N-CSR

As filed with the Securities and Exchange Commission on January 9, 2019

UNITED STATESSECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number (811-07168)

Hennessy Funds Trust (Exact name of registrant as specified in charter)

7250 Redwood Blvd., Suite 200

Novato, CA 94945 (Address of principal executive offices) (Zip code)

Neil J. Hennessy

7250 Redwood Blvd., Suite 200

Novato, CA 94945 (Name and address of agent for service)

800-966-4354

Registrant’s telephone number, including area code

Date of fiscal year end: October 31, 2018

Date of reporting period: October 31, 2018

Item 1. Reports to Stockholders.

ANNUAL REPORT

OCTOBER 31, 2018

HENNESSY CORNERSTONE

GROWTH FUND

Investor Class  HFCGX

Institutional Class  HICGX

hennessyfunds.com  |  1-800-966-4354

(This Page Intentionally Left Blank.)

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 Policy and Proxy Voting Records	34
Quarterly Schedule of Investments	34
Important Notice Regarding Delivery of Shareholder Documents	34
Privacy Policy	35

HENNESSY FUNDS 1-800-966-4354

December 2018

Dear Hennessy Funds Shareholder:

Over the past year, we have witnessed the return of market volatility. U.S. stocks still registered healthy gains, bolstered by the impact on corporate profits of the successful passage of the tax reform bill in December 2017. However, concerns over potential trade disruptions, especially between the U.S. and China, and worries over higher short-term interest rates, which many believe could possibly trigger a recession down the road, put downward pressure on equity valuations.

The U.S. economy performed well over the period, and actually achieved an acceleration in GDP growth to over 3% on an annualized basis in the second and third quarters of calendar year 2018. During the past year, companies continued to hire workers, adding over 200,000 jobs per month on average, sending the unemployment rate down to 3.7% in October, which is the lowest it has been since 1969. Consumer confidence is high and still rising, and corporate profits reached record levels in the third quarter of calendar year 2018, posting a year-over-year increase of 26% for the companies in the S&P 500 Index.

The Federal Reserve, confident about the strength of the economy and mindful of a tight labor market, raised short-term interest rates four times over the last year, by a quarter point each time. Long-term bond yields also rose, driven higher primarily by evidence of faster wage growth, pushing the U.S. 10-year Treasury bond over 3% for the first time since 2013.

As I write this, we are experiencing the market’s 20th downturn since 2010. I have been saying that every bull market experiences volatility and pullbacks. Many financial commentators think this bull market is “long in the tooth.” I do not agree with them. I believe stock valuations are still very reasonable. The prospective price to earnings multiple for the Dow Jones Industrial Average has come down from almost 20x at the end of 2017 to 16x, just above its 10-year average of 15x. The prospective PE multiple for the S&P 500 Index has also come down, from 20x to 17x, and compares favorably to its 10-year average of 16x.

Cash, meanwhile, continues to build up on corporate balance sheets. The companies in the S&P 500 Index reported a total of over $5.4 trillion in cash and marketable securities in their latest filings. Companies have been spending some of their cash, increasing their investment spending and laying the groundwork for future earnings growth. However, they have also been returning capital to shareholders. S&P 500 Index companies announced $433.6 billion in share repurchases during the second quarter of calendar year 2018, nearly doubling the previous record of $242.1 billion set in the first quarter. Companies are also raising their dividends.

In addition, I believe the Federal Reserve will take care not to raise interest rates too high or too fast and endanger the economic expansion. While wage growth has risen to over 3% in October, other measures of inflationary pressure, such as the Consumer Price Index and the Producer Price Index, still show prices increasing at a more moderate pace, closer to 2%. Given continued evidence of modest rates of inflation, I believe the Fed will be able to maintain its gradual pace of interest rate hikes.

Finally and importantly, I still see no signs of euphoria in this market. In my opinion, the enthusiasm present earlier in the year, which followed the significant reduction in corporate income tax rates, has largely evaporated, and it has been replaced with anxiety

HENNESSYFUNDS.COM

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LETTER TO SHAREHOLDERS

over higher interest rates and their potential impact on growth. In the past, I have likened the current bull market to that of 1982-2000, and I still believe this comparison holds true. I am confident in the strength of the market today and believe the economy will continue to grow in the coming year, albeit at a more moderate pace.

Thank you for your continued confidence and investment in the Hennessy 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 commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is a valuation measure and is calculated by dividing a company’s market price per share by its earnings per share. Earnings growth is not a measure of a fund’s future performance.

HENNESSY FUNDS 1-800-966-4354

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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, 2018

	One	Five	Ten
	Year	Years	Years
Hennessy Cornerstone Growth Fund –
Investor Class (HFCGX)	-8.24%	7.24%	9.69%
Hennessy Cornerstone Growth Fund –
Institutional Class (HICGX)	-7.93%	7.55%	10.03%
Russell 2000® Index	1.85%	8.01%	12.44%
S&P 500 Index	7.35%	11.34%	13.24%

Expense ratios:  1.30% (Investor Class); 0.97% (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 table does 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 www.hennessyfunds.com.

The Russell 2000^® Index is commonly used to measure the performance of U.S. small-capitalization stocks. The S&P 500 Index is commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes or Russell ratings or underlying data and no party may rely on any Russell Indexes or Russell ratings or underlying data contained in this communication. No further distribution of Russell data is permitted without Russell’s express written consent. Russell does not promote, sponsor, or endorse the content of this communication.

The expense ratios presented are from the most recent prospectus. The expense ratios for the current reporting period are available in the Financial Highlights section of this report.

HENNESSYFUNDS.COM

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PERFORMANCE OVERVIEW

PERFORMANCE NARRATIVE

Portfolio Managers Neil J. Hennessy and Ryan C. Kelley

Performance:

For the 12-month period ended October 31, 2018, the Investor Class of the Hennessy Cornerstone Growth Fund returned -8.24%, underperforming the Russell 2000^® Index (the Fund’s primary benchmark) and the S&P 500 Index, which returned 1.85% and 7.35%, respectively, for the same period.

The Fund’s underperformance relative to its primary benchmark can be attributed predominantly to stock selection, particularly in the Consumer Discretionary and Information Technology sectors. Scientific Games Corp., Vipshop Holdings, Ltd., and Tailored Brands, Inc. were among the holdings that detracted most from relative performance in the Consumer Discretionary sector. In the Information Technology sector, two electronic component manufacturers, KEMET Corp. and Smart Global Holdings, Inc., and technology hardware and service provider Insight Enterprises, Inc. performed poorly, detracting from relative performance. Paper manufacturer Verso Corp., logistics provider XPO Logistics, Inc., and business service provider Insperity, Inc. were strong performers over the period and contributed positively to the Fund’s return.

The Fund no longer holds any of the companies mentioned with the exception of Verso Corp., XPO Logistics, Inc., and Insperity, Inc.

Portfolio Strategy:

The Fund utilizes a quantitative approach in building a portfolio of attractively valued, growing companies whose stock prices are exhibiting strong price momentum. In essence, the strategy seeks to combine elements of both value and momentum investing by selecting 50 stocks that have relatively low price-to-sales ratios, have generated increased earnings over the past year, and have positive stock price appreciation over the past three- and six-month periods.

Investment Commentary:

We continue to believe that the outlook for small-cap and mid-cap stocks is positive. The U.S. economy is growing at a healthy rate, unemployment is low, and growth in both consumption and capital spending has accelerated over the last 12 months. Corporate earnings have risen significantly over the first nine months of 2018, helped, in part, by lower taxes. We expect earnings growth to be slower next year yet remain positive, driven primarily by continued steady economic growth.

There are three primary industry groups where the Fund currently maintains overweight positions: Materials, Retailing, and Consumer Durables & Apparel. Many consumer and retailing companies have been benefiting from strong employment growth and continued increases in consumer spending and, therefore, have seen their earnings and stock prices rise over the last year. As a result, the Fund owns stock in some of these companies, including Burlington Stores, Inc., Kohl’s Corp., and Callaway Golf Co. Materials companies have also been benefiting from strong economic growth and an upturn in capital spending in the United States. As a result, Verso Corp. and other holdings from the Materials industry group have been reporting solid growth in earnings and have seen their stock prices perform well.

_______________

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.

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The Fund invests in small-capitalization and medium-capitalization 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 valuation measure calculated by dividing a company’s market price per share by its revenue per share.

HENNESSYFUNDS.COM

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PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as ofOctober 31, 2018

HENNESSY CORNERSTONE GROWTH FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)	% NET ASSETS
CVR Energy, Inc.	3.96%
Insperity, Inc.	3.13%
Verso Corp.	2.98%
Crocs, Inc.	2.84%
Boot Barn Holdings, Inc.	2.70%
Burlington Stores, Inc.	2.63%
Callaway Golf Co.	2.54%
Centene Corp.	2.42%
CBIZ, Inc.	2.29%
Progressive Corp.	2.26%

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.

The Global Industry Classification Standard (GICS^®) was developed by and is the exclusive property and a service mark of MSCI, Inc. and Standard & Poor Financial Services LLC.  It has been licensed for use by the Hennessy Funds.

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COMMON STOCKS – 95.23%	Number				% of
	of Shares		Value		Net Assets
Communication Services – 2.05%
Live Nation Entertainment, Inc. (a)		70,400	$	3,681,920		2.05	%
Consumer Discretionary – 27.07%
Best Buy Co., Inc.		47,100		3,304,536		1.84	%
BJ’s Restaurants, Inc.		49,000		2,997,820		1.67	%
Boot Barn Holdings, Inc. (a)		196,300		4,844,684		2.70	%
Burlington Stores, Inc. (a)		27,500		4,715,975		2.63	%
Callaway Golf Co.		213,400		4,566,760		2.54	%
Crocs, Inc. (a)		247,800		5,089,812		2.84	%
KB Home		109,000		2,176,730		1.21	%
Kohl’s Corp.		52,500		3,975,825		2.21	%
Lear Corp.		17,400		2,312,460		1.29	%
Noodles & Co. (a)		281,200		2,651,716		1.48	%
Penn National Gaming, Inc. (a)		122,700		2,979,156		1.66	%
Regis Corp. (a)		202,700		3,413,468		1.90	%
Restoration Hardware Holdings, Inc. (a)		24,300		2,811,753		1.57	%
Turtle Beach Corp. (a)		154,800		2,747,700		1.53	%
				48,588,395		27.07	%
Consumer Staples – 7.23%
Nomad Foods Ltd. (a) (b)		197,700		3,776,070		2.10	%
Pyxus International, Inc. (a)		86,500		2,053,510		1.15	%
Sprouts Farmers Market, Inc. (a)		127,600		3,431,164		1.91	%
The Chefs’ Warehouse, Inc. (a)		110,400		3,712,752		2.07	%
				12,973,496		7.23	%
Energy – 9.46%
CVR Energy, Inc.		165,226		7,104,718		3.96	%
HollyFrontier Corp.		54,900		3,702,456		2.06	%
Legacy Reserves, Inc. (a)		580,600		2,444,326		1.36	%
Renewable Energy Group, Inc. (a)		119,800		3,723,384		2.08	%
				16,974,884		9.46	%
Financials – 8.62%
EZCORP, Inc., Class A (a)		252,500		2,509,850		1.40	%
LPL Financial Holdings, Inc.		52,700		3,246,320		1.81	%
PennyMac Financial Services, Inc., Class A		136,000		2,718,640		1.51	%
Progressive Corp.		58,300		4,063,510		2.26	%
The Carlyle Group LP		144,900		2,937,123		1.64	%
				15,475,443		8.62	%

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

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SCHEDULE OF INVESTMENTS

COMMON STOCKS	Number				% of
	of Shares		Value		Net Assets
Health Care – 12.21%
AMN Healthcare Services, Inc. (a)		58,600	$	2,966,332		1.65	%
Anthem, Inc.		14,400		3,968,208		2.21	%
Centene Corp. (a)		33,300		4,339,656		2.42	%
Endo International PLC (a)(b)		195,000		3,303,300		1.84	%
Providence Service Corp. (a)		52,400		3,463,116		1.93	%
UnitedHealth Group, Inc.		14,800		3,867,980		2.16	%
				21,908,592		12.21	%
Industrials – 14.03%
ArcBest Corp.		70,200		2,605,824		1.45	%
BlueLinx Holdings, Inc. (a)		82,900		1,952,295		1.09	%
CBIZ, Inc. (a)		185,700		4,118,826		2.29	%
CNH Industrial N.V. (b)		236,200		2,454,118		1.37	%
Insperity, Inc.		51,100		5,613,335		3.13	%
MasTec, Inc. (a)		65,800		2,862,958		1.59	%
SPX FLOW, Inc. (a)		70,300		2,406,369		1.34	%
XPO Logistics, Inc. (a)		35,500		3,172,990		1.77	%
				25,186,715		14.03	%
Information Technology – 5.96%
Comtech Telecommunications Corp.		142,500		3,978,600		2.21	%
Mantech International Corp., Class A		62,200		3,562,816		1.99	%
Unisys Corp. (a)		172,000		3,166,520		1.76	%
				10,707,936		5.96	%
Materials – 8.60%
Boise Cascade Co.		76,700		2,361,593		1.31	%
Constellium N.V., Class A (a)(b)		273,200		2,475,192		1.38	%
Huntsman Corp.		99,200		2,170,496		1.21	%
Verso Corp. (a)		190,100		5,343,711		2.98	%
Warrior Met Coal, Inc.		110,100		3,082,800		1.72	%
				15,433,792		8.60	%
Total Common Stocks
(Cost $168,247,369)				170,931,173		95.23	%

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

HENNESSY FUNDS 1-800-966-4354

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SHORT-TERM INVESTMENTS – 4.96%	Number					% of
	of Shares		Value			Net Assets
Money Market Funds – 4.96%
Fidelity Government Portfolio, Institutional Class, 2.06% (c)		8,908,236	$	8,908,236			4.96	%
Total Short-Term Investments
(Cost $8,908,236)				8,908,236			4.96	%
Total Investments
(Cost $177,155,605) – 100.19%				179,839,409			100.19	%
Liabilities in Excess of Other Assets – (0.19)%				(344,117	)		(0.19	)%
TOTAL NET ASSETS – 100.00%			$	179,495,292			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 seven-day yield as of October 31, 2018.

Summary of Fair Value Exposure at October 31, 2018

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2018 (See Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Communication Services	$	3,681,920	$	—	$	—	$	3,681,920
Consumer Discretionary		48,588,395		—		—		48,588,395
Consumer Staples		12,973,496		—		—		12,973,496
Energy		16,974,884		—		—		16,974,884
Financials		15,475,443		—		—		15,475,443
Health Care		21,908,592		—		—		21,908,592
Industrials		25,186,715		—		—		25,186,715
Information Technology		10,707,936		—		—		10,707,936
Materials		15,433,792		—		—		15,433,792
Total Common Stocks	$	170,931,173	$	—	$	—	$	170,931,173
Short-Term Investments
Money Market Funds	$	8,908,236	$	—	$	—	$	8,908,236
Total Short-Term Investments	$	8,908,236	$	—	$	—	$	8,908,236
Total Investments	$	179,839,409	$	—	$	—	$	179,839,409

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

HENNESSYFUNDS.COM

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SCHEDULE OF INVESTMENTS

Level 3 Reconciliation Disclosure

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

	Rights
Balance as of October 31, 2017	$	55
Accrued discounts/premiums		—
Realized gain (loss)		—
Change in unrealized appreciation (depreciation)*		(55	)
Purchases		—
Transfer in and/or out of Level 3		—
Balance as of October 31, 2018	$	—
Change in unrealized appreciation/depreciation during the period for
Level 3 investments held at October 31, 2018	$	—

* The rights were acquired in a past merger.  The fair value of the rights was determined under procedures established by the Board of Trustees.  The rights expired during the period and were removed from the Fund’s holdings on July 25, 2018.

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

HENNESSY FUNDS 1-800-966-4354

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Financial Statements

Statement of Assets and Liabilities as of October 31, 2018

ASSETS:
Investments in securities, at value (cost $177,155,605)	$	179,839,409
Dividends and interest receivable		23,616
Receivable for fund shares sold		7,122
Prepaid expenses and other assets		21,078
Total Assets		179,891,225
LIABILITIES:
Payable for fund shares redeemed		48,591
Payable to advisor		118,204
Payable to administrator		16,998
Payable to auditor		21,900
Accrued distribution fees		135,180
Accrued service fees		14,136
Accrued trustees fees		5,964
Accrued expenses and other payables		34,960
Total Liabilities		395,933
NET ASSETS	$	179,495,292
NET ASSETS CONSIST OF:
Capital stock	$	163,609,128
Total distributable earnings		15,886,164
Total Net Assets	$	179,495,292
NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	158,977,658
Shares issued and outstanding		7,170,178
Net asset value, offering price and redemption price per share	$	22.17
Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	20,517,634
Shares issued and outstanding		896,632
Net asset value, offering price and redemption price per share	$	22.88

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

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STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS

Financial Statements

Statement of Operations for the year ended October 31, 2018

INVESTMENT INCOME:
Dividend income	$	1,461,646
Interest income		81,106
Total investment income		1,542,752
EXPENSES:
Investment advisory fees (See Note 5)		1,542,181
Sub-transfer agent expenses – Investor Class (See Note 5)		270,596
Sub-transfer agent expenses – Institutional Class (See Note 5)		12,969
Distribution fees – Investor Class (See Note 5)		275,181
Administration, fund accounting, custody and transfer agent fees (See Note 5)		199,081
Service fees – Investor Class (See Note 5)		183,454
Federal and state registration fees		41,019
Compliance expense (See Note 5)		29,500
Audit fees		23,148
Reports to shareholders		23,203
Trustees’ fees and expenses		17,128
Legal fees		705
Interest expense (See Note 7)		355
Other expenses		14,570
Total expenses before recoupment from advisor		2,633,090
Expense recoupment by advisor – Institutional Class		1,024
Net expenses		2,634,114
NET INVESTMENT LOSS	$	(1,091,362	)
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on investments	$	15,676,800
Net change in unrealized appreciation/depreciation on investments		(30,685,707	)
Net loss on investments		(15,008,907	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(16,100,269	)

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, 2018			October 31, 2017
OPERATIONS:
Net investment loss	$	(1,091,362	)	$	(615,891	)
Net realized gain on investments		15,676,800			25,408,962
Net change in unrealized
appreciation/depreciation on investments		(30,685,707	)		26,412,588
Net increase (decrease) in net
assets resulting from operations		(16,100,269	)		51,205,659
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		2,945,262			5,154,765
Proceeds from shares subscribed – Institutional Class		1,645,129			6,572,602
Cost of shares redeemed – Investor Class		(26,887,338	)		(37,414,723	)
Cost of shares redeemed – Institutional Class		(10,968,680	)		(7,012,794	)
Net decrease in net assets derived
from capital share transactions		(33,265,627	)		(32,700,150	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		(49,365,896	)		18,505,509
NET ASSETS:
Beginning of year		228,861,188			210,355,679
End of year	$	179,495,292		$	228,861,188	(1)
CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		122,514			233,860
Shares sold – Institutional Class		65,421			279,691
Shares redeemed – Investor Class		(1,116,060	)		(1,795,884	)
Shares redeemed – Institutional Class		(442,363	)		(328,917	)
Net decrease in shares outstanding		(1,370,488	)		(1,611,250	)

⁽¹⁾ Includes accumulated net investment loss of $(796,849).

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

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.

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FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	24.16		$	18.98		$	20.00		$	18.68		$	15.65
	(0.17	)		(0.09	)		(0.02	)		0.06			(0.04	)
	(1.82	)		5.27			(0.98	)		1.26			3.07
	(1.99	)		5.18			(1.00	)		1.32			3.03
	—			—			(0.02	)		—			—
	—			—			(0.02	)		—			—
$	22.17		$	24.16		$	18.98		$	20.00		$	18.68
	(8.24	)%		27.29	%		(5.00	)%		7.07	%		19.36	%
$	158.98		$	197.22		$	184.61		$	248.74		$	227.68
	1.30	%		1.30	%		1.32	%		1.15	%		1.23	%
	(0.56	)%		(0.33	)%		(0.18	)%		0.30	%		(0.17	)%
	133	%		98	%		97	%		102	%		84	%

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

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17

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/recoupment

After expense reimbursement/recoupment

Ratio of net investment income to average net assets:

Before expense reimbursement/recoupment

After expense reimbursement/recoupment

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.

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FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	24.85		$	19.46		$	20.47		$	19.08		$	15.94
	0.11			0.01			0.17			0.03			0.06
	(2.08	)		5.38			(1.13	)		1.36			3.08
	(1.97	)		5.39			(0.96	)		1.39			3.14
	—			—			(0.05	)		—			—
	—			—			(0.05	)		—			—
$	22.88		$	24.85		$	19.46		$	20.47		$	19.08
	(7.93	)%		27.70	%		(4.69	)%		7.29	%		19.70	%
$	20.52		$	31.65		$	25.74		$	38.96		$	25.54
	0.96	%		0.97	%		0.98	%		0.99	%		1.03	%
	0.96	%		0.97	%		0.98	%		0.99	%		0.98	%
	(0.23	)%		(0.00	)%		0.14	%		0.51	%		0.03	%
	(0.23	)%		(0.00	)%		0.14	%		0.51	%		0.08	%
	133	%		98	%		97	%		102	%		84	%

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

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Financial Statements

Notes to the Financial Statements October 31, 2018

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 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 12b-1 distribution and service, shareholder servicing, and sub-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 to U.S. generally accepted accounting principles (“GAAP”).

a).	Securities 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 because 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/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book and tax basis differences. Temporary differences are primarily the result of the treatment of partnership income and wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
	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 fiscal year 2018 have been identified and appropriately reclassified in the Statement of Assets and Liabilities. The adjustments are as follows:

Total
Distributable
Earnings	Capital Stock
$(584,133)	$584,133

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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. Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and paid annually, usually in December.
f).	Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
g).	Use of Estimates – 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 (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by (ii) the total number of 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).	New Accounting Pronouncements – In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 does not eliminate the requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the changes in unrealized gains and losses for recurring Level 3 fair value measurements. ASU 2018-13 requires that information is provided about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has

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evaluated the impact of this change in guidance, and due to the permissibility of early adoption, modified the Fund’s fair value disclosures for the current reporting period.

j).

New Rule Issuances – In August 2018, the Securities and Exchange Commission issued Final Rule Release No. 33 10532, Disclosure Update and Simplification, which in part amends certain financial statement disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, GAAP, or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amendments to Rule 6-04.17 of Regulation S-X (balance sheet) were amended to require presentation of the total, rather than the components of net assets, of distributable earnings on the balance sheet. Consistent with GAAP, funds will be required to disclose total distributable earnings. The amendments to Rule 6-09 of Regulation S-X (statement of changes in net assets) omit the requirement to separately state the sources of distributions paid as well as omit the requirement to parenthetically state the book basis amount of undistributed net investment income. Instead, consistent with GAAP, funds will be required to disclose the total amount of distributions paid, except that any tax return of capital must be separately disclosed. The requirements of the Final Rule Release are effective November 5, 2018 and the Fund’s Statement of Assets and Liabilities and the Statement of Changes in Net Assets for the current and prior reporting period have been modified accordingly.

3).  SECURITIES VALUATION

The Fund follows 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 of 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 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

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NOTES TO THE FINANCIAL STATEMENTS

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 foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).

Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, are generally priced at the ending NAV provided by the applicable mutual fund’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.

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 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 values of other similar securities, and news events with direct bearing on 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

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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’ values as determined by the Board or its designee, pursuant to the fair value pricing procedures adopted by the Board, instead of being determined by the market. Using a fair value pricing methodology to price a foreign security may result in a value that is different from such foreign security’s most recent closing price and from the value used by other investment companies to calculate their NAVs. Such securities are generally classified in Level 2 of 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 “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 determinations. Various inputs are used to determine 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, 2018, are included in the Schedule of Investments.

4).  INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during fiscal year 2018 were $269,523,806 and $304,025,169, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during fiscal year 2018.

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. 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, as amended. During fiscal year 2018, the Fund did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940, as amended.

5).  INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

The Advisor provides the Fund with investment advisory services under an Investment Advisory Agreement. The Advisor furnishes all investment advice, office space, and facilities, as well as 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 an annual rate of 0.74%. The net investment advisory fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

In the past, the Advisor had contractually agreed to waive its fees and absorb expenses to the extent that total annual operating expenses exceeded 0.98% of the Fund’s

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NOTES TO THE FINANCIAL STATEMENTS

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. The Advisor recouped $1,024 from the Fund during fiscal year 2018.  There are no further recoverable amounts.

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 advisory 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. The shareholder service fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 is currently only using up to 0.15% of its average daily net assets attributable to Investor Class shares 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, printing and mailing of prospectuses to other than current shareholders, 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 distribution fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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. The sub-transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services (“Fund Services”) provides the Fund with administrative, fund accounting, and transfer agent services. As administrator, Fund Services 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. U.S. Bank N.A., an affiliate of Fund Services, serves as the Fund’s custodian. The servicing agreements between the Trust and Fund Services and U.S. Bank N.A. contain a fee schedule that is inclusive of administrative, fund accounting, custody, and transfer agent fees. The administrative, fund accounting, custody, and transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 Fund Services and U.S. Bank N.A.

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25

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. The compliance fees expensed by the Fund during fiscal year 2018 are included in 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 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 fiscal year 2018, the Fund had an outstanding average daily balance and a weighted average interest rate of $7,781 and 4.50%, respectively. The interest expensed by the Fund during fiscal year 2018 is included in the Statement of Operations. The maximum amount outstanding for the Fund during fiscal year 2018 was $838,000. As of October 31, 2018, the Fund did not have any borrowings outstanding under the line of credit.

8).  FEDERAL TAX INFORMATION

As of October 31, 2018, the components of accumulated earnings (losses) for income tax purposes were as follows:

	Investments
Cost of investments for tax purposes	$	177,241,031
Gross tax unrealized appreciation	$	19,606,515
Gross tax unrealized depreciation		(17,008,137	)
Net tax unrealized appreciation/(depreciation)	$	2,598,378
Undistributed ordinary income	$	—
Undistributed long-term capital gains		14,373,091
Total distributable earnings	$	14,373,091
Other accumulated gain/(loss)	$	(1,085,305	)
Total accumulated gain/(loss)	$	15,886,164

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 partnership adjustments and wash sales.

As of October 31, 2018, the Fund had no tax basis capital losses to offset future capital gains.

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NOTES TO THE FINANCIAL STATEMENTS

As of October 31, 2018, the Fund deferred, on a tax basis, a late-year ordinary loss of $1,085,305. Late-year ordinary losses are net ordinary losses incurred after December 31, 2017, but within the taxable year, that are deemed to arise on the first day of the Fund’s next taxable year.

During fiscal year 2018 and fiscal year 2017, the Fund did not pay any distributions.

9).  EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2018, 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, 2018, capital gains were declared and paid to shareholders of record on December 6, 2018, as follows:

	Long-term
Investor Class	$1.81640
Institutional Class	$1.87674

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Report of Independent Registered Public

Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the shareholders of Hennessy Cornerstone Growth Fund

Novato, CA

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Hennessy Cornerstone Growth Fund (the “Fund”), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

The financial highlights for each of the three years in the period ended October 31, 2016 have been audited by other auditors, whose report dated December 22, 2016 expressed unqualified opinions on such financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management.  Our responsibility is to express an opinion on the Fund’s financial statements based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We have served as the auditor of one or more of the funds in the Trust since 2002.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.  The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2018 by correspondence with the custodian.  We believe that our audits provide a reasonable basis for our opinion.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2018

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS

Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Funds 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 to the Board of Trustees (“Advisers”) 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: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board of Trustees 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 Trustee oversees the 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 worked for the	None.
(1981)		Sutter Health organization since
Adviser to the Board		2011 in various positions. He has
		served as the Chief Executive Officer
		of the Sutter Roseville Medical
		Center since 2018. From 2016 through
		2018, he served as the Vice President
		of Strategy for the Sutter Health Valley
		Area, which includes 11 hospitals,
		13 ambulatory surgery centers,
		16,000 employees, and 1,900 physicians.
		From 2013 through 2016, Mr. Alexander
		served as Sutter Novato Community
		Hospital’s Chief Administrative Officer,
		and from 2011 through 2012, he
		served as a Director of Strategy
		within Sutter’s West Bay Region.

HENNESSY FUNDS 1-800-966-4354

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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. Neil Hennessy has been employed	Hennessy
(1956)	a Trustee and	by Hennessy Advisors, Inc. since	Advisors, Inc.
Trustee, Chairman of	June 2008 as	1989 and currently serves as its
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 President, Chief Operating
Executive Vice President		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 Secretary
Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013 and currently serves as its Chief
Senior Vice President		Compliance Officer and Senior Vice President.
and Head of Distribution
Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)(3)		as its General Counsel since June 2013.
Senior Vice President and
Chief Compliance Officer

HENNESSYFUNDS.COM

30

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)(4)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Large Cap Financial Fund and the Hennessy Small
and Portfolio Manager		Cap Financial Fund since inception. Mr. Ellison also served as a
		Portfolio Manager of the Hennessy Technology Fund from its
		inception until February 2017. Mr. Ellison served as Director,
		CIO and President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.
Ryan C. Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)(5)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Gas Utility Fund, the Hennessy Large Cap Financial
and Portfolio Manager		Fund, and the Hennessy Small 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. Mr. Kelley has also served as a Portfolio
		Manager of the Hennessy Cornerstone Growth Fund, the
		Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
		Cornerstone Large Growth Fund, and the Hennessy
		Cornerstone Value Fund since February 2017, as a Co-Portfolio
		Manager of the Hennessy Technology Fund since February
		2017, and as a Portfolio Manager of the Hennessy Total Return
		Fund and the Hennessy Balanced Fund since May 2018.
		Mr. Kelley served as Portfolio Manager of FBR Fund Advisers,
		Inc. from January 2008 to October 2012.
Tania Kelley	October 2003	Ms. Kelley has been employed by Hennessy Advisors, Inc.
(1965)		since October 2003.
Senior Vice President
and Head of Marketing
Daniel P. Hennessy	December 2016	Mr. Daniel Hennessy has been employed by Hennessy Advisors,
(1990)		Inc. since 2015. He has served as an Associate Analyst or
Vice President		Analyst of the Hennessy Technology Fund since February 2017.
and Analyst		Mr. Daniel Hennessy previously served as a Mutual Fund
		Specialist at U.S. Bancorp Fund Services, LLC (now doing
		business as U.S. Bank Global Fund Services) from November
		2014 to July 2015. Prior to that, he attended the University of
		San Diego, where he earned a degree in Political Science.

_______________

(1)	Messrs. DeSousa, Doyle, N. 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 the Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
(2)	Mr. N. 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 this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
(4)	The address of this officer is 101 Federal Street, Suite 1900, Boston, MA 02110.
(5)	The address of this officer is 1340 Environ Way, Suite 332, Chapel Hill, NC 27517.

HENNESSY FUNDS 1-800-966-4354

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Expense Example (Unaudited)

October 31, 2018

As a shareholder of the Fund, you incur 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, 2018, through October 31, 2018.

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. Bank Global Fund Services, 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” or “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. 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.

HENNESSYFUNDS.COM

32

EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period(1)
	Account Value	Account Value	May 1, 2018 –
	May 1, 2018	October 31, 2018	October 31, 2018
Investor Class
Actual	$1,000.00	$   943.40	$6.40
Hypothetical (5% return before expenses)	$1,000.00	$1,018.62	$6.64
Institutional Class
Actual	$1,000.00	$   945.10	$4.71
Hypothetical (5% return before expenses)	$1,000.00	$1,020.37	$4.89

⁽¹⁾ Expenses are equal to the Fund’s annualized expense ratio of 1.31% for Investor Class shares or 0.96% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/365 days (to reflect one-half year period).

HENNESSY FUNDS 1-800-966-4354

33

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 www.hennessyfunds.com/proxy-voting/voting-policy; or (3) on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at www.hennessyfunds.com/proxy-voting/voting-record 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 a 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 Forms N-Q are available on the SEC’s website at www.sec.gov.  Information included in the Fund’s Forms N-Q will also be available upon request by calling 1-800-966-4354.

Important Notice Regarding Delivery

of Shareholder Documents

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of shareholder reports, proxy statements, and prospectuses to shareholders who share an address and have the same last name. This process does not apply to account statements. You may request an individual copy of a shareholder document at any time. If you would like to receive separate mailings of shareholder documents, please call U.S. Bank Global Fund Services at 1-800-261-6950 or 1-414-765-4124, and individual delivery will begin within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact such intermediary directly to request individual delivery.

HENNESSYFUNDS.COM

34

PROXY VOTING — PRIVACY POLICY

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 will be shared with non-affiliated third parties.

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35

(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 Boulevard, Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT, &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

d/b/a U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Drive, 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

Two Liberty Place

50 South 16th Street, Suite 2900

Philadelphia, Pennsylvania 19102-2529

DISTRIBUTOR

Quasar Distributors, LLC

777 East Wisconsin Avenue

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, 2018

HENNESSY FOCUS FUND

Investor Class  HFCSX

Institutional Class  HFCIX

hennessyfunds.com  |  1-800-966-4354

(This Page Intentionally Left Blank.)

Contents

Letter to Shareholders	2
Performance Overview	4
Financial Statements
Schedule of Investments	8
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 Policy and Proxy Voting Records	34
Quarterly Schedule of Investments	34
Federal Tax Distribution Information	34
Important Notice Regarding Delivery of Shareholder Documents	34
Privacy Policy	35

HENNESSY FUNDS 1-800-966-4354

December 2018

Dear Hennessy Funds Shareholder:

Over the past year, we have witnessed the return of market volatility. U.S. stocks still registered healthy gains, bolstered by the impact on corporate profits of the successful passage of the tax reform bill in December 2017. However, concerns over potential trade disruptions, especially between the U.S. and China, and worries over higher short-term interest rates, which many believe could possibly trigger a recession down the road, put downward pressure on equity valuations.

The U.S. economy performed well over the period, and actually achieved an acceleration in GDP growth to over 3% on an annualized basis in the second and third quarters of calendar year 2018. During the past year, companies continued to hire workers, adding over 200,000 jobs per month on average, sending the unemployment rate down to 3.7% in October, which is the lowest it has been since 1969. Consumer confidence is high and still rising, and corporate profits reached record levels in the third quarter of calendar year 2018, posting a year-over-year increase of 26% for the companies in the S&P 500 Index.

The Federal Reserve, confident about the strength of the economy and mindful of a tight labor market, raised short-term interest rates four times over the last year, by a quarter point each time. Long-term bond yields also rose, driven higher primarily by evidence of faster wage growth, pushing the U.S. 10-year Treasury bond over 3% for the first time since 2013.

As I write this, we are experiencing the market’s 20th downturn since 2010. I have been saying that every bull market experiences volatility and pullbacks. Many financial commentators think this bull market is “long in the tooth.” I do not agree with them. I believe stock valuations are still very reasonable. The prospective price to earnings multiple for the Dow Jones Industrial Average has come down from almost 20x at the end of 2017 to 16x, just above its 10-year average of 15x. The prospective PE multiple for the S&P 500 Index has also come down, from 20x to 17x, and compares favorably to its 10-year average of 16x.

Cash, meanwhile, continues to build up on corporate balance sheets. The companies in the S&P 500 Index reported a total of over $5.4 trillion in cash and marketable securities in their latest filings. Companies have been spending some of their cash, increasing their investment spending and laying the groundwork for future earnings growth. However, they have also been returning capital to shareholders. S&P 500 Index companies announced $433.6 billion in share repurchases during the second quarter of calendar year 2018, nearly doubling the previous record of $242.1 billion set in the first quarter. Companies are also raising their dividends.

In addition, I believe the Federal Reserve will take care not to raise interest rates too high or too fast and endanger the economic expansion. While wage growth has risen to over 3% in October, other measures of inflationary pressure, such as the Consumer Price Index and the Producer Price Index, still show prices increasing at a more moderate pace, closer to 2%. Given continued evidence of modest rates of inflation, I believe the Fed will be able to maintain its gradual pace of interest rate hikes.

Finally and importantly, I still see no signs of euphoria in this market. In my opinion, the enthusiasm present earlier in the year, which followed the significant reduction in corporate income tax rates, has largely evaporated, and it has been replaced with anxiety

HENNESSYFUNDS.COM

2

LETTER TO SHAREHOLDERS

over higher interest rates and their potential impact on growth. In the past, I have likened the current bull market to that of 1982-2000, and I still believe this comparison holds true. I am confident in the strength of the market today and believe the economy will continue to grow in the coming year, albeit at a more moderate pace.

Thank you for your continued confidence and investment in the Hennessy 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 commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is a valuation measure and is calculated by dividing a company’s market price per share by its earnings per share. Earnings growth is not a measure of a fund’s future performance.

HENNESSY FUNDS 1-800-966-4354

3

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, 2018

	One	Five	Ten
	Year	Years	Years
Hennessy Focus Fund –
Investor Class (HFCSX)	-2.02%	7.55%	13.69%
Hennessy Focus Fund –
Institutional Class (HFCIX)	-1.65%	7.94%	14.08%
Russell 3000® Index	6.60%	10.81%	13.35%
Russell Midcap® Growth Index	6.14%	10.10%	15.10%

Expense ratios:  1.50% (Investor Class); 1.12% (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 table does 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 www.hennessyfunds.com. Performance for periods on or prior to October 26, 2012, is that of the FBR Focus Fund.

The Russell 3000^® Index is commonly used to measure the performance of U.S. stocks. The Russell Midcap^® Growth Index is commonly used to measure the performance of U.S. medium-capitalization growth stocks. One cannot invest directly in an index.

Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes or Russell ratings or underlying data and no party may rely on any Russell Indexes or Russell ratings or underlying data contained in this communication. No further distribution of Russell data is permitted without Russell’s express written consent. Russell does not promote, sponsor, or endorse the content of this communication.

HENNESSYFUNDS.COM

4

PERFORMANCE OVERVIEW

The expense ratios presented are from the most recent prospectus. The expense ratios for the current reporting period are available in the Financial Highlights section of this report.

PERFORMANCE NARRATIVE

Portfolio Managers Brian E. Macauley, CFA, David S. Rainey, CFA, and Ira M. Rothberg, CFA Broad Run Investment Management, LLC (sub-advisor)

Performance:

For the 12-month period ended October 31, 2018, the Investor Class of the Hennessy Focus Fund returned -2.02%, underperforming both the Russell 3000^® Index (the Fund’s primary index) and the Russell Midcap^® Growth Index, which returned 6.60% and 6.14%, respectively, for the same period.

Leading contributors to the Fund’s performance were O’Reilly Automotive, Inc., Twenty-First Century Fox, Inc., and American Tower Corp. O’Reilly Automotive, Inc. and American Tower Corp. produced attractive financial results over the 12-month period, which helped drive appreciation in their stock prices. Twenty-First Century Fox, Inc. shares appreciated during the period as The Walt Disney Company ultimately raised its bid for the company’s cable entertainment networks and film and television studios.

Leading detractors from the Fund’s performance were American Woodmark Corporation, NVR, Inc., and Encore Capital Group, Inc. The share prices of American Woodmark Corporation, a cabinet manufacturer, and NVR, Inc., a homebuilder, came under pressure as mortgage rates increased and rising home prices reduced housing affordability. Industry demand has slowed, but remains positive. We believe that the deceleration in housing starts is a temporary pause in the longer trend of housing recovery. U.S. single-family housing starts are 0.8-0.9 million versus a 1.2 million average over the last 50 years, implying 30 to 50% additional growth just to get back to a normal level. We used the price weakness in American Woodmark Corporation and NVR, Inc. to add to our positions. In early May, Encore Capital Group, Inc., a buyer of defaulted consumer receivables, announced an agreement to purchase the remaining economic interest in Cabot Credit Management that it did not already own. Cabot Credit Management is one of the largest credit management services providers in Europe and the market leader in the United Kingdom and Ireland. While the market initially reacted favorably to the announcement, shares subsequently traded lower as the valuations of comparable European companies declined.

The Fund continues to hold shares of all the companies mentioned except Twenty-First Century Fox, Inc.

Importantly, despite the 12-month relative underperformance, we are pleased with how the businesses in the portfolio are performing, with almost all growing owner earnings per share, excluding the benefit of the tax cut, at a sustained mid-teens clip, and we expect their stock prices to follow fundamentals over time. Portfolio valuation on a next 12-month price-to-owner earnings basis remains at a discount to the Fund’s primary benchmark. We take comfort in having a portfolio grounded in attractive near-term earnings multiples and in a market that appears long on enthusiasm and short on skepticism.

We invest with a long-term time horizon and encourage shareholders to do the same. Despite the discussion of 12-month results referenced above, we encourage fellow shareholders to also evaluate the Fund’s performance over five- and ten-year periods, since shorter periods can be influenced by many transitory issues unrelated to the growth in the intrinsic value of the Fund’s holdings.

HENNESSY FUNDS 1-800-966-4354

5

Portfolio Strategy and Investment Commentary:

In the Fund, we target “compounders” – businesses trading at reasonable valuations that have the competitive position, management, and growth to potentially create outsized value for an extended period of time. We believe that our criteria-driven, fundamental research, applied with a long-term investment horizon, allows us to identify these opportunities. We continue to have a positive outlook for the Fund because we believe its holdings are predominately a collection of “compounders” that we believe should grow their earnings at attractive rates for a long time to come.

Charles Schwab & Co. was the Fund’s fourth-largest holding at the end of the period. We have a long history with the company and believe that it measures up very well against the investment criteria that guide our search for “compounders” and that it serves as a good illustration of our investing strategy.

Schwab began its corporate journey as an investment newsletter and repositioned itself as a discount broker after brokerage commissions were deregulated in May 1975. Today, Schwab has evolved beyond solely trading services to offer a mutual fund marketplace, custody, and other services to independent investment advisors, equity index funds, an ETF marketplace, a robo-advisor, and target-date ETFs. As a discount broker, Schwab was able to undercut traditional full-service brokers on price, providing tremendous savings to customers. Through the years, Schwab continually reinvested in technology to maintain its low-cost position, passing along savings to attract more customers, building its scale, and enabling further reinvestment. Four decades after its founding, Schwab remains a systematic market share gainer using essentially the same low-cost, low-price business model it began with. Adding to the appeal of the business model, client assets, particularly RIA assets, are very sticky and make Schwab a powerful asset-gathering machine.

Today, Schwab has approximately $3.6 trillion in client assets under custody, growing at about 10% per annum, which we believe should translate into low-teens earnings per share growth. With only 8% market share of a $45 trillion opportunity (inclusive of retail bank deposits), we believe this growth can continue for decades. The shares are trading at 16x next 12 month earnings per share, essentially in line with the market, for a world-class business with excellent opportunity for growth ahead. Finally, Mr. Schwab still owns 10% of the company and is the chairman of the board of directors. He shepherds the company with a long-term mindset and deep belief in perpetuating its low-cost, low-price business model.

_______________

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.

Earnings growth is not representative of the Fund’s future performance.

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 invests in small-capitalization and medium-capitalization companies, which involves additional risks such as limited liquidity and greater volatility. Investments in foreign securities involve greater volatility and political, economic, and currency risk and differences in accounting methods. Please see the Fund’s prospectus for a more complete discussion of these and other risks.

HENNESSYFUNDS.COM

6

PERFORMANCE OVERVIEW

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.

Owner earnings is a valuation method created by Warren Buffet defined as (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges minus (c) the average annual amount of capital expenditures for plant and equipment that the business requires to fully maintain its long-term competitive position and its unit volume.

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7

Financial Statements

Schedule of Investments as of October 31, 2018

HENNESSY FOCUS FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)	% NET ASSETS
American Tower Corp., Class A		11.98	%
O’Reilly Automotive, Inc.		10.14	%
CarMax, Inc.		9.35	%
The Charles Schwab Corp.		8.66	%
Markel Corp.		8.66	%
Brookfield Asset Management, Inc.		8.60	%
Aon PLC		8.56	%
Hexcel Corp.		7.01	%
NVR, Inc.		4.94	%
American Woodmark Corp.		4.15	%

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.

The Global Industry Classification Standard (GICS^®) was developed by and is the exclusive property and a service mark of MSCI, Inc. and Standard & Poor Financial Services LLC.  It has been licensed for use by the Hennessy Funds.

HENNESSYFUNDS.COM

8

SCHEDULE OF INVESTMENTS

COMMON STOCKS – 75.31%	Number				% of
	of Shares		Value		Net Assets
Consumer Discretionary – 26.40%
Camping World Holdings, Inc. (d)		2,471,506	$	42,386,328		1.97	%
CarMax, Inc. (a)		2,962,712		201,197,772		9.35	%
NVR, Inc. (a)		47,487		106,324,818		4.94	%
O’Reilly Automotive, Inc. (a)		679,856		218,063,812		10.14	%
				567,972,730		26.40	%
Financials – 32.03%
Aon PLC (b)		1,179,036		184,141,842		8.56	%
Encore Capital Group, Inc. (a)(d)		3,082,416		78,324,191		3.64	%
Markel Corp. (a)		170,380		186,266,231		8.66	%
Marlin Business Services Corp. (d)		1,010,273		26,853,056		1.25	%
Metro Bank PLC (a) (b)		956,183		27,181,581		1.26	%
The Charles Schwab Corp.		4,029,065		186,303,966		8.66	%
				689,070,867		32.03	%
Industrials – 16.88%
American Woodmark Corp. (a)(d)		1,475,202		89,161,209		4.15	%
Ametek, Inc.		459,822		30,844,860		1.43	%
Ashtead Group PLC (b)		2,941,861		72,780,367		3.38	%
Hexcel Corp.		2,577,037		150,808,205		7.01	%
Mistras Group, Inc. (a)		979,716		19,496,348		0.91	%
				363,090,989		16.88	%
Total Common Stocks
(Cost $945,213,544)				1,620,134,586		75.31	%
REITS – 20.58%
Financials – 20.58%
American Tower Corp., Class A		1,653,694		257,662,062		11.98	%
Brookfield Asset Management, Inc. (b)		4,543,328		185,140,616		8.60	%
				442,802,678		20.58	%
Total REITS
(Cost $207,870,109)				442,802,678		20.58	%

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

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9

SHORT-TERM INVESTMENTS – 4.21%	Number					% of
	of Shares		Value			Net Assets
Money Market Funds – 4.21%
Fidelity Government Portfolio, Institutional Class, 2.06% (c)		90,654,933	$	90,654,933			4.21	%
Total Short-Term Investments
(Cost $90,654,933)				90,654,933			4.21	%
Total Investments
(Cost $1,243,738,586) – 100.10%				2,153,592,197			100.10	%
Liabilities in Excess of Other Assets – (0.10)%				(2,183,491	)		(0.10	)%
TOTAL NET ASSETS – 100.00%			$	2,151,408,706			100.00	%

Percentages are stated as a percent of net assets.

PLC – Public Limited Company

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 seven-day yield as of October 31, 2018.
(d)	Investment represents five percent or more of the outstanding voting securities of the issuer, and is or was an affiliate of the Hennessy Focus Fund, as defined in the Investment Company Act of 1940, as amended, at or during the year ended October 31, 2018. Details of transactions with these affiliated companies for the year ended October 31, 2018, are as follows:

	American			Camping World			Encore Capital			Marlin Business
Issuer	Woodmark Corp.			Holdings, Inc.			Group, Inc.			Services Corp.
Beginning Cost	$	54,953,784		$	—		$	73,525,403		$	15,865,289
Purchase Cost	$	20,369,449		$	52,261,467		$	31,327,664		$	—
Sales Cost	$	—		$	—		$	—		$	—
Ending Cost	$	75,323,233		$	52,261,467		$	104,853,067		$	15,865,289
Dividend Income	$	—		$	—		$	—		$	565,753
Net change in unrealized
appreciation/ (depreciation)	$	(51,799,912	)	$	(9,875,139	)	$	(57,923,990	)	$	4,728,077
Realized Gain/Loss	$	—		$	—		$	—		$	—
Shares		1,475,202			2,471,506			3,082,416			1,010,273
Market Value	$	89,161,209		$	42,386,328		$	78,324,191		$	26,853,056

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

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SCHEDULE OF INVESTMENTS

Summary of Fair Value Exposure at October 31, 2018

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2018 (See Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Consumer Discretionary	$	567,972,730	$	—	$	—	$	567,972,730
Financials		689,070,867		—		—		689,070,867
Industrials		363,090,989		—		—		363,090,989
Total Common Stocks	$	1,620,134,586	$	—	$	—	$	1,620,134,586
REITS
Financials	$	442,802,678	$	—	$	—	$	442,802,678
Total REITS	$	442,802,678	$	—	$	—	$	442,802,678
Short-Term Investments
Money Market Funds	$	90,654,933	$	—	$	—	$	90,654,933
Total Short-Term Investments	$	90,654,933	$	—	$	—	$	90,654,933
Total Investments	$	2,153,592,197	$	—	$	—	$	2,153,592,197

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

HENNESSY FUNDS 1-800-966-4354

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Financial Statements

Statement of Assets and Liabilities as of October 31, 2018

ASSETS:
Investments in unaffiliated securities, at value (cost $995,435,530)	$	1,916,867,413
Investments in affiliated securities, at value (cost $248,303,056)		236,724,784
Total investments in securities, at value (cost $1,243,738,586)		2,153,592,197
Dividends and interest receivable		676,086
Receivable for fund shares sold		1,522,394
Prepaid expenses and other assets		93,172
Total Assets		2,155,883,849
LIABILITIES:
Payable for fund shares redeemed		1,721,980
Payable to advisor		1,723,545
Payable to administrator		203,686
Payable to auditor		21,900
Accrued distribution fees		288,372
Accrued service fees		119,145
Accrued trustees fees		5,964
Accrued expenses and other payables		390,551
Total Liabilities		4,475,143
NET ASSETS	$	2,151,408,706
NET ASSETS CONSIST OF:
Capital stock	$	903,414,014
Total distributable earnings		1,247,994,692
Total Net Assets	$	2,151,408,706
NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	1,339,447,913
Shares issued and outstanding		16,098,413
Net asset value, offering price and redemption price per share	$	83.20
Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	811,960,793
Shares issued and outstanding		9,478,426
Net asset value, offering price and redemption price per share	$	85.66

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

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STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS

Financial Statements

Statement of Operations for the year ended October 31, 2018

INVESTMENT INCOME:
Dividend income from unaffiliated securities(1)	$	17,833,607
Dividend income from affiliated securities		565,753
Interest income		1,265,221
Total investment income		19,664,581
EXPENSES:
Investment advisory fees (See Note 5)		23,437,190
Sub-transfer agent expenses – Investor Class (See Note 5)		3,273,425
Sub-transfer agent expenses – Institutional Class (See Note 5)		773,046
Administration, fund accounting, custody and transfer agent fees (See Note 5)		2,499,733
Distribution fees – Investor Class (See Note 5)		2,397,805
Service fees – Investor Class (See Note 5)		1,598,536
Reports to shareholders		151,493
Federal and state registration fees		73,899
Compliance expense (See Note 5)		29,495
Legal fees		28,256
Trustees’ fees and expenses		25,707
Audit fees		22,502
Interest expense (See Note 7)		643
Other expenses		181,038
Total expenses		34,492,768
NET INVESTMENT LOSS	$	(14,828,187	)
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on:
Unaffiliated investments	$	373,659,739
Affiliated investments		—
Net change in unrealized appreciation/depreciation on:
Unaffiliated investments		(258,976,278	)
Affiliated investments		(114,870,964	)
Net loss on investments		(187,503	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(15,015,690	)

⁽¹⁾ Net of foreign taxes withheld of $402,085.

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, 2018			October 31, 2017
OPERATIONS:
Net investment loss	$	(14,828,187	)	$	(9,635,486	)
Net realized gain on investments		373,659,739			6,262,037
Net change in unrealized
appreciation/depreciation on investments		(373,847,242	)		477,904,990
Net increase (decrease) in net
assets resulting from operations		(15,015,690	)		474,531,541
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Distributable earnings – Investor Class		(103,968	)		—
Distributable earnings – Institutional Class		(67,148	)		—
Total distributions		(171,116	)		—
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		110,725,649			192,418,104
Proceeds from shares subscribed – Institutional Class		198,457,882			329,777,433
Dividends reinvested – Investor Class		102,585			—
Dividends reinvested – Institutional Class		57,674			—
Cost of shares redeemed – Investor Class		(432,891,744	)		(448,768,404	)
Cost of shares redeemed – Institutional Class		(442,177,824	)		(208,168,872	)
Net decrease in net assets derived
from capital share transactions		(565,725,778	)		(134,741,739	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		(580,912,584	)		339,789,802
NET ASSETS:
Beginning of year		2,732,321,290			2,392,531,488
End of year	$	2,151,408,706		$	2,732,321,290	(1)
CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		1,252,599			2,500,539
Shares sold – Institutional Class		2,178,048			4,162,013
Shares issued to holders as reinvestment
of dividends – Investor Class		1,169			—
Shares issued to holders as reinvestment
of dividends – Institutional Class		641			—
Shares redeemed – Investor Class		(4,879,914	)		(5,805,953	)
Shares redeemed – Institutional Class		(4,839,525	)		(2,633,695	)
Net decrease in shares outstanding		(6,286,982	)		(1,777,096	)

⁽¹⁾ Includes accumulated net investment loss of $(10,054,323).

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

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15

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

Paid-in capital from redemption fees

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⁽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.

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FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	84.92		$	70.63		$	71.94		$	69.46		$	63.58
	(0.86	)		(0.51	)		(0.45	)		(0.33	)		0.27
	(0.85	)		14.80			(0.72	)		8.07			6.68
	(1.71	)		14.29			(1.17	)		7.74			6.95
	—			—			—			(0.02	)		—
	(0.01	)		—			(0.14	)		(5.24	)		(1.07	)
	(0.01	)		—			(0.14	)		(5.26	)		(1.07	)
	—			—			—			—			0.00	(1)
$	83.20		$	84.92		$	70.63		$	71.94		$	69.46
	(2.02	)%		20.23	%		(1.63	)%		11.83	%		11.05	%
$	1,339.45		$	1,675.00		$	1,626.71		$	1,615.36		$	1,213.03
	1.47	%		1.48	%		1.47	%		1.46	%		1.41	%
	(0.72	)%		(0.51	)%		(0.65	)%		(0.55	)%		0.41	%
	13	%		5	%		2	%		4	%		18	%

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

HENNESSY FUNDS 1-800-966-4354

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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

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.

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FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	87.10		$	72.17		$	73.24		$	70.50		$	64.32
	(0.28	)		(0.11	)		(0.14	)		(0.08	)		0.35
	(1.15	)		15.04			(0.79	)		8.19			6.90
	(1.43	)		14.93			(0.93	)		8.11			7.25
	—			—			—			(0.05	)		—
	(0.01	)		—			(0.14	)		(5.32	)		(1.07	)
	(0.01	)		—			(0.14	)		(5.37	)		(1.07	)
$	85.66		$	87.10		$	72.17		$	73.24		$	70.50
	(1.65	)%		20.69	%		(1.27	)%		12.23	%		11.40	%
$	811.96		$	1,057.32		$	765.82		$	520.06		$	283.31
	1.09	%		1.10	%		1.10	%		1.11	%		1.10	%
	(0.34	)%		(0.13	)%		(0.28	)%		(0.19	)%		0.59	%
	13	%		5	%		2	%		4	%		18	%

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

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Financial Statements

Notes to the Financial Statements October 31, 2018

1).  ORGANIZATION

The Hennessy Focus 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 capital appreciation. The Fund is a non-diversified fund.

The Fund offers Investor Class and Institutional Class shares. Each class of shares differs principally in its respective 12b-1 distribution and service, shareholder servicing, and sub-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 to U.S. generally accepted accounting principles (“GAAP”).

a).	Securities 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 because 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/loss and realized gains/losses for federal income tax purposes may differ from those reported in 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. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
	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 fiscal year 2018 have been identified and appropriately reclassified in the Statement of Assets and Liabilities. The adjustments are as follows:

Total
Distributable
Earnings	Capital Stock
$(10,636,072)	$10,636,072

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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. Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and paid annually, usually in December.
f).	Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
g).	Use of Estimates – 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 (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by (ii) the total number of 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).	New Accounting Pronouncements – In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 does not eliminate the requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the changes in unrealized gains and losses for recurring Level 3 fair value measurements. ASU 2018-13 requires that information is provided about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has

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21

evaluated the impact of this change in guidance, and due to the permissibility of early adoption, modified the Fund’s fair value disclosures for the current reporting period.

j).

New Rule Issuances – In August 2018, the Securities and Exchange Commission issued Final Rule Release No. 33 10532, Disclosure Update and Simplification, which in part amends certain financial statement disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, GAAP, or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amendments to Rule 6-04.17 of Regulation S-X (balance sheet) were amended to require presentation of the total, rather than the components of net assets, of distributable earnings on the balance sheet. Consistent with GAAP, funds will be required to disclose total distributable earnings. The amendments to Rule 6-09 of Regulation S-X (statement of changes in net assets) omit the requirement to separately state the sources of distributions paid as well as omit the requirement to parenthetically state the book basis amount of undistributed net investment income. Instead, consistent with GAAP, funds will be required to disclose the total amount of distributions paid, except that any tax return of capital must be separately disclosed. The requirements of the Final Rule Release are effective November 5, 2018 and the Fund’s Statement of Assets and Liabilities and the Statement of Changes in Net Assets for the current and prior reporting period have been modified accordingly.

3).  SECURITIES VALUATION

The Fund follows 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 of 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 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”)

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NOTES TO THE FINANCIAL STATEMENTS

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 foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).

Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, are generally priced at the ending NAV provided by the applicable mutual fund’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.

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 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 values of other similar securities, and news events with direct bearing on a security or markets. Fair value pricing results in an estimated price for a

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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’ values as determined by the Board or its designee, pursuant to the fair value pricing procedures adopted by the Board, instead of being determined by the market. Using a fair value pricing methodology to price a foreign security may result in a value that is different from such foreign security’s most recent closing price and from the value used by other investment companies to calculate their NAVs. Such securities are generally classified in Level 2 of 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 “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 determinations. Various inputs are used to determine 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, 2018, are included in the Schedule of Investments.

4).  INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during fiscal year 2018 were $318,736,284 and $811,569,966, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during fiscal year 2018.

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. 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, as amended. During fiscal year 2018, the Fund did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940, as amended.

5).  INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

The Advisor provides the Fund with investment advisory services under an Investment Advisory Agreement. The Advisor oversees the provision of investment advice and furnishes office space and facilities, as well as 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 an annual rate of 0.90%. The net investment advisory fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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NOTES TO THE FINANCIAL STATEMENTS

The Advisor has delegated the day-to-day management of the Fund to a sub-advisor, Broad Run Investment Management, LLC. The Advisor pays the sub-advisory 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 a rate of 0.29%.

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 advisory 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. The shareholder service fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 is currently only using up to 0.15% of its average daily net assets attributable to Investor Class shares 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, printing and mailing of prospectuses to other than current shareholders, 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 distribution fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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. The sub-transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services (“Fund Services”) provides the Fund with administrative, fund accounting, and transfer agent services. As administrator, Fund Services 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. U.S. Bank N.A., an affiliate of Fund Services, serves as the Fund’s custodian. The servicing agreements between the Trust and Fund Services and U.S. Bank N.A. contain a fee schedule that is inclusive of administrative, fund accounting, custody, and transfer agent fees. The administrative, fund accounting, custody, and transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 Fund Services 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

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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. The compliance fees expensed by the Fund during fiscal year 2018 are included in 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 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 fiscal year 2018 the Fund had an outstanding average daily balance and a weighted average interest rate of $12,688 and 5.00%, respectively. The interest expensed by the Fund during fiscal year 2018 is included in the Statement of Operations. The maximum amount outstanding for the Fund during fiscal year 2018 was $4,631,000. As of October 31, 2018, the Fund did not have any borrowings outstanding under the line of credit.

8).  FEDERAL TAX INFORMATION

As of October 31, 2018, the components of accumulated earnings (losses) for income tax purposes were as follows:

	Investments
Cost of investments for tax purposes	$	1,243,738,586
Gross tax unrealized appreciation	$	998,259,530
Gross tax unrealized depreciation		(88,405,919	)
Net tax unrealized appreciation/(depreciation)	$	909,853,611
Undistributed ordinary income	$	—
Undistributed long-term capital gains		351,447,441
Total distributable earnings	$	351,447,441
Other accumulated gain/(loss)	$	(13,306,360	)
Total accumulated gain/(loss)	$	1,247,994,692

As of October 31, 2018, the Fund had no tax basis capital losses to offset future capital gains.

As of October 31, 2018, the Fund deferred, on a tax basis, a late-year ordinary loss of $13,306,360. Late-year ordinary losses are net ordinary losses incurred after December 31, 2017, but within the taxable year, that are deemed to arise on the first day of the Fund’s next taxable year.

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NOTES TO THE FINANCIAL STATEMENTS

During fiscal year 2018 and fiscal year 2017, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2018		October 31, 2017
Ordinary income	$	—	$	—
Long-term capital gain		171,116		—
	$	171,116	$	—

9).  EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2018, 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, 2018, capital gains were declared and paid to shareholders of record on December 6, 2018, as follows:

	Long-term
Investor Class	$14.47031
Institutional Class	$14.98779

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Report of Independent Registered Public

Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the shareholders of Hennessy Focus Fund

Novato, CA

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Hennessy Focus Fund (the “Fund”), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2018, 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, financial highlights for each of the five years in the period then ended, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, 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.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management.  Our responsibility is to express an opinion on the Fund’s financial statements based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We have served as the auditor of one or more of the funds in the Trust since 2002.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.  The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2018 by correspondence with the custodian.  We believe that our audits provide a reasonable basis for our opinion.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2018

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS

Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Funds 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 to the Board of Trustees (“Advisers”) 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: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board of Trustees 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 Trustee oversees the 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 worked for the	None.
(1981)		Sutter Health organization since
Adviser to the Board		2011 in various positions. He has
		served as the Chief Executive Officer
		of the Sutter Roseville Medical
		Center since 2018. From 2016 through
		2018, he served as the Vice President
		of Strategy for the Sutter Health Valley
		Area, which includes 11 hospitals,
		13 ambulatory surgery centers,
		16,000 employees, and 1,900 physicians.
		From 2013 through 2016, Mr. Alexander
		served as Sutter Novato Community
		Hospital’s Chief Administrative Officer,
		and from 2011 through 2012, he
		served as a Director of Strategy
		within Sutter’s West Bay Region.

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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. Neil Hennessy has been employed	Hennessy
(1956)	a Trustee and	by Hennessy Advisors, Inc. since	Advisors, Inc.
Trustee, Chairman of	June 2008 as	1989 and currently serves as its
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 President, Chief Operating
Executive Vice President		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 Secretary
Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013 and currently serves as its Chief
Senior Vice President		Compliance Officer and Senior Vice President.
and Head of Distribution
Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)(3)		as its General Counsel since June 2013.
Senior Vice President and
Chief Compliance Officer

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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)(4)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Large Cap Financial Fund and the Hennessy Small
and Portfolio Manager		Cap Financial Fund since inception. Mr. Ellison also served as a
		Portfolio Manager of the Hennessy Technology Fund from its
		inception until February 2017. Mr. Ellison served as Director,
		CIO and President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.
Ryan C. Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)(5)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Gas Utility Fund, the Hennessy Large Cap Financial
and Portfolio Manager		Fund, and the Hennessy Small 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. Mr. Kelley has also served as a Portfolio
		Manager of the Hennessy Cornerstone Growth Fund, the
		Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
		Cornerstone Large Growth Fund, and the Hennessy
		Cornerstone Value Fund since February 2017, as a Co-Portfolio
		Manager of the Hennessy Technology Fund since February
		2017, and as a Portfolio Manager of the Hennessy Total Return
		Fund and the Hennessy Balanced Fund since May 2018.
		Mr. Kelley served as Portfolio Manager of FBR Fund Advisers,
		Inc. from January 2008 to October 2012.
Tania Kelley	October 2003	Ms. Kelley has been employed by Hennessy Advisors, Inc.
(1965)		since October 2003.
Senior Vice President
and Head of Marketing

Daniel P. Hennessy	December 2016	Mr. Daniel Hennessy has been employed by Hennessy Advisors,
(1990)		Inc. since 2015. He has served as an Associate Analyst or
Vice President		Analyst of the Hennessy Technology Fund since February 2017.
and Analyst		Mr. Daniel Hennessy previously served as a Mutual Fund
		Specialist at U.S. Bancorp Fund Services, LLC (now doing
		business as U.S. Bank Global Fund Services) from November
		2014 to July 2015. Prior to that, he attended the University of
		San Diego, where he earned a degree in Political Science.

______________

(1)	Messrs. DeSousa, Doyle, N. 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 the Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
(2)	Mr. N. 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 this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
(4)	The address of this officer is 101 Federal Street, Suite 1900, Boston, MA 02110.
(5)	The address of this officer is 1340 Environ Way, Suite 332, Chapel Hill, NC 27517.

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Expense Example (Unaudited)

October 31, 2018

As a shareholder of the Fund, you incur 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, 2018, through October 31, 2018.

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. Bank Global Fund Services, 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” or “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. 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.

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EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period(1)
	Account Value	Account Value	May 1, 2018 –
	May 1, 2018	October 31, 2018	October 31, 2018
Investor Class
Actual	$1,000.00	$   966.20	$7.29
Hypothetical (5% return before expenses)	$1,000.00	$1,017.80	$7.48
Institutional Class
Actual	$1,000.00	$   968.10	$5.41
Hypothetical (5% return before expenses)	$1,000.00	$1,019.71	$5.55

⁽¹⁾ Expenses are equal to the Fund’s annualized expense ratio of 1.47% for Investor Class shares or 1.09% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/365 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

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 www.hennessyfunds.com/proxy-voting/voting-policy; or (3) on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at www.hennessyfunds.com/proxy-voting/voting-record 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 a 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 Forms N-Q are available on the SEC’s website at www.sec.gov.  Information included in the Fund’s Forms N-Q will also be available upon request by calling 1-800-966-4354.

Federal Tax Distribution Information

(Unaudited)

For fiscal year 2018, 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 0.00%.

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for fiscal year 2018 was 0.00%.

The percentage of taxable ordinary income distributions that were 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 0.00%.

Important Notice Regarding Delivery

of Shareholder Documents

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of shareholder reports, proxy statements, and prospectuses to shareholders who share an address and have the same last name. This process does not apply to account statements. You may request an individual copy of a shareholder document at any time. If you would like to receive separate mailings of shareholder documents, please call U.S. Bank Global Fund Services at 1-800-261-6950 or 1-414-765-4124, and individual delivery will begin within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact such intermediary directly to request individual delivery.

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PROXY VOTING — PRIVACY POLICY

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 will be shared with non-affiliated third parties.

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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 Boulevard, Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT, &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

d/b/a U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Drive, 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

Two Liberty Place

50 South 16th Street, Suite 2900

Philadelphia, Pennsylvania 19102-2529

DISTRIBUTOR

Quasar Distributors, LLC

777 East Wisconsin Avenue

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, 2018

HENNESSY CORNERSTONE

MID CAP 30 FUND

Investor Class  HFMDX

Institutional Class  HIMDX

hennessyfunds.com  |  1-800-966-4354

(This Page Intentionally Left Blank.)

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	27
Trustees and Officers of the Fund	28
Expense Example	32
Proxy Voting Policy and Proxy Voting Records	34
Quarterly Schedule of Investments	34
Federal Tax Distribution Information	34
Important Notice Regarding Delivery of Shareholder Documents	34
Privacy Policy	35

HENNESSY FUNDS 1-800-966-4354

December 2018

Dear Hennessy Funds Shareholder:

Over the past year, we have witnessed the return of market volatility. U.S. stocks still registered healthy gains, bolstered by the impact on corporate profits of the successful passage of the tax reform bill in December 2017. However, concerns over potential trade disruptions, especially between the U.S. and China, and worries over higher short-term interest rates, which many believe could possibly trigger a recession down the road, put downward pressure on equity valuations.

The U.S. economy performed well over the period, and actually achieved an acceleration in GDP growth to over 3% on an annualized basis in the second and third quarters of calendar year 2018. During the past year, companies continued to hire workers, adding over 200,000 jobs per month on average, sending the unemployment rate down to 3.7% in October, which is the lowest it has been since 1969. Consumer confidence is high and still rising, and corporate profits reached record levels in the third quarter of calendar year 2018, posting a year-over-year increase of 26% for the companies in the S&P 500 Index.

The Federal Reserve, confident about the strength of the economy and mindful of a tight labor market, raised short-term interest rates four times over the last year, by a quarter point each time. Long-term bond yields also rose, driven higher primarily by evidence of faster wage growth, pushing the U.S. 10-year Treasury bond over 3% for the first time since 2013.

As I write this, we are experiencing the market’s 20th downturn since 2010. I have been saying that every bull market experiences volatility and pullbacks. Many financial commentators think this bull market is “long in the tooth.” I do not agree with them. I believe stock valuations are still very reasonable. The prospective price to earnings multiple for the Dow Jones Industrial Average has come down from almost 20x at the end of 2017 to 16x, just above its 10-year average of 15x. The prospective PE multiple for the S&P 500 Index has also come down, from 20x to 17x, and compares favorably to its 10-year average of 16x.

Cash, meanwhile, continues to build up on corporate balance sheets. The companies in the S&P 500 Index reported a total of over $5.4 trillion in cash and marketable securities in their latest filings. Companies have been spending some of their cash, increasing their investment spending and laying the groundwork for future earnings growth. However, they have also been returning capital to shareholders. S&P 500 Index companies announced $433.6 billion in share repurchases during the second quarter of calendar year 2018, nearly doubling the previous record of $242.1 billion set in the first quarter. Companies are also raising their dividends.

In addition, I believe the Federal Reserve will take care not to raise interest rates too high or too fast and endanger the economic expansion. While wage growth has risen to over 3% in October, other measures of inflationary pressure, such as the Consumer Price Index and the Producer Price Index, still show prices increasing at a more moderate pace, closer to 2%. Given continued evidence of modest rates of inflation, I believe the Fed will be able to maintain its gradual pace of interest rate hikes.

Finally and importantly, I still see no signs of euphoria in this market. In my opinion, the enthusiasm present earlier in the year, which followed the significant reduction in corporate income tax rates, has largely evaporated, and it has been replaced with anxiety

HENNESSYFUNDS.COM

2

LETTER TO SHAREHOLDERS

over higher interest rates and their potential impact on growth. In the past, I have likened the current bull market to that of 1982-2000, and I still believe this comparison holds true. I am confident in the strength of the market today and believe the economy will continue to grow in the coming year, albeit at a more moderate pace.

Thank you for your continued confidence and investment in the Hennessy 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 commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is a valuation measure and is calculated by dividing a company’s market price per share by its earnings per share. Earnings growth is not a measure of a fund’s future performance.

HENNESSY FUNDS 1-800-966-4354

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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, 2018

	One	Five	Ten
	Year	Years	Years
Hennessy Cornerstone Mid Cap 30 Fund –
Investor Class (HFMDX)	-10.54%	6.13%	11.41%
Hennessy Cornerstone Mid Cap 30 Fund –
Institutional Class (HIMDX)	-10.22%	6.48%	11.79%
Russell Midcap® Index	2.79%	8.97%	14.19%
S&P 500 Index	7.35%	11.34%	13.24%

Expense ratios:  1.34% (Investor Class); 0.97% (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 table does 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 www.hennessyfunds.com.

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

Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes or Russell ratings or underlying data and no party may rely on any Russell Indexes or Russell ratings or underlying data contained in this communication. No further distribution of Russell data is permitted without Russell’s express written consent. Russell does not promote, sponsor, or endorse the content of this communication.

The expense ratios presented are from the most recent prospectus. The expense ratios for the current reporting period are available in the Financial Highlights section of this report.

HENNESSYFUNDS.COM

4

PERFORMANCE OVERVIEW

PERFORMANCE NARRATIVE

Portfolio Managers Neil J. Hennessy and Ryan C. Kelley

Performance:

For the 12-month period ended October 31, 2018, the Investor Class of the Hennessy Cornerstone Mid Cap 30 Fund returned -10.54%, underperforming both the Russell Midcap^® Index (the Fund’s primary benchmark) and the S&P 500 Index, which returned 2.79% and 7.35%, respectively, for the same period.

The Fund’s underperformance relative to its primary benchmark can be attributed primarily to stock selection, particularly in the Consumer Discretionary and Industrials sectors. Recreational vehicle producers Thor Industries, Inc. and Winnebago Industries, Inc. and homebuilders KB Home and LGI Homes, Inc. were among the holdings that detracted most from relative performance in the Consumer Discretionary sector. Gaming related stocks, such as Scientific Games Corp. and Penn National Gaming, Inc., also performed poorly. In the Industrials sector, another homebuilding-related stock, Builders FirstSource, Inc. contributed negatively to the Fund’s performance. The Fund’s underperformance relative to its benchmark was offset to some degree by strong performance from positions in HollyFrontier Corp., CVR Energy, Inc., NRG Energy, Inc., and Kemper Corp.

The Fund no longer holds any of the companies mentioned with the exception of Penn National Gaming, Inc.

Portfolio Strategy:

The Fund utilizes a quantitative approach in building a concentrated portfolio of attractively valued, mid-cap growing companies whose stock prices are exhibiting strong price momentum. In essence, the strategy seeks to combine elements of both value and momentum investing by selecting 30 stocks that have relatively low price-to-sales ratios, have generated increased earnings over the past year, and have positive stock price appreciation over the past three- and six-month periods.

Investment Commentary:

We continue to believe that the outlook for mid-cap stocks is positive. The U.S. economy is growing at a healthy rate, unemployment is low, and growth in both consumption and capital spending has accelerated over the last 12 months. Corporate earnings have risen significantly over the first nine months of 2018, helped, in part, by lower taxes. We expect earnings growth to be slower next year yet remain positive, driven primarily by continued steady economic growth.

There are four primary industry groups where the Fund currently maintains significant overweight positions: Retailing, Food & Staples Retailing, Commercial & Professional Services, and Transportation. Many retailing companies have been benefiting from strong employment growth and continued increases in consumer spending and, therefore, have seen their earnings and stock prices rise over the last year. As a result, the Fund owns stocks of some of these companies, including American Eagle Outfitters, Inc., Murphy USA, Inc., and Sprouts Farmers Market, Inc. Commercial Service and Transportation companies have also been benefiting from strong economic growth and an upturn in capital spending in the United States. As a result, Insperity, Inc., Landstar System, Inc., and other holdings in the Fund from these more cyclical groups have been reporting solid growth in earnings and have seen their stock prices perform well.

HENNESSY FUNDS 1-800-966-4354

5

_______________

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 Fund invests in small-capitalization and medium-capitalization companies, which may have 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.

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 valuation measure calculated by dividing a company’s market price per share by its revenue per share.

