 1900, Boston, MA 02110.
⁽⁴⁾	The address of this officer is 1340 Environ Way, Suite 305, Chapel Hill, NC 27517.

HENNESSY FUNDS

1-800-966-4354

Expense Example (Unaudited)

October 31, 2016

Actual Expenses

Hypothetical Example for Comparison Purposes

HENNESSYFUNDS.COM

EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period⁽¹⁾
	Account Value	Account Value	May 1, 2016 –
	May 1, 2016	October 31, 2016	October 31, 2016
Investor Class
Actual	$1,000.00	$ 998.60	$19.94
Hypothetical (5% return before expenses)	$1,000.00	$1,005.18	$20.01

Institutional Class
Actual	$1,000.00	$1,001.60	$17.81
Hypothetical (5% return before expenses)	$1,000.00	$1,007.34	$17.86

⁽¹⁾	Expenses are equal to the Fund’s annualized expense ratio of 3.97% for Investor Class shares or 3.54% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/366 days (to reflect one-half year period).

HENNESSY FUNDS

1-800-966-4354

How to Obtain a Copy of the Fund’s

Proxy Voting Policy and Proxy Voting Records

Quarterly Filings on Form N-Q

Federal Tax Distribution Information

(Unaudited)

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for the fiscal year ended October 31, 2016, was 58.09%.

Householding

HENNESSYFUNDS.COM

PROXY VOTING — PRIVACY POLICY

We collect the following non-public personal information about you:

	•	information we receive from you on or in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income, and date of birth; and

	•	information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payment history, parties to transactions, cost basis information, and other financial information.

HENNESSY FUNDS

1-800-966-4354

For information, questions or assistance, please call

The Hennessy Funds

1-800-966-4354 or 1-415-899-1555

INVESTMENT ADVISOR

Hennessy Advisors, Inc.

7250 Redwood Blvd., Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Dr., Suite 302

Milwaukee, Wisconsin 53212

TRUSTEES

Neil J. Hennessy

Robert T. Doyle

J. Dennis DeSousa

Gerald P. Richardson

COUNSEL

Foley & Lardner LLP

777 East Wisconsin Avenue

Milwaukee, Wisconsin 53202-5306

INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

Tait, Weller & Baker LLP

1818 Market Street, Suite 2400

Philadelphia, Pennsylvania 19103

DISTRIBUTOR

Quasar Distributors, LLC

615 East Michigan Street

Milwaukee, Wisconsin 53202

hennessyfunds.com | 1-800-966-4354

This report has been prepared for shareholders and may be distributed to

others only if preceded or accompanied by a current prospectus.

	One	Five	Ten
	Year	Years	Years
Hennessy Focus Fund –
Investor Class (HFCSX)	-1.63%	13.64%	8.93%
Hennessy Focus Fund –
Institutional Class (HFCIX)⁽¹⁾	-1.27%	14.01%	9.24%
Russell 3000^® Index	4.24%	13.35%	6.76%
Russell Mid Cap^® Growth Index	0.40%	12.02%	7.65%

TOP TEN HOLDINGS (EXCLUDING CASH/CASH EQUIVALENTS)	% NET ASSETS

American Tower Corp., Class A	10.50%

O’Reilly Automotive, Inc.	9.32%

Markel Corp.	7.91%

Brookfield Asset Management, Inc.	6.65%

CarMax, Inc.	6.18%

Aon PLC	5.46%

The Charles Schwab Corp.	5.34%

Hexcel Corp.	4.93%

Gaming and Leisure Properties, Inc.	4.28%

Twenty First Century Fox, Inc.	4.21%

COMMON STOCKS – 63.59%	Number				% of
	of Shares		Value		Net Assets
Consumer Discretionary – 20.36%
CarMax, Inc. (a)		2,962,712	$	147,957,837		6.18	%
O’Reilly Automotive, Inc. (a)		842,815		222,873,999		9.32	%
Penn National Gaming, Inc. (a)		1,197,772		15,487,192		0.65	%
Twenty First Century Fox, Inc.		3,837,592		100,813,542		4.21	%
				487,132,570		20.36	%