HENNESSYFUNDS.COM

6

PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as ofOctober 31, 2018

HENNESSY CORNERSTONE MID CAP 30 FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)	% NET ASSETS
AES Corp.	3.93%
Cleveland-Cliffs, Inc.	3.90%
Casey’s General Stores, Inc.	3.88%
Spirit Airlines, Inc.	3.85%
Old Republic International Corp.	3.52%
Crocs, Inc.	3.51%
Clean Harbors, Inc.	3.49%
UGI Corp.	3.47%
Sprouts Farmers Market, Inc.	3.47%
Booz Allen Hamilton Holding Corp.	3.41%

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.

The Global Industry Classification Standard (GICS^®) was developed by and is the exclusive property and a service mark of MSCI, Inc. and Standard & Poor Financial Services LLC.  It has been licensed for use by the Hennessy Funds.

HENNESSY FUNDS 1-800-966-4354

7

COMMON STOCKS – 96.92%	Number				% of
	of Shares		Value		Net Assets
Consumer Discretionary – 24.51%
Aaron’s, Inc.		465,900	$	21,957,867		3.29	%
American Axle & Manufacturing Holdings, Inc. (a)		1,367,400		20,743,458		3.11	%
American Eagle Outfitters, Inc.		892,161		20,573,233		3.08	%
BJ’s Restaurants, Inc.		313,700		19,192,166		2.88	%
Crocs, Inc. (a)		1,139,600		23,407,384		3.51	%
Murphy USA, Inc. (a)		280,200		22,592,526		3.38	%
Penn National Gaming, Inc. (a)		701,758		17,038,684		2.55	%
Restoration Hardware Holdings, Inc. (a)		156,500		18,108,615		2.71	%
				163,613,933		24.51	%
Consumer Staples – 10.58%
Casey’s General Stores, Inc.		205,400		25,902,994		3.88	%
Post Holdings, Inc. (a)		243,442		21,525,141		3.23	%
Sprouts Farmers Market, Inc. (a)		861,700		23,171,113		3.47	%
				70,599,248		10.58	%
Energy – 5.70%
EnLink Midstream Partners LP		1,289,900		19,554,884		2.93	%
PBF Energy, Inc.		442,900		18,535,365		2.77	%
				38,090,249		5.70	%
Financials – 6.89%
Assurant, Inc.		231,700		22,523,557		3.37	%
Old Republic International Corp.		1,065,700		23,498,685		3.52	%
				46,022,242		6.89	%
Health Care – 6.17%
Allscripts Healthcare Solutions, Inc. (a)		1,626,800		19,375,188		2.90	%
Molina Healthcare, Inc. (a)		171,900		21,791,763		3.27	%
				41,166,951		6.17	%
Industrials – 19.08%
Clean Harbors, Inc. (a)		342,600		23,310,504		3.49	%
Insperity, Inc.		195,900		21,519,615		3.22	%
Landstar System, Inc.		200,400		20,058,036		3.00	%
NOW, Inc. (a)		1,403,900		18,026,076		2.70	%
Spirit Airlines, Inc. (a)		494,700		25,674,930		3.85	%
Trinity Industries, Inc.		659,000		18,814,450		2.82	%
				127,403,611		19.08	%

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

HENNESSYFUNDS.COM

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SCHEDULE OF INVESTMENTS

COMMON STOCKS	Number					% of
	of Shares		Value			Net Assets
Information Technology – 9.56%
Booz Allen Hamilton Holding Corp.		460,100	$	22,793,354			3.41	%
CACI International, Inc., Class A (a)		120,300		21,468,738			3.22	%
Conduent, Inc. (a)		1,024,700		19,571,770			2.93	%
				63,833,862			9.56	%
Materials – 7.03%
Ashland Global Holdings, Inc.		282,400		20,891,952			3.13	%
Cleveland-Cliffs, Inc. (a)		2,422,700		26,068,252			3.90	%
				46,960,204			7.03	%
Utilities – 7.40%
AES Corp.		1,800,000		26,244,000			3.93	%
UGI Corp.		437,000		23,187,220			3.47	%
				49,431,220			7.40	%
Total Common Stocks
(Cost $708,444,037)				647,121,520			96.92	%
SHORT-TERM INVESTMENTS – 3.60%
Money Market Funds – 3.60%
Fidelity Government Portfolio, Institutional Class, 2.06% (b)		24,064,354		24,064,354			3.60	%
Total Short-Term Investments
(Cost $24,064,354)				24,064,354			3.60	%
Total Investments
(Cost $732,508,391) – 100.52%				671,185,874			100.52	%
Liabilities in Excess of Other Assets – (0.52)%				(3,498,646	)		(0.52	)%
TOTAL NET ASSETS – 100.00%			$	667,687,228			100.00	%

Percentages are stated as a percent of net assets.

(a)	Non-income producing security.
(b)	The rate listed is the fund’s seven-day yield as of October 31, 2018.

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

HENNESSY FUNDS 1-800-966-4354

9

Summary of Fair Value Exposure at October 31, 2018

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2018 (See Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Consumer Discretionary	$	163,613,933	$	—	$	—	$	163,613,933
Consumer Staples		70,599,248		—		—		70,599,248
Energy		38,090,249		—		—		38,090,249
Financials		46,022,242		—		—		46,022,242
Health Care		41,166,951		—		—		41,166,951
Industrials		127,403,611		—		—		127,403,611
Information Technology		63,833,862		—		—		63,833,862
Materials		46,960,204		—		—		46,960,204
Utilities		49,431,220		—		—		49,431,220
Total Common Stocks	$	647,121,520	$	—	$	—	$	647,121,520
Short-Term Investments
Money Market Funds	$	24,064,354	$	—	$	—	$	24,064,354
Total Short-Term Investments	$	24,064,354	$	—	$	—	$	24,064,354
Total Investments	$	671,185,874	$	—	$	—	$	671,185,874

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

HENNESSYFUNDS.COM

10

SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES

Financial Statements

Statement of Assets and Liabilities as of October 31, 2018

ASSETS:
Investments in securities, at value (cost $732,508,391)	$	671,185,874
Dividends and interest receivable		332,885
Receivable for fund shares sold		108,579
Return of capital receivable		503,061
Prepaid expenses and other assets		43,059
Total Assets		672,173,458
LIABILITIES:
Payable for fund shares redeemed		3,683,772
Payable to advisor		464,484
Payable to administrator		68,418
Payable to auditor		21,900
Accrued distribution fees		74,050
Accrued service fees		30,659
Accrued interest payable		2,600
Accrued trustees fees		5,962
Accrued expenses and other payables		134,385
Total Liabilities		4,486,230
NET ASSETS	$	667,687,228
NET ASSETS CONSIST OF:
Capital stock	$	573,353,708
Total distributable earnings		94,333,520
Total Net Assets	$	667,687,228
NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	338,386,287
Shares issued and outstanding		20,058,687
Net asset value, offering price and redemption price per share	$	16.87
Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	329,300,941
Shares issued and outstanding		18,950,436
Net asset value, offering price and redemption price per share	$	17.38

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

HENNESSY FUNDS 1-800-966-4354

11

Financial Statements

Statement of Operations for the year ended October 31, 2018

INVESTMENT INCOME:
Dividend income	$	8,063,454
Interest income		335,638
Total investment income		8,399,092
EXPENSES:
Investment advisory fees (See Note 5)		7,413,487
Sub-transfer agent expenses – Investor Class (See Note 5)		900,533
Sub-transfer agent expenses – Institutional Class (See Note 5)		504,826
Administration, fund accounting, custody and transfer agent fees (See Note 5)		951,554
Distribution fees – Investor Class (See Note 5)		661,878
Service fees – Investor Class (See Note 5)		441,252
Reports to shareholders		70,608
Federal and state registration fees		44,516
Compliance expense (See Note 5)		29,499
Audit fees		23,146
Trustees’ fees and expenses		20,188
Interest expense (See Note 7)		10,317
Legal fees		8,669
Other expenses		56,523
Total expenses		11,136,996
NET INVESTMENT LOSS	$	(2,737,904	)
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on investments	$	263,670,396
Net change in unrealized appreciation/depreciation on investments		(355,690,732	)
Net loss on investments		(92,020,336	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(94,758,240	)

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

HENNESSYFUNDS.COM

12

STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS

Financial Statements

Statements of Changes in Net Assets

	Year Ended			Year Ended
	October 31, 2018			October 31, 2017
OPERATIONS:
Net investment loss	$	(2,737,904	)	$	(1,057,646	)
Net realized gain on investments		263,670,396			245,505,242
Net change in unrealized
appreciation/depreciation on investments		(355,690,732	)		(15,162,353	)
Net increase (decrease) in net assets resulting from operations		(94,758,240	)		229,285,243
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Distributable earnings – Investor Class		(59,254,277	)		(3,088,473	)
Distributable earnings – Institutional Class		(103,063,607	)		(4,766,317	)
Total distributions		(162,317,884	)		(7,854,790	)(1)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued in the Reorganization –
Investor Class (see Note 9)		216,366,669			—
Proceeds from shares issued in the Reorganization –
Institutional Class (see Note 9)		105,537,409			—
Proceeds from shares subscribed – Investor Class		20,976,077			37,287,639
Proceeds from shares subscribed – Institutional Class		53,065,851			90,659,855
Dividends reinvested – Investor Class		58,251,271			3,040,512
Dividends reinvested – Institutional Class		99,300,713			4,572,946
Cost of shares redeemed – Investor Class		(196,042,061	)		(257,782,079	)
Cost of shares redeemed – Institutional Class		(404,237,132	)		(367,781,422	)
Net decrease in net assets derived
from capital share transactions		(46,781,203	)		(490,002,549	)
TOTAL DECREASE IN NET ASSETS		(303,857,327	)		(268,572,096	)
NET ASSETS:
Beginning of year		971,544,555			1,240,116,651
End of year	$	667,687,228		$	971,544,555	(2)
CHANGES IN SHARES OUTSTANDING:
Shares issued in the Reorganization – Investor Class		10,499,531			—
Shares issued in the Reorganization – Institutional Class		4,794,539			—
Shares sold – Investor Class		1,074,535			1,844,085
Shares sold – Institutional Class		2,546,896			4,348,038
Shares issued to holders as reinvestment
of dividends – Investor Class		3,038,668			149,705
Shares issued to holders as reinvestment
of dividends – Institutional Class		5,045,768			220,065
Shares redeemed – Investor Class		(10,187,380	)		(12,769,278	)
Shares redeemed – Institutional Class		(20,331,396	)		(17,841,055	)
Net decrease in shares outstanding		(3,518,839	)		(24,048,440	)

(1)	All distributions were from net realized gain.
(2)	Includes accumulated net investment loss of $(1,118,367).

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

HENNESSY FUNDS 1-800-966-4354

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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

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.

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FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	22.46		$	18.37		$	20.12		$	19.00		$	17.32
	(0.06	)		(0.15	)		(0.07	)		0.10			(0.05	)
	(1.87	)		4.36			(1.51	)		2.16			3.04
	(1.93	)		4.21			(1.58	)		2.26			2.99
	—			—			(0.03	)		—			(0.05	)
	(3.66	)		(0.12	)		(0.14	)		(1.14	)		(1.26	)
	(3.66	)		(0.12	)		(0.17	)		(1.14	)		(1.31	)
$	16.87		$	22.46		$	18.37		$	20.12		$	19.00
	(10.54	)%		23.02	%		(7.89	)%		12.35	%		18.25	%
$	338.39		$	351.16		$	485.15		$	765.90		$	258.17
	1.31	%		1.34	%		1.35	%		1.17	%		1.25	%
	(0.47	)%		(0.33	)%		(0.24	)%		0.27	%		(0.47	)%
	181	%		106	%		108	%		5	%		132	%

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

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 reimbursement

After reimbursement

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

Before reimbursement

After reimbursement

Portfolio turnover rate⁽²⁾

(1)	Amount is less than $(0.01) or $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.

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FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	23.07		$	18.80		$	20.55		$	19.36		$	17.62
	(0.00	)(1)		0.02			0.00	(1)		(0.03	)		(0.08	)
	(1.92	)		4.38			(1.54	)		2.38			3.17
	(1.92	)		4.40			(1.54	)		2.35			3.09
	—			—			(0.06	)		—			(0.09	)
	(3.77	)		(0.13	)		(0.15	)		(1.16	)		(1.26	)
	(3.77	)		(0.13	)		(0.21	)		(1.16	)		(1.35	)
$	17.38		$	23.07		$	18.80		$	20.55		$	19.36
	(10.22	)%		23.47	%		(7.53	)%		12.62	%		18.57	%
$	329.30		$	620.38		$	754.97		$	306.04		$	75.53
	0.95	%		0.97	%		0.97	%		0.96	%		1.07	%
	0.95	%		0.97	%		0.97	%		0.96	%		0.98	%
	(0.12	)%		0.04	%		0.07	%		0.41	%		(0.29	)%
	(0.12	)%		0.04	%		0.07	%		0.41	%		(0.20	)%
	181	%		106	%		108	%		5	%		132	%

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

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Financial Statements

Notes to the Financial Statements October 31, 2018

1).  ORGANIZATION

The Hennessy Cornerstone Mid Cap 30 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.

The Fund offers Investor Class and Institutional Class shares. Each class of shares differs principally in its respective 12b-1 distribution and service, shareholder servicing, and sub-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 to U.S. generally accepted accounting principles (“GAAP”).

a).	Securities 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 because 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/loss and realized gains/losses for federal income tax purposes may differ from those reported in 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. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
	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 fiscal year 2018 have been identified and appropriately reclassified in the Statement of Assets and Liabilities. The adjustments are as follows:

Total
Distributable
Earnings	Capital Stock
$(101,348,648)	$101,348,648

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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. Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and paid annually, usually in December.
f).	Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
g).	Use of Estimates – 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 (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by (ii) the total number of 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).	New Accounting Pronouncements – In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 does not eliminate the requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the changes in unrealized gains and losses for recurring Level 3 fair value measurements. ASU 2018-13 requires that information is provided about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has

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evaluated the impact of this change in guidance, and due to the permissibility of early adoption, modified the Fund’s fair value disclosures for the current reporting period.

j).

New Rule Issuances – In August 2018, the Securities and Exchange Commission issued Final Rule Release No. 33 10532, Disclosure Update and Simplification, which in part amends certain financial statement disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, GAAP, or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amendments to Rule 6-04.17 of Regulation S-X (balance sheet) were amended to require presentation of the total, rather than the components of net assets, of distributable earnings on the balance sheet. Consistent with GAAP, funds will be required to disclose total distributable earnings. The amendments to Rule 6-09 of Regulation S-X (statement of changes in net assets) omit the requirement to separately state the sources of distributions paid as well as omit the requirement to parenthetically state the book basis amount of undistributed net investment income. Instead, consistent with GAAP, funds will be required to disclose the total amount of distributions paid, except that any tax return of capital must be separately disclosed. The requirements of the Final Rule Release are effective November 5, 2018 and the Fund’s Statement of Assets and Liabilities and the Statement of Changes in Net Assets for the current and prior reporting period have been modified accordingly.

3).  SECURITIES VALUATION

The Fund follows 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 of 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 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

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NOTES TO THE FINANCIAL STATEMENTS

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 foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).

Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, are generally priced at the ending NAV provided by the applicable mutual fund’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.

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 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 values of other similar securities, and news events with direct bearing on 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.

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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’ values as determined by the Board or its designee, pursuant to the fair value pricing procedures adopted by the Board, instead of being determined by the market. Using a fair value pricing methodology to price a foreign security may result in a value that is different from such foreign security’s most recent closing price and from the value used by other investment companies to calculate their NAVs. Such securities are generally classified in Level 2 of 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 “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 determinations. Various inputs are used to determine 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, 2018, are included in the Schedule of Investments.

4).  INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during fiscal year 2018 were $1,741,081,425 and $2,272,356,313, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during fiscal year 2018.

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. 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, as amended. During fiscal year 2018, the Fund did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940, as amended.

5).  INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

The Advisor provides the Fund with investment advisory services under an Investment Advisory Agreement. The Advisor furnishes all investment advice, office space, and facilities, as well as 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 an annual rate of 0.74%. The net investment advisory fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

The Advisor has agreed to limit total annual operating expenses to 1.39% of the Fund’s net assets for Investor Class shares and 1.07% of the Fund’s net assets for Institutional Class shares (in each case, excluding all federal, state, and local taxes,

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NOTES TO THE FINANCIAL STATEMENTS

interest, brokerage commissions, acquired fund fees and expenses and other costs incurred in connection with the purchase and sale of securities, and extraordinary items) through January 12, 2020, pursuant to the written direction of the Board. For a period of three years after the year in which the Advisor waives or reimburses 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.

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 advisory 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. The shareholder service fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 is currently only using up to 0.15% of its average daily net assets attributable to Investor Class shares 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, printing and mailing of prospectuses to other than current shareholders, 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 distribution fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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. The sub-transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services (“Fund Services”) provides the Fund with administrative, fund accounting, and transfer agent services. As administrator, Fund Services 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. U.S. Bank N.A., an affiliate of Fund Services, serves as the Fund’s custodian. The servicing agreements between the Trust and Fund Services and U.S. Bank N.A. contain a fee schedule that is inclusive of administrative, fund accounting, custody, and transfer agent fees. The administrative, fund accounting, custody, and transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 Fund Services and U.S. Bank N.A.

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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. The compliance fees expensed by the Fund during fiscal year 2018 are included in 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 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 fiscal year 2018, the Fund had an outstanding average daily balance and a weighted average interest rate of $227,690 and 4.47%, respectively. The interest expensed by the Fund during fiscal year 2018 is included in the Statement of Operations. The maximum amount outstanding for the Fund during fiscal year 2018 was $17,829,000. As of October 31, 2018, the Fund did not have any borrowings outstanding under the line of credit.

8).  FEDERAL TAX INFORMATION

As of October 31, 2018, the components of accumulated earnings (losses) for income tax purposes were as follows:

	Investments
Cost of investments for tax purposes	$	739,706,681
Gross tax unrealized appreciation	$	4,822,523
Gross tax unrealized depreciation		(73,343,330	)
Net tax unrealized appreciation/(depreciation)	$	(68,520,807	)
Undistributed ordinary income	$	5,436,050
Undistributed long-term capital gains		157,418,277
Total distributable earnings	$	162,854,327
Other accumulated gain/(loss)	$	—
Total accumulated gain/(loss)	$	94,333,520

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.

As of October 31, 2018, the Fund had no tax basis capital losses to offset future capital gains.

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NOTES TO THE FINANCIAL STATEMENTS

As of October 31, 2018, the Fund did not defer, on a tax basis, any late-year ordinary losses. Late-year ordinary losses are net ordinary losses incurred after December 31, 2017, but within the taxable year, that are deemed to arise on the first day of the Fund’s next taxable year.

During fiscal year 2018 and fiscal year 2017, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2018		October 31, 2017
Ordinary income	$	—	$	—
Long-term capital gain		162,317,884		7,854,790
	$	162,317,884	$	7,854,790

9).  AGREEMENT AND PLAN OF REORGANIZATION

On November 16, 2017, and December 26, 2017, shareholders of each of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund, respectively, approved an Agreement and Plan of Reorganization between the Trust, on behalf of the Fund, and Rainier Investment Management Mutual Funds, a Delaware statutory trust, on behalf of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund, respectively. The Agreements and Plans of Reorganization provided for the transfer of all of the assets of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund to the Fund and the assumption of the liabilities (other than any excluded liabilities) of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund by the Fund. The Rainier Mid Cap Equity Fund, the Rainier Small/Mid Cap Equity Fund, and the Fund have substantially similar investment objectives. The following tables illustrate the specifics of the reorganization of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund into the Fund:

	Shares Issued	Hennessy Mid Cap 30 Fund Net Assets
Rainier Mid	to Shareholders		Combined
Cap Equity Fund	of Rainier Mid		(Post Merger)	Tax Status
Net Assets	Cap Equity Fund	Pre Merger	Net Assets	of Transfer
$69,217,067(1)	2,967,419	$968,703,016	$1,037,920,083	Non-taxable

⁽¹⁾  Includes unrealized appreciation in the amount of $21,463,644.

	Shares Issued	Hennessy Mid Cap 30 Fund Net Assets
Rainier Small/Mid	to Shareholders of		Combined
Cap Equity Fund	Rainier Small/Mid		(Post Merger)	Tax Status
Net Assets	Cap Equity Fund	Pre Merger	Net Assets	of Transfer
$252,687,011(2)	12,326,651	$1,016,365,858	$1,269,052,869	Non-taxable

⁽²⁾  Includes unrealized appreciation in the amount of $93,637,548.

Assuming the reorganization had been completed on November 1, 2017, the beginning of the annual reporting period of the Fund, the pro forma results of operation (unaudited) for fiscal year 2018 would have been as follows:

Net investment loss	$	(3,175,732	)
Net realized gain on investments	$	270,696,978
Net change in unrealized appreciation/depreciation on investments	$	(345,824,579	)
Net decrease in net assets resulting from operations	$	(78,303,333	)

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Because the Fund has been managed as a single integrated portfolio since the reorganization was completed, it is not practicable to separate the amounts of revenue and earnings of the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund that have been included in the Fund’s Statement of Operations since December 1, 2017, and January 12, 2018, the dates the reorganizations were completed, respectively.

10).  EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2018, 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, 2018, capital gains were declared and paid to shareholders of record on December 6, 2018, as follows:

	Long-term	Short-term
Investor Class	$4.34596	$0.15008
Institutional Class	$4.44097	$0.15336

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NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Report of Independent Registered Public

Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the shareholders of Hennessy Cornerstone Mid Cap 30 Fund

Novato, CA

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Hennessy Cornerstone Mid Cap 30 Fund (the “Fund”), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

The financial highlights for each of the three years in the period ended October 31, 2016 have been audited by other auditors, whose report dated December 22, 2016 expressed unqualified opinions on such financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management.  Our responsibility is to express an opinion on the Fund’s financial statements based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We have served as the auditor of one or more of the funds in the Trust since 2002.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.  The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2018 by correspondence with the custodian.  We believe that our audits provide a reasonable basis for our opinion.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2018

HENNESSY FUNDS 1-800-966-4354

27

Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Funds 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 to the Board of Trustees (“Advisers”) 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: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board of Trustees 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 Trustee oversees the 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 worked for the	None.
(1981)		Sutter Health organization since
Adviser to the Board		2011 in various positions. He has
		served as the Chief Executive Officer
		of the Sutter Roseville Medical
		Center since 2018. From 2016 through
		2018, he served as the Vice President
		of Strategy for the Sutter Health Valley
		Area, which includes 11 hospitals,
		13 ambulatory surgery centers,
		16,000 employees, and 1,900 physicians.
		From 2013 through 2016, Mr. Alexander
		served as Sutter Novato Community
		Hospital’s Chief Administrative Officer,
		and from 2011 through 2012, he
		served as a Director of Strategy
		within Sutter’s West Bay Region.

HENNESSYFUNDS.COM

28

TRUSTEES AND OFFICERS OF THE FUND

			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. Neil Hennessy has been employed	Hennessy
(1956)	a Trustee and	by Hennessy Advisors, Inc. since	Advisors, Inc.
Trustee, Chairman of	June 2008 as	1989 and currently serves as its
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 President, Chief Operating
Executive Vice President		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 Secretary
Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013 and currently serves as its Chief
Senior Vice President		Compliance Officer and Senior Vice President.
and Head of Distribution
Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)(3)		as its General Counsel since June 2013.
Senior Vice President and
Chief Compliance Officer

HENNESSY FUNDS 1-800-966-4354

29

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)(4)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Large Cap Financial Fund and the Hennessy Small
and Portfolio Manager		Cap Financial Fund since inception. Mr. Ellison also served as a
		Portfolio Manager of the Hennessy Technology Fund from its
		inception until February 2017. Mr. Ellison served as Director,
		CIO and President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.
Ryan C. Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)(5)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Gas Utility Fund, the Hennessy Large Cap Financial
and Portfolio Manager		Fund, and the Hennessy Small 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. Mr. Kelley has also served as a Portfolio
		Manager of the Hennessy Cornerstone Growth Fund, the
		Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
		Cornerstone Large Growth Fund, and the Hennessy
		Cornerstone Value Fund since February 2017, as a Co-Portfolio
		Manager of the Hennessy Technology Fund since February
		2017, and as a Portfolio Manager of the Hennessy Total Return
		Fund and the Hennessy Balanced Fund since May 2018.
		Mr. Kelley served as Portfolio Manager of FBR Fund Advisers,
		Inc. from January 2008 to October 2012.
Tania Kelley	October 2003	Ms. Kelley has been employed by Hennessy Advisors, Inc.
(1965)		since October 2003.
Senior Vice President
and Head of Marketing
Daniel P. Hennessy	December 2016	Mr. Daniel Hennessy has been employed by Hennessy Advisors,
(1990)		Inc. since 2015. He has served as an Associate Analyst or
Vice President		Analyst of the Hennessy Technology Fund since February 2017.
and Analyst		Mr. Daniel Hennessy previously served as a Mutual Fund
		Specialist at U.S. Bancorp Fund Services, LLC (now doing
		business as U.S. Bank Global Fund Services) from November
		2014 to July 2015. Prior to that, he attended the University of
		San Diego, where he earned a degree in Political Science.

_______________

(1)	Messrs. DeSousa, Doyle, N. 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 the Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
(2)	Mr. N. 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 this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
(4)	The address of this officer is 101 Federal Street, Suite 1900, Boston, MA 02110.
(5)	The address of this officer is 1340 Environ Way, Suite 332, Chapel Hill, NC 27517.

HENNESSYFUNDS.COM

30

TRUSTEES AND OFFICERS OF THE FUND

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HENNESSY FUNDS 1-800-966-4354

31

Expense Example (Unaudited)

October 31, 2018

As a shareholder of the Fund, you incur 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, 2018, through October 31, 2018.

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. Bank Global Fund Services, 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” or “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. 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.

HENNESSYFUNDS.COM

32

EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period(1)
	Account Value	Account Value	May 1, 2018 –
	May 1, 2018	October 31, 2018	October 31, 2018
Investor Class
Actual	$1,000.00	$   895.40	$6.31
Hypothetical (5% return before expenses)	$1,000.00	$1,018.55	$6.72
Institutional Class
Actual	$1,000.00	$   897.30	$4.54
Hypothetical (5% return before expenses)	$1,000.00	$1,020.42	$4.84

⁽¹⁾ Expenses are equal to the Fund’s annualized expense ratio of 1.32% for Investor Class shares or 0.95% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/365 days (to reflect one-half year period).

HENNESSY FUNDS 1-800-966-4354

33

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 www.hennessyfunds.com/proxy-voting/voting-policy; or (3) on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at www.hennessyfunds.com/proxy-voting/voting-record 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 a 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 Forms N-Q are available on the SEC’s website at www.sec.gov.  Information included in the Fund’s Forms N-Q will also be available upon request by calling 1-800-966-4354.

Federal Tax Distribution Information

(Unaudited)

For fiscal year 2018, 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 0.00%.

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for fiscal year 2018 was 0.00%.

The percentage of taxable ordinary income distributions that were 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 0.00%.

Important Notice Regarding Delivery

of Shareholder Documents

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of shareholder reports, proxy statements, and prospectuses to shareholders who share an address and have the same last name. This process does not apply to account statements. You may request an individual copy of a shareholder document at any time. If you would like to receive separate mailings of shareholder documents, please call U.S. Bank Global Fund Services at 1-800-261-6950 or 1-414-765-4124, and individual delivery will begin within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact such intermediary directly to request individual delivery.

HENNESSYFUNDS.COM

34

PROXY VOTING — PRIVACY POLICY

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 will be shared with non-affiliated third parties.

HENNESSY FUNDS 1-800-966-4354

35

(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 Boulevard, Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT, &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

d/b/a U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Drive, 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

Two Liberty Place

50 South 16th Street, Suite 2900

Philadelphia, Pennsylvania 19102-2529

DISTRIBUTOR

Quasar Distributors, LLC

777 East Wisconsin Avenue

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, 2018

HENNESSY CORNERSTONE

LARGE GROWTH FUND

Investor Class  HFLGX

Institutional Class  HILGX

hennessyfunds.com  |  1-800-966-4354

(This Page Intentionally Left Blank.)

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	14
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 Policy and Proxy Voting Records	34
Quarterly Schedule of Investments	34
Federal Tax Distribution Information	34
Important Notice Regarding Delivery of Shareholder Documents	34
Privacy Policy	35

HENNESSY FUNDS 1-800-966-4354

December 2018

Dear Hennessy Funds Shareholder:

Over the past year, we have witnessed the return of market volatility. U.S. stocks still registered healthy gains, bolstered by the impact on corporate profits of the successful passage of the tax reform bill in December 2017. However, concerns over potential trade disruptions, especially between the U.S. and China, and worries over higher short-term interest rates, which many believe could possibly trigger a recession down the road, put downward pressure on equity valuations.

The U.S. economy performed well over the period, and actually achieved an acceleration in GDP growth to over 3% on an annualized basis in the second and third quarters of calendar year 2018. During the past year, companies continued to hire workers, adding over 200,000 jobs per month on average, sending the unemployment rate down to 3.7% in October, which is the lowest it has been since 1969. Consumer confidence is high and still rising, and corporate profits reached record levels in the third quarter of calendar year 2018, posting a year-over-year increase of 26% for the companies in the S&P 500 Index.

The Federal Reserve, confident about the strength of the economy and mindful of a tight labor market, raised short-term interest rates four times over the last year, by a quarter point each time. Long-term bond yields also rose, driven higher primarily by evidence of faster wage growth, pushing the U.S. 10-year Treasury bond over 3% for the first time since 2013.

As I write this, we are experiencing the market’s 20th downturn since 2010. I have been saying that every bull market experiences volatility and pullbacks. Many financial commentators think this bull market is “long in the tooth.” I do not agree with them. I believe stock valuations are still very reasonable. The prospective price to earnings multiple for the Dow Jones Industrial Average has come down from almost 20x at the end of 2017 to 16x, just above its 10-year average of 15x. The prospective PE multiple for the S&P 500 Index has also come down, from 20x to 17x, and compares favorably to its 10-year average of 16x.

Cash, meanwhile, continues to build up on corporate balance sheets. The companies in the S&P 500 Index reported a total of over $5.4 trillion in cash and marketable securities in their latest filings. Companies have been spending some of their cash, increasing their investment spending and laying the groundwork for future earnings growth. However, they have also been returning capital to shareholders. S&P 500 Index companies announced $433.6 billion in share repurchases during the second quarter of calendar year 2018, nearly doubling the previous record of $242.1 billion set in the first quarter. Companies are also raising their dividends.

In addition, I believe the Federal Reserve will take care not to raise interest rates too high or too fast and endanger the economic expansion. While wage growth has risen to over 3% in October, other measures of inflationary pressure, such as the Consumer Price Index and the Producer Price Index, still show prices increasing at a more moderate pace, closer to 2%. Given continued evidence of modest rates of inflation, I believe the Fed will be able to maintain its gradual pace of interest rate hikes.

Finally and importantly, I still see no signs of euphoria in this market. In my opinion, the enthusiasm present earlier in the year, which followed the significant reduction in corporate income tax rates, has largely evaporated, and it has been replaced with anxiety

HENNESSYFUNDS.COM

2

LETTER TO SHAREHOLDERS

over higher interest rates and their potential impact on growth. In the past, I have likened the current bull market to that of 1982-2000, and I still believe this comparison holds true. I am confident in the strength of the market today and believe the economy will continue to grow in the coming year, albeit at a more moderate pace.

Thank you for your continued confidence and investment in the Hennessy 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 commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is a valuation measure and is calculated by dividing a company’s market price per share by its earnings per share. Earnings growth is not a measure of a fund’s future performance.

HENNESSY FUNDS 1-800-966-4354

3

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, 2018

			Since
	One	Five	Inception
	Year	Years	(3/20/09)
Hennessy Cornerstone Large Growth Fund –
Investor Class (HFLGX)	8.53%	9.12%	15.53%
Hennessy Cornerstone Large Growth Fund –
Institutional Class (HILGX)	8.82%	9.36%	15.82%
Russell 1000® Index	6.98%	11.05%	16.53%
S&P 500 Index	7.35%	11.34%	16.42%

Expense ratios:  1.26% (Investor Class); Gross 1.01%, Net 0.99%⁽¹⁾ (Institutional Class)

⁽¹⁾ The Fund’s investment advisor has contractually agreed to limit expenses until November 30, 2019.

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 table does 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 www.hennessyfunds.com.

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

Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes or Russell ratings or underlying data and no party may rely on any Russell Indexes or Russell ratings or underlying data contained in this communication. No further distribution of Russell data is permitted without Russell’s express written consent. Russell does not promote, sponsor, or endorse the content of this communication.

HENNESSYFUNDS.COM

4

PERFORMANCE OVERVIEW

The expense ratios presented are from the most recent prospectus. The expense ratios for the current reporting period are available in the Financial Highlights section of this report.

PERFORMANCE NARRATIVE

Portfolio Managers Neil J. Hennessy and Ryan C. Kelley

Performance:

For the 12-month period ended October 31, 2018, the Investor Class of the Hennessy Cornerstone Large Growth Fund returned 8.53%, outperforming both the Russell 1000^® Index (the Fund’s primary benchmark) and the S&P 500 Index, which returned 6.98% and 7.35%, respectively, for the same period.

The Fund’s outperformance relative to its primary benchmark can be attributed predominantly to stock selection, particularly in the Health Care and Industrials sectors. Hospital operator HCA Healthcare, Inc., pharmaceutical companies AbbVie, Inc. and AmerisourceBergen Corp., and medical distributor Express Scripts Holding Co. were among the holdings that contributed most to relative performance in the Health Care sector. In the Industrials sector, airline operators United Continental Holdings, Inc. and Delta Air Lines, Inc. and railroads CSX Corp. and Union Pacific Corp. were strong performers over the period and contributed positively to the Fund’s relative return. Many holdings in the Consumer Discretionary sector also performed well over the period, including Target Corp., Kohl’s Corp., and Darden Restaurants, Inc. This positive performance was partially offset by the weak performances of several stocks in the Information Technology sector, including Applied Materials, Inc. and Micron Technology, Inc.

The Fund continues to hold all of the companies mentioned with the exception of AbbVie, Inc. and AmerisourceBergen Corp.

Portfolio Strategy:

The Fund utilizes a quantitative approach to build a portfolio of attractively valued, highly profitable, larger-cap companies. In essence, the strategy seeks high-quality, high-return companies that are possibly being overlooked by investors by selecting 50 larger-cap stocks that have relatively low price-to-cash-flow ratios and have generated high returns on capital over the past year.

Investment Commentary:

We continue to believe that the outlook for large-cap stocks is positive. The U.S. economy is growing at a healthy rate, unemployment is low, and growth in both consumption and capital spending has accelerated over the last 12 months. Corporate earnings have risen significantly over the first nine months of 2018, helped, in part, by lower taxes. We expect earnings growth to be slower next year yet remain positive, driven primarily by continued steady economic growth.

There are three primary industry groups where the Fund currently maintains overweight positions: Transportation, Retailing, and Food, Beverage & Tobacco. Many transportation and retailing companies have been benefiting from strong economic growth and, therefore, have seen profitability and returns on capital rise. As a result, the Fund owns certain stocks from these groups, including United Continental Holdings, Inc., Delta Air Lines, Inc., Target Corp., and Kohl’s Corp. Food, Beverage, & Tobacco industry stocks have lagged the general market, and we believe many now look undervalued. Despite this underperformance, many of the Fund’s holdings in this industry group have maintained strong levels of profitability and have continued to generate high returns on total capital and steady earnings growth.

HENNESSY FUNDS 1-800-966-4354

5

_______________

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 Fund may invest in medium-capitalization 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.

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-cash-flow ratio is a valuation measure calculated by dividing a company’s market price per share by its cash flow per share. Return on capital measures a company’s profitability and is calculated by expressing net profits minus dividends as a percentage of total capital.

HENNESSYFUNDS.COM

6

PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as ofOctober 31, 2018

HENNESSY CORNERSTONE LARGE GROWTH FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)	% NET ASSETS
HCA Healthcare, Inc.	2.63%
Apple, Inc.	2.61%
United Continental Holdings, Inc.	2.58%
Express Scripts Holding Co.	2.58%
CSX Corp.	2.51%
Centene Corp.	2.45%
Kohl’s Corp.	2.40%
HP, Inc.	2.29%
Walgreens Boots Alliance, Inc.	2.26%
Target Corp.	2.25%

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.

The Global Industry Classification Standard (GICS^®) was developed by and is the exclusive property and a service mark of MSCI, Inc. and Standard & Poor Financial Services LLC.  It has been licensed for use by the Hennessy Funds.

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COMMON STOCKS – 96.01%	Number				% of
	of Shares		Value		Net Assets
Communication Services – 8.28%
CBS Corp., Class B		52,900	$	3,033,815		2.09	%
Omnicom Group, Inc.		35,700		2,653,224		1.83	%
The Walt Disney Co.		27,200		3,123,376		2.15	%
Verizon Communications, Inc.		56,100		3,202,749		2.21	%
				12,013,164		8.28	%
Consumer Discretionary – 18.86%
AutoZone, Inc. (a)		3,900		2,860,533		1.97	%
Best Buy Co., Inc.		40,000		2,806,400		1.93	%
Darden Restaurants, Inc.		29,900		3,185,845		2.20	%
General Motors Co.		67,000		2,451,530		1.69	%
Kohl’s Corp.		46,000		3,483,580		2.40	%
L Brands, Inc.		57,800		1,873,876		1.29	%
Starbucks Corp.		50,770		2,958,368		2.04	%
Target Corp.		39,100		3,269,933		2.25	%
The Gap, Inc.		89,500		2,443,350		1.68	%
Wyndham Hotels & Resorts, Inc.		23,900		1,178,031		0.81	%
Wyndham Worldwide Corp.		24,200		868,296		0.60	%
				27,379,742		18.86	%
Consumer Staples – 18.64%
Altria Group, Inc.		43,000		2,796,720		1.93	%
Campbell Soup Co.		60,700		2,270,787		1.56	%
Conagra Brands, Inc.		78,800		2,805,280		1.93	%
CVS Health Corp.		40,300		2,917,317		2.01	%
General Mills, Inc.		51,200		2,242,560		1.54	%
Kimberly-Clark Corp.		24,700		2,576,210		1.77	%
The Kroger Co.		103,400		3,077,184		2.12	%
Tyson Foods, Inc., Class A		37,700		2,258,984		1.56	%
Walgreens Boots Alliance, Inc.		41,100		3,278,547		2.26	%
Walmart, Inc.		28,300		2,837,924		1.96	%
				27,061,513		18.64	%
Financials – 3.62%
Allstate Corp.		31,000		2,967,320		2.04	%
Ameriprise Financial, Inc.		18,000		2,290,320		1.58	%
				5,257,640		3.62	%

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

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SCHEDULE OF INVESTMENTS

COMMON STOCKS	Number				% of
	of Shares		Value		Net Assets
Health Care – 7.66%
Centene Corp. (a)		27,300	$	3,557,736		2.45	%
Express Scripts Holding Co. (a)		38,600		3,743,042		2.58	%
HCA Healthcare, Inc.		28,600		3,818,958		2.63	%
				11,119,736		7.66	%
Industrials – 19.57%
American Airlines Group, Inc.		56,200		1,971,496		1.36	%
CSX Corp.		52,900		3,642,694		2.51	%
Deere & Co.		17,700		2,397,288		1.65	%
Delta Air Lines, Inc.		54,000		2,955,420		2.04	%
FedEx Corp.		11,700		2,577,978		1.78	%
PACCAR, Inc.		41,200		2,357,052		1.62	%
Southwest Airlines Co.		49,500		2,430,450		1.67	%
Union Pacific Corp.		21,898		3,201,925		2.21	%
United Continental Holdings, Inc. (a)		43,900		3,753,889		2.58	%
Waste Management, Inc.		34,900		3,122,503		2.15	%
				28,410,695		19.57	%
Information Technology – 13.02%
Apple, Inc.		17,330		3,792,844		2.61	%
Applied Materials, Inc.		56,800		1,867,584		1.29	%
HP, Inc.		137,800		3,326,492		2.29	%
Intel Corp.		62,750		2,941,720		2.03	%
International Business Machines Corp.		18,600		2,146,998		1.48	%
Lam Research Corp.		16,300		2,310,199		1.59	%
Micron Technology, Inc. (a)		66,700		2,515,924		1.73	%
				18,901,761		13.02	%
Materials – 6.36%
Eastman Chemical Co.		28,800		2,256,480		1.55	%
Freeport-McMoRan, Inc.		160,100		1,865,165		1.29	%
Nucor Corp.		44,300		2,619,016		1.80	%
Steel Dynamics, Inc.		62,900		2,490,840		1.72	%
				9,231,501		6.36	%
Total Common Stocks
(Cost $131,231,207)				139,375,752		96.01	%

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

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SHORT-TERM INVESTMENTS – 4.12%	Number					% of
	of Shares		Value			Net Assets
Money Market Funds – 4.12%
Fidelity Government Portfolio, Institutional Class, 2.06% (b)		5,979,305	$	5,979,305			4.12	%
Total Short-Term Investments
(Cost $5,979,305)				5,979,305			4.12	%
Total Investments
(Cost $137,210,512) – 100.13%				145,355,057			100.13	%
Liabilities in Excess of Other Assets – (0.13)%				(193,434	)		(0.13	)%
TOTAL NET ASSETS – 100.00%			$	145,161,623			100.00	%

Percentages are stated as a percent of net assets.

(a)	Non-income producing security.
(b)	The rate listed is the fund’s seven-day yield as of October 31, 2018.

Summary of Fair Value Exposure at October 31, 2018

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2018 (See Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Communication Services	$	12,013,164	$	—	$	—	$	12,013,164
Consumer Discretionary		27,379,742		—		—		27,379,742
Consumer Staples		27,061,513		—		—		27,061,513
Financials		5,257,640		—		—		5,257,640
Health Care		11,119,736		—		—		11,119,736
Industrials		28,410,695		—		—		28,410,695
Information Technology		18,901,761		—		—		18,901,761
Materials		9,231,501		—		—		9,231,501
Total Common Stocks	$	139,375,752	$	—	$	—	$	139,375,752
Short-Term Investments
Money Market Funds	$	5,979,305	$	—	$	—	$	5,979,305
Total Short-Term Investments	$	5,979,305	$	—	$	—	$	5,979,305
Total Investments	$	145,355,057	$	—	$	—	$	145,355,057

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

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SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES

Financial Statements

Statement of Assets and Liabilities as of October 31, 2018

ASSETS:
Investments in securities, at value (cost $137,210,512)	$	145,355,057
Dividends and interest receivable		166,239
Receivable for fund shares sold		4,894
Prepaid expenses and other assets		16,777
Total Assets		145,542,967
LIABILITIES:
Payable for fund shares redeemed		5,056
Payable to advisor		92,600
Payable to administrator		13,178
Payable to auditor		21,900
Accrued distribution fees		226,211
Accrued service fees		10,857
Accrued trustees fees		5,963
Accrued expenses and other payables		5,579
Total Liabilities		381,344
NET ASSETS	$	145,161,623
NET ASSETS CONSIST OF:
Capital stock	$	108,975,614
Total distributable earnings		36,186,009
Total Net Assets	$	145,161,623
NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	125,908,520
Shares issued and outstanding		10,284,365
Net asset value, offering price and redemption price per share	$	12.24
Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	19,253,103
Shares issued and outstanding		1,555,060
Net asset value, offering price and redemption price per share	$	12.38

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, 2018

INVESTMENT INCOME:
Dividend income	$	3,062,722
Interest income		62,738
Total investment income		3,125,460
EXPENSES:
Investment advisory fees (See Note 5)		1,127,992
Distribution fees – Investor Class (See Note 5)		197,920
Administration, fund accounting, custody and transfer agent fees (See Note 5)		146,207
Service fees – Investor Class (See Note 5)		131,947
Sub-transfer agent expenses – Investor Class (See Note 5)		97,529
Sub-transfer agent expenses – Institutional Class (See Note 5)		7,888
Federal and state registration fees		30,371
Compliance expense (See Note 5)		29,509
Audit fees		23,134
Trustees’ fees and expenses		17,151
Reports to shareholders		15,705
Legal fees		834
Other expenses		9,259
Total expenses before recoupment from advisor		1,835,446
Expense recoupment by advisor – Institutional Class		238
Net expenses		1,835,684
NET INVESTMENT INCOME	$	1,289,776
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on investments	$	29,755,376
Net change in unrealized appreciation/depreciation on investments		(20,362,172	)
Net gain on investments		9,393,204
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	10,682,980

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

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STATEMENT OF OPERATIONS

(This Page Intentionally Left Blank.)

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Financial Statements

Statements of Changes in Net Assets

	Year Ended			Year Ended
	October 31, 2018			October 31, 2017
OPERATIONS:
Net investment income	$	1,289,776		$	1,052,238
Net realized gain on investments		29,755,376			10,781,271
Net change in unrealized
appreciation/depreciation on investments		(20,362,172	)		3,606,256
Net increase in net assets resulting from operations		10,682,980			15,439,765
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Distributable earnings – Investor Class		(5,633,818	)		(1,086,070	)
Distributable earnings – Institutional Class		(941,276	)		(172,457	)
Total distributions		(6,575,094	)		(1,258,527	)(1)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued in
the Reorganization – Investor Class (See Note 9)		42,940,857			—
Proceeds from shares issued in
the Reorganization – Institutional Class (See Note 9)		9,672,906			—
Proceeds from shares subscribed – Investor Class		2,864,547			6,295,964
Proceeds from shares subscribed – Institutional Class		995,312			772,639
Dividends reinvested – Investor Class		5,350,903			1,010,431
Dividends reinvested – Institutional Class		911,739			169,405
Cost of shares redeemed – Investor Class		(20,588,670	)		(15,757,878	)
Cost of shares redeemed – Institutional Class		(5,008,275	)		(2,723,788	)
Net increase (decrease) in net assets
derived from capital share transactions		37,139,319			(10,233,227	)
TOTAL INCREASE IN NET ASSETS		41,247,205			3,948,011
NET ASSETS:
Beginning of year		103,914,418			99,966,407
End of year	$	145,161,623		$	103,914,418	(2)

(1)	All distributions were from net investment income.
(2)	Includes accumulated net investment income of $1,052,238.

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, 2018			October 31, 2017
CHANGES IN SHARES OUTSTANDING:
Shares issued in the Reorganization – Investor Class		3,458,944			—
Shares issued in the Reorganization – Institutional Class		771,378			—
Shares sold – Investor Class		230,354			565,507
Shares sold – Institutional Class		78,488			68,027
Shares issued to holders as reinvestment
of dividends – Investor Class		442,489			92,025
Shares issued to holders as reinvestment
of dividends – Institutional Class		74,617			15,303
Shares redeemed – Investor Class		(1,653,034	)		(1,394,127	)
Shares redeemed – Institutional Class		(395,137	)		(238,017	)
Net increase (decrease) in shares outstanding		3,008,099			(891,282	)

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.

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FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	11.75		$	10.27		$	12.99		$	15.16		$	13.56
	0.06			0.11			0.09			0.17			0.15
	0.94			1.49			0.08			0.04			2.28
	1.00			1.60			0.17			0.21			2.43
	(0.08	)		(0.12	)		(0.16	)		(0.14	)		(0.15	)
	(0.43	)		—			(2.73	)		(2.24	)		(0.68	)
	(0.51	)		(0.12	)		(2.89	)		(2.38	)		(0.83	)
$	12.24		$	11.75		$	10.27		$	12.99		$	15.16
	8.53	%		15.70	%		2.63	%		1.11	%		18.73	%
$	125.91		$	91.74		$	87.73		$	98.64		$	105.51
	1.24	%		1.25	%		1.25	%		1.09	%		1.15	%
	0.81	%		0.95	%		1.22	%		1.37	%		1.12	%
	70	%		65	%		53	%		79	%		57	%

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/recoupment

After expense reimbursement/recoupment

Ratio of net investment income to average net assets:

Before expense reimbursement/recoupment

After expense reimbursement/recoupment

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.

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FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	11.87		$	10.37		$	13.10		$	15.30		$	13.68
	0.14			0.13			0.13			0.20			0.17
	0.90			1.52			0.07			0.02			2.30
	1.04			1.65			0.20			0.22			2.47
	(0.10	)		(0.15	)		(0.17	)		(0.16	)		(0.17	)
	(0.43	)		—			(2.76	)		(2.26	)		(0.68	)
	(0.53	)		(0.15	)		(2.93	)		(2.42	)		(0.85	)
$	12.38		$	11.87		$	10.37		$	13.10		$	15.30
	8.82	%		16.00	%		2.92	%		1.19	%		18.96	%
$	19.25		$	12.17		$	12.24		$	13.82		$	14.88
	0.96	%		1.00	%		1.01	%		0.99	%		1.06	%
	0.96	%		1.00	%		1.01	%		0.99	%		0.98	%
	1.08	%		1.20	%		1.47	%		1.47	%		1.21	%
	1.08	%		1.20	%		1.47	%		1.47	%		1.30	%
	70	%		65	%		53	%		79	%		57	%

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

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Financial Statements

Notes to the Financial Statements October 31, 2018

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.

The Fund offers Investor Class and Institutional Class shares.  Each class of shares differs principally in its respective 12b-1 distribution and service, shareholder servicing, and sub-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 to U.S. generally accepted accounting principles (“GAAP”).

a).	Securities 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 because 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/loss and realized gains/losses for federal income tax purposes may differ from those reported in 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.  The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
	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 fiscal year 2018 have been identified and appropriately reclassified in the Statement of Assets and Liabilities. The adjustments are as follows:

Total
Distributable
Earnings	Capital Stock
$(3,003,589)	$3,003,589

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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.  Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.  Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December.  Distributions of net realized capital gains, if any, are declared and paid annually, usually in December.
f).	Security Transactions – Investment and shareholder transactions are recorded on the trade date.  The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the security lot sold with the net sale proceeds.  Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
g).	Use of Estimates – 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 (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by (ii) the total number of 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).	New Accounting Pronouncements – In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 does not eliminate the requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the changes in unrealized gains and losses for recurring Level 3 fair value measurements. ASU 2018-13 requires that information is provided about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has

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21

evaluated the impact of this change in guidance, and due to the permissibility of early adoption, modified the Fund’s fair value disclosures for the current reporting period.

j).

New Rule Issuances – In August 2018, the Securities and Exchange Commission issued Final Rule Release No. 33 10532, Disclosure Update and Simplification, which in part amends certain financial statement disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, GAAP, or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amendments to Rule 6-04.17 of Regulation S-X (balance sheet) were amended to require presentation of the total, rather than the components of net assets, of distributable earnings on the balance sheet. Consistent with GAAP, funds will be required to disclose total distributable earnings. The amendments to Rule 6-09 of Regulation S-X (statement of changes in net assets) omit the requirement to separately state the sources of distributions paid as well as omit the requirement to parenthetically state the book basis amount of undistributed net investment income. Instead, consistent with GAAP, funds will be required to disclose the total amount of distributions paid, except that any tax return of capital must be separately disclosed. The requirements of the Final Rule Release are effective November 5, 2018 and the Fund’s Statement of Assets and Liabilities and the Statement of Changes in Net Assets for the current and prior reporting period have been modified accordingly.

3).  SECURITIES VALUATION

The Fund follows 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 of 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 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. 

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NOTES TO THE FINANCIAL STATEMENTS

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.

Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, are generally priced at the ending NAV provided by the applicable mutual fund’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.

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 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 values of other similar securities, and news events with direct bearing on 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 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 “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 determinations.  Various inputs are used to determine 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

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investing in those securities.  Details related to the fair valuation hierarchy of the Fund’s securities as of October 31, 2018, are included in the Schedule of Investments.

4).  INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during fiscal year 2018 were $101,540,954 and $121,513,975, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during fiscal year 2018.

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.  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, as amended.  During fiscal year 2018, the Fund did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940, as amended.

5).  INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

The Advisor provides the Fund with investment advisory services under an Investment Advisory Agreement.  The Advisor furnishes all investment advice, office space, and facilities, as well as 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 an annual rate of 0.74%.  The net investment advisory fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

The Advisor has contractually agreed to limit total annual operating expenses to 1.29% of the Fund’s net assets for Investor Class shares and 0.98% of the Fund’s net assets for Institutional Class shares (in each case, 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) through November 30, 2019. In addition, in the past, the Advisor had contractually agreed to waive its fees and absorb expenses to the extent that 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). This prior 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 waives or reimburses 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.  The Advisor recouped $238 from the Fund during fiscal year 2018.  There are no further recoverable amounts.

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 advisory 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.  The shareholder service fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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

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NOTES TO THE FINANCIAL STATEMENTS

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 is currently only using up to 0.15% of its average daily net assets attributable to Investor Class shares 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, printing and mailing of prospectuses to other than current shareholders, 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 distribution fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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.  The sub-transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services (“Fund Services”) provides the Fund with administrative, fund accounting, and transfer agent services. As administrator, Fund Services 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. U.S. Bank N.A., an affiliate of Fund Services, serves as the Fund’s custodian. The servicing agreements between the Trust and Fund Services and U.S. Bank N.A. contain a fee schedule that is inclusive of administrative, fund accounting, custody, and transfer agent fees. The administrative, fund accounting, custody, and transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 Fund Services 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.  The compliance fees expensed by the Fund during fiscal year 2018 are included in 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.

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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 fiscal year 2018, the Fund did not have any borrowings outstanding under the line of credit.

8).  FEDERAL TAX INFORMATION

As of October 31, 2018, the components of accumulated earnings (losses) for income tax purposes were as follows:

	Investments
Cost of investments for tax purposes	$	137,238,677
Gross tax unrealized appreciation	$	20,050,417
Gross tax unrealized depreciation		(11,934,063	)
Net tax unrealized appreciation/(depreciation)	$	8,116,354
Undistributed ordinary income	$	1,289,774
Undistributed long-term capital gains		26,779,881
Total distributable earnings	$	28,069,655
Other accumulated gain/(loss)	$	—
Total accumulated gain/(loss)	$	36,186,009

As of October 31, 2018, the Fund had no tax basis capital losses to offset future capital gains.

As of October 31, 2018, the Fund did not defer, on a tax basis, any late-year ordinary losses.  Late-year ordinary losses are net ordinary losses incurred after December 31, 2017, but within the taxable year, that are deemed to arise on the first day of the Fund’s next taxable year.

During fiscal year 2018 and fiscal year 2017, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2018		October 31, 2017
Ordinary income(1)	$	1,275,498	$	1,258,527
Long-term capital gain		5,299,596		—
	$	6,575,094	$	1,258,527

⁽¹⁾  Ordinary income includes short-term capital gains.

9).  AGREEMENT AND PLAN OF REORGANIZATION

On November 16, 2017, shareholders of the Rainier Large Cap Equity Fund approved an Agreement and Plan of Reorganization between the Trust, on behalf of the Fund, and Rainier Investment Management Mutual Funds, a Delaware statutory trust, on behalf of the Rainier Large Cap Equity Fund. The Agreement and Plan of Reorganization provided for the transfer of all of the assets of the Rainier Large Cap Equity Fund to the Fund and the assumption of the liabilities (other than any excluded liabilities) of the Rainier Large

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26

NOTES TO THE FINANCIAL STATEMENTS

Cap Equity Fund by the Fund. The Rainier Large Cap Equity Fund and the Fund have substantially similar investment objectives. The reorganization was effective as of the close of business on December 1, 2017. The following tables illustrate the specifics of the reorganization of the Rainier Large Cap Equity Fund into the Fund:

	Shares Issued	Hennessy Large Growth Fund Net Assets
Rainier Large	to Shareholders		Combined
Cap Equity Fund	of Rainier Large		(Post Merger)	Tax Status
Net Assets	Cap Equity Fund	Pre Merger	Net Assets	of Transfer
$52,613,763(1)	4,230,322	$109,172,141	$161,785,904	Non-taxable

⁽¹⁾  Includes unrealized appreciation in the amount of $17,759,641.

Assuming the reorganization had been completed on November 1, 2017, the beginning of the annual reporting period of the Fund, the pro forma results of operation (unaudited) for fiscal year 2018, would have been as follows:

Net investment income	$	1,324,395
Net realized gain on investments	$	30,907,365
Net change in unrealized appreciation on investments	$	(20,226,635	)
Net increase in net assets resulting from operations	$	12,005,125

Because the Fund has been managed as a single integrated portfolio since the reorganization was completed, it is not practicable to separate the amounts of revenue and earnings of the Rainier Large Cap Equity Fund that have been included in the Fund’s Statement of Operations since December 1, 2017.

10).  EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2018, 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, 2018, capital gains were declared and paid to shareholders of record on December 6, 2018, as follows:

	Long-term
Investor Class	$2.29850
Institutional Class	$2.32790

On December 27, 2018, income distributions were declared and paid to shareholders of record on December 26, 2018, as follows:

Investor Class	$0.08724196
Institutional Class	$0.11795880

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Report of Independent Registered Public

Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the shareholders of Hennessy Cornerstone Large Growth Fund

Novato, CA

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Hennessy Cornerstone Large Growth Fund (the “Fund”), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

The financial highlights for each of the three years in the period ended October 31, 2016 have been audited by other auditors, whose report dated December 22, 2016 expressed unqualified opinions on such financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management.  Our responsibility is to express an opinion on the Fund’s financial statements based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We have served as the auditor of one or more of the funds in the Trust since 2002.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.  The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2018 by correspondence with the custodian.  We believe that our audits provide a reasonable basis for our opinion.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2018

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS

Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Funds 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 to the Board of Trustees (“Advisers”) 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: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board of Trustees 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 Trustee oversees the 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 worked for the	None.
(1981)		Sutter Health organization since
Adviser to the Board		2011 in various positions. He has
		served as the Chief Executive Officer
		of the Sutter Roseville Medical
		Center since 2018. From 2016 through
		2018, he served as the Vice President
		of Strategy for the Sutter Health Valley
		Area, which includes 11 hospitals,
		13 ambulatory surgery centers,
		16,000 employees, and 1,900 physicians.
		From 2013 through 2016, Mr. Alexander
		served as Sutter Novato Community
		Hospital’s Chief Administrative Officer,
		and from 2011 through 2012, he
		served as a Director of Strategy
		within Sutter’s West Bay Region.

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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. Neil Hennessy has been employed	Hennessy
(1956)	a Trustee and	by Hennessy Advisors, Inc. since	Advisors, Inc.
Trustee, Chairman of	June 2008 as	1989 and currently serves as its
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 President, Chief Operating
Executive Vice President		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 Secretary
Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013 and currently serves as its Chief
Senior Vice President		Compliance Officer and Senior Vice President.
and Head of Distribution
Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)(3)		as its General Counsel since June 2013.
Senior Vice President and
Chief Compliance Officer

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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)(4)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Large Cap Financial Fund and the Hennessy Small
and Portfolio Manager		Cap Financial Fund since inception. Mr. Ellison also served as a
		Portfolio Manager of the Hennessy Technology Fund from its
		inception until February 2017. Mr. Ellison served as Director,
		CIO and President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.
Ryan C. Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)(5)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Gas Utility Fund, the Hennessy Large Cap Financial
and Portfolio Manager		Fund, and the Hennessy Small 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. Mr. Kelley has also served as a Portfolio
		Manager of the Hennessy Cornerstone Growth Fund, the
		Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
		Cornerstone Large Growth Fund, and the Hennessy
		Cornerstone Value Fund since February 2017, as a Co-Portfolio
		Manager of the Hennessy Technology Fund since February
		2017, and as a Portfolio Manager of the Hennessy Total Return
		Fund and the Hennessy Balanced Fund since May 2018.
		Mr. Kelley served as Portfolio Manager of FBR Fund Advisers,
		Inc. from January 2008 to October 2012.
Tania Kelley	October 2003	Ms. Kelley has been employed by Hennessy Advisors, Inc.
(1965)		since October 2003.
Senior Vice President
and Head of Marketing
Daniel P. Hennessy	December 2016	Mr. Daniel Hennessy has been employed by Hennessy Advisors,
(1990)		Inc. since 2015. He has served as an Associate Analyst or
Vice President		Analyst of the Hennessy Technology Fund since February 2017.
and Analyst		Mr. Daniel Hennessy previously served as a Mutual Fund
		Specialist at U.S. Bancorp Fund Services, LLC (now doing
		business as U.S. Bank Global Fund Services) from November
		2014 to July 2015. Prior to that, he attended the University of
		San Diego, where he earned a degree in Political Science.

_______________

(1)	Messrs. DeSousa, Doyle, N. 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 the Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
(2)	Mr. N. 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 this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
(4)	The address of this officer is 101 Federal Street, Suite 1900, Boston, MA 02110.
(5)	The address of this officer is 1340 Environ Way, Suite 332, Chapel Hill, NC 27517.

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Expense Example (Unaudited)

October 31, 2018

As a shareholder of the Fund, you incur 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, 2018, through October 31, 2018.

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. Bank Global Fund Services, 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” or “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. 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.

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EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period(1)
	Account Value	Account Value	May 1, 2018 –
	May 1, 2018	October 31, 2018	October 31, 2018
Investor Class
Actual	$1,000.00	$1,025.10	$6.38
Hypothetical (5% return before expenses)	$1,000.00	$1,018.90	$6.36
Institutional Class
Actual	$1,000.00	$1,027.40	$4.91
Hypothetical (5% return before expenses)	$1,000.00	$1,020.37	$4.89

⁽¹⁾ Expenses are equal to the Fund’s annualized expense ratio of 1.25% for Investor Class shares or 0.96% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/365 days (to reflect one-half year period).

HENNESSY FUNDS 1-800-966-4354

33

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 www.hennessyfunds.com/proxy-voting/voting-policy; or (3) on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at www.hennessyfunds.com/proxy-voting/voting-record 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 a 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 Forms N-Q are available on the SEC’s website at www.sec.gov.  Information included in the Fund’s Forms N-Q will also be available upon request by calling 1-800-966-4354.

Federal Tax Distribution Information

(Unaudited)

For fiscal year 2018, 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 100.00%.

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for fiscal year 2018 was 100.00%.

The percentage of taxable ordinary income distributions that were 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 17.50%.

Important Notice Regarding Delivery

of Shareholder Documents

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of shareholder reports, proxy statements, and prospectuses to shareholders who share an address and have the same last name. This process does not apply to account statements. You may request an individual copy of a shareholder document at any time. If you would like to receive separate mailings of shareholder documents, please call U.S. Bank Global Fund Services at 1-800-261-6950 or 1-414-765-4124, and individual delivery will begin within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact such intermediary directly to request individual delivery.

HENNESSYFUNDS.COM

34

PROXY VOTING — PRIVACY POLICY

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 will be shared with non-affiliated third parties.

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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 Boulevard, Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT, &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

d/b/a U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Drive, 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

Two Liberty Place

50 South 16th Street, Suite 2900

Philadelphia, Pennsylvania 19102-2529

DISTRIBUTOR

Quasar Distributors, LLC

777 East Wisconsin Avenue

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, 2018

HENNESSY CORNERSTONE

VALUE FUND

Investor Class  HFCVX

Institutional Class  HICVX

hennessyfunds.com  |  1-800-966-4354

(This Page Intentionally Left Blank.)

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	14
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 Policy and Proxy Voting Records	34
Quarterly Schedule of Investments	34
Federal Tax Distribution Information	34
Important Notice Regarding Delivery of Shareholder Documents	34
Privacy Policy	35

HENNESSY FUNDS 1-800-966-4354

December 2018

Dear Hennessy Funds Shareholder:

Over the past year, we have witnessed the return of market volatility. U.S. stocks still registered healthy gains, bolstered by the impact on corporate profits of the successful passage of the tax reform bill in December 2017. However, concerns over potential trade disruptions, especially between the U.S. and China, and worries over higher short-term interest rates, which many believe could possibly trigger a recession down the road, put downward pressure on equity valuations.

The U.S. economy performed well over the period, and actually achieved an acceleration in GDP growth to over 3% on an annualized basis in the second and third quarters of calendar year 2018. During the past year, companies continued to hire workers, adding over 200,000 jobs per month on average, sending the unemployment rate down to 3.7% in October, which is the lowest it has been since 1969. Consumer confidence is high and still rising, and corporate profits reached record levels in the third quarter of calendar year 2018, posting a year-over-year increase of 26% for the companies in the S&P 500 Index.

The Federal Reserve, confident about the strength of the economy and mindful of a tight labor market, raised short-term interest rates four times over the last year, by a quarter point each time. Long-term bond yields also rose, driven higher primarily by evidence of faster wage growth, pushing the U.S. 10-year Treasury bond over 3% for the first time since 2013.

As I write this, we are experiencing the market’s 20th downturn since 2010. I have been saying that every bull market experiences volatility and pullbacks. Many financial commentators think this bull market is “long in the tooth.” I do not agree with them. I believe stock valuations are still very reasonable. The prospective price to earnings multiple for the Dow Jones Industrial Average has come down from almost 20x at the end of 2017 to 16x, just above its 10-year average of 15x. The prospective PE multiple for the S&P 500 Index has also come down, from 20x to 17x, and compares favorably to its 10-year average of 16x.

Cash, meanwhile, continues to build up on corporate balance sheets. The companies in the S&P 500 Index reported a total of over $5.4 trillion in cash and marketable securities in their latest filings. Companies have been spending some of their cash, increasing their investment spending and laying the groundwork for future earnings growth. However, they have also been returning capital to shareholders. S&P 500 Index companies announced $433.6 billion in share repurchases during the second quarter of calendar year 2018, nearly doubling the previous record of $242.1 billion set in the first quarter. Companies are also raising their dividends.

In addition, I believe the Federal Reserve will take care not to raise interest rates too high or too fast and endanger the economic expansion. While wage growth has risen to over 3% in October, other measures of inflationary pressure, such as the Consumer Price Index and the Producer Price Index, still show prices increasing at a more moderate pace, closer to 2%. Given continued evidence of modest rates of inflation, I believe the Fed will be able to maintain its gradual pace of interest rate hikes.

Finally and importantly, I still see no signs of euphoria in this market. In my opinion, the enthusiasm present earlier in the year, which followed the significant reduction in corporate income tax rates, has largely evaporated, and it has been replaced with anxiety

HENNESSYFUNDS.COM

2

LETTER TO SHAREHOLDERS

over higher interest rates and their potential impact on growth. In the past, I have likened the current bull market to that of 1982-2000, and I still believe this comparison holds true. I am confident in the strength of the market today and believe the economy will continue to grow in the coming year, albeit at a more moderate pace.

Thank you for your continued confidence and investment in the Hennessy 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 commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is a valuation measure and is calculated by dividing a company’s market price per share by its earnings per share. Earnings growth is not a measure of a fund’s future performance.

HENNESSY FUNDS 1-800-966-4354

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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, 2018

	One	Five	Ten
	Year	Years	Years
Hennessy Cornerstone Value Fund –
Investor Class (HFCVX)	3.64%	7.68%	12.39%
Hennessy Cornerstone Value Fund –
Institutional Class (HICVX)	3.88%	7.88%	12.66%
Russell 1000® Value Index	3.03%	8.61%	11.30%
S&P 500 Index	7.35%	11.34%	13.24%

Expense ratios:  1.23% (Investor Class); 0.98% (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 table does 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 www.hennessyfunds.com.

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

Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes or Russell ratings or underlying data and no party may rely on any Russell Indexes or Russell ratings or underlying data contained in this communication. No further distribution of Russell data is permitted without Russell’s express written consent. Russell does not promote, sponsor, or endorse the content of this communication.

The expense ratios presented are from the most recent prospectus. The expense ratios for the current reporting period are available in the Financial Highlights section of this report.

HENNESSYFUNDS.COM

4

PERFORMANCE OVERVIEW

PERFORMANCE NARRATIVE

Portfolio Managers Neil J. Hennessy and Ryan C. Kelley

Performance:

For the 12-month period ended October 31, 2018, the Investor Class of the Hennessy Cornerstone Value Fund returned 3.64%, outperforming the Russell 1000^® Value Index (the Fund’s primary benchmark), which returned 3.03% for same period, but underperforming the S&P 500 Index, which returned 7.35% for the same period.

The Fund’s outperformance relative to its primary benchmark can be attributed to both stock selection and sector allocation. The Fund’s overweight position in Health Care and underweight position in Financials contributed positively to the Fund’s performance. Within the Health Care sector, pharmaceutical companies AbbVie, Inc., Eli Lilly & Co., and Johnson & Johnson performed particularly well. In the Industrials sector, aircraft maker The Boeing Co. and electrical and electronic equipment manufacturer Emerson Electric Co. were among the holdings that contributed most to relative performance. Many holdings in the Information Technology sector also performed well over the period, including QUALCOMM, Inc. and Cisco Systems, Inc. This positive performance was partially offset by weakness in several stocks in the Financials sector, including life insurance companies MetLife, Inc. and Manulife Financial Corp., and the Fund’s holdings in foreign telecommunications companies including Vodafone Group PLC and BCE, Inc.

The Fund continues to hold Eli Lilly & Co., Johnson & Johnson, Emerson Electric Co., Cisco Systems, Inc., and Manulife Financial Corp.

Portfolio Strategy:

The Fund utilizes a quantitative approach to build a portfolio of potentially undervalued, profitable, large-cap companies with high dividend yields. In essence, the strategy seeks 50 established companies that are generating sufficient cash flows to pay generous dividends but that are possibly being overlooked by investors.

Investment Commentary:

We continue to believe that the outlook for large-cap stocks is positive. The U.S. economy is growing at a healthy rate, unemployment is low, and growth in both consumption and capital spending has accelerated over the last 12 months. Corporate earnings have risen significantly over the first nine months of 2018, helped, in part, by lower taxes. We expect earnings growth to be slower next year yet remain positive, driven primarily by continued steady economic growth.

There are three primary industry groups where the Fund currently maintains overweight positions: Energy, Pharmaceuticals, and Food, Beverage & Tobacco. Many pharmaceutical and food & beverage companies have strong competitive positions protected by patents and consumer branding and, therefore, may generate excess cash flows and pay higher dividends. As a result, the Fund owns stocks from these groups, including Merck & Co. Inc., Pfizer Inc., The Coca-Cola Co., and PepsiCo, Inc. Energy stocks overall have lagged the general market, despite the recovery in the price of crude oil, and we believe many now look undervalued. Despite this general underperformance, the Fund’s holdings in this industry group, including TOTAL SA, Marathon Petroleum Corp., and Phillips 66, have maintained strong levels of profitability and have continued to generate positive cash flow and pay dividends.

_______________

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.

HENNESSY FUNDS 1-800-966-4354

5

The Fund may invest in medium-capitalization 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.

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.

Cash flow refers to the net amount of cash and cash equivalents being transferred into and out of a company.

Dividend yield is calculated by dividing a company’s dividends per share by its market price per share.

HENNESSYFUNDS.COM

6

PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as ofOctober 31, 2018

HENNESSY CORNERSTONE VALUE FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)	% NET ASSETS
Eli Lilly & Co.	2.78%
Merck & Co., Inc.	2.59%
Pfizer, Inc.	2.43%
Target Corp.	2.32%
Cisco Systems, Inc.	2.30%
Equinor ASA - ADR	2.29%
Thomson Reuters Corp.	2.25%
Verizon Communications, Inc.	2.21%
GlaxoSmithKline PLC - ADR	2.18%
Amgen, Inc.	2.17%

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.

The Global Industry Classification Standard (GICS^®) was developed by and is the exclusive property and a service mark of MSCI, Inc. and Standard & Poor Financial Services LLC.  It has been licensed for use by the Hennessy Funds.

HENNESSY FUNDS 1-800-966-4354

7

COMMON STOCKS – 96.08%

	Number				% of
	of Shares		Value		Net Assets
Communication Services – 3.92%
AT&T, Inc.		152,860	$	4,689,745		1.71	%
Verizon Communications, Inc.		105,900		6,045,831		2.21	%
				10,735,576		3.92	%
Consumer Discretionary – 8.95%
Carnival Corp. (a)		79,900		4,477,596		1.63	%
Ford Motor Co.		521,845		4,983,620		1.82	%
General Motors Co.		135,000		4,939,650		1.80	%
Las Vegas Sands Corp.		73,800		3,766,014		1.38	%
Target Corp.		76,100		6,364,243		2.32	%
				24,531,123		8.95	%
Consumer Staples – 16.76%
Altria Group, Inc.		81,400		5,294,256		1.93	%
CVS Health Corp.		72,700		5,262,753		1.92	%
General Mills, Inc.		97,900		4,288,020		1.57	%
PepsiCo, Inc.		47,600		5,349,288		1.95	%
Philip Morris International, Inc.		53,400		4,702,938		1.72	%
The Coca-Cola Co.		120,300		5,759,964		2.10	%
The Kraft Heinz Co.		73,000		4,012,810		1.46	%
The Procter & Gamble Co.		66,300		5,879,484		2.15	%
Unilever PLC – ADR (a)		101,400		5,372,172		1.96	%
				45,921,685		16.76	%
Energy – 23.34%
BP PLC – ADR (a)		133,800		5,802,906		2.12	%
Canadian Natural Resources Ltd. (a)		167,600		4,578,832		1.67	%
Chevron Corp.		45,675		5,099,614		1.86	%
Equinor ASA – ADR (a)		244,200		6,275,940		2.29	%
Exxon Mobil Corp.		65,610		5,227,805		1.91	%
Marathon Petroleum Corp.		82,600		5,819,170		2.12	%
Occidental Petroleum Corp.		76,360		5,121,465		1.87	%
Phillips 66		55,900		5,747,638		2.10	%
Royal Dutch Shell PLC – ADR (a)		79,600		5,230,516		1.91	%
Schlumberger Ltd. (a)		77,800		3,991,918		1.46	%
Suncor Energy, Inc. (a)		157,900		5,259,649		1.92	%
Total S.A. – ADR (a)		98,600		5,777,960		2.11	%
				63,933,413		23.34	%

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

HENNESSYFUNDS.COM

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SCHEDULE OF INVESTMENTS

COMMON STOCKS

	Number				% of
	of Shares		Value		Net Assets
Financials – 10.76%
Bank of Nova Scotia (a)		86,100	$	4,624,431		1.69	%
HSBC Holdings PLC – ADR (a)		106,200		4,363,758		1.59	%
Manulife Financial Corp. (a)		269,600		4,238,112		1.55	%
Royal Bank of Canada (a)		66,800		4,865,712		1.78	%
Thomson Reuters Corp. (a)		132,200		6,160,520		2.25	%
Toronto-Dominion Bank (a)		94,100		5,218,786		1.90	%
				29,471,319		10.76	%
Health Care – 17.65%
Amgen, Inc.		30,800		5,937,932		2.17	%
Bristol-Myers Squibb Co.		91,400		4,619,356		1.69	%
Eli Lilly & Co.		70,300		7,623,332		2.78	%
Gilead Sciences, Inc.		68,300		4,656,694		1.70	%
GlaxoSmithKline PLC – ADR (a)		152,600		5,960,556		2.18	%
Johnson & Johnson		41,400		5,795,586		2.11	%
Merck & Co., Inc.		96,600		7,110,726		2.59	%
Pfizer, Inc.		154,500		6,652,770		2.43	%
				48,356,952		17.65	%
Industrials – 6.73%
Emerson Electric Co.		79,300		5,382,884		1.96	%
General Electric Co.		354,034		3,575,743		1.31	%
Johnson Controls International PLC (a)		146,300		4,677,211		1.71	%
United Parcel Service, Inc., Class B		45,000		4,794,300		1.75	%
				18,430,138		6.73	%
Information Technology – 7.97%
Cisco Systems, Inc.		137,810		6,304,807		2.30	%
HP, Inc.		245,500		5,926,370		2.16	%
Intel Corp.		118,900		5,574,032		2.03	%
International Business Machines Corp.		35,000		4,040,050		1.48	%
				21,845,259		7.97	%
Total Common Stocks
(Cost $253,844,570)				263,225,465		96.08	%

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

HENNESSY FUNDS 1-800-966-4354

9

SHORT-TERM INVESTMENTS – 4.02%

	Number					% of
	of Shares		Value			Net Assets
Money Market Funds – 4.02%
Fidelity Government Portfolio, Institutional Class, 2.06% (b)		11,019,735	$	11,019,735			4.02	%
Total Short-Term Investments
(Cost $11,019,735)				11,019,735			4.02	%
Total Investments
(Cost $264,864,305) – 100.10%				274,245,200			100.10	%
Liabilities in Excess of Other Assets – (0.10)%				(272,243	)		(0.10	)%
TOTAL NET ASSETS – 100.00%			$	273,972,957			100.00	%

Percentages are stated as a percent of net assets.

ADR – American Depositary Receipt

PLC – Public Limited Company

(a)	U.S.-traded security of a foreign corporation.
(b)	The rate listed is the fund’s seven-day yield as of October 31, 2018.

Summary of Fair Value Exposure at October 31, 2018

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2018 (See Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Communication Services	$	10,735,576	$	—	$	—	$	10,735,576
Consumer Discretionary		24,531,123		—		—		24,531,123
Consumer Staples		45,921,685		—		—		45,921,685
Energy		63,933,413		—		—		63,933,413
Financials		29,471,319		—		—		29,471,319
Health Care		48,356,952		—		—		48,356,952
Industrials		18,430,138		—		—		18,430,138
Information Technology		21,845,259		—		—		21,845,259
Total Common Stocks	$	263,225,465	$	—	$	—	$	263,225,465
Short-Term Investments
Money Market Funds	$	11,019,735	$	—	$	—	$	11,019,735
Total Short-Term Investments	$	11,019,735	$	—	$	—	$	11,019,735
Total Investments	$	274,245,200	$	—	$	—	$	274,245,200

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

HENNESSYFUNDS.COM

10

SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES

Financial Statements

Statement of Assets and Liabilities as of October 31, 2018

ASSETS:
Investments in securities, at value (cost $264,864,305)	$	274,245,200
Dividends and interest receivable		556,916
Receivable for fund shares sold		43,969
Prepaid expenses and other assets		25,280
Total Assets		274,871,365
LIABILITIES:
Payable for fund shares redeemed		6,216
Payable to advisor		177,379
Payable to administrator		24,951
Payable to auditor		21,901
Accrued distribution fees		603,034
Accrued service fees		23,335
Accrued trustees fees		5,963
Accrued expenses and other payables		35,629
Total Liabilities		898,408
NET ASSETS	$	273,972,957
NET ASSETS CONSIST OF:
Capital stock	$	228,405,343
Total distributable earnings		45,567,614
Total Net Assets	$	273,972,957
NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	266,756,238
Shares issued and outstanding		13,828,075
Net asset value, offering price and redemption price per share	$	19.29
Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	7,216,719
Shares issued and outstanding		373,364
Net asset value, offering price and redemption price per share	$	19.33

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

HENNESSY FUNDS 1-800-966-4354

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Financial Statements

Statement of Operations for the year ended October 31, 2018

INVESTMENT INCOME:
Dividend income(1)	$	9,752,505
Interest income		150,939
Total investment income		9,903,444
EXPENSES:
Investment advisory fees (See Note 5)		2,145,562
Distribution fees – Investor Class (See Note 5)		423,872
Service fees – Investor Class (See Note 5)		282,581
Administration, fund accounting, custody and transfer agent fees (See Note 5)		277,676
Sub-transfer agent expenses – Investor Class (See Note 5)		197,807
Sub-transfer agent expenses – Institutional Class (See Note 5)		7,113
Federal and state registration fees		34,005
Compliance expense (See Note 5)		29,499
Reports to shareholders		23,864
Audit fees		23,135
Trustees’ fees and expenses		17,597
Legal fees		2,570
Other expenses		19,748
Total expenses		3,485,029
NET INVESTMENT INCOME	$	6,418,415
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on investments	$	33,529,159
Net change in unrealized appreciation/depreciation on investments		(29,037,130	)
Net gain on investments		4,492,029
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	10,910,444

⁽¹⁾ Net of foreign taxes withheld and issuance fees of $337,593.

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

HENNESSYFUNDS.COM

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STATEMENT OF OPERATIONS

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Financial Statements

Statements of Changes in Net Assets

	Year Ended			Year Ended
	October 31, 2018			October 31, 2017
OPERATIONS:
Net investment income	$	6,418,415		$	5,498,468
Net realized gain on investments		33,529,159			40,317,512
Net change in unrealized
appreciation/depreciation on investments		(29,037,130	)		(11,111,810	)
Net increase in net assets resulting from operations		10,910,444			34,704,170
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Distributable earnings – Investor Class		(38,837,104	)		(2,916,316	)
Distributable earnings – Institutional Class		(1,032,863	)		(52,044	)
Total distributions		(39,869,967	)		(2,968,360	)(1)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued in the Reorganization –
Investor Class (see Note 9)		—			141,680,285
Proceeds from shares issued in the Reorganization –
Institutional Class (see Note 9)		—			3,258,094
Proceeds from shares subscribed – Investor Class		2,033,069			2,341,233
Proceeds from shares subscribed – Institutional Class		1,207,915			2,547,752
Dividends reinvested – Investor Class		36,758,791			2,640,562
Dividends reinvested – Institutional Class		906,473			33,704
Cost of shares redeemed – Investor Class		(24,897,883	)		(23,154,846	)
Cost of shares redeemed – Institutional Class		(1,542,637	)		(1,029,188	)
Net increase in net assets derived
from capital share transactions		14,465,728			128,317,596
TOTAL INCREASE (DECREASE) IN NET ASSETS		(14,493,795	)		160,053,406
NET ASSETS:
Beginning of year		288,466,752			128,413,346
End of year	$	273,972,957		$	288,466,752	(2)

(1)	All distributions were from net investment income.
(2)	Includes accumulated net investment income of $4,980,270.

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, 2018			October 31, 2017
CHANGES IN SHARES OUTSTANDING:
Shares issued in the Reorganization – Investor Class		—			7,092,199
Shares issued in the Reorganization – Institutional Class		—			163,058
Shares sold – Investor Class		101,307			118,558
Shares sold – Institutional Class		60,882			127,648
Shares issued to holders as reinvestment
of dividends – Investor Class		1,887,491			138,105
Shares issued to holders as reinvestment
of dividends – Institutional Class		46,455			1,763
Shares redeemed – Investor Class		(1,247,375	)		(1,154,302	)
Shares redeemed – Institutional Class		(77,746	)		(50,925	)
Net increase in shares outstanding		771,014			6,436,104

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⁽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.

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FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	21.48		$	18.36		$	17.69		$	18.41		$	16.90
	0.41			0.45			0.43			0.44			0.39
	0.35			3.10			0.67			(0.75	)		1.55
	0.76			3.55			1.10			(0.31	)		1.94
	(0.42	)		(0.43	)		(0.43	)		(0.41	)		(0.43	)
	(2.53	)		—			—			—			—
	(2.95	)		(0.43	)		(0.43	)		(0.41	)		(0.43	)
$	19.29		$	21.48		$	18.36		$	17.69		$	18.41
	3.64	%		19.63	%		6.41	%		(1.77	)%		11.69	%
$	266.76		$	281.07		$	126.53		$	129.86		$	145.04
	1.21	%		1.22	%		1.25	%		1.10	%		1.17	%
	2.21	%		2.36	%		2.33	%		2.32	%		2.18	%
	41	%		72	%		36	%		46	%		34	%

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.

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FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	21.52		$	18.40		$	17.67		$	18.41		$	16.92
	0.45			0.43			0.48			0.53			0.59
	0.35			3.18			0.67			(0.83	)		1.37
	0.80			3.61			1.15			(0.30	)		1.96
	(0.46	)		(0.49	)		(0.42	)		(0.44	)		(0.47	)
	(2.53	)		—			—			—			—
	(2.99	)		(0.49	)		(0.42	)		(0.44	)		(0.47	)
$	19.33		$	21.52		$	18.40		$	17.67		$	18.41
	3.88	%		19.95	%		6.72	%		(1.72	)%		11.82	%
$	7.22		$	7.40		$	1.88		$	1.75		$	10.65
	0.98	%		0.97	%		0.95	%		1.00	%		1.03	%
	0.98	%		0.97	%		0.95	%		1.00	%		0.98	%
	2.43	%		2.60	%		2.63	%		2.43	%		2.30	%
	2.43	%		2.60	%		2.63	%		2.43	%		2.35	%
	41	%		72	%		36	%		46	%		34	%

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

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Financial Statements

Notes to the Financial Statements October 31, 2018

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 investment objective of the Fund is total return, consisting of capital appreciation and current income. The Fund is a diversified fund.

The Fund offers Investor Class and Institutional Class shares. Each class of shares differs principally in its respective 12b-1 distribution and service, shareholder servicing, and sub-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 to U.S. generally accepted accounting principles (“GAAP”).

a).	Securities 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 because 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/loss and realized gains/losses for federal income tax purposes may differ from those reported in 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. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
	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 fiscal year 2018 have been identified and appropriately reclassified in the Statement of Assets and Liabilities. The adjustments are as follows:

Total
Distributable
Earnings	Capital Stock
$(2,168,104)	$2,168,104

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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. Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and paid annually, usually in December.
f).	Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
g).	Use of Estimates – 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 (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by (ii) the total number of 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).	New Accounting Pronouncements – In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 does not eliminate the requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the changes in unrealized gains and losses for recurring Level 3 fair value measurements. ASU 2018-13 requires that information is provided about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has

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evaluated the impact of this change in guidance, and due to the permissibility of early adoption, modified the Fund’s fair value disclosures for the current reporting period.

j).

New Rule Issuances – In August 2018, the Securities and Exchange Commission issued Final Rule Release No. 33 10532, Disclosure Update and Simplification, which in part amends certain financial statement disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, GAAP, or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amendments to Rule 6-04.17 of Regulation S-X (balance sheet) were amended to require presentation of the total, rather than the components of net assets, of distributable earnings on the balance sheet. Consistent with GAAP, funds will be required to disclose total distributable earnings. The amendments to Rule 6-09 of Regulation S-X (statement of changes in net assets) omit the requirement to separately state the sources of distributions paid as well as omit the requirement to parenthetically state the book basis amount of undistributed net investment income. Instead, consistent with GAAP, funds will be required to disclose the total amount of distributions paid, except that any tax return of capital must be separately disclosed. The requirements of the Final Rule Release are effective November 5, 2018 and the Fund’s Statement of Assets and Liabilities and the Statement of Changes in Net Assets for the current and prior reporting period have been modified accordingly.

3).  SECURITIES VALUATION

The Fund follows 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 of 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 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”)

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NOTES TO THE FINANCIAL STATEMENTS

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 foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).

Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, are generally priced at the ending NAV provided by the applicable mutual fund’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.

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 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 values of other similar securities, and news events with direct bearing on a security or markets. Fair value pricing results in an estimated price for a

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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’ values as determined by the Board or its designee, pursuant to the fair value pricing procedures adopted by the Board, instead of being determined by the market. Using a fair value pricing methodology to price a foreign security may result in a value that is different from such foreign security’s most recent closing price and from the value used by other investment companies to calculate their NAVs. Such securities are generally classified in Level 2 of 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 “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 determinations. Various inputs are used to determine 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, 2018, are included in the Schedule of Investments.

4).  INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during fiscal year 2018 were $115,959,770 and $138,013,783, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during fiscal year 2018.

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. 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, as amended. During fiscal year 2018, the Fund did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940, as amended.

5).  INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

The Advisor provides the Fund with investment advisory services under an Investment Advisory Agreement. The Advisor furnishes all investment advice, office space, and facilities, as well as 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 an annual rate of 0.74%. The net investment advisory fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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NOTES TO THE FINANCIAL STATEMENTS

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 advisory 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. The shareholder service fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 is currently only using up to 0.15% of its average daily net assets attributable to Investor Class shares 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, printing and mailing of prospectuses to other than current shareholders, 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 distribution fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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. The sub-transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services (“Fund Services”) provides the Fund with administrative, fund accounting, and transfer agent services. As administrator, Fund Services 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. U.S. Bank N.A., an affiliate of Fund Services, serves as the Fund’s custodian. The servicing agreements between the Trust and Fund Services and U.S. Bank N.A. contain a fee schedule that is inclusive of administrative, fund accounting, custody, and transfer agent fees. The administrative, fund accounting, custody, and transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 Fund Services 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. The compliance fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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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 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 fiscal year 2018, the Fund did not have any borrowings outstanding under the line of credit.

8).  FEDERAL TAX INFORMATION

As of October 31, 2018, the components of accumulated earnings (losses) for income tax purposes were as follows:

	Investments
Cost of investments for tax purposes	$	265,224,797
Gross tax unrealized appreciation	$	31,214,430
Gross tax unrealized depreciation		(22,194,269	)
Net tax unrealized appreciation/(depreciation)	$	9,020,161
Undistributed ordinary income	$	20,685,079
Undistributed long-term capital gains		15,862,374
Total distributable earnings	$	36,547,453
Other accumulated gain/(loss)	$	—
Total accumulated gain/(loss)	$	45,567,614

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.

As of October 31, 2018, the Fund had no tax basis capital losses to offset future capital gains.

As of October 31, 2018, the Fund did not defer, on a tax basis, any late-year ordinary losses. Late-year ordinary losses are net ordinary losses incurred after December 31, 2017, but within the taxable year, that are deemed to arise on the first day of the Fund’s next taxable year.

During fiscal year 2018 and fiscal year 2017, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2018		October 31, 2017
Ordinary income(1)	$	8,809,992	$	2,968,360
Long-term capital gain		31,059,975		—
	$	39,869,967	$	2,968,360
(1) Ordinary income includes short-term capital gains.

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NOTES TO THE FINANCIAL STATEMENTS

9).  AGREEMENT AND PLAN OF REORGANIZATION

On December 27, 2016, the Board of the Trust approved and declared advisable the reorganization of the Hennessy Large Value Fund (the “Large Value Fund”) into the Fund pursuant to an Agreement and Plan of Reorganization. The purpose of the reorganization was to combine two funds within the Trust with similar investment objectives and strategies. The reorganization provided for the transfer of assets of the Large Value Fund to the Fund and the assumption of the liabilities of the Large Value Fund by the Fund. Following the reorganization, the Fund held the assets of the Large Value Fund until the Fund rebalanced its portfolio in the winter, pursuant to its customary procedures. The reorganization was effective as of the close of business on February 27, 2017. The following tables illustrate the specifics of the reorganization of the Large Value Fund into the Fund:

	Shares Issued
	to Shareholders	Cornerstone
Large Value Fund	of Large Value	Value Fund	Combined	Tax Status
Net Assets	Fund	Net Assets	Net Assets	of Transfer
$144,938,380(1)	7,255,257	$138,339,221	$283,277,601	Non-taxable

⁽¹⁾ Includes accumulated realized losses and unrealized appreciation in the amounts of $(1,561,193) and $34,112,735, respectively.

Assuming the reorganization had been completed on November 1, 2016, the beginning of the annual reporting period of the Fund for fiscal year 2017, the pro forma results of operation (unaudited) for fiscal year 2017 would have been as follows:

Net investment income	$	6,090,397
Net realized gain on investments	$	41,027,748
Net change in unrealized appreciation on investments	$	5,413,160
Net increase in net assets resulting from operations	$	52,531,305

Because the Fund has been managed as a single integrated portfolio since the reorganization was completed, it is not practicable to separate the amounts of revenue and earnings of the Large Value Fund that have been included in the Fund’s Statement of Operations since February 27, 2017.

10).  EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2018, 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, 2018, capital gains were declared and paid to shareholders of record on December 6, 2018, as follows:

	Long-term		Short-term
Investor Class	$	1.12340	$	1.09611
Institutional Class	$	1.12535	$	1.09801

On December 27, 2018, income distributions were declared and paid to shareholders of record on December 26, 2018, as follows:

Investor Class	$	0.41092028
Institutional Class	$	0.44958484

HENNESSY FUNDS 1-800-966-4354

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Report of Independent Registered Public

Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the shareholders of Hennessy Cornerstone Value Fund

Novato, CA

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Hennessy Cornerstone Value Fund (the “Fund”), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

The financial highlights for each of the three years in the period ended October 31, 2016 have been audited by other auditors, whose report dated December 22, 2016 expressed unqualified opinions on such financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management.  Our responsibility is to express an opinion on the Fund’s financial statements based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We have served as the auditor of one or more of the funds in the Trust since 2002.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.  The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2018 by correspondence with the custodian.  We believe that our audits provide a reasonable basis for our opinion.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2018

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS

Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Funds 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 to the Board of Trustees (“Advisers”) 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: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board of Trustees 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 Trustee oversees the 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 worked for the	None.
(1981)		Sutter Health organization since
Adviser to the Board		2011 in various positions. He has
		served as the Chief Executive Officer
		of the Sutter Roseville Medical
		Center since 2018. From 2016 through
		2018, he served as the Vice President
		of Strategy for the Sutter Health Valley
		Area, which includes 11 hospitals,
		13 ambulatory surgery centers,
		16,000 employees, and 1,900 physicians.
		From 2013 through 2016, Mr. Alexander
		served as Sutter Novato Community
		Hospital’s Chief Administrative Officer,
		and from 2011 through 2012, he
		served as a Director of Strategy
		within Sutter’s West Bay Region.

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29

			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. Neil Hennessy has been employed	Hennessy
(1956)	a Trustee and	by Hennessy Advisors, Inc. since	Advisors, Inc.
Trustee, Chairman of	June 2008 as	1989 and currently serves as its
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 President, Chief Operating
Executive Vice President		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 Secretary
Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013 and currently serves as its Chief
Senior Vice President		Compliance Officer and Senior Vice President.
and Head of Distribution
Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)(3)		as its General Counsel since June 2013.
Senior Vice President and
Chief Compliance Officer

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30

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)(4)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Large Cap Financial Fund and the Hennessy Small
and Portfolio Manager		Cap Financial Fund since inception. Mr. Ellison also served as a
		Portfolio Manager of the Hennessy Technology Fund from its
		inception until February 2017. Mr. Ellison served as Director,
		CIO and President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.
Ryan C. Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)(5)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Gas Utility Fund, the Hennessy Large Cap Financial
and Portfolio Manager		Fund, and the Hennessy Small 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. Mr. Kelley has also served as a Portfolio
		Manager of the Hennessy Cornerstone Growth Fund, the
		Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
		Cornerstone Large Growth Fund, and the Hennessy
		Cornerstone Value Fund since February 2017, as a Co-Portfolio
		Manager of the Hennessy Technology Fund since February
		2017, and as a Portfolio Manager of the Hennessy Total Return
		Fund and the Hennessy Balanced Fund since May 2018.
		Mr. Kelley served as Portfolio Manager of FBR Fund Advisers,
		Inc. from January 2008 to October 2012.
Tania Kelley	October 2003	Ms. Kelley has been employed by Hennessy Advisors, Inc.
(1965)		since October 2003.
Senior Vice President
and Head of Marketing

Daniel P. Hennessy	December 2016	Mr. Daniel Hennessy has been employed by Hennessy Advisors,
(1990)		Inc. since 2015. He has served as an Associate Analyst or
Vice President		Analyst of the Hennessy Technology Fund since February 2017.
and Analyst		Mr. Daniel Hennessy previously served as a Mutual Fund
		Specialist at U.S. Bancorp Fund Services, LLC (now doing
		business as U.S. Bank Global Fund Services) from November
		2014 to July 2015. Prior to that, he attended the University of
		San Diego, where he earned a degree in Political Science.

_______________

(1)	Messrs. DeSousa, Doyle, N. 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 the Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
(2)	Mr. N. 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 this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
(4)	The address of this officer is 101 Federal Street, Suite 1900, Boston, MA 02110.
(5)	The address of this officer is 1340 Environ Way, Suite 332, Chapel Hill, NC 27517.

HENNESSY FUNDS 1-800-966-4354

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Expense Example (Unaudited)

October 31, 2018

As a shareholder of the Fund, you incur 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, 2018, through October 31, 2018.

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. Bank Global Fund Services, 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” or “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. 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.

HENNESSYFUNDS.COM

32

EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period(1)
	Account Value	Account Value	May 1, 2018 –
	May 1, 2018	October 31, 2018	October 31, 2018
Investor Class
Actual	$1,000.00	$   992.30	$6.08
Hypothetical (5% return before expenses)	$1,000.00	$1,019.11	$6.16
Institutional Class
Actual	$1,000.00	$   993.80	$4.92
Hypothetical (5% return before expenses)	$1,000.00	$1,020.27	$4.99

⁽¹⁾ Expenses are equal to the Fund’s annualized expense ratio of 1.21% for Investor Class shares or 0.98% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/365 days (to reflect one-half year period).

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33

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 www.hennessyfunds.com/proxy-voting/voting-policy; or (3) on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at www.hennessyfunds.com/proxy-voting/voting-record 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 a 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 Forms N-Q are available on the SEC’s website at www.sec.gov.  Information included in the Fund’s Forms N-Q will also be available upon request by calling 1-800-966-4354.

Federal Tax Distribution Information

(Unaudited)

For fiscal year 2018, 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 92.71%.

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for fiscal year 2018 was 63.20%.

The percentage of taxable ordinary income distributions that were 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 29.97%.

Important Notice Regarding Delivery

of Shareholder Documents

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of shareholder reports, proxy statements, and prospectuses to shareholders who share an address and have the same last name. This process does not apply to account statements. You may request an individual copy of a shareholder document at any time. If you would like to receive separate mailings of shareholder documents, please call U.S. Bank Global Fund Services at 1-800-261-6950 or 1-414-765-4124, and individual delivery will begin within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact such intermediary directly to request individual delivery.

HENNESSYFUNDS.COM

34

PROXY VOTING — PRIVACY POLICY

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 will be shared with non-affiliated third parties.

HENNESSY FUNDS 1-800-966-4354

35

(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 Boulevard, Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT, &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

d/b/a U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Drive, 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

Two Liberty Place

50 South 16th Street, Suite 2900

Philadelphia, Pennsylvania 19102-2529

DISTRIBUTOR

Quasar Distributors, LLC

777 East Wisconsin Avenue

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, 2018

HENNESSY TOTAL RETURN FUND

Investor Class  HDOGX

hennessyfunds.com  |  1-800-966-4354

(This Page Intentionally Left Blank.)

Contents

Letter to Shareholders	2
Performance Overview	4
Financial Statements
Schedule of Investments	6
Statement of Assets and Liabilities	10
Statement of Operations	11
Statements of Changes in Net Assets	12
Statement of Cash Flows	13
Financial Highlights	14
Notes to the Financial Statements	16
Report of Independent Registered Public Accounting Firm	25
Trustees and Officers of the Fund	26
Expense Example	30
Proxy Voting Policy and Proxy Voting Records	32
Quarterly Schedule of Investments	32
Federal Tax Distribution Information	32
Important Notice Regarding Delivery of Shareholder Documents	32
Privacy Policy	33

HENNESSY FUNDS 1-800-966-4354

December 2018

Dear Hennessy Funds Shareholder:

Over the past year, we have witnessed the return of market volatility. U.S. stocks still registered healthy gains, bolstered by the impact on corporate profits of the successful passage of the tax reform bill in December 2017. However, concerns over potential trade disruptions, especially between the U.S. and China, and worries over higher short-term interest rates, which many believe could possibly trigger a recession down the road, put downward pressure on equity valuations.

The U.S. economy performed well over the period, and actually achieved an acceleration in GDP growth to over 3% on an annualized basis in the second and third quarters of calendar year 2018. During the past year, companies continued to hire workers, adding over 200,000 jobs per month on average, sending the unemployment rate down to 3.7% in October, which is the lowest it has been since 1969. Consumer confidence is high and still rising, and corporate profits reached record levels in the third quarter of calendar year 2018, posting a year-over-year increase of 26% for the companies in the S&P 500 Index.

The Federal Reserve, confident about the strength of the economy and mindful of a tight labor market, raised short-term interest rates four times over the last year, by a quarter point each time. Long-term bond yields also rose, driven higher primarily by evidence of faster wage growth, pushing the U.S. 10-year Treasury bond over 3% for the first time since 2013.

As I write this, we are experiencing the market’s 20th downturn since 2010. I have been saying that every bull market experiences volatility and pullbacks. Many financial commentators think this bull market is “long in the tooth.” I do not agree with them. I believe stock valuations are still very reasonable. The prospective price to earnings multiple for the Dow Jones Industrial Average has come down from almost 20x at the end of 2017 to 16x, just above its 10-year average of 15x. The prospective PE multiple for the S&P 500 Index has also come down, from 20x to 17x, and compares favorably to its 10-year average of 16x.

Cash, meanwhile, continues to build up on corporate balance sheets. The companies in the S&P 500 Index reported a total of over $5.4 trillion in cash and marketable securities in their latest filings. Companies have been spending some of their cash, increasing their investment spending and laying the groundwork for future earnings growth. However, they have also been returning capital to shareholders. S&P 500 Index companies announced $433.6 billion in share repurchases during the second quarter of calendar year 2018, nearly doubling the previous record of $242.1 billion set in the first quarter. Companies are also raising their dividends.

In addition, I believe the Federal Reserve will take care not to raise interest rates too high or too fast and endanger the economic expansion. While wage growth has risen to over 3% in October, other measures of inflationary pressure, such as the Consumer Price Index and the Producer Price Index, still show prices increasing at a more moderate pace, closer to 2%. Given continued evidence of modest rates of inflation, I believe the Fed will be able to maintain its gradual pace of interest rate hikes.

Finally and importantly, I still see no signs of euphoria in this market. In my opinion, the enthusiasm present earlier in the year, which followed the significant reduction in corporate income tax rates, has largely evaporated, and it has been replaced with anxiety

HENNESSYFUNDS.COM

2

LETTER TO SHAREHOLDERS

over higher interest rates and their potential impact on growth. In the past, I have likened the current bull market to that of 1982-2000, and I still believe this comparison holds true. I am confident in the strength of the market today and believe the economy will continue to grow in the coming year, albeit at a more moderate pace.

Thank you for your continued confidence and investment in the Hennessy 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 commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is a valuation measure and is calculated by dividing a company’s market price per share by its earnings per share. Earnings growth is not a measure of a fund’s future performance.

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3

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, 2018

	One	Five	Ten
	Year	Years	Years
Hennessy Total Return Fund (HDOGX)	4.92%	6.94%	8.90%
75/25 Blended DJIA/Treasury Index	7.90%	9.70%	10.12%
Dow Jones Industrial Average	9.87%	12.76%	13.33%

Expense ratio:  1.58%

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 table does 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 www.hennessyfunds.com.

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 ICE BofAML U.S. 3-Month Treasury Bill Index. The Dow Jones Industrial Average is commonly used to measure the performance of U.S. stocks. The ICE BofAML U.S. 3-Month Treasury Bill Index is comprised of Treasury securities maturing in 90 days. One cannot invest directly in an index.

The expense ratio presented is from the most recent prospectus. The expense ratio for the current reporting period is available in the Financial Highlights section of this report.

PERFORMANCE NARRATIVE

Portfolio Managers Neil J. Hennessy and Ryan C. Kelley

Performance:

For the 12-month period ended October 31, 2018, the Hennessy Total Return Fund returned 4.92%, underperforming both the 75/25 Blended DJIA/Treasury Index (the

HENNESSYFUNDS.COM

4

PERFORMANCE OVERVIEW

Fund’s primary benchmark) and the Dow Jones Industrial Average, which returned 7.90% and 9.87%, respectively, for the same period.

The Fund underperformed its primary benchmark predominantly as a result of stock selection, particularly in the Industrials sector, where the Fund’s holding in General Electric Co. hurt performance.  In the Information Technology sector, the Fund did not own Apple, Inc., which detracted from relative performance, as did the Fund’s overweight position in International Business Machines Corp.  The Fund’s overweight position in the Health Care sector contributed positively to relative performance, with pharmaceutical companies Pfizer, Inc. and Merck & Co., Inc. performing well.

The Fund continues to hold all the companies mentioned with the exception of Apple, Inc.

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 equity markets rise and outperform in periods when equity 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 and the balance of the Fund is invested in lower-risk, short-duration U.S. Treasuries.

Investment Commentary:

We continue to believe that the outlook for U.S. stocks is positive. The U.S. economy is growing at a healthy rate, unemployment is low, and growth in both consumption and capital spending has accelerated over the last 12 months. Corporate earnings have risen significantly over the first nine months of 2018, helped, in part, by lower taxes. We expect earnings growth to be slower next year yet remain positive, driven primarily by continued steady economic growth.

Should the market experience a correction, we would expect our more defensive holdings to perform well relative to the market. 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 continue to rise.

_______________

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 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.

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.

Dividend yield is calculated by dividing a company’s dividends per share by its market price per share.  Earnings growth is not representative of the Fund’s future performance.

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5

Financial Statements

Schedule of Investments as of October 31, 2018

HENNESSY TOTAL RETURN FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)	% NET ASSETS
U.S. Treasury Bill, 2.155%, 11/15/2018	25.12%
U.S. Treasury Bill, 2.125%, 12/20/2018	22.97%
U.S. Treasury Bill, 2.270%, 01/17/2019	20.85%
Cisco Systems, Inc.	7.98%
Pfizer, Inc.	7.80%
Verizon Communications, Inc.	7.51%
Merck & Co., Inc.	7.21%
The Coca-Cola Co.	7.13%
The Procter & Gamble Co.	7.05%
Exxon Mobil Corp.	6.53%

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.

The Global Industry Classification Standard (GICS^®) was developed by and is the exclusive property and a service mark of MSCI, Inc. and Standard & Poor Financial Services LLC.  It has been licensed for use by the Hennessy Funds.

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6

SCHEDULE OF INVESTMENTS

COMMON STOCKS – 67.50%	Number				% of
	of Shares		Value		Net Assets
Communication Services – 7.51%
Verizon Communications, Inc.		94,200	$	5,377,878		7.51	%
Consumer Staples – 14.18%
The Coca-Cola Co.		106,600		5,104,008		7.13	%
The Procter & Gamble Co.		56,900		5,045,892		7.05	%
				10,149,900		14.18	%
Energy – 12.97%
Chevron Corp.		41,300		4,611,145		6.44	%
Exxon Mobil Corp.		58,700		4,677,216		6.53	%
				9,288,361		12.97	%
Health Care – 15.01%
Merck & Co., Inc.		70,100		5,160,061		7.21	%
Pfizer, Inc.		129,800		5,589,188		7.80	%
				10,749,249		15.01	%
Industrials – 2.33%
General Electric Co.		165,000		1,666,500		2.33	%
Information Technology – 15.50%
Cisco Systems, Inc.		124,900		5,714,175		7.98	%
Intel Corp.		37,600		1,762,688		2.46	%
International Business Machines Corp.		31,400		3,624,502		5.06	%
				11,101,365		15.50	%
Total Common Stocks
(Cost $43,886,864)				48,333,253		67.50	%

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

HENNESSY FUNDS 1-800-966-4354

7

SHORT-TERM INVESTMENTS – 74.15%	Number of Shares/					% of
	Par Amount		Value			Net Assets
Money Market Funds – 5.21%
Fidelity Government Portfolio, Institutional Class, 2.06% (a)		3,416,000	$	3,416,000			4.77	%
The Government & Agency Portfolio, Institutional Class, 2.08% (a)		313,295		313,295			0.44	%
				3,729,295			5.21	%
U.S. Treasury Bills (c) – 68.94%
2.155%, 11/15/2018 (b)		18,000,000		17,985,895			25.12	%
2.125%, 12/20/2018 (b)		16,500,000		16,452,388			22.97	%
2.270%, 01/17/2019 (b)		15,000,000		14,928,254			20.85	%
				49,366,537			68.94	%
Total Short-Term Investments
(Cost $53,095,391)				53,095,832			74.15	%
Total Investments
(Cost $96,982,255) – 141.65%				101,429,085			141.65	%
Liabilities in Excess of Other Assets – (41.65)%				(29,825,736	)		(41.65	)%
TOTAL NET ASSETS – 100.00%			$	71,603,349			100.00	%

Percentages are stated as a percent of net assets.

(a)	The rate listed is the fund’s seven-day yield as of October 31, 2018.
(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.

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SCHEDULE OF INVESTMENTS

Summary of Fair Value Exposure at October 31, 2018

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2018 (See Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Communication Services	$	5,377,878	$	—	$	—	$	5,377,878
Consumer Staples		10,149,900		—		—		10,149,900
Energy		9,288,361		—		—		9,288,361
Health Care		10,749,249		—		—		10,749,249
Industrials		1,666,500		—		—		1,666,500
Information Technology		11,101,365		—		—		11,101,365
Total Common Stocks	$	48,333,253	$	—	$	—	$	48,333,253
Short-Term Investments
Money Market Funds	$	3,729,295	$	—	$	—	$	3,729,295
U.S. Treasury Bills		—		49,366,537		—		49,366,537
Total Short-Term Investments	$	3,729,295	$	49,366,537	$	—	$	53,095,832
Total Investments	$	52,062,548	$	49,366,537	$	—	$	101,429,085

Schedule of Reverse Repurchase Agreements

				Principal	Maturity	Maturity
Face Value		Counterparty	Rate	Trade Date	Date	Amount
$	10,794,000	Jefferies LLC	2.25%	8/16/18	11/15/18	$	10,854,716
	9,894,500	Jefferies LLC	2.40%	9/20/18	12/20/18		9,953,867
	8,995,000	Jefferies LLC	2.40%	10/18/18	1/17/19		9,048,970
$	29,683,500					$	29,857,553

As of October 31, 2018, the fair value of securities held as collateral for reverse repurchase agreements was $32,911,016, as noted on the Schedule of Investments.

Reverse repurchase agreements are carried at face value; hence, they are not included in the fair valuation hierarchy.  The face value of the reverse repurchase agreements at October 31, 2018, was $29,683,500.  Due to the short-term nature of the reverse repurchase agreements, face value approximates fair value.  The face value plus interest due at maturity is equal to $29,857,553.

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

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9

Financial Statements

Statement of Assets and Liabilities as of October 31, 2018

ASSETS:
Investments in securities, at value (cost $96,982,255)	$	101,429,085
Dividends and interest receivable		102,263
Receivable for fund shares sold		31,118
Prepaid expenses and other assets		12,102
Total Assets		101,574,568
LIABILITIES:
Payable for fund shares redeemed		37,149
Payable to advisor		36,298
Payable to administrator		6,279
Payable to auditor		21,900
Accrued distribution fees		70,854
Accrued service fees		6,050
Reverse repurchase agreements		29,683,500
Accrued interest payable		86,112
Accrued trustees fees		5,962
Accrued expenses and other payables		17,115
Total Liabilities		29,971,219
NET ASSETS	$	71,603,349
NET ASSETS CONSIST OF:
Capital stock	$	65,081,638
Total distributable earnings		6,521,711
Total Net Assets	$	71,603,349
NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	71,603,349
Shares issued and outstanding		5,274,843
Net asset value, offering price and redemption price per share	$	13.57

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

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STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS

Financial Statements

Statement of Operations for the year ended October 31, 2018

INVESTMENT INCOME:
Dividend income	$	1,817,785
Interest income		832,360
Total investment income		2,650,145
EXPENSES:
Interest expense (See Notes 7 and 9)		555,805
Investment advisory fees (See Note 5)		438,837
Distribution fees – Investor Class (See Note 5)		109,709
Service fees – Investor Class (See Note 5)		73,139
Administration, fund accounting, custody and transfer agent fees (See Note 5)		69,602
Sub-transfer agent expenses – Investor Class (See Note 5)		68,130
Compliance expense (See Note 5)		29,499
Federal and state registration fees		24,571
Audit fees		23,145
Trustees’ fees and expenses		16,865
Reports to shareholders		11,956
Legal fees		83
Other expenses		6,834
Total expenses		1,428,175
NET INVESTMENT INCOME	$	1,221,970
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on investments	$	2,578,436
Net change in unrealized appreciation/depreciation on investments		(298,004	)
Net gain on investments		2,280,432
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	3,502,402

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

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11

Financial Statements

Statements of Changes in Net Assets

	Year Ended			Year Ended
	October 31, 2018			October 31, 2017
OPERATIONS:
Net investment income	$	1,221,970		$	1,187,349
Net realized gain on investments		2,578,436			8,689,833
Net change in unrealized
appreciation/depreciation on investments		(298,004	)		49,360
Net increase in net assets resulting from operations		3,502,402			9,926,542
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Distributable earnings – Investor Class		(9,194,795	)		(5,600,022	)
Total distributions		(9,194,795	)		(5,600,022	)(1)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		4,184,396			17,437,144
Dividends reinvested – Investor Class		8,730,660			5,335,208
Cost of shares redeemed – Investor Class		(13,372,214	)		(33,215,945	)
Net decrease in net assets derived
from capital share transactions		(457,158	)		(10,443,593	)
TOTAL DECREASE IN NET ASSETS		(6,149,551	)		(6,117,073	)
NET ASSETS:
Beginning of year		77,752,900			83,869,973
End of year	$	71,603,349		$	77,752,900	(2)
CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		306,057			1,237,906
Shares issued to holders as reinvestment
of dividends – Investor Class		654,267			387,386
Shares redeemed – Investor Class		(989,853	)		(2,382,169	)
Net decrease in shares outstanding		(29,529	)		(756,877	)

(1)	Includes net investment income distributions of $1,171,215 and net realized gain distributions of $4,428,807 for the Investor Class.
(2)	Includes accumulated net investment income of $112,796.

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

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STATEMENTS OF CHANGES IN NET ASSETS/STATEMENT OF CASH FLOWS

Financial Statements

Statement of Cash Flows for the year ended October 31, 2018

Cash flows from operating activities:
Net increase in net assets from operations	$	3,502,402
Adjustments to reconcile net increase in net assets from
operations to net cash provided by operating activities:
Payments to purchase securities		(5,249,464	)
Proceeds from sale of securities		12,566,221
Proceeds from securities litigation		9,577
Sale of short term investments, net		4,602,726
Realized gain on investments in securities		(2,578,436	)
Net accretion of discount on securities		(799,743	)
Change in unrealized appreciation on investments in securities		298,004
(Increases) decreases in operating assets:
Decrease in dividends and interest receivable		16,831
Decrease in prepaid expenses and other assets		873
Increases (decreases) in operating liabilities:
Decrease in payable to advisor		(3,934	)
Decrease in payable to administrator		(6,850	)
Increase in accrued distribution fees		8,318
Decrease in accrued service fees		(655	)
Increase in accrued interest payable		47,250
Increase in accrued audit fees		595
Increase in accrued trustee fees		390
Increase in other accrued expenses and payables		3,768
Net cash provided by operating activities		12,417,873
Cash flows from financing activities:
Decrease in reverse repurchase agreements		(2,698,500	)
Proceeds from shares sold		4,159,008
Payment on shares redeemed		(13,414,246	)
Distributions paid in cash, net of reinvestments		(464,135	)
Net cash used in financing activities		(12,417,873	)
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	$	8,730,660
Cash paid for interest	$	508,555

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)

Gross ratio of expenses, including interest expense, 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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14

FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	14.66		$	13.84		$	14.19		$	15.27		$	14.30
	0.23			0.20			0.16			0.20			0.20
	0.43			1.48			0.88			(0.02	)		0.96
	0.66			1.68			1.04			0.18			1.16
	(0.23	)		(0.20	)		(0.16	)		(0.20	)		(0.19	)
	(1.52	)		(0.66	)		(1.23	)		(1.06	)		—
	(1.75	)		(0.86	)		(1.39	)		(1.26	)		(0.19	)
$	13.57		$	14.66		$	13.84		$	14.19		$	15.27
	4.92	%		12.56	%		8.20	%		1.22	%		8.15	%
$	71.60		$	77.75		$	83.87		$	69.42		$	83.89
	1.95	%		1.57	%		1.44	%		1.28	%		1.34	%
	1.67	%		1.38	%		1.22	%		1.40	%		1.31	%
	10	%		36	%		44	%		27	%		23	%

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

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Financial Statements

Notes to the Financial Statements October 31, 2018

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 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.

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 to U.S. generally accepted accounting principles (“GAAP”).

a).	Securities 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 because 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/loss and realized gains/losses for federal income tax purposes may differ from those reported in 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.  The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
	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 fiscal year 2018 have been identified and appropriately reclassified in the Statement of Assets and Liabilities. The adjustments are as follows:

Total
Distributable
Earnings	Capital Stock
$(459,287)	$459,287

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

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NOTES TO THE FINANCIAL STATEMENTS

	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.  Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter.  Distributions of net realized capital gains, if any, are declared and paid annually, usually in December.
f).	Security Transactions – Investment and shareholder transactions are recorded on the trade date.  The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the security lot sold with the net sale proceeds.  Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
g).	Use of Estimates – 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 (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by (ii) the total number of 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).	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, provide a substitute for purchasing or selling particular securities, or 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 its level of risk more quickly and efficiently than transactions in other types of instruments.  The main reason for 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 fiscal year 2018, the Fund did not hold any derivative instruments.

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17

j).	Repurchase and Reverse Repurchase Agreements – The Fund may enter into repurchase agreements and reverse repurchase agreements with member banks or security dealers of the Federal Reserve Board whom the investment advisor deems creditworthy.  Transactions involving repurchase agreements and reverse repurchase agreements are treated as collateralized financing transactions and are recorded at their contracted resell or repurchase amounts, which approximates fair value.  Interest on repurchase agreements and reverse repurchase agreements is included in interest receivable and interest payable, respectively.
	In connection with repurchase agreements, securities pledged as collateral 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 fair 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.
	At October 31, 2018, securities with a fair value of $32,911,016, which are included in investments in securities in the Statement of Assets and Liabilities, were pledged to collateralize reverse repurchase agreements.
k).	Offsetting Assets and Liabilities – The Fund follows the financial reporting rules regarding offsetting assets and liabilities and related netting arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position.  Reverse repurchase transactions are entered into by the Fund under Master Repurchase Agreements (“MRAs”) that permit the Fund, under certain circumstances, including an event of default (such as bankruptcy or insolvency), to offset payables under the MRA with collateral held with the counterparty and create one single net payment from the Fund.  Upon a bankruptcy or insolvency of the MRA counterparty, the Fund is considered an unsecured creditor with respect to excess collateral and, as such, the return of excess collateral may be delayed.  In the event the buyer of securities under an MRA files for bankruptcy or becomes insolvent, the Fund’s use of the proceeds of the MRA may be restricted while the other party, or its trustee or receiver, determines whether or not to enforce the Fund’s obligation to repurchase the securities.  For additional information regarding the offsetting of assets and liabilities at October 31, 2018, please refer to the table in Note 9.
l).	New Accounting Pronouncements – In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 does not eliminate the requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the changes in unrealized gains and losses for recurring Level 3 fair value measurements. ASU 2018-13 requires that information is provided about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has evaluated the impact of this change in guidance, and due to the permissibility of early adoption, modified the Fund’s fair value disclosures for the current reporting period.
m).	New Rule Issuances – In August 2018, the Securities and Exchange Commission issued Final Rule Release No. 33 10532, Disclosure Update and Simplification, which

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18

NOTES TO THE FINANCIAL STATEMENTS

in part amends certain financial statement disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, GAAP, or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amendments to Rule 6-04.17 of Regulation S-X (balance sheet) were amended to require presentation of the total, rather than the components of net assets, of distributable earnings on the balance sheet. Consistent with GAAP, funds will be required to disclose total distributable earnings. The amendments to Rule 6-09 of Regulation S-X (statement of changes in net assets) omit the requirement to separately state the sources of distributions paid as well as omit the requirement to parenthetically state the book basis amount of undistributed net investment income. Instead, consistent with GAAP, funds will be required to disclose the total amount of distributions paid, except that any tax return of capital must be separately disclosed. The requirements of the Final Rule Release are effective November 5, 2018 and the Fund’s Statement of Assets and Liabilities and the Statement of Changes in Net Assets for the current and prior reporting period have been modified accordingly.

3).  SECURITIES VALUATION

The Fund follows 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 of 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 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.

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Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, are generally priced at the ending NAV provided by the applicable mutual fund’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.

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 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 values of other similar securities, and news events with direct bearing on 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 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 “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 determinations.  Various inputs are used to determine 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, 2018, are included in the Schedule of Investments.

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NOTES TO THE FINANCIAL STATEMENTS

4).  INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during fiscal year 2018 were $5,249,464 and $12,566,221, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during fiscal year 2018.

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.  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, as amended.  During fiscal year 2018, the Fund did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940, as amended.

5).  INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

The Advisor provides the Fund with investment advisory services under an Investment Advisory Agreement.  The Advisor furnishes all investment advice, office space, and facilities, as well as 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 an annual rate of 0.60%.  The net investment advisory fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

The Board has approved a Shareholder Servicing Agreement for the Fund, which was instituted to compensate the Advisor for the non-investment advisory 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.  The shareholder service fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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.  Even though the authorized rate is up to 0.25%, 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, printing and mailing of prospectuses to other than current shareholders, 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 distribution fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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.  The sub-transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services (“Fund Services”) provides the Fund with administrative, fund accounting, and transfer agent services. As administrator, Fund Services 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. U.S. Bank N.A., an affiliate of Fund Services, serves as the Fund’s custodian. The servicing agreements between the Trust and Fund Services and U.S. Bank N.A. contain a fee schedule that is inclusive of administrative, fund accounting, custody, and transfer agent fees. The administrative, fund accounting, custody, and transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 Fund Services 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.  The compliance fees expensed by the Fund during fiscal year 2018 are included in 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 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 fiscal year 2018, the Fund did not have any borrowings outstanding under the line of credit.

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NOTES TO THE FINANCIAL STATEMENTS

8).  FEDERAL TAX INFORMATION

As of October 31, 2018, the components of accumulated earnings (losses) for income tax purposes were as follows:

	Investments
Cost of investments for tax purposes	$	97,111,504
Gross tax unrealized appreciation	$	7,948,884
Gross tax unrealized depreciation		(3,631,303	)
Net tax unrealized appreciation/(depreciation)	$	4,317,581
Undistributed ordinary income	$	87,850
Undistributed long-term capital gains		2,116,280
Total distributable earnings	$	2,204,130
Other accumulated gain/(loss)	$	—
Total accumulated gain/(loss)	$	6,521,711

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.

As of October 31, 2018, the Fund had no tax basis capital losses to offset future capital gains.

As of October 31, 2018, the Fund did not defer, on a tax basis, any late-year ordinary losses.  Late-year ordinary losses are net ordinary losses incurred after December 31, 2017, but within the taxable year, that are deemed to arise on the first day of the Fund’s next taxable year.

During fiscal year 2018 and fiscal year 2017, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2018		October 31, 2017
Ordinary income(1)	$	1,939,475	$	1,216,622
Long-term capital gain		7,255,320		4,383,400
	$	9,194,795	$	5,600,022

⁽¹⁾  Ordinary income includes short-term capital gains.

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 in the Statement of Assets and Liabilities.  Interest payments made under reverse repurchase agreements were $555,805, and are recorded as a component of interest expense in the Statement of Operations.

During fiscal year 2018, the average daily balance and average interest rate in effect for reverse repurchase agreements were $29,865,864 and 1.821%, respectively.  Below is information about the scheduled maturity date, amount, and interest rate for outstanding reverse repurchase agreements as of October 31, 2018:

Maturity Date	Amount	Interest Rate
November 15, 2018	$10,794,000	2.25%
December 20, 2018	$  9,894,500	2.40%
January 17, 2019	$  8,995,000	2.40%

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Outstanding reverse repurchase agreements at October 31, 2018, were equal to 41.46% 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	$29,683,500	$       —	$29,683,500	$29,683,500	$       —	$       —
	$29,683,500	$       —	$29,683,500	$29,683,500	$       —	$       —

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

10).  EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2018, 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, 2018, capital gains were declared and paid to shareholders of record on December 6, 2018, as follows:

	Long-term
Investor Class	$0.39762

On December 27, 2018, income distributions were declared and paid to shareholders of record on December 26, 2018, as follows:

Investor Class $0.03291752

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NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Report of Independent Registered Public

Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the shareholders of Hennessy Total Return Fund

Novato, CA

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Hennessy Total Return Fund (the “Fund”), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

The financial highlights for each of the three years in the period ended October 31, 2016 have been audited by other auditors, whose report dated December 22, 2016 expressed unqualified opinions on such financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We have served as the auditor of one or more of the funds in the Trust since 2002.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.  The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2018 by correspondence with the custodian.  We believe that our audits provide a reasonable basis for our opinion.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2018

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Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Funds 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 to the Board of Trustees (“Advisers”) 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: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board of Trustees 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 Trustee oversees the 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 worked for the	None.
(1981)		Sutter Health organization since
Adviser to the Board		2011 in various positions. He has
		served as the Chief Executive Officer
		of the Sutter Roseville Medical
		Center since 2018. From 2016 through
		2018, he served as the Vice President
		of Strategy for the Sutter Health Valley
		Area, which includes 11 hospitals,
		13 ambulatory surgery centers,
		16,000 employees, and 1,900 physicians.
		From 2013 through 2016, Mr. Alexander
		served as Sutter Novato Community
		Hospital’s Chief Administrative Officer,
		and from 2011 through 2012, he
		served as a Director of Strategy
		within Sutter’s West Bay Region.

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TRUSTEES AND OFFICERS OF THE FUND

			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. Neil Hennessy has been employed	Hennessy
(1956)	a Trustee and	by Hennessy Advisors, Inc. since	Advisors, Inc.
Trustee, Chairman of	June 2008 as	1989 and currently serves as its
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 President, Chief Operating
Executive Vice President		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 Secretary
Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013 and currently serves as its Chief
Senior Vice President		Compliance Officer and Senior Vice President.
and Head of Distribution
Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)(3)		as its General Counsel since June 2013.
Senior Vice President and
Chief Compliance Officer

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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)(4)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Large Cap Financial Fund and the Hennessy Small
and Portfolio Manager		Cap Financial Fund since inception. Mr. Ellison also served as a
		Portfolio Manager of the Hennessy Technology Fund from its
		inception until February 2017. Mr. Ellison served as Director,
		CIO and President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.
Ryan C. Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)(5)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Gas Utility Fund, the Hennessy Large Cap Financial
and Portfolio Manager		Fund, and the Hennessy Small 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. Mr. Kelley has also served as a Portfolio
		Manager of the Hennessy Cornerstone Growth Fund, the
		Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
		Cornerstone Large Growth Fund, and the Hennessy
		Cornerstone Value Fund since February 2017, as a Co-Portfolio
		Manager of the Hennessy Technology Fund since February
		2017, and as a Portfolio Manager of the Hennessy Total Return
		Fund and the Hennessy Balanced Fund since May 2018.
		Mr. Kelley served as Portfolio Manager of FBR Fund Advisers,
		Inc. from January 2008 to October 2012.
Tania Kelley	October 2003	Ms. Kelley has been employed by Hennessy Advisors, Inc.
(1965)		since October 2003.
Senior Vice President
and Head of Marketing
Daniel P. Hennessy	December 2016	Mr. Daniel Hennessy has been employed by Hennessy Advisors,
(1990)		Inc. since 2015. He has served as an Associate Analyst or
Vice President		Analyst of the Hennessy Technology Fund since February 2017.
and Analyst		Mr. Daniel Hennessy previously served as a Mutual Fund
		Specialist at U.S. Bancorp Fund Services, LLC (now doing
		business as U.S. Bank Global Fund Services) from November
		2014 to July 2015. Prior to that, he attended the University of
		San Diego, where he earned a degree in Political Science.

_______________

(1)	Messrs. DeSousa, Doyle, N. 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 the Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
(2)	Mr. N. 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 this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
(4)	The address of this officer is 101 Federal Street, Suite 1900, Boston, MA 02110.
(5)	The address of this officer is 1340 Environ Way, Suite 332, Chapel Hill, NC 27517.

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TRUSTEES AND OFFICERS OF THE FUND

(This Page Intentionally Left Blank.)

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Expense Example (Unaudited)

October 31, 2018

As a shareholder of the Fund, you incur 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, 2018, through October 31, 2018.

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. Bank Global Fund Services, 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 ratio 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. 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.

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EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period(1)
	Account Value	Account Value	May 1, 2018 –
	May 1, 2018	October 31, 2018	October 31, 2018
Investor Class
Actual	$1,000.00	$1,036.00	$10.73
Hypothetical (5% return before expenses)	$1,000.00	$1,014.67	$10.61

⁽¹⁾ Expenses are equal to the Fund’s annualized expense ratio of 2.09%, multiplied by the average account value over the period, multiplied by 184/365 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

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 www.hennessyfunds.com/proxy-voting/voting-policy; or (3) on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at www.hennessyfunds.com/proxy-voting/voting-record 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 a 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 Forms N-Q are available on the SEC’s website at www.sec.gov.  Information included in the Fund’s Forms N-Q will also be available upon request by calling 1-800-966-4354.

Federal Tax Distribution Information

(Unaudited)

For fiscal year 2018, 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 100.00%.

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for fiscal year 2018 was 100.00%.

The percentage of taxable ordinary income distributions that were 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 35.71%.

Important Notice Regarding Delivery

of Shareholder Documents

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of shareholder reports, proxy statements, and prospectuses to shareholders who share an address and have the same last name. This process does not apply to account statements. You may request an individual copy of a shareholder document at any time. If you would like to receive separate mailings of shareholder documents, please call U.S. Bank Global Fund Services at 1-800-261-6950 or 1-414-765-4124, and individual delivery will begin within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact such intermediary directly to request individual delivery.

HENNESSYFUNDS.COM

32

PROXY VOTING — PRIVACY POLICY

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 will be shared with non-affiliated third parties.

HENNESSY FUNDS 1-800-966-4354

33

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 Boulevard, Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT, &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

d/b/a U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Drive, 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

Two Liberty Place

50 South 16th Street, Suite 2900

Philadelphia, Pennsylvania 19102-2529

DISTRIBUTOR

Quasar Distributors, LLC

777 East Wisconsin Avenue

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, 2018

HENNESSY EQUITY AND

INCOME FUND

Investor Class  HEIFX

Institutional Class  HEIIX

hennessyfunds.com  |  1-800-966-4354

(This Page Intentionally Left Blank.)

Contents

Letter to Shareholders	2
Performance Overview	4
Financial Statements
Schedule of Investments	8
Statement of Assets and Liabilities	19
Statement of Operations	20
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 Policy and Proxy Voting Records	40
Quarterly Schedule of Investments	40
Federal Tax Distribution Information	40
Important Notice Regarding Delivery of Shareholder Documents	40
Privacy Policy	41

HENNESSY FUNDS 1-800-966-4354

December 2018

Dear Hennessy Funds Shareholder:

Over the past year, we have witnessed the return of market volatility. U.S. stocks still registered healthy gains, bolstered by the impact on corporate profits of the successful passage of the tax reform bill in December 2017. However, concerns over potential trade disruptions, especially between the U.S. and China, and worries over higher short-term interest rates, which many believe could possibly trigger a recession down the road, put downward pressure on equity valuations.

The U.S. economy performed well over the period, and actually achieved an acceleration in GDP growth to over 3% on an annualized basis in the second and third quarters of calendar year 2018. During the past year, companies continued to hire workers, adding over 200,000 jobs per month on average, sending the unemployment rate down to 3.7% in October, which is the lowest it has been since 1969. Consumer confidence is high and still rising, and corporate profits reached record levels in the third quarter of calendar year 2018, posting a year-over-year increase of 26% for the companies in the S&P 500 Index.

The Federal Reserve, confident about the strength of the economy and mindful of a tight labor market, raised short-term interest rates four times over the last year, by a quarter point each time. Long-term bond yields also rose, driven higher primarily by evidence of faster wage growth, pushing the U.S. 10-year Treasury bond over 3% for the first time since 2013.

As I write this, we are experiencing the market’s 20th downturn since 2010. I have been saying that every bull market experiences volatility and pullbacks. Many financial commentators think this bull market is “long in the tooth.” I do not agree with them. I believe stock valuations are still very reasonable. The prospective price to earnings multiple for the Dow Jones Industrial Average has come down from almost 20x at the end of 2017 to 16x, just above its 10-year average of 15x. The prospective PE multiple for the S&P 500 Index has also come down, from 20x to 17x, and compares favorably to its 10-year average of 16x.

Cash, meanwhile, continues to build up on corporate balance sheets. The companies in the S&P 500 Index reported a total of over $5.4 trillion in cash and marketable securities in their latest filings. Companies have been spending some of their cash, increasing their investment spending and laying the groundwork for future earnings growth. However, they have also been returning capital to shareholders. S&P 500 Index companies announced $433.6 billion in share repurchases during the second quarter of calendar year 2018, nearly doubling the previous record of $242.1 billion set in the first quarter. Companies are also raising their dividends.

In addition, I believe the Federal Reserve will take care not to raise interest rates too high or too fast and endanger the economic expansion. While wage growth has risen to over 3% in October, other measures of inflationary pressure, such as the Consumer Price Index and the Producer Price Index, still show prices increasing at a more moderate pace, closer to 2%. Given continued evidence of modest rates of inflation, I believe the Fed will be able to maintain its gradual pace of interest rate hikes.

Finally and importantly, I still see no signs of euphoria in this market. In my opinion, the enthusiasm present earlier in the year, which followed the significant reduction in corporate income tax rates, has largely evaporated, and it has been replaced with anxiety

HENNESSYFUNDS.COM

2

LETTER TO SHAREHOLDERS

over higher interest rates and their potential impact on growth. In the past, I have likened the current bull market to that of 1982-2000, and I still believe this comparison holds true. I am confident in the strength of the market today and believe the economy will continue to grow in the coming year, albeit at a more moderate pace.

Thank you for your continued confidence and investment in the Hennessy 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 commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is a valuation measure and is calculated by dividing a company’s market price per share by its earnings per share. Earnings growth is not a measure of a fund’s future performance.

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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, 2018

	One	Five	Ten
	Year	Years	Years
Hennessy Equity and Income Fund –
Investor Class (HEIFX)	3.44%	5.70%	8.76%
Hennessy Equity and Income Fund –
Institutional Class (HEIIX)	3.86%	6.08%	9.09%
Blended Balanced Index	4.07%	7.39%	9.43%
S&P 500 Index	7.35%	11.34%	13.24%

Expense ratios:  1.48% (Investor Class); 1.10% (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 table does 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 www.hennessyfunds.com. Performance for the period from March 13, 2010, to October 26, 2012, is that of the FBR Balanced Fund, and performance for the periods on or prior to March 12, 2010, is that of the AFBA 5 Star Balanced Fund.

The Blended Balanced Index consists of 60% common stocks represented by the S&P 500 Index and 40% bonds represented by the Bloomberg Barclays Capital Intermediate U.S. Government/Credit Index. The S&P 500 Index is commonly used to measure the performance of U.S. stocks. The Bloomberg Barclays Capital Intermediate U.S. Government/Credit Index is commonly used to measure the performance of U.S. bonds. One cannot invest directly in an index.

The expense ratios presented are from the most recent prospectus. The expense ratios for the current reporting period are available in the Financial Highlights section of this report.

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4

PERFORMANCE OVERVIEW

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 Allocation: Gary B. Cloud, CFA, and Peter G. Greig, CFA

Financial Counselors, Inc. (sub-advisor)

Performance:

For the 12-month period ended October 31, 2018, the Investor Class of the Hennessy Equity and Income Fund returned 3.44%, underperforming both the Blended Balanced Index (the Fund’s primary benchmark) and the S&P 500 Index, which returned 4.07% and 7.35%, respectively, for the same period.

Equities: Stock selection was the primary factor that contributed to solid performance of the equity allocation of the portfolio, especially in the Financials and Information Technology sectors, where insurance company Progressive Corp. and credit card network company Visa, Inc. performed well. Other holdings that contributed positively to performance included O’Reilly Automotive, Inc., Nike, Inc., and Norfolk Southern Corp. Top detractors from performance included Carnival Corp., CarMax, Inc., General Dynamics Corp., BlackRock, Inc., and Dollar Tree, Inc. The Fund continues to hold all of the stocks mentioned with the exception of Nike, Inc.

Sector allocation had a slightly negative impact on the Fund’s relative performance. The Fund’s overweight position in Financials and underweight position in Information Technology hurt performance, while the Fund’s overweight position in Consumer Discretionary and underweight position in Consumer Staples contributed positively to performance.

Fixed Income: The overweight position in investment grade corporate credit and yield curve positioning was the largest positive contributor to performance of the fixed income allocation of the portfolio over the 12-month period. The income and aging from these higher-yielding investment grade securities exceeded the amount represented in the benchmark. Additionally, the Fund’s overweight position in shorter-term securities compared to the index helped cushion the price decline from longer-dated securities. The Fund’s slight exposure to preferred stocks and high-yield credit securities, or “junk bonds,” was another positive factor aiding performance. Effective duration and industry sector positioning was the largest relative detractor from overall performance compared to the benchmark.

Portfolio Strategy:

The Fund seeks a balanced portfolio of approximately 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 Commentary:

Equities: The U.S. economy continues to expand, with annualized real GDP growth averaging over 3% over the last two quarters, while the inflation rate remains relatively low. Looking ahead, we remain optimistic about the economy and believe there are a number of positives that should support consumer spending in the future, including a strong labor market and rising wages.

HENNESSY FUNDS 1-800-966-4354

5

In terms of monetary policy, we believe the Federal Reserve will continue to increase the fed funds rate with a 25 basis point hike expected in December and roughly three additional increases in 2019. We also believe that the timing and magnitude of rate increases next year are likely to be determined by the rate of growth of the economy overall and conditions in the labor market. Long bond rates have risen recently as a result of firming inflation expectations, higher growth expectations, and balance sheet normalization from the Federal Reserve.

Discussion of higher import tariffs continued throughout the year. The main dispute appears to be between the United States and China, where a number of tariffs have already been announced and enacted. So far, we believe these tariffs have failed to meaningfully impact trade or negatively affect the outlook for most companies, but the impact could be greater in the years ahead.

Looking forward, the combination of solid economic growth, low inflation (core inflation in the 2% range), and relatively low-but-rising interest rates usually creates a positive environment for stocks. We believe this positive outlook holds true today, but we have a more balanced view longer term. Potential risks include relatively high valuations for stocks using traditional metrics, rising inflation, the impact of increasing tariffs, and a more aggressive tightening policy from the Federal Reserve. While we believe the risks and rewards are somewhat balanced as they relate to stocks overall, we always remain cautious and focus on limiting downside in each holding. Fortunately, we are still finding new, high-conviction potential investment ideas for the Fund.

Finally, we believe the Fund is well positioned based on the strength of the companies owned and the overall valuation of the portfolio. In our opinion, the market valuation overall is not very attractive on a PE basis, and we could certainly see a pullback or greater volatility in the near future. In an environment of lower expected returns and greater volatility, we believe the Fund offers a defensive option for equity investors.

Fixed Income: We believe the Federal Reserve is likely to raise the federal funds rate in December based on an implied probability analysis. What will happen in 2019 and 2020 on the interest rate front is very uncertain, as the Federal Reserve has indicated three or four quarter-point rate hikes are likely over that time horizon, and the marketplace has only priced in about two. Core Consumer Price Index and Personal Consumption Expenditure, both measures of inflationary pressure, have finally reached the Federal Reserve’s targets, after undershooting them over the last five years. We believe the cyclical pressures on the inflation front are close to peaking and may level off around 2.0% for the next few years.

One major change over the last 12 months has been the shape of the U.S. yield curve. The 10-year Treasury bond yield minus the 2-year Treasury bond yield has continued to flatten this year to around 0.27%, after starting the period at .67%. A narrow spread between short-term and long-term rates is a warning sign from the marketplace that monetary policy is becoming too restrictive. At this point, the economy can probably withstand a higher base interest rate than markets and investors are comfortable with. Therefore, a slight moderation in the overall level of economic activity could open a pathway for the Federal Reserve to be more reserved with future rate hikes and allow the economy to press along.

As we look forward, it is our belief that the federal funds rate is approaching a neutral level. We expect another rate increase in December and that 10-year Treasury bond yields may move modestly higher. However, we believe short-term rates already reflect at least three future rate increases and might not change significantly from current rates. We expect corporate bonds to continue to perform relatively well as there are no

HENNESSYFUNDS.COM

6

PERFORMANCE OVERVIEW

material signs that economic growth is slowing. With inflation targeted at 2%, we believe the U.S. bond market now offers an attractive real return in addition to the portfolio diversification and risk mitigation benefits it provides.

_______________

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.

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 exchange-traded funds). 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.

Basis point refers to a common unit of measure for interest rates and other percentages in finance and is equal to 1/100th of 1%.  Duration is a measure of the sensitivity of the price (the value of the principal) of a fixed-income investment to a change in interest rates and is expressed as a number of years. Yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity dates. Investment grade is a rating that indicates that a municipal or corporate bond has a relatively low risk of default. PE, or price-to-earnings ratio, is a valuation measure calculated by dividing a company’s market price per share by its earnings per share. Diversification does not assure a profit nor protect against loss in a declining market.

HENNESSY FUNDS 1-800-966-4354

7

Financial Statements

Schedule of Investments as ofOctober 31, 2018

HENNESSY EQUITY AND INCOME FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)	% NET ASSETS
Berkshire Hathaway, Inc., Class B	4.35%
Apple, Inc.	3.86%
The Progressive Corp.	3.49%
Visa, Inc., Class A	3.00%
Alphabet, Inc., Class C	2.97%
Norfolk Southern Corp.	2.61%
Dollar Tree, Inc.	2.34%
CarMax, Inc.	2.28%
Carnival Corp.	2.27%
BlackRock, Inc.	1.97%

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.

The Global Industry Classification Standard (GICS^®) was developed by and is the exclusive property and a service mark of MSCI, Inc. and Standard & Poor Financial Services LLC.  It has been licensed for use by the Hennessy Funds.