Energy – 2.60%
World Fuel Services Corp.		1,547,585		62,290,296		2.60	%

Financials – 22.43%
Aon PLC (b)		1,179,036		130,672,560		5.46	%
Diamond Hill Investment Group, Inc.		145,893		26,553,985		1.11	%
Encore Capital Group, Inc. (a) (d)		2,258,784		44,836,862		1.87	%
Markel Corp. (a)		215,672		189,237,083		7.91	%
Marlin Business Services Corp. (d)		1,010,273		17,679,777		0.74	%
The Charles Schwab Corp.		4,029,065		127,721,361		5.34	%
				536,701,628		22.43	%

Health Care – 1.74%
Henry Schein, Inc. (a)		279,398		41,686,181		1.74	%

Industrials – 10.58%
American Woodmark Corp. (a) (d)		1,209,780		90,370,566		3.78	%
Ametek, Inc.		459,822		20,278,150		0.85	%
Hexcel Corp.		2,592,037		117,911,763		4.93	%
Mistras Group, Inc. (a)		1,171,870		24,538,958		1.02	%
				253,099,437		10.58	%

Information Technology – 5.88%
Alphabet, Inc., Class A (a)		68,984		55,870,142		2.34	%
Alphabet, Inc., Class C (a)		108,017		84,743,657		3.54	%
				140,613,799		5.88	%

Total Common Stocks
(Cost $904,303,452)				1,521,523,911		63.59	%

REITS – 21.44%	Number					% of
	of Shares		Value			Net Assets
Financials – 21.44%
American Tower Corp., Class A		2,145,080	$	251,381,925			10.51	%
Brookfield Asset Management, Inc. (b)		4,543,328		159,107,347			6.65	%
Gaming and Leisure Properties, Inc.		3,122,341		102,506,455			4.28	%
				512,995,727			21.44	%

Total REITS
(Cost $324,420,323)				512,995,727			21.44	%

SHORT-TERM INVESTMENTS – 15.11%

Money Market Funds – 15.11%
Fidelity Government Portfolio, Institutional Class, 0.27% (c)		119,705,000		119,705,000			5.01	%
First American Government Obligations Fund, 0.24% (c)		2,339,306		2,339,306			0.10	%
The Government & Agency Portfolio, Institutional Class, 0.29% (c)		119,705,000		119,705,000			5.00	%
Morgan Stanley Institutional Liquidity Fund –
Government Portfolio, 0.30% (c)		119,705,000		119,705,000			5.00	%
				361,454,306			15.11	%

Total Short-Term Investments
(Cost $361,454,306)				361,454,306			15.11	%

Total Investments
(Cost $1,590,178,081) – 100.14%				2,395,973,944			100.14	%
Liabilities in Excess of Other Assets – (0.14)%				(3,442,456	)		(0.14	)%

TOTAL NET ASSETS – 100.00%			$	2,392,531,488			100.00	%

	American		Encore Capital		Marlin Business
Issuer	Woodmark Corp.		Group, Inc.		Services Corp.
Beginning Cost	$	32,425,960	$	72,792,945	$	15,865,289
Purchase Cost	$	19,466,818	$	732,458		—
Sales Cost		—		—		—
Ending Cost	$	51,892,778	$	73,525,403	$	15,865,289
Dividend Income		—		—	$	565,753
Shares		1,209,780		2,258,784		1,010,273
Market Value	$	90,370,566	$	44,836,862	$	17,679,777

ASSETS:
Investments in securities, at value (cost $1,448,894,611)	$	2,243,086,739
Investments in affiliated securities, at value (cost $141,283,470)		152,887,205
Total Investments in securities, at value (cost $1,590,178,081)		2,395,973,944
Dividends and interest receivable		763,395
Receivable for fund shares sold		2,747,797
Prepaid expenses and other assets		89,921
Total Assets		2,399,575,057

LIABILITIES:
Payable for fund shares redeemed		3,900,537
Payable to advisor		1,853,205
Payable to administrator		398,595
Payable to auditor		20,699
Accrued distribution fees		305,646
Accrued service fees		140,290
Accrued trustees fees		3,896
Accrued expenses and other payables		420,701
Total Liabilities		7,043,569
NET ASSETS	$	2,392,531,488

NET ASSETS CONSIST OF:
Capital stock	$	1,602,944,656
Accumulated net investment loss		(10,118,034	)
Accumulated net realized loss on investments		(6,090,997	)
Unrealized net appreciation on investments		805,795,863
Total Net Assets	$	2,392,531,488

NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	1,626,709,875
Shares issued and outstanding		23,029,973
Net asset value, offering price and redemption price per share	$	70.63

Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	765,821,613
Shares issued and outstanding		10,610,944
Net asset value, offering price and redemption price per share	$	72.17

INVESTMENT INCOME:
Dividend income⁽¹⁾	$	17,557,919
Dividend income from affiliated securities		565,753
Interest income		718,429
Total investment income		18,842,101

EXPENSES:
Investment advisory fees (See Note 5)		20,616,778
Sub-transfer agent expenses – Investor Class (See Note 5)		3,349,325
Sub-transfer agent expenses – Institutional Class (See Note 5)		548,698
Distribution fees – Investor Class (See Note 5)		2,439,835
Administration, fund accounting, custody and transfer agent fees (See Note 5)		2,232,718
Service fees – Investor Class (See Note 5)		1,626,556
Reports to shareholders		150,078
Federal and state registration fees		87,138
Compliance expense (See Note 5)		23,709
Trustees’ fees and expenses		22,538
Legal fees		22,070
Audit fees		20,697
Other expenses		149,203
Total expenses		31,289,343
NET INVESTMENT LOSS	$	(12,447,242	)

REALIZED AND UNREALIZED LOSSES:
Net realized loss on investments	$	(5,426,283	)
Net change in unrealized appreciation on investments		(13,249,337	)
Net loss on investments		(18,675,620	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(31,122,862	)

⁽¹⁾	Amount is less than $0.01.
⁽²⁾	Portfolio turnover is calculated on the basis of the Fund as a whole.

Cost of investments for tax purposes	$	1,590,178,081
Gross tax unrealized appreciation	$	869,999,821
Gross tax unrealized depreciation		(64,203,958	)
Net tax unrealized appreciation	$	805,795,863
Undistributed ordinary income	$	—
Undistributed long-term capital gains		—
Total distributable earnings	$	—
Other accumulated loss	$	(16,209,031	)
Total accumulated gain	$	789,586,832

COMMON STOCKS – 99.72%	Number				% of
	of Shares		Value		Net Assets
Consumer Discretionary – 33.66%
AutoNation, Inc. (a)		510,500	$	22,395,635		1.81	%
Big Lots, Inc.		204,800		8,888,320		0.72	%
Boyd Gaming Corp. (a)		1,584,600		28,300,956		2.28	%
Express, Inc. (a)		1,662,900		19,988,058		1.61	%
GameStop Corp., Class A		700,400		16,844,620		1.36	%
JC Penney Co., Inc. (a)		3,597,600		30,903,384		2.49	%
Lear Corp.		256,000		31,431,680		2.53	%
Lennar Corp.		642,500		26,785,825		2.16	%
Lithia Motors, Inc., Class A		275,418		23,625,356		1.91	%
Mohawk Industries, Inc. (a)		13,400		2,469,620		0.20	%
NVR, Inc. (a)		19,614		29,872,122		2.41	%
Pool Corp.		395,000		36,569,100		2.95	%
Ross Stores, Inc.		264,600		16,548,084		1.33	%
Sinclair Broadcast Group Inc.		1,032,600		25,918,260		2.09	%
The Goodyear Tire & Rubber Co.		965,700		28,034,271		2.26	%
The Interpublic Group of Companies, Inc.		1,969,779		44,103,352		3.56	%
Wayfair, Inc., Class A (a)		741,757		24,722,761		1.99	%
				417,401,404		33.66	%

Consumer Staples – 7.08%
Casey's General Stores, Inc.		295,900		33,433,741		2.70	%
CVS Health Corp.		119,690		10,065,929		0.81	%
Ingredion, Inc.		337,700		44,296,109		3.57	%
				87,795,779		7.08	%

Energy – 2.52%
Anadarko Petroleum Corp.		115,800		6,883,152		0.56	%
EOG Resources, Inc.		269,500		24,368,190		1.96	%
				31,251,342		2.52	%

Financials – 5.11%
AmTrust Financial Services, Inc.		955,000		25,202,450		2.03	%
Hanover Insurance Group, Inc.		375,200		28,586,488		2.31	%
Willis Towers Watson PLC (b)		75,800		9,543,220		0.77	%
				63,332,158		5.11	%

Health Care – 6.64%
Abbott Laboratories		122,100		4,791,204		0.39	%
Charles River Laboratories International, Inc. (a)		105,300		7,990,164		0.64	%

(a)	Non-income producing security.
(b)	U.S. traded security of a foreign corporation.
(c)	The rate listed is the fund's 7-day yield as of October 31, 2016.

ASSETS:
Investments in securities, at value (cost $1,051,526,353)	$	1,245,955,729
Dividends and interest receivable		282,563
Receivable for fund shares sold		831,788
Prepaid expenses and other assets		58,537
Total Assets		1,247,128,617

LIABILITIES:
Payable for fund shares redeemed		5,538,041
Payable to advisor		851,049
Payable to administrator		210,799
Payable to auditor		22,881
Accrued distribution fees		83,969
Accrued service fees		59,264
Accrued interest payable		1,780
Accrued trustees fees		3,898
Accrued expenses and other payables		240,285
Total Liabilities		7,011,966
NET ASSETS	$	1,240,116,651

NET ASSETS CONSIST OF:
Capital stock	$	1,300,283,246
Accumulated net investment loss		(1,670,147	)
Accumulated net realized gain on investments		4,701,455
Unrealized net appreciation on investments		(63,197,903	)
Total Net Assets	$	1,240,116,651

NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	485,147,576
Shares issued and outstanding		26,408,820
Net asset value, offering price and redemption price per share	$	18.37

Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	754,969,075
Shares issued and outstanding		40,167,581
Net asset value, offering price and redemption price per share	$	18.80

INVESTMENT INCOME:
Dividend income⁽¹⁾	$	11,472,235
Interest income		39,471
Total investment income		11,511,706

EXPENSES:
Investment advisory fees (See Note 5)		7,856,506
Sub-transfer agent expenses – Investor Class (See Note 5)		1,420,424
Sub-transfer agent expenses – Institutional Class (See Note 5)		391,620
Administration, fund accounting, custody and transfer agent fees (See Note 5)		1,034,908
Distribution fees – Investor Class (See Note 5)		963,758
Service fees – Investor Class (See Note 5)		642,505
Federal and state registration fees		152,884
Reports to shareholders		125,770
Audit fees		23,842
Compliance expense (See Note 5)		23,709
Trustees' fees and expenses		18,314
Interest expense (See Note 7)		14,025
Legal fees		12,786
Other expenses		54,880
Total expenses		12,735,931
NET INVESTMENT LOSS	$	(1,224,225	)

REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on investments	$	5,942,875
Net change in unrealized appreciation on investments		(104,787,882	)
Net loss on investments		(98,845,007	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(100,069,232	)

		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.

Cost of investments for tax purposes	$	1,054,679,591
Gross tax unrealized appreciation	$	277,332,537
Gross tax unrealized depreciation		(86,056,399	)
Net tax unrealized appreciation	$	191,276,138
Undistributed ordinary income	$	—
Undistributed long-term capital gains		7,854,693
Total distributable earnings	$	7,854,693
Other accumulated loss	$	(259,297,426	)
Total accumulated loss	$	(60,166,595	)

	Shares issued	Westport	Shares issued	Hennessy
	to Shareholders	Select Cap	to Shareholders	Mid Cap 30
Westport Fund	of Westport	Fund	of Westport	Fund	Combined	Tax Status
Net Assets	Fund	Net Assets	Select Cap Fund	Net Assets	Net Assets	of Transfer
$327,593,695⁽¹⁾	16,818,829	$106,936,284⁽²⁾	5,490,173	$944,525,090	$1,379,055,069	Non-taxable

⁽¹⁾	Includes accumulated realized losses and unrealized appreciation in the amounts of $24,482,976 and $179,647,207, respectively.
⁽²⁾	Includes accumulated realized losses and unrealized appreciation in the amounts of $49,229,674 and $77,980,073, respectively.

Net investment loss	$	(3,630,389	)
Net realized gain on investments	$	187,733,108
Net change in unrealized appreciation on investments	$	5,795,235
Net increase in net assets resulting from operations	$	189,897,954

*	The AGA Stock Index is a market capitalization-weighted index, consisting of member companies of the American Gas Association. Performance for the AGA Stock Index is provided monthly by the American Gas Association.
**	Member of the American Gas Association (AGA).