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8

SCHEDULE OF INVESTMENTS

COMMON STOCKS – 58.38%	Number				% of
	of Shares		Value		Net Assets
Communication Services – 3.98%
Alphabet, Inc., Class C (a)		6,039	$	6,502,614		2.97	%
Verizon Communications, Inc.		38,815		2,215,948		1.01	%
				8,718,562		3.98	%
Consumer Discretionary – 11.23%
CarMax, Inc. (a)		73,485		4,990,366		2.28	%
Carnival Corp. (b)		88,995		4,987,280		2.27	%
Dollar Tree, Inc. (a)		60,811		5,126,367		2.34	%
Home Depot, Inc.		22,055		3,879,033		1.77	%
Lowe’s Companies, Inc.		19,114		1,820,035		0.83	%
O’Reilly Automotive, Inc. (a)		11,890		3,813,718		1.74	%
				24,616,799		11.23	%
Consumer Staples – 4.92%
Altria Group, Inc.		63,901		4,156,121		1.90	%
Nestle S.A. (b)		49,942		4,209,112		1.92	%
The Coca-Cola Co.		50,606		2,423,015		1.10	%
				10,788,248		4.92	%
Energy – 1.21%
Chevron Corp.		23,672		2,642,979		1.21	%
Financials – 14.45%
Alleghany Corp.		6,684		4,014,945		1.83	%
Bank of America Corp.		75,498		2,076,195		0.95	%
Berkshire Hathaway, Inc., Class B (a)		46,499		9,545,315		4.35	%
BlackRock, Inc.		10,472		4,308,390		1.97	%
The Progressive Corp.		109,777		7,651,457		3.49	%
Wells Fargo & Co.		76,569		4,075,768		1.86	%
				31,672,070		14.45	%
Health Care – 1.03%
Bristol-Myers Squibb Co.		44,831		2,265,759		1.03	%
Industrials – 7.99%
Deere & Co.		11,890		1,610,381		0.73	%
FedEx Corp.		15,691		3,457,355		1.58	%
General Dynamics Corp.		19,229		3,318,541		1.51	%
Norfolk Southern Corp.		34,049		5,714,444		2.61	%
Southwest Airlines Co.		69,421		3,408,571		1.56	%
				17,509,292		7.99	%

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

HENNESSY FUNDS 1-800-966-4354

9

COMMON STOCKS	Number				% of
	of Shares		Value		Net Assets
Information Technology – 8.69%
Apple, Inc.		38,656	$	8,460,252		3.86	%
Cisco Systems, Inc.		87,497		4,002,988		1.83	%
Visa, Inc., Class A		47,683		6,573,102		3.00	%
				19,036,342		8.69	%
Materials – 4.88%
Albemarle Corp.		39,212		3,890,615		1.78	%
Martin Marietta Materials, Inc.		19,380		3,319,406		1.51	%
NewMarket Corp.		9,054		3,494,482		1.59	%
				10,704,503		4.88	%
Total Common Stocks
(Cost $99,644,037)				127,954,554		58.38	%
PREFERRED STOCKS – 1.86%
Communication Services – 0.05%
AT&T, Inc., 5.350%, 11/01/2066		4,530		106,772		0.05	%
Consumer Staples – 0.08%
CHS, Inc., Series 4, 7.500%, Perpetual		7,005		185,843		0.08	%
Energy – 0.05%
Enbridge, Inc., Series B, 6.375% to 04/15/2023,
3.593% to 04/15/2028, 3.843% to 04/15/2043, then
3 Month LIBOR USD + 4.593%, 04/15/2078 (b)(f)		4,410		108,839		0.05	%
Financials – 1.61%
Aegon N.V., 6.375%, Perpetual (b)		3,845		97,278		0.05	%
Arch Capital Group Ltd., Series F, 5.450%, Perpetual (b)		4,575		103,120		0.05	%
Axis Capital Holdings Ltd, Series E, 5.500%, Perpetual (b)		2,470		57,057		0.03	%
Banc of California, Inc., Series E, 7.000%, Perpetual		3,805		97,408		0.05	%
Bank of America Corp.
Series GG, 6.000%, Perpetual		3,455		86,824		0.04	%
Series CC, 6.200%, Perpetual		2,360		61,053		0.03	%
BB&T Corp.
5.625%, Perpetual		4,230		105,962		0.05	%
Series F, 5.200%, Perpetual		4,400		105,512		0.05	%
Capital One Financial Corp.
Series F, 6.200%, Perpetual		4,330		110,458		0.05	%
Series H, 6.000%, Perpetual		4,365		111,526		0.05	%
Citigroup, Inc., Series S, 6.300%, Perpetual		3,605		93,874		0.04	%

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

HENNESSYFUNDS.COM

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SCHEDULE OF INVESTMENTS

PREFERRED STOCKS	Number				% of
	of Shares		Value		Net Assets
Financials (Continued)
Fannie Mae Preferred, Series S, 8.250%, Perpetual (a)		7,000	$	41,860		0.02	%
First Republic Bank
Series F, 5.700%, Perpetual		3,120		76,534		0.04	%
Series G, 5.500%, Perpetual		3,170		75,192		0.03	%
Hartford Financial Services Group, Inc., Series G, 6.000%, Perpetual (a)		4,400		110,352		0.05	%
Huntington Bancshares, Inc., Series D, 6.250%, Perpetual		5,930		152,164		0.07	%
IBERIABANK Corp., Series B, 6.625% to 08/01/2025 then
3 Month LIBOR USD + 4.262%, Perpetual (f)		1,920		50,400		0.02	%
ING Groep N.V., 6.125%, Perpetual (b)		2,055		51,909		0.02	%
JPMorgan Chase & Co., Series BB, 6.150%, Perpetual		8,595		217,539		0.10	%
KeyCorp
Series E, 6.125% to 12/15/2026 then
3 Month LIBOR USD + 3.892%, Pepetual (f)		4,075		107,172		0.05	%
Series F, 5.650%, Pepetual (a)		2,065		50,035		0.02	%
Legg Mason, Inc.
5.450%, 09/15/2056		2,085		48,956		0.02	%
6.375%, 03/15/2056		1,946		49,545		0.03	%
MetLife, Inc., Series E, 5.625%, Pepetual		4,400		108,944		0.05	%
Morgan Stanley, Series I, 6.375% to 10/15/2024 then
3 Month LIBOR USD + 3.708%, Perpetual (f)		7,000		183,260		0.08	%
National General Holdings Corp., Series C, 7.500%, Perpetual		2,450		58,653		0.03	%
Regions Financial Corp., Series B, 6.375% to 09/15/2024 then
3 Month LIBOR USD + 3.536%, Perpetual (f)		4,145		110,423		0.05	%
State Street Corp.
Series D, 5.900% to 03/15/2024 then
3 Month LIBOR USD + 3.108%, Perpetual (f)		4,150		108,066		0.05	%
Series E, 6.000%, Perpetual		1,950		49,569		0.02	%
TCF Financial Corp., Series C, 5.700%, Perpetual		2,090		50,244		0.02	%
The Allstate Corp., Series G, 5.625%, Perpetual		4,745		116,110		0.05	%
The Charles Schwab Corp.
Series C, 6.000%, Perpetual		4,315		110,982		0.05	%
Series D, 5.950%, Perpetual		4,375		113,094		0.05	%
The Goldman Sachs Group, Inc.
Series K, 6.375% to 05/10/2024 then
3 Month LIBOR USD + 3.550%, Perpetual (f)		2,560		67,226		0.03	%
Series N, 6.300%, Perpetual		2,620		66,941		0.03	%
U.S. Bancorp, Series F, 6.500% to 01/15/2022 then
3 Month LIBOR USD + 4.447%, Perpetual (d)(f)		2,755		74,413		0.03	%
Webster Financial Corp., Series F, 5.250%, Perpetual		1,075		24,005		0.01	%

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

HENNESSY FUNDS 1-800-966-4354

11

PREFERRED STOCKS	Number				% of
	of Shares		Value		Net Assets
Financials (Continued)
Wells Fargo & Co.
Series V, 6.000%, Perpetual		4,325	$	110,677		0.05	%
Series X, 5.500%, Perpetual		4,475		109,727		0.05	%
				3,524,064		1.61	%
Utilities – 0.07%
DTE Energy Co., Series F, 6.000%, 12/15/2076		2,320		60,181		0.03	%
The Southern Co., 6.250%, 10/15/2075		3,840		98,265		0.04	%
				158,446		0.07	%
Total Preferred Stocks
(Cost $4,293,450)				4,083,964		1.86	%
REITS – 0.68%
Financials – 0.68%
Annaly Capital Management, Inc., Series F, 6.950% to 09/30/2022 then
3 Month LIBOR USD + 4.993%, Perpetual (f)		4,370		109,818		0.05	%
Apollo Commercial Real Estate Finance, Inc.		9,010		168,577		0.08	%
Chimera Investment Corp.		9,270		172,422		0.08	%
Chimera Investment Corp.
Series A, 8.000%, Perpetual		4,620		117,440		0.05	%
Series B, 8.000% to 03/30/2024 then
3 Month LIBOR USD + 5.791%, Perpetual (f)		2,350		60,795		0.03	%
Invesco Mortgage Capital, Inc., Series C, 7.500% to 09/27/2027 then
3 Month LIBOR USD + 5.289%, Perpetual (f)		4,510		112,028		0.05	%
Monmouth Real Estate Investment Corp., Series C, 6.125%, Perpetual		4,180		100,320		0.05	%
Public Storage, Series B, 5.400%, Perpetual		3,015		71,486		0.03	%
Starwood Property Trust, Inc.		7,765		168,656		0.08	%
Two Harbors Investment Corp.		10,655		156,522		0.07	%
Two Harbors Investment Corp., Series B, 7.625% to 07/27/2027 then
3 Month LIBOR USD + 5.352%, Perpetual (f)		6,880		169,798		0.08	%
Vornado Realty Trust, Series M, 5.250%, Perpetual		3,310		72,555		0.03	%
				1,480,417		0.68	%
Total REITS
(Cost $1,461,792)				1,480,417		0.68	%

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

HENNESSYFUNDS.COM

12

SCHEDULE OF INVESTMENTS

CORPORATE BONDS – 25.28%	Par				% of
	Amount		Value		Net Assets
Communication Services – 1.99%
AT&T, Inc.
3.000%, 02/15/2022		500,000	$	488,546		0.22	%
4.250%, 03/01/2027		980,000		952,013		0.44	%
5.350%, 09/01/2040		200,000		191,314		0.09	%
5.800%, 02/15/2019		400,000		403,234		0.18	%
Deutsche Telekom AG, 6.000%, 07/08/2019 (b)		1,160,000		1,182,457		0.54	%
Verizon Communications, Inc., 2.450%, 11/01/2022		1,200,000		1,147,866		0.52	%
				4,365,430		1.99	%
Consumer Discretionary – 0.93%
Alibaba Group Holding Ltd, 3.600%, 11/28/2024 (b)		1,000,000		973,733		0.45	%
Ford Motor Co., 7.450%, 07/16/2031		1,000,000		1,054,612		0.48	%
				2,028,345		0.93	%
Consumer Staples – 0.61%
CVS Health Corp., 4.125%, 05/15/2021		1,000,000		1,012,632		0.46	%
Wal-Mart Stores, Inc., 5.000%, 10/25/2040		300,000		325,020		0.15	%
				1,337,652		0.61	%
Energy – 2.55%
Boardwalk Pipelines LP, 4.450%, 07/15/2027		1,200,000		1,129,091		0.52	%
Canadian Natural Resources Ltd., 3.900%, 02/01/2025 (b)		1,000,000		972,520		0.44	%
Encana Corp., 3.900%, 11/15/2021 (b)		1,600,000		1,599,429		0.73	%
Husky Energy, Inc., 4.000%, 04/15/2024 (b)		750,000		741,111		0.34	%
National Oilwell Varco, Inc., 2.600%, 12/01/2022		1,200,000		1,137,768		0.52	%
				5,579,919		2.55	%
Financials – 12.48%
American International Group, Inc.
4.125%, 02/15/2024		1,000,000		997,203		0.45	%
4.875%, 06/01/2022		1,000,000		1,029,262		0.47	%
Boston Properties, Inc., 5.875%, 10/15/2019		700,000		713,841		0.33	%
Capital One Financial Corp., 4.750%, 07/15/2021		1,500,000		1,544,533		0.70	%
Capital One NA, 2.250%, 09/13/2021		500,000		479,996		0.22	%
Comerica, Inc., 2.125%, 05/23/2019		500,000		497,721		0.23	%
Diamond 1 Finance Corp. / Diamond 2
Finance Corp., 5.450%, 06/15/2023 (e)		1,220,000		1,265,727		0.58	%
Discover Financial Services, 5.200%, 04/27/2022		900,000		930,200		0.42	%
Fifth Third Bancorp, 2.375%, 04/25/2019		1,675,000		1,670,583		0.76	%
First Niagara Financial Group, Inc., 6.750%, 03/19/2020		590,000		615,538		0.28	%
General Electric Capital Corp., 6.000%, 08/07/2019		610,000		622,231		0.28	%

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

HENNESSY FUNDS 1-800-966-4354

13

CORPORATE BONDS	Par				% of
	Amount		Value		Net Assets
Financials (Continued)
Huntington Bancshares Inc/OH, 4.000%, 05/15/2025		765,000	$	759,780		0.35	%
JPMorgan Chase & Co., 2.700%, 05/18/2023		1,000,000		956,257		0.43	%
KeyCorp, 5.100%, 03/24/2021		950,000		983,833		0.45	%
Lincoln National Corp., 6.250%, 02/15/2020		780,000		807,281		0.37	%
Morgan Stanley, 5.500%, 07/28/2021		2,333,000		2,445,238		1.12	%
Prudential Financial, Inc., 3.878%, 03/27/2028		400,000		393,830		0.18	%
Qwest Capital Funding, Inc., 6.500%, 11/15/2018		700,000		700,437		0.32	%
Raymond James Financial, Inc.
3.625%, 09/15/2026		1,500,000		1,413,916		0.65	%
5.625%, 04/01/2024		700,000		747,580		0.34	%
Synchrony Financial, 3.750%, 08/15/2021		1,200,000		1,184,152		0.54	%
Synovus Financial Corp., 3.125%, 11/01/2022		1,300,000		1,238,250		0.56	%
The Goldman Sachs Group, Inc.
5.375%, 03/15/2020		1,100,000		1,129,638		0.52	%
6.000%, 06/15/2020		1,500,000		1,560,413		0.71	%
The Toronto-Dominion Bank, 2.125%, 07/02/2019 (b)		1,500,000		1,492,572		0.68	%
Westpac Banking Corp., 4.875%, 11/19/2019 (b)		450,000		458,107		0.21	%
Willis North America, Inc., 3.600%, 05/15/2024		750,000		722,458		0.33	%
				27,360,577		12.48	%
Health Care – 3.12%
Agilent Technologies, Inc., 5.000%, 07/15/2020		650,000		667,098		0.30	%
Amgen, Inc.
3.450%, 10/01/2020		1,000,000		1,002,700		0.46	%
3.625%, 05/22/2024		1,500,000		1,479,520		0.68	%
Celgene Corp., 3.625%, 05/15/2024		1,600,000		1,555,749		0.71	%
Edwards Lifesciences Corp., 4.300%, 06/15/2028		1,450,000		1,440,936		0.66	%
Express Scripts Holding Co., 3.500%, 06/15/2024		700,000		680,554		0.31	%
				6,826,557		3.12	%
Industrials – 0.45%
Rio Tinto Finance USA Ltd., 3.750%, 06/15/2025 (b)		1,000,000		992,273		0.45	%
Information Technology – 0.97%
Apple, Inc., 4.500%, 02/23/2036		250,000		260,438		0.12	%
Corning, Inc.
6.625%, 05/15/2019		695,000		707,906		0.32	%
6.850%, 03/01/2029		275,000		319,813		0.15	%
Juniper Networks, Inc., 4.600%, 03/15/2021		600,000		611,989		0.28	%
Oracle Corp., 2.650%, 07/15/2026		250,000		228,865		0.10	%
				2,129,011		0.97	%

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

HENNESSYFUNDS.COM

14

SCHEDULE OF INVESTMENTS

CORPORATE BONDS	Par				% of
	Amount		Value		Net Assets
Materials – 1.71%
AngloGold Ashanti Holdings PLC, 5.125%, 08/01/2022 (b)		1,000,000	$	1,010,000		0.46	%
Goldcorp, Inc., 3.625%, 06/09/2021 (b)		750,000		746,032		0.34	%
Newmont Mining Corp., 3.500%, 03/15/2022		1,000,000		988,095		0.45	%
The Dow Chemical Co., 4.250%, 11/15/2020		1,000,000		1,013,328		0.46	%
				3,757,455		1.71	%
Retail Trade – 0.47%
Macy’s Retail Holdings, Inc.
4.375%, 09/01/2023		900,000		893,188		0.41	%
4.500%, 12/15/2034		175,000		139,786		0.06	%
				1,032,974		0.47	%
Total Corporate Bonds
(Cost $56,404,646)				55,410,193		25.28	%
MORTGAGE BACKED SECURITIES – 4.66%
Fannie Mae Pool
3.000%, 10/01/2043		2,484,505		2,371,276		1.08	%
3.500%, 01/01/2042		500,088		491,377		0.22	%
4.000%, 10/01/2041		560,442		564,965		0.26	%
4.000%, 12/01/2041		506,195		510,271		0.23	%
4.500%, 08/01/2020		17,662		17,991		0.01	%
6.000%, 10/01/2037		128,731		140,423		0.06	%
Fannie Mae REMICS
Series 13-52, 1.250%, 06/25/2043		157,830		138,552		0.06	%
Series 12-22, 2.000%, 11/25/2040		136,397		130,301		0.06	%
Series 12-16, 2.000%, 11/25/2041		119,407		111,833		0.05	%
Series, 10-134, 2.250%, 03/25/2039		104,508		101,897		0.05	%
Freddie Mac Gold Pool
3.000%, 05/01/2042		923,283		882,181		0.40	%
3.000%, 09/01/2042		1,772,138		1,693,273		0.77	%
3.500%, 01/01/2048		1,698,356		1,654,836		0.76	%
5.000%, 05/01/2020		14,371		14,448		0.01	%
5.500%, 04/01/2037		74,191		80,518		0.04	%
Freddie Mac REMICS
Series 4146, 1.500%, 10/15/2042		95,896		92,041		0.04	%
Series 4309, 2.000%, 10/15/2043		96,721		91,029		0.04	%
Series 3928, 2.500%, 08/15/2040		256,956		253,138		0.12	%
Series 3870, 2.750%, 01/15/2041		74,142		71,558		0.03	%
Series 4016, 3.000%, 09/15/2039		299,221		293,234		0.13	%
Series 4322, 3.000%, 05/15/2043		293,613		288,532		0.13	%
Government National Mortgage Association, 1.750%, 02/16/2043		252,301		229,956		0.11	%
Total Mortgage Backed Securities
(Cost $10,649,436)				10,223,630		4.66	%

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

HENNESSY FUNDS 1-800-966-4354

15

U.S. TREASURY OBLIGATIONS – 4.27%	Par				% of
	Amount		Value		Net Assets
U.S. Treasury Bonds – 0.43%
U.S. Treasury Bonds, 3.625%, 02/15/2044		900,000	$	934,400		0.43	%
U.S. Treasury Notes – 3.84%
U.S. Treasury Notes
2.625%, 11/15/2020		2,200,000		2,188,742		1.00	%
2.750%, 02/15/2024		3,000,000		2,962,969		1.35	%
3.625%, 08/15/2019		3,250,000		3,273,867		1.49	%
				8,425,578		3.84	%
Total U.S. Treasury Obligations
(Cost $9,501,752)				9,359,978		4.27	%
U.S. GOVERNMENT AGENCY ISSUES – 2.83%
Fannie Mae
1.500%, 08/10/2021		1,000,000		956,038		0.44	%
1.500%, 04/18/2028 (g)		1,000,000		993,267		0.45	%
2.500%, 03/30/2026 (g)		1,200,000		1,193,130		0.55	%
Federal Home Loan Banks
1.250%, 10/17/2031 (g)		1,250,000		1,181,805		0.54	%
2.750%, 07/11/2031		800,000		710,473		0.32	%
Freddie Mac
2.000%, 10/27/2023 (g)		1,200,000		1,173,619		0.53	%
Total U.S. Government Agency Issues
(Cost $6,398,673)				6,208,332		2.83	%
INVESTMENT COMPANIES (EXCLUDING
MONEY MARKET FUNDS) – 1.20%
Apollo Investment Corp.		30,270		156,496		0.07	%
Ares Capital Corp.		10,130		173,831		0.08	%
BlackRock TCP Capital Corp.		11,000		154,000		0.07	%
FS Investment Corp.		21,350		134,291		0.06	%
Guggenheim Credit Allocation Fund		34,000		697,680		0.32	%
Hercules Capital, Inc.		13,115		164,331		0.08	%
Monroe Capital Corp.		12,670		161,036		0.07	%
New Mountain Finance Corp.		12,065		160,585		0.07	%
SPDR Barclays Capital High Yield Bond		1,000		35,160		0.02	%
SPDR Barclays Short Term High Yield		4,000		108,240		0.05	%
TPG Specialty Lending, Inc.		8,965		180,017		0.08	%
Vanguard High-Yield Corporate Fund		89,820		507,484		0.23	%
Total Investment Companies (Excluding
Money Market Funds)
(Cost $2,805,706)				2,633,151		1.20	%

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

HENNESSYFUNDS.COM

16

SCHEDULE OF INVESTMENTS

SHORT-TERM INVESTMENTS – 0.78%	Number				% of
	of Shares		Value		Net Assets
Money Market Funds – 0.78%
Fidelity Government Portfolio, Institutional Class, 2.06% (c)		1,702,921	$	1,702,921		0.78	%
Total Short-Term Investments
(Cost $1,702,921)				1,702,921		0.78	%
Total Investments
(Cost $192,862,413) – 99.94%				219,057,140		99.94	%
Other Assets in Excess of Liabilities – 0.06%				126,312		0.06	%
TOTAL NET ASSETS – 100.00%			$	219,183,452		100.00	%

Percentages are stated as a percent of net assets.

PLC – Public Limited Company

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 seven-day yield as of October 31, 2018.
(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, 2018, are as follows:

Issuer	U.S. Bancorp
Beginning Cost	$	93,213
Purchase Cost	$	—
Sales Cost	$	(13,953	)
Ending Cost	$	79,260
Dividend Income	$	5,068
Net Change in
Unrealized Appreciation	$	(4,882	)
Realized Gain/Loss	$	(431	)
Shares		2,755
Market Value	$	74,413

(e)	Rule 144A security. Security is exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended.  Rule 144A securities may be resold in transactions exempt from registration to qualified institutional investors.  As of October 31, 2018, the market value of this security totaled $1,265,727, which represents 0.58% of net assets.
(f)	Variable rate security; rate disclosed is the current rate as of October 31, 2018.
(g)	Step-up bond; rate disclosed is the current rate as of October 31, 2018.

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

HENNESSY FUNDS 1-800-966-4354

17

Summary of Fair Value Exposure at October 31, 2018

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2018 (See Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Communication Services	$	8,718,562	$	—	$	—	$	8,718,562
Consumer Discretionary		24,616,799		—		—		24,616,799
Consumer Staples		10,788,248		—		—		10,788,248
Energy		2,642,979		—		—		2,642,979
Financials		31,672,070		—		—		31,672,070
Health Care		2,265,759		—		—		2,265,759
Industrials		17,509,292		—		—		17,509,292
Information Technology		19,036,342		—		—		19,036,342
Materials		10,704,503		—		—		10,704,503
Total Common Stocks	$	127,954,554	$	—	$	—	$	127,954,554
Preferred Stocks
Communication Services	$	106,772	$	—	$	—	$	106,772
Consumer Staples		185,843		—		—		185,843
Energy		108,839		—		—		108,839
Financials		3,524,064		—		—		3,524,064
Utilities		158,446		—		—		158,446
Total Preferred Stocks	$	4,083,964	$	—	$	—	$	4,083,964
REITS
Financials	$	1,480,417	$	—	$	—	$	1,480,417
Total REITS	$	1,480,417	$	—	$	—	$	1,480,417
Corporate Bonds
Communication Services	$	—	$	4,365,430	$	—	$	4,365,430
Consumer Discretionary		—		2,028,345		—		2,028,345
Consumer Staples		—		1,337,652		—		1,337,652
Energy		—		5,579,919		—		5,579,919
Financials		—		27,360,577		—		27,360,577
Health Care		—		6,826,557		—		6,826,557
Industrials		—		992,273		—		992,273
Information Technology		—		2,129,011		—		2,129,011
Materials		—		3,757,455		—		3,757,455
Retail Trade		—		1,032,974		—		1,032,974
Total Corporate Bonds	$	—	$	55,410,193	$	—	$	55,410,193
Mortgage Backed Securities	$	—	$	10,223,630	$	—	$	10,223,630
U.S. Treasury Obligations
U.S. Treasury Bonds	$	—	$	934,400	$	—	$	934,400
U.S. Treasury Notes		—		8,425,578		—		8,425,578
Total U.S. Treasury Obligations	$	—	$	9,359,978	$	—	$	9,359,978
U.S. Government Agency Issues	$	—	$	6,208,332	$	—	$	6,208,332
Investment Companies (Excluding
Money Market Funds)	$	2,633,151	$	—	$	—	$	2,633,151
Short-Term Investments
Money Market Funds	$	1,702,921	$	—	$	—	$	1,702,921
Total Short-Term Investments	$	1,702,921	$	—	$	—	$	1,702,921
Total Investments	$	137,855,007	$	81,202,133	$	—	$	219,057,140

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

HENNESSYFUNDS.COM

18

SCHEDULE OF INVESTMENTS/ STATEMENT OF ASSETS AND LIABILITIES

Financial Statements

Statement of Assets and Liabilities as of October 31, 2018

ASSETS:
Investments in unaffiliated securities, at value (cost $192,783,153)	$	218,982,727
Investments in affiliated securities, at value (cost $79,260)		74,413
Total investments in securities, at value (cost $192,862,413)		219,057,140
Dividends and interest receivable		895,595
Receivable for fund shares sold		171,398
Prepaid expenses and other assets		25,819
Total Assets		220,149,952
LIABILITIES:
Payable for securities purchased		109,956
Payable for fund shares redeemed		573,489
Payable to advisor		152,521
Payable to administrator		20,033
Payable to auditor		21,900
Accrued distribution fees		23,447
Accrued service fees		10,584
Accrued trustees fees		5,962
Accrued expenses and other payables		48,608
Total Liabilities		966,500
NET ASSETS	$	219,183,452
NET ASSETS CONSIST OF:
Capital stock	$	177,515,510
Total distributable earnings		41,667,942
Total Net Assets	$	219,183,452
NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	121,321,192
Shares issued and outstanding		7,668,265
Net asset value, offering price and redemption price per share	$	15.82
Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	97,862,260
Shares issued and outstanding		6,555,993
Net asset value, offering price and redemption price per share	$	14.93

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

HENNESSY FUNDS 1-800-966-4354

19

Financial Statements

Statement of Operations for the year ended October 31, 2018

INVESTMENT INCOME:
Dividend income from unaffiliated securities	$	3,011,363
Dividend income from affiliated securities		5,068
Interest income		2,668,571
Total investment income		5,685,002
EXPENSES:
Investment advisory fees (See Note 5)		1,969,709
Sub-transfer agent expenses – Investor Class (See Note 5)		303,602
Sub-transfer agent expenses – Institutional Class (See Note 5)		73,424
Administration, fund accounting, custody and transfer agent fees (See Note 5)		232,757
Distribution fees – Investor Class (See Note 5)		209,274
Service fees – Investor Class (See Note 5)		139,516
Federal and state registration fees		38,950
Compliance expense (See Note 5)		29,501
Audit fees		22,503
Reports to shareholders		20,158
Trustees’ fees and expenses		17,460
Legal fees		454
Interest expense (See Note 7)		40
Other expenses		18,473
Total expenses		3,075,821
NET INVESTMENT INCOME	$	2,609,181
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain (loss) on:
Unaffiliated investments	$	17,839,361
Affiliated investments		(431	)
Net change in unrealized appreciation/depreciation on:
Unaffiliated investments		(10,478,946	)
Affiliated investments		(4,882	)
Net gain on investments		7,355,102
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	9,964,283

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, 2018			October 31, 2017
OPERATIONS:
Net investment income	$	2,609,181		$	2,708,905
Net realized gain on investments		17,838,930			18,193,893
Net change in unrealized
appreciation/depreciation on investments		(10,483,828	)		19,387,071
Net increase in net assets resulting from operations		9,964,283			40,289,869
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Distributable earnings – Investor Class		(8,985,666	)		(17,440,506	)
Distributable earnings – Institutional Class		(7,053,813	)		(11,893,937	)
Total distributions		(16,039,479	)		(29,334,443	)(1)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		7,048,624			8,054,934
Proceeds from shares subscribed – Institutional Class		13,307,380			20,836,993
Dividends reinvested – Investor Class		8,738,463			17,017,145
Dividends reinvested – Institutional Class		5,575,964			9,255,346
Cost of shares redeemed – Investor Class		(46,331,304	)		(78,489,456	)
Cost of shares redeemed – Institutional Class		(29,143,836	)		(53,524,682	)
Net decrease in net assets derived
from capital share transactions		(40,804,709	)		(76,849,720	)
TOTAL DECREASE IN NET ASSETS		(46,879,905	)		(65,894,294	)
NET ASSETS:
Beginning of year		266,063,357			331,957,651
End of year	$	219,183,452		$	266,063,357	(2)
CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		438,224			516,776
Shares sold – Institutional Class		882,622			1,415,138
Shares issued to holders as reinvestment
of dividends – Investor Class		550,174			1,128,293
Shares issued to holders as reinvestment
of dividends – Institutional Class		371,576			648,210
Shares redeemed – Investor Class		(2,885,470	)		(5,022,332	)
Shares redeemed – Institutional Class		(1,918,909	)		(3,644,868	)
Net decrease in shares outstanding		(2,561,783	)		(4,958,783	)

(1)	Includes net investment income distributions of $1,353,800 and $1,431,025 and net realized gain distributions of $16,086,706 and $10,462,912 for Investor Class and Institutional Class, respectively.
(2)	Includes accumulated net investment income of $103,437.

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 period (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.

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FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	16.24		$	15.61		$	16.15		$	16.68		$	15.77
	0.16			0.14			0.14			0.13			0.16
	0.40			1.95			(0.16	)		0.11			1.41
	0.56			2.09			(0.02	)		0.24			1.57
	(0.14	)		(0.12	)		(0.13	)		(0.13	)		(0.16	)
	(0.84	)		(1.34	)		(0.39	)		(0.64	)		(0.50	)
	(0.98	)		(1.46	)		(0.52	)		(0.77	)		(0.66	)
$	15.82		$	16.24		$	15.61		$	16.15		$	16.68
	3.44	%		14.16	%		(0.12	)%		1.43	%		10.28	%
$	121.32		$	155.33		$	202.04		$	292.84		$	284.45
	1.42	%		1.43	%		1.43	%		1.38	%		1.33	%
	0.89	%		0.78	%		0.84	%		0.83	%		1.01	%
	18	%		15	%		24	%		39	%		28	%

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

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.

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FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	15.34		$	14.76		$	15.28		$	15.80		$	14.97
	0.19			0.16			0.18			0.19			0.20
	0.39			1.87			(0.13	)		0.09			1.33
	0.58			2.03			0.05			0.28			1.53
	(0.20	)		(0.18	)		(0.20	)		(0.19	)		(0.20	)
	(0.79	)		(1.27	)		(0.37	)		(0.61	)		(0.50	)
	(0.99	)		(1.45	)		(0.57	)		(0.80	)		(0.70	)
$	14.93		$	15.34		$	14.76		$	15.28		$	15.80
	3.86	%		14.60	%		0.30	%		1.75	%		10.60	%
$	97.86		$	110.74		$	129.91		$	168.84		$	102.10
	1.02	%		1.05	%		1.03	%		1.04	%		1.05	%
	1.28	%		1.16	%		1.23	%		1.18	%		1.29	%
	18	%		15	%		24	%		39	%		28	%

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

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Financial Statements

Notes to the Financial Statements October 31, 2018

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 investment objective of the Fund is long-term capital growth and current income. The Fund is a diversified fund.

The Fund offers Investor Class and Institutional Class shares. Each class of shares differs principally in its respective 12b-1 distribution and service, shareholder servicing, and sub-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 to U.S. generally accepted accounting principles (“GAAP”).

a).	Securities 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 because 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/loss and realized gains/losses for federal income tax purposes may differ from those reported in 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. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
	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 fiscal year 2018 have been identified and appropriately reclassified in the Statement of Assets and Liabilities. The adjustments are as follows:

Total
Distributable
Earnings	Capital Stock
$(2,443,808)	$2,443,808

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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. Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if any, are declared and paid annually, usually in December.
f).	Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
g).	Use of Estimates – 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 (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by (ii) the total number of 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).	New Accounting Pronouncements – In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 does not eliminate the requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the changes in unrealized gains and losses for recurring Level 3 fair value measurements. ASU 2018-13 requires that information is provided about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has

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evaluated the impact of this change in guidance, and due to the permissibility of early adoption, modified the Fund’s fair value disclosures for the current reporting period.

j).

New Rule Issuances – In August 2018, the Securities and Exchange Commission issued Final Rule Release No. 33 10532, Disclosure Update and Simplification, which in part amends certain financial statement disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, GAAP, or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amendments to Rule 6-04.17 of Regulation S-X (balance sheet) were amended to require presentation of the total, rather than the components of net assets, of distributable earnings on the balance sheet. Consistent with GAAP, funds will be required to disclose total distributable earnings. The amendments to Rule 6-09 of Regulation S-X (statement of changes in net assets) omit the requirement to separately state the sources of distributions paid as well as omit the requirement to parenthetically state the book basis amount of undistributed net investment income. Instead, consistent with GAAP, funds will be required to disclose the total amount of distributions paid, except that any tax return of capital must be separately disclosed. The requirements of the Final Rule Release are effective November 5, 2018 and the Fund’s Statement of Assets and Liabilities and the Statement of Changes in Net Assets for the current and prior reporting period have been modified accordingly.

3).  SECURITIES VALUATION

The Fund follows 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 of 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 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”)

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NOTES TO THE FINANCIAL STATEMENTS

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 foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).

Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, are generally priced at the ending NAV provided by the applicable mutual fund’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.

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 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 values of other similar securities, and news events with direct bearing on a security or markets. Fair value pricing results in an estimated price for a

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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’ values as determined by the Board or its designee, pursuant to the fair value pricing procedures adopted by the Board, instead of being determined by the market. Using a fair value pricing methodology to price a foreign security may result in a value that is different from such foreign security’s most recent closing price and from the value used by other investment companies to calculate their NAVs. Such securities are generally classified in Level 2 of 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 “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 determinations. Various inputs are used to determine 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, 2018, are included in the Schedule of Investments.

4).  INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during fiscal year 2018 were $32,659,272 and $87,242,972, respectively.

Purchases and sales/maturities of long-term U.S. government securities for the Fund during fiscal year 2018 were $11,940,605 and $9,903,857, respectively.

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. 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, as amended. During fiscal year 2018, the Fund did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940, as amended.

5).  INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

The Advisor provides the Fund with investment advisory services under an Investment Advisory Agreement. The Advisor oversees the provision of investment advice and furnishes office space and facilities, as well as 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 an annual rate of 0.80%. The net investment advisory fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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NOTES TO THE FINANCIAL STATEMENTS

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-advisory 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, which was instituted to compensate the Advisor for the non-investment advisory 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. The shareholder service fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 is currently only using up to 0.15% of its average daily net assets attributable to Investor Class shares 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, printing and mailing of prospectuses to other than current shareholders, 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 distribution fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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. The sub-transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services (“Fund Services”) provides the Fund with administrative, fund accounting, and transfer agent services. As administrator, Fund Services 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. U.S. Bank N.A., an affiliate of Fund Services, serves as the Fund’s custodian. The servicing agreements between the Trust and Fund Services and U.S. Bank N.A. contain a fee schedule that is inclusive of administrative, fund accounting, custody, and transfer agent fees. The administrative, fund accounting, custody, and transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 Fund Services and U.S. Bank N.A.

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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. The compliance fees expensed by the Fund during fiscal year 2018 are included in 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 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 fiscal year 2018, the Fund had an outstanding average daily balance and a weighted average interest rate of $937 and 4.25%, respectively. The interest expensed by the Fund during fiscal year 2018 is included in the Statement of Operations. The maximum amount outstanding for the Fund during fiscal year 2018 was $342,000. As of October 31, 2018, the Fund did not have any borrowings outstanding under the line of credit.

8).  FEDERAL TAX INFORMATION

As of October 31, 2018, the components of accumulated earnings (losses) for income tax purposes were as follows:

	Investments
Cost of investments for tax purposes	$	192,870,478
Gross tax unrealized appreciation	$	30,737,666
Gross tax unrealized depreciation		(4,551,004	)
Net tax unrealized appreciation/(depreciation)	$	26,186,662
Undistributed ordinary income	$	240,336
Undistributed long-term capital gains		15,240,944
Total distributable earnings	$	15,481,280
Other accumulated gain/(loss)	$	—
Total accumulated gain/(loss)	$	41,667,942

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.

As of October 31, 2018, the Fund had no tax basis capital losses to offset future capital gains.

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NOTES TO THE FINANCIAL STATEMENTS

As of October 31, 2018, the Fund did not defer, on a tax basis, any late-year ordinary losses. Late-year ordinary losses are net ordinary losses incurred after December 31, 2017, but within the taxable year, that are deemed to arise on the first day of the Fund’s next taxable year.

During fiscal year 2018 and fiscal year 2017, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2018		October 31, 2017
Ordinary income(1)	$	2,623,910	$	2,761,400
Long-term capital gain		13,415,569		26,573,043
	$	16,039,479	$	29,334,443

⁽¹⁾  Ordinary income includes short-term capital gains.

9).  EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2018, 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, 2018, capital gains were declared and paid to shareholders of record on December 6, 2018, as follows:

	Long-term	Short-term
Investor Class	$1.12438	$0.00988
Institutional Class	$1.06068	$0.00932

On December 27, 2018, income distributions were declared and paid to shareholders of record on December 26, 2018, as follows:

Investor Class	$0.03033943
Institutional Class	$0.05691292

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Report of Independent Registered Public

Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the shareholders of Hennessy Equity and Income Fund

Novato, CA

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Hennessy Equity and Income Fund (the “Fund”), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2018, 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, financial highlights for each of the five years in the period then ended, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, 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.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management.  Our responsibility is to express an opinion on the Fund’s financial statements based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We have served as the auditor of one or more of the funds in the Trust since 2002.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.  The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2018 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures.  We believe that our audits provide a reasonable basis for our opinion.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2018

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS

Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Funds 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 to the Board of Trustees (“Advisers”) 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: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board of Trustees 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 Trustee oversees the 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 worked for the	None.
(1981)		Sutter Health organization since
Adviser to the Board		2011 in various positions. He has
		served as the Chief Executive Officer
		of the Sutter Roseville Medical
		Center since 2018. From 2016 through
		2018, he served as the Vice President
		of Strategy for the Sutter Health Valley
		Area, which includes 11 hospitals,
		13 ambulatory surgery centers,
		16,000 employees, and 1,900 physicians.
		From 2013 through 2016, Mr. Alexander
		served as Sutter Novato Community
		Hospital’s Chief Administrative Officer,
		and from 2011 through 2012, he
		served as a Director of Strategy
		within Sutter’s West Bay Region.

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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. Neil Hennessy has been employed	Hennessy
(1956)	a Trustee and	by Hennessy Advisors, Inc. since	Advisors, Inc.
Trustee, Chairman of	June 2008 as	1989 and currently serves as its
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 President, Chief Operating
Executive Vice President		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 Secretary
Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013 and currently serves as its Chief
Senior Vice President		Compliance Officer and Senior Vice President.
and Head of Distribution
Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)(3)		as its General Counsel since June 2013.
Senior Vice President and
Chief Compliance Officer

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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)(4)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Large Cap Financial Fund and the Hennessy Small
and Portfolio Manager		Cap Financial Fund since inception. Mr. Ellison also served as a
		Portfolio Manager of the Hennessy Technology Fund from its
		inception until February 2017. Mr. Ellison served as Director,
		CIO and President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.
Ryan C. Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)(5)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Gas Utility Fund, the Hennessy Large Cap Financial
and Portfolio Manager		Fund, and the Hennessy Small 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. Mr. Kelley has also served as a Portfolio
		Manager of the Hennessy Cornerstone Growth Fund, the
		Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
		Cornerstone Large Growth Fund, and the Hennessy
		Cornerstone Value Fund since February 2017, as a Co-Portfolio
		Manager of the Hennessy Technology Fund since February
		2017, and as a Portfolio Manager of the Hennessy Total Return
		Fund and the Hennessy Balanced Fund since May 2018.
		Mr. Kelley served as Portfolio Manager of FBR Fund Advisers,
		Inc. from January 2008 to October 2012.
Tania Kelley	October 2003	Ms. Kelley has been employed by Hennessy Advisors, Inc.
(1965)		since October 2003.
Senior Vice President
and Head of Marketing

Daniel P. Hennessy	December 2016	Mr. Daniel Hennessy has been employed by Hennessy Advisors,
(1990)		Inc. since 2015. He has served as an Associate Analyst or
Vice President		Analyst of the Hennessy Technology Fund since February 2017.
and Analyst		Mr. Daniel Hennessy previously served as a Mutual Fund
		Specialist at U.S. Bancorp Fund Services, LLC (now doing
		business as U.S. Bank Global Fund Services) from November
		2014 to July 2015. Prior to that, he attended the University of
		San Diego, where he earned a degree in Political Science.

_______________

(1)	Messrs. DeSousa, Doyle, N. 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 the Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
(2)	Mr. N. 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 this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
(4)	The address of this officer is 101 Federal Street, Suite 1900, Boston, MA 02110.
(5)	The address of this officer is 1340 Environ Way, Suite 332, Chapel Hill, NC 27517.

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Expense Example (Unaudited)

October 31, 2018

As a shareholder of the Fund, you incur 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, 2018, through October 31, 2018.

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. Bank Global Fund Services, 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” or “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. 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.

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38

EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period(1)
	Account Value	Account Value	May 1, 2018 –
	May 1, 2018	October 31, 2018	October 31, 2018
Investor Class
Actual	$1,000.00	$1,021.50	$7.18
Hypothetical (5% return before expenses)	$1,000.00	$1,018.10	$7.17
Institutional Class
Actual	$1,000.00	$1,023.70	$5.15
Hypothetical (5% return before expenses)	$1,000.00	$1,020.11	$5.14

⁽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 184/365 days (to reflect one-half year period).

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39

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 www.hennessyfunds.com/proxy-voting/voting-policy; or (3) on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at www.hennessyfunds.com/proxy-voting/voting-record 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 a 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 Forms N-Q are available on the SEC’s website at www.sec.gov.  Information included in the Fund’s Forms N-Q will also be available upon request by calling 1-800-966-4354.

Federal Tax Distribution Information

(Unaudited)

For fiscal year 2018, 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 100.00%.

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for fiscal year 2018 was 100.00%.

The percentage of taxable ordinary income distributions that were 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 0.00%.

Important Notice Regarding Delivery

of Shareholder Documents

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of shareholder reports, proxy statements, and prospectuses to shareholders who share an address and have the same last name. This process does not apply to account statements. You may request an individual copy of a shareholder document at any time. If you would like to receive separate mailings of shareholder documents, please call U.S. Bank Global Fund Services at 1-800-261-6950 or 1-414-765-4124, and individual delivery will begin within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact such intermediary directly to request individual delivery.

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40

PROXY VOTING — PRIVACY POLICY

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 will be shared with non-affiliated third parties.

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41

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 Boulevard, Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT, &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

d/b/a U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Drive, 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

Two Liberty Place

50 South 16th Street, Suite 2900

Philadelphia, Pennsylvania 19102-2529

DISTRIBUTOR

Quasar Distributors, LLC

777 East Wisconsin Avenue

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, 2018

HENNESSY BALANCED

FUND

Investor Class  HBFBX

hennessyfunds.com  |  1-800-966-4354

(This Page Intentionally Left Blank.)

Contents

Letter to Shareholders	2
Performance Overview	4
Financial Statements
Schedule of Investments	6
Statement of Assets and Liabilities	9
Statement of Operations	10
Statements of Changes in Net Assets	11
Financial Highlights	12
Notes to the Financial Statements	14
Report of Independent Registered Public Accounting Firm	21
Trustees and Officers of the Fund	22
Expense Example	26
Proxy Voting Policy and Proxy Voting Records	28
Quarterly Schedule of Investments	28
Federal Tax Distribution Information	28
Important Notice Regarding Delivery of Shareholder Documents	28
Privacy Policy	29

HENNESSY FUNDS 1-800-966-4354

December 2018

Dear Hennessy Funds Shareholder:

Over the past year, we have witnessed the return of market volatility. U.S. stocks still registered healthy gains, bolstered by the impact on corporate profits of the successful passage of the tax reform bill in December 2017. However, concerns over potential trade disruptions, especially between the U.S. and China, and worries over higher short-term interest rates, which many believe could possibly trigger a recession down the road, put downward pressure on equity valuations.

The U.S. economy performed well over the period, and actually achieved an acceleration in GDP growth to over 3% on an annualized basis in the second and third quarters of calendar year 2018. During the past year, companies continued to hire workers, adding over 200,000 jobs per month on average, sending the unemployment rate down to 3.7% in October, which is the lowest it has been since 1969. Consumer confidence is high and still rising, and corporate profits reached record levels in the third quarter of calendar year 2018, posting a year-over-year increase of 26% for the companies in the S&P 500 Index.

The Federal Reserve, confident about the strength of the economy and mindful of a tight labor market, raised short-term interest rates four times over the last year, by a quarter point each time. Long-term bond yields also rose, driven higher primarily by evidence of faster wage growth, pushing the U.S. 10-year Treasury bond over 3% for the first time since 2013.

As I write this, we are experiencing the market’s 20th downturn since 2010. I have been saying that every bull market experiences volatility and pullbacks. Many financial commentators think this bull market is “long in the tooth.” I do not agree with them. I believe stock valuations are still very reasonable. The prospective price to earnings multiple for the Dow Jones Industrial Average has come down from almost 20x at the end of 2017 to 16x, just above its 10-year average of 15x. The prospective PE multiple for the S&P 500 Index has also come down, from 20x to 17x, and compares favorably to its 10-year average of 16x.

Cash, meanwhile, continues to build up on corporate balance sheets. The companies in the S&P 500 Index reported a total of over $5.4 trillion in cash and marketable securities in their latest filings. Companies have been spending some of their cash, increasing their investment spending and laying the groundwork for future earnings growth. However, they have also been returning capital to shareholders. S&P 500 Index companies announced $433.6 billion in share repurchases during the second quarter of calendar year 2018, nearly doubling the previous record of $242.1 billion set in the first quarter. Companies are also raising their dividends.

In addition, I believe the Federal Reserve will take care not to raise interest rates too high or too fast and endanger the economic expansion. While wage growth has risen to over 3% in October, other measures of inflationary pressure, such as the Consumer Price Index and the Producer Price Index, still show prices increasing at a more moderate pace, closer to 2%. Given continued evidence of modest rates of inflation, I believe the Fed will be able to maintain its gradual pace of interest rate hikes.

Finally and importantly, I still see no signs of euphoria in this market. In my opinion, the enthusiasm present earlier in the year, which followed the significant reduction in corporate income tax rates, has largely evaporated, and it has been replaced with anxiety

HENNESSYFUNDS.COM

2

LETTER TO SHAREHOLDERS

over higher interest rates and their potential impact on growth. In the past, I have likened the current bull market to that of 1982-2000, and I still believe this comparison holds true. I am confident in the strength of the market today and believe the economy will continue to grow in the coming year, albeit at a more moderate pace.

Thank you for your continued confidence and investment in the Hennessy 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 commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is a valuation measure and is calculated by dividing a company’s market price per share by its earnings per share. Earnings growth is not a measure of a fund’s future performance.

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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, 2018

	One	Five	Ten
	Year	Years	Years
Hennessy Balanced Fund (HBFBX)	3.46%	4.47%	6.12%
50/50 Blended DJIA/Treasury Index	5.66%	6.66%	7.05%
Dow Jones Industrial Average	9.87%	12.76%	13.33%

Expense ratio:  1.83%

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 table does 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 www.hennessyfunds.com.

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 ICE BofAML 1-Year U.S. Treasury Note Index. The Dow Jones Industrial Average is commonly used to measure the performance of U.S. stocks. The ICE BofAML 1-Year U.S. Treasury Note Index is comprised of Treasury securities maturing in approximately one year. One cannot invest directly in an index.

The expense ratio presented is from the most recent prospectus. The expense ratio for the current reporting period is available in the Financial Highlights section of this report.

PERFORMANCE NARRATIVE

Portfolio Managers Neil J. Hennessy and Ryan C. Kelley

Performance:

For the 12-month period ended October 31, 2018, the Hennessy Balanced Fund returned 3.46%, underperforming both the 50/50 Blended DJIA/Treasury Index (the Fund’s primary

HENNESSYFUNDS.COM

4

PERFORMANCE OVERVIEW

benchmark) and the Dow Jones Industrial Average, which returned 5.66% and 9.87%, respectively, for the same period.

The Fund underperformed its primary benchmark predominantly as a result of stock selection, particularly in the Industrials sector, where the Fund’s holding in General Electric Co. hurt performance. In the Information Technology sector, the Fund did not own Apple, Inc., which detracted from relative performance, as did the Fund’s overweight position in International Business Machines Corp. The Fund’s overweight position in the Health Care sector contributed positively to relative performance, with pharmaceutical companies Pfizer, Inc. and Merck & Co., Inc. performing well.

The Fund continues to hold all the companies mentioned with the exception of Apple, Inc.

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 equity markets rise and outperform in periods when equity 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 believe to be high-quality companies, each with a historically high dividend yield, while the balance of the Fund is invested in lower-risk, short-duration U.S. Treasuries.

Investment Commentary:

We continue to believe that the outlook for U.S. stocks is positive. The U.S. economy is growing at a healthy rate, unemployment is low, and growth in both consumption and capital spending has accelerated over the last 12 months. Corporate earnings have risen significantly over the first nine months of 2018, helped, in part, by lower taxes. We expect earnings growth to be slower next year yet remain positive, driven primarily by continued steady economic growth.

Should the market experience a correction, we would expect our more defensive holdings to perform well relative to the market. 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 continue to rise.

_______________

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 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.

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.

Dividend yield is calculated by dividing a company’s dividends per share by its market price per share.

Earnings growth is not representative of the Fund’s future performance.

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5

Financial Statements

Schedule of Investments as of October 31, 2018

HENNESSY BALANCED FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)	% NET ASSETS
U.S. Treasury Bill, 2.305%, 01/31/2019	17.11%
U.S. Treasury Bill, 2.200%, 12/06/2018	8.59%
U.S. Treasury Bill, 2.275%, 05/23/2019	8.49%
U.S. Treasury Bill, 2.275%, 06/20/2019	6.78%
Cisco Systems, Inc.	5.55%
Pfizer, Inc.	5.28%
The Procter & Gamble Co.	5.23%
Merck & Co., Inc.	5.13%
The Coca-Cola Co.	5.13%
Verizon Communications, Inc.	4.92%

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.

The Global Industry Classification Standard (GICS^®) was developed by and is the exclusive property and a service mark of MSCI, Inc. and Standard & Poor Financial Services LLC.  It has been licensed for use by the Hennessy Funds.

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SCHEDULE OF INVESTMENTS

COMMON STOCKS – 48.32%	Number				% of
	of Shares		Value		Net Assets
Communication Services – 4.92%
Verizon Communications, Inc.		10,008	$	571,357		4.92	%
Consumer Staples – 10.36%
The Coca-Cola Co.		12,450		596,106		5.13	%
The Procter & Gamble Co.		6,850		607,458		5.23	%
				1,203,564		10.36	%
Energy – 9.01%
Chevron Corp.		4,630		516,940		4.45	%
Exxon Mobil Corp.		6,650		529,872		4.56	%
				1,046,812		9.01	%
Health Care – 10.41%
Merck & Co., Inc.		8,100		596,241		5.13	%
Pfizer, Inc.		14,252		613,691		5.28	%
				1,209,932		10.41	%
Industrials – 1.45%
General Electric Co.		16,702		168,690		1.45	%
Information Technology – 12.17%
Cisco Systems, Inc.		14,088		644,526		5.55	%
Intel Corp.		6,950		325,816		2.80	%
International Business Machines Corp.		3,846		443,944		3.82	%
				1,414,286		12.17	%
Total Common Stocks
(Cost $5,095,269)				5,614,641		48.32	%

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

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SHORT-TERM INVESTMENTS – 52.34%	Number of Shares/					% of
	Par Amount		Value			Net Assets
Money Market Funds – 3.69%
Fidelity Government Portfolio, Institutional Class, 2.06% (a)		429,571	$	429,571			3.69	%
U.S. Treasury Bills – 48.65%
2.135%, 11/08/2018 (b)		500,000		499,843			4.30	%
2.200%, 12/06/2018 (b)		1,000,000		998,342			8.59	%
2.305%, 01/31/2019 (b)		2,000,000		1,988,461			17.11	%
2.275%, 05/23/2019 (b)		1,000,000		986,227			8.49	%
2.275%, 06/20/2019 (b)		800,000		787,385			6.78	%
2.335%, 07/18/2019 (b)		400,000		392,827			3.38	%
				5,653,085			48.65	%
Total Short-Term Investments
(Cost $6,087,923)				6,082,656			52.34	%
Total Investments
(Cost $11,183,192) – 100.66%				11,697,297			100.66	%
Liabilities in Excess of Other Assets – (0.66)%				(76,726	)		(0.66	)%
TOTAL NET ASSETS – 100.00%			$	11,620,571			100.00	%

Percentages are stated as a percent of net assets.

(a)	The rate listed is the fund’s seven-day yield as of October 31, 2018.
(b)	The rate listed is discount rate at issue.

Summary of Fair Value Exposure at October 31, 2018

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2018 (See Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Communication Services	$	571,357	$	—	$	—	$	571,357
Consumer Staples		1,203,564		—		—		1,203,564
Energy		1,046,812		—		—		1,046,812
Health Care		1,209,932		—		—		1,209,932
Industrials		168,690		—		—		168,690
Information Technology		1,414,286		—		—		1,414,286
Total Common Stocks	$	5,614,641	$	—	$	—	$	5,614,641
Short-Term Investments
Money Market Funds	$	429,571	$	—	$	—	$	429,571
U.S. Treasury Bills		—		5,653,085		—		5,653,085
Total Short-Term Investments	$	429,571	$	5,653,085	$	—	$	6,082,656
Total Investments	$	6,044,212	$	5,653,085	$	—	$	11,697,297

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

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SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES

Financial Statements

Statement of Assets and Liabilities as of October 31, 2018

ASSETS:
Investments in securities, at value (cost $11,183,192)	$	11,697,297
Dividends and interest receivable		11,695
Prepaid expenses and other assets		8,074
Total Assets		11,717,066
LIABILITIES:
Payable for fund shares redeemed		815
Payable to advisor		5,968
Payable to administrator		1,033
Payable to auditor		21,900
Accrued distribution fees		49,955
Accrued service fees		995
Accrued trustees fees		5,962
Accrued expenses and other payables		9,867
Total Liabilities		96,495
NET ASSETS	$	11,620,571
NET ASSETS CONSIST OF:
Capital stock	$	10,561,571
Total distributable earnings		1,059,000
Total Net Assets	$	11,620,571
NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	11,620,571
Shares issued and outstanding		941,712
Net asset value, offering price and redemption price per share	$	12.34

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, 2018

INVESTMENT INCOME:
Dividend income	$	204,566
Interest income		98,172
Total investment income		302,738
EXPENSES:
Investment advisory fees (See Note 5)		71,737
Compliance expense (See Note 5)		29,499
Audit fees		23,182
Federal and state registration fees		20,669
Trustees’ fees and expenses		17,396
Distribution fees – Investor Class (See Note 5)		17,934
Service fees – Investor Class (See Note 5)		11,956
Administration, fund accounting, custody and transfer agent fees (See Note 5)		11,571
Sub-transfer agent expenses – Investor Class (See Note 5)		6,831
Reports to shareholders		5,734
Other expenses		2,897
Total expenses		219,406
NET INVESTMENT INCOME	$	83,332
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on investments	$	591,543
Net change in unrealized appreciation/depreciation on investments		(256,449	)
Net gain on investments		335,094
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	418,426

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, 2018			October 31, 2017
OPERATIONS:
Net investment income	$	83,332		$	54,758
Net realized gain on investments		591,543			900,400
Net change in unrealized
appreciation/depreciation on investments		(256,449	)		149,079
Net increase in net assets resulting from operations		418,426			1,104,237
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Distributable earnings – Investor Class		(931,750	)		(893,436	)
Total distributions		(931,750	)		(893,436	)(1)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		501,087			991,429
Dividends reinvested – Investor Class		914,566			877,425
Cost of shares redeemed – Investor Class		(1,520,707	)		(1,920,997	)
Net decrease in net assets derived
from capital share transactions		(105,054	)		(52,143	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		(618,378	)		158,658
NET ASSETS:
Beginning of year		12,238,949			12,080,291
End of year	$	11,620,571		$	12,238,949	(2)
CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		39,254			79,582
Shares issued to holders as reinvestment
of dividends – Investor Class		75,304			72,055
Shares redeemed – Investor Class		(123,009	)		(154,177	)
Net decrease in shares outstanding		(8,451	)		(2,540	)

(1)	Includes net investment income distributions of $48,189 and net realized gain distributions of $845,247.
(2)	Includes accumulated undistributed net investment income of $6,569.

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

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11

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,
2018			2017			2016			2015			2014
$	12.88		$	12.68		$	12.37		$	12.98		$	12.90
	0.09			0.06			0.04			0.03			0.02
	0.33			1.09			0.58			(0.01	)		0.51
	0.42			1.15			0.62			0.02			0.53
	(0.08	)		(0.05	)		(0.04	)		(0.03	)		(0.01	)
	(0.88	)		(0.90	)		(0.27	)		(0.60	)		(0.44	)
	(0.96	)		(0.95	)		(0.31	)		(0.63	)		(0.45	)
$	12.34		$	12.88		$	12.68		$	12.37		$	12.98
	3.46	%		9.56	%		5.20	%		0.11	%		4.26	%
$	11.62		$	12.24		$	12.08		$	11.63		$	12.54
	1.84	%		1.82	%		1.68	%		1.68	%		1.75	%
	0.70	%		0.45	%		0.33	%		0.20	%		0.17	%
	21	%		31	%		51	%		34	%		23	%

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

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13

Financial Statements

Notes to the Financial Statements October 31, 2018

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 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.

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 to U.S. generally accepted accounting principles (“GAAP”).

a).	Securities 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 because 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/loss and realized gains/losses for federal income tax purposes may differ from those reported in 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. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
	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 fiscal year 2018 have been identified and appropriately reclassified in the Statement of Assets and Liabilities. The adjustments are as follows:

Total
Distributable
Earnings	Capital Stock
$(38,228)	$38,228

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

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NOTES TO THE FINANCIAL STATEMENTS

	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. Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if any, are declared and paid annually, usually in December.
f).	Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
g).	Use of Estimates – 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 (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by (ii) the total number of 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).	New Accounting Pronouncements – In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 does not eliminate the requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the changes in unrealized gains and losses for recurring Level 3 fair value measurements. ASU 2018-13 requires that information is provided about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has evaluated the impact of this change in guidance, and due to the permissibility of early adoption, modified the Fund’s fair value disclosures for the current reporting period.
j).	New Rule Issuances – In August 2018, the Securities and Exchange Commission issued Final Rule Release No. 33 10532, Disclosure Update and Simplification, which in part amends certain financial statement disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in

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15

light of other Commission disclosure requirements, GAAP, or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amendments to Rule 6-04.17 of Regulation S-X (balance sheet) were amended to require presentation of the total, rather than the components of net assets, of distributable earnings on the balance sheet. Consistent with GAAP, funds will be required to disclose total distributable earnings. The amendments to Rule 6-09 of Regulation S-X (statement of changes in net assets) omit the requirement to separately state the sources of distributions paid as well as omit the requirement to parenthetically state the book basis amount of undistributed net investment income. Instead, consistent with GAAP, funds will be required to disclose the total amount of distributions paid, except that any tax return of capital must be separately disclosed. The requirements of the Final Rule Release are effective November 5, 2018 and the Fund’s Statement of Assets and Liabilities and the Statement of Changes in Net Assets for the current and prior reporting period have been modified accordingly.

3).  SECURITIES VALUATION

The Fund follows 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 of 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 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.

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NOTES TO THE FINANCIAL STATEMENTS

Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, are generally priced at the ending NAV provided by the applicable mutual fund’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.

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 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 values of other similar securities, and news events with direct bearing on 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 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 “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 determinations. Various inputs are used to determine 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, 2018, are included in the Schedule of Investments.

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17

4).  INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during fiscal year 2018 were $1,207,341 and $2,254,091, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during fiscal year 2018.

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. 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, as amended. During fiscal year 2018, the Fund did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940, as amended.

5).  INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

The Advisor provides the Fund with investment advisory services under an Investment Advisory Agreement. The Advisor furnishes all investment advice, office space, and facilities, as well as 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 an annual rate of 0.60%. The net investment advisory fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

The Board has approved a Shareholder Servicing Agreement for the Fund, which was instituted to compensate the Advisor for the non-investment advisory 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. The shareholder service fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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. Even though the authorized rate is up to 0.25%, 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, printing and mailing of prospectuses to other than current shareholders, 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 distribution fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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. The sub-transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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18

NOTES TO THE FINANCIAL STATEMENTS

U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services (“Fund Services”) provides the Fund with administrative, fund accounting, and transfer agent services. As administrator, Fund Services 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. U.S. Bank N.A., an affiliate of Fund Services, serves as the Fund’s custodian. The servicing agreements between the Trust and Fund Services and U.S. Bank N.A. contain a fee schedule that is inclusive of administrative, fund accounting, custody, and transfer agent fees. The administrative, fund accounting, custody, and transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 Fund Services 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. The compliance fees expensed by the Fund during fiscal year 2018 are included in 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 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 fiscal year 2018, the Fund did not have any borrowings outstanding under the line of credit.

HENNESSY FUNDS 1-800-966-4354

19

8).  FEDERAL TAX INFORMATION

As of October 31, 2018, the components of accumulated earnings (losses) for income tax purposes were as follows:

	Investments
Cost of investments for tax purposes	$	11,194,398
Gross tax unrealized appreciation	$	888,065
Gross tax unrealized depreciation		(385,166	)
Net tax unrealized appreciation/(depreciation)	$	502,899
Undistributed ordinary income	$	7,891
Undistributed long-term capital gains		548,210
Total distributable earnings	$	556,101
Other accumulated gain/(loss)	$	—
Total accumulated gain/(loss)	$	1,059,000

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.

As of October 31, 2018, the Fund had no tax basis capital losses to offset future capital gains.

As of October 31, 2018, the Fund did not defer, on a tax basis, any late-year ordinary losses. Late-year ordinary losses are net ordinary losses incurred after December 31, 2017, but within the taxable year, that are deemed to arise on the first day of the Fund’s next taxable year.

During fiscal year 2018 and fiscal year 2017, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2018		October 31, 2017
Ordinary income(1)	$	144,183	$	91,227
Long-term capital gain		787,567		802,209
	$	931,750	$	893,436

⁽¹⁾  Ordinary income includes short-term capital gains.

9).  EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2018, 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, 2018, capital gains were declared and paid to shareholders of record on December 6, 2018, as follows:

	Long-term
Investor Class	$0.54675

On December 27, 2018, income distributions were declared and paid to shareholders of record on December 26, 2018, as follows:

Investor Class $0.02951113

HENNESSYFUNDS.COM

20

NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Report of Independent Registered Public

Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the shareholders of Hennessy Balanced Fund

Novato, CA

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Hennessy Balanced Fund (the “Fund”), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

The financial highlights for each of the three years in the period ended October 31, 2016 have been audited by other auditors, whose report dated December 22, 2016 expressed unqualified opinions on such financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management.  Our responsibility is to express an opinion on the Fund’s financial statements based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We have served as the auditor of one or more of the funds in the Trust since 2002.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.  The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2018 by correspondence with the custodian.  We believe that our audits provide a reasonable basis for our opinion.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2018

HENNESSY FUNDS 1-800-966-4354

21

Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Funds 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 to the Board of Trustees (“Advisers”) 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: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board of Trustees 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 Trustee oversees the 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 worked for the	None.
(1981)		Sutter Health organization since
Adviser to the Board		2011 in various positions. He has
		served as the Chief Executive Officer
		of the Sutter Roseville Medical
		Center since 2018. From 2016 through
		2018, he served as the Vice President
		of Strategy for the Sutter Health Valley
		Area, which includes 11 hospitals,
		13 ambulatory surgery centers,
		16,000 employees, and 1,900 physicians.
		From 2013 through 2016, Mr. Alexander
		served as Sutter Novato Community
		Hospital’s Chief Administrative Officer,
		and from 2011 through 2012, he
		served as a Director of Strategy
		within Sutter’s West Bay Region.

HENNESSYFUNDS.COM

22

TRUSTEES AND OFFICERS OF THE FUND

			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. Neil Hennessy has been employed	Hennessy
(1956)	a Trustee and	by Hennessy Advisors, Inc. since	Advisors, Inc.
Trustee, Chairman of	June 2008 as	1989 and currently serves as its
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 President, Chief Operating
Executive Vice President		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 Secretary
Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013 and currently serves as its Chief
Senior Vice President		Compliance Officer and Senior Vice President.
and Head of Distribution
Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)(3)		as its General Counsel since June 2013.
Senior Vice President and
Chief Compliance Officer

HENNESSY FUNDS 1-800-966-4354

23

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)(4)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Large Cap Financial Fund and the Hennessy Small
and Portfolio Manager		Cap Financial Fund since inception. Mr. Ellison also served as a
		Portfolio Manager of the Hennessy Technology Fund from its
		inception until February 2017. Mr. Ellison served as Director,
		CIO and President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.
Ryan C. Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)(5)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Gas Utility Fund, the Hennessy Large Cap Financial
and Portfolio Manager		Fund, and the Hennessy Small 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. Mr. Kelley has also served as a Portfolio
		Manager of the Hennessy Cornerstone Growth Fund, the
		Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
		Cornerstone Large Growth Fund, and the Hennessy
		Cornerstone Value Fund since February 2017, as a Co-Portfolio
		Manager of the Hennessy Technology Fund since February
		2017, and as a Portfolio Manager of the Hennessy Total Return
		Fund and the Hennessy Balanced Fund since May 2018.
		Mr. Kelley served as Portfolio Manager of FBR Fund Advisers,
		Inc. from January 2008 to October 2012.
Tania Kelley	October 2003	Ms. Kelley has been employed by Hennessy Advisors, Inc.
(1965)		since October 2003.
Senior Vice President
and Head of Marketing

Daniel P. Hennessy	December 2016	Mr. Daniel Hennessy has been employed by Hennessy Advisors,
(1990)		Inc. since 2015. He has served as an Associate Analyst or
Vice President		Analyst of the Hennessy Technology Fund since February 2017.
and Analyst		Mr. Daniel Hennessy previously served as a Mutual Fund
		Specialist at U.S. Bancorp Fund Services, LLC (now doing
		business as U.S. Bank Global Fund Services) from November
		2014 to July 2015. Prior to that, he attended the University of
		San Diego, where he earned a degree in Political Science.

_______________

(1)	Messrs. DeSousa, Doyle, N. 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 the Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
(2)	Mr. N. 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 this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
(4)	The address of this officer is 101 Federal Street, Suite 1900, Boston, MA 02110.
(5)	The address of this officer is 1340 Environ Way, Suite 332, Chapel Hill, NC 27517.

HENNESSYFUNDS.COM

24

TRUSTEES AND OFFICERS OF THE FUND

(This Page Intentionally Left Blank.)

HENNESSY FUNDS 1-800-966-4354

25

Expense Example (Unaudited)

October 31, 2018

As a shareholder of the Fund, you incur 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, 2018, through October 31, 2018.

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. Bank Global Fund Services, 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 ratio 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. 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.

HENNESSYFUNDS.COM

26

EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period(1)
	Account Value	Account Value	May 1, 2018 –
	May 1, 2018	October 31, 2018	October 31, 2018
Investor Class
Actual	$1,000.00	$1,018.10	$9.31
Hypothetical (5% return before expenses)	$1,000.00	$1,015.98	$9.30

⁽¹⁾ Expenses are equal to the Fund’s annualized expense ratio of 1.83% multiplied by the average account value over the period, multiplied by 184/365 days (to reflect one-half year period).

HENNESSY FUNDS 1-800-966-4354

27

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 www.hennessyfunds.com/proxy-voting/voting-policy; or (3) on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at www.hennessyfunds.com/proxy-voting/voting-record 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 a 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 Forms N-Q are available on the SEC’s website at www.sec.gov.  Information included in the Fund’s Forms N-Q will also be available upon request by calling 1-800-966-4354.

Federal Tax Distribution Information

(Unaudited)

For fiscal year 2018, 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 100.00%.

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for fiscal year 2018 was 100.00%.

The percentage of taxable ordinary income distributions that were 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 43.12%.

Important Notice Regarding Delivery

of Shareholder Documents

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of shareholder reports, proxy statements, and prospectuses to shareholders who share an address and have the same last name. This process does not apply to account statements. You may request an individual copy of a shareholder document at any time. If you would like to receive separate mailings of shareholder documents, please call U.S. Bank Global Fund Services at 1-800-261-6950 or 1-414-765-4124, and individual delivery will begin within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact such intermediary directly to request individual delivery.

HENNESSYFUNDS.COM

28

PROXY VOTING — PRIVACY POLICY

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 will be shared with non-affiliated third parties.

HENNESSY FUNDS 1-800-966-4354

29

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 Boulevard, Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT, &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

d/b/a U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Drive, 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

Two Liberty Place

50 South 16th Street, Suite 2900

Philadelphia, Pennsylvania 19102-2529

DISTRIBUTOR

Quasar Distributors, LLC

777 East Wisconsin Avenue

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, 2018

HENNESSY BP ENERGY FUND

Investor Class  HNRGX

Institutional Class  HNRIX

hennessyfunds.com  |  1-800-966-4354

(This Page Intentionally Left Blank.)

Contents

Letter to Shareholders	2
Performance Overview	4
Financial Statements
Schedule of Investments	7
Statement of Assets and Liabilities	11
Statements of Operations	12
Statements of Changes in Net Assets	14
Financial Highlights	16
Notes to the Financial Statements	20
Report of Independent Registered Public Accounting Firm	31
Trustees and Officers of the Fund	32
Expense Example	36
Proxy Voting Policy and Proxy Voting Records	38
Quarterly Schedule of Investments	38
Important Notice Regarding Delivery of Shareholder Documents	38
Board Approval of Investment Advisory Agreements	39
Privacy Policy	44

HENNESSY FUNDS 1-800-966-4354

December 2018

Dear Hennessy Funds Shareholder:

Over the past year, we have witnessed the return of market volatility. U.S. stocks still registered healthy gains, bolstered by the impact on corporate profits of the successful passage of the tax reform bill in December 2017. However, concerns over potential trade disruptions, especially between the U.S. and China, and worries over higher short-term interest rates, which many believe could possibly trigger a recession down the road, put downward pressure on equity valuations.

The U.S. economy performed well over the period, and actually achieved an acceleration in GDP growth to over 3% on an annualized basis in the second and third quarters of calendar year 2018. During the past year, companies continued to hire workers, adding over 200,000 jobs per month on average, sending the unemployment rate down to 3.7% in October, which is the lowest it has been since 1969. Consumer confidence is high and still rising, and corporate profits reached record levels in the third quarter of calendar year 2018, posting a year-over-year increase of 26% for the companies in the S&P 500 Index.

The Federal Reserve, confident about the strength of the economy and mindful of a tight labor market, raised short-term interest rates four times over the last year, by a quarter point each time. Long-term bond yields also rose, driven higher primarily by evidence of faster wage growth, pushing the U.S. 10-year Treasury bond over 3% for the first time since 2013.

As I write this, we are experiencing the market’s 20th downturn since 2010. I have been saying that every bull market experiences volatility and pullbacks. Many financial commentators think this bull market is “long in the tooth.” I do not agree with them. I believe stock valuations are still very reasonable. The prospective price to earnings multiple for the Dow Jones Industrial Average has come down from almost 20x at the end of 2017 to 16x, just above its 10-year average of 15x. The prospective PE multiple for the S&P 500 Index has also come down, from 20x to 17x, and compares favorably to its 10-year average of 16x.

Cash, meanwhile, continues to build up on corporate balance sheets. The companies in the S&P 500 Index reported a total of over $5.4 trillion in cash and marketable securities in their latest filings. Companies have been spending some of their cash, increasing their investment spending and laying the groundwork for future earnings growth. However, they have also been returning capital to shareholders. S&P 500 Index companies announced $433.6 billion in share repurchases during the second quarter of calendar year 2018, nearly doubling the previous record of $242.1 billion set in the first quarter. Companies are also raising their dividends.

In addition, I believe the Federal Reserve will take care not to raise interest rates too high or too fast and endanger the economic expansion. While wage growth has risen to over 3% in October, other measures of inflationary pressure, such as the Consumer Price Index and the Producer Price Index, still show prices increasing at a more moderate pace, closer to 2%. Given continued evidence of modest rates of inflation, I believe the Fed will be able to maintain its gradual pace of interest rate hikes.

Finally and importantly, I still see no signs of euphoria in this market. In my opinion, the enthusiasm present earlier in the year, which followed the significant reduction in corporate income tax rates, has largely evaporated, and it has been replaced with anxiety

HENNESSYFUNDS.COM

2

LETTER TO SHAREHOLDERS

over higher interest rates and their potential impact on growth. In the past, I have likened the current bull market to that of 1982-2000, and I still believe this comparison holds true. I am confident in the strength of the market today and believe the economy will continue to grow in the coming year, albeit at a more moderate pace.

Thank you for your continued confidence and investment in the Hennessy 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 commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is a valuation measure and is calculated by dividing a company’s market price per share by its earnings per share. Earnings growth is not a measure of a fund’s future performance.

HENNESSY FUNDS 1-800-966-4354

3

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 TOTAL RETURN FOR PERIODS ENDED OCTOBER 31, 2018

		One	Since Inception
	11 Months(1)	Year	(12/31/13)
Hennessy BP Energy Fund –
Investor Class (HNRGX)	-5.91%	-3.58%	-1.25%
Hennessy BP Energy Fund –
Institutional Class (HNRIX)	-5.66%	-3.29%	-1.02%
S&P 500 Energy Index	0.01%	1.78%	-2.74%
S&P North American Natural
Resources Sector Index	-4.07%	-2.56%	-3.98%
S&P 500 Index	4.15%	7.35%	10.49%

Expense ratios:  1.87% (Investor Class); 1.57% (Institutional Class)

⁽¹⁾ The period ended October 31, 2018, consists of 11 months because the Fund changed its fiscal year end from November 30 to October 31, effective October 26, 2018.

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 table does 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 www.hennessyfunds.com. Performance for periods on or prior to October 26, 2018, is that of the BP Capital TwinLine Energy Fund.

The S&P 500 Energy Index is commonly used to measure the performance of U.S. energy stocks. The S&P North American Natural Resources Sector Index is commonly used to measure the performance of U.S. stocks in the energy and materials sectors. The S&P 500 Index is commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

The expense ratios presented are from the most recent prospectus. The expense ratios for the current reporting period are available in the Financial Highlights section of this report.

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PERFORMANCE OVERVIEW

PERFORMANCE NARRATIVE

Portfolio Managers Toby Loftin, Trip Rodgers, CFA, and Tim Dumois

BP Capital Fund Advisors, LLC (sub-advisor)

Performance:

For the 11-month period ended October 31, 2018, the Investor Class of the Hennessy BP Energy Fund returned -5.91%, underperforming the S&P 500 Energy Index (the Fund’s primary benchmark), the S&P North American Natural Resources Sector Index, and the S&P 500 Index, which returned 0.01%, -4.07%, and 4.15%, respectively, for the same period.

The Fund’s underperformance relative to its primary benchmark was due in part to its overweight position in oilfield service equities, as well as high exposure to small and midsize oil producers that performed poorly, particularly late in the period as oil prices retreated. The Fund’s holdings in energy end-user groups also detracted from relative performance, as a result of weak performance from stocks in the Materials and Industrials sectors.

Portfolio Strategy:

The Fund seeks to invest in companies across the energy value chain. This includes crude oil and natural gas exploration and production companies, oilfield service providers, midstream companies, refiners, and energy end users. In particular, we believe the inclusion of energy end users, such as materials, industrials, and transportation companies, differentiates the Fund from traditional energy funds. Including such companies in the investment universe enables the Fund to invest in a broader range of energy-related themes and provides greater flexibility to adjust subsector weightings based on our investment outlook. The Fund typically owns 25-40 securities and historically has had little overlap with the top holdings of commonly-used energy and commodity equity benchmarks.

Investment Commentary:

A continuation of global inventory drawdowns was the primary driver of higher oil prices in the 11-month period ended October 31, 2018. Global demand for crude oil and refined products stayed relatively strong, while a decline in exports from two large oil-producing countries, Venezuela and Iran, as a result of geopolitical issues constrained supply.

Late in the period, oil prices retreated as investors worried that a stronger U.S. dollar and slower growth outside the United States could lead to a softening in demand for crude oil. Investors also feared that a substantial boost in exports from Saudi Arabia, robust production growth in the United States, and the discussion of temporary waivers to be given to select countries relating to Iranian oil import restrictions could boost supply. Despite this price correction, we believe Saudi Arabia’s continued dependence on higher oil prices to fund its fiscal budget will lead OPEC to take measures to support prices, as it did with production cuts at the beginning of 2017. Additionally, we believe demographic factors will continue to support crude oil demand growth from emerging markets.

Since its inception, the Fund has maintained a preference for oil and gas production through horizontal fracking of shale deposits. This has resulted in an overweight positioning of the Fund in U.S.-focused producers. Many of these companies have significantly lowered their operating costs and greatly expanded their production and reserves in recent years. We also see attractive investment opportunities in companies servicing these shale producers, as well as in midstream companies that enable the critical flow of crude oil and natural gas from production centers to end-user markets, both in the United States and abroad.

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We remain optimistic regarding companies in the Energy sector, particularly exploration and production companies, many of which have recently adopted more shareholder-friendly strategies. We believe management teams are more focused today on spending only as much as they generate from operating cash flows and on returning free cash flow to shareholders through dividends and share repurchases. Finally, we expect consolidation to remain a major sector theme in upcoming years, as U.S. companies seek to amass the most efficient and productive acreage positions in key areas like the Permian Basin and to eliminate corporate overhead.

_______________

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 Fund invests in small-capitalization and medium-capitalization companies, which involves additional risks such as limited liquidity and greater volatility. Funds that concentrate in a single sector may be subject to a higher degree of risk. Energy-related companies are subject to specific risks, including fluctuations in commodity prices and consumer demand, substantial government regulation, and depletion of reserves. Investments in lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities. Use of derivatives can increase the volatility of the Fund.

MLPs and MLP investments have unique characteristics. The Fund does not receive the same tax benefits as a direct investment in an MLP.

The prices of MLP units may fluctuate abruptly and trading volume may be low, making it difficult for the Fund to sell its units at a favorable price. MLP general partners have the power to take actions that adversely affect the interests of unit holders. Most MLPs do not pay U.S. federal income tax at the partnership level, but an adverse change in tax laws could result in MLPs being treated as corporations for federal income tax purposes, which could reduce or eliminate distributions paid by MLPs to the Fund. If the Fund’s MLP investments exceed 25% of its assets, the Fund may not qualify for treatment as a regulated investment company under the Internal Revenue Code. The Fund would be taxed as an ordinary corporation, which could substantially reduce the Fund’s net assets and its distributions to shareholders. 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.

Cash flow refers to the net amount of cash and cash equivalents being transferred into and out of a company.

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PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as ofOctober 31, 2018

HENNESSY BP ENERGY FUND

(% of Total Assets)

TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)	% TOTAL ASSETS
Diamondback Energy, Inc.	3.87%
WPX Energy, Inc.	3.75%
Nutrien Ltd.	3.70%
ProPetro Holding Corp.	3.54%
Quanta Services, Inc.	3.52%
Patterson-UTI Energy, Inc.	3.52%
Parsley Energy, Inc., Class A	3.52%
Targa Resources Corp.	3.36%
Pioneer Natural Resources Co.	3.32%
Knight-Swift Transportation Holdings, Inc.	3.32%

Note: The Fund concentrates its investments in the Energy industry. For presentation purposes, the Fund uses custom categories.

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COMMON STOCKS – 89.05%	Number				% of
	of Shares		Value		Net Assets
Agricultural Products – 3.72%
Nutrien Ltd. (b)		68,139	$	3,606,597		3.72	%
Building Materials – 1.86%
Summit Materials, Inc., Class A (a)		133,715		1,805,153		1.86	%
Chemicals – 3.04%
Huntsman Corp.		134,575		2,944,501		3.04	%
Downstream – 5.22%
Delek U.S. Holdings, Inc.		74,491		2,735,309		2.82	%
Marathon Petroleum Corp.		32,975		2,323,089		2.40	%
				5,058,398		5.22	%
Exploration & Production – 39.21%
Anadarko Petroleum Corp.		51,949		2,763,687		2.85	%
Antero Resources Corp. (a)		193,917		3,081,341		3.18	%
Callon Petroleum Co. (a)		223,219		2,225,493		2.29	%
Continental Resources, Inc. (a)		44,784		2,359,221		2.43	%
Diamondback Energy, Inc.		33,612		3,776,644		3.89	%
Encana Corp. (b)		181,515		1,858,714		1.92	%
EOG Resources, Inc.		8,273		871,478		0.90	%
HighPoint Resources Corp. (a)		307,794		1,144,994		1.18	%
Marathon Oil Corp.		139,367		2,646,579		2.73	%
Newfield Exploration Co. (a)		99,874		2,017,455		2.08	%
Oasis Petroleum, Inc. (a)		181,859		1,829,501		1.89	%
Occidental Petroleum Corp.		46,470		3,116,743		3.21	%
Parsley Energy, Inc., Class A (a)		146,464		3,430,187		3.54	%
Pioneer Natural Resources Co.		21,980		3,236,995		3.34	%
WPX Energy, Inc. (a)		228,441		3,664,194		3.78	%
				38,023,226		39.21	%
Metals & Mining – 6.10%
Alcoa Corp. (a)		77,332		2,705,847		2.79	%
The Timken Co.		81,264		3,213,991		3.31	%
				5,919,838		6.10	%
Midstream – 5.76%
Targa Resources Corp.		63,449		3,278,410		3.38	%
The Williams Companies, Inc.		94,713		2,304,367		2.38	%
				5,582,777		5.76	%

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

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SCHEDULE OF INVESTMENTS

COMMON STOCKS	Number				% of
	of Shares		Value		Net Assets
Oil Services – 20.80%
Forum Energy Technologies, Inc. (a)		235,215	$	2,107,526		2.17	%
Halliburton Co.		83,453		2,894,150		2.98	%
MRC Global, Inc. (a)		135,723		2,148,495		2.22	%
Patterson-UTI Energy, Inc.		206,198		3,431,135		3.54	%
ProPetro Holding Corp. (a)		195,888		3,457,423		3.57	%
Quanta Services, Inc. (a)		110,159		3,436,961		3.54	%
Solaris Oilfield Infrastructure, Inc., Class A (a)		204,190		2,695,308		2.78	%
				20,170,998		20.80	%
Transportation – 3.34%
Knight-Swift Transportation Holdings, Inc.		101,128		3,236,096		3.34	%
Total Common Stocks
(Cost $93,627,859)				86,347,584		89.05	%
PARTNERSHIPS & TRUSTS – 10.07%
Midstream – 10.07%
Energy Transfer LP		169,046		2,626,971		2.71	%
Enterprise Products Partners LP		108,236		2,902,890		3.00	%
MPLX LP		61,836		2,078,308		2.14	%
Plains All American Pipeline LP		98,929		2,153,684		2.22	%
				9,761,853		10.07	%
Total Partnerships & Trusts
(Cost $10,043,233)				9,761,853		10.07	%

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

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SHORT-TERM INVESTMENTS – 1.20%	Number					% of
	of Shares		Value			Net Assets
Money Market Funds – 1.20%
Morgan Stanley Institutional Liquidity Funds,
Government Portfolio, 2.05% (c)		1,163,922	$	1,163,922			1.20	%
Total Short-Term Investments
(Cost $1,163,922)				1,163,922			1.20	%
Total Investments
(Cost $104,835,014) – 100.32%				97,273,359			100.32	%
Liabilities in Excess of Other Assets – (0.32)%				(311,345	)		(0.32	)%
TOTAL NET ASSETS – 100.00%			$	96,962,014			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 seven-day yield as of October 31, 2018.