TOP TEN HOLDINGS (EXCLUDING CASH/CASH EQUIVALENTS)	% NET ASSETS

Dominion Resources, Inc.	5.04%

Sempra Energy	5.02%

National Grid PLC	4.97%

TransCanada Corp.	4.90%

Enbridge, Inc.	4.90%

Spectra Energy Corp.	4.90%

Kinder Morgan, Inc.	4.89%

PG&E Corp.	4.80%

Cheniere Energy, Inc.	4.74%

Atmos Energy Corp.	4.68%

COMMON STOCKS – 97.99%	Number				% of
	of Shares		Value		Net Assets
Energy – 26.03%
Cheniere Energy, Inc. (a)		1,830,617	$	69,014,261		4.74	%
Enbridge, Inc. (b)		1,651,432		71,292,319		4.90	%
EQT Corp.		374,532		24,719,112		1.70	%
Kinder Morgan, Inc.		3,480,601		71,108,678		4.89	%
Spectra Energy Corp.		1,704,555		71,267,445		4.90	%
TransCanada Corp. (b)		1,574,553		71,295,760		4.90	%
				378,697,575		26.03	%

Financials – 0.50%
Berkshire Hathaway, Inc., Class A (a)		34		7,333,800		0.50	%

Utilities – 71.46%
ALLETE, Inc.		2,200		134,838		0.01	%
Alliant Energy Corp.		146,308		5,567,019		0.38	%
Ameren Corp.		187,990		9,390,101		0.65	%
Atmos Energy Corp.		915,536		68,106,723		4.68	%
Avangrid, Inc.		117,800		4,642,498		0.32	%
Avista Corp.		104,472		4,325,141		0.30	%
Black Hills Corp.		84,459		5,223,789		0.36	%
Centerpoint Energy, Inc.		1,025,328		23,377,478		1.61	%
Chesapeake Utilities Corp.		103,658		6,639,295		0.46	%
CMS Energy Corp.		746,648		31,471,213		2.16	%
Consolidated Edison, Inc.		445,286		33,641,357		2.31	%
Corning Natural Gas Holding Corp.		21,064		452,876		0.03	%
Delta Natural Gas Company, Inc.		60,928		1,434,854		0.10	%
Dominion Resources, Inc.		974,446		73,278,339		5.04	%
DTE Energy Co.		294,754		28,299,332		1.95	%
Duke Energy Corp.		298,737		23,904,935		1.64	%
Entergy Corp.		12,300		906,264		0.06	%
Eversource Energy		281,475		15,498,014		1.07	%
Exelon Corp.		424,831		14,473,992		0.99	%
Gas Natural, Inc.		62,718		774,567		0.05	%
MDU Resources Group, Inc.		696,907		18,265,933		1.26	%
MGE Energy, Inc.		52,554		3,071,781		0.21	%
National Fuel Gas Co.		398,524		20,874,687		1.43	%
National Grid PLC – ADR (b)		1,105,558		72,325,604		4.97	%

SHORT-TERM INVESTMENTS – 1.21%	Number					% of
	of Shares		Value			Net Assets
Money Market Funds – 1.21%
Fidelity Government Portfolio, Institutional Class, 0.27% (c)		17,666,707	$	17,666,707			1.21	%

Total Short-Term Investments
(Cost $17,666,707)				17,666,707			1.21	%

Total Investments
(Cost $1,018,430,307) – 100.35%				1,459,985,838			100.35	%
Liabilities in Excess of Other Assets – (0.35)%				(5,060,407	)		(0.35	)%

TOTAL NET ASSETS – 100.00%			$	1,454,925,431			100.00	%

	forward rate. The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing of such contract is included in net realized gain or loss from foreign currency transactions. During the fiscal year ended October 31, 2016, the Fund did not enter into any forward contracts.

k).	Repurchase Agreements – The Fund may enter into repurchase agreements with member banks or security dealers of the Federal Reserve Board whom the investment advisor deems creditworthy. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates.

	Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. Provisions of the repurchase agreements ensure that the market value of the collateral, including accrued interest thereon, is sufficient to cover the repurchase amount in the event of default of the counterparty. If the counterparty defaults and the value of the collateral declines or if the counterparty enters an insolvency proceeding, realization of the collateral by the Fund may be delayed or limited. During the fiscal year ended October 31, 2016, the Fund did not enter into any repurchase agreements.

l).	New Accounting Pronouncements – In May 2015, the FASB issued ASU No. 2015-07 “Disclosure for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent).” The amendments in ASU No. 2015-07 remove the requirement to categorize within the fair value hierarchy investments measured at NAV and require the disclosure of sufficient information to reconcile the fair value of the remaining assets categorized within the fair value hierarchy to the financial statements. The amendments in ASU No. 2015-07 are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Management has reviewed the requirements and believes the adoption of ASU 2015-07 will not have a material impact on the Fund’s financial statements and related disclosures.

Cost of investments for tax purposes	$	1,105,247,006
Gross tax unrealized appreciation on investments	$	462,497,659
Gross tax unrealized depreciation on investments		(107,758,827	)
Net tax unrealized appreciation on investments	$	354,738,832
Net tax unrealized appreciation of foreign currency translation	$	1,298
Undistributed ordinary income	$	—
Undistributed long-term capital gains		19,805,168
Total distributable earnings	$	19,805,168
Other accumulated loss	$	—
Total accumulated gain	$	374,545,298

TOP TEN HOLDINGS (EXCLUDING CASH/CASH EQUIVALENTS)	% NET ASSETS

Hingham Institution for Savings	5.71%

Brookline Bancorp, Inc.	5.68%

Independent Bank Corp.	5.30%

Kearny Financial Corp. of Maryland	5.18%

Washington Federal, Inc.	5.02%

Eagle Bancorp, Inc.	4.81%

Flushing Financial Corp.	4.75%

Meridian Bancorp, Inc.	4.63%

PacWest Bancorp	4.31%

Clifton Bancorp, Inc.	4.24%

COMMON STOCKS – 92.54%	Number				% of
	of Shares		Value		Net Assets
Financials – 92.54%
BankUnited, Inc.		82,500	$	2,404,050		1.57	%
Banner Corp.		88,000		3,972,320		2.59	%
Beneficial Bancorp, Inc.		320,000		4,640,000		3.03	%
Brookline Bancorp, Inc.		680,000		8,704,000		5.68	%
Capstar Financial Holdings, Inc. (a)		180,000		3,060,000		2.00	%
Clifton Bancorp, Inc.		425,000		6,498,250		4.24	%
Eagle Bancorp, Inc. (a)		150,000		7,372,500		4.81	%
FCB Financial Holdings, Inc., Class A (a)		140,000		5,222,000		3.40	%
First BanCorp. (a) (b)		730,000		3,744,900		2.44	%
First Connecticut Bancorp, Inc.		257,483		4,570,323		2.98	%
Flushing Financial Corp.		340,000		7,282,800		4.75	%
Hingham Institution for Savings		61,000		8,750,450		5.71	%
Independent Bank Corp.		147,500		8,134,625		5.30	%
Kearny Financial Corp. of Maryland		570,000		7,951,500		5.18	%
Meridian Bancorp, Inc.		445,000		7,097,750		4.63	%
OceanFirst Financial Corp.		222,500		4,601,300		3.00	%
Opus Bank		80,000		1,604,000		1.05	%
PacWest Bancorp		152,500		6,616,975		4.31	%
Pinnacle Financial Partners, Inc.		27,500		1,419,000		0.92	%
Provident Financial Services, Inc.		270,000		6,126,300		3.99	%
ServisFirst Bancshares, Inc.		7,500		406,050		0.26	%
Texas Capital Bancshares, Inc. (a)		30,000		1,779,000		1.16	%
United Financial Bancorp, Inc.		370,000		5,442,700		3.55	%
Washington Federal, Inc.		282,500		7,698,125		5.02	%
Western Alliance Bancorp (a)		80,000		2,988,800		1.95	%
Wintrust Financial Corp.		85,000		4,585,750		2.99	%
WSFS Financial Corp.		97,500		3,417,375		2.23	%
Yadkin Financial Corp.		210,000		5,825,400		3.80	%

				141,916,243		92.54	%

Total Common Stocks
(Cost $118,518,615)				141,916,243		92.54	%

SHORT-TERM INVESTMENTS – 7.54%	Number					% of
	of Shares		Value			Net Assets
Money Market Funds – 7.54%
Fidelity Government Portfolio, Institutional Class, 0.27% (c)		7,639,000	$	7,639,000			4.98	%
The Government & Agency Portfolio, Institutional Class, 0.29% (c)		3,920,898		3,920,898			2.56	%

				11,559,898			7.54	%

Total Short-Term Investments
(Cost $11,559,898)				11,559,898			7.54	%

Total Investments
(Cost $130,078,513) – 100.08%				153,476,141			100.08	%
Liabilities in Excess
of Other Assets – (0.08)%				(117,209	)		(0.08	)%

TOTAL NET ASSETS – 100.00%			$	153,358,932			100.00	%

INVESTMENT INCOME:
Dividend income⁽¹⁾	$	3,904,376
Interest income		27,852
Total investment income		3,932,228

EXPENSES:
Investment advisory fees (See Note 5)		1,848,196
Sub-transfer agent expenses – Investor Class (See Note 5)		404,545
Sub-transfer agent expenses – Institutional Class (See Note 5)		21,875
Distribution fees – Investor Class (See Note 5)		273,787
Administration, fund accounting, custody and transfer agent fees (See Note 5)		200,492
Service fees – Investor Class (See Note 5)		182,525
Federal and state registration fees		37,444
Compliance expense (See Note 5)		23,709
Reports to shareholders		22,654
Audit fees		20,699
Trustees’ fees and expenses		15,946
Interest expense (See Note 7)		8,193
Legal fees		1,551
Other expenses		16,984
Total expenses		3,078,600
NET INVESTMENT INCOME	$	853,628

REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on investments	$	22,692,434
Net change in unrealized appreciation on investments		(20,515,915	)
Net gain on investments		2,176,519
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	3,030,147

⁽¹⁾	Calculated based on average shares outstanding method.
⁽²⁾	Amount is less than $0.01.
⁽³⁾	Portfolio turnover is calculated on the basis of the Fund as a whole.

Cost of investments for tax purposes	$	130,922,641
Gross tax unrealized appreciation	$	25,325,854
Gross tax unrealized depreciation		(2,772,354	)
Net tax unrealized appreciation	$	22,553,500
Undistributed ordinary income	$	492,304
Undistributed long-term capital gains		22,925,941
Total distributable earnings	$	23,418,245
Other accumulated loss	$	—
Total accumulated gain	$	45,971,745

COMMON STOCKS – 89.87%	Number				% of
	of Shares		Value		Net Assets
Financials – 76.03%
Bank of America Corp.		80,000	$	1,320,000		4.89	%
Berkshire Hathaway, Inc., Class B (a)		10,000		1,443,000		5.34	%
Capital One Financial Corp.		13,000		962,520		3.56	%
Citigroup, Inc.		17,000		835,550		3.09	%
Citizens Financial Group, Inc.		50,000		1,317,000		4.87	%
Comerica, Inc.		26,000		1,354,340		5.01	%
Fifth Third Bancorp		63,000		1,370,880		5.07	%
Huntington Bancshares, Inc.		80,000		848,000		3.14	%
JPMorgan Chase & Co.		15,000		1,038,900		3.85	%
KeyCorp		72,000		1,016,640		3.76	%
Morgan Stanley		20,000		671,400		2.48	%
Regions Financial Corp.		80,000		856,800		3.17	%
SunTrust Banks, Inc.		30,000		1,356,900		5.02	%
Synchrony Financial		37,000		1,057,830		3.92	%
The Bank of New York Mellon Corp.		12,500		540,875		2.00	%
The Goldman Sachs Group, Inc.		5,500		980,320		3.63	%
The PNC Financial Services Group, Inc.		15,000		1,434,000		5.31	%
U.S. Bancorp (c)		18,000		805,680		2.98	%
Wells Fargo & Co.		29,000		1,334,290		4.94	%
				20,544,925		76.03	%

Information Technology – 13.84%
MasterCard, Inc., Class A		9,000		963,180		3.57	%
PayPal Holdings, Inc. (a)		32,000		1,333,120		4.93	%
Visa, Inc., Class A		17,500		1,443,925		5.34	%
				3,740,225		13.84	%

Total Common Stocks
(Cost $21,669,253)				24,285,150		89.87	%

REITS – 4.89%

Financials – 4.89%
Public Storage		3,000		641,160		2.38	%
Ventas, Inc.		10,000		677,500		2.51	%
				1,318,660		4.89	%