Summary of Fair Value Exposure at October 31, 2018

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2018 (See Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Agricultural Products	$	3,606,597	$	—	$	—	$	3,606,597
Building Materials		1,805,153		—		—		1,805,153
Chemicals		2,944,501		—		—		2,944,501
Downstream		5,058,398		—		—		5,058,398
Exploration & Production		38,023,226		—		—		38,023,226
Metals & Mining		5,919,838		—		—		5,919,838
Midstream		5,582,777		—		—		5,582,777
Oil Services		20,170,998		—		—		20,170,998
Transportation		3,236,096		—		—		3,236,096
Total Common Stocks	$	86,347,584	$	—	$	—	$	86,347,584
Partnerships & Trusts
Midstream	$	9,761,853	$	—	$	—	$	9,761,853
Total Partnerships & Trusts	$	9,761,853	$	—	$	—	$	9,761,853
Short-Term Investments
Money Market Funds	$	1,163,922	$	—	$	—	$	1,163,922
Total Short-Term Investments	$	1,163,922	$	—	$	—	$	1,163,922
Total Investments	$	97,273,359	$	—	$	—	$	97,273,359

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

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SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES

Financial Statements

Statement of Assets and Liabilities as of October 31, 2018

ASSETS:
Investments in securities, at value (cost $104,835,014)	$	97,273,359
Cash		1,820
Dividends and interest receivable		950
Return of capital receivable		134,229
Receivable for fund shares sold		163,732
Prepaid expenses and other assets		11,873
Total Assets		97,585,963
LIABILITIES:
Payable for securities purchased		295,311
Payable for fund shares redeemed		123,258
Payable to advisor		112,147
Payable to administrator		19,668
Payable to auditor		25,100
Accrued distribution fees		4,212
Accrued service fees		249
Accrued trustees fees		3,450
Accrued expenses and other payables		40,554
Total Liabilities		623,949
NET ASSETS	$	96,962,014
NET ASSETS CONSIST OF:
Capital stock	$	106,022,804
Total distributable earnings		(9,060,790	)
Total Net Assets	$	96,962,014
NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	18,155,294
Shares issued and outstanding		990,785
Net asset value, offering price and redemption price per share	$	18.32
Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	78,806,720
Shares issued and outstanding		4,260,643
Net asset value, offering price and redemption price per share	$	18.50

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

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Financial Statements

Statements of Operations

	11 Months Ended			Year Ended
	October 31, 2018(1)			November 30, 2017
INVESTMENT INCOME:
Distributions received from master limited partnerships	$	1,230,991		$	2,132,699
Less: return of capital on distributions received		(1,138,853	)		(2,082,043	)
Dividend income from common stock(2)		804,121			831,100
Interest income		45,114			39,985
Other income		976			—
Total investment income		942,349			921,741
EXPENSES:
Investment advisory fees (See Note 5)		1,517,058			1,786,981
Administration, fund accounting, custody
and transfer agent fees (See Note 5)		170,107			219,246
Sub-transfer agent expenses –
Investor Class (See Note 5)		12,208			36,685	(3)
Sub-transfer agent expenses –
Institutional Class (See Note 5)		58,982			116,336
Distribution fees – Investor Class (See Note 5)		51,574			102,684	(3)
Federal and state registration fees		43,988			62,625
Audit fees		25,100			25,013
Trustees’ fees and expenses		17,848			13,924
Reports to shareholders		17,670			15,910
Compliance expense (See Note 5)		10,649			12,211
Legal fees		4,946			10,382
Service fees – Investor Class (See Note 5)		249			—
Interest expense (See Note 7)		197			93
Other expenses		28,507			24,275
Total expenses		1,959,083			2,426,365
NET INVESTMENT LOSS	$	(1,016,734	)	$	(1,504,624	)
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on:
Investments	$	12,791,029		$	14,678,919
Written options		—			31,308
Net change in unrealized
appreciation/depreciation on investments		(15,177,094	)		(20,430,679	)
Net loss on investments		(2,386,065	)		(5,720,452	)
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS	$	(3,402,799	)	$	(7,225,076	)

(1)	The period ended October 31, 2018, consists of 11 months due to the Fund’s fiscal year end change from November 30 to October 31, effective October 26, 2018.
(2)	Net of foreign taxes withheld of $20,578 and $9,465, respectively.
(3)	Effective November 28, 2017, Class C shares converted into Class A shares (redesignated as Investor Class shares).  The amounts presented are inclusive of Class C sub-transfer agent expenses of $19,264 and Class C distribution fees of $59,132.

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

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STATEMENTS OF OPERATIONS

(This Page Intentionally Left Blank.)

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Financial Statements

Statements of Changes in Net Assets

OPERATIONS:

Net investment loss

Net realized gain (loss) on investments

Net change in unrealized appreciation/depreciation on investments

Net increase/(decrease) in net assets resulting from operations

DISTRIBUTIONS TO SHAREHOLDERS FROM:

Distributable earnings – Institutional Class

Total distributable earnings

CAPITAL SHARE TRANSACTIONS:

Proceeds from shares subscribed – Investor Class

Proceeds from shares subscribed – Class C⁽²⁾

Proceeds from shares subscribed – Institutional Class

Proceeds from shares sold in connection with the conversion of Class C shares into Investor Class shares⁽²⁾

Dividends reinvested – Institutional Class

Cost of shares redeemed – Investor Class

Cost of shares redeemed – Class C⁽²⁾

Cost of shares redeemed – Institutional Class

Cost of shares redeemed in connection with the conversion of Class C shares into Investor Class shares⁽²⁾

Net increase (decrease) in net assets derived from capital share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS

NET ASSETS:

Beginning of period

End of period

CHANGES IN SHARES OUTSTANDING:

Shares sold – Investor Class

Shares sold – Class C⁽²⁾

Shares sold – Institutional Class

Shares sold in connection with the conversion of Class C shares into Investor Class shares⁽²⁾

Shares redeemed in connection with the conversion of Class C shares into Investor Class shares⁽²⁾

Shares issued to holders as reinvestment of dividends – Institutional Class

Shares redeemed – Investor Class

Shares redeemed – Class C⁽²⁾

Shares redeemed – Institutional Class

Net decrease in shares outstanding

(1)	The period ended October 31, 2018, consists of 11 months due to the Fund’s fiscal year end change from November 30 to October 31, effective October 26, 2018.
(2)	Effective November 28, 2017, Class C shares converted into Class A shares (redesignated as Investor Class shares).
(3)	All distributions were from net investment income.
(4)	Includes accumulated net investment loss of $(3,269,605).
(5)	Includes accumulated net investment loss of $(1,725,723).

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

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STATEMENTS OF CHANGES IN NET ASSETS

11 Months Ended			Year Ended			Year Ended
October 31, 2018(1)			November 30, 2017			November 30, 2016
$	(1,016,734	)	$	(1,504,624	)	$	(918,255	)
	12,791,029			14,710,227			(12,251,964	)
	(15,177,094	)		(20,430,679	)		43,189,916
	(3,402,799	)		(7,225,076	)		30,019,697
	—			—			(202,924	)
	—			—			(202,924	)(3)
	4,580,057			4,800,150			4,780,718
	—			1,716,520			3,187,859
	27,159,764			38,623,311			31,506,175
	—			7,420,979			—
	—			—			201,492
	(8,125,374	)		(8,176,184	)		(7,562,686	)
	—			(4,155,967	)		(1,811,437	)
	(68,363,869	)		(37,713,776	)		(28,748,825	)
	—			(7,420,979	)		—
	(44,749,422	)		(4,905,946	)		1,553,296
	(48,152,221	)		(12,131,022	)		31,370,069
	145,114,235			157,245,257			125,875,188
$	96,962,014		$	145,114,235	(4)	$	157,245,257	(5)
	216,063			244,584			288,406
	—			88,930			200,589
	1,279,785			2,010,365			1,951,347
	—			389,181			—
	—			(394,345	)		—
	—			—			10,549
	(389,081	)		(425,815	)		(473,366	)
	—			(219,288	)		(110,064	)
	(3,263,694	)		(1,916,043	)		(1,889,870	)
	(2,156,927	)		(222,431	)		(22,409	)

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 period

PER SHARE DATA:

Net asset value, beginning of period

Income from investment operations:

Net investment loss⁽²⁾

Net realized and unrealized gains (losses) on investments

Total from investment operations

Less distributions:

Dividends from net realized gains

Total distributions

Net asset value, end of period

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of period (millions)

Ratio of expenses to average net assets

Ratio of net investment loss to average net assets

Portfolio turnover rate⁽⁶⁾

(1)	Fund commenced operations on December 31, 2013.
(2)	Calculated using the average shares outstanding method.
(3)	Not annualized.
(4)	Annualized.
(5)	The period ended October 31, 2018, consists of 11 months due to the Fund’s fiscal year end change from November 30, to October 31, effective October 26, 2018.
(6)	Portfolio turnover is calculated on the basis of the Fund as a whole.

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

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FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Period Ended			Year Ended November 30,									Period Ended
October 31,												November 30,
2018(5)			2017			2016			2015			2014(1)
$	19.47		$	20.54		$	16.41		$	20.45		$	20.00
	(0.20	)		(0.23	)		(0.15	)		(0.10	)		(0.11	)
	(0.95	)		(0.84	)		4.28			(3.46	)		0.56
	(1.15	)		(1.07	)		4.13			(3.56	)		0.45
	—			—			—			(0.48	)		—
	—			—			—			(0.48	)		—
$	18.32		$	19.47		$	20.54		$	16.41		$	20.45
	(5.91	)%(3)		(5.21	)%		25.17	%		(17.57	)%		2.25	%(3)
$	18.16		$	22.66		$	19.64		$	18.72		$	15.14
	1.82	%(4)		1.87	%		1.89	%		1.87	%		1.98	%(4)
	(1.05	)%(4)		(1.21	)%		(0.92	)%		(0.51	)%		(0.53	)%(4)
	72	%(3)		84	%		83	%		79	%		72	%(3)

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 period

PER SHARE DATA:

Net asset value, beginning of period

Income from investment operations:

Net investment loss⁽²⁾

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 period

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of period (millions)

Ratio of expenses to average net assets

Ratio of net investment loss to average net assets

Portfolio turnover rate⁽⁶⁾

(1)	Fund commenced operations on December 31, 2013.
(2)	Calculated using the average shares outstanding method.
(3)	Not annualized.
(4)	Annualized.
(5)	The period ended October 31, 2018, consists of 11 months due to the Fund’s fiscal year end change from November 30 to October 31, effective October 26, 2018.
(6)	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

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FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Period Ended			Year Ended November 30,									Period Ended
October 31,												November 30,
2018(5)			2017			2016			2015			2014(1)
$	19.61		$	20.64		$	16.46		$	20.45		$	20.00
	(0.15	)		(0.19	)		(0.11	)		(0.04	)		(0.06	)
	(0.96	)		(0.84	)		4.32			(3.47	)		0.51
	(1.11	)		(1.03	)		4.21			(3.51	)		0.45
	—			—			(0.03	)		—			—
	—			—			—			(0.48	)		—
	—			—			(0.03	)		(0.48	)		—
$	18.50		$	19.61		$	20.64		$	16.46		$	20.45
	(5.66	)%(3)		(4.99	)%		25.61	%		(17.32	)%		2.25	%(3)
$	78.81		$	122.45		$	126.92		$	100.05		$	68.31
	1.57	%(4)		1.62	%		1.60	%		1.54	%		1.73	%(4)
	(0.79	)%(4)		(0.98	)%		(0.65	)%		(0.20	)%		(0.28	)%(4)
	72	%(3)		84	%		83	%		79	%		72	%(3)

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

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Financial Statements

Notes to the Financial Statements October 31, 2018

1).  ORGANIZATION

The Hennessy BP Energy 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 BP Capital TwinLine Energy Fund (the “Predecessor Fund”) pursuant to a reorganization that took place after the close of business on October 26, 2018.  Prior to October 26, 2018, the Fund had no investment operations. As a result of the reorganization, holders of Class A shares of the Predecessor Fund received Investor Class shares of the Fund, and holders of Class I shares of the Predecessor Fund received Institutional Class shares of the Fund. The Fund is the accounting and performance information successor of the Predecessor Fund.  The investment objective of the Fund is to seek total return.  The Fund is a diversified fund. Effective October 26, 2018, the Fund changed its fiscal year end from November 30 to October 31.

The Fund offers Investor Class and Institutional Class shares.  Each class of shares differs principally in its respective 12b-1 distribution and service, shareholder servicing, and sub-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 to U.S. generally accepted accounting principles (“GAAP”).

a).

Securities 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 because 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/loss and realized gains/losses for federal income tax purposes may differ from those reported in 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 and investments in companies organized as partnerships for tax purposes.  The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense.  Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes.  The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.

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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 11-month period ended October 31, 2018, have been identified and appropriately reclassified in the Statement of Assets and Liabilities. The adjustments are as follows:

Total
Distributable
Earnings	Capital Stock
$1,552,995	$(1,552,995)

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.  Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December.  Distributions of net realized capital gains, if any, are declared and paid annually, usually in December.
f).	Security Transactions – Investment and shareholder transactions are recorded on the trade date.  The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the security lot sold with the net sale proceeds.  Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
g).	Use of Estimates – 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 (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by (ii) the total number of 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).	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, provide a substitute for purchasing or selling particular securities, or increase potential income gain.  Derivatives are financial

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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 its level of risk more quickly and efficiently than transactions in other types of instruments.  The main reason for 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 11-month period ended October 31, 2018, the Fund did not hold any derivative instruments.  The effect of derivative instruments on the Statement of Operations for the year ended November 30, 2017, was as follows:

			Change in Unrealized
			Appreciation/
		Realized Gain (Loss)	Depreciation
	Location of Gain (Loss) on	on Derivatives	on Derivatives
Instruments	Derivatives Recognized in Income	Recognized in Income	Recognized in Income
Equity Contracts:	Net realized gain (loss) on	$31,308	$   —
Call Option Written	transactions from written options

	The average absolute notional value of options held during the year ended November 30, 2017, was $14,144.
j).	Partnership Accounting Policy – The Fund records its pro rata share of income/loss and capital gains/losses to the extent of distributions it has received, allocated from the underlying partnerships and accordingly adjusts the cost basis of the underlying partnerships for return of capital.
k).	New Accounting Pronouncements – In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 does not eliminate the requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the changes in unrealized gains and losses for recurring Level 3 fair value measurements. ASU 2018-13 requires that information is provided about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has evaluated the impact of this change in guidance, and due to the permissibility of early adoption, modified the Fund’s fair value disclosures for the current reporting period.
l).	New Rule Issuances – In August 2018, the Securities and Exchange Commission issued Final Rule Release No. 33 10532, Disclosure Update and Simplification, which in part amends certain financial statement disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, GAAP, or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the

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NOTES TO THE FINANCIAL STATEMENTS

total mix of information provided to investors. The amendments to Rule 6-04.17 of Regulation S-X (balance sheet) were amended to require presentation of the total, rather than the components of net assets, of distributable earnings on the balance sheet. Consistent with GAAP, funds will be required to disclose total distributable earnings. The amendments to Rule 6-09 of Regulation S-X (statement of changes in net assets) omit the requirement to separately state the sources of distributions paid as well as omit the requirement to parenthetically state the book basis amount of undistributed net investment income. Instead, consistent with GAAP, funds will be required to disclose the total amount of distributions paid, except that any tax return of capital must be separately disclosed. The requirements of the Final Rule Release are effective November 5, 2018 and the Fund’s Statement of Assets and Liabilities and the Statement of Changes in Net Assets for the current and prior reporting period have been modified accordingly.

3).  SECURITIES VALUATION

The Fund follows 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 of 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 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, MLPs, 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

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foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).

Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, are generally priced at the ending NAV provided by the applicable mutual fund’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.

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 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 values of other similar securities, and news events with direct bearing on 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’ values as determined by the Board or its designee, pursuant to the fair value pricing procedures adopted by the Board, instead of being determined by the market.  Using a fair value pricing methodology to price a foreign security may result in a value that is different from

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NOTES TO THE FINANCIAL STATEMENTS

such foreign security’s most recent closing price and from the value used by other investment companies to calculate their NAVs.  Such securities are generally classified in Level 2 of 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 “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 determinations.  Various inputs are used to determine 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, 2018, are included in the Schedule of Investments.

4).  INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during the 11-month period ended October 31, 2018, were $91,608,447 and $129,781,856, respectively.  For the year ended November 30, 2017, the purchases and sales of investment securities (excluding government and short-term investments) for the Fund were $112,921,597 and $117,993,398, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during the 11-month period ended October 31, 2018, or the year ended November 30, 2017.

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. 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, as amended. During the period of October 26, 2018 (reorganization date), through October 31, 2018, the Fund did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940, as amended.

5).  INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Prior to the close of business on October 26, 2018, BP Capital Fund Advisors, LLC (“BPCFA”) acted as the investment advisor to the Predecessor Fund. BPCFA furnished all investment advice, office space, and facilities, as well as most of the personnel needed by the Fund. As compensation for its services, BPCFA was entitled to a monthly fee from the Predecessor Fund. The fee was based upon the average daily net assets of the Predecessor Fund at an annual rate of 1.25%.  The net investment advisory fees expensed by the fund during the period from December 1, 2017, to October 26, 2018, and the year ended November 30, 2017, were $1,500,624 and $1,786,981, respectively.

Effective following the close of business on October 26, 2018, the Advisor (Hennessy Advisors, Inc.) began providing the Fund with investment advisory services under an Investment Advisory Agreement.  The Advisor oversees the provision of investment advice and furnishes office space and facilities, as well as 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 an annual rate

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of 1.25%.  The net investment advisory fees expensed by the Fund during the period from October 27, 2018, to October 31, 2018, were $16,434.

Following the close of business on October 26, 2018, the Advisor delegated the day-to-day management of the Fund to a sub-advisor, BPCFA, and began paying a sub-advisory fee, based upon the daily net assets of the Fund, at the rate of 0.40%. The Advisor pays the sub-advisory fees from its own assets, and these fees are not an additional expense of the Fund.

The Advisor has contractually agreed to limit total annual operating expenses to 2.00% of the Fund’s net assets for Investor Class shares and 1.75% of the Fund’s net assets for Institutional Class shares (in each case, excluding all federal, state, and local taxes, interest, brokerage commissions, dividend and interest expenses on short sales, extraordinary items, and acquired fund fees and expenses and other costs incurred in connection with the purchase and sale of securities) through October 25, 2020.

For a period of three years after the year in which the Advisor waives or reimburses 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.

During the period from December 1, 2017, to the close of business on October 26, 2018, and the year ended November 30, 2017, BPCFA had contractually agreed to limit total annual operating expenses and to maintain the expense limitation for the Predecessor Fund on the same terms as described above.

During the period from December 1, 2017, to the close of business on October 26, 2018, and the year ended November 30, 2017, the Predecessor Fund had a Shareholder Servicing Plan in place on behalf of each share class. Under the Shareholder Servicing Plan, Investor Class and Institutional Class shares were authorized to pay an annual shareholder servicing fee of up to 0.10% of each class’s average daily net assets. This fee was used to finance certain activities related to servicing and maintaining shareholder accounts and is included in sub-transfer agent expenses in the Statement of Operations.

Effective following the close of business on October 26, 2018, the Board approved a Shareholder Servicing Agreement for Investor Class shares of the Fund, which was instituted to compensate the Advisor for the non-investment advisory 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. The shareholder servicing fees expensed by the Fund during the period from October 27, 2018, to October 31, 2018, were $249.

During the period from December 1, 2017, to the close of business on October 26, 2018, and the year ended November 30, 2017, the Predecessor Fund had a distribution plan in place pursuant to Rule 12b-1 under the 1940 Act. The distribution plan required the payment of a monthly service fee to Foreside Fund Services, LLC at an annual rate of 0.25% of the average daily net assets attributed to Investor Class shares. Effective following the close of business on October 26, 2018, the Fund 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 is currently only using up to 0.15% of its average daily net assets attributable to Investor Class shares 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, printing and mailing of prospectuses to other than current shareholders, printing and mailing of

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NOTES TO THE FINANCIAL STATEMENTS

sales literature, and compensation for sales and marketing activities or to financial institutions and others, such as dealers and distributors. The distribution fees expensed by the Fund during the 11-month period ended October 31, 2018, and the year ended November 30, 2017, are included in the Statement of Operations.

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.  The sub-transfer agent fees (inclusive of the fees under the Shareholder Servicing Plan for the Predecessor Fund described above) expensed by the Fund during the 11-month period ended October 31, 2018, and the year ended November 30, 2017, are included in the Statement of Operations.

U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services (“Fund Services”) provides the Fund with administrative, fund accounting, and transfer agent services. As administrator, Fund Services 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. U.S. Bank N.A., an affiliate of Fund Services, serves as the Fund’s custodian. The servicing agreements between the Trust and Fund Services and U.S. Bank N.A. contain a fee schedule that is inclusive of administrative, fund accounting, custody, and transfer agent fees. The administrative, fund accounting, custody, and transfer agent fees expensed by the Fund during the 11-month period ended October 31, 2018, and the year ended November 30, 2017, are included in the Statement of Operations.

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 Fund Services and U.S. Bank N.A.

During the period from December 1, 2017, to the close of business on October 26, 2018, and the year ended November 30, 2017, the officers and Chief Compliance Officer of the Predecessor Fund were employees of Fund Services.  Chief Compliance Officer Fees paid by the Predecessor Fund to Fund Services during the period from December 1, 2017, to October 26, 2018 and the year ended November 30, 2017, were $10,649 and $12,211, respectively.  Effective following the close of business on October 26, 2018, 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. The Fund did not incur any compliance expense during the period from October 27, 2018, to October 31, 2018.

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

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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

During the year ended November 30, 2017, the Predecessor Fund had a $10,000,000 line of credit with U.S. Bank N.A. for temporary or extraordinary purposes. During such period, the Predecessor Fund had an outstanding average daily balance and a weighted average interest rate of $2,455 and 3.75%, respectively. The interest expensed by the Predecessor Fund during such period is included in the statement of Operations. The maximum amount outstanding for the Predecessor Fund during such period was $896,000.

During the period from December 1, 2017, through October 26, 2018, the Predecessor Fund had an outstanding average daily balance and a weighted average interest rate of $2,376 and 4.75%, respectively. The interest expensed by the Predecessor Fund during such period is included in the Statement of Operations. The maximum amount outstanding for the Predecessor Fund during such period was $784,000. As of October 26, 2018, the Predecessor Fund did not have any borrowings outstanding under the line of credit.

After the close of business on October 26, 2018, the Fund had 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). From October 29, 2018, through October 31, 2018, the Fund did not have any borrowings outstanding under the line of credit.

8).  FEDERAL TAX INFORMATION

As of October 31, 2018, the components of accumulated earnings (losses) for income tax purposes were as follows:

	Investments
Cost of investments for tax purposes	$	105,533,525
Gross tax unrealized appreciation	$	6,621,959
Gross tax unrealized depreciation		(14,882,125	)
Net tax unrealized appreciation/(depreciation)	$	(8,260,166	)
Undistributed ordinary income	$	—
Undistributed long-term capital gains		—
Total distributable earnings	$	—
Other accumulated gain/(loss)	$	(800,624	)
Total accumulated gain/(loss)	$	(9,060,790	)

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.

As of October 31, 2018, the Fund had short-term unlimited capital losses of $321,596 to offset future capital gains.  During the period ended October 31, 2018, the capital losses utilized for the Fund were $12,205,155.

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NOTES TO THE FINANCIAL STATEMENTS

Capital losses sustained in fiscal year 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.

As of October 31, 2018, the Fund deferred, on a tax basis, a late-year ordinary loss of $479,028. Late-year ordinary losses are net ordinary losses incurred after December 31, 2017, but within the taxable year, that are deemed to arise on the first day of the Fund’s next taxable year.

During the 11-month period ended October 31, 2018, and the years ended November 30, 2017 and 2016, the tax character of distributions paid by the Fund was as follows:

	11-Month Period Ended		Year Ended		Year Ended
	October 31, 2018		November 30, 2017		November 30, 2016
Ordinary income(1)	$	—	$	—	$	202,924
Long-term capital gain		—		—		—
	$	—	$	—	$	202,924

⁽¹⁾  Ordinary income includes short-term capital gains.

9).  AGREEMENT AND PLAN OF REORGANIZATION

On October 22, 2018, shareholders of the Predecessor Fund approved an Agreement and Plan of Reorganization between the Trust, on behalf of the Fund, and Professionally Managed Portfolios, a Massachusetts business Trust, on behalf of the Predecessor Fund. The Agreement and Plan of Reorganization provided for the transfer of all of the assets of the Predecessor Fund to the Fund and the assumption of the liabilities (other than any excluded liabilities) of the Predecessor Fund by the Fund. The Fund was created to carry out the reorganization and has a substantially similar investment objective and substantially similar principal investment strategies as the Predecessor Fund. The following table illustrates the specifics of the reorganization of the Predecessor Fund into the Fund:

	Shares Issued
Predecessor Fund	to Shareholders of	Fund	Combined	Tax Status
Net Assets	Predecessor Fund	Net Assets	Net Assets	of Transfer
$96,818,691(1)	5,275,159	$0	$96,818,691	Non-taxable

⁽¹⁾ Includes accumulated net investment loss, accumulated realized gains and unrealized depreciation in the amounts of $(4,224,600), $821,745 and $(8,461,891), respectively.

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10).  MATTERS SUBMITTED TO A SHAREHOLDER VOTE (Unaudited)

A special meeting of shareholders of the Predecessor Fund was held on October 22, 2018, and the following matter was approved:

Proposal to approve an Agreement and Plan of Reorganization pursuant to which all of the assets of the BP Capital TwinLine Energy Fund will be transferred to the Hennessy BP Energy Fund, a newly formed series of Hennessy Funds Trust, in exchange for Investor Class and Institutional Class shares of the Hennessy BP Energy Fund, distributed pro rata by the BP Capital TwinLine Energy Fund to its Class A and Class I shareholders, and the Hennessy BP Energy Fund’s assumption of BP Capital TwinLine Energy Fund’s stated liabilities.

For: 1,887,897

Against: 5,798

Abstain: 14,026

Nonvotes: 833,517

11).  EVENTS SUBSEQUENT TO PERIOD END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2018, 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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NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Report of Independent Registered Public

Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the shareholders of the Hennessy BP Energy Fund

Novato, CA

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of the Hennessy BP Energy Fund (the “Fund”), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2018, the related statements of operations for the eleven months ended October 31, 2018 and the year ended November 30, 2017, the statements of changes in net assets for the eleven months ended October 31, 2018 and each of the two years ended November 30, 2017, financial highlights for the eleven months ended October 31, 2018 and each of the three years ended November 30, 2017, and for the period from December 31, 2013 (commencement of operations) to November 30, 2014, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, the results of its operations for the year then ended, the changes in its net assets for the year then ended each of the two years in the period ended November 30, 2017, and the financial highlights for each of periods noted above, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management.  Our responsibility is to express an opinion on the Fund’s financial statements based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We have served as the auditor of one or more of the funds in the Trust since 2002.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.  The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2018 by correspondence with the custodian and brokers.  We believe that our audits provide a reasonable basis for our opinion.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2018

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Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Funds 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 to the Board of Trustees (“Advisers”) 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: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board of Trustees 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 Trustee oversees the 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 worked for the	None.
(1981)		Sutter Health organization since
Adviser to the Board		2011 in various positions. He has
		served as the Chief Executive Officer
		of the Sutter Roseville Medical
		Center since 2018. From 2016 through
		2018, he served as the Vice President
		of Strategy for the Sutter Health Valley
		Area, which includes 11 hospitals,
		13 ambulatory surgery centers,
		16,000 employees, and 1,900 physicians.
		From 2013 through 2016, Mr. Alexander
		served as Sutter Novato Community
		Hospital’s Chief Administrative Officer,
		and from 2011 through 2012, he
		served as a Director of Strategy
		within Sutter’s West Bay Region.

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TRUSTEES AND OFFICERS OF THE FUND

			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. Neil Hennessy has been employed	Hennessy
(1956)	a Trustee and	by Hennessy Advisors, Inc. since	Advisors, Inc.
Trustee, Chairman of	June 2008 as	1989 and currently serves as its
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 President, Chief Operating
Executive Vice President		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 Secretary
Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013 and currently serves as its Chief
Senior Vice President		Compliance Officer and Senior Vice President.
and Head of Distribution
Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)(3)		as its General Counsel since June 2013.
Senior Vice President and
Chief Compliance Officer

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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)(4)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Large Cap Financial Fund and the Hennessy Small
and Portfolio Manager		Cap Financial Fund since inception. Mr. Ellison also served as a
		Portfolio Manager of the Hennessy Technology Fund from its
		inception until February 2017. Mr. Ellison served as Director,
		CIO and President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.
Ryan C. Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)(5)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Gas Utility Fund, the Hennessy Large Cap Financial
and Portfolio Manager		Fund, and the Hennessy Small 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. Mr. Kelley has also served as a Portfolio
		Manager of the Hennessy Cornerstone Growth Fund, the
		Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
		Cornerstone Large Growth Fund, and the Hennessy
		Cornerstone Value Fund since February 2017, as a Co-Portfolio
		Manager of the Hennessy Technology Fund since February
		2017, and as a Portfolio Manager of the Hennessy Total Return
		Fund and the Hennessy Balanced Fund since May 2018.
		Mr. Kelley served as Portfolio Manager of FBR Fund Advisers,
		Inc. from January 2008 to October 2012.
Tania Kelley	October 2003	Ms. Kelley has been employed by Hennessy Advisors, Inc.
(1965)		since October 2003.
Senior Vice President
and Head of Marketing
Daniel P. Hennessy	December 2016	Mr. Daniel Hennessy has been employed by Hennessy Advisors,
(1990)		Inc. since 2015. He has served as an Associate Analyst or
Vice President		Analyst of the Hennessy Technology Fund since February 2017.
and Analyst		Mr. Daniel Hennessy previously served as a Mutual Fund
		Specialist at U.S. Bancorp Fund Services, LLC (now doing
		business as U.S. Bank Global Fund Services) from November
		2014 to July 2015. Prior to that, he attended the University of
		San Diego, where he earned a degree in Political Science.

_______________

(1)	Messrs. DeSousa, Doyle, N. 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 the Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
(2)	Mr. N. 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 this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
(4)	The address of this officer is 101 Federal Street, Suite 1900, Boston, MA 02110.
(5)	The address of this officer is 1340 Environ Way, Suite 332, Chapel Hill, NC 27517.

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TRUSTEES AND OFFICERS OF THE FUND

(This Page Intentionally Left Blank.)

Expense Example (Unaudited)

October 31, 2018

As a shareholder of the Fund, you incur 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, 2018, through October 31, 2018.

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. Bank Global Fund Services, 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” or “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. 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.

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EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period(1)
	Account Value	Account Value	May 1, 2018 –
	May 1, 2018	October 31, 2018	October 31, 2018
Investor Class
Actual	$1,000.00	$   858.90	$8.39
Hypothetical (5% return before expenses)	$1,000.00	$1,016.18	$9.10
Institutional Class
Actual	$1,000.00	$   860.50	$7.17
Hypothetical (5% return before expenses)	$1,000.00	$1,017.49	$7.78

⁽¹⁾ Expenses are equal to the Fund’s annualized expense ratio of 1.79% for Investor Class shares or 1.53% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/365 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

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 www.hennessyfunds.com/proxy-voting/voting-policy; or (3) on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at www.hennessyfunds.com/proxy-voting/voting-record 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 a 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 Forms N-Q are available on the SEC’s website at www.sec.gov.  Information included in the Fund’s Forms N-Q will also be available upon request by calling 1-800-966-4354.

Important Notice Regarding Delivery

of Shareholder Documents

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of shareholder reports, proxy statements, and prospectuses to shareholders who share an address and have the same last name. This process does not apply to account statements. You may request an individual copy of a shareholder document at any time. If you would like to receive separate mailings of shareholder documents, please call U.S. Bank Global Fund Services at 1-800-261-6950 or 1-414-765-4124, and individual delivery will begin within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact such intermediary directly to request individual delivery.

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PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS

Board Approval of Investment Advisory

Agreements (Unaudited)

At its meeting on October 7, 2018, the Board of Trustees of the Fund (the “Board,” and the members thereof, the “Trustees”) unanimously approved the new investment advisory agreement of the Fund with Hennessy Advisors, Inc. (the “Advisor”) and the new sub-advisory agreement of the Fund between the Advisor and BP Capital Fund Advisors, LLC (the “Sub-Advisor”). The Fund was established in connection with an agreement and plan of reorganization between the Trust, with respect to the Fund, and Professionally Managed Portfolios, with respect to BP Capital TwinLine Energy Fund (the “predecessor Fund”), pursuant to which the predecessor Fund was reorganized into the Fund.

As part of the process of approving the advisory and sub-advisory agreements, the Trustees reviewed their fiduciary duties with respect to approving the advisory and sub-advisory agreements and the relevant factors for them to consider. In addition, the Trustees who are not deemed “interested persons” (as defined by the Investment Company Act of 1940, as amended) of the Fund (the “Independent Trustees”) met in executive session to discuss the approval of the advisory and sub-advisory agreements.

In advance of the meeting, the Advisor sent detailed information to the Trustees to assist them in their evaluation of the advisory and sub-advisory agreements. This information included, but was not limited to, the following:

(1)	A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the advisory and sub-advisory agreements and the relevant factors for consideration;
(2)	A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the advisory and sub-advisory agreements and also referenced the documents that had been provided to help the Board assess each such factor;
(3)	An inventory of the range of services to be provided by the Advisor and the Sub-Advisor to the Fund, and the distinction between the services to be provided by the Advisor as compared to the services to be provided by the Sub-Advisor;
(4)	A written discussion of economies of scale;
(5)	The forms of advisory and sub-advisory agreements;
(6)	A recent fact sheet of the predecessor Fund, which included, among other things, performance information over various periods during which the Sub-Advisor was the investment advisor to the predecessor Fund;
(7)	A peer expense comparison for the anticipated net expense ratio and the investment advisory fee of the Fund;
(8)	The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
(9)	Information about the Fund’s compliance program;
(10)	The Advisor’s current Form ADV Part 1A (noting that the Advisor is not required to prepare and maintain Form ADV Part 2A or 2B);
(11)	A completed questionnaire from the Sub-Advisor;
(12)	The Sub-Advisor’s Code of Ethics;
(13)	The Sub-Advisor’s Form ADV Parts 1A, 2A, and 2B; and
(14)	Financial information of the Sub-Advisor.

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All of the factors discussed were considered as a whole by the Trustees, as well as by the Independent Trustees meeting in executive session. The Trustees viewed the factors in their totality, with no single factor being the principal or determinative factor in the Trustees’ determination of whether to approve the advisory and sub-advisory agreements.

Prior to approving the advisory and sub-advisory agreements, the Trustees, including the Independent Trustees in executive session, considered, among other items:

(1)	The nature and quality of the advisory services to be provided by the Advisor and the Sub-Advisor;
(2)	A comparison of the anticipated fees and expenses of the Fund to other similar funds;
(3)	Whether economies of scale would be recognized by the Fund;
(4)	The costs and profitability of the Fund to the Advisor and the Sub-Advisor;
(5)	The performance of the predecessor Fund; and
(6)	Any benefits to the Advisor and the Sub-Advisor from serving as an investment advisor to the Fund (other than the advisory fee and sub-advisory fee).

The material considerations and determinations of the Trustees, including the Independent Trustees, were as follows:

(1) The Trustees considered the services identified below that are, or will be, provided by the Advisor. Based on this review, the Trustees concluded that the Advisor will provide high-quality services to the Fund, and they noted that their overall confidence in the Advisor is high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the other Hennessy Funds by the Advisor and that the nature and extent of the services to be provided by the Advisor are appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.

(a)	The Advisor will oversee the Sub-Advisor for the Fund, and the Sub-Advisor will act as the portfolio manager for the Fund.
(b)	The Advisor will perform a daily reconciliation of portfolio positions and cash for the Fund.
(c)	The Advisor will monitor the Fund’s compliance with its investment objectives and restrictions.
(d)	The Advisor will monitor compliance with federal securities laws and will perform or continue to perform activities such as maintaining a compliance program, conducting ongoing reviews of the compliance programs of the Sub-Advisor (including its Code of Ethics) and the Fund’s other service providers, monitoring incidents of abusive trading practices, reviewing Fund expense accruals, payments, and fixed expense ratios, evaluating insurance providers for fidelity bond, D&O/E&O, and cybersecurity insurance coverage, conducting employee compliance training, reviewing reports provided by service providers, maintaining books and records, and preparing an annual compliance report for the Board.
(e)	The Advisor will oversee the selection and continued employment of the Sub-Advisor, review the Fund’s investment performance, and monitor the Sub-Advisor’s adherence to the Fund’s investment objectives, policies, and restrictions.

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BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS

(f)	The Advisor will review the investment performance of the Fund on a regular basis, including a written summary prepared by the Fund’s portfolio managers of the Fund’s performance for the most recent 12-month period for each annual report of the Fund (or, for the 2018 annual report, the Fund’s most recent 11-month period).
(g)	The Advisor oversees service providers that will provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services to the Fund.
(h)	The Advisor maintains in-house marketing and distribution departments that will provide marketing and distribution services on behalf of the Fund.
(i)	The Advisor will be actively involved with preparing regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
(j)	The Advisor will oversee distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Waterhouse, and Pershing. The Advisor participates in “no transaction fee” (“NTF”) programs with these companies on behalf of the Hennessy Funds, which allows customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
(k)	The Advisor pays the incentive compensation of the Trust’s compliance officers and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight personnel, as well as management executives, all of whom will provide services to the Fund.
(l)	The Advisor provides a quarterly compliance certification to the Board.
(m)	The Advisor prepares or reviews Board materials, frequently presents to the Board or leads Board discussions, prepares or reviews meeting minutes, and arranges for Board training and education.

(2) The Trustees considered the services identified below that will be provided by the Sub-Advisor. Based on this review, the Trustees concluded that the Sub-Advisor will provide high-quality services to the Fund. The Trustees also concluded that they were satisfied with the portfolio management services that the Sub-Advisor provided to the Predecessor Fund.

(a) The Sub-Advisor will act as the portfolio manager for the Fund. In this capacity, the Sub-Advisor will do the following:

(i)	manage the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
(ii)	seek best execution for the Fund’s portfolio;
(iii)	manage the use of soft dollars for the Fund; and
(iv)	manage proxy voting for the Fund.

(b) The Sub-Advisor will ensure that its compliance program includes policies and procedures relevant to the Fund and the Sub-Advisor’s duties as a portfolio manager to the Fund.

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41

(c)	The Sub-Advisor will prepare a written summary of the Fund’s performance for the most recent 12-month period for each annual report of the Fund (or, for the 2018 annual report, the Fund’s most recent 11-month period).
(d)	The Sub-Advisor will provide a quarterly compliance certification to the Board regarding trading and allocation practices, supervisory matters, its compliance program (including its code of ethics), compliance with the Fund’s policies, and general firm updates.

(3)	The Trustees considered the distinction between the services to be performed by the Advisor and the Sub-Advisor. The Trustees noted that the management of the Fund, including the oversight of the Sub-Advisor, would involve more comprehensive and substantive duties than the duties of the Sub-Advisor. Specifically, the Trustees considered the lists of services identified above and concluded that the services to be performed by the Advisor for the Fund would require a higher level of service and oversight than the services to be performed by the Sub-Advisor. Based on this determination, the Trustees concluded that the differential in advisory fees between the Advisor and the Sub-Advisor is reasonable.
(4)	The Trustees compared the performance of the predecessor Fund to benchmark indices over various periods and noted that the investment objectives and investment strategies of the Fund would be substantially similar to those of the predecessor Fund. Based on all such information, the Trustees believe that the Sub-Advisor had managed the predecessor Fund, and the Advisor and the Sub-Advisor will manage the Fund, in a manner that is materially consistent with its stated investment objective and style. The Trustees concluded that the approval of the advisory and sub-advisory agreements was warranted.
(5)	The Trustees reviewed the advisory fees and anticipated overall expense ratios of the Fund compared to other funds similar in asset size and investment objective using data from Morningstar. As part of the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials considered at the meeting. The Trustees determined that the advisory fee and anticipated overall expense ratio of the Fund falls within the range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are reasonable and warranted approval of the advisory and sub-advisory agreements.
(6)	The Trustees also considered whether the Advisor was likely to realize economies of scale that it should share with the Fund’s shareholders. The Trustees noted that many of the expenses that the Advisor will incur to manage the Fund are asset-based fees, so the Advisor would not realize material economies of scale as the assets of the Fund increase. For example, mutual fund platform fees would increase as the Fund’s assets grow. The Trustees also considered the Advisor’s agreement to waive fees for the Fund for two years. The Board noted that at current asset levels it did not appear likely that the Advisor would realize economies of scale and concluded that it would continue to monitor economies of scale in the future as circumstances changed.
(7)	The Trustees considered the profitability of the Advisor and the Sub-Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor has put into managing

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BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS

	and distributing the Fund. The Trustees then concluded that the anticipated profits of the Advisor and the Sub-Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
(8)	The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees, along with a very low level of turnover, and concluded that this was beneficial to the Fund and its shareholders.  The Trustees also considered the business backgrounds and key employees of the Sub-Advisor and determined that they believe these employees have the necessary expertise to manage the portfolio of the Fund for the benefit of the Fund and its shareholders.
(9)	The Trustees considered any anticipated benefits to the Advisor and the Sub-Advisor from serving as advisors to the Fund other than the advisory fee or sub-advisory fee. The Trustees noted that the Advisor and the Sub-Advisor in the future may derive ancillary benefits from, by way of example, their association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that they expected any such products and services to be used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits expected to be realized by the Advisor and the Sub-Advisor from their relationships with the Fund were reasonable.

After reviewing the materials provided at the meeting and management’s presentation, as well as other factors that the Trustees deemed relevant, the Trustees, including the Independent Trustees, approved the new advisory and sub-advisory agreements.

HENNESSY FUNDS 1-800-966-4354

43

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 will be shared with non-affiliated third parties.

HENNESSYFUNDS.COM

44

PRIVACY POLICY

(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 Boulevard, Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT, &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

d/b/a U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Drive, 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

Two Liberty Place

50 South 16th Street, Suite 2900

Philadelphia, Pennsylvania 19102-2529

DISTRIBUTOR

Quasar Distributors, LLC

777 East Wisconsin Avenue

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, 2018

HENNESSY BP MIDSTREAM FUND

Investor Class  HMSFX

Institutional Class  HMSIX

hennessyfunds.com  |  1-800-966-4354

(This Page Intentionally Left Blank.)

Contents

Letter to Shareholders	2
Performance Overview	4
Financial Statements
Schedule of Investments	7
Statement of Assets and Liabilities	10
Statements of Operations	11
Statements of Changes in Net Assets	12
Financial Highlights	14
Notes to the Financial Statements	18
Report of Independent Registered Public Accounting Firm	30
Trustees and Officers of the Fund	31
Expense Example	34
Proxy Voting Policy and Proxy Voting Records	36
Quarterly Schedule of Investments	36
Federal Tax Distribution Information	36
Important Notice Regarding Delivery of Shareholder Documents	36
Board Approval of Investment Advisory Agreements	37
Privacy Policy	42

HENNESSY FUNDS 1-800-966-4354

December 2018

Dear Hennessy Funds Shareholder:

Over the past year, we have witnessed the return of market volatility. U.S. stocks still registered healthy gains, bolstered by the impact on corporate profits of the successful passage of the tax reform bill in December 2017. However, concerns over potential trade disruptions, especially between the U.S. and China, and worries over higher short-term interest rates, which many believe could possibly trigger a recession down the road, put downward pressure on equity valuations.

The U.S. economy performed well over the period, and actually achieved an acceleration in GDP growth to over 3% on an annualized basis in the second and third quarters of calendar year 2018. During the past year, companies continued to hire workers, adding over 200,000 jobs per month on average, sending the unemployment rate down to 3.7% in October, which is the lowest it has been since 1969. Consumer confidence is high and still rising, and corporate profits reached record levels in the third quarter of calendar year 2018, posting a year-over-year increase of 26% for the companies in the S&P 500 Index.

The Federal Reserve, confident about the strength of the economy and mindful of a tight labor market, raised short-term interest rates four times over the last year, by a quarter point each time. Long-term bond yields also rose, driven higher primarily by evidence of faster wage growth, pushing the U.S. 10-year Treasury bond over 3% for the first time since 2013.

As I write this, we are experiencing the market’s 20th downturn since 2010. I have been saying that every bull market experiences volatility and pullbacks. Many financial commentators think this bull market is “long in the tooth.” I do not agree with them. I believe stock valuations are still very reasonable. The prospective price to earnings multiple for the Dow Jones Industrial Average has come down from almost 20x at the end of 2017 to 16x, just above its 10-year average of 15x. The prospective PE multiple for the S&P 500 Index has also come down, from 20x to 17x, and compares favorably to its 10-year average of 16x.

Cash, meanwhile, continues to build up on corporate balance sheets. The companies in the S&P 500 Index reported a total of over $5.4 trillion in cash and marketable securities in their latest filings. Companies have been spending some of their cash, increasing their investment spending and laying the groundwork for future earnings growth. However, they have also been returning capital to shareholders. S&P 500 Index companies announced $433.6 billion in share repurchases during the second quarter of calendar year 2018, nearly doubling the previous record of $242.1 billion set in the first quarter. Companies are also raising their dividends.

In addition, I believe the Federal Reserve will take care not to raise interest rates too high or too fast and endanger the economic expansion. While wage growth has risen to over 3% in October, other measures of inflationary pressure, such as the Consumer Price Index and the Producer Price Index, still show prices increasing at a more moderate pace, closer to 2%. Given continued evidence of modest rates of inflation, I believe the Fed will be able to maintain its gradual pace of interest rate hikes.

Finally and importantly, I still see no signs of euphoria in this market. In my opinion, the enthusiasm present earlier in the year, which followed the significant reduction in corporate income tax rates, has largely evaporated, and it has been replaced with anxiety

HENNESSYFUNDS.COM

2

LETTER TO SHAREHOLDERS

over higher interest rates and their potential impact on growth. In the past, I have likened the current bull market to that of 1982-2000, and I still believe this comparison holds true. I am confident in the strength of the market today and believe the economy will continue to grow in the coming year, albeit at a more moderate pace.

Thank you for your continued confidence and investment in the Hennessy 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 commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is a valuation measure and is calculated by dividing a company’s market price per share by its earnings per share. Earnings growth is not a measure of a fund’s future performance.

HENNESSY FUNDS 1-800-966-4354

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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 on its inception date and assumes the reinvestment of dividends.

AVERAGE TOTAL RETURN FOR PERIODS ENDED OCTOBER 31, 2018

		One	Since Inception
	11 Months(1)	Year	(12/31/13)
Hennessy BP Midstream Fund –
Investor Class (HMSFX)	-6.15%	-7.17%	-3.74%
Hennessy BP Midstream Fund –
Institutional Class (HMSIX)	-5.94%	-6.96%	-3.50%
Alerian MLP Index	2.06%	0.68%	-5.49%
S&P 500 Index	4.15%	7.35%	10.49%

Expense ratios:  1.78% (Investor Class); 1.49% (Institutional Class)

⁽¹⁾ The period ended October 31, 2018, consists of 11 months because the Fund changed its fiscal year end from November 30 to October 31, effective October 26, 2018.

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 table does 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 www.hennessyfunds.com. Performance for periods on or prior to October 26, 2018, is that of the BP Capital TwinLine MLP Fund.

The Alerian MLP Index is float-adjusted, capitalization-weighted index commonly used to measure the performance of energy master limited partnerships. The S&P 500 Index is commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

The expense ratios presented are from the most recent prospectus. The expense ratios for the current reporting period are available in the Financial Highlights section of this report.

HENNESSYFUNDS.COM

4

PERFORMANCE OVERVIEW

PERFORMANCE NARRATIVE

Portfolio Managers Toby Loftin and Ben Cook

BP Capital Fund Advisors, LLC (sub-advisor)

Performance:

For the 11-month period ended October 31, 2018, the Investor Class of the Hennessy BP Midstream Fund returned -6.15%, underperforming both the Alerian MLP Index (the Fund’s primary benchmark) and the S&P 500 Index, which returned 2.06% and 4.15%, respectively, for the same period.

The Fund underperformed its primary benchmark index primarily as a result of overweight positions in Master Limited Partnerships (MLPs) that were heavily affected by an adverse Federal Energy Regulatory Commission ruling. The ruling, which passed in March 2018, effectively led to a reduction in cash flow and distribution forecasts for certain regulated businesses. The Fund was overweight MLP companies with large regulated businesses, such as pipeline operators, which experienced sharp reductions in their expected profitability and so performed poorly. The Fund was underweight large-cap, more diversified MLPs with less exposure to regulated businesses that experienced much smaller reductions in their expected profitability and so performed relatively well. The Fund also underperformed the broader domestic equity market, as represented by the S&P 500 Index, as a result of investor rotation out of energy-related companies and into consumer-oriented industry groups such as retailers and healthcare service companies. Large-cap, diversified midstream companies, unaffected by the aforementioned ruling, contributed most to relative performance. On an individual company basis, major contributors to the Fund’s relative performance included Targa Resources, Inc., Kinder Morgan, Inc., and Hess Midstream Partners LP, while major detractors included Energy Transfer Partners LP, TC Pipeline Partners LP, and Enbridge Energy Partners LP.

The Fund continues to own all the companies mentioned.

Portfolio Strategy:

The Fund seeks to build a portfolio of midstream energy companies with the following characteristics: cash flows linked to non-price factors such as volumes consumed; long-term agreements with customers such as utilities or power consumers; and strong balance sheets. Our intensive, fundamental, “boots-on-the-ground” research process, coupled with proprietary financial modeling, differentiates us from our competitors and allows us to uncover potential equity mispricings that can meaningfully drive performance.

Investment Commentary:

Despite the underperformance versus the broader equity market this year, we believe the outlook for midstream energy companies remains bright. We believe midstream companies can benefit from the current robust rate of growth in the production of crude oil, natural gas, and natural gas liquids in the U.S. They can also benefit from U.S. exports of crude oil, natural gas, and natural gas liquids that have also been growing rapidly. Midstream companies can also benefit from higher energy commodity prices.

HENNESSY FUNDS 1-800-966-4354

5

Three holdings were added to the Fund this year, including Cheniere Energy Partners LP, CNX Midstream Partners LP, and Noble Midstream Partners LP. Eleven companies are no longer in the Fund, including Buckeye Partners LP, Dominion Midstream Partners LP, Enbridge Energy Partner, LP, Kinder Morgan, Inc. preferred shares, PBFX Partners LP, Rice Midstream Partners LP, Tallgrass Energy Partner, LP, TC Pipelines LP, Valero Partners LP, and Dominion Energy, Inc.

_______________

Opinions expressed are those of the Portfolio Manager 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 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 invests in small-capitalization and medium-capitalization companies, which involves additional risks such as limited liquidity and greater volatility. Funds that concentrate in a single sector may be subject to a higher degree of risk. Energy-related companies are subject to specific risks, including fluctuations in commodity prices and consumer demand, substantial government regulation, and depletion of reserves. Investments in lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities. Use of derivatives can increase the volatility of the Fund.

MLPs and MLP investments have unique characteristics. The Fund does not receive the same tax benefits as a direct investment in an MLP.

The prices of MLP units may fluctuate abruptly and trading volume may be low, making it difficult for the Fund to sell its units at a favorable price. MLP general partners have the power to take actions that adversely affect the interests of unit holders. Most MLPs do not pay U.S. federal income tax at the partnership level, but an adverse change in tax laws could result in MLPs being treated as corporations for federal income tax purposes, which could reduce or eliminate distributions paid by MLPs to the Fund. The Fund is treated as a regular corporation, or “C” corporation, for U.S. federal income tax purposes, and therefore, is subject to U.S. federal income tax on its taxable income at the graduated rates applicable to corporations (currently a maximum rate of 21%), as well as state and local income taxes. The Fund will not benefit from current favorable federal income tax rates on long-term capital gains, and Fund income and losses will not be passed on to shareholders. The Fund accrues deferred income taxes for future tax liabilities associated with the portion of MLP distributions considered to be a tax-deferred return of capital and for any net operating gains as well as capital appreciation of its investments. This deferred tax liability is reflected in the daily net asset value of the Fund and as a result the Fund’s after-tax performance could differ significantly from the underlying assets even if the pre-tax performance is closely tracked. 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.

Cash flow refers to the net amount of cash and cash equivalents being transferred into and out of a company.

HENNESSYFUNDS.COM

6

PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as ofOctober 31, 2018

HENNESSY BP MIDSTREAM FUND

(% of Total Assets)

TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)	% TOTAL ASSETS
Energy Transfer Equity LP	14.45%
The Williams Companies, Inc.	9.44%
Enterprise Products Partners LP	9.09%
Targa Resources Corp.	7.35%
Kinder Morgan, Inc.	5.80%
MPLX LP	5.11%
Shell Midstream Partners LP	5.11%
CNX Midstream Partners LP	5.02%
Magellan Midstream Partners LP	4.85%
Plains All American Pipeline LP	4.79%

Note: The Fund concentrates its investments in the Energy industry.  For presentation purposes, the Fund uses custom categories.

HENNESSY FUNDS 1-800-966-4354

7

COMMON STOCKS – 27.13%	Number				% of
	of Shares		Value		Net Assets
Gathering & Processing – 8.83%
Targa Resources Corp.		140,093	$	7,238,605		8.83	%
Natural Gas/NGL Transportation – 18.30%
Kinder Morgan, Inc.		335,438		5,709,155		6.96	%
The Williams Companies, Inc.		382,053		9,295,349		11.34	%
				15,004,504		18.30	%
Total Common Stocks
(Cost $24,288,755)				22,243,109		27.13	%
PARTNERSHIPS & TRUSTS – 91.95%
Crude Oil & Refined Products – 46.32%
Andeavor Logistics LP		59,713		2,392,103		2.92	%
BP Midstream Partners LP		126,629		2,310,979		2.82	%
Enterprise Products Partners LP		333,755		8,951,309		10.92	%
Hess Midstream Partners LP		126,693		2,848,059		3.47	%
Holly Energy Partners LP		86,539		2,520,016		3.07	%
Magellan Midstream Partners LP		77,462		4,777,856		5.83	%
Phillips 66 Partners LP		90,718		4,437,017		5.41	%
Plains All American Pipeline LP		216,636		4,716,166		5.75	%
Shell Midstream Partners LP		246,015		5,028,546		6.13	%
				37,982,051		46.32	%
Gathering & Processing – 21.56%
Antero Midstream GP LP		141,570		2,280,693		2.78	%
Antero Midstream Partners LP		28,800		868,320		1.06	%
CNX Midstream Partners LP		270,611		4,938,651		6.02	%
MPLX LP		149,649		5,029,703		6.14	%
Noble Midstream Partners LP		40,697		1,389,395		1.70	%
Western Gas Partners LP		80,080		3,167,965		3.86	%
				17,674,727		21.56	%
Natural Gas/NGL Transportation – 24.07%
Cheniere Energy Partners LP		41,245		1,388,719		1.69	%
Energy Transfer Equity LP		915,275		14,223,370		17.35	%
EQM Midstream Partners LP		89,892		4,126,942		5.03	%
				19,739,031		24.07	%
Total Partnerships & Trusts
(Cost $78,851,763)				75,395,809		91.95	%

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

HENNESSYFUNDS.COM

8

SCHEDULE OF INVESTMENTS

SHORT-TERM INVESTMENTS – 0.00% (b)	Number					% of
	of Shares		Value			Net Assets
Money Market Funds – 0.00% (b)
Morgan Stanley Institutional Liquidity Funds – Government Portfolio,
Institutional Class 2.05% (a)		142	$	142			0.00	%
Total Short-Term Investments
(Cost $142)				142			0.00	%
Total Investments
(Cost $103,140,660) – 119.08%				97,639,060			119.08	%
Liabilities in Excess of Other Assets – (19.08)%				(15,641,730	)		(19.08	)%
TOTAL NET ASSETS – 100.00%			$	81,997,330			100.00	%

Percentages are stated as a percent of net assets.

(a)	The rate listed is the fund’s seven-day yield at October 31, 2018.
(b)	Amount calculated is less than 0.005%.

Summary of Fair Value Exposure at October 31, 2018

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2018 (See Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Gathering & Processing	$	7,238,605	$	—	$	—	$	7,238,605
Natural Gas/NGL Transportation		15,004,504		—		—		15,004,504
Total Common Stocks	$	22,243,109	$	—	$	—	$	22,243,109
Partnerships & Trusts
Crude Oil & Refined Products	$	37,982,051	$	—	$	—	$	37,982,051
Gathering & Processing		17,674,727		—		—		17,674,727
Natural Gas/NGL Transportation		19,739,031		—		—		19,739,031
Total Partnerships & Trusts	$	75,395,809	$	—	$	—	$	75,395,809
Short-Term Investments
Money Market Funds	$	142	$	—	$	—	$	142
Total Short-Term Investments	$	142	$	—	$	—	$	142
Total Investments	$	97,639,060	$	—	$	—	$	97,639,060

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

HENNESSY FUNDS 1-800-966-4354

9

Financial Statements

Statement of Assets and Liabilities as of October 31, 2018

ASSETS:
Investments in securities, at value (cost $103,140,660)	$	97,639,060
Dividends and interest receivable		648,813
Receivable for securities sold		150,560
Receivable for fund shares sold		1,527
Prepaid expenses and other assets		15,939
Total Assets		98,455,899
LIABILITIES:
Loans payable		127,000
Payable for fund shares redeemed		16,099,440
Payable to advisor		84,790
Payable to administrator		29,368
Payable to auditor		56,981
Accrued distribution fees		4,304
Accrued service fees		273
Accrued franchise tax		19,899
Accrued trustees fees		3,450
Accrued expenses and other payables		33,064
Total Liabilities		16,458,569
NET ASSETS	$	81,997,330
NET ASSETS CONSIST OF:
Capital stock	$	105,270,507
Total distributable earnings		(23,273,177	)
Total Net Assets	$	81,997,330
NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	20,072,836
Shares issued and outstanding		1,585,162
Net asset value, offering price and redemption price per share	$	12.66
Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	61,924,494
Shares issued and outstanding		4,825,100
Net asset value, offering price and redemption price per share	$	12.83

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

HENNESSYFUNDS.COM

10

STATEMENT OF ASSETS AND LIABILITIES/STATEMENTS OF OPERATIONS

Financial Statements

Statements of Operations

	11 Months Ended			Year Ended
	October 31, 2018(1)			November 30, 2017
INVESTMENT INCOME:
Distributions received from master limited partnerships	$	5,760,323		$	4,921,818
Less: return of capital on distributions received		(5,740,549	)		(4,921,818	)
Dividend income		388,201			288,824
Interest income		15,391			29,818
Other income		930			—
Total investment income		424,296			318,642
EXPENSES:
Investment advisory fees (See Note 5)		1,104,181			901,198
Sub-transfer agent expenses – Investor Class (See Note 5)		14,172			17,002	(2)
Sub-transfer agent expenses – Institutional Class (See Note 5)		72,141			65,503
Administration, fund accounting, custody
and transfer agent fees (See Note 5)		173,370			157,030
Distribution fees – Investor Class (See Note 5)		39,396			50,502	(2)
Service fees – Investor Class (See Note 5)		273			—
Federal and state registration fees		49,221			72,493
Reports to shareholders		23,377			20,121
Compliance expense (See Note 5)		10,271			10,807
Audit fees		46,411			27,411
Trustees’ fees and expenses		17,661			13,555
Legal fees		4,946			10,381
Interest expense (See Note 7)		5,338			—
Franchise tax expense		20,651			5,826
Other expenses		24,488			41,564
Total expenses before reimbursement by advisor		1,605,897			1,393,393
Expense reimbursement by advisor – Investor Class		(11,873	)		(22,557	)
Expense reimbursement by advisor – Institutional Class		(53,808	)		(91,065	)
Total expenses before state franchise and income taxes		1,540,216			1,279,771
State franchise and income tax expense		272			17,880
Total expenses		1,540,488			1,297,651
NET INVESTMENT LOSS	$	(1,116,192	)	$	(979,009	)
REALIZED AND UNREALIZED LOSSES:
Net realized gain (loss) on investments	$	(4,616,225	)	$	2,579,686
Net change in unrealized
appreciation/depreciation on investments		(2,268,476	)		(7,705,161	)
Net loss on investments		(6,884,701	)		(5,125,475	)
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS	$	(8,000,893	)	$	(6,104,484	)

(1)	The period ended October 31, 2018, consists of 11 months due to the Fund’s fiscal year end change from November 30 to October 31, effective October 26, 2018.
(2)	Effective November 28, 2017, Class C shares converted into Class A shares (redesignated as Investor Class shares).  The amounts presented are inclusive of Class C sub-transfer agent expenses of $3,099 and Class C distribution fees of $15,743.

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

HENNESSY FUNDS 1-800-966-4354

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Financial Statements

Statements of Changes in Net Assets

OPERATIONS:

Net investment loss

Net realized gain (loss) on investments

Net change in unrealized appreciation/depreciation on investments

Net increase (decrease) in net assets resulting from operations

DISTRIBUTIONS TO SHAREHOLDERS FROM:

Return of capital – Investor Class

Return of capital – Class C⁽²⁾

Return of capital – Institutional Class

Total distributions

CAPITAL SHARE TRANSACTIONS:

Proceeds from shares subscribed – Investor Class

Proceeds from shares subscribed – Class C⁽²⁾

Proceeds from shares subscribed – Institutional Class

Proceeds from shares sold in connection with the conversion of Class C shares into Investor Class shares⁽²⁾

Dividends reinvested – Investor Class

Dividends reinvested – Class C⁽²⁾

Dividends reinvested – Institutional Class

Cost of shares redeemed – Investor Class

Cost of shares redeemed – Class C⁽²⁾

Cost of shares redeemed – Institutional Class

Cost of shares redeemed in connection with the conversion of Class C shares into Investor Class shares⁽²⁾

Net increase (decrease) in net assets derived from capital share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS

NET ASSETS:

Beginning of year

End of year

CHANGES IN SHARES OUTSTANDING:

Shares sold – Investor Class

Shares sold – Class C⁽²⁾

Shares sold – Institutional Class

Shares sold in connection with the conversion of Class C shares into Investor Class shares⁽²⁾

Shares issued to holders as reinvestment of dividends – Investor Class

Shares issued to holders as reinvestment of dividends – Class C⁽²⁾

Shares issued to holders as reinvestment of dividends – Institutional Class

Shares redeemed – Investor Class

Shares redeemed – Class C⁽²⁾

Shares redeemed – Institutional Class

Shares redeemed in connection with the conversion of Class C shares into Investor Class shares⁽²⁾

Net increase/(decrease) in shares outstanding

(1)	The period ended October 31, 2018, consists of 11 months due to the Fund’s fiscal year end change from November 30 to October 31, effective October 26, 2018.
(2)	Effective November 28, 2017, Class C shares converted into Class A shares (redesignated as Investor Class shares).
(3)	Includes accumulated net investment loss of $(1,594,345).
(4)	Includes accumulated net investment loss of $(615,336).

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

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12

STATEMENTS OF CHANGES IN NET ASSETS

11 Months Ended			Year Ended			Year Ended
October 31, 2018(1)			November 30, 2017			November 30, 2016
$	(1,116,192	)	$	(979,009	)	$	(359,288	)
	(4,616,225	)		2,579,686			(2,131,928	)
	(2,268,476	)		(7,705,161	)		8,783,980
	(8,000,893	)		(6,104,484	)		6,292,764
	(1,237,326	)		(878,781	)		(594,838	)
	—			(159,349	)		(133,706	)
	(6,588,759	)		(3,683,962	)		(1,690,839	)
	(7,826,085	)		(4,722,092	)		(2,419,383	)
	12,908,692			9,320,726			8,205,734
	—			881,860			781,503
	61,536,519			65,450,965			23,087,389
	—			2,418,423			—
	1,178,239			824,902			582,056
	—			134,926			112,132
	5,538,251			2,907,358			1,586,986
	(8,575,706	)		(7,382,602	)		(4,491,015	)
	—			(395,943	)		(643,867	)
	(74,214,680	)		(10,344,313	)		(10,511,018	)
	—			(2,418,423	)		—
	(1,628,685	)		61,397,879			18,709,900
	(17,455,663	)		50,571,303			22,583,281
	99,452,993			48,881,690			26,298,409
$	81,997,330		$	99,452,993	(3)	$	48,881,690	(4)
	943,640			172,119			549,681
	—			54,624			53,955
	4,254,660			4,105,091			1,632,576
	—			582,014			—
	84,132			51,651			38,802
	—			8,532			7,570
	391,738			180,611			106,199
	(605,087	)		(455,427	)		(343,289	)
	—			(25,294	)		(43,305	)
	(5,454,423	)		(646,034	)		(757,714	)
	—			(174,005	)		—
	(385,340	)		3,853,882			1,244,475

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

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13

Financial Statements

Financial Highlights

For an Investor Class share outstanding throughout each period

PER SHARE DATA:

Net asset value, beginning of period

Income from investment operations:

Net investment loss⁽²⁾⁽⁶⁾

Net realized and unrealized gains (losses) on investments

Total from investment operations

Less distributions:

Dividends from return of capital

Total distributions

Net asset value, end of period

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of period (millions)

Ratio of expenses to average net assets:

Before expense reimbursement

After expense reimbursement

State and federal income tax expense

Deferred tax expense

Total expense

Ratio of net investment loss to average net assets:

Before expense reimbursement⁽⁶⁾

After expense reimbursement⁽⁶⁾

Portfolio turnover rate⁽⁸⁾

(1)	Fund commenced operations on December 31, 2013.
(2)	Calculated using the average shares outstanding method.
(3)	Not annualized.
(4)	Annualized.
(5)	Deferred tax expense estimate is derived from net investment loss and realized and unrealized gain/loss.
(6)	Includes state income tax expense and deferred tax expense from net investment loss only.
(7)	The period ended October 31, 2018, consists of 11 months due to the Fund’s fiscal year end change from November 30 to October 31, effective October 26, 2018.
(8)	Portfolio turnover is calculated on the basis of the Fund as a whole.

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

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FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Period Ended			Year Ended November 30,									Period Ended
October 31,												November 30,
2018(7)			2017			2016			2015			2014(1)
$	14.51		$	16.54		$	15.45		$	22.25		$	20.00
	(0.16	)		(0.22	)		(0.17	)		(0.20	)		(0.20	)
	(0.66	)		(0.78	)		2.29			(5.60	)		2.87
	(0.82	)		(1.00	)		2.12			(5.80	)		2.67
	(1.03	)		(1.03	)		(1.03	)		(1.00	)		(0.42	)
	(1.03	)		(1.03	)		(1.03	)		(1.00	)		(0.42	)
$	12.66		$	14.51		$	16.54		$	15.45		$	22.25
	(6.15	)%(3)		(6.49	)%		14.78	%		(27.17	)%		13.37	%(3)
$	20.07		$	16.86		$	13.43		$	8.76		$	7.17
	1.83	%(4)		1.89	%		2.21	%		2.70	%		4.04	%(4)
	1.75	%(4)		1.75	%		1.74	%		1.74	%		1.75	%(4)
	0.03	%		0.02	%		—			—			—
	—			—			—			(1.32	)%(5)		3.98	%(4)(5)
	1.78	%(4)		1.77	%		1.74	%		0.42	%		5.73	%(4)
	(1.34	)%(4)		(1.50	)%		(1.60	)%		(1.97	)%		(3.28	)%(4)
	(1.26	)%(4)		(1.36	)%		(1.13	)%		(1.01	)%		(0.99	)%(4)
	64	%(3)		63	%		139	%		96	%		70	%(3)

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

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15

Financial Statements

Financial Highlights

For an Institutional Class share outstanding throughout each period

PER SHARE DATA:

Net asset value, beginning of period

Income from investment operations:

Net investment loss⁽²⁾⁽⁶⁾

Net realized and unrealized gains (losses) on investments

Total from investment operations

Less distributions:

Dividends from return of capital

Total distributions

Net asset value, end of period

TOTAL RETURN

SUPPLEMENTAL DATA AND RATIOS:

Net assets, end of period (millions)

Ratio of expenses to average net assets:

Before expense reimbursement

After expense reimbursement

State and federal income tax expense

Deferred tax expense

Total expense

Ratio of net investment loss to average net assets:

Before expense reimbursement⁽⁶⁾

After expense reimbursement⁽⁶⁾

Portfolio turnover rate⁽⁸⁾

(1)	Fund commenced operations on December 31, 2013.
(2)	Calculated using the average shares outstanding method.
(3)	Not annualized.
(4)	Annualized.
(5)	Deferred tax expense estimate is derived from the net investment loss and realized and unrealized gain/loss.
(6)	Includes state income tax expense and deferred tax expense from net investment loss only.
(7)	The period ended October 31, 2018, consists of 11 months due to the Fund’s fiscal year end change from November 30 to October 31, effective October 26, 2018.
(8)	Portfolio turnover is calculated on the basis of the Fund as a whole.

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

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FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Period Ended			Year Ended November 30,									Period Ended
October 31,												November 30,
2018(7)			2017			2016			2015			2014(1)
$	14.66		$	16.66		$	15.53		$	22.28		$	20.00
	(0.14	)		(0.18	)		(0.12	)		(0.14	)		(0.15	)
	(0.66	)		(0.79	)		2.28			(5.61	)		2.87
	(0.80	)		(0.97	)		2.16			(5.75	)		2.72
	(1.03	)		(1.03	)		(1.03	)		(1.00	)		(0.44	)
	(1.03	)		(1.03	)		(1.03	)		(1.00	)		(0.44	)
$	12.83		$	14.66		$	16.66		$	15.53		$	22.28
	(5.94	)%(3)		(6.25	)%		14.97	%		(26.90	)%		13.60	%(3)
$	61.92		$	82.59		$	33.22		$	15.72		$	7.79
	1.56	%(4)		1.64	%		1.95	%		2.34	%		3.79	%(4)
	1.50	%(4)		1.50	%		1.48	%		1.42	%		1.50	%(4)
	0.02	%		0.02	%		—			—			—
	—			—			—			(1.24	)%(5)		3.98	%(4)(5)
	1.52	%(4)		1.52	%		1.48	%		0.18	%		5.48	%(4)
	(1.15	)%(4)		(1.28	)%		(1.28	)%		(1.63	)%		(3.03	)%(4)
	(1.09	)%(4)		(1.14	)%		(0.81	)%		(0.71	)%		(0.74	)%(4)
	64	%(3)		63	%		139	%		96	%		70	%(3)

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

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Financial Statements

Notes to the Financial Statements October 31, 2018

1).  ORGANIZATION

The Hennessy BP Midstream 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 BP Capital TwinLine MLP Fund (the “Predecessor Fund”) pursuant to a reorganization that took place after the close of business on October 26, 2018.  Prior to October 26, 2018, the Fund had no investment operations.  As a result of the reorganization, holders of Class A shares of the Predecessor Fund received Investor Class shares of the Fund, and holders of Class I shares of the Predecessor Fund received Institutional Class shares of the Fund. The Fund is the accounting and performance information successor of the Predecessor Fund.  The investment objective of the Fund is to seek capital appreciation through distribution growth along with current income. The Fund is treated as a regular corporation, or “C” corporation, for U.S. federal income tax purposes. Because the Fund is treated as a “C” corporation, it will not be taxed as a regulated investment company under Subchapter M of the Code, and therefore is not required to comply with the diversification requirements applicable to regulated investment companies. The Fund is a non-diversified fund.  Effective October 26, 2018, the Fund changed its fiscal year end from November 30 to October 31.

The Fund offers Investor Class and Institutional Class shares.  Each class of shares differs principally in its respective 12b-1 distribution and service, shareholder servicing, and sub-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 to U.S. generally accepted accounting principles (“GAAP”).

a).	Securities Valuation – All investments in securities are recorded at their estimated fair value, as described in Note 3.
b).	Federal Income Taxes – The Fund, taxed as a corporation, is obligated to pay U.S. federal and state income tax on its taxable income. Currently, the maximum marginal regular federal income tax rate for a corporation is 21%. The Fund invests its assets primarily in midstream energy infrastructure investments, which may include, but are not limited to, master limited partnerships (“MLPs”) and entities with economic characteristics similar to MLPs. MLPs are treated as partnerships for federal income tax purposes. As a limited partner in MLPs, the Fund reports its allocable share of each MLP’s taxable income in computing its own taxable income.
	In calculating the Fund’s daily net asset value, the Fund will account for its deferred tax asset and liability balances. In accordance with U.S. GAAP, the Fund will accrue a deferred income tax liability balance for its future tax liability associated

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NOTES TO THE FINANCIAL STATEMENTS

with the capital appreciation of its investments and the distributions received by the Fund on equity securities of MLPs considered to be return of capital and for any net operating gains. This accrual will be based on the current effective U.S. federal income tax rate plus an estimated state income tax rate.

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting and tax purposes. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that at least some portion of a deferred income tax asset will not be realized. From time to time, as new information becomes available, the Fund will modify its estimates or assumption regarding the deferred tax liabilities or assets. As of October 31, 2018, the Fund did not record a deferred tax asset or liability.

The Tax Cuts and Jobs Act of 2017 was signed on December 22, 2017, reducing the federal corporate income tax rate from 35% to 21% and repealing the corporate alternate minimum tax. As a result, the Fund’s net deferred tax asset balance of $2,767,593 on December 22, 2017, was reduced to $1,781,088, which continued to be offset by a full valuation allowance. Due to the full valuation allowance, the reduction in the federal corporate income tax rate had no impact on the Fund’s net asset value per share. If the Fund’s deferred tax asset were to change to a deferred tax liability, the liability would be reflected at the newly enacted corporate tax rate of 21% plus an estimated state and local income tax rate.

Deferred Tax Assets:	Total
Net operating loss carryforwards	$	567,057
State net operating loss carryforwards		22,339
Capital loss carryforwards (tax basis)		2,739,024
Unrealized losses		376,281
Alternative minimum tax credit		—
Total Deferred Tax Assets (Before Valuation Allowance)		3,704,701
Valuation Allowance		(3,688,806	)
Total Net Deferred Tax Asset / Liability	$	15,895

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.  Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets. Distributions received from the Fund’s investments in MLPs generally are comprised of ordinary income, capital gains and return of capital from the energy trusts of MLPs. The Fund records investment income on the ex-date of the distributions. For financial statement purposes, the

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19

	Fund uses return of capital and income estimates to allocate the dividend income received. Such estimates are based on historical information available from each energy trust or MLP and other industry sources. These estimates may subsequently be revised based on information received from energy trusts and MLPs after their tax reporting periods are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Fund.
e).	Distributions to Shareholders – The Fund intends to make quarterly cash distributions to its shareholders. Due to the tax treatment of the Fund’s allocations and distributions from MLPs, a significant portion of the Fund’s distributions to shareholders will likely be treated as return of capital to shareholders for U.S. federal income tax purposes (i.e., as distributions in excess of the Fund’s current and accumulated earnings and profits as described below). However, no assurance can be given in this regard; just as the Fund’s corporate income tax liability can fluctuate materially from year to year, the extent to which the Fund is able to make return-of-capital distributions also can vary materially from year to year depending on a number of different factors, including the composition of the Fund’s portfolio, the level of allocations of net income and other tax items for the Fund from its underlying MLP investments during a particular taxable year, the length of time the Fund has owned the MLP equity securities in its portfolio, and the extent to which the Fund disposes of MLP equity securities during a particular year, including, if necessary, to meet Fund shareholder redemption requests.
	In general, a distribution will constitute a return of capital to a shareholder, rather than a dividend, to the extent such distribution exceeds the Fund’s current and accumulated earnings and profits. The portion of any distribution treated as a return of capital will constitute a tax-free return of capital to the extent of the shareholder’s basis in its Fund shares and thereafter generally will be taxable to the shareholder as a capital gain. Any such distribution, in turn, will result in a reduction in a shareholder’s basis in the Fund’s shares (but not below zero) to the extent of the return of capital and in the shareholder’s recognizing more gain or less loss (that is, will result in an increase of a shareholder’s tax liability) when the shareholder later sells shares of the Fund. To permit the Fund to maintain a more stable distribution rate, the Fund may distribute less or more than the entire amount of cash it receives from its investments in a particular period. Any undistributed cash would be available to supplement future distributions, and until distributed would add to the Fund’s net asset value. Correspondingly, such amounts, once distributed, will be deducted from the Fund’s net asset value. In addition, the Fund may determine not to make distributions in quarters in which the Fund believes that a distribution could cause adverse tax consequences to shareholders, including when the Fund believes that a distribution may not constitute a tax-free return of capital as described above.
f).	Security Transactions – Investment and shareholder transactions are recorded on the trade date.  The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the security lot sold with the net sale proceeds.  Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
g).	Use of Estimates – 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.

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NOTES TO THE FINANCIAL STATEMENTS

h).	Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by (ii) the total number of 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).	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, provide a substitute for purchasing or selling particular securities, or 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 its level of risk more quickly and efficiently than transactions in other types of instruments.  The main reason for 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 11-month period ended October 31, 2018, and the year ended November 30, 2017, the Fund did not hold any derivative instruments.
j).	Partnership Accounting Policy – The Fund records its pro rata share of income/loss and capital gains/losses to the extent of distributions it has received, allocated from the underlying partnerships and accordingly adjusts the cost basis of the underlying partnerships for return of capital.
k).	New Accounting Pronouncements – In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 does not eliminate the requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the changes in unrealized gains and losses for recurring Level 3 fair value measurements. ASU 2018-13 requires that information is provided about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has evaluated the impact of this change in guidance, and due to the permissibility of early adoption, modified the Fund’s fair value disclosures for the current reporting period.
l).	New Rule Issuances – In August 2018, the Securities and Exchange Commission issued Final Rule Release No. 33 10532, Disclosure Update and Simplification, which in part amends certain financial statement disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, GAAP, or changes in the information environment. The amendments are intended to facilitate the disclosure

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of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amendments to Rule 6-04.17 of Regulation S-X (balance sheet) were amended to require presentation of the total, rather than the components of net assets, of distributable earnings on the balance sheet. Consistent with GAAP, funds will be required to disclose total distributable earnings. The amendments to Rule 6-09 of Regulation S-X (statement of changes in net assets) omit the requirement to separately state the sources of distributions paid as well as omit the requirement to parenthetically state the book basis amount of undistributed net investment income. Instead, consistent with GAAP, funds will be required to disclose the total amount of distributions paid, except that any tax return of capital must be separately disclosed. The requirements of the Final Rule Release are effective November 5, 2018 and the Fund’s Statement of Assets and Liabilities and the Statement of Changes in Net Assets for the current and prior reporting period have been modified accordingly.

3).  SECURITIES VALUATION

The Fund follows 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 of 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 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, MLPs, 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

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NOTES TO THE FINANCIAL STATEMENTS

have occurred in the interim.  In certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).

Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, are generally priced at the ending NAV provided by the applicable mutual fund’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.

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 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 values of other similar securities, and news events with direct bearing on 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’ values as determined by the Board or its designee, pursuant to the fair value pricing procedures adopted by the Board, instead of being determined by the market.  Using a fair value

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23

pricing methodology to price a foreign security may result in a value that is different from such foreign security’s most recent closing price and from the value used by other investment companies to calculate their NAVs.  Such securities are generally classified in Level 2 of 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 “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 determinations.  Various inputs are used to determine 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, 2018, are included in the Schedule of Investments.

4).  INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during the 11-month period ended October 31, 2018, were $82,692,307 and $68,209,113, respectively.  For the year ended November 30, 2017, the purchases and sales of investment securities (excluding government and short-term investments) for the Fund were $107,519,630 and $48,698,827, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during the 11-month period ended October 31, 2018, or the year ended November 30, 2017.

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. 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, as amended. During the period of October 26, 2018 (reorganization date), through October 31, 2018, the Fund did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940, as amended.

5).  INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Prior to the close of business on October 26, 2018, BP Capital Fund Advisors, LLC (“BPCFA”) acted as the investment advisor to the Predecessor Fund. BPCFA furnished all investment advice, office space, and facilities, as well as most of the personnel needed by the Fund. As compensation for its services, BPCFA was entitled to a monthly fee from the Predecessor Fund. The fee was based upon the average daily net assets of the Predecessor Fund at an annual rate of 1.10%.  The net investment advisory fees expensed by the Fund during the period from December 1, 2017, to October 26, 2018, and the year ended November 30, 2017, were $1,089,471 and $901,198, respectively.

Effective following the close of business on October 26, 2018, the Advisor (Hennessy Advisors, Inc.) began providing the Fund with investment advisory services under an Investment Advisory Agreement.  The Advisor oversees the provision of investment advice and furnishes office space and facilities, as well as most of the personnel needed by the Fund.  As compensation for its services, the Advisor is entitled to a monthly fee from

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NOTES TO THE FINANCIAL STATEMENTS

the Fund.  The fee is based upon the average daily net assets of the Fund at an annual rate of 1.10%.  The net investment advisory fees expensed by the Fund during the period from October 27, 2018, to October 31, 2018, were $14,710.

Following the close of business on October 26, 2018, the Advisor delegated the day-to-day management of the Fund to a sub-advisor, BPCFA, and began paying a sub-advisory fee, based upon the daily net assets of the Fund, at the rate of 0.40%. The Advisor pays the sub-advisory fees from its own assets, and these fees are not an additional expense of the Fund.

The Advisor has contractually agreed to limit total annual operating expenses to 1.75% of the Fund’s net assets for Investor Class shares and 1.50% of the Fund’s net assets for Institutional Class shares (in each case, excluding all federal, state, and local taxes, interest, brokerage commissions, dividend and interest expenses on short sales, extraordinary items, and acquired fund fees and expenses and other costs incurred in connection with the purchase and sale of securities) through October 25, 2020.  During the period October 26, 2018, through October 31, 2018, the Advisor waived expenses of $2,918.

For a period of three years after the year in which the Advisor waives or reimburses 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. During the period October 26, 2018, through October 31, 2018, cumulative expenses subject to potential recovery under the aforementioned conditions and year of expiration were as follows:

	October 31, 2021
Investor Class	$	597
Institutional Class	$	2,321

During the year ended November 30, 2017, and for the period from December 1, 2017, to the close of business on October 26, 2018, BPCFA had contractually agreed to limit total annual operating expenses and to maintain the expense limitation for the Predecessor Fund on the same terms as described above.  During the year ended November 30, 2017, BPCFA waived expenses of $113,622.  During the period from December 1, 2017, to the close of business on October 26, 2018, BPCFA waived expenses of $62,763.  All previously fees waived by BPCFA are no longer subject to reimbursement from the Fund.

During the period from December 1, 2017, to the close of business on October 26, 2018, and for the year ended November 30, 2017, the Predecessor Fund had a Shareholder Servicing Plan in place on behalf of each share class. Under the Shareholder Servicing Plan, Investor Class and Institutional Class shares were authorized to pay an annual shareholder servicing fee of up to 0.10% of each class’s average daily net assets. This fee was used to finance certain activities related to servicing and maintaining shareholder accounts and is included in sub-transfer agent expenses in the Statement of Operations.

Effective following the close of business on October 26, 2018, the Board approved a Shareholder Servicing Agreement for Investor Class shares of the Fund, which was instituted to compensate the Advisor for the non-investment advisory 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. The shareholder servicing fees expensed by the Fund during the period from October 27, 2018, to October 31, 2018, were $273.

During the period from December 1, 2017, to the close of business on October 26, 2018, and for the year ended November 30, 2017, the Predecessor Fund had a distribution plan in place pursuant to Rule 12b-1 under the 1940 Act. The distribution plan required the

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25

payment of a monthly service fee to Foreside Fund Services, LLC at an annual rate of 0.25% of the average daily net assets attributed to Investor Class shares. Effective following the close of business on October 26, 2018, the Fund 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 is currently only using up to 0.15% of its average daily net assets attributable to Investor Class shares 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, printing and mailing of prospectuses to other than current shareholders, 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 distribution fees expensed by the Fund during the 11-month period ended October 31, 2018, and the year ended November 30, 2017, are included in the Statement of Operations.

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.  The sub-transfer agent fees (inclusive of the fees under the shareholder servicing plan for the Predecessor Fund described above) expensed by the Fund during the 11-month period ended October 31, 2018, and the year ended November 30, 2017, are included in the Statement of Operations.

U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services (“Fund Services”) provides the Fund with administrative, fund accounting, and transfer agent services. As administrator, Fund Services 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. U.S. Bank N.A., an affiliate of Fund Services, serves as the Fund’s custodian. The servicing agreements between the Trust and Fund Services and U.S. Bank N.A. contain a fee schedule that is inclusive of administrative, fund accounting, custody, and transfer agent fees. The administrative, fund accounting, custody, and transfer agent fees expensed by the Fund during the 11-month period ended October 31, 2018, and the year ended November 30, 2017, are included in the Statement of Operations.

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 Fund Services and U.S. Bank N.A.

During the period from December 1, 2017, to the close of business on October 26, 2018, and the year ended November 30, 2017, the officers and Chief Compliance Officer of the Predecessor Fund were employees of Fund Services.  Chief Compliance Officer Fees paid by the Predecessor Fund to Fund Services during the period from December 1, 2017, to October 26, 2018 and the year ended November 30, 2017, were $10,271 and $10,807, respectively.  Effective following the close of business on October 26, 2018, 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

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NOTES TO THE FINANCIAL STATEMENTS

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. The Fund did not incur any compliance expense during the period from October 27, 2018, to October 31, 2018.

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

During the year ended November 30, 2017, the Predecessor Fund had a $10,000,000 line of credit with U.S. Bank N.A. for temporary or extraordinary purposes. During such period, the Predecessor Fund did not have any borrowings on the line of credit.  During the period from December 1, 2017, through October 26, 2018, the Predecessor Fund had an outstanding average daily balance and a weighted average interest rate of $109,400 and 4.76%, respectively. The interest expensed by the Predecessor Fund during such period is included in the Statement of Operations. The maximum amount outstanding for the Predecessor Fund during such period was $2,560,000. As of October 26, 2018, the Predecessor Fund did not have any borrowings outstanding under the line of credit.

After the close of business on October 26, 2018, the Fund had 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). From October 29, 2018, through October 31, 2018, the Fund had an outstanding average daily balance and a weighted average interest rate of $86,600 and 5.25%, respectively. The interest expensed by the Fund during such period is included in the Statement of Operations. The maximum amount outstanding for the Fund during such period was $269,000. As of October 31, 2018, the Fund had a loan payable of $127,000.

8).  FEDERAL TAX INFORMATION

As of October 31, 2018, the components of accumulated earnings (losses) for income tax purposes were as follows:

	Investments
Cost of investments for tax purposes	$	100,000,804
Gross tax unrealized appreciation	$	4,967,160
Gross tax unrealized depreciation		(7,328,904	)
Net tax unrealized appreciation	$	(2,361,744	)

To the extent the Fund has a net capital loss in any tax year, the net capital loss generally can be carried back three years and forward five years to offset any capital gains realized during those other years. To the extent the Fund has a net operating loss in any

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tax year the net operating loss generally can be carried back two years or forward twenty years to reduce the Fund’s net income realized during those other years. In the event a capital loss carryover or net operating loss carryover cannot be utilized in the carryover periods, the Fund’s U.S. federal income tax liability may be higher than expected, which will result in less cash available to distribute to shareholders. As of October 31, 2018, the Fund had capital loss carryforwards that expire as follows:

Amount		Expiration
$	1,511,860	10/31/2020
	2,137,300	10/31/2021
	7,987,383	10/31/2023

As of October 31, 2018, the Fund had net operating loss carryforwards that expire as follows:

Amount		Expiration
$	1,937,148	10/31/2037
	539,645	Indefinite

Total income taxes have been computed by applying the federal statutory income tax rate of 35% plus a blended state income tax rate. The Fund applied this effective rate to net investment income, realized and unrealized gains on investments before taxes in computing its total income taxes.

Total Tax Expense (Benefit)	Total
Tax expense (benefit) at statutory rates	$	(1,680,187	)
State income tax expense, net of federal benefit		(200,745	)
Tax expense (benefit) on permanent items(1)		(42,681	)
Tax expense (benefit) due to change in effective state rates		—
Total current tax expense (benefit)		—
Change in Federal/State rate due to tax reform		986,505
Change in valuation allowance		921,213
Total tax expense	$	(15,895	)

⁽¹⁾  Permanent items are made up of dividends received deductions.

The Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. Management has analyzed the Fund’s tax positions and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on U.S. federal tax returns and state tax returns filed or expected to be filed since inception of the Fund. No income tax returns are currently under examination. Generally, tax authorities can examine all tax returns filed for the last three years. Due to the nature of the Fund’s investments, the Fund may be required to file income tax returns in several states. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially.

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NOTES TO THE FINANCIAL STATEMENTS

During the 11-month period ended October 31, 2018 (estimated), and the years ended November 30, 2017 and 2016, the tax character of distributions paid by the Fund was as follows:

	11-Month Period Ended		Year Ended		Year Ended
	October 31, 2018		November 30, 2017		November 30, 2016
Ordinary income(1)	$	—	$	637,466	$	—
Long-term capital gain		—		—		—
Return of capital		7,826,085		4,084,626		2,419,383
	$	7,826,085	$	4,722,092	$	2,419,383

⁽¹⁾  Ordinary income includes short-term capital gains.

9).  AGREEMENT AND PLAN OF REORGANIZATION

On October 22, 2018, shareholders of the Predecessor Fund approved an Agreement and Plan of Reorganization between the Trust, on behalf of the Fund, and Professionally Managed Portfolios, a Massachusetts business Trust, on behalf of the Predecessor Fund. The Agreement and Plan of Reorganization provided for the transfer of all of the assets of the Predecessor Fund to the Fund and the assumption of the liabilities (other than any excluded liabilities) of the Predecessor Fund by the Fund. The Fund was created to carry out the reorganization and has a substantially similar investment objective and substantially similar principal investment strategies as the Predecessor Fund. The reorganization was effective as of the close of business on October 26, 2018. The following table illustrates the specifics of the reorganization of the Predecessor Fund into the Fund:

	Shares Issued
Predecessor Fund	to Shareholders of	Fund	Combined	Tax Status
Net Assets	Predecessor Fund	Net Assets	Net Assets	of Transfer
$98,129,391(1)	7,698,159	$0	$98,129,391	Non-taxable

⁽¹⁾ Includes accumulated net investment loss, accumulated realized gains and unrealized appreciation in the amounts of $(15,348,815), $(7,211,324) and $(5,832,377), respectively.

10).  MATTERS SUBMITTED TO A SHAREHOLDER VOTE (Unaudited)

A special meeting of shareholders of the Predecessor Fund was held on October 22, 2018, and the following matter was approved:

Proposal to approve an Agreement and Plan of Reorganization pursuant to which all of the assets of the BP Capital TwinLine MLP Fund will be transferred to the Hennessy BP Midstream Fund, a newly formed series of Hennessy Funds Trust, in exchange for Investor Class and Institutional Class shares of the Hennessy BP Midstream Fund, distributed pro rata by the BP Capital TwinLine MLP Fund to its Class A and Class I shareholders, and the Hennessy BP Midstream Fund’s assumption of BP Capital TwinLine MLP Fund’s stated liabilities.

For: 4,802,637

Against: 28,256

Abstain: 22,075

Nonvotes: 0

11).  EVENTS SUBSEQUENT TO PERIOD END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2018, 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

To the Board of Trustees of Hennessy Funds Trust

and the shareholders of Hennessy BP Midstream Fund

Novato, CA

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Hennessy BP Midstream Fund (the “Fund”), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2018, the related statements of operations for the eleven months ended October 31, 2018 and the year ended November 30, 2017, the statements of changes in net assets for the eleven months ended October 31, 2018 and each of the two years ended November 30, 2017, financial highlights for the eleven months ended October 31, 2018 and each of the three years ended November 30, 2017, and for the period from December 31, 2013 (commencement of operations) to November 30, 2014, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, the results of its operations, the changes in its net assets and the financial highlights for each of periods noted above, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management.  Our responsibility is to express an opinion on the Fund’s financial statements based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We have served as the auditor of one or more of the funds in the Trust since 2002.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.  The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2018 by correspondence with the custodian.  We believe that our audits provide a reasonable basis for our opinion.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2018

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS

Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Funds 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 to the Board of Trustees (“Advisers”) 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: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board of Trustees 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 Trustee oversees the 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 worked for the	None.
(1981)		Sutter Health organization since
Adviser to the Board		2011 in various positions. He has
		served as the Chief Executive Officer
		of the Sutter Roseville Medical
		Center since 2018. From 2016 through
		2018, he served as the Vice President
		of Strategy for the Sutter Health Valley
		Area, which includes 11 hospitals,
		13 ambulatory surgery centers,
		16,000 employees, and 1,900 physicians.
		From 2013 through 2016, Mr. Alexander
		served as Sutter Novato Community
		Hospital’s Chief Administrative Officer,
		and from 2011 through 2012, he
		served as a Director of Strategy
		within Sutter’s West Bay Region.

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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. Neil Hennessy has been employed	Hennessy
(1956)	a Trustee and	by Hennessy Advisors, Inc. since	Advisors, Inc.
Trustee, Chairman of	June 2008 as	1989 and currently serves as its
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 President, Chief Operating
Executive Vice President		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 Secretary
Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013 and currently serves as its Chief
Senior Vice President		Compliance Officer and Senior Vice President.
and Head of Distribution
Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)(3)		as its General Counsel since June 2013.
Senior Vice President and
Chief Compliance Officer

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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)(4)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Large Cap Financial Fund and the Hennessy Small
and Portfolio Manager		Cap Financial Fund since inception. Mr. Ellison also served as a
		Portfolio Manager of the Hennessy Technology Fund from its
		inception until February 2017. Mr. Ellison served as Director,
		CIO and President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.
Ryan C. Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)(5)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Gas Utility Fund, the Hennessy Large Cap Financial
and Portfolio Manager		Fund, and the Hennessy Small 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. Mr. Kelley has also served as a Portfolio
		Manager of the Hennessy Cornerstone Growth Fund, the
		Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
		Cornerstone Large Growth Fund, and the Hennessy
		Cornerstone Value Fund since February 2017, as a Co-Portfolio
		Manager of the Hennessy Technology Fund since February
		2017, and as a Portfolio Manager of the Hennessy Total Return
		Fund and the Hennessy Balanced Fund since May 2018.
		Mr. Kelley served as Portfolio Manager of FBR Fund Advisers,
		Inc. from January 2008 to October 2012.
Tania Kelley	October 2003	Ms. Kelley has been employed by Hennessy Advisors, Inc.
(1965)		since October 2003.
Senior Vice President
and Head of Marketing
Daniel P. Hennessy	December 2016	Mr. Daniel Hennessy has been employed by Hennessy Advisors,
(1990)		Inc. since 2015. He has served as an Associate Analyst or
Vice President		Analyst of the Hennessy Technology Fund since February 2017.
and Analyst		Mr. Daniel Hennessy previously served as a Mutual Fund
		Specialist at U.S. Bancorp Fund Services, LLC (now doing
		business as U.S. Bank Global Fund Services) from November
		2014 to July 2015. Prior to that, he attended the University of
		San Diego, where he earned a degree in Political Science.

_______________

(1)	Messrs. DeSousa, Doyle, N. 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 the Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
(2)	Mr. N. 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 this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
(4)	The address of this officer is 101 Federal Street, Suite 1900, Boston, MA 02110.
(5)	The address of this officer is 1340 Environ Way, Suite 332, Chapel Hill, NC 27517.

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Expense Example (Unaudited)

October 31, 2018

As a shareholder of the Fund, you incur 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, 2018, through October 31, 2018.

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. Bank Global Fund Services, 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” or “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. 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.

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EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period(1)
	Account Value	Account Value	May 1, 2018 –
	May 1, 2018	October 31, 2018	October 31, 2018
Investor Class
Actual	$1,000.00	$   981.00	$8.69
Hypothetical (5% return before expenses)	$1,000.00	$1,016.43	$8.84
Institutional Class
Actual	$1,000.00	$   982.70	$7.45
Hypothetical (5% return before expenses)	$1,000.00	$1,017.69	$7.58

⁽¹⁾ Expenses are equal to the Fund’s annualized expense ratio of 1.74% for Investor Class shares or 1.49% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/365 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

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 www.hennessyfunds.com/proxy-voting/voting-policy; or (3) on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at www.hennessyfunds.com/proxy-voting/voting-record 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 a 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 Forms N-Q are available on the SEC’s website at www.sec.gov.  Information included in the Fund’s Forms N-Q will also be available upon request by calling 1-800-966-4354.

Federal Tax Distribution Information

(Unaudited)

For fiscal year 2018, 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 0.00%.

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for fiscal year 2018 was 0.00%.

The percentage of taxable ordinary income distributions that were 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 0.00%.

Important Notice Regarding Delivery

of Shareholder Documents

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of shareholder reports, proxy statements, and prospectuses to shareholders who share an address and have the same last name. This process does not apply to account statements. You may request an individual copy of a shareholder document at any time. If you would like to receive separate mailings of shareholder documents, please call U.S. Bank Global Fund Services at 1-800-261-6950 or 1-414-765-4124, and individual delivery will begin within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact such intermediary directly to request individual delivery.

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PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS

Board Approval of Investment Advisory

Agreements (Unaudited)

At its meeting on October 7, 2018, the Board of Trustees of the Fund (the “Board,” and the members thereof, the “Trustees”) unanimously approved the new investment advisory agreement of the Fund with Hennessy Advisors, Inc. (the “Advisor”) and the new sub-advisory agreement of the Fund between the Advisor and BP Capital Fund Advisors, LLC (the “Sub-Advisor”). The Fund was established in connection with an agreement and plan of reorganization between the Trust, with respect to the Fund, and Professionally Managed Portfolios, with respect to BP Capital TwinLine MLP Fund (the “predecessor Fund”), pursuant to which the predecessor Fund was reorganized into the Fund.

As part of the process of approving the advisory and sub-advisory agreements, the Trustees reviewed their fiduciary duties with respect to approving the advisory and sub-advisory agreements and the relevant factors for them to consider. In addition, the Trustees who are not deemed “interested persons” (as defined by the Investment Company Act of 1940, as amended) of the Fund (the “Independent Trustees”) met in executive session to discuss the approval of the advisory and sub-advisory agreements.

In advance of the meeting, the Advisor sent detailed information to the Trustees to assist them in their evaluation of the advisory and sub-advisory agreements. This information included, but was not limited to, the following:

(1)	A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the advisory and sub-advisory agreements and the relevant factors for consideration;
(2)	A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the advisory and sub-advisory agreements and also referenced the documents that had been provided to help the Board assess each such factor;
(3)	An inventory of the range of services to be provided by the Advisor and the Sub-Advisor to the Fund, and the distinction between the services to be provided by the Advisor as compared to the services to be provided by the Sub-Advisor;
(4)	A written discussion of economies of scale;
(5)	The forms of advisory and sub-advisory agreements;
(6)	A recent fact sheet of the predecessor Fund, which included, among other things, performance information over various periods during which the Sub-Advisor was the investment advisor to the predecessor Fund;
(7)	A peer expense comparison for the anticipated net expense ratio and the investment advisory fee of the Fund;
(8)	The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
(9)	Information about the Fund’s compliance program;
(10)	The Advisor’s current Form ADV Part 1A (noting that the Advisor is not required to prepare and maintain Form ADV Part 2A or 2B);
(11)	A completed questionnaire from the Sub-Advisor;
(12)	The Sub-Advisor’s Code of Ethics;
(13)	The Sub-Advisor’s Form ADV Parts 1A, 2A, and 2B; and
(14)	Financial information of the Sub-Advisor.

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All of the factors discussed were considered as a whole by the Trustees, as well as by the Independent Trustees meeting in executive session. The Trustees viewed the factors in their totality, with no single factor being the principal or determinative factor in the Trustees’ determination of whether to approve the advisory and sub-advisory agreements.

Prior to approving the advisory and sub-advisory agreements, the Trustees, including the Independent Trustees in executive session, considered, among other items:

(1)	The nature and quality of the advisory services to be provided by the Advisor and the Sub-Advisor;
(2)	A comparison of the anticipated fees and expenses of the Fund to other similar funds;
(3)	Whether economies of scale would be recognized by the Fund;
(4)	The costs and profitability of the Fund to the Advisor and the Sub-Advisor;
(5)	The performance of the predecessor Fund; and
(6)	Any benefits to the Advisor and the Sub-Advisor from serving as an investment advisor to the Fund (other than the advisory fee and sub-advisory fee).

The material considerations and determinations of the Trustees, including the Independent Trustees, were as follows:

(1) The Trustees considered the services identified below that are, or will be, provided by the Advisor. Based on this review, the Trustees concluded that the Advisor will provide high-quality services to the Fund, and they noted that their overall confidence in the Advisor is high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the other Hennessy Funds by the Advisor and that the nature and extent of the services to be provided by the Advisor are appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.

(a)	The Advisor will oversee the Sub-Advisor for the Fund, and the Sub-Advisor will act as the portfolio manager for the Fund.
(b)	The Advisor will perform a daily reconciliation of portfolio positions and cash for the Fund.
(c)	The Advisor will monitor the Fund’s compliance with its investment objectives and restrictions.
(d)	The Advisor will monitor compliance with federal securities laws and will perform or continue to perform activities such as maintaining a compliance program, conducting ongoing reviews of the compliance programs of the Sub-Advisor (including its Code of Ethics) and the Fund’s other service providers, monitoring incidents of abusive trading practices, reviewing Fund expense accruals, payments, and fixed expense ratios, evaluating insurance providers for fidelity bond, D&O/E&O, and cybersecurity insurance coverage, conducting employee compliance training, reviewing reports provided by service providers, maintaining books and records, and preparing an annual compliance report for the Board.
(e)	The Advisor will oversee the selection and continued employment of the Sub-Advisor, review the Fund’s investment performance, and monitor the Sub-Advisor’s adherence to the Fund’s investment objectives, policies, and restrictions.

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BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS

(f)	The Advisor will review the investment performance of the Fund on a regular basis, including a written summary prepared by the Fund’s portfolio managers of the Fund’s performance for the most recent 12-month period for each annual report of the Fund (or, for the 2018 annual report, the Fund’s most recent 11-month period).
(g)	The Advisor oversees service providers that will provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services to the Fund.
(h)	The Advisor maintains in-house marketing and distribution departments that will provide marketing and distribution services on behalf of the Fund.
(i)	The Advisor will be actively involved with preparing regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
(j)	The Advisor will oversee distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Waterhouse, and Pershing. The Advisor participates in “no transaction fee” (“NTF”) programs with these companies on behalf of the Hennessy Funds, which allows customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
(k)	The Advisor pays the incentive compensation of the Trust’s compliance officers and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight personnel, as well as management executives, all of whom will provide services to the Fund.
(l)	The Advisor provides a quarterly compliance certification to the Board.
(m)	The Advisor prepares or reviews Board materials, frequently presents to the Board or leads Board discussions, prepares or reviews meeting minutes, and arranges for Board training and education.

(2) The Trustees considered the services identified below that will be provided by the Sub-Advisor. Based on this review, the Trustees concluded that the Sub-Advisor will provide high-quality services to the Fund. The Trustees also concluded that they were satisfied with the portfolio management services that the Sub-Advisor provided to the Predecessor Fund.

(a) The Sub-Advisor will act as the portfolio manager for the Fund. In this capacity, the Sub-Advisor will do the following:

(i)	manage the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
(ii)	seek best execution for the Fund’s portfolio;
(iii)	manage the use of soft dollars for the Fund; and
(iv)	manage proxy voting for the Fund.

(b) The Sub-Advisor will ensure that its compliance program includes policies and procedures relevant to the Fund and the Sub-Advisor’s duties as a portfolio manager to the Fund.

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39

(c)	The Sub-Advisor will prepare a written summary of the Fund’s performance for the most recent 12-month period for each annual report of the Fund (or, for the 2018 annual report, the Fund’s most recent 11-month period).
(d)	The Sub-Advisor will provide a quarterly compliance certification to the Board regarding trading and allocation practices, supervisory matters, its compliance program (including its code of ethics), compliance with the Fund’s policies, and general firm updates.

(3)	The Trustees considered the distinction between the services to be performed by the Advisor and the Sub-Advisor. The Trustees noted that the management of the Fund, including the oversight of the Sub-Advisor, would involve more comprehensive and substantive duties than the duties of the Sub-Advisor. Specifically, the Trustees considered the lists of services identified above and concluded that the services to be performed by the Advisor for the Fund would require a higher level of service and oversight than the services to be performed by the Sub-Advisor. Based on this determination, the Trustees concluded that the differential in advisory fees between the Advisor and the Sub-Advisor is reasonable.
(4)	The Trustees compared the performance of the predecessor Fund to benchmark indices over various periods and noted that the investment objectives and investment strategies of the Fund would be substantially similar to those of the predecessor Fund. Based on all such information, the Trustees believe that the Sub-Advisor had managed the predecessor Fund, and the Advisor and the Sub-Advisor will manage the Fund, in a manner that is materially consistent with its stated investment objective and style. The Trustees concluded that the approval of the advisory and sub-advisory agreements was warranted.
(5)	The Trustees reviewed the advisory fees and anticipated overall expense ratios of the Fund compared to other funds similar in asset size and investment objective using data from Morningstar. As part of the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials considered at the meeting. The Trustees determined that the advisory fee and anticipated overall expense ratio of the Fund falls within the range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are reasonable and warranted approval of the advisory and sub-advisory agreements.
(6)	The Trustees also considered whether the Advisor was likely to realize economies of scale that it should share with the Fund’s shareholders. The Trustees noted that many of the expenses that the Advisor will incur to manage the Fund are asset-based fees, so the Advisor would not realize material economies of scale as the assets of the Fund increase. For example, mutual fund platform fees would increase as the Fund’s assets grow. The Trustees also considered the Advisor’s agreement to waive fees for the Fund for two years. The Board noted that at current asset levels it did not appear likely that the Advisor would realize economies of scale and concluded that it would continue to monitor economies of scale in the future as circumstances changed.
(7)	The Trustees considered the profitability of the Advisor and the Sub-Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor has put into managing

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BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS

	and distributing the Fund. The Trustees then concluded that the anticipated profits of the Advisor and the Sub-Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
(8)	The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees, along with a very low level of turnover, and concluded that this was beneficial to the Fund and its shareholders.  The Trustees also considered the business backgrounds and key employees of the Sub-Advisor and determined that they believe these employees have the necessary expertise to manage the portfolio of the Fund for the benefit of the Fund and its shareholders.
(9)	The Trustees considered any anticipated benefits to the Advisor and the Sub-Advisor from serving as advisors to the Fund other than the advisory fee or sub-advisory fee. The Trustees noted that the Advisor and the Sub-Advisor in the future may derive ancillary benefits from, by way of example, their association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that they expected any such products and services to be used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits expected to be realized by the Advisor and the Sub-Advisor from their relationships with the Fund were reasonable.

After reviewing the materials provided at the meeting and management’s presentation, as well as other factors that the Trustees deemed relevant, the Trustees, including the Independent Trustees, approved the new advisory and sub-advisory agreements.

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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 will be shared with non-affiliated third parties.

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PRIVACY POLICY

(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 Boulevard, Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT, &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

d/b/a U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Drive, 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

Two Liberty Place

50 South 16th Street, Suite 2900

Philadelphia, Pennsylvania 19102-2529

DISTRIBUTOR

Quasar Distributors, LLC

777 East Wisconsin Avenue

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, 2018

HENNESSY GAS UTILITY FUND

Investor Class  GASFX

Institutional Class  HGASX

hennessyfunds.com  |  1-800-966-4354

(This Page Intentionally Left Blank.)

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	17
Report of Independent Registered Public Accounting Firm	25
Trustees and Officers of the Fund	26
Expense Example	30
Proxy Voting Policy and Proxy Voting Records	32
Quarterly Schedule of Investments	32
Federal Tax Distribution Information	32
Important Notice Regarding Delivery of Shareholder Documents	32
Privacy Policy	33

HENNESSY FUNDS 1-800-966-4354

December 2018

Dear Hennessy Funds Shareholder:

Over the past year, we have witnessed the return of market volatility. U.S. stocks still registered healthy gains, bolstered by the impact on corporate profits of the successful passage of the tax reform bill in December 2017. However, concerns over potential trade disruptions, especially between the U.S. and China, and worries over higher short-term interest rates, which many believe could possibly trigger a recession down the road, put downward pressure on equity valuations.

The U.S. economy performed well over the period, and actually achieved an acceleration in GDP growth to over 3% on an annualized basis in the second and third quarters of calendar year 2018. During the past year, companies continued to hire workers, adding over 200,000 jobs per month on average, sending the unemployment rate down to 3.7% in October, which is the lowest it has been since 1969. Consumer confidence is high and still rising, and corporate profits reached record levels in the third quarter of calendar year 2018, posting a year-over-year increase of 26% for the companies in the S&P 500 Index.

The Federal Reserve, confident about the strength of the economy and mindful of a tight labor market, raised short-term interest rates four times over the last year, by a quarter point each time. Long-term bond yields also rose, driven higher primarily by evidence of faster wage growth, pushing the U.S. 10-year Treasury bond over 3% for the first time since 2013.

As I write this, we are experiencing the market’s 20th downturn since 2010. I have been saying that every bull market experiences volatility and pullbacks. Many financial commentators think this bull market is “long in the tooth.” I do not agree with them. I believe stock valuations are still very reasonable. The prospective price to earnings multiple for the Dow Jones Industrial Average has come down from almost 20x at the end of 2017 to 16x, just above its 10-year average of 15x. The prospective PE multiple for the S&P 500 Index has also come down, from 20x to 17x, and compares favorably to its 10-year average of 16x.

Cash, meanwhile, continues to build up on corporate balance sheets. The companies in the S&P 500 Index reported a total of over $5.4 trillion in cash and marketable securities in their latest filings. Companies have been spending some of their cash, increasing their investment spending and laying the groundwork for future earnings growth. However, they have also been returning capital to shareholders. S&P 500 Index companies announced $433.6 billion in share repurchases during the second quarter of calendar year 2018, nearly doubling the previous record of $242.1 billion set in the first quarter. Companies are also raising their dividends.

In addition, I believe the Federal Reserve will take care not to raise interest rates too high or too fast and endanger the economic expansion. While wage growth has risen to over 3% in October, other measures of inflationary pressure, such as the Consumer Price Index and the Producer Price Index, still show prices increasing at a more moderate pace, closer to 2%. Given continued evidence of modest rates of inflation, I believe the Fed will be able to maintain its gradual pace of interest rate hikes.

Finally and importantly, I still see no signs of euphoria in this market. In my opinion, the enthusiasm present earlier in the year, which followed the significant reduction in corporate income tax rates, has largely evaporated, and it has been replaced with anxiety

HENNESSYFUNDS.COM

2

LETTER TO SHAREHOLDERS

over higher interest rates and their potential impact on growth. In the past, I have likened the current bull market to that of 1982-2000, and I still believe this comparison holds true. I am confident in the strength of the market today and believe the economy will continue to grow in the coming year, albeit at a more moderate pace.

Thank you for your continued confidence and investment in the Hennessy 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 commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is a valuation measure and is calculated by dividing a company’s market price per share by its earnings per share. Earnings growth is not a measure of a fund’s future performance.

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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, 2018

	One	Five	Ten
	Year	Years	Years
Hennessy Gas Utility Fund –
Investor Class (GASFX)	-2.86%	5.89%	11.52%
Hennessy Gas Utility Fund –
Institutional Class (HGASX)(1)	-2.51%	6.02%	11.59%
AGA Stock Index	-1.58%	7.06%	12.45%
S&P 500 Index	7.35%	11.34%	13.24%

Expense ratios:  1.01% (Investor Class); 0.64% (Institutional Class)

⁽¹⁾ The inception date of Institutional Class shares is March 1, 2017. Performance shown prior to the inception of Institutional Class shares reflects the performance of Investor Class shares and includes expenses that are not applicable to, and are higher than, those of Institutional Class shares.

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 table does 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 www.hennessyfunds.com. Performance for periods on or prior to October 26, 2012, is that of the FBR Gas Utility Index Fund.

The AGA Stock Index is a market capitalization-weighted index, adjusted monthly, consisting of member companies of the American Gas Association. The S&P 500 Index is commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

The expense ratios presented are from the most recent prospectus. The expense ratios for the current reporting period are available in the Financial Highlights section of this report.

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PERFORMANCE OVERVIEW

PERFORMANCE NARRATIVE

Portfolio Manager Ryan C. Kelley

Performance:

For the 12-month period ended October 31, 2018, the Investor Class of the Hennessy Gas Utility Fund returned -2.86%, underperforming both the AGA Stock Index (the Fund’s primary benchmark) and the S&P 500 Index, which returned -1.58% and 7.35%, respectively, for the same period.

The Fund slightly underperformed its primary benchmark due to Fund expenses, the timing of cash flows, trading costs, and the impact of holding cash. The Fund also underperformed the broader domestic equity market, as represented by the S&P 500 Index, as a result of investor rotation out of utilities and into consumer-oriented industry groups such as retailers and healthcare service companies. Liquid natural gas producer Cheniere Energy, Inc., natural gas distributor Atmos Energy Corp., and utility company Public Service Enterprises Group, Inc. were among the holdings that contributed positively to relative performance. Pipeline company TransCanada Corp., utility company PG&E Corp., and pipeline and midstream distributor Enbridge, Inc. performed poorly and were among the holdings that detracted most from relative performance over the period.

The Fund continues to hold all of the companies mentioned.

Portfolio Strategy:

The Fund’s objective is to maintain a high correlation with the AGA Stock Index. The Fund seeks to achieve this goal by owning all of the companies in the AGA Stock Index in substantially the same proportion as the AGA Stock Index. The investment thesis of the Fund is that competitive and stable pricing, abundant domestic supply, and new sources and uses of natural gas should lead to long-term, steady growth in demand and drive growth in natural gas distribution. This should, in turn, drive long-term growth in earnings of the companies in the Fund. In addition, we believe that natural gas’s position as the cleanest of the fossil fuels should lead to additional increased demand, particularly from the electricity generation industry.

Investment Commentary:

Despite the underperformance versus the broader equity market this year, we believe the thesis of the Fund remains firmly in place. The production of natural gas in the United States, in particular from shale producers, continues to grow steadily. Demand for natural gas from domestic sources, especially the power industry, also continues to grow. In addition, exports of natural gas via pipelines to Mexico and in the form of liquid natural gas to the rest of the world are increasing steadily. The Fund continues to seek total return by investing in natural gas distribution companies with the potential for both income and long-term capital appreciation.

_______________

Opinions expressed are those of the Portfolio Manager 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.

Investments in foreign securities may involve political, economic, and currency risks, greater volatility, and differences in accounting methods. Investments are focused in the natural gas distribution and transmission industry; sector funds may be subject to a higher degree of market risk. Please see the Fund’s prospectus for a more complete discussion of these and other risks.

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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.

Cash flow refers to the net amount of cash and cash equivalents being transferred into and out of a company. Correlation measures the relationship between the changes of two or more financial variables over time.

HENNESSYFUNDS.COM

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PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as ofOctober 31, 2018

HENNESSY GAS UTILITY FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)	% NET ASSETS
Kinder Morgan, Inc.	5.04%
The Southern Co.	5.02%
Cheniere Energy, Inc.	5.01%
Enbridge, Inc.	5.01%
Atmos Energy Corp.	4.98%
Dominion Resources, Inc.	4.94%
TransCanada Corp.	4.90%
Sempra Energy	4.83%
National Grid PLC - ADR	4.69%
WEC Energy Group, Inc.	3.94%

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.

The Global Industry Classification Standard (GICS^®) was developed by and is the exclusive property and a service mark of MSCI, Inc. and Standard & Poor Financial Services LLC.  It has been licensed for use by the Hennessy Funds.

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COMMON STOCKS – 97.82%	Number				% of
	of Shares		Value		Net Assets
Energy – 21.27%
Cheniere Energy, Inc. (a)		773,917	$	46,752,326		5.01	%
Enbridge, Inc. (b)		1,500,765		46,688,799		5.01	%
EQT Corp.		132,682		4,507,208		0.48	%
Kinder Morgan, Inc.		2,764,101		47,044,999		5.04	%
Tellurian, Inc. (a)		965,690		7,725,520		0.83	%
TransCanada Corp. (b)		1,212,853		45,748,815		4.90	%
				198,467,667		21.27	%
Financials – 0.56%
Berkshire Hathaway, Inc., Class A (a)		17		5,230,985		0.56	%
Utilities – 75.99%
Algonquin Power & Utilities Corp. (b)		293,664		2,930,767		0.31	%
ALLETE, Inc.		1,475		109,150		0.01	%
Ameren Corp.		113,240		7,313,039		0.78	%
Atmos Energy Corp.		499,086		46,454,925		4.98	%
Avangrid, Inc.		19,200		902,592		0.10	%
Avista Corp.		64,572		3,320,292		0.36	%
Black Hills Corp.		139,547		8,303,046		0.89	%
Centerpoint Energy, Inc.		678,828		18,335,144		1.97	%
Chesapeake Utilities Corp.		63,658		5,057,628		0.54	%
CMS Energy Corp.		456,998		22,630,541		2.43	%
Consolidated Edison, Inc.		309,936		23,555,136		2.53	%
Corning Natural Gas Holding Corp.		14,599		283,520		0.03	%
Dominion Resources, Inc.		645,296		46,087,040		4.94	%
DTE Energy Co.		211,804		23,806,770		2.55	%
Duke Energy Corp.		303,787		25,101,920		2.69	%
Entergy Corp.		8,260		693,427		0.07	%
Eversource Energy		162,075		10,252,865		1.10	%
Exelon Corp.		264,631		11,593,484		1.24	%
Fortis, Inc. (b)		357,776		11,817,341		1.27	%
MDU Resources Group, Inc.		450,407		11,242,159		1.21	%
MGE Energy, Inc.		33,229		2,076,148		0.22	%
National Fuel Gas Co.		289,924		15,739,974		1.69	%
National Grid PLC – ADR (b)		817,844		43,754,654		4.69	%
New Jersey Resources Corp.		296,634		13,378,193		1.43	%

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

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SCHEDULE OF INVESTMENTS

COMMON STOCKS	Number				% of
	of Shares		Value		Net Assets
Utilities (Continued)
NiSource, Inc.		1,128,781	$	28,625,886		3.07	%
Northwest Natural Holding Co.		149,803		9,705,736		1.04	%
NorthWestern Corp.		52,398		3,078,906		0.33	%
ONE Gas, Inc.		273,675		21,595,694		2.32	%
PG&E Corp. (a)		677,449		31,711,388		3.40	%
PPL Corp.		317,419		9,649,538		1.03	%
Public Service Enterprise Group, Inc.		449,490		24,016,251		2.57	%
RGC Resources, Inc.		44,091		1,251,303		0.13	%
SCANA Corp.		127,966		5,125,038		0.55	%
Sempra Energy		408,840		45,021,461		4.83	%
South Jersey Industries, Inc.		353,671		10,447,441		1.12	%
Southwest Gas Holdings, Inc.		223,317		17,255,705		1.85	%
Spire, Inc.		221,491		16,075,817		1.72	%
The Southern Co.		1,040,200		46,840,206		5.02	%
UGI Corp.		236,752		12,562,061		1.35	%
Unitil Corp.		45,298		2,152,108		0.23	%
Vectren Corp.		237,628		16,997,531		1.82	%
WEC Energy Group, Inc.		537,740		36,781,416		3.94	%
Xcel Energy, Inc.		311,399		15,261,665		1.64	%
				708,894,906		75.99	%
Total Common Stocks
(Cost $554,235,399)				912,593,558		97.82	%
PARTNERSHIPS – 1.06%
Energy – 1.06%
Plains GP Holdings L.P., Class A		464,255		9,921,130		1.06	%
Total Partnerships
(Cost $10,782,802)				9,921,130		1.06	%

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

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SHORT-TERM INVESTMENTS – 1.20%	Number					% of
	of Shares		Value			Net Assets
Money Market Funds – 1.20%
Fidelity Government Portfolio, Institutional Class, 2.06% (c)		11,158,332	$	11,158,332			1.20	%
Total Short-Term Investments
(Cost $11,158,332)				11,158,332			1.20	%
Total Investments
(Cost $576,176,533) – 100.08%				933,673,020			100.08	%
Liabilities in Excess of Other Assets – (0.08)%				(737,909	)		(0.08	)%
TOTAL NET ASSETS – 100.00%			$	932,935,111			100.00	%

Percentages are stated as a percent of net assets.

PLC – Public Limited Company

ADR – American Depositary Receipt

(a)	Non-income producing security.
(b)	U.S.-traded security of a foreign corporation.
(c)	The rate listed is the fund’s seven-day yield as of October 31, 2018.

Summary of Fair Value Exposure at October 31, 2018

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2018 (See Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Energy	$	198,467,667	$	—	$	—	$	198,467,667
Financials		5,230,985		—		—		5,230,985
Utilities		708,894,906		—		—		708,894,906
Total Common Stocks	$	912,593,558	$	—	$	—	$	912,593,558
Partnerships
Energy	$	9,921,130	$	—	$	—	$	9,921,130
Total Partnerships	$	9,921,130	$	—	$	—	$	9,921,130
Short-Term Investments
Money Market Funds	$	11,158,332	$	—	$	—	$	11,158,332
Total Short-Term Investments	$	11,158,332	$	—	$	—	$	11,158,332
Total Investments	$	933,673,020	$	—	$	—	$	933,673,020

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

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SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES

Financial Statements

Statement of Assets and Liabilities as of October 31, 2018

ASSETS:
Investments in securities, at value (cost $576,176,533)	$	933,673,020
Dividends and interest receivable		872,542
Receivable for fund shares sold		696,053
Return of capital receivable		139,277
Prepaid expenses and other assets		52,126
Total Assets		935,433,018
LIABILITIES:
Payable for fund shares redeemed		1,537,514
Payable to advisor		326,856
Payable to administrator		87,301
Payable to auditor		21,900
Accrued distribution fees		188,645
Accrued service fees		72,297
Accrued trustees fees		5,962
Accrued expenses and other payables		257,432
Total Liabilities		2,497,907
NET ASSETS	$	932,935,111
NET ASSETS CONSIST OF:
Capital stock	$	565,784,442
Total distributable earnings		367,150,669
Total Net Assets	$	932,935,111
NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	825,183,820
Shares issued and outstanding		28,772,409
Net asset value, offering price and redemption price per share	$	28.68
Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	107,751,291
Shares issued and outstanding		3,760,837
Net asset value, offering price and redemption price per share	$	28.65

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, 2018

INVESTMENT INCOME:
Dividend income(1)	$	35,171,514
Interest income		111,961
Total investment income		35,283,475
EXPENSES:
Investment advisory fees (See Note 5)		4,424,651
Sub-transfer agent expenses – Investor Class (See Note 5)		2,003,070
Sub-transfer agent expenses – Institutional Class (See Note 5)		84,711
Distribution fees – Investor Class (See Note 5)		1,510,841
Administration, fund accounting, custody and transfer agent fees (See Note 5)		1,057,661
Service fees – Investor Class (See Note 5)		1,007,227
Reports to shareholders		98,956
Federal and state registration fees		44,497
Compliance expense (See Note 5)		29,499
Audit fees		22,503
Trustees’ fees and expenses		20,415
Interest expense (See Note 7)		10,290
Legal fees		3,031
Other expenses		519,152
Total expenses		10,836,504
NET INVESTMENT INCOME	$	24,446,971
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on investments	$	108,812,839
Net change in unrealized appreciation/depreciation on investments		(180,455,187	)
Net loss on investments		(71,642,348	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(47,195,377	)

⁽¹⁾   Net of foreign taxes withheld and issuance fees of $1,032,685.

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, 2018			October 31, 2017
OPERATIONS:
Net investment income	$	24,446,971		$	33,553,345
Net realized gain on investments		108,812,839			11,936,515
Net change in unrealized
appreciation/depreciation on investments		(180,455,187	)		96,396,614
Net increase (decrease) in net
assets resulting from operations		(47,195,377	)		141,886,474
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Distributable earnings – Investor Class		(28,287,790	)		(54,176,348	)
Distributable earnings – Institutional Class		(3,147,794	)		(376,747	)
Total distributions		(31,435,584	)		(54,553,095	)(1)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		47,357,112			119,194,987
Proceeds from shares subscribed – Institutional Class		91,140,382			86,926,934
Dividends reinvested – Investor Class		27,211,310			51,110,167
Dividends reinvested – Institutional Class		2,284,927			280,823
Cost of shares redeemed – Investor Class		(483,654,388	)		(405,814,851	)
Cost of shares redeemed – Institutional Class		(64,094,803	)		(2,635,338	)
Net decrease in net assets derived
from capital share transactions		(379,755,460	)		(150,937,278	)
TOTAL DECREASE IN NET ASSETS		(458,386,421	)		(63,603,899	)
NET ASSETS:
Beginning of year		1,391,321,532			1,454,925,431
End of year	$	932,935,111		$	1,391,321,532
CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		1,647,747			4,053,758
Shares sold – Institutional Class		3,149,149			2,868,864
Shares issued to holders as reinvestment
of dividends – Investor Class		938,546			1,768,098
Shares issued to holders as reinvestment
of dividends – Institutional Class		79,037			9,411
Shares redeemed – Investor Class		(16,873,463	)		(13,691,570	)
Shares redeemed – Institutional Class		(2,258,650	)		(86,974	)
Net decrease in shares outstanding		(13,317,634	)		(5,078,413	)

⁽¹⁾ Includes net investment income distributions of $34,370,968 and $376,747 and net realized gain distributions of $19,805,380 and $0 for Investor Class and Institutional Class, respectively.

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

Paid-in capital from redemption fees

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⁽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.

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FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	30.35		$	28.57		$	27.69		$	31.30		$	26.69
	0.65			0.70			0.62			0.69			0.62
	(1.52	)		2.20			1.58			(2.69	)		5.18
	(0.87	)		2.90			2.20			(2.00	)		5.80
	(0.64	)		(0.72	)		(0.69	)		(0.70	)		(0.59	)
	(0.16	)		(0.40	)		(0.63	)		(0.91	)		(0.60	)
	(0.80	)		(1.12	)		(1.32	)		(1.61	)		(1.19	)
	—			—			—			—			0.00	(1)
$	28.68		$	30.35		$	28.57		$	27.69		$	31.30
	(2.86	)%		10.39	%		8.52	%		(6.59	)%		22.49	%
$	825.18		$	1,306.70		$	1,454.93		$	1,649.21		$	2,254.98
	1.01	%		1.01	%		1.01	%		0.93	%		0.77	%
	2.18	%		2.34	%		2.25	%		2.33	%		2.26	%
	14	%		18	%		38	%		37	%		20	%

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 period

	Year Ended			Period Ended
	October 31, 2018			October 31, 2017(1)
PER SHARE DATA:
Net asset value, beginning of period	$	30.32		$	29.68
Income from investment operations:
Net investment income		0.71			0.62
Net realized and unrealized gains (losses) on investments		(1.47	)		0.72
Total from investment operations		(0.76	)		1.34
Less distributions:
Dividends from net investment income		(0.75	)		(0.70	)
Dividends from net realized gains		(0.16	)		—
Total distributions		(0.91	)		(0.70	)
Net asset value, end of period	$	28.65		$	30.32
TOTAL RETURN		(2.51	)%		4.56	%(2)(3)
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (millions)	$	107.75		$	84.62
Ratio of expenses to average net assets		0.65	%		0.64	%(4)
Ratio of net investment income to average net assets		2.47	%		1.23	%(4)
Portfolio turnover rate(5)		14	%		18	%(2)

(1)	Institutional Class shares commenced operations on March 1, 2017.
(2)	Not annualized.
(3)	Actual return from inception date of March 1, 2017, to the year end of October 31, 2017.
(4)	Annualized.
(5)	Portfolio turnover is calculated on the basis of the Fund as a whole.

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

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FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS/NOTES TO THE FINANCIAL STATEMENTS

Financial Statements

Notes to the Financial Statements October 31, 2018

1).  ORGANIZATION

The Hennessy Gas Utility 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 did not have Institutional Class shares until March 1, 2017. The investment objective of the Fund is income and capital appreciation. The Fund is a diversified fund.

The Fund offers Investor Class and Institutional Class shares. Each class of shares differs principally in its respective 12b-1 distribution and service, shareholder servicing, and sub-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 to U.S. generally accepted accounting principles (“GAAP”).

a).

Securities 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 because 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/loss and realized gains/losses for federal income tax purposes may differ from those reported in 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. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.

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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 fiscal year 2018 have been identified and appropriately reclassified in the Statement of Assets and Liabilities. The adjustments are as follows:

Total
Distributable
Earnings	Capital Stock
$(14,068,317)	$14,068,317

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. Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if any, are declared and paid annually, usually in December.
f).	Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
g).	Use of Estimates – 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 (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by (ii) the total number of 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).	New Accounting Pronouncements – In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates the requirement to disclose the amount of and reasons for transfers

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NOTES TO THE FINANCIAL STATEMENTS

between Level 1 and Level 2 of the fair value hierarchy, the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 does not eliminate the requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the changes in unrealized gains and losses for recurring Level 3 fair value measurements. ASU 2018-13 requires that information is provided about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has evaluated the impact of this change in guidance, and due to the permissibility of early adoption, modified the Fund’s fair value disclosures for the current reporting period.

j).

New Rule Issuances – In August 2018, the Securities and Exchange Commission issued Final Rule Release No. 33 10532, Disclosure Update and Simplification, which in part amends certain financial statement disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, GAAP, or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amendments to Rule 6-04.17 of Regulation S-X (balance sheet) were amended to require presentation of the total, rather than the components of net assets, of distributable earnings on the balance sheet. Consistent with GAAP, funds will be required to disclose total distributable earnings. The amendments to Rule 6-09 of Regulation S-X (statement of changes in net assets) omit the requirement to separately state the sources of distributions paid as well as omit the requirement to parenthetically state the book basis amount of undistributed net investment income. Instead, consistent with GAAP, funds will be required to disclose the total amount of distributions paid, except that any tax return of capital must be separately disclosed. The requirements of the Final Rule Release are effective November 5, 2018 and the Fund’s Statement of Assets and Liabilities and the Statement of Changes in Net Assets for the current and prior reporting period have been modified accordingly.

3).  SECURITIES VALUATION

The Fund follows 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 of 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 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.

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19

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 foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).

Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, are generally priced at the ending NAV provided by the applicable mutual fund’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.

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.

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NOTES TO THE FINANCIAL STATEMENTS

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 values of other similar securities, and news events with direct bearing on 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’ values as determined by the Board or its designee, pursuant to the fair value pricing procedures adopted by the Board, instead of being determined by the market. Using a fair value pricing methodology to price a foreign security may result in a value that is different from such foreign security’s most recent closing price and from the value used by other investment companies to calculate their NAVs. Such securities are generally classified in Level 2 of 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 “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 determinations. Various inputs are used to determine 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, 2018, are included in the Schedule of Investments.

4).  INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during fiscal year 2018 were $153,746,575 and $540,819,962, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during fiscal year 2018.

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. 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, as amended. During fiscal year 2018, the Fund did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940, as amended.

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21

5).  INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

The Advisor provides the Fund with investment advisory services under an Investment Advisory Agreement. The Advisor furnishes all investment advice, office space, and facilities, as well as 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 an annual rate of 0.40%. The net investment advisory fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 advisory 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. The shareholder service fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 is currently only using up to 0.15% of its average daily net assets attributable to Investor Class shares 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, printing and mailing of prospectuses to other than current shareholders, 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 distribution fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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. The sub-transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

The Fund has entered into an Administrative Services Agreement among the Fund, the Advisor, and the American Gas Association (“AGA”), pursuant to which the AGA provides administrative services to the Fund, including overseeing the calculation of the AGA Stock Index. ScottMadden, Inc. performs the actual computations required to produce the AGA Stock Index and receives a fee for such calculations pursuant to a contractual arrangement with AGA. AGA does not furnish other securities advice to the Fund or the Advisor or make recommendations regarding the purchase or sale of securities by the Fund. Under the terms of the Administrative Services Agreement, which has been approved by the Board, AGA provides the Fund with current information regarding the common stock composition of the AGA Stock Index at least monthly. In addition, upon request, AGA provides the Fund and the Advisor with information on the natural gas industry. The Fund pays AGA a fee at an annual rate of 0.04% of the average daily net assets of the Fund.

U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services (“Fund Services”) provides the Fund with administrative, fund accounting, and transfer agent

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22

NOTES TO THE FINANCIAL STATEMENTS

services. As administrator, Fund Services 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. U.S. Bank N.A., an affiliate of Fund Services, serves as the Fund’s custodian. The servicing agreements between the Trust and Fund Services and U.S. Bank N.A. contain a fee schedule that is inclusive of administrative, fund accounting, custody, and transfer agent fees. The administrative, fund accounting, custody, and transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 Fund Services 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. The compliance fees expensed by the Fund during fiscal year 2018 are included in 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 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 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 fiscal year 2018 the Fund had an outstanding average daily balance and a weighted average interest rate of $228,233 and 4.45%, respectively. The interest expensed by the Fund during fiscal year 2018 is included in the Statement of Operations. The maximum amount outstanding for the Fund during fiscal year 2018 was $15,120,000. As of October 31, 2018, the Fund did not have any borrowings outstanding under the line of credit.

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23

8).  FEDERAL TAX INFORMATION

As of October 31, 2018, the components of accumulated earnings (losses) for income tax purposes were as follows:

	Investments
Cost of investments for tax purposes	$	644,588,436
Gross tax unrealized appreciation	$	372,505,808
Gross tax unrealized depreciation		(83,421,224	)
Net tax unrealized appreciation/(depreciation)	$	289,084,584
Undistributed ordinary income	$	84,398
Undistributed long-term capital gains		77,979,918
Total distributable earnings	$	78,064,316
Other accumulated gain/(loss)	$	1,769
Total accumulated gain/(loss)	$	367,150,669

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.

As of October 31, 2018, the Fund had no tax basis capital losses to offset future capital gains.

As of October 31, 2018, the Fund did not defer, on a tax basis, any late-year ordinary losses. Late-year ordinary losses are net ordinary losses incurred after December 31, 2017, but within the taxable year, that are deemed to arise on the first day of the Fund’s next taxable year.

During fiscal year 2018 and fiscal year 2017, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2018		October 31, 2017
Ordinary income(1)	$	27,292,416	$	34,747,715
Long-term capital gain		4,143,168		19,805,380
	$	31,435,584	$	54,553,095

⁽¹⁾  Ordinary income includes short-term capital gains.

9).  EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2018, 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, 2018, capital gains were declared and paid to shareholders of record on December 6, 2018, as follows:

	Long-term
Investor Class	$2.48261
Institutional Class	$2.50030

On December 27, 2018, income distributions were declared and paid to shareholders of record on December 26, 2018, as follows:

Investor Class	$0.12129264
Institutional Class	$0.16312707

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NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Report of Independent Registered Public

Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the shareholders of the Hennessy Gas Utility Fund

Novato, CA

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of the Hennessy Gas Utility Fund (the “Fund”), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2018, 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, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, the results of its operations for the year then ended, and the changes in its net assets for each of the two year 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.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management.  Our responsibility is to express an opinion on the Fund’s financial statements based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We have served as the auditor of one or more of the funds in the Trust since 2002.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.  The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2018 by correspondence with the custodian.  We believe that our audits provide a reasonable basis for our opinion.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2018

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Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Funds 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 to the Board of Trustees (“Advisers”) 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: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board of Trustees 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 Trustee oversees the 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 worked for the	None.
(1981)		Sutter Health organization since
Adviser to the Board		2011 in various positions. He has
		served as the Chief Executive Officer
		of the Sutter Roseville Medical
		Center since 2018. From 2016 through
		2018, he served as the Vice President
		of Strategy for the Sutter Health Valley
		Area, which includes 11 hospitals,
		13 ambulatory surgery centers,
		16,000 employees, and 1,900 physicians.
		From 2013 through 2016, Mr. Alexander
		served as Sutter Novato Community
		Hospital’s Chief Administrative Officer,
		and from 2011 through 2012, he
		served as a Director of Strategy
		within Sutter’s West Bay Region.

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TRUSTEES AND OFFICERS OF THE FUND

			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. Neil Hennessy has been employed	Hennessy
(1956)	a Trustee and	by Hennessy Advisors, Inc. since	Advisors, Inc.
Trustee, Chairman of	June 2008 as	1989 and currently serves as its
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 President, Chief Operating
Executive Vice President		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 Secretary
Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013 and currently serves as its Chief
Senior Vice President		Compliance Officer and Senior Vice President.
and Head of Distribution
Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)(3)		as its General Counsel since June 2013.
Senior Vice President and
Chief Compliance Officer

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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)(4)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Large Cap Financial Fund and the Hennessy Small
and Portfolio Manager		Cap Financial Fund since inception. Mr. Ellison also served as a
		Portfolio Manager of the Hennessy Technology Fund from its
		inception until February 2017. Mr. Ellison served as Director,
		CIO and President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.
Ryan C. Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)(5)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Gas Utility Fund, the Hennessy Large Cap Financial
and Portfolio Manager		Fund, and the Hennessy Small 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. Mr. Kelley has also served as a Portfolio
		Manager of the Hennessy Cornerstone Growth Fund, the
		Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
		Cornerstone Large Growth Fund, and the Hennessy
		Cornerstone Value Fund since February 2017, as a Co-Portfolio
		Manager of the Hennessy Technology Fund since February
		2017, and as a Portfolio Manager of the Hennessy Total Return
		Fund and the Hennessy Balanced Fund since May 2018.
		Mr. Kelley served as Portfolio Manager of FBR Fund Advisers,
		Inc. from January 2008 to October 2012.
Tania Kelley	October 2003	Ms. Kelley has been employed by Hennessy Advisors, Inc.
(1965)		since October 2003.
Senior Vice President
and Head of Marketing
Daniel P. Hennessy	December 2016	Mr. Daniel Hennessy has been employed by Hennessy Advisors,
(1990)		Inc. since 2015. He has served as an Associate Analyst or
Vice President		Analyst of the Hennessy Technology Fund since February 2017.
and Analyst		Mr. Daniel Hennessy previously served as a Mutual Fund
		Specialist at U.S. Bancorp Fund Services, LLC (now doing
		business as U.S. Bank Global Fund Services) from November
		2014 to July 2015. Prior to that, he attended the University of
		San Diego, where he earned a degree in Political Science.

_______________

(1)	Messrs. DeSousa, Doyle, N. 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 the Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
(2)	Mr. N. 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 this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
(4)	The address of this officer is 101 Federal Street, Suite 1900, Boston, MA 02110.
(5)	The address of this officer is 1340 Environ Way, Suite 332, Chapel Hill, NC 27517.

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TRUSTEES AND OFFICERS OF THE FUND

(This Page Intentionally Left Blank.)

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Expense Example (Unaudited)

October 31, 2018

As a shareholder of the Fund, you incur 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, 2018, through October 31, 2018.

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. Bank Global Fund Services, 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” or “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. 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.

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EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period(1)
	Account Value	Account Value	May 1, 2018 –
	May 1, 2018	October 31, 2018	October 31, 2018
Investor Class
Actual	$1,000.00	$1,031.50	$5.07
Hypothetical (5% return before expenses)	$1,000.00	$1,020.21	$5.04
Institutional Class
Actual	$1,000.00	$1,033.20	$3.28
Hypothetical (5% return before expenses)	$1,000.00	$1,021.98	$3.26

⁽¹⁾ Expenses are equal to the Fund’s annualized expense ratio of 0.99% for Investor Class shares or 0.64% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/365 days (to reflect one-half year period).

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31

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 www.hennessyfunds.com/proxy-voting/voting-policy; or (3) on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at www.hennessyfunds.com/proxy-voting/voting-record 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 a 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 Forms N-Q are available on the SEC’s website at www.sec.gov.  Information included in the Fund’s Forms N-Q will also be available upon request by calling 1-800-966-4354.

Federal Tax Distribution Information

(Unaudited)

For fiscal year 2018, 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 100.00%.

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for fiscal year 2018 was 100.00%.

The percentage of taxable ordinary income distributions that were 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 10.76%.

Important Notice Regarding Delivery

of Shareholder Documents

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of shareholder reports, proxy statements, and prospectuses to shareholders who share an address and have the same last name. This process does not apply to account statements. You may request an individual copy of a shareholder document at any time. If you would like to receive separate mailings of shareholder documents, please call U.S. Bank Global Fund Services at 1-800-261-6950 or 1-414-765-4124, and individual delivery will begin within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact such intermediary directly to request individual delivery.

HENNESSYFUNDS.COM

32

PROXY VOTING — PRIVACY POLICY

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 will be shared with non-affiliated third parties.

HENNESSY FUNDS 1-800-966-4354

33

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 Boulevard, Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT, &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

d/b/a U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Drive, 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

Two Liberty Place

50 South 16th Street, Suite 2900

Philadelphia, Pennsylvania 19102-2529

DISTRIBUTOR

Quasar Distributors, LLC

777 East Wisconsin Avenue

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, 2018

HENNESSY JAPAN FUND

Investor Class  HJPNX

Institutional Class  HJPIX

hennessyfunds.com  |  1-800-966-4354

(This Page Intentionally Left Blank.)

Contents

Letter to Shareholders	2
Performance Overview	4
Financial Statements
Schedule of Investments	7
Statement of Assets and Liabilities	10
Statement of Operations	11
Statements of Changes in Net Assets	13
Financial Highlights	14
Notes to the Financial Statements	18
Report of Independent Registered Public Accounting Firm	27
Trustees and Officers of the Fund	28
Expense Example	32
Proxy Voting Policy and Proxy Voting Records	34
Quarterly Schedule of Investments	34
Federal Tax Distribution Information	34
Important Notice Regarding Delivery of Shareholder Documents	34
Privacy Policy	35

HENNESSY FUNDS 1-800-966-4354

December 2018

Dear Hennessy Funds Shareholder:

Over the past year, the Japanese stock market lost ground, declining by -4.12% in U.S. dollar terms as measured by the Tokyo Stock Price Index (TOPIX) over the 12-months ended October 31, 2018. Japanese stocks rose through the last two months of 2017, but were subject to some volatility and downward pressure during 2018. Domestically, Japan made economic progress during the year. The Japanese economy continued to exhibit relatively strong growth, the inflation rate stayed positive, Shinzo Abe was reelected as leader of the Liberal Democratic Party, and corporate profits grew at a healthy rate. However, developments abroad had negative repercussions on Japanese markets. In particular, investors were dismayed by the imposition of trade tariffs by the U.S., which set off fears of an international trade war. In addition, investors worried about the steady rise in U.S. short-term interest rates, capital outflows from emerging markets as a result of these rate increases, the overvaluation of global technology stocks and fears of a further slowdown in the Chinese economy.

The Japanese economy continued to perform well this year, with GDP growth averaging 1.3% year-over-year over the last five quarters. Investors have also seen a welcome acceleration in the inflation rate, from roughly 0.5% in 2017 to 1.0% in 2018. There is little doubt that reaching the Bank of Japan’s target inflation rate of 2% will be hard in the short term. However, we believe keeping the consumer price index rising at a rate of about 1% will do much to help change inflation expectations for the better.

We believe the structural reform program in Japan is progressing well. Over the last few years, the Liberal Democratic Party’s administration has implemented scores of structural reforms affecting the tax code, the labor market, and corporate governance regulations. In June 2018, the government passed the much-anticipated labor market bill that introduced key reforms including “equal pay for equal work” for non-regular workers, and merit-based pay for highly-skilled employees. We believe these reforms represent an important step for Japan, and will help raise labor productivity, which today is lower than in many other developed countries. New revisions to the corporate governance code are also being discussed. Under the new guidelines, companies would have to publish a management succession plan, meet diversity criteria in their boardrooms, and justify non-strategic, crossholdings between companies.

Following the recent decline in stock prices, we believe stock valuations are very attractive. The prospective price to earnings multiple for the Tokyo Stock Price Index, or TOPIX, has come down from over 16x in January 2018 to 13x, well below its 7-year average of 15x. Moreover, we believe Japan has many high-quality, globally-oriented companies run by able management, and whose businesses are protected by high barriers to entry. Many of these companies operate in fast-growing, global industries, such as factory automation, Internet services, and robotics. As a result, we believe Japanese equities offer investors the opportunity to gain exposure to growth around the world, including developing countries, but with better transparency, better corporate governance, good liquidity, and reasonable valuations.

HENNESSYFUNDS.COM

2

LETTER TO SHAREHOLDERS

We remain optimistic about the long-term prospects for Japan and its stock market. Thank you for your continued confidence and investment in the Hennessy Funds.

Sincerely,

Tadahiro Fujimura	Masakazu Takeda
Portfolio Manager,	Portfolio Manager,
Hennessy Japan Small Cap Fund;	Hennessy Japan Fund;
Chief Investment Officer	Fund Manager
SPARX Asset Management Co., Ltd.	SPARX Asset Management Co., Ltd.

SPARX Asset Management Co., Ltd., located in Tokyo, Japan, is the sub-advisor to the Hennessy Japan Fund and the Hennessy Japan Small Cap Fund.

Past performance does not guarantee future results.

Mutual fund investing involves risk. Principal loss is possible.

Opinions expressed are those of Tadahiro Fujimura and Masakazu Takeda and are subject to change, are not guaranteed, and should not be considered investment advice.

The Tokyo Stock Price Index (TOPIX) is an unmanaged index commonly used to measure the performance of Japanese stocks. One cannot invest directly in an index.

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

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3

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, 2018

	One	Five	Ten
	Year	Years	Years
Hennessy Japan Fund –
Investor Class (HJPNX)	2.70%	11.32%	13.27%
Hennessy Japan Fund –
Institutional Class (HJPIX)	3.14%	11.67%	13.57%
Russell/Nomura Total MarketTM Index	-4.88%	5.96%	7.32%
Tokyo Price Index (TOPIX)	-4.12%	5.85%	7.38%

Expense ratios:  1.47% (Investor Class); 1.06% (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 table does 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 www.hennessyfunds.com.

The Russell/Nomura Total Market™ Index contains the top 98% of all stocks listed on Japan’s stock exchanges and registered on Japan’s OTC market in terms of market capitalization. The Tokyo Price Index (TOPIX) is a market capitalization-weighted index of all companies listed on the First Section of the Tokyo Stock Exchange. One cannot invest directly in an index.

Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes or Russell ratings or underlying data and no party may rely on any Russell Indexes or Russell ratings or underlying data contained in this communication. No further distribution of Russell data is permitted without Russell’s express written consent. Russell does not promote, sponsor, or endorse the content of this communication.

HENNESSYFUNDS.COM

4

PERFORMANCE OVERVIEW

The expense ratios presented are from the most recent prospectus. The expense ratios for the current reporting period are available in the Financial Highlights section of this report.

PERFORMANCE NARRATIVE

Portfolio Managers Masakazu Takeda, CFA and CMA*, and Yu Shimizu, CMA*

SPARX Asset Management Co., Ltd. (sub-advisor)

Performance:

For the 12-month period ended October 31, 2018, the Investor Class of the Hennessy Japan Fund returned 2.70%, outperforming both the Russell/Nomura Total Market™ Index (the Fund’s primary benchmark) and the Tokyo Stock Price Index (TOPIX), which returned -4.88% and -4.12%, respectively, for the same period, in U.S. dollar terms.

The largest positive contributors to the Fund’s performance relative to its primary benchmark among the 33 TOPIX sub-industries were Retail Trade, Pharmaceutical, and Chemicals. The largest sub-industry detractors to the Fund’s performance were Foods, Banks, and Electric Appliances.