Total REITS
(Cost $1,400,667)				1,318,660		4.89	%

SHORT-TERM INVESTMENTS – 4.78%	Number				% of
	of Shares		Value		Net Assets
Money Market Funds – 4.78%
Fidelity Government Portfolio, Institutional Class, 0.27% (b)		1,292,546	$	1,292,546		4.78	%

Total Short-Term Investments
(Cost $1,292,546)				1,292,546		4.78	%

Total Investments
(Cost $24,362,466) – 99.54%				26,896,356		99.54	%
Other Assets in Excess of Liabilities – 0.46%				125,147		0.46	%

TOTAL NET ASSETS – 100.00%			$	27,021,503		100.00	%

ASSETS:
Investments in securities, at value (cost $23,611,066)	$	26,090,676
Investments in affiliated securities, at value (cost $751,400)		805,680
Total Investments in securities, at value (cost $24,362,466)		26,896,356
Dividends and interest receivable		24,533
Receivable for fund shares sold		6,800
Receivable for securities sold		752,144
Prepaid expenses and other assets		13,290
Total Assets		27,693,123

LIABILITIES:
Payable for securities purchased		592,732
Payable for fund shares redeemed		946
Payable to advisor		20,625
Payable to administrator		4,646
Payable to auditor		20,699
Accrued distribution fees		716
Accrued service fees		2,263
Accrued trustees fees		3,897
Accrued expenses and other payables		25,096
Total Liabilities		671,620
NET ASSETS	$	27,021,503

NET ASSETS CONSIST OF:
Capital stock	$	27,508,992
Accumulated net investment income		188,556
Accumulated net realized loss on investments		(3,209,935	)
Unrealized net appreciation on investments		2,533,890
Total Net Assets	$	27,021,503

NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	26,674,296
Shares issued and outstanding		1,643,968
Net asset value, offering price and redemption price per share	$	16.23

Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	347,207
Shares issued and outstanding		21,352
Net asset value, offering price and redemption price per share	$	16.26

INVESTMENT INCOME:
Dividend income	$	1,290,058
Dividend income from affiliated securities		68,890
Interest income		15,914
Total investment income		1,374,862

EXPENSES:
Investment advisory fees (See Note 5)		678,056
Sub-transfer agent expenses – Investor Class (See Note 5)		177,895
Sub-transfer agent expenses – Institutional Class (See Note 5)		156
Distribution fees – Investor Class (See Note 5)		112,316
Service fees – Investor Class (See Note 5)		74,877
Administration, fund accounting, custody and transfer agent fees (See Note 5)		73,601
Federal and state registration fees		36,457
Compliance expense (See Note 5)		23,710
Audit fees		20,699
Trustees’ fees and expenses		15,387
Reports to shareholders		14,016
Interest expense (See Note 7)		12,373
Legal fees		1,073
Other expenses		9,274
Total expenses		1,249,890
NET INVESTMENT INCOME	$	124,972

REALIZED AND UNREALIZED LOSSES:
Net realized loss on:
Unaffiliated investments	$	(3,019,345	)
Affiliated investments		(13,695	)
Net change in unrealized appreciation on investments		(2,828,079	)
Net loss on investments		(5,861,119	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(5,736,147	)

	Year Ended			Period Ended
	October 31, 2016			October 31, 2015⁽¹⁾
PER SHARE DATA:
Net asset value, beginning of year	$	18.39		$	19.72

Income from investment operations:
Net investment income		0.02			0.01
Net realized and unrealized losses on investments		(0.36	)		(1.34	)
Total from investment operations		(0.34	)		(1.33	)

Less distributions:
Dividends from net investment income		(0.09	)		—
Dividends from net realized gains		(1.70	)		—
Total distributions		(1.79	)		—
Net asset value, end of year	$	16.26		$	18.39

TOTAL RETURN		(2.14	)%		(6.74	)%⁽²⁾

SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of year (millions)	$	0.35		$	0.29
Ratio of expenses to average net assets		1.24	%		1.19	%⁽³⁾
Ratio of net investment income to average net assets		0.52	%		0.25	%⁽³⁾
Portfolio turnover rate⁽⁴⁾		141	%		74	%⁽²⁾