Among the best performing stocks in the Fund during the period were Fast Retailing Co. Ltd., the operator of “UNIQLO” brand casual wear stores, Rohto Pharmaceutical Co. Ltd., a leading skincare cosmetics and OTC ophthalmic medicines producer, and Terumo Corp., Japan’s largest medical device manufacturer. Shares of Fast Retailing Co. Ltd. performed well due to continued business expansion across Asia. Shares of Rohto Pharmaceutical Co. Ltd. rose as earnings results showed improvements across all geographies and all segments after lackluster performance in the previous fiscal year. Lastly, shares of Terumo Corp. advanced as the company’s overseas cardiovascular systems business maintained strong revenue growth, while the general hospital and the blood management systems segments also posted solid profit growth. The Fund continues to hold all of the companies mentioned.

The main detractors to the Fund’s performance were Misumi Group, Inc., a maker and distributor of metal mold components and precision machinery parts, Kubota Corp., a leading manufacturer of farming equipment, and Japan Tobacco, Inc., one of the largest global tobacco manufacturers. Misumi Group, Inc.’s share price declined as the company lowered prices and increased promotional spending in order to improve its competitive position. Kubota Corp.’s share price slipped on weak sales in China. Japan Tobacco, Inc. performed poorly as a result of lower reported profits and a forecast of no growth in earnings for fiscal year 2019. The Fund continues to hold all of the companies mentioned.

Portfolio Strategy:

The Fund seeks long-term capital appreciation by investing in Japanese companies regardless of market cap. The Fund seeks companies that have strong businesses and management and are trading at attractive valuations. The portfolio is limited to our best ideas and maintains a concentrated number of holdings.

Investment Commentary:

We remain confident in the outlook for the Fund’s investments, notwithstanding the decline in the Japanese equity market over the last year. When negative short-term factors are influencing the economy and the market, we believe it is important to keep a longer-term perspective.

All the companies in the portfolio have demonstrated above-average growth over most historical time periods, and we anticipate that this growth should continue in the years to come. Over the last two decades, global markets have experienced tumultuous

HENNESSY FUNDS 1-800-966-4354

5

times: the Asian financial crisis (1998), the Dot-com bubble collapse (2001), Japan’s banking system crisis (2003), the Global Financial Crisis (2008), the Euro debt crisis (2010), and the Great Eastern Japan earthquake (2011), among others. On an individual company level, Nidec Corporation experienced a sharp decline in demand for its then best-selling product, HDD motors, which resulted in a share price drop of almost 50% between 2010 and 2012. Likewise, Kao Corporation was impacted by a large-scale product recall due to a serious product defect, which temporarily tarnished its brand image. Dire as these events may have seemed, the companies in question survived them and have prospered subsequently, in large part due to their inherent competitive edge and management prowess. The Fund continues to hold both companies.

We believe all the companies in the Fund possess durable competitive advantages and could see their revenues continue to grow over the next five to ten years. We also believe that current valuations of the holdings in the Fund are reasonable.

In uncertain times like these, many stock market participants pay attention to macro developments. We prefer to focus on individual businesses when making investment decisions. We believe that long-term appreciation of share prices can only be achieved by continuous expansion of the intrinsic value of the business.

_______________

*  Chartered Member of the Security Analysts Association of Japan

Opinions expressed are those of the Portfolio Manager 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 Fund invests in small-capitalization and medium-capitalization companies, which may have more limited liquidity and greater price volatility than large-capitalization companies. The Fund invests in the stocks of companies operating in Japan; single-country funds may be subject to a higher degree of risk. 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.

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.

HENNESSYFUNDS.COM

6

PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as ofOctober 31, 2018

HENNESSY JAPAN FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)	% NET ASSETS
Fast Retailing Co., Ltd.	5.48%
Nidec Corp.	5.29%
Mitsubishi UFJ Financial Group, Inc.	5.08%
Rohto Pharmaceutical Co., Ltd.	5.07%
Recruit Holdings Co., Ltd.	5.07%
Softbank Group Co.	5.04%
Daikin Industries	4.98%
Terumo Corp.	4.97%
Shimano, Inc.	4.94%
Unicharm Corp.	4.94%

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.

The Global Industry Classification Standard (GICS^®) was developed by and is the exclusive property and a service mark of MSCI, Inc. and Standard & Poor Financial Services LLC.  It has been licensed for use by the Hennessy Funds.

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7

COMMON STOCKS – 93.04%	Number				% of
	of Shares		Value		Net Assets
Communication Services – 5.04%
Softbank Group Co.		320,600	$	25,371,905		5.04	%
Consumer Discretionary – 19.37%
Asics Corp.		930,000		13,460,384		2.68	%
Fast Retailing Co., Ltd.		54,800		27,592,095		5.48	%
Isuzu Motors, Ltd.		438,900		5,754,220		1.14	%
Ryohin Keikaku Co., Ltd.		29,600		7,824,166		1.56	%
Shimano, Inc.		182,000		24,856,690		4.94	%
Toyota Motor Corp.		306,900		17,978,500		3.57	%
				97,466,055		19.37	%
Consumer Staples – 14.95%
Japan Tobacco, Inc.		870,600		22,370,352		4.45	%
Kao Corp.		372,500		24,779,530		4.93	%
Pigeon Corp.		75,400		3,188,836		0.63	%
Unicharm Corp.		915,800		24,844,495		4.94	%
				75,183,213		14.95	%
Financials – 8.38%
Mitsubishi UFJ Financial Group, Inc.		4,225,900		25,577,229		5.08	%
Sumitomo Mitsui Financial Group, Inc.		425,800		16,578,565		3.30	%
				42,155,794		8.38	%
Health Care – 10.04%
Rohto Pharmaceutical Co., Ltd.		805,900		25,524,875		5.07	%
Terumo Corp.		463,000		24,993,636		4.97	%
				50,518,511		10.04	%
Industrials – 29.57%
Daikin Industries		216,400		25,083,341		4.98	%
Kubota Corp.		1,570,700		24,796,320		4.93	%
Misumi Group, Inc.		1,106,600		22,177,145		4.41	%
Mitsubishi Corp.		873,900		24,596,188		4.89	%
Nidec Corp.		207,100		26,600,934		5.29	%
Recruit Holdings Co., Ltd.		949,700		25,489,561		5.07	%
				148,743,489		29.57	%
Information Technology – 4.29%
Keyence Corp.		44,200		21,592,576		4.29	%

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

HENNESSYFUNDS.COM

8

SCHEDULE OF INVESTMENTS

COMMON STOCKS	Number					% of
	of Shares		Value			Net Assets
Materials – 1.40%
Fuji Seal International, Inc.		232,200	$	7,043,638			1.40	%
Total Common Stocks
(Cost $398,170,188)				468,075,181			93.04	%
SHORT-TERM INVESTMENTS – 7.56%
Money Market Funds – 7.56%
Fidelity Government Portfolio, Institutional Class, 2.06% (a)		24,528,000		24,528,000			4.88	%
The Government & Agency Portfolio, Institutional Class, 2.08% (a)		13,483,614		13,483,614			2.68	%
Total Short-Term Investments
(Cost $38,011,614)				38,011,614			7.56	%
Total Investments
(Cost $436,181,802) – 100.60%				506,086,795			100.60	%
Liabilities in Excess of Other Assets – (0.60)%				(3,001,246	)		(0.60	)%
TOTAL NET ASSETS – 100.00%			$	503,085,549			100.00	%

Percentages are stated as a percent of net assets.

(a) The rate listed is the fund’s seven-day yield as of October 31, 2018.

Summary of Fair Value Exposure at October 31, 2018

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2018 (See Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Communication Services	$	—	$	25,371,905	$	—	$	25,371,905
Consumer Discretionary		—		97,466,055		—		97,466,055
Consumer Staples		—		75,183,213		—		75,183,213
Financials		—		42,155,794		—		42,155,794
Health Care		—		50,518,511		—		50,518,511
Industrials		—		148,743,489		—		148,743,489
Information Technology		—		21,592,576		—		21,592,576
Materials		—		7,043,638		—		7,043,638
Total Common Stocks	$	—	$	468,075,181	$	—	$	468,075,181
Short-Term Investments
Money Market Funds	$	38,011,614	$	—	$	—	$	38,011,614
Total Short-Term Investments	$	38,011,614	$	—	$	—	$	38,011,614
Total Investments	$	38,011,614	$	468,075,181	$	—	$	506,086,795

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

HENNESSY FUNDS 1-800-966-4354

9

Financial Statements

Statement of Assets and Liabilities as of October 31, 2018

ASSETS:
Investments in securities, at value (cost $436,181,802)	$	506,086,795
Dividends and interest receivable		2,130,012
Receivable for fund shares sold		2,844,651
Prepaid expenses and other assets		51,238
Total Assets		511,112,696
LIABILITIES:
Payable for securities purchased		6,022,535
Payable for fund shares redeemed		1,506,792
Payable to advisor		350,908
Payable to administrator		44,323
Payable to auditor		21,901
Accrued distribution fees		19,282
Accrued service fees		9,468
Accrued trustees fees		5,963
Accrued expenses and other payables		45,975
Total Liabilities		8,027,147
NET ASSETS	$	503,085,549
NET ASSETS CONSIST OF:
Capital stock	$	432,732,094
Total distributable earnings		70,353,455
Total Net Assets	$	503,085,549
NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	103,330,179
Shares issued and outstanding		3,072,953
Net asset value, offering price and redemption price per share	$	33.63
Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	399,755,370
Shares issued and outstanding		11,529,940
Net asset value, offering price and redemption price per share	$	34.67

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

HENNESSYFUNDS.COM

10

STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS

Financial Statements

Statement of Operations for the year ended October 31, 2018

INVESTMENT INCOME:
Dividend income(1)	$	5,917,052
Interest income		455,265
Total investment income		6,372,317
EXPENSES:
Investment advisory fees (See Note 5)		3,455,857
Sub-transfer agent expenses – Investor Class (See Note 5)		262,634
Sub-transfer agent expenses – Institutional Class (See Note 5)		193,589
Administration, fund accounting, custody and transfer agent fees (See Note 5)		415,000
Distribution fees – Investor Class (See Note 5)		164,320
Service fees – Investor Class (See Note 5)		109,547
Federal and state registration fees		59,892
Reports to shareholders		44,939
Compliance expense (See Note 5)		29,499
Audit fees		23,146
Trustees’ fees and expenses		18,598
Legal fees		4,319
Other expenses		28,739
Total expenses		4,810,079
NET INVESTMENT INCOME	$	1,562,238
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized loss on investments	$	(652,030	)
Net change in unrealized appreciation/depreciation on investments		(3,199,977	)
Net loss on investments		(3,852,007	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(2,289,769	)

⁽¹⁾ Net of foreign taxes withheld of $655,907.

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

HENNESSY FUNDS 1-800-966-4354

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(This Page Intentionally Left Blank.)

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STATEMENTS OF CHANGES IN NET ASSETS

Financial Statements

Statements of Changes in Net Assets

	Year Ended			Year Ended
	October 31, 2018			October 31, 2017
OPERATIONS:
Net investment income	$	1,562,238		$	233,529
Net realized loss on investments		(652,030	)		(281,051	)
Net change in unrealized
appreciation/depreciation on investments		(3,199,977	)		36,173,877
Net increase (decrease) in net
assets resulting from operations		(2,289,769	)		36,126,355
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Distributable earnings – Investor Class		(15,953	)		—
Distributable earnings – Institutional Class		(192,575	)		—
Total distributions		(208,528	)		—
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		68,964,189			48,195,357
Proceeds from shares subscribed – Institutional Class		371,916,788			115,058,173
Dividends reinvested – Investor Class		15,517			—
Dividends reinvested – Institutional Class		171,054			—
Cost of shares redeemed – Investor Class		(51,079,674	)		(38,068,126	)
Cost of shares redeemed – Institutional Class		(146,269,372	)		(29,067,977	)
Net increase in net assets derived
from capital share transactions		243,718,502			96,117,427
TOTAL INCREASE IN NET ASSETS		241,220,205			132,243,782
NET ASSETS:
Beginning of year		261,865,344			129,621,562
End of year	$	503,085,549		$	261,865,344
CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		1,945,260			1,683,845
Shares sold – Institutional Class		10,243,014			3,882,507
Shares issued to holders as reinvestment
of dividends – Investor Class		445			—
Shares issued to holders as reinvestment
of dividends – Institutional Class		4,774			—
Shares redeemed – Investor Class		(1,451,162	)		(1,329,272	)
Shares redeemed – Institutional Class		(3,991,370	)		(990,930	)
Net increase in shares outstanding		6,750,961			3,246,150

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

HENNESSY FUNDS 1-800-966-4354

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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 loss

Net realized and unrealized gains on investments

Total from investment operations

Less distributions:

Dividends from net investment income

Dividends from return of capital

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 loss to average net assets

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

14

FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	32.75		$	27.81		$	24.07		$	21.77		$	19.68
	(0.00	)(1)		(0.03	)		(0.11	)		(0.10	)		(0.06	)
	0.89			4.97			3.85			2.40			2.15
	0.89			4.94			3.74			2.30			2.09
	(0.01	)		—			—			—			—
	—			—			—			—			—
	(0.01	)		—			—			—			—
$	33.63		$	32.75		$	27.81		$	24.07		$	21.77
	2.70	%		17.76	%		15.54	%		10.56	%		10.62	%
$	103.33		$	84.44		$	61.85		$	61.56		$	27.26
	1.43	%		1.46	%		1.50	%		1.53	%		1.70	%
	(0.02	)%		(0.15	)%		(0.38	)%		(0.44	)%		(0.18	)%
	1	%		0	%		5	%		21	%		22	%

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 on investments

Total from investment operations

Less distributions:

Dividends from net investment income

Dividends from return of capital

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.

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FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	33.64		$	28.45		$	24.55		$	22.15		$	19.98
	0.15			0.03			(0.01	)		(0.02	)		0.07
	0.91			5.16			3.91			2.42			2.10
	1.06			5.19			3.90			2.40			2.17
	(0.03	)		—			—			—			—
	—			—			—			—			—
	(0.03	)		—			—			—			—
$	34.67		$	33.64		$	28.45		$	24.55		$	22.15
	3.14	%		18.24	%		15.89	%		10.84	%		10.86	%
$	399.76		$	177.42		$	67.78		$	54.13		$	25.75
	1.01	%		1.05	%		1.17	%		1.27	%		1.50	%
	0.49	%		0.30	%		(0.03	)%		(0.08	)%		0.26	%
	1	%		0	%		5	%		21	%		22	%

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

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Financial Statements

Notes to the Financial Statements October 31, 2018

1).  ORGANIZATION

The Hennessy Japan 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 capital appreciation. The Fund is a diversified fund, but may employ a relatively focused investment strategy and may hold securities of fewer issuers than other diversified funds.

The Fund offers Investor Class and Institutional Class shares. Each class of shares differs principally in its respective 12b-1 distribution and service, shareholder servicing, and sub-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 to U.S. generally accepted accounting principles (“GAAP”).

a).	Securities 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 because 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/loss and realized gains/losses for federal income tax purposes may differ from those reported in 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. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
	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 fiscal year 2018 have been identified and appropriately reclassified in the Statement of Assets and Liabilities. The adjustments are as follows:

Total
Distributable
Earnings	Capital Stock
$6,121,138	$(6,121,138)

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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. Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and paid annually, usually in December.
f).	Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
g).	Use of Estimates – 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 (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by (ii) the total number of 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 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/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).	New Accounting Pronouncements – In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Disclosure Framework—Changes to the Disclosure

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Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 does not eliminate the requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the changes in unrealized gains and losses for recurring Level 3 fair value measurements. ASU 2018-13 requires that information is provided about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has evaluated the impact of this change in guidance, and due to the permissibility of early adoption, modified the Fund’s fair value disclosures for the current reporting period.

k).

New Rule Issuances – In August 2018, the Securities and Exchange Commission issued Final Rule Release No. 33 10532, Disclosure Update and Simplification, which in part amends certain financial statement disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, GAAP, or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amendments to Rule 6-04.17 of Regulation S-X (balance sheet) were amended to require presentation of the total, rather than the components of net assets, of distributable earnings on the balance sheet. Consistent with GAAP, funds will be required to disclose total distributable earnings. The amendments to Rule 6-09 of Regulation S-X (statement of changes in net assets) omit the requirement to separately state the sources of distributions paid as well as omit the requirement to parenthetically state the book basis amount of undistributed net investment income. Instead, consistent with GAAP, funds will be required to disclose the total amount of distributions paid, except that any tax return of capital must be separately disclosed. The requirements of the Final Rule Release are effective November 5, 2018 and the Fund’s Statement of Assets and Liabilities and the Statement of Changes in Net Assets for the current and prior reporting period have been modified accordingly.

3).  SECURITIES VALUATION

The Fund follows 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 of 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 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).

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NOTES TO THE FINANCIAL STATEMENTS

Level 3 – Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable inputs are unavailable.

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 foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).

Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, are generally priced at the ending NAV provided by the applicable mutual fund’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.

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

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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 values of other similar securities, and news events with direct bearing on 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’ values as determined by the Board or its designee, pursuant to the fair value pricing procedures adopted by the Board, instead of being determined by the market. Using a fair value pricing methodology to price a foreign security may result in a value that is different from such foreign security’s most recent closing price and from the value used by other investment companies to calculate their NAVs. Such securities are generally classified in Level 2 of 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 “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 determinations. Various inputs are used to determine 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, 2018, are included in the Schedule of Investments.

4).  INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during fiscal year 2018 were $223,968,754 and $2,744,713, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during fiscal year 2018.

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. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another Hennessy

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NOTES TO THE FINANCIAL STATEMENTS

Fund complies with Rule 17a-7 of the Investment Company Act of 1940, as amended. During fiscal year 2018, the Fund did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940, as amended.

5).  INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

The Advisor provides the Fund with investment advisory services under an Investment Advisory Agreement. The Advisor oversees the provision of investment advice and furnishes office space and facilities, as well as 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 an annual rate of 0.80%, effective as of March 1, 2016. Prior to that date, the annual rate was 1.00%. The net investment advisory fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

The Advisor has delegated the day-to-day management of the Fund to a sub-advisor, SPARX Asset Management Co., Ltd. The Advisor pays the sub-advisory 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 an average rate of 0.35%. Effective February 28, 2018, the Advisor amended the sub-advisory agreement with SPARX Asset Management Co., Ltd. to increase the sub-advisory fee to 0.40% of daily net assets between $500 million and $1 billion and 0.42% of daily net assets over $1 billion. The sub-advisory fee for the first $500 million of daily net assets remained at 0.35%. At the time of the amendment, the Fund had less than $500 million of daily net assets.

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 advisory 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. The shareholder service fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 is currently only using up to 0.15% of its average daily net assets attributable to Investor Class shares 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, printing and mailing of prospectuses to other than current shareholders, 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 distribution fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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. The sub-transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services (“Fund Services”) provides the Fund with administrative, fund accounting, and transfer agent services. As administrator, Fund Services 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. U.S. Bank N.A., an affiliate of Fund Services, serves as the Fund’s custodian. The servicing agreements between the Trust and Fund Services and U.S. Bank N.A. contain a fee schedule that is inclusive of administrative, fund accounting, custody, and transfer agent fees. The administrative, fund accounting, custody, and transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 Fund Services 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. The compliance fees expensed by the Fund during fiscal year 2018 are included in 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 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 fiscal year 2018, the Fund did not have any borrowings outstanding under the line of credit.

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NOTES TO THE FINANCIAL STATEMENTS

8).  FEDERAL TAX INFORMATION

As of October 31, 2018, the components of accumulated earnings (losses) for income tax purposes were as follows:

	Investments
Cost of investments for tax purposes	$	436,311,692
Gross tax unrealized appreciation	$	94,180,873
Gross tax unrealized depreciation		(24,408,547	)
Net tax unrealized appreciation/(depreciation)	$	69,772,326
Undistributed ordinary income	$	861,036
Undistributed long-term capital gains		—
Total distributable earnings	$	861,036
Other accumulated gain/(loss)	$	(279,907	)
Total accumulated gain/(loss)	$	70,353,455

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.

As of October 31, 2018, the Fund had capital loss carryforwards that expire as follows:

$  31,383	Unlimited Long-Term
$248,524	Unlimited Short-Term

During fiscal year 2018, capital losses expired were $6,121,138.

Capital losses sustained in fiscal year 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.

As of October 31, 2018, the Fund did not defer, on a tax basis, any late-year ordinary losses. Late-year ordinary losses are net ordinary losses incurred after December 31, 2017, but within the taxable year, that are deemed to arise on the first day of the Fund’s next taxable year.

During fiscal year 2018 and fiscal year 2017, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2018		October 31, 2017
Ordinary income(1)	$	208,528	$	—
Long-term capital gain		—		—
	$	208,528	$	—

⁽¹⁾  Ordinary income includes short-term capital gains.

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9).  EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2018, 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 27, 2018, income distributions were declared and paid to shareholders of record on December 26, 2018, as follows:

Investor Class	$0.01193503
Institutional Class	$0.10566737

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NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Report of Independent Registered Public

Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the shareholders of the Hennessy Japan Fund

Novato, CA

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of the Hennessy Japan Fund (the “Fund”), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

The financial highlights for each of the three years in the period ended October 31, 2016 have been audited by other auditors, whose report dated December 22, 2016 expressed unqualified opinions on such financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management.  Our responsibility is to express an opinion on the Fund’s financial statements based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We have served as the auditor of one or more of the funds in the Trust since 2002.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2018 by correspondence with the custodian and brokers, or other appropriate auditing procedures where replies from brokers were not received.  We believe that our audits provide a reasonable basis for our opinion.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2018

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Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Funds 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 to the Board of Trustees (“Advisers”) 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: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board of Trustees 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 Trustee oversees the 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 worked for the	None.
(1981)		Sutter Health organization since
Adviser to the Board		2011 in various positions. He has
		served as the Chief Executive Officer
		of the Sutter Roseville Medical
		Center since 2018. From 2016 through
		2018, he served as the Vice President
		of Strategy for the Sutter Health Valley
		Area, which includes 11 hospitals,
		13 ambulatory surgery centers,
		16,000 employees, and 1,900 physicians.
		From 2013 through 2016, Mr. Alexander
		served as Sutter Novato Community
		Hospital’s Chief Administrative Officer,
		and from 2011 through 2012, he
		served as a Director of Strategy
		within Sutter’s West Bay Region.

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28

TRUSTEES AND OFFICERS OF THE FUND

			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. Neil Hennessy has been employed	Hennessy
(1956)	a Trustee and	by Hennessy Advisors, Inc. since	Advisors, Inc.
Trustee, Chairman of	June 2008 as	1989 and currently serves as its
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 President, Chief Operating
Executive Vice President		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 Secretary
Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013 and currently serves as its Chief
Senior Vice President		Compliance Officer and Senior Vice President.
and Head of Distribution
Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)(3)		as its General Counsel since June 2013.
Senior Vice President and
Chief Compliance Officer

HENNESSY FUNDS 1-800-966-4354

29

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)(4)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Large Cap Financial Fund and the Hennessy Small
and Portfolio Manager		Cap Financial Fund since inception. Mr. Ellison also served as a
		Portfolio Manager of the Hennessy Technology Fund from its
		inception until February 2017. Mr. Ellison served as Director,
		CIO and President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.
Ryan C. Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)(5)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Gas Utility Fund, the Hennessy Large Cap Financial
and Portfolio Manager		Fund, and the Hennessy Small 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. Mr. Kelley has also served as a Portfolio
		Manager of the Hennessy Cornerstone Growth Fund, the
		Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
		Cornerstone Large Growth Fund, and the Hennessy
		Cornerstone Value Fund since February 2017, as a Co-Portfolio
		Manager of the Hennessy Technology Fund since February
		2017, and as a Portfolio Manager of the Hennessy Total Return
		Fund and the Hennessy Balanced Fund since May 2018.
		Mr. Kelley served as Portfolio Manager of FBR Fund Advisers,
		Inc. from January 2008 to October 2012.
Tania Kelley	October 2003	Ms. Kelley has been employed by Hennessy Advisors, Inc.
(1965)		since October 2003.
Senior Vice President
and Head of Marketing
Daniel P. Hennessy	December 2016	Mr. Daniel Hennessy has been employed by Hennessy Advisors,
(1990)		Inc. since 2015. He has served as an Associate Analyst or
Vice President		Analyst of the Hennessy Technology Fund since February 2017.
and Analyst		Mr. Daniel Hennessy previously served as a Mutual Fund
		Specialist at U.S. Bancorp Fund Services, LLC (now doing
		business as U.S. Bank Global Fund Services) from November
		2014 to July 2015. Prior to that, he attended the University of
		San Diego, where he earned a degree in Political Science.

_______________

(1)	Messrs. DeSousa, Doyle, N. 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 the Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
(2)	Mr. N. 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 this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
(4)	The address of this officer is 101 Federal Street, Suite 1900, Boston, MA 02110.
(5)	The address of this officer is 1340 Environ Way, Suite 332, Chapel Hill, NC 27517.

HENNESSYFUNDS.COM

30

TRUSTEES AND OFFICERS OF THE FUND

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Expense Example (Unaudited)

October 31, 2018

As a shareholder of the Fund, you incur 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, 2018, through October 31, 2018.

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. Bank Global Fund Services, 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” or “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. 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.

HENNESSYFUNDS.COM

32

EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period(1)
	Account Value	Account Value	May 1, 2018 –
	May 1, 2018	October 31, 2018	October 31, 2018
Investor Class
Actual	$1,000.00	$   954.00	$7.09
Hypothetical (5% return before expenses)	$1,000.00	$1,017.95	$7.32
Institutional Class
Actual	$1,000.00	$   955.90	$4.98
Hypothetical (5% return before expenses)	$1,000.00	$1,020.11	$5.14

⁽¹⁾ Expenses are equal to the Fund’s annualized expense ratio of 1.44% for Investor Class shares or 1.01% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/365 days (to reflect one-half year period).

HENNESSY FUNDS 1-800-966-4354

33

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 www.hennessyfunds.com/proxy-voting/voting-policy; or (3) on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at www.hennessyfunds.com/proxy-voting/voting-record 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 a 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 Forms N-Q are available on the SEC’s website at www.sec.gov.  Information included in the Fund’s Forms N-Q will also be available upon request by calling 1-800-966-4354.

Federal Tax Distribution Information

(Unaudited)

For fiscal year 2018, 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 100.00%.

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for fiscal year 2018 was 0.00%.

The percentage of taxable ordinary income distributions that were 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 0.00%.

For the year ended October 31, 2018, the Fund earned foreign source income and paid foreign taxes, as noted below, which it intends to pass through to its shareholders pursuant to Section 853 of the Internal Revenue Code.

	Gross Foreign Income	Foreign Tax Paid
Japan	$6,574,319	$655,907

Important Notice Regarding Delivery

of Shareholder Documents

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of shareholder reports, proxy statements, and prospectuses to shareholders who share an address and have the same last name. This process does not apply to account statements. You may request an individual copy of a shareholder document at any time. If you would like to receive separate mailings of shareholder documents, please call U.S. Bank Global Fund Services at 1-800-261-6950 or 1-414-765-4124, and individual delivery will begin within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact such intermediary directly to request individual delivery.

HENNESSYFUNDS.COM

34

PROXY VOTING — PRIVACY POLICY

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 will be shared with non-affiliated third parties.

HENNESSY FUNDS 1-800-966-4354

35

(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 Boulevard, Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT, &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

d/b/a U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Drive, 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

Two Liberty Place

50 South 16th Street, Suite 2900

Philadelphia, Pennsylvania 19102-2529

DISTRIBUTOR

Quasar Distributors, LLC

777 East Wisconsin Avenue

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, 2018

HENNESSY JAPAN SMALL CAP FUND

Investor Class  HJPSX

Institutional Class  HJSIX

hennessyfunds.com  |  1-800-966-4354

(This Page Intentionally Left Blank.)

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	17
Report of Independent Registered Public Accounting Firm	25
Trustees and Officers of the Fund	26
Expense Example	30
Proxy Voting Policy and Proxy Voting Records	32
Quarterly Schedule of Investments	32
Federal Tax Distribution Information	32
Important Notice Regarding Delivery of Shareholder Documents	32
Privacy Policy	33

HENNESSY FUNDS 1-800-966-4354

December 2018

Dear Hennessy Funds Shareholder:

Over the past year, the Japanese stock market lost ground, declining by -4.12% in U.S. dollar terms as measured by the Tokyo Stock Price Index (TOPIX) over the 12-months ended October 31, 2018. Japanese stocks rose through the last two months of 2017, but were subject to some volatility and downward pressure during 2018. Domestically, Japan made economic progress during the year. The Japanese economy continued to exhibit relatively strong growth, the inflation rate stayed positive, Shinzo Abe was reelected as leader of the Liberal Democratic Party, and corporate profits grew at a healthy rate. However, developments abroad had negative repercussions on Japanese markets. In particular, investors were dismayed by the imposition of trade tariffs by the U.S., which set off fears of an international trade war. In addition, investors worried about the steady rise in U.S. short-term interest rates, capital outflows from emerging markets as a result of these rate increases, the overvaluation of global technology stocks and fears of a further slowdown in the Chinese economy.

The Japanese economy continued to perform well this year, with GDP growth averaging 1.3% year-over-year over the last five quarters. Investors have also seen a welcome acceleration in the inflation rate, from roughly 0.5% in 2017 to 1.0% in 2018. There is little doubt that reaching the Bank of Japan’s target inflation rate of 2% will be hard in the short term. However, we believe keeping the consumer price index rising at a rate of about 1% will do much to help change inflation expectations for the better.

We believe the structural reform program in Japan is progressing well. Over the last few years, the Liberal Democratic Party’s administration has implemented scores of structural reforms affecting the tax code, the labor market, and corporate governance regulations. In June 2018, the government passed the much-anticipated labor market bill that introduced key reforms including “equal pay for equal work” for non-regular workers, and merit-based pay for highly-skilled employees. We believe these reforms represent an important step for Japan, and will help raise labor productivity, which today is lower than in many other developed countries. New revisions to the corporate governance code are also being discussed. Under the new guidelines, companies would have to publish a management succession plan, meet diversity criteria in their boardrooms, and justify non-strategic, crossholdings between companies.

Following the recent decline in stock prices, we believe stock valuations are very attractive. The prospective price to earnings multiple for the Tokyo Stock Price Index, or TOPIX, has come down from over 16x in January 2018 to 13x, well below its 7-year average of 15x. Moreover, we believe Japan has many high-quality, globally-oriented companies run by able management, and whose businesses are protected by high barriers to entry. Many of these companies operate in fast-growing, global industries, such as factory automation, Internet services, and robotics. As a result, we believe Japanese equities offer investors the opportunity to gain exposure to growth around the world, including developing countries, but with better transparency, better corporate governance, good liquidity, and reasonable valuations.

HENNESSYFUNDS.COM

2

LETTER TO SHAREHOLDERS

We remain optimistic about the long-term prospects for Japan and its stock market. Thank you for your continued confidence and investment in the Hennessy Funds.

Sincerely,

Tadahiro Fujimura	Masakazu Takeda
Portfolio Manager,	Portfolio Manager,
Hennessy Japan Small Cap Fund;	Hennessy Japan Fund;
Chief Investment Officer	Fund Manager
SPARX Asset Management Co., Ltd.	SPARX Asset Management Co., Ltd.

SPARX Asset Management Co., Ltd., located in Tokyo, Japan, is the sub-advisor to the Hennessy Japan Fund and the Hennessy Japan Small Cap Fund.

Past performance does not guarantee future results.

Mutual fund investing involves risk. Principal loss is possible.

Opinions expressed are those of Tadahiro Fujimura and Masakazu Takeda and are subject to change, are not guaranteed, and should not be considered investment advice.

The Tokyo Stock Price Index (TOPIX) is an unmanaged index commonly used to measure the performance of Japanese stocks. One cannot invest directly in an index.

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

HENNESSY FUNDS 1-800-966-4354

3

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, 2018

	One	Five	Ten
	Year	Years	Years
Hennessy Japan Small Cap Fund –
Investor Class (HJPSX)	2.64%	13.95%	15.87%
Hennessy Japan Small Cap Fund –
Institutional Class (HJSIX)(1)	3.12%	14.20%	15.99%
Russell/Nomura Small CapTM Index	-6.62%	8.32%	10.46%
Tokyo Price Index (TOPIX)	-4.12%	5.85%	7.38%

Expense ratios:  1.61% (Investor Class); 1.20% (Institutional Class)

⁽¹⁾ The inception date of Institutional Class shares is June 15, 2015. Performance shown prior to the inception of Institutional Class shares reflects the performance of Investor Class shares and includes expenses that are not applicable to, and are higher than, those of Institutional Class shares.

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 table does 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 www.hennessyfunds.com.

The Russell/Nomura Small Cap™ Index contains the bottom 15% of the Russell/Nomura Total Market™ Index, which contains the top 98% of all stocks listed on Japan’s stock exchanges and registered on Japan’s OTC market in terms of market capitalization. The Tokyo Price Index (TOPIX) is a market capitalization-weighted index of all companies listed on the First Section of the Tokyo Stock Exchange. One cannot invest directly in an index.

Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes or Russell ratings or underlying data and no party may rely on any Russell Indexes or Russell ratings or underlying data contained in this

HENNESSYFUNDS.COM

4

PERFORMANCE OVERVIEW

communication. No further distribution of Russell data is permitted without Russell’s express written consent. Russell does not promote, sponsor, or endorse the content of this communication.

The expense ratios presented are from the most recent prospectus. The expense ratios for the current reporting period are available in the Financial Highlights section of this report.

PERFORMANCE NARRATIVE

Portfolio Managers Tadahiro Fujimura, CFA and CMA*, and Tetsuya Hirano, CMA*

SPARX Asset Management Co., Ltd. (sub-advisor)

Performance:

For the 12-month period ended October 31, 2018, the Investor Class of the Hennessy Japan Small Cap Fund returned 2.64%, outperforming both the Russell/Nomura Small Cap™ Index (the Fund’s primary benchmark) and the Tokyo Stock Price Index (TOPIX), which returned -6.62% and -4.12%, respectively, for the same period, in U.S. dollar terms.

In the first half of the year, strong performance from high-tech and machinery-related stocks contributed positively to the Fund’s relative performance. In the second half, rising corporate spending on technology led to strong performance by software and service stocks held by the Fund. Fund holdings that performed poorly over the period included several stocks in the Consumer and Telecommunications sectors.

In terms of individual stocks, electron microscope and measuring device producer Jeol Ltd. was the greatest positive contributor to Fund performance. Rising spending on research and development led to increased demand for the company’s measuring devices, and the company also released a new product for semiconductor devices that had the potential for future growth. Midsized logistics firm SBS Holdings, Inc. also contributed positively to performance. Investors expected significant profits growth from an acquisition, and the company has been raising prices. Enterprise package software publisher Obic Business Consultants Co. Ltd. also performed well due to strong sales of its cloud-compatible software.

The largest negative contributor to Fund performance was Nippon Koei Co. Ltd. The company suffered from delays affecting long-term projects and lower demand for its consulting services from electric utilities. High-volume seller of smartphone earphones Foster Electric Co. Ltd. also performed poorly due to disappointing sales to major smartphone manufacturers. Shares of construction recycling and biomass power generation firm Takeei Corp. also declined as bans on plastic waste imports caused operating costs to rise.

The Fund continues to hold all the companies mentioned except Jeol Ltd. and Foster Electric Co. Ltd.

Portfolio Strategy and Investment Commentary:

During the upturn at the start of the period, small-cap stocks generally continued to generate positive performance. However, small stocks retreated along with the rest of the market over the balance of the period, as investors added worries about high equity valuations to their concerns over tariffs and Chinese GDP growth.

Following the recent decline in stock prices, we believe that many small-cap stocks, especially those outside technology-related sectors, look undervalued. We anticipate that the stock prices of many of these companies may rebound in the months ahead, should companies begin to actively repurchase their own shares after earnings announcements.

HENNESSY FUNDS 1-800-966-4354

5

We also expect that high employment levels and slightly faster growth in wages will lead to a recovery in domestic demand in 2019.

The investment strategy of the Fund remains the same. The Fund seeks companies with strong business models and exceptional management trading at attractive valuations. Over the next few months, we will be looking for opportunities to add to existing positions where valuations look most attractive. We will also be watching earnings trends in both domestic and foreign demand-related stocks and considering options for investments that we believe promise long-term growth.

_______________

* Chartered Member of the Security Analysts Association of Japan

Opinions expressed are those of the Portfolio Manager 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 Fund invests in small-capitalization and medium-capitalization companies, which may have more limited liquidity and greater price volatility than large-capitalization companies. The Fund invests in the stocks of companies operating in Japan; single-country funds may be subject to a higher degree of risk. 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.

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.

HENNESSYFUNDS.COM

6

PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as ofOctober 31, 2018

HENNESSY JAPAN SMALL CAP FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)	% NET ASSETS
Asahi Holdings, Inc.	2.80%
NS Solutions Corp.	2.78%
OBIC Business Consultants Co., Ltd.	2.74%
Nippon Yusoki Co., Ltd.	2.62%
DCM Holdings Co., Ltd.	2.49%
Takuma Co., Ltd.	2.46%
Sato Holdings Corp.	2.37%
SBS Holdings, Inc.	2.36%
Nihon Kohden Corp.	2.35%
Hamakyorex Co., Ltd.	2.31%

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.

The Global Industry Classification Standard (GICS^®) was developed by and is the exclusive property and a service mark of MSCI, Inc. and Standard & Poor Financial Services LLC.  It has been licensed for use by the Hennessy Funds.

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7

COMMON STOCKS – 99.37%	Number				% of
	of Shares		Value		Net Assets
Communication Services – 3.48%
Kakaku.com., Inc.		196,600	$	3,560,840		1.78	%
Macromill, Inc.		171,100		3,385,870		1.70	%
				6,946,710		3.48	%
Consumer Discretionary – 15.69%
Bic Camera, Inc.		237,400		3,134,229		1.57	%
DCM Holdings Co., Ltd.		511,100		4,969,941		2.49	%
Doshisha Co., Ltd.		200,300		4,124,401		2.07	%
Hiramatsu, Inc.		505,100		2,111,338		1.06	%
Kasai Kogyo Co., Ltd.		272,900		2,516,043		1.26	%
Komeda Holdings Co., Ltd.		167,500		3,295,018		1.65	%
Pacific Industrial Co., Ltd.		253,100		3,697,842		1.86	%
Saizeriya Co., Ltd.		167,100		3,171,246		1.59	%
Seiren Co., Ltd.		169,800		2,415,767		1.21	%
TPR Co., Ltd.		75,600		1,841,341		0.93	%
				31,277,166		15.69	%
Consumer Staples – 4.60%
Kobe Bussan Co., Ltd.		159,400		4,047,504		2.03	%
Nishimoto Co., Ltd.		80,600		3,652,205		1.83	%
Soiken Holdings, Inc.		348,600		1,480,881		0.74	%
				9,180,590		4.60	%
Financials – 3.01%
Aozora Bank, Ltd.		110,400		3,809,507		1.91	%
Lifenet Insurance Co. (a)		389,800		2,185,322		1.10	%
				5,994,829		3.01	%
Health Care – 4.05%
JEOL Ltd.		58,800		968,779		0.49	%
Nihon Kohden Corp.		156,800		4,694,311		2.35	%
Ship Healthcare Holdings, Inc.		66,800		2,415,212		1.21	%
				8,078,302		4.05	%
Industrials – 41.66%
BELLSYSTEM24 Holdings, Inc.		297,700		3,932,346		1.97	%
Benefit One, Inc.		157,700		4,065,001		2.04	%
Daihen Corp.		61,400		1,439,222		0.72	%
EF-ON, Inc.		299,100		2,871,310		1.44	%

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

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SCHEDULE OF INVESTMENTS

COMMON STOCKS	Number				% of
	of Shares		Value		Net Assets
Industrials (Continued)
Hamakyorex Co., Ltd.		142,400	$	4,597,940		2.31	%
Hanwa Co., Ltd.		122,200		4,001,930		2.01	%
Hito Communication, Inc.		231,800		4,100,317		2.06	%
Juki Corp.		90,700		1,015,700		0.51	%
Kanematsu Corp.		296,600		3,808,323		1.91	%
KAWADA TECHNOLOGIES, Inc.		20,400		1,173,808		0.59	%
Kito Corp.		176,000		2,661,080		1.33	%
Maeda Kosen Co., Ltd.		143,800		2,784,270		1.40	%
METAWATER Co., Ltd.		116,700		2,992,447		1.50	%
MIRAIT Holdings Corp.		277,100		4,474,280		2.24	%
Nihon Flush Co., Ltd.		143,300		2,745,915		1.38	%
Nippon Koei Co., Ltd.		173,800		3,912,189		1.96	%
Nippon Yusoki Co., Ltd.		439,200		5,222,081		2.62	%
Nissei ASB Machine Co., Ltd.		35,600		1,192,973		0.60	%
Okamura Corp.		332,400		4,531,001		2.27	%
Sato Holdings Corp.		159,700		4,719,250		2.37	%
SBS Holdings, Inc.		371,700		4,704,836		2.36	%
Shibuya Corp.		110,400		3,710,088		1.86	%
Takeei Corp.		313,500		1,991,796		1.00	%
Takuma Co., Ltd.		384,700		4,903,534		2.46	%
Tocalo Co., Ltd.		171,200		1,489,811		0.75	%
				83,041,448		41.66	%
Information Technology – 18.51%
Digital Garage, Inc.		119,700		3,273,437		1.64	%
Elecom Co., Ltd.		176,500		4,178,820		2.10	%
Macnica Fuji Electronics Holdings, Inc.		252,400		3,648,896		1.83	%
Mimaki Engineering Co., Ltd.		442,900		4,548,398		2.28	%
Nihon Unisys, Ltd.		152,400		3,339,733		1.68	%
Nippon Signal Company, Ltd.		231,900		2,123,307		1.06	%
NS Solutions Corp.		185,500		5,535,734		2.78	%
OBIC Business Consultants Co., Ltd.		68,400		5,466,984		2.74	%
Sun Corp.		293,500		1,410,029		0.71	%
UMC Electronics Co., Ltd.		180,900		3,365,957		1.69	%
				36,891,295		18.51	%

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

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COMMON STOCKS	Number					% of
	of Shares		Value			Net Assets
Materials – 8.37%
Asahi Holdings, Inc.		260,800	$	5,584,766			2.80	%
Asia Pile Holdings Co.		692,000		3,993,263			2.00	%
Kuriyama Holdings Corp.		175,900		2,733,051			1.37	%
Stella Chemifa Corp.		143,900		4,379,255			2.20	%
				16,690,335			8.37	%
Total Common Stocks
(Cost $194,388,845)				198,100,675			99.37	%
SHORT-TERM INVESTMENTS – 0.69%
Money Market Funds – 0.69%
Fidelity Government Portfolio, Institutional Class, 2.06% (b)		1,368,475		1,368,475			0.69	%
Total Short-Term Investments
(Cost $1,368,475)				1,368,475			0.69	%
Total Investments
(Cost $195,757,320) – 100.06%				199,469,150			100.06	%
Liabilities in Excess of Other Assets – (0.06)%				(116,910	)		(0.06	)%
TOTAL NET ASSETS – 100.00%			$	199,352,240			100.00	%

Percentages are stated as a percent of net assets.

(a)	Non-income producing security.
(b)	The rate listed is the fund’s seven-day yield as of October 31, 2018.

Summary of Fair Value Exposure at October 31, 2018

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2018 (See Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Communication Services	$	—	$	6,946,710	$	—	$	6,946,710
Consumer Discretionary		—		31,277,166		—		31,277,166
Consumer Staples		—		9,180,590		—		9,180,590
Financials		—		5,994,829		—		5,994,829
Health Care		—		8,078,302		—		8,078,302
Industrials		—		83,041,448		—		83,041,448
Information Technology		—		36,891,295		—		36,891,295
Materials		—		16,690,335		—		16,690,335
Total Common Stocks	$	—	$	198,100,675	$	—	$	198,100,675
Short-Term Investments
Money Market Funds	$	1,368,475	$	—	$	—	$	1,368,475
Total Short-Term Investments	$	1,368,475	$	—	$	—	$	1,368,475
Total Investments	$	1,368,475	$	198,100,675	$	—	$	199,469,150

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

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SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES

Financial Statements

Statement of Assets and Liabilities as of October 31, 2018

ASSETS:
Investments in securities, at value (cost $195,757,320)	$	199,469,150
Dividends and interest receivable		1,435,971
Receivable for fund shares sold		479,652
Prepaid expenses and other assets		34,318
Total Assets		201,419,091
LIABILITIES:
Payable for securities purchased		579,624
Payable for fund shares redeemed		1,237,908
Payable to advisor		143,911
Payable to administrator		18,458
Payable to auditor		21,900
Accrued distribution fees		19,660
Accrued service fees		8,976
Accrued trustees fees		5,964
Accrued expenses and other payables		30,450
Total Liabilities		2,066,851
NET ASSETS	$	199,352,240
NET ASSETS CONSIST OF:
Capital stock	$	189,397,047
Total distributable earnings		9,955,193
Total Net Assets	$	199,352,240
NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	100,934,185
Shares issued and outstanding		6,735,449
Net asset value, offering price and redemption price per share	$	14.99
Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	98,418,055
Shares issued and outstanding		6,637,191
Net asset value, offering price and redemption price per share	$	14.83

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, 2018

INVESTMENT INCOME:
Dividend income(1)	$	3,377,962
Interest income		177,614
Total investment income		3,555,576
EXPENSES:
Investment advisory fees (See Note 5)		1,642,461
Sub-transfer agent expenses – Investor Class (See Note 5)		256,062
Sub-transfer agent expenses – Institutional Class (See Note 5)		53,213
Administration, fund accounting, custody and transfer agent fees (See Note 5)		196,932
Distribution fees – Investor Class (See Note 5)		167,647
Service fees – Investor Class (See Note 5)		111,765
Federal and state registration fees		55,963
Reports to shareholders		31,517
Compliance expense (See Note 5)		29,499
Audit fees		23,181
Trustees’ fees and expenses		17,310
Legal fees		1,581
Other expenses		15,180
Total expenses		2,602,311
NET INVESTMENT INCOME	$	953,265
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on investments	$	8,566,596
Net change in unrealized appreciation/depreciation on investments		(13,684,693	)
Net loss on investments		(5,118,097	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(4,164,832	)

⁽¹⁾ Net of foreign taxes withheld of $375,218.

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, 2018			October 31, 2017
OPERATIONS:
Net investment income	$	953,265		$	174,013
Net realized gain on investments		8,566,596			2,713,582
Net change in unrealized
appreciation/depreciation on investments		(13,684,693	)		13,111,946
Net increase (decrease) in net
assets resulting from operations		(4,164,832	)		15,999,541
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Distributable earnings – Investor Class		(1,780,476	)		(550,773	)
Distributable earnings – Institutional Class		(1,109,923	)		(37,604	)
Total distributions		(2,890,399	)		(588,377	)(1)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		111,702,386			49,025,671
Proceeds from shares subscribed – Institutional Class		137,676,100			27,290,706
Dividends reinvested – Investor Class		1,748,813			545,989
Dividends reinvested – Institutional Class		1,109,776			37,604
Cost of shares redeemed – Investor Class		(80,170,785	)		(18,881,862	)
Cost of shares redeemed – Institutional Class		(64,230,751	)		(4,516,415	)
Net increase in net assets derived
from capital share transactions		107,835,539			53,501,693
TOTAL INCREASE IN NET ASSETS		100,780,308			68,912,857
NET ASSETS:
Beginning of year		98,571,932			29,659,075
End of year	$	199,352,240		$	98,571,932	(2)
CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		6,964,885			3,750,829
Shares sold – Institutional Class		8,685,841			2,024,977
Shares issued to holders as reinvestment
of dividends – Investor Class		113,712			49,783
Shares issued to holders as reinvestment
of dividends – Institutional Class		72,917			3,468
Shares redeemed – Investor Class		(5,026,572	)		(1,440,939	)
Shares redeemed – Institutional Class		(4,071,372	)		(380,799	)
Net increase in shares outstanding		6,739,411			4,007,319

(1)	Includes net investment income distributions of $307,249 and $7,754 and net realized gain distributions of $243,524 and $29,850 for the Investor Class and Institutional Class, respectively.
(2)	Includes accumulated net investment loss of $(37,056).

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 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 (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.

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FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	14.92		$	11.29		$	10.29		$	10.51		$	11.70
	0.05			0.08			0.03			(0.02	)		(0.04	)
	0.35			3.77			1.31			0.71			1.36
	0.40			3.85			1.34			0.69			1.32
	(0.05	)		(0.12	)		—			—			—
	(0.28	)		(0.10	)		(0.34	)		(0.91	)		(2.51	)
	(0.33	)		(0.22	)		(0.34	)		(0.91	)		(2.51	)
$	14.99		$	14.92		$	11.29		$	10.29		$	10.51
	2.64	%		34.82	%		13.44	%		7.37	%		13.99	%
$	100.93		$	69.86		$	26.23		$	22.68		$	19.36
	1.46	%		1.60	%		1.91	%		2.12	%		2.24	%
	0.21	%		0.26	%		0.25	%		(0.38	)%		(0.39	)%
	35	%		41	%		22	%		75	%		63	%

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 period

										Period Ended
	Year Ended October 31,									October 31,
	2018			2017			2016			2015(1)
PER SHARE DATA:
Net asset value, beginning of period	$	14.72		$	11.33		$	10.30		$	10.89
Income from
investment operations:
Net investment income (loss)		0.11			0.05			0.06			(0.01	)
Net realized and unrealized
gains (losses) on investments		0.36			3.78			1.31			(0.58	)
Total from investment operations		0.47			3.83			1.37			(0.59	)
Less distributions:
Dividends from net
investment income		(0.08	)		(0.10	)		—			—
Dividends from net realized gains		(0.28	)		(0.34	)		(0.34	)		—
Total distributions		(0.36	)		(0.44	)		(0.34	)		—
Net asset value, end of period	$	14.83		$	14.72		$	11.33		$	10.30
TOTAL RETURN		3.12	%		35.17	%		13.73	%		(5.42	)%(2)
SUPPLEMENTAL
DATA AND RATIOS:
Net assets, end of period (millions)	$	98.42		$	28.71		$	3.42		$	2.65
Ratio of expenses to
average net assets		1.04	%		1.19	%		1.63	%		1.86	%(3)
Ratio of net investment income
(loss) to average net assets		0.77	%		0.80	%		0.63	%		(1.04	)%(3)
Portfolio turnover rate(4)		35	%		41	%		22	%		75	%(2)

(1)	Institutional Class shares commenced operations on June 15, 2015.
(2)	Not annualized.
(3)	Annualized.
(4)	Portfolio turnover is calculated on the basis of the Fund as a whole.

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

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FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS/NOTES TO THE FINANCIAL STATEMENTS

Financial Statements

Notes to the Financial Statements October 31, 2018

1).  ORGANIZATION

The Hennessy Japan Small Cap 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 did not have Institutional Class shares until June 15, 2015. The investment objective of the Fund is long-term capital appreciation. The Fund is a diversified fund.

The Fund offers Investor Class and Institutional Class shares. Each class of shares differs principally in its respective 12b-1 distribution and service, shareholder servicing, and sub-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 to U.S. generally accepted accounting principles (“GAAP”).

a).	Securities 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 because 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/loss and realized gains/losses for federal income tax purposes may differ from those reported in 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. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
	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 fiscal year 2018 have been identified and appropriately reclassified in the Statement of Assets and Liabilities. The adjustments are as follows:

Total
Distributable
Earnings	Capital Stock
$(2,438,804)	$2,438,804

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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. Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and paid annually, usually in December.
f).	Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
g).	Use of Estimates – 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 (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by (ii) the total number of 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 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/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).	New Accounting Pronouncements – In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Disclosure Framework—Changes to the Disclosure

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NOTES TO THE FINANCIAL STATEMENTS

Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 does not eliminate the requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the changes in unrealized gains and losses for recurring Level 3 fair value measurements. ASU 2018-13 requires that information is provided about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has evaluated the impact of this change in guidance, and due to the permissibility of early adoption, modified the Fund’s fair value disclosures for the current reporting period.

k).

New Rule Issuances – In August 2018, the Securities and Exchange Commission issued Final Rule Release No. 33 10532, Disclosure Update and Simplification, which in part amends certain financial statement disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, GAAP, or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amendments to Rule 6-04.17 of Regulation S-X (balance sheet) were amended to require presentation of the total, rather than the components of net assets, of distributable earnings on the balance sheet. Consistent with GAAP, funds will be required to disclose total distributable earnings. The amendments to Rule 6-09 of Regulation S-X (statement of changes in net assets) omit the requirement to separately state the sources of distributions paid as well as omit the requirement to parenthetically state the book basis amount of undistributed net investment income. Instead, consistent with GAAP, funds will be required to disclose the total amount of distributions paid, except that any tax return of capital must be separately disclosed. The requirements of the Final Rule Release are effective November 5, 2018 and the Fund’s Statement of Assets and Liabilities and the Statement of Changes in Net Assets for the current and prior reporting period have been modified accordingly.

3).  SECURITIES VALUATION

The Fund follows 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 of 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 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).

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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 foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).

Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, are generally priced at the ending NAV provided by the applicable mutual fund’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.

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

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NOTES TO THE FINANCIAL STATEMENTS

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 values of other similar securities, and news events with direct bearing on 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’ values as determined by the Board or its designee, pursuant to the fair value pricing procedures adopted by the Board, instead of being determined by the market. Using a fair value pricing methodology to price a foreign security may result in a value that is different from such foreign security’s most recent closing price and from the value used by other investment companies to calculate their NAVs. Such securities are generally classified in Level 2 of 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 “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 determinations. Various inputs are used to determine 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, 2018, are included in the Schedule of Investments.

4).  INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during fiscal year 2018 were $179,744,244 and $66,403,237, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during fiscal year 2018.

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. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another Hennessy

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21

Fund complies with Rule 17a-7 of the Investment Company Act of 1940, as amended. During fiscal year 2018, the Fund did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940, as amended.

5).  INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

The Advisor provides the Fund with investment advisory services under an Investment Advisory Agreement. The Advisor oversees the provision of investment advice and furnishes office space and facilities, as well as 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 an annual rate of 0.80%, effective as of March 1, 2016. Prior to that date, the annual rate was 1.20%. The net investment advisory fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

The Advisor has delegated the day-to-day management of the Fund to a sub-advisor, SPARX Asset Management Co., Ltd. The Advisor pays the sub-advisory 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 an average rate of 0.31%. Prior to February 28, 2018, the sub-advisory fee for the Fund was 0.20%. Effective February 28, 2018, the Advisor amended the sub-advisory agreement with SPARX Asset Management Co., Ltd. to increase the sub-advisory fee to 0.35% of the first $500 million of daily net assets, 0.40% of the next $500 million of daily net assets, and 0.42% of daily net assets over $1 billion. The Fund currently has less than $500 million of daily net assets.

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 advisory 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. The shareholder service fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 is currently only using up to 0.15% of its average daily net assets attributable to Investor Class shares 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, printing and mailing of prospectuses to other than current shareholders, 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 distribution fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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. The sub-transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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NOTES TO THE FINANCIAL STATEMENTS

U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services (“Fund Services”) provides the Fund with administrative, fund accounting, and transfer agent services. As administrator, Fund Services 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. U.S. Bank N.A., an affiliate of Fund Services, serves as the Fund’s custodian. The servicing agreements between the Trust and Fund Services and U.S. Bank N.A. contain a fee schedule that is inclusive of administrative, fund accounting, custody, and transfer agent fees. The administrative, fund accounting, custody, and transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 Fund Services 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. The compliance fees expensed by the Fund during fiscal year 2018 are included in 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 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 fiscal year 2018, the Fund did not have any borrowings outstanding under the line of credit.

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8).  FEDERAL TAX INFORMATION

As of October 31, 2018, the components of accumulated earnings (losses) for income tax purposes were as follows:

	Investments
Cost of investments for tax purposes	$	195,799,022
Gross tax unrealized appreciation	$	22,448,859
Gross tax unrealized depreciation		(18,782,297	)
Net tax unrealized appreciation/(depreciation)	$	3,666,562
Undistributed ordinary income	$	275,368
Undistributed long-term capital gains		6,013,263
Total distributable earnings	$	6,288,631
Other accumulated gain/(loss)	$	—
Total accumulated gain/(loss)	$	9,955,193

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 passive foreign investment companies.

As of October 31, 2018, the Fund had no tax basis capital losses to offset future capital gains.

As of October 31, 2018, the Fund did not defer, on a tax basis, any late-year ordinary losses. Late-year ordinary losses are net ordinary losses incurred after December 31, 2017, but within the taxable year, that are deemed to arise on the first day of the Fund’s next taxable year.

During fiscal year 2018 and fiscal year 2017, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2018		October 31, 2017
Ordinary income(1)	$	583,714	$	588,377
Long-term capital gain		2,306,685		—
	$	2,890,399	$	588,377

⁽¹⁾  Ordinary income includes short-term capital gains.

9).  EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2018, 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, 2018, capital gains were declared and paid to shareholders of record on December 6, 2018, as follows:

	Long-term	Short-term
Investor Class	$0.46558	$0.00020
Institutional Class	$0.45707	$0.00020

On December 27, 2018, income distributions were declared and paid to shareholders of record on December 26, 2018, as follows:

Investor Class	$               —
Institutional Class	$0.04449547

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24

NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Report of Independent Registered Public

Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the shareholders of the Hennessy Japan Small Cap Fund

Novato, CA

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of the Hennessy Japan Small Cap Fund (the “Fund”), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

The financial highlights for each of the three years in the period ended October 31, 2016 have been audited by other auditors, whose report dated December 22, 2016 expressed unqualified opinions on such financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management.  Our responsibility is to express an opinion on the Fund’s financial statements based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We have served as the auditor of one or more of the funds in the Trust since 2002.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2018 by correspondence with the custodian and brokers, or other appropriate auditing procedures where replies from brokers were not received.  We believe that our audits provide a reasonable basis for our opinion.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2018

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Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Funds 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 to the Board of Trustees (“Advisers”) 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: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board of Trustees 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 Trustee oversees the 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 worked for the	None.
(1981)		Sutter Health organization since
Adviser to the Board		2011 in various positions. He has
		served as the Chief Executive Officer
		of the Sutter Roseville Medical
		Center since 2018. From 2016 through
		2018, he served as the Vice President
		of Strategy for the Sutter Health Valley
		Area, which includes 11 hospitals,
		13 ambulatory surgery centers,
		16,000 employees, and 1,900 physicians.
		From 2013 through 2016, Mr. Alexander
		served as Sutter Novato Community
		Hospital’s Chief Administrative Officer,
		and from 2011 through 2012, he
		served as a Director of Strategy
		within Sutter’s West Bay Region.

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TRUSTEES AND OFFICERS OF THE FUND

			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. Neil Hennessy has been employed	Hennessy
(1956)	a Trustee and	by Hennessy Advisors, Inc. since	Advisors, Inc.
Trustee, Chairman of	June 2008 as	1989 and currently serves as its
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 President, Chief Operating
Executive Vice President		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 Secretary
Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013 and currently serves as its Chief
Senior Vice President		Compliance Officer and Senior Vice President.
and Head of Distribution
Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)(3)		as its General Counsel since June 2013.
Senior Vice President and
Chief Compliance Officer

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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)(4)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Large Cap Financial Fund and the Hennessy Small
and Portfolio Manager		Cap Financial Fund since inception. Mr. Ellison also served as a
		Portfolio Manager of the Hennessy Technology Fund from its
		inception until February 2017. Mr. Ellison served as Director,
		CIO and President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.
Ryan C. Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)(5)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Gas Utility Fund, the Hennessy Large Cap Financial
and Portfolio Manager		Fund, and the Hennessy Small 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. Mr. Kelley has also served as a Portfolio
		Manager of the Hennessy Cornerstone Growth Fund, the
		Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
		Cornerstone Large Growth Fund, and the Hennessy
		Cornerstone Value Fund since February 2017, as a Co-Portfolio
		Manager of the Hennessy Technology Fund since February
		2017, and as a Portfolio Manager of the Hennessy Total Return
		Fund and the Hennessy Balanced Fund since May 2018.
		Mr. Kelley served as Portfolio Manager of FBR Fund Advisers,
		Inc. from January 2008 to October 2012.
Tania Kelley	October 2003	Ms. Kelley has been employed by Hennessy Advisors, Inc.
(1965)		since October 2003.
Senior Vice President
and Head of Marketing
Daniel P. Hennessy	December 2016	Mr. Daniel Hennessy has been employed by Hennessy Advisors,
(1990)		Inc. since 2015. He has served as an Associate Analyst or
Vice President		Analyst of the Hennessy Technology Fund since February 2017.
and Analyst		Mr. Daniel Hennessy previously served as a Mutual Fund
		Specialist at U.S. Bancorp Fund Services, LLC (now doing
		business as U.S. Bank Global Fund Services) from November
		2014 to July 2015. Prior to that, he attended the University of
		San Diego, where he earned a degree in Political Science.

_______________

(1)	Messrs. DeSousa, Doyle, N. 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 the Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
(2)	Mr. N. 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 this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
(4)	The address of this officer is 101 Federal Street, Suite 1900, Boston, MA 02110.
(5)	The address of this officer is 1340 Environ Way, Suite 332, Chapel Hill, NC 27517.

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TRUSTEES AND OFFICERS OF THE FUND

(This Page Intentionally Left Blank.)

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Expense Example (Unaudited)

October 31, 2018

As a shareholder of the Fund, you incur 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, 2018, through October 31, 2018.

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. Bank Global Fund Services, 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” or “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. 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.

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EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period(1)
	Account Value	Account Value	May 1, 2018 –
	May 1, 2018	October 31, 2018	October 31, 2018
Investor Class
Actual	$1,000.00	$   914.60	$7.09
Hypothetical (5% return before expenses)	$1,000.00	$1,017.80	$7.48
Institutional Class
Actual	$1,000.00	$   916.00	$5.07
Hypothetical (5% return before expenses)	$1,000.00	$1,019.91	$5.35

⁽¹⁾ Expenses are equal to the Fund’s annualized expense ratio of 1.47% for Investor Class shares or 1.05% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/365 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

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 www.hennessyfunds.com/proxy-voting/voting-policy; or (3) on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at www.hennessyfunds.com/proxy-voting/voting-record 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 a 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 Forms N-Q are available on the SEC’s website at www.sec.gov.  Information included in the Fund’s Forms N-Q will also be available upon request by calling 1-800-966-4354.

Federal Tax Distribution Information

(Unaudited)

For fiscal year 2018, 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 100.00%.

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for fiscal year 2018 was 0.00%.

The percentage of taxable ordinary income distributions that were 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 0.00%.

For the year ended October 31, 2018, the Fund earned foreign source income and paid foreign taxes, as noted below, which it intends to pass through to its shareholders pursuant to Section 853 of the Internal Revenue Code.

	Gross Foreign Income	Foreign Tax Paid
Japan	$3,753,180	$375,218

Important Notice Regarding Delivery

of Shareholder Documents

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of shareholder reports, proxy statements, and prospectuses to shareholders who share an address and have the same last name. This process does not apply to account statements. You may request an individual copy of a shareholder document at any time. If you would like to receive separate mailings of shareholder documents, please call U.S. Bank Global Fund Services at 1-800-261-6950 or 1-414-765-4124, and individual delivery will begin within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact such intermediary directly to request individual delivery.

HENNESSYFUNDS.COM

32

PROXY VOTING — PRIVACY POLICY

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 will be shared with non-affiliated third parties.

HENNESSY FUNDS 1-800-966-4354

33

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 Boulevard, Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT, &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

d/b/a U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Drive, 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

Two Liberty Place

50 South 16th Street, Suite 2900

Philadelphia, Pennsylvania 19102-2529

DISTRIBUTOR

Quasar Distributors, LLC

777 East Wisconsin Avenue

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, 2018

HENNESSY LARGE CAP

FINANCIAL FUND

Investor Class  HLFNX

Institutional Class  HILFX

hennessyfunds.com  |  1-800-966-4354

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Contents

Letter to Shareholders	2
Performance Overview	4
Financial Statements
Schedule of Investments	7
Statement of Assets and Liabilities	10
Statement of Operations	11
Statements of Changes in Net Assets	13
Financial Highlights	14
Notes to the Financial Statements	17
Report of Independent Registered Public Accounting Firm	25
Trustees and Officers of the Fund	26
Expense Example	30
Proxy Voting Policy and Proxy Voting Records	32
Quarterly Schedule of Investments	32
Federal Tax Distribution Information	32
Important Notice Regarding Delivery of Shareholder Documents	32
Privacy Policy	33

HENNESSY FUNDS 1-800-966-4354

December 2018

Dear Hennessy Funds Shareholder:

Over the past year, we have witnessed the return of market volatility. U.S. stocks still registered healthy gains, bolstered by the impact on corporate profits of the successful passage of the tax reform bill in December 2017. However, concerns over potential trade disruptions, especially between the U.S. and China, and worries over higher short-term interest rates, which many believe could possibly trigger a recession down the road, put downward pressure on equity valuations.

The U.S. economy performed well over the period, and actually achieved an acceleration in GDP growth to over 3% on an annualized basis in the second and third quarters of calendar year 2018. During the past year, companies continued to hire workers, adding over 200,000 jobs per month on average, sending the unemployment rate down to 3.7% in October, which is the lowest it has been since 1969. Consumer confidence is high and still rising, and corporate profits reached record levels in the third quarter of calendar year 2018, posting a year-over-year increase of 26% for the companies in the S&P 500 Index.

The Federal Reserve, confident about the strength of the economy and mindful of a tight labor market, raised short-term interest rates four times over the last year, by a quarter point each time. Long-term bond yields also rose, driven higher primarily by evidence of faster wage growth, pushing the U.S. 10-year Treasury bond over 3% for the first time since 2013.

As I write this, we are experiencing the market’s 20th downturn since 2010. I have been saying that every bull market experiences volatility and pullbacks. Many financial commentators think this bull market is “long in the tooth.” I do not agree with them. I believe stock valuations are still very reasonable. The prospective price to earnings multiple for the Dow Jones Industrial Average has come down from almost 20x at the end of 2017 to 16x, just above its 10-year average of 15x. The prospective PE multiple for the S&P 500 Index has also come down, from 20x to 17x, and compares favorably to its 10-year average of 16x.

Cash, meanwhile, continues to build up on corporate balance sheets. The companies in the S&P 500 Index reported a total of over $5.4 trillion in cash and marketable securities in their latest filings. Companies have been spending some of their cash, increasing their investment spending and laying the groundwork for future earnings growth. However, they have also been returning capital to shareholders. S&P 500 Index companies announced $433.6 billion in share repurchases during the second quarter of calendar year 2018, nearly doubling the previous record of $242.1 billion set in the first quarter. Companies are also raising their dividends.

In addition, I believe the Federal Reserve will take care not to raise interest rates too high or too fast and endanger the economic expansion. While wage growth has risen to over 3% in October, other measures of inflationary pressure, such as the Consumer Price Index and the Producer Price Index, still show prices increasing at a more moderate pace, closer to 2%. Given continued evidence of modest rates of inflation, I believe the Fed will be able to maintain its gradual pace of interest rate hikes.

Finally and importantly, I still see no signs of euphoria in this market. In my opinion, the enthusiasm present earlier in the year, which followed the significant reduction in corporate income tax rates, has largely evaporated, and it has been replaced with anxiety

HENNESSYFUNDS.COM

2

LETTER TO SHAREHOLDERS

over higher interest rates and their potential impact on growth. In the past, I have likened the current bull market to that of 1982-2000, and I still believe this comparison holds true. I am confident in the strength of the market today and believe the economy will continue to grow in the coming year, albeit at a more moderate pace.

Thank you for your continued confidence and investment in the Hennessy 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 commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is a valuation measure and is calculated by dividing a company’s market price per share by its earnings per share. Earnings growth is not a measure of a fund’s future performance.

HENNESSY FUNDS 1-800-966-4354

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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, 2018

	One	Five	Ten
	Year	Years	Years
Hennessy Large Cap Financial Fund –
Investor Class (HLFNX)	1.82%	8.31%	9.92%
Hennessy Large Cap Financial Fund –
Institutional Class (HILFX)(1)	2.16%	8.59%	10.07%
Russell 1000® Financial Services Index	3.72%	11.52%	10.68%
Russell 1000® Index	6.98%	11.05%	13.42%

Expense ratios:  1.82% (Investor Class); 1.51% (Institutional Class)

⁽¹⁾ The inception date of Institutional Class shares is June 15, 2015. Performance shown prior to the inception of Institutional Class shares reflects the performance of Investor Class shares and includes expenses that are not applicable to, and are higher than, those of Institutional Class shares.

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 table does 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 www.hennessyfunds.com. Performance for periods on or prior to October 26, 2012, is that of the FBR Large Cap Financial Fund.

The Russell 1000^® Financial Services Index is commonly used to measure the performance of large-capitalization financial sector stocks. The Russell 1000^® Index is commonly used to measure the performance of U.S. large-capitalization stocks. One cannot invest directly in an index.

Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes or Russell ratings or underlying data and no party may rely on any Russell Indexes or Russell ratings or underlying data contained in this

HENNESSYFUNDS.COM

4

PERFORMANCE OVERVIEW

communication. No further distribution of Russell data is permitted without Russell’s express written consent. Russell does not promote, sponsor, or endorse the content of this communication.

The expense ratios presented are from the most recent prospectus. The expense ratios for the current reporting period are available in the Financial Highlights section of this report.

PERFORMANCE NARRATIVE

Portfolio Managers David H. Ellison and Ryan C. Kelley

Performance:

For the 12-month period ended October 31, 2018, the Investor Class of the Hennessy Large Cap Financial Fund returned 1.82%, underperforming the Russell 1000^® Financial Services Index (the Fund’s primary benchmark) and the Russell 1000^® Index, which returned 3.72% and 6.98%, respectively, for the same period.

The Fund’s underperformance relative to its primary benchmark can be attributed predominantly to stock selection, particularly in the Diversified Financials industry group. This underperformance was offset to some degree by positive contributions to relative performance from sub-industry allocation. The Fund’s overweight position in Software and Services contributed most significantly to relative performance, with payment services companies including Mastercard, Inc., Visa, Inc., PayPal Holdings, Inc., and Global Payments, Inc. performing well. The Fund’s underweight position in Insurance also helped relative performance. Among the holdings in the Diversified Financials industry group, State Street Corp., Morgan Stanley, and Goldman Sachs Group, Inc. performed poorly over the period.

The Fund continues to hold all of the companies mentioned.

Portfolio Strategy:

Historically, the Fund has tilted its investments more heavily toward regional banks and diversified global banks and to a lesser degree toward insurance companies, real estate companies, and asset managers. However, we have increased our exposure to electronic payment companies over the last few years. We believe that growth in the electronic payment industry will continue as the use of mobile payment methods spreads. In general, we seek companies that we believe have high-quality management teams, less complex business models, and the prospect of sustainable earnings growth over time. We also try to identify companies that we expect will do well in the current environment, which is characterized by low-but-rising interest rates, competitive loan markets, and growing competition from electronic payment platforms. We are less interested in focusing solely on companies that appear to promise an increase in profitability when interest rates rise, loan demand increases, or pricing becomes more favorable, as we believe the timing of these macro industry dynamics is difficult to predict.

Investment Commentary:

We continue to believe that the outlook for large-cap financial companies is good. The macroeconomic environment in the United States is positive. The U.S. economy is growing at a healthy rate, unemployment is low, and growth in both consumption and capital spending has accelerated over the last 12 months. Corporate earnings have risen significantly over the first nine months of 2018, helped, in part, by lower taxes. We expect earnings growth to be slower next year yet remain positive, driven primarily by continued steady economic growth.

HENNESSY FUNDS 1-800-966-4354

5

The Fund remains overweight fee-based electronic service providers because we believe these companies will continue to grow their revenues and earnings, driven by the global shift towards cashless forms of payment. In our opinion, the outlook for larger banks is also favorable, with the prospect of higher net interest margins as the Federal Reserve continues to increase short-term interest rates. In addition, we believe many large banks have been slow to implement technology and operate too many branches, and management teams are now recognizing that they have an opportunity over the next decade to increase efficiency and drive earnings growth, regardless of the rate of loan growth or level of interest rates. In addition, banks are changing the way they do business, constructing their balance sheets with less risk and moving to increase their fee-based businesses.

_______________

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 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. Investments are focused in the financial services industry; sector funds may be subject to a higher degree of market risk. The Fund invests in medium-sized companies, which may have limited liquidity and greater volatility compared to larger companies. 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.

HENNESSYFUNDS.COM

6

PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as ofOctober 31, 2018

HENNESSY LARGE CAP FINANCIAL FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)	% NET ASSETS
Visa, Inc., Class A	5.25%
The PNC Financial Services Group, Inc.	5.16%
Mastercard, Inc., Class A	5.16%
JPMorgan Chase & Co.	5.03%
Bank of America Corp.	5.02%
Capital One Financial Corp.	5.02%
Berkshire Hathaway, Inc., Class B	4.94%
PayPal Holdings, Inc.	4.90%
Citigroup, Inc.	4.27%
Moody’s Corp.	4.09%

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.

The Global Industry Classification Standard (GICS^®) was developed by and is the exclusive property and a service mark of MSCI, Inc. and Standard & Poor Financial Services LLC.  It has been licensed for use by the Hennessy Funds.

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7

COMMON STOCKS – 90.11%	Number				% of
	of Shares		Value		Net Assets
Communication Services – 2.59%
Zillow Group, Inc. (a)		32,000	$	1,291,840		2.59	%
Financials – 63.42%
American Express Co.		9,000		924,570		1.85	%
Bank of America Corp.		91,000		2,502,500		5.02	%
Berkshire Hathaway, Inc., Class B (a)		12,000		2,463,360		4.94	%
Capital One Financial Corp.		28,000		2,500,400		5.02	%
Citigroup, Inc.		32,500		2,127,450		4.27	%
Citizens Financial Group, Inc.		47,000		1,755,450		3.52	%
Fifth Third Bancorp		20,000		539,800		1.08	%
JPMorgan Chase & Co.		23,000		2,507,460		5.03	%
KeyCorp		60,000		1,089,600		2.19	%
Moody’s Corp.		14,000		2,036,720		4.09	%
Morgan Stanley		34,000		1,552,440		3.11	%
MSCI, Inc.		7,500		1,127,850		2.26	%
State Street Corp.		14,000		962,500		1.93	%
SunTrust Banks, Inc.		27,000		1,691,820		3.39	%
The Charles Schwab Corp.		39,000		1,803,360		3.62	%
The Goldman Sachs Group, Inc.		5,500		1,239,535		2.49	%
The PNC Financial Services Group, Inc.		20,000		2,569,800		5.16	%
U.S. Bancorp (c)		22,000		1,149,940		2.31	%
Wells Fargo & Co.		20,000		1,064,600		2.14	%
				31,609,155		63.42	%
Information Technology – 24.10%
Global Payments, Inc.		15,000		1,713,450		3.44	%
Mastercard, Inc., Class A		13,000		2,569,710		5.16	%
PayPal Holdings, Inc. (a)		29,000		2,441,510		4.90	%
SS&C Technologies Holdings, Inc.		7,500		383,700		0.77	%
Total System Services, Inc.		17,000		1,549,550		3.11	%
Visa, Inc., Class A		19,000		2,619,150		5.25	%
Worldpay, Inc. (a)		8,000		734,720		1.47	%
				12,011,790		24.10	%
Total Common Stocks
(Cost $39,311,908)				44,912,785		90.11	%

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

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SCHEDULE OF INVESTMENTS

SHORT-TERM INVESTMENTS – 12.39%	Number					% of
	of Shares		Value			Net Assets
Money Market Funds – 12.39%
Fidelity Government Portfolio, Institutional Class, 2.06% (b)		2,436,000	$	2,436,000			4.89	%
Morgan Stanley Institutional Liquidity Fund Government Portfolio,
Institutional Class, 2.05% (b)		1,302,912		1,302,912			2.61	%
The Government & Agency Portfolio, Institutional Class, 2.08% (b)		2,436,000		2,436,000			4.89	%
Total Short-Term Investments
(Cost $6,174,912)				6,174,912			12.39	%
Total Investments
(Cost $45,486,820) – 102.50%				51,087,697			102.50	%
Liabilities in Excess of Other Assets – (2.50)%				(1,244,795	)		(2.50	)%
TOTAL NET ASSETS – 100.00%			$	49,842,902			100.00	%

Percentages are stated as a percent of net assets.

(a)	Non-income producing security.
(b)	The rate listed is the fund’s seven-day yield as of October 31, 2018.
(c)	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, 2018, are as follows:

Issuer	U.S. Bancorp
Beginning Cost	$	838,120
Purchase Cost	$	1,155,804
Sales Cost	$	(848,280	)
Ending Cost	$	1,145,644
Dividend Income	$	21,240
Net Change in
Unrealized Depreciation	$	(82,044	)
Realized Gain	$	50,621
Shares		22,000
Market Value	$	1,149,940

Summary of Fair Value Exposure at October 31, 2018

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2018 (See Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Communication Services	$	1,291,840	$	—	$	—	$	1,291,840
Financials		31,609,155		—		—		31,609,155
Information Technology		12,011,790		—		—		12,011,790
Total Common Stocks	$	44,912,785	$	—	$	—	$	44,912,785
Short-Term Investments
Money Market Funds	$	6,174,912	$	—	$	—	$	6,174,912
Total Short-Term Investments	$	6,174,912	$	—	$	—	$	6,174,912
Total Investments	$	51,087,697	$	—	$	—	$	51,087,697

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

HENNESSY FUNDS 1-800-966-4354

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Financial Statements

Statement of Assets and Liabilities as of October 31, 2018

ASSETS:
Investments in unaffiliated securities, at value (cost $44,341,176)	$	49,937,757
Investments in affiliated securities, at value (cost $1,145,644)		1,149,940
Total investments in securities, at value (cost $45,486,820)		51,087,697
Dividends and interest receivable		55,963
Receivable for fund shares sold		33,877
Receivable for securities sold		246,097
Prepaid expenses and other assets		15,197
Total Assets		51,438,831
LIABILITIES:
Payable for securities purchased		1,479,002
Payable for fund shares redeemed		19,521
Payable to advisor		39,198
Payable to administrator		4,590
Payable to auditor		21,900
Accrued distribution fees		8,586
Accrued service fees		3,576
Accrued interest payable		91
Accrued trustees fees		5,960
Accrued expenses and other payables		13,505
Total Liabilities		1,595,929
NET ASSETS	$	49,842,902
NET ASSETS CONSIST OF:
Capital stock	$	43,876,268
Total distributable earnings		5,966,634
Total Net Assets	$	49,842,902
NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	40,989,982
Shares issued and outstanding		1,912,926
Net asset value, offering price and redemption price per share	$	21.43
Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	8,852,920
Shares issued and outstanding		413,800
Net asset value, offering price and redemption price per share	$	21.39

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

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STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS

Financial Statements

Statement of Operations for the year ended October 31, 2018

INVESTMENT INCOME:
Dividend income from unaffiliated securities	$	542,564
Dividend income from affiliated securities		21,240
Interest income		32,642
Total investment income		596,446
EXPENSES:
Investment advisory fees (See Note 5)		428,499
Sub-transfer agent expenses – Investor Class (See Note 5)		69,674
Sub-transfer agent expenses – Institutional Class (See Note 5)		5,749
Distribution fees – Investor Class (See Note 5)		59,248
Administration, fund accounting, custody and transfer agent fees (See Note 5)		45,895
Service fees – Investor Class (See Note 5)		39,499
Federal and state registration fees		34,329
Compliance expense (See Note 5)		29,500
Audit fees		22,501
Trustees’ fees and expenses		16,727
Reports to shareholders		16,621
Interest expense (See Note 7)		4
Other expenses		5,936
Total expenses		774,182
NET INVESTMENT LOSS	$	(177,736	)
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on:
Unaffiliated investments	$	1,150,798
Affiliated investments		50,621
Net change in unrealized appreciation/depreciation on:
Unaffiliated investments		(1,576,046	)
Affiliated investments		(82,044	)
Net loss on investments		(456,671	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(634,407	)

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

HENNESSY FUNDS 1-800-966-4354

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STATEMENTS OF CHANGES IN NET ASSETS

Financial Statements

Statements of Changes in Net Assets

	Year Ended			Year Ended
	October 31, 2018			October 31, 2017
OPERATIONS:
Net investment loss	$	(177,736	)	$	(116,337	)
Net realized gain on investments		1,201,419			4,459,225
Net change in unrealized
appreciation/depreciation on investments		(1,658,090	)		4,725,077
Net increase (decrease) in net
assets resulting from operations		(634,407	)		9,067,965
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Distributable earnings – Investor Class		(1,219,312	)		(158,906	)
Distributable earnings – Institutional Class		(296,176	)		(29,650	)
Total distributions		(1,515,488	)		(188,556	)(1)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		24,589,903			5,666,734
Proceeds from shares subscribed – Institutional Class		7,641,988			5,259,686
Dividends reinvested – Investor Class		1,178,036			154,596
Dividends reinvested – Institutional Class		296,176			29,650
Cost of shares redeemed – Investor Class		(9,240,403	)		(14,389,624	)
Cost of shares redeemed – Institutional Class		(4,636,260	)		(458,597	)
Net increase (decrease) in net assets derived
from capital share transactions		19,829,440			(3,737,555	)
TOTAL INCREASE IN NET ASSETS		17,679,545			5,141,854
NET ASSETS:
Beginning of year		32,163,357			27,021,503
End of year	$	49,842,902		$	32,163,357	(2)
CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		1,072,989			289,553
Shares sold – Institutional Class		339,855			265,747
Shares issued to holders as reinvestment
of dividends – Investor Class		54,162			8,027
Shares issued to holders as reinvestment
of dividends – Institutional Class		13,686			1,551
Shares redeemed – Investor Class		(410,285	)		(745,488	)
Shares redeemed – Institutional Class		(205,942	)		(22,449	)
Net increase (decrease) in shares outstanding		864,465			(203,059	)

(1)	All distributions were from net investment income.
(2)	Includes accumulated undistributed net investment loss of $(114,001).

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

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

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.

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FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	22.02		$	16.23		$	18.36		$	20.87		$	19.01
	(0.07	)		(0.08	)		0.07			0.01			0.00	(1)
	0.48			5.97			(0.49	)		(0.40	)		2.44
	0.41			5.89			(0.42	)		(0.39	)		2.44
	—			(0.10	)		(0.02	)		—			—
	(1.00	)		—			(1.69	)		(2.12	)		(0.58	)
	(1.00	)		(0.10	)		(1.71	)		(2.12	)		(0.58	)
$	21.43		$	22.02		$	16.23		$	18.36		$	20.87
	1.82	%		36.41	%		(2.57	)%		(2.57	)%		13.04	%
$	40.99		$	26.33		$	26.67		$	100.73		$	98.07
	1.69	%		1.81	%		1.66	%		1.57	%		1.49	%
	(0.44	)%		(0.41	)%		0.16	%		0.03	%		(0.01	)%
	64	%		76	%		141	%		74	%		58	%

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 period

										Period Ended
	Year Ended October 31,									October 31,
	2018			2017			2016			2015(1)
PER SHARE DATA:
Net asset value, beginning of period	$	21.91		$	16.26		$	18.39		$	19.72
Income from
investment operations:
Net investment income (loss)		0.03			0.18			0.02			0.01
Net realized and unrealized
gains (losses) on investments		0.45			5.78			(0.36	)		(1.34	)
Total from investment operations		0.48			5.96			(0.34	)		(1.33	)
Less distributions:
Dividends from net
investment income		—			(0.31	)		(0.09	)		—
Dividends from net realized gains		(1.00	)		—			(1.70	)		—
Total distributions		(1.00	)		(0.31	)		(1.79	)		—
Net asset value, end of period	$	21.39		$	21.91		$	16.26		$	18.39
TOTAL RETURN		2.16	%		36.92	%		(2.14	)%		(6.74	)%(2)
SUPPLEMENTAL
DATA AND RATIOS:
Net assets, end of period (millions)	$	8.85		$	5.83		$	0.35		$	0.29
Ratio of expenses to
average net assets		1.34	%		1.50	%		1.24	%		1.19	%(3)
Ratio of net investment income
(loss) to average net assets		(0.07	)%		(0.17	)%		0.52	%		0.25	%(3)
Portfolio turnover rate(4)		64	%		76	%		141	%		74	%(2)

(1)	Institutional Class shares commenced operations on June 15, 2015.
(2)	Not annualized.
(3)	Annualized.
(4)	Portfolio turnover is calculated on the basis of the Fund as a whole.

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

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FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS/NOTES TO THE FINANCIAL STATEMENTS

Financial Statements

Notes to the Financial Statements October 31, 2018

1).  ORGANIZATION

The Hennessy Large Cap Financial 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 did not have Institutional Class shares until June 15, 2015.  The investment objective of the Fund is capital appreciation.  The Fund is a non-diversified fund.

The Fund offers Investor Class and Institutional Class shares.  Each class of shares differs principally in its respective 12b-1 distribution and service, shareholder servicing, and sub-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 to U.S. generally accepted accounting principles (“GAAP”).

a).	Securities 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 because 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/loss and realized gains/losses for federal income tax purposes may differ from those reported in 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.  The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
	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 fiscal year 2018 have been identified and appropriately reclassified in the Statement of Assets and Liabilities. The adjustments are as follows:

Total
Distributable
Earnings	Capital Stock
$(64,607)	$64,607

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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.  Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.  Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December.  Distributions of net realized capital gains, if any, are declared and paid annually, usually in December.
f).	Security Transactions – Investment and shareholder transactions are recorded on the trade date.  The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the security lot sold with the net sale proceeds.  Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
g).	Use of Estimates – 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 (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by (ii) the total number of 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).	New Accounting Pronouncements – In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 does not eliminate the requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the changes in unrealized gains and losses for recurring Level 3 fair value measurements. ASU 2018-13 requires that information is provided about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has

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NOTES TO THE FINANCIAL STATEMENTS

evaluated the impact of this change in guidance, and due to the permissibility of early adoption, modified the Fund’s fair value disclosures for the current reporting period.

j).

New Rule Issuances – In August 2018, the Securities and Exchange Commission issued Final Rule Release No. 33 10532, Disclosure Update and Simplification, which in part amends certain financial statement disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, GAAP, or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amendments to Rule 6-04.17 of Regulation S-X (balance sheet) were amended to require presentation of the total, rather than the components of net assets, of distributable earnings on the balance sheet. Consistent with GAAP, funds will be required to disclose total distributable earnings. The amendments to Rule 6-09 of Regulation S-X (statement of changes in net assets) omit the requirement to separately state the sources of distributions paid as well as omit the requirement to parenthetically state the book basis amount of undistributed net investment income. Instead, consistent with GAAP, funds will be required to disclose the total amount of distributions paid, except that any tax return of capital must be separately disclosed. The requirements of the Final Rule Release are effective November 5, 2018 and the Fund’s Statement of Assets and Liabilities and the Statement of Changes in Net Assets for the current and prior reporting period have been modified accordingly.

3).  SECURITIES VALUATION

The Fund follows 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 of 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 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”)

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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 foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).

Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, are generally priced at the ending NAV provided by the applicable mutual fund’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.

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 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 values of other similar securities, and news events with direct bearing on a security or markets.  Fair value pricing results in an estimated price for a

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NOTES TO THE FINANCIAL STATEMENTS

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’ values as determined by the Board or its designee, pursuant to the fair value pricing procedures adopted by the Board, instead of being determined by the market.  Using a fair value pricing methodology to price a foreign security may result in a value that is different from such foreign security’s most recent closing price and from the value used by other investment companies to calculate their NAVs.  Such securities are generally classified in Level 2 of 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 “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 determinations.  Various inputs are used to determine 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, 2018, are included in the Schedule of Investments.

4).  INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during fiscal year 2018 were $42,122,633 and $28,569,905, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during fiscal year 2018.

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.  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, as amended.  During fiscal year 2018, the Fund did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940, as amended.

5).  INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

The Advisor provides the Fund with investment advisory services under an Investment Advisory Agreement.  The Advisor furnishes all investment advice, office space, and facilities, as well as 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 an annual rate of 0.90%.  The net investment advisory fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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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 advisory 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.  The shareholder service fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 is currently only using up to 0.15% of its average daily net assets attributable to Investor Class shares 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, printing and mailing of prospectuses to other than current shareholders, 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 distribution fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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.  The sub-transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services (“Fund Services”) provides the Fund with administrative, fund accounting, and transfer agent services. As administrator, Fund Services 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. U.S. Bank N.A., an affiliate of Fund Services, serves as the Fund’s custodian. The servicing agreements between the Trust and Fund Services and U.S. Bank N.A. contain a fee schedule that is inclusive of administrative, fund accounting, custody, and transfer agent fees. The administrative, fund accounting, custody, and transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 Fund Services 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.  The compliance fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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NOTES TO THE FINANCIAL STATEMENTS

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 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 fiscal year 2018 the Fund had an outstanding average daily balance and a weighted average interest rate of $71 and 5.00%, respectively. The interest expensed by the Fund during fiscal year 2018 is included in the Statement of Operations. The maximum amount outstanding for the Fund during fiscal year 2018 was $26,000. As of October 31, 2018, the Fund did not have any borrowings outstanding under the line of credit.

8).  FEDERAL TAX INFORMATION

As of October 31, 2018, the components of accumulated earnings (losses) for income tax purposes were as follows:

	Investments
Cost of investments for tax purposes	$	46,213,309
Gross tax unrealized appreciation	$	7,356,788
Gross tax unrealized depreciation		(2,482,400	)
Net tax unrealized appreciation/(depreciation)	$	4,874,388
Undistributed ordinary income	$	—
Undistributed long-term capital gains		1,232,897
Total distributable earnings	$	1,232,897
Other accumulated gain/(loss)	$	(140,651	)
Total accumulated gain/(loss)	$	5,966,634

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 late-year ordinary losses.

As of October 31, 2018, the Fund had no tax basis capital losses to offset future capital gains.

As of October 31, 2018, the Fund deferred, on a tax basis, a late-year ordinary loss of $140,651.  Late-year ordinary losses are net ordinary losses incurred after December 31, 2017, but within the taxable year, that are deemed to arise on the first day of the Fund’s next taxable year.

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During fiscal year 2018 and fiscal year 2017, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2018		October 31, 2017
Ordinary income(1)	$	—	$	187,217
Long-term capital gain		1,515,488		1,339
	$	1,515,488	$	188,556

⁽¹⁾  Ordinary income includes short-term capital gains.

9).  EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2018, 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, 2018, capital gains were declared and paid to shareholders of record on December 6, 2018, as follows:

	Long-term
Investor Class	$0.58896
Institutional Class	$0.59199

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NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Report of Independent Registered Public

Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the shareholders of Hennessy Large Cap Financial Fund

Novato, CA

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Hennessy Large Cap Financial Fund (the “Fund”), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2018, 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, financial highlights for each of the five years in the period then ended, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, 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.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management.  Our responsibility is to express an opinion on the Fund’s financial statements based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We have served as the auditor of one or more of the funds in the Trust since 2002.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.  The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2018 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures.  We believe that our audits provide a reasonable basis for our opinion.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2018

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Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Funds 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 to the Board of Trustees (“Advisers”) 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: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board of Trustees 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 Trustee oversees the 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 worked for the	None.
(1981)		Sutter Health organization since
Adviser to the Board		2011 in various positions. He has
		served as the Chief Executive Officer
		of the Sutter Roseville Medical
		Center since 2018. From 2016 through
		2018, he served as the Vice President
		of Strategy for the Sutter Health Valley
		Area, which includes 11 hospitals,
		13 ambulatory surgery centers,
		16,000 employees, and 1,900 physicians.
		From 2013 through 2016, Mr. Alexander
		served as Sutter Novato Community
		Hospital’s Chief Administrative Officer,
		and from 2011 through 2012, he
		served as a Director of Strategy
		within Sutter’s West Bay Region.

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26

TRUSTEES AND OFFICERS OF THE FUND

			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. Neil Hennessy has been employed	Hennessy
(1956)	a Trustee and	by Hennessy Advisors, Inc. since	Advisors, Inc.
Trustee, Chairman of	June 2008 as	1989 and currently serves as its
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 President, Chief Operating
Executive Vice President		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 Secretary
Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013 and currently serves as its Chief
Senior Vice President		Compliance Officer and Senior Vice President.
and Head of Distribution
Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)(3)		as its General Counsel since June 2013.
Senior Vice President and
Chief Compliance Officer

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27

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)(4)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Large Cap Financial Fund and the Hennessy Small
and Portfolio Manager		Cap Financial Fund since inception. Mr. Ellison also served as a
		Portfolio Manager of the Hennessy Technology Fund from its
		inception until February 2017. Mr. Ellison served as Director,
		CIO and President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.
Ryan C. Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)(5)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Gas Utility Fund, the Hennessy Large Cap Financial
and Portfolio Manager		Fund, and the Hennessy Small 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. Mr. Kelley has also served as a Portfolio
		Manager of the Hennessy Cornerstone Growth Fund, the
		Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
		Cornerstone Large Growth Fund, and the Hennessy
		Cornerstone Value Fund since February 2017, as a Co-Portfolio
		Manager of the Hennessy Technology Fund since February
		2017, and as a Portfolio Manager of the Hennessy Total Return
		Fund and the Hennessy Balanced Fund since May 2018.
		Mr. Kelley served as Portfolio Manager of FBR Fund Advisers,
		Inc. from January 2008 to October 2012.
Tania Kelley	October 2003	Ms. Kelley has been employed by Hennessy Advisors, Inc.
(1965)		since October 2003.
Senior Vice President
and Head of Marketing

Daniel P. Hennessy	December 2016	Mr. Daniel Hennessy has been employed by Hennessy Advisors,
(1990)		Inc. since 2015. He has served as an Associate Analyst or
Vice President		Analyst of the Hennessy Technology Fund since February 2017.
and Analyst		Mr. Daniel Hennessy previously served as a Mutual Fund
		Specialist at U.S. Bancorp Fund Services, LLC (now doing
		business as U.S. Bank Global Fund Services) from November
		2014 to July 2015. Prior to that, he attended the University of
		San Diego, where he earned a degree in Political Science.

_______________

(1)	Messrs. DeSousa, Doyle, N. 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 the Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
(2)	Mr. N. 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 this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
(4)	The address of this officer is 101 Federal Street, Suite 1900, Boston, MA 02110.
(5)	The address of this officer is 1340 Environ Way, Suite 332, Chapel Hill, NC 27517.

HENNESSYFUNDS.COM

28

TRUSTEES AND OFFICERS OF THE FUND

(This Page Intentionally Left Blank.)

HENNESSY FUNDS 1-800-966-4354

29

Expense Example (Unaudited)

October 31, 2018

As a shareholder of the Fund, you incur 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, 2018, through October 31, 2018.

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. Bank Global Fund Services, 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” or “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. 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.

HENNESSYFUNDS.COM

30

EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period(1)
	Account Value	Account Value	May 1, 2018 –
	May 1, 2018	October 31, 2018	October 31, 2018
Investor Class
Actual	$1,000.00	$   965.30	$8.27
Hypothetical (5% return before expenses)	$1,000.00	$1,016.79	$8.49
Institutional Class
Actual	$1,000.00	$   967.00	$6.40
Hypothetical (5% return before expenses)	$1,000.00	$1,018.70	$6.56

⁽¹⁾ Expenses are equal to the Fund’s annualized expense ratio of 1.67% for Investor Class shares or 1.29% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/365 days (to reflect one-half year period).

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31

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 www.hennessyfunds.com/proxy-voting/voting-policy; or (3) on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at www.hennessyfunds.com/proxy-voting/voting-record 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 a 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 Forms N-Q are available on the SEC’s website at www.sec.gov.  Information included in the Fund’s Forms N-Q will also be available upon request by calling 1-800-966-4354.

Federal Tax Distribution Information

(Unaudited)

For fiscal year 2018, 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 0.00%.

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for fiscal year 2018 was 0.00%.

The percentage of taxable ordinary income distributions that were 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 0.00%.

Important Notice Regarding Delivery

of Shareholder Documents

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of shareholder reports, proxy statements, and prospectuses to shareholders who share an address and have the same last name. This process does not apply to account statements. You may request an individual copy of a shareholder document at any time. If you would like to receive separate mailings of shareholder documents, please call U.S. Bank Global Fund Services at 1-800-261-6950 or 1-414-765-4124, and individual delivery will begin within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact such intermediary directly to request individual delivery.

HENNESSYFUNDS.COM

32

PROXY VOTING — PRIVACY POLICY

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 will be shared with non-affiliated third parties.

HENNESSY FUNDS 1-800-966-4354

33

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 Boulevard, Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT, &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

d/b/a U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Drive, 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

Two Liberty Place

50 South 16th Street, Suite 2900

Philadelphia, Pennsylvania 19102-2529

DISTRIBUTOR

Quasar Distributors, LLC

777 East Wisconsin Avenue

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, 2018

HENNESSY SMALL CAP

FINANCIAL FUND

Investor Class  HSFNX

Institutional Class  HISFX

hennessyfunds.com | 1-800-966-4354

(This Page Intentionally Left Blank.)

Contents

Letter to Shareholders	2
Performance Overview	4
Financial Statements
Schedule of Investments	7
Statement of Assets and Liabilities	10
Statement of Operations	11
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 Policy and Proxy Voting Records	32
Quarterly Schedule of Investments	32
Federal Tax Distribution Information	32
Important Notice Regarding Delivery of Shareholder Documents	32
Privacy Policy	33

HENNESSY FUNDS 1-800-966-4354

December 2018

Dear Hennessy Funds Shareholder:

Over the past year, we have witnessed the return of market volatility. U.S. stocks still registered healthy gains, bolstered by the impact on corporate profits of the successful passage of the tax reform bill in December 2017. However, concerns over potential trade disruptions, especially between the U.S. and China, and worries over higher short-term interest rates, which many believe could possibly trigger a recession down the road, put downward pressure on equity valuations.

The U.S. economy performed well over the period, and actually achieved an acceleration in GDP growth to over 3% on an annualized basis in the second and third quarters of calendar year 2018. During the past year, companies continued to hire workers, adding over 200,000 jobs per month on average, sending the unemployment rate down to 3.7% in October, which is the lowest it has been since 1969. Consumer confidence is high and still rising, and corporate profits reached record levels in the third quarter of calendar year 2018, posting a year-over-year increase of 26% for the companies in the S&P 500 Index.

The Federal Reserve, confident about the strength of the economy and mindful of a tight labor market, raised short-term interest rates four times over the last year, by a quarter point each time. Long-term bond yields also rose, driven higher primarily by evidence of faster wage growth, pushing the U.S. 10-year Treasury bond over 3% for the first time since 2013.

As I write this, we are experiencing the market’s 20th downturn since 2010. I have been saying that every bull market experiences volatility and pullbacks. Many financial commentators think this bull market is “long in the tooth.” I do not agree with them. I believe stock valuations are still very reasonable. The prospective price to earnings multiple for the Dow Jones Industrial Average has come down from almost 20x at the end of 2017 to 16x, just above its 10-year average of 15x. The prospective PE multiple for the S&P 500 Index has also come down, from 20x to 17x, and compares favorably to its 10-year average of 16x.

Cash, meanwhile, continues to build up on corporate balance sheets. The companies in the S&P 500 Index reported a total of over $5.4 trillion in cash and marketable securities in their latest filings. Companies have been spending some of their cash, increasing their investment spending and laying the groundwork for future earnings growth. However, they have also been returning capital to shareholders. S&P 500 Index companies announced $433.6 billion in share repurchases during the second quarter of calendar year 2018, nearly doubling the previous record of $242.1 billion set in the first quarter. Companies are also raising their dividends.

In addition, I believe the Federal Reserve will take care not to raise interest rates too high or too fast and endanger the economic expansion. While wage growth has risen to over 3% in October, other measures of inflationary pressure, such as the Consumer Price Index and the Producer Price Index, still show prices increasing at a more moderate pace, closer to 2%. Given continued evidence of modest rates of inflation, I believe the Fed will be able to maintain its gradual pace of interest rate hikes.

Finally and importantly, I still see no signs of euphoria in this market. In my opinion, the enthusiasm present earlier in the year, which followed the significant reduction in corporate income tax rates, has largely evaporated, and it has been replaced with anxiety

HENNESSYFUNDS.COM

2

LETTER TO SHAREHOLDERS

over higher interest rates and their potential impact on growth. In the past, I have likened the current bull market to that of 1982-2000, and I still believe this comparison holds true. I am confident in the strength of the market today and believe the economy will continue to grow in the coming year, albeit at a more moderate pace.

Thank you for your continued confidence and investment in the Hennessy 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 commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is a valuation measure and is calculated by dividing a company’s market price per share by its earnings per share. Earnings growth is not a measure of a fund’s future performance.

HENNESSY FUNDS 1-800-966-4354

3

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, 2018

	One	Five	Ten
	Year	Years	Years
Hennessy Small Cap Financial Fund –
Investor Class (HSFNX)	-8.79%	6.98%	9.41%
Hennessy Small Cap Financial Fund –
Institutional Class (HISFX)	-8.42%	7.37%	9.74%
Russell 2000® Financial Services Index	-1.99%	9.28%	10.20%
Russell 2000® Index	1.85%	8.01%	12.44%

Expense ratios:  1.53% (Investor Class); 1.16% (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 table does 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 www.hennessyfunds.com. Performance for periods on or prior to October 26, 2012, is that of the FBR Small Cap Financial Fund.

The Russell 2000^® Financial Services Index is commonly used to measure the performance of U.S. small-capitalization financial sector stocks. The Russell 2000^® Index is commonly used to measure the performance of U.S. small-capitalization stocks. One cannot invest directly in an index.

Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes or Russell ratings or underlying data and no party may rely on any Russell Indexes or Russell ratings or underlying data contained in this communication. No further distribution of Russell data is permitted without Russell’s express written consent. Russell does not promote, sponsor, or endorse the content of this communication.

HENNESSYFUNDS.COM

4

PERFORMANCE OVERVIEW

The expense ratios presented are from the most recent prospectus. The expense ratios for the current reporting period are available in the Financial Highlights section of this report.

PERFORMANCE NARRATIVE

Portfolio Managers David H. Ellison and Ryan C. Kelley

Performance:

For the 12-month period ended October 31, 2018, the Investor Class of the Hennessy Small Cap Financial Fund returned -8.79%, underperforming the Russell 2000^® Financial Services Index (the Fund’s primary benchmark) and the Russell 2000^® Index, which returned -1.99% and 1.85%, respectively, for the same period.

The Fund’s underperformance relative to its primary benchmark can be attributed predominantly to stock selection, mainly in the Banking sector.  Much of the underperformance began in the latter part of the period – the Fund is primarily invested in smaller, traditional depository franchises, and investors became increasingly concerned regarding asset quality issues as well as lack of substantial net interest margin expansion or loan growth. Banc of California, Inc., ConnectOne Bancorp, Inc., Eagle Bancorp, Inc., and Dime Community Bancshares, Inc. were among the holdings that detracted most from relative performance over the period. First BanCorp, Hingham Institution for Savings, Brookline Bancorp, Inc., and Meta Financial Group, Inc. were among the Fund’s best performing holdings and contributed positively to the Fund’s relative performance.

The Fund continues to hold all of the companies mentioned except for Meta Financial Group, Inc.

Portfolio Strategy:

Generally, the Fund tilts its investments more heavily toward regional banks, thrifts, and, at times, mortgage finance companies. Within these preferred sub-industries, we seek companies that we believe have high-quality management teams, uncomplicated business models, and sustainable earnings growth opportunities. Moreover, we identify companies that we expect will do well in the current environment, which is characterized by low-but-rising interest rates, competitive loan markets, and heightened regulatory control. We are less interested in companies that appear to promise an increase in profitability when interest rates rise or loan demand and pricing becomes more favorable because we believe these industry dynamics are difficult to predict.

Investment Commentary:

We continue to believe that the outlook for small-cap financial companies is good. The macroeconomic environment in the United States is positive. The U.S. economy is growing at a healthy rate, unemployment is low, and growth in both consumption and capital spending has accelerated over the last 12 months. Corporate earnings have risen significantly over the first nine months of 2018, helped, in part, by lower taxes. We expect earnings growth to be slower next year yet remain positive, driven primarily by continued steady economic growth.

In our opinion, the outlook for smaller banks and thrifts is also favorable, with the prospect of higher net interest margins as the Federal Reserve continues to increase short-term interest rates. We also expect to see continued consolidation in the sector, which should offer additional opportunities for higher profitability as a result of greater market power and economies of scale.

HENNESSY FUNDS 1-800-966-4354

5

_______________

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 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. Investments are focused in the financial services industry; sector funds may be subject to a higher degree of market risk. The Fund invests in smaller companies, which may have more limited liquidity and greater volatility compared to larger companies. 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.

HENNESSYFUNDS.COM

6

PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as of October 31, 2018

HENNESSY SMALL CAP FINANCIAL FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)	% NET ASSETS
Hingham Institution for Savings	5.17%
Union Bankshares Corp.	4.87%
Brookline Bancorp, Inc.	4.77%
OceanFirst Financial Corp.	4.74%
Meridian Bancorp, Inc.	4.27%
Kearny Financial Corp. of Maryland	4.19%
Eagle Bancorp, Inc.	3.74%
First BanCorp.	3.69%
ConnectOne Bancorp, Inc.	3.55%
Independent Bank Corp.	3.48%

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.

The Global Industry Classification Standard (GICS^®) was developed by and is the exclusive property and a service mark of MSCI, Inc. and Standard & Poor Financial Services LLC.  It has been licensed for use by the Hennessy Funds.

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7

COMMON STOCKS – 89.67%	Number				% of
	of Shares		Value		Net Assets
Financials – 89.67%
Axos Financial, Inc. (a)		45,000	$	1,366,200		0.87	%
Banc of California, Inc.		264,000		4,210,800		2.67	%
BankUnited, Inc.		120,000		3,972,000		2.52	%
Banner Corp.		60,000		3,469,200		2.20	%
Beneficial Bancorp, Inc.		225,000		3,516,750		2.23	%
Blue Hills Bancorp, Inc.		125,000		2,901,250		1.84	%
Brookline Bancorp, Inc.		485,000		7,517,500		4.77	%
Capstar Financial Holdings, Inc.		10,000		147,800		0.09	%
Columbia Financial, Inc. (a)		360,000		5,428,800		3.44	%
ConnectOne Bancorp, Inc.		270,000		5,597,100		3.55	%
Dime Community Bancshares, Inc.		80,000		1,289,600		0.82	%
Eagle Bancorp, Inc. (a)		120,000		5,900,400		3.74	%
FCB Financial Holdings, Inc., Class A (a)		105,000		4,108,650		2.61	%
First BanCorp. (a)(b)		630,000		5,814,900		3.69	%
Flushing Financial Corp.		5,000		113,450		0.07	%
Green Bancorp, Inc.		175,000		3,237,500		2.05	%
HarborOne Bancorp, Inc. (a)		290,000		5,278,000		3.35	%
Hingham Institution for Savings		40,000		8,144,000		5.17	%
IBERIABANK Corp.		52,500		3,910,725		2.48	%
Independent Bank Corp.		70,000		5,491,500		3.48	%
Kearny Financial Corp. of Maryland		510,000		6,599,400		4.19	%
Lakeland Bancorp, Inc.		170,000		2,799,900		1.78	%
Meridian Bancorp, Inc.		425,000		6,732,000		4.27	%
Midland States Bancorp, Inc.		45,000		1,213,650		0.77	%
OceanFirst Financial Corp.		295,000		7,469,400		4.74	%
Opus Bank		180,000		3,418,200		2.17	%
PacWest Bancorp		92,500		3,757,350		2.38	%
People’s United Financial, Inc.		140,000		2,192,400		1.39	%
Provident Financial Services, Inc.		15,000		366,000		0.23	%
Sterling Bancorp		250,000		4,495,000		2.85	%
The Bank of N.T. Butterfield & Son Ltd. (b)		30,000		1,208,700		0.77	%
Union Bankshares Corp.		225,000		7,681,500		4.87	%
United Financial Bancorp, Inc.		230,000		3,553,500		2.25	%
Washington Federal, Inc.		140,000		3,942,400		2.50	%

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

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SCHEDULE OF INVESTMENTS

COMMON STOCKS	Number				% of
	of Shares		Value		Net Assets
Financials (Continued)
Western Alliance Bancorp (a)		15,000	$	723,600		0.46	%
Wintrust Financial Corp.		50,000		3,807,000		2.41	%
				141,376,125		89.67	%
Total Common Stocks
(Cost $128,374,584)				141,376,125		89.67	%
SHORT-TERM INVESTMENTS – 10.05%
Money Market Funds – 10.05%
Fidelity Government Portfolio, Institutional Class, 2.06% (c)		7,911,000		7,911,000		5.02	%
Morgan Stanley Institutional Liquidity Fund, Government Portfolio,
Institutional Class, 2.05% (c)		89,297		89,297		0.05	%
The Government & Agency Portfolio, Institutional Class, 2.08% (c)		7,849,000		7,849,000		4.98	%
				15,849,297		10.05	%
Total Short-Term Investments
(Cost $15,849,297)				15,849,297		10.05	%
Total Investments
(Cost $144,223,881) – 99.72%				157,225,422		99.72	%
Other Assets in Excess of Liabilities – 0.28%				436,313		0.28	%
TOTAL NET ASSETS – 100.00%			$	157,661,735		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 seven-day yield as of October 31, 2018.

Summary of Fair Value Exposure at October 31, 2018

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2018 (See Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Financials	$	141,376,125	$	—	$	—	$	141,376,125
Total Common Stocks	$	141,376,125	$	—	$	—	$	141,376,125
Short-Term Investments
Money Market Funds	$	15,849,297	$	—	$	—	$	15,849,297
Total Short-Term Investments	$	15,849,297	$	—	$	—	$	15,849,297
Total Investments	$	157,225,422	$	—	$	—	$	157,225,422

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

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Financial Statements

Statement of Assets and Liabilities as of October 31, 2018

ASSETS:
Investments in securities, at value (cost $144,223,881)	$	157,225,422
Dividends and interest receivable		130,120
Receivable for fund shares sold		154,311
Receivable for securities sold		1,330,052
Prepaid expenses and other assets		22,071
Total Assets		158,861,976
LIABILITIES:
Payable for securities purchased		655,633
Payable for fund shares redeemed		295,502
Payable to advisor		127,743
Payable to administrator		15,425
Payable to auditor		21,899
Accrued distribution fees		26,086
Accrued service fees		10,971
Accrued trustees fees		5,964
Accrued expenses and other payables		41,018
Total Liabilities		1,200,241
NET ASSETS	$	157,661,735
NET ASSETS CONSIST OF:
Capital stock	$	135,883,798
Total distributable earnings		21,777,937
Total Net Assets	$	157,661,735
NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	121,997,850
Shares issued and outstanding		5,556,065
Net asset value, offering price and redemption price per share	$	21.96
Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	35,663,885
Shares issued and outstanding		2,686,067
Net asset value, offering price and redemption price per share	$	13.28

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

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STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS

Financial Statements

Statement of Operations for the year ended October 31, 2018

INVESTMENT INCOME:
Dividend income	$	3,092,630
Interest income		137,076
Total investment income		3,229,706
EXPENSES:
Investment advisory fees (See Note 5)		1,757,915
Sub-transfer agent expenses – Investor Class (See Note 5)		344,353
Sub-transfer agent expenses – Institutional Class (See Note 5)		26,717
Distribution fees – Investor Class (See Note 5)		236,954
Administration, fund accounting, custody and transfer agent fees (See Note 5)		188,398
Service fees – Investor Class (See Note 5)		157,969
Federal and state registration fees		44,405
Compliance expense (See Note 5)		29,500
Reports to shareholders		23,763
Audit fees		22,500
Trustees’ fees and expenses		17,265
Legal fees		1,184
Other expenses		16,173
Total expenses		2,867,096
NET INVESTMENT INCOME	$	362,610
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on investments	$	12,332,055
Net change in unrealized appreciation/depreciation on investments		(27,410,886	)
Net loss on investments		(15,078,831	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(14,716,221	)

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, 2018			October 31, 2017
OPERATIONS:
Net investment income (loss)	$	362,610		$	(3,352	)
Net realized gain on investments		12,332,055			19,986,888
Net change in unrealized
appreciation/depreciation on investments		(27,410,886	)		17,014,799
Net increase (decrease) in net assets resulting from operations		(14,716,221	)		36,998,335
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Distributable earnings – Investor Class		(12,667,248	)		(20,280,034	)
Distributable earnings – Institutional Class		(2,810,391	)		(3,532,520	)
Total distributions		(15,477,639	)		(23,812,554	)(1)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		21,302,624			100,903,651
Proceeds from shares subscribed – Institutional Class		22,839,938			35,239,059
Dividends reinvested – Investor Class		12,401,989			19,917,344
Dividends reinvested – Institutional Class		2,696,156			3,189,710
Cost of shares redeemed – Investor Class		(62,443,809	)		(90,350,351	)
Cost of shares redeemed – Institutional Class		(20,874,270	)		(23,511,159	)
Net increase (decrease) in net
assets derived from capital share transactions		(24,077,372	)		45,388,254
TOTAL INCREASE (DECREASE) IN NET ASSETS		(54,271,232	)		58,574,035
NET ASSETS:
Beginning of year		211,932,967			153,358,932
End of year	$	157,661,735		$	211,932,967
CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		852,589			3,914,617
Shares sold – Institutional Class		1,489,112			2,297,508
Shares issued to holders as reinvestment
of dividends – Investor Class		506,624			782,880
Shares issued to holders as reinvestment
of dividends – Institutional Class		182,573			206,594
Shares redeemed – Investor Class		(2,490,267	)		(3,635,991	)
Shares redeemed – Institutional Class		(1,402,574	)		(1,581,565	)
Net increase (decrease) in shares outstanding		(861,943	)		1,984,043

⁽¹⁾ Includes net investment income distributions of $483,756 and $414,103 and net realized gain distributions of $19,796,278 and $3,118,417 for the Investor Class and Institutional Class, respectively.

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

Paid-in capital from redemption fees

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⁽³⁾

(1)	Calculated based on average shares outstanding method.
(2)	Amount is less than $0.01 or $(0.01).
(3)	Portfolio turnover is calculated on the basis of the Fund as a whole.

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

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FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	26.02		$	23.48		$	23.81		$	24.13		$	25.40
	0.03			(0.04	)		0.10			0.03	(1)		(0.10	)
	(2.12	)		5.83			1.20			2.99			0.49
	(2.09	)		5.79			1.30			3.02			0.39
	(0.00	)(2)		(0.06	)		(0.03	)		—			(0.06	)
	(1.97	)		(3.19	)		(1.60	)		(3.34	)		(1.60	)
	(1.97	)		(3.25	)		(1.63	)		(3.34	)		(1.66	)
	—			—			—			—			0.00	(2)
$	21.96		$	26.02		$	23.48		$	23.81		$	24.13
	(8.79	)%		25.03	%		5.80	%		14.51	%		1.40	%
$	122.00		$	174.01		$	132.09		$	218.50		$	193.09
	1.54	%		1.52	%		1.54	%		1.50	%		1.44	%
	0.11	%		(0.06	)%		0.38	%		0.17	%		(0.36	)%
	28	%		46	%		46	%		49	%		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 (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

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

Portfolio turnover rate⁽²⁾

(1)	Calculated based on average shares outstanding method.
(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.

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FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	15.69		$	14.23		$	14.39		$	14.53		$	15.96
	0.07			0.02			0.09			0.06	(1)		(0.09	)
	(1.27	)		3.56			0.75			1.81			0.40
	(1.20	)		3.58			0.84			1.87			0.31
	(0.02	)		(0.17	)		(0.04	)		—			(0.14	)
	(1.19	)		(1.95	)		(0.96	)		(2.01	)		(1.60	)
	(1.21	)		(2.12	)		(1.00	)		(2.01	)		(1.74	)
$	13.28		$	15.69		$	14.23		$	14.39		$	14.53
	(8.42	)%		25.56	%		6.22	%		14.91	%		1.70	%
$	35.66		$	37.92		$	21.27		$	25.94		$	42.23
	1.15	%		1.15	%		1.17	%		1.17	%		1.12	%
	0.51	%		0.30	%		0.72	%		0.48	%		(0.04	)%
	28	%		46	%		46	%		49	%		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, 2018

1).  ORGANIZATION

The Hennessy Small Cap Financial 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 capital appreciation.  The Fund is a non-diversified fund.

The Fund offers Investor Class and Institutional Class shares.  Each class of shares differs principally in its respective 12b-1 distribution and service, shareholder servicing, and sub-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 to U.S. generally accepted accounting principles (“GAAP”).

a).	Securities 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 because 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/loss and realized gains/losses for federal income tax purposes may differ from those reported in 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.  The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
	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 fiscal year 2018 have been identified and appropriately reclassified in the Statement of Assets and Liabilities. The adjustments are as follows:

Total
Distributable
Earnings	Capital Stock
$(2,752,574)	$2,752,574

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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.  Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December.  Distributions of net realized capital gains, if any, are declared and paid annually, usually in December.
f).	Security Transactions – Investment and shareholder transactions are recorded on the trade date.  The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the security lot sold with the net sale proceeds.  Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
g).	Use of Estimates – 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 (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by (ii) the total number of 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).	New Accounting Pronouncements – In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 does not eliminate the requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the changes in unrealized gains and losses for recurring Level 3 fair value measurements. ASU 2018-13 requires that information is provided about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has

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evaluated the impact of this change in guidance, and due to the permissibility of early adoption, modified the Fund’s fair value disclosures for the current reporting period.

j).

New Rule Issuances – In August 2018, the Securities and Exchange Commission issued Final Rule Release No. 33 10532, Disclosure Update and Simplification, which in part amends certain financial statement disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, GAAP, or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amendments to Rule 6-04.17 of Regulation S-X (balance sheet) were amended to require presentation of the total, rather than the components of net assets, of distributable earnings on the balance sheet. Consistent with GAAP, funds will be required to disclose total distributable earnings. The amendments to Rule 6-09 of Regulation S-X (statement of changes in net assets) omit the requirement to separately state the sources of distributions paid as well as omit the requirement to parenthetically state the book basis amount of undistributed net investment income. Instead, consistent with GAAP, funds will be required to disclose the total amount of distributions paid, except that any tax return of capital must be separately disclosed. The requirements of the Final Rule Release are effective November 5, 2018 and the Fund’s Statement of Assets and Liabilities and the Statement of Changes in Net Assets for the current and prior reporting period have been modified accordingly.

3).  SECURITIES VALUATION

The Fund follows 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 of 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 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”)

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NOTES TO THE FINANCIAL STATEMENTS

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 foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).

Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, are generally priced at the ending NAV provided by the applicable mutual fund’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.

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 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 values of other similar securities, and news events with direct bearing on 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

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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’ values as determined by the Board or its designee, pursuant to the fair value pricing procedures adopted by the Board, instead of being determined by the market.  Using a fair value pricing methodology to price a foreign security may result in a value that is different from such foreign security’s most recent closing price and from the value used by other investment companies to calculate their NAVs.  Such securities are generally classified in Level 2 of 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 “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 determinations.  Various inputs are used to determine 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, 2018, are included in the Schedule of Investments.

4).  INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during fiscal year 2018 were $52,311,129 and $100,724,973, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during fiscal year 2018.

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.  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, as amended.  During fiscal year 2018, the Fund did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940, as amended.

5).  INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

The Advisor provides the Fund with investment advisory services under an Investment Advisory Agreement.  The Advisor furnishes all investment advice, office space, and facilities, as well as 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 an annual rate of 0.90%.  The net investment advisory fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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NOTES TO THE FINANCIAL STATEMENTS

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 advisory 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.  The shareholder service fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 is currently only using up to 0.15% of its average daily net assets attributable to Investor Class shares 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, printing and mailing of prospectuses to other than current shareholders, 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 distribution fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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.  The sub-transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services (“Fund Services”) provides the Fund with administrative, fund accounting, and transfer agent services. As administrator, Fund Services 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. U.S. Bank N.A., an affiliate of Fund Services, serves as the Fund’s custodian. The servicing agreements between the Trust and Fund Services and U.S. Bank N.A. contain a fee schedule that is inclusive of administrative, fund accounting, custody, and transfer agent fees. The administrative, fund accounting, custody, and transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 Fund Services 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.  The compliance fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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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 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 fiscal year 2018, the Fund did not have any borrowings outstanding under the line of credit.

8).  FEDERAL TAX INFORMATION

As of October 31, 2018, the components of accumulated earnings (losses) for income tax purposes were as follows:

	Investments
Cost of investments for tax purposes	$	144,911,472
Gross tax unrealized appreciation	$	20,712,537
Gross tax unrealized depreciation		(8,398,587	)
Net tax unrealized appreciation/(depreciation)	$	12,313,950
Undistributed ordinary income	$	304,362
Undistributed long-term capital gains		9,159,625
Total distributable earnings	$	9,463,987
Other accumulated gain/(loss)	$	—
Total accumulated gain/(loss)	$	21,777,937

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.

As of October 31, 2018, the Fund had no tax basis capital losses to offset future capital gains.

As of October 31, 2018, the Fund did not defer, on a tax basis, any late-year ordinary losses.  Late-year ordinary losses are net ordinary losses incurred after December 31, 2017, but within the taxable year, that are deemed to arise on the first day of the Fund’s next taxable year.

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NOTES TO THE FINANCIAL STATEMENTS

During fiscal year 2018 and fiscal year 2017, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2018		October 31, 2017
Ordinary income(1)	$	1,372,736	$	897,859
Long-term capital gain		14,104,903		22,914,695
	$	15,477,639	$	23,812,554

⁽¹⁾  Ordinary income includes short-term capital gains.

9).  EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2018, 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, 2018, capital gains were declared and paid to shareholders of record on December 6, 2018, as follows:

	Long-term	Short-term
Investor Class	$1.31958	$0.00162
Institutional Class	$0.82307	$0.00101

On December 27, 2018, income distributions were declared and paid to shareholders of record on December 26, 2018, as follows:

Investor Class	$0.07118721
Institutional Class	$0.18030516

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Report of Independent Registered Public

Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the shareholders of Hennessy Small Cap Financial Fund

Novato, CA

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Hennessy Small Cap Financial Fund (the “Fund”), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2018, 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, financial highlights for each of the five years in the period then ended, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, 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.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management.  Our responsibility is to express an opinion on the Fund’s financial statements based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We have served as the auditor of one or more of the funds in the Trust since 2002.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.  The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2018 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures.  We believe that our audits provide a reasonable basis for our opinion.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2018

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/ TRUSTEES AND OFFICERS

Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Funds 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 to the Board of Trustees (“Advisers”) 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: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board of Trustees 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 Trustee oversees the 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 worked for the	None.
(1981)		Sutter Health organization since
Adviser to the Board		2011 in various positions. He has
		served as the Chief Executive Officer
		of the Sutter Roseville Medical
		Center since 2018. From 2016 through
		2018, he served as the Vice President
		of Strategy for the Sutter Health Valley
		Area, which includes 11 hospitals,
		13 ambulatory surgery centers,
		16,000 employees, and 1,900 physicians.
		From 2013 through 2016, Mr. Alexander
		served as Sutter Novato Community
		Hospital’s Chief Administrative Officer,
		and from 2011 through 2012, he
		served as a Director of Strategy
		within Sutter’s West Bay Region.

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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. Neil Hennessy has been employed	Hennessy
(1956)	a Trustee and	by Hennessy Advisors, Inc. since	Advisors, Inc.
Trustee, Chairman of	June 2008 as	1989 and currently serves as its
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 President, Chief Operating
Executive Vice President		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 Secretary
Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013 and currently serves as its Chief
Senior Vice President		Compliance Officer and Senior Vice President.
and Head of Distribution
Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)(3)		as its General Counsel since June 2013.
Senior Vice President and
Chief Compliance Officer

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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)(4)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Large Cap Financial Fund and the Hennessy Small
and Portfolio Manager		Cap Financial Fund since inception. Mr. Ellison also served as a
		Portfolio Manager of the Hennessy Technology Fund from its
		inception until February 2017. Mr. Ellison served as Director,
		CIO and President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.
Ryan C. Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)(5)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Gas Utility Fund, the Hennessy Large Cap Financial
and Portfolio Manager		Fund, and the Hennessy Small 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. Mr. Kelley has also served as a Portfolio
		Manager of the Hennessy Cornerstone Growth Fund, the
		Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
		Cornerstone Large Growth Fund, and the Hennessy
		Cornerstone Value Fund since February 2017, as a Co-Portfolio
		Manager of the Hennessy Technology Fund since February
		2017, and as a Portfolio Manager of the Hennessy Total Return
		Fund and the Hennessy Balanced Fund since May 2018.
		Mr. Kelley served as Portfolio Manager of FBR Fund Advisers,
		Inc. from January 2008 to October 2012.
Tania Kelley	October 2003	Ms. Kelley has been employed by Hennessy Advisors, Inc.
(1965)		since October 2003.
Senior Vice President
and Head of Marketing

Daniel P. Hennessy	December 2016	Mr. Daniel Hennessy has been employed by Hennessy Advisors,
(1990)		Inc. since 2015. He has served as an Associate Analyst or
Vice President		Analyst of the Hennessy Technology Fund since February 2017.
and Analyst		Mr. Daniel Hennessy previously served as a Mutual Fund
		Specialist at U.S. Bancorp Fund Services, LLC (now doing
		business as U.S. Bank Global Fund Services) from November
		2014 to July 2015. Prior to that, he attended the University of
		San Diego, where he earned a degree in Political Science.

_______________

(1)	Messrs. DeSousa, Doyle, N. 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 the Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
(2)	Mr. N. 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 this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
(4)	The address of this officer is 101 Federal Street, Suite 1900, Boston, MA 02110.
(5)	The address of this officer is 1340 Environ Way, Suite 332, Chapel Hill, NC 27517.

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Expense Example (Unaudited)

October 31, 2018

As a shareholder of the Fund, you incur 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, 2018, through October 31, 2018.

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. Bank Global Fund Services, 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” or “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. 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.

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EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period(1)
	Account Value	Account Value	May 1, 2018 –
	May 1, 2018	October 31, 2018	October 31, 2018
Investor Class
Actual	$1,000.00	$   901.10	$7.38
Hypothetical (5% return before expenses)	$1,000.00	$1,017.44	$7.83
Institutional Class
Actual	$1,000.00	$   902.80	$5.47
Hypothetical (5% return before expenses)	$1,000.00	$1,019.46	$5.80

⁽¹⁾ Expenses are equal to the Fund’s annualized expense ratio of 1.54% for Investor Class shares or 1.14% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/365 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

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 www.hennessyfunds.com/proxy-voting/voting-policy; or (3) on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at www.hennessyfunds.com/proxy-voting/voting-record 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 a 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 Forms N-Q are available on the SEC’s website at www.sec.gov.  Information included in the Fund’s Forms N-Q will also be available upon request by calling 1-800-966-4354.

Federal Tax Distribution Information

(Unaudited)

For fiscal year 2018, 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 100.00%.

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for fiscal year 2018 was 100.00%.

The percentage of taxable ordinary income distributions that were 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 94.94%.

Important Notice Regarding Delivery

of Shareholder Documents

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of shareholder reports, proxy statements, and prospectuses to shareholders who share an address and have the same last name. This process does not apply to account statements. You may request an individual copy of a shareholder document at any time. If you would like to receive separate mailings of shareholder documents, please call U.S. Bank Global Fund Services at 1-800-261-6950 or 1-414-765-4124, and individual delivery will begin within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact such intermediary directly to request individual delivery.

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PROXY VOTING — PRIVACY POLICY

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 will be shared with non-affiliated third parties.

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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 Boulevard, Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT, &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

d/b/a U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Drive, 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

Two Liberty Place

50 South 16th Street, Suite 2900

Philadelphia, Pennsylvania 19102-2529

DISTRIBUTOR

Quasar Distributors, LLC

777 East Wisconsin Avenue

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, 2018

HENNESSY TECHNOLOGY FUND

Investor Class  HTECX

Institutional Class  HTCIX

hennessyfunds.com  |  1-800-966-4354

(This Page Intentionally Left Blank.)

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 Policy and Proxy Voting Records	32
Quarterly Schedule of Investments	32
Federal Tax Distribution Information	32
Important Notice Regarding Delivery of Shareholder Documents	32
Privacy Policy	33

HENNESSY FUNDS 1-800-966-4354

December 2018

Dear Hennessy Funds Shareholder:

Over the past year, we have witnessed the return of market volatility. U.S. stocks still registered healthy gains, bolstered by the impact on corporate profits of the successful passage of the tax reform bill in December 2017. However, concerns over potential trade disruptions, especially between the U.S. and China, and worries over higher short-term interest rates, which many believe could possibly trigger a recession down the road, put downward pressure on equity valuations.

The U.S. economy performed well over the period, and actually achieved an acceleration in GDP growth to over 3% on an annualized basis in the second and third quarters of calendar year 2018. During the past year, companies continued to hire workers, adding over 200,000 jobs per month on average, sending the unemployment rate down to 3.7% in October, which is the lowest it has been since 1969. Consumer confidence is high and still rising, and corporate profits reached record levels in the third quarter of calendar year 2018, posting a year-over-year increase of 26% for the companies in the S&P 500 Index.

The Federal Reserve, confident about the strength of the economy and mindful of a tight labor market, raised short-term interest rates four times over the last year, by a quarter point each time. Long-term bond yields also rose, driven higher primarily by evidence of faster wage growth, pushing the U.S. 10-year Treasury bond over 3% for the first time since 2013.

As I write this, we are experiencing the market’s 20th downturn since 2010. I have been saying that every bull market experiences volatility and pullbacks. Many financial commentators think this bull market is “long in the tooth.” I do not agree with them. I believe stock valuations are still very reasonable. The prospective price to earnings multiple for the Dow Jones Industrial Average has come down from almost 20x at the end of 2017 to 16x, just above its 10-year average of 15x. The prospective PE multiple for the S&P 500 Index has also come down, from 20x to 17x, and compares favorably to its 10-year average of 16x.

Cash, meanwhile, continues to build up on corporate balance sheets. The companies in the S&P 500 Index reported a total of over $5.4 trillion in cash and marketable securities in their latest filings. Companies have been spending some of their cash, increasing their investment spending and laying the groundwork for future earnings growth. However, they have also been returning capital to shareholders. S&P 500 Index companies announced $433.6 billion in share repurchases during the second quarter of calendar year 2018, nearly doubling the previous record of $242.1 billion set in the first quarter. Companies are also raising their dividends.

In addition, I believe the Federal Reserve will take care not to raise interest rates too high or too fast and endanger the economic expansion. While wage growth has risen to over 3% in October, other measures of inflationary pressure, such as the Consumer Price Index and the Producer Price Index, still show prices increasing at a more moderate pace, closer to 2%. Given continued evidence of modest rates of inflation, I believe the Fed will be able to maintain its gradual pace of interest rate hikes.

Finally and importantly, I still see no signs of euphoria in this market. In my opinion, the enthusiasm present earlier in the year, which followed the significant reduction in corporate income tax rates, has largely evaporated, and it has been replaced with anxiety

HENNESSYFUNDS.COM

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LETTER TO SHAREHOLDERS

over higher interest rates and their potential impact on growth. In the past, I have likened the current bull market to that of 1982-2000, and I still believe this comparison holds true. I am confident in the strength of the market today and believe the economy will continue to grow in the coming year, albeit at a more moderate pace.

Thank you for your continued confidence and investment in the Hennessy 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 commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

PE, or price to earnings, is a valuation measure and is calculated by dividing a company’s market price per share by its earnings per share. Earnings growth is not a measure of a fund’s future performance.

HENNESSY FUNDS 1-800-966-4354

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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, 2018

	One	Five	Ten
	Year	Years	Years
Hennessy Technology Fund –
Investor Class (HTECX)	7.25%	7.85%	11.02%
Hennessy Technology Fund –
Institutional Class (HTCIX)(1)	7.54%	8.18%	11.28%
NASDAQ Composite Index	9.74%	14.58%	16.92%
S&P 500 Index	7.35%	11.34%	13.24%

Expense ratios:	Gross 4.12%, Net 1.24%(2) (Investor Class);
	Gross 3.70%, Net 0.99%(2) (Institutional Class)

(1)	The inception date of Institutional Class shares is March 12, 2010. 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.
(2)	The Fund’s investment advisor has contractually agreed to limit expenses until February 28, 2019.

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 table does 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 www.hennessyfunds.com. Performance for periods on or prior to October 26, 2012, is that of the FBR Technology Fund.

The NASDAQ Composite Index is a broad-based capitalization-weighted index of all common stocks listed on The NASDAQ Stock Market. The S&P 500 Index is commonly used to measure the performance of U.S. stocks. One cannot invest directly in an index.

The expense ratios presented are from the most recent prospectus. The expense ratios for the current reporting period are available in the Financial Highlights section of this report.

HENNESSYFUNDS.COM

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PERFORMANCE OVERVIEW

PERFORMANCE NARRATIVE

Portfolio Manager Ryan C. Kelley

Performance:

For the 12-month period ended October 31, 2018, the Investor Class of the Hennessy Technology Fund returned 7.25%, underperforming the NASDAQ Composite Index (the Fund’s primary benchmark) and the S&P 500 Index, which returned 9.74% and 7.35%, respectively, for the same period.

The Fund’s underperformance relative to its primary benchmark can be attributed predominantly to stock selection within the Information Technology sector. Applied Materials, Inc., a capital equipment manufacturer for the semiconductor industry, LG Display Co. Ltd., a producer of digital display products and Box, Inc., an Internet applications software company, were among the Information Technology sector holdings that detracted the most from performance. The Fund’s underweight positions in Apple, Inc. and Amazon.com, Inc. also hurt performance. Match Group, Inc., an online dating service, Fortinet, Inc., a provider of network security solutions, Cardtronics PLC, a cash machine provider, and Paycom Software, Inc., an employment software solutions company, were among the holdings that contributed most positively to relative performance.

The Fund continues to hold all of the companies mentioned with the exception of Cardtronics PLC.

Portfolio Strategy:

The Fund utilizes a quantitative investment strategy based on identifying technology-related stocks that have strong cash flows and the ability to sustain profitability. The Fund seeks to build a portfolio of companies that have historically delivered returns in excess of their cost of capital, exhibit strong cash flows and profits, have relatively low debt on their balance sheets, and trade at attractive relative valuations.

Investment Commentary:

We continue to believe that the outlook for U.S. stocks is positive. The U.S. economy is growing at a healthy rate, unemployment is low, and growth in both consumption and capital spending has accelerated over the last 12 months. Corporate earnings have risen significantly over the first nine months of 2018, helped, in part, by lower taxes. We expect earnings growth to be slower next year yet remain positive, driven primarily by continued steady economic growth.

We believe the outlook for the Technology sector and technology-related stocks is also positive. Earnings growth for technology stocks has been outpacing earnings growth for the market as a whole by a significant margin. However, technology stocks are not trading at a premium in terms of valuation, either relative to the market or relative to historical averages. PE multiples for both the Information Technology sector and the S&P 500 Index on a forward basis are approximately 16.5x, while the average forward PE multiple for the Information Technology sector since 1990 is approximately 19.6x.

_______________

Opinions expressed are those of the Portfolio Manager 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.

Investments are focused in the Technology sector as well as the following sub-industries: Internet & Direct Marketing Retail, Interactive Home Entertainment, and Interactive Media Services. Sector funds may be subject to a higher degree of market risk. Investments in foreign securities

HENNESSY FUNDS 1-800-966-4354

5

may involve political, economic, and currency risks, greater volatility, and differences in accounting methods. The Fund invests in small-sized and medium-sized companies, which may have more limited liquidity and greater volatility compared to larger companies. 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.

PE, or price to earnings, is calculated by dividing a company’s market price per share by its earnings per share. Cash flow refers to the net amount of cash and cash equivalents being transferred into and out of a company. Earnings growth is not a measure of the Fund’s future performance.

HENNESSYFUNDS.COM

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PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS

Financial Statements

Schedule of Investments as of October 31, 2018

HENNESSY TECHNOLOGY FUND

(% of Net Assets)

TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)	% NET ASSETS
Red Hat, Inc.	2.31%
Xerox Corp.	1.85%
CDW Corp. of Delaware	1.81%
NCR Corp.	1.74%
Amkor Technology, Inc.	1.72%
Ituran Location and Control Ltd.	1.72%
Cadence Design Systems, Inc.	1.71%
Ubiquiti Networks, Inc.	1.71%
Celestica, Inc.	1.71%
The Western Union Co.	1.70%

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.

The Global Industry Classification Standard (GICS^®) was developed by and is the exclusive property and a service mark of MSCI, Inc. and Standard & Poor Financial Services LLC.  It has been licensed for use by the Hennessy Funds.

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COMMON STOCKS – 94.00%	Number				% of
	of Shares		Value		Net Assets
Communication Services – 1.55%
Match Group, Inc. (a)		1,321	$	68,322		1.55	%
Consumer Discretionary – 3.15%
JD.com, Inc. – ADR (a)(b)		3,106		73,053		1.66	%
Vipshop Holdings Ltd. – ADR (a)(b)		13,463		65,431		1.49	%
				138,484		3.15	%
Information Technology – 89.30%
Accenture PLC, Class A (b)		435		68,565		1.56	%
Adobe, Inc. (a)		283		69,550		1.58	%
Advanced Micro Devices, Inc. (a)		2,717		49,477		1.12	%
Amkor Technology, Inc. (a)		10,576		75,618		1.72	%
Apple, Inc.		334		73,099		1.66	%
Applied Materials, Inc.		2,002		65,826		1.50	%
Arista Networks, Inc. (a)		298		68,644		1.56	%
Autodesk, Inc. (a)		491		63,462		1.44	%
Automatic Data Processing, Inc.		493		71,031		1.61	%
Booz Allen Hamilton Holding Corp.		1,501		74,360		1.69	%
Box, Inc., Class A (a)		3,627		65,286		1.48	%
Broadridge Financial Solutions, Inc.		603		70,515		1.60	%
Cadence Design Systems, Inc. (a)		1,689		75,279		1.71	%
CDW Corp. of Delaware		885		79,659		1.81	%
Celestica, Inc. (a)(b)		7,228		75,027		1.71	%
Citrix Systems, Inc. (a)		685		70,192		1.60	%
Cornerstone OnDemand, Inc. (a)		1,404		69,147		1.57	%
DXC Technology Co.		845		61,541		1.40	%
F5 Networks, Inc. (a)		410		71,865		1.63	%
Fair Isaac Corp. (a)		338		65,136		1.48	%
Fiserv, Inc. (a)		919		72,877		1.66	%
Fortinet, Inc. (a)		868		71,332		1.62	%
Hewlett Packard Enterprise Co.		4,633		70,653		1.61	%
Hortonworks, Inc. (a)		3,143		56,134		1.28	%
Ichor Holdings, Ltd. (a)(b)		3,711		65,870		1.50	%
Intuit, Inc.		336		70,896		1.61	%
Ituran Location and Control Ltd. (b)		2,215		75,576		1.72	%
Jabil Circuit, Inc.		2,915		72,088		1.64	%

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

HENNESSYFUNDS.COM

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SCHEDULE OF INVESTMENTS

COMMON STOCKS	Number				% of
	of Shares		Value		Net Assets
Information Technology (Continued)
KLA-Tencor Corp.		751	$	68,747		1.56	%
Lam Research Corp.		502		71,148		1.62	%
LG Display Co., Ltd – ADR (a)(b)		9,169		67,300		1.53	%
Logitech International S.A. (b)		1,785		65,902		1.50	%
Mastercard, Inc., Class A		355		70,173		1.60	%
NCR Corp. (a)		2,845		76,388		1.74	%
NetApp, Inc.		928		72,839		1.66	%
Palo Alto Networks, Inc. (a)		352		64,430		1.46	%
Paychex, Inc.		1,063		69,616		1.58	%
Paycom Software, Inc. (a)		540		67,608		1.54	%
Paylocity Holding Corp. (a)		1,017		66,908		1.52	%
Proofpoint, Inc. (a)		759		69,031		1.57	%
Red Hat, Inc. (a)		591		101,439		2.31	%
Sabre Corp.		3,007		74,123		1.69	%
Sanmina Corp. (a)		2,920		73,876		1.68	%
Science Applications International Corp.		971		67,494		1.53	%
Seagate Technology PLC (b)		1,629		65,535		1.49	%
ServiceNow, Inc. (a)		412		74,588		1.70	%
SMART Global Holdings, Inc. (a)(b)		2,317		64,899		1.48	%
SYNNEX Corp.		836		64,882		1.47	%
Texas Instruments, Inc.		716		66,466		1.51	%
The Ultimate Software Group, Inc. (a)		248		66,124		1.50	%
The Western Union Co.		4,145		74,776		1.70	%
Ubiquiti Networks, Inc.		808		75,217		1.71	%
Versum Materials, Inc.		2,175		68,643		1.56	%
Vishay Intertechnology, Inc.		3,954		72,358		1.64	%
Wix.com Ltd. (a)(b)		693		67,464		1.53	%
Xerox Corp.		2,923		81,464		1.85	%
				3,928,143		89.30	%
Total Common Stocks
(Cost $4,087,704)				4,134,949		94.00	%

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

HENNESSY FUNDS 1-800-966-4354

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SHORT-TERM INVESTMENTS – 6.54%	Number					% of
	of Shares		Value			Net Assets
Money Market Funds – 6.54%
Fidelity Government Portfolio, Institutional Class, 2.06% (c)		215,000	$	215,000			4.89	%
The Government & Agency Portfolio, Institutional Class, 2.08% (c)		72,501		72,501			1.65	%
Total Short-Term Investments
(Cost $287,501)				287,501			6.54	%
Total Investments
(Cost $4,375,205) – 100.54%				4,422,450			100.54	%
Liabilities in Excess of Other Assets – (0.54)%				(23,848	)		(0.54	)%
TOTAL NET ASSETS – 100.00%			$	4,398,602			100.00	%

Percentages are stated as a percent of net assets.

ADR – American Depositary Receipt

PLC – Public Limited Company

(a)	Non-income producing security.
(b)	U.S.-traded security of a foreign corporation.
(c)	The rate listed is the fund’s seven-day yield as of October 31, 2018.

Summary of Fair Value Exposure at October 31, 2018

The following is a summary of the inputs used to value the Fund’s net assets as of October 31, 2018 (See Note 3 in the accompanying notes to the financial statements):

Common Stocks	Level 1		Level 2		Level 3		Total
Communication Services	$	68,322	$	—	$	—	$	68,322
Consumer Discretionary		138,484		—		—		138,484
Information Technology		3,928,143		—		—		3,928,143
Total Common Stocks	$	4,134,949	$	—	$	—	$	4,134,949
Short-Term Investments
Money Market Funds	$	287,501	$	—	$	—	$	287,501
Total Short-Term Investments	$	287,501	$	—	$	—	$	287,501
Total Investments	$	4,422,450	$	—	$	—	$	4,422,450

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

HENNESSYFUNDS.COM

10

SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES

Financial Statements

Statement of Assets and Liabilities as of October 31, 2018

ASSETS:
Investments in securities, at value (cost $4,375,205)	$	4,422,450
Dividends and interest receivable		2,774
Receivable for fund shares sold		176
Prepaid expenses and other assets		16,217
Due from Advisor		8,057
Total Assets		4,449,674
LIABILITIES:
Payable for fund shares redeemed		7,156
Payable to administrator		404
Payable to auditor		21,899
Accrued distribution fees		6,841
Accrued service fees		287
Accrued trustees fees		5,961
Accrued expenses and other payables		8,524
Total Liabilities		51,072
NET ASSETS	$	4,398,602
NET ASSETS CONSIST OF:
Capital stock	$	3,829,622
Total distributable earnings		568,980
Total Net Assets	$	4,398,602
NET ASSETS
Investor Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Investor Class shares	$	3,308,812
Shares issued and outstanding		183,382
Net asset value, offering price and redemption price per share	$	18.04
Institutional Class:
Shares authorized (no par value)	Unlimited
Net assets applicable to outstanding Institutional Class shares	$	1,089,790
Shares issued and outstanding		59,007
Net asset value, offering price and redemption price per share	$	18.47

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

HENNESSY FUNDS 1-800-966-4354

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Financial Statements

Statement of Operations for the year ended October 31, 2018

INVESTMENT INCOME:
Dividend income(1)	$	36,306
Interest income		2,944
Total investment income		39,250
EXPENSES:
Investment advisory fees (See Note 5)		33,671
Federal and state registration fees		32,563
Compliance expense (See Note 5)		29,500
Audit fees		22,499
Trustees’ fees and expenses		16,623
Reports to shareholders		6,022
Sub-transfer agent expenses – Investor Class (See Note 5)		5,871
Sub-transfer agent expenses – Institutional Class (See Note 5)		4
Distribution fees – Investor Class (See Note 5)		5,067
Administration, fund accounting, custody and transfer agent fees (See Note 5)		4,008
Service fees – Investor Class (See Note 5)		3,378
Interest expense (See Note 7)		31
Other expenses		4,001
Total expenses before reimbursement by advisor		163,238
Expense reimbursement by advisor – Investor Class (See Note 5)		(83,351	)
Expense reimbursement by advisor – Institutional Class (See Note 5)		(26,820	)
Net expenses		53,067
NET INVESTMENT LOSS	$	(13,817	)
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gain on investments	$	629,547
Net change in unrealized appreciation/depreciation on investments		(302,826	)
Net gain on investments		326,721
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	312,904

⁽¹⁾ Net of foreign taxes withheld and issuance fees of $721.

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

HENNESSYFUNDS.COM

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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, 2018			October 31, 2017
OPERATIONS:
Net investment loss	$	(13,817	)	$	(41,753	)
Net realized gain on investments		629,547			632,539
Net change in unrealized
appreciation/depreciation on investments		(302,826	)		31,853
Net increase in net assets resulting from operations		312,904			622,639
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Distributable earnings – Investor Class		(284,124	)		—
Distributable earnings – Institutional Class		(107,305	)		—
Total distributions		(391,429	)		—
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed – Investor Class		552,927			422,345
Proceeds from shares subscribed – Institutional Class		88,271			218,028
Dividends reinvested – Investor Class		278,793			—
Dividends reinvested – Institutional Class		106,216			—
Cost of shares redeemed – Investor Class		(654,226	)		(587,405	)
Cost of shares redeemed – Institutional Class		(308,951	)		(74,362	)
Net increase (decrease) in net assets derived
from capital share transactions		63,030			(21,394	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		(15,495	)		601,245
NET ASSETS:
Beginning of year		4,414,097			3,812,852
End of year	$	4,398,602		$	4,414,097	(1)
CHANGES IN SHARES OUTSTANDING:
Shares sold – Investor Class		29,132			24,507
Shares sold – Institutional Class		4,606			12,743
Shares issued to holders as reinvestment
of dividends – Investor Class		16,634			—
Shares issued to holders as reinvestment
of dividends – Institutional Class		6,208			—
Shares redeemed – Investor Class		(35,601	)		(35,133	)
Shares redeemed – Institutional Class		(16,346	)		(4,356	)
Net increase (decrease) in shares outstanding		4,633			(2,239	)

⁽¹⁾ Includes accumulated net investment loss of $(22,185).

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 loss

Net realized and unrealized gains on investments

Total from investment operations

Less distributions:

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 loss to average net assets:

Before expense reimbursement

After expense reimbursement

Portfolio turnover rate⁽²⁾

(1)	The Fund’s current expense limitation agreement, which became effective on February 28, 2017, was in effect for eight months of the year ended October 31, 2017. The Fund previously had an expense limitation agreement in effect from October 26, 2012, to February 28, 2015.
(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

14

FINANCIAL HIGHLIGHTS — INVESTOR CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	18.46		$	15.82		$	15.36		$	14.86		$	13.57
	(0.05	)		(0.23	)		(0.68	)		(0.38	)		(0.23	)
	1.26			2.87			1.14			0.88			1.52
	1.21			2.64			0.46			0.50			1.29
	(1.63	)		—			—			—			—
	(1.63	)		—			—			—			—
$	18.04		$	18.46		$	15.82		$	15.36		$	14.86
	7.25	%		16.69	%		2.99	%		3.36	%		9.51	%
$	3.31		$	3.20		$	2.91		$	4.04		$	4.99
	3.70	%		4.16	%		3.61	%		3.13	%		2.92	%
	1.23	%		2.15	%(1)		3.61	%		2.75	%		1.95	%
	(2.83	)%		(3.16	)%		(2.92	)%		(2.30	)%		(2.53	)%
	(0.36	)%		(1.15	)%(1)		(2.92	)%		(1.92	)%		(1.55	)%
	225	%		267	%		80	%		163	%		204	%

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 on investments

Total from investment operations

Less distributions:

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)	The Fund’s current expense limitation agreement, which became effective on February 28, 2017, was in effect for eight months of the year ended October 31, 2017. The Fund previously had an expense limitation agreement in effect from October 26, 2012, to February 28, 2015.
(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.

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FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS

Year Ended October 31,
2018			2017			2016			2015			2014
$	18.85		$	16.11		$	15.58		$	15.02		$	13.68
	0.01			(0.12	)		(0.43	)		(0.25	)		(0.26	)
	1.28			2.86			0.96			0.81			1.60
	1.29			2.74			0.53			0.56			1.34
	(1.67	)		—			—			—			—
	(1.67	)		—			—			—			—
$	18.47		$	18.85		$	16.11		$	15.58		$	15.02
	7.54	%		17.01	%		3.40	%		3.73	%		9.80	%
$	1.09		$	1.22		$	0.90		$	0.95		$	0.93
	3.27	%		3.74	%		3.28	%		2.76	%		2.60	%
	0.98	%		1.77	%(1)		3.28	%		2.44	%		1.70	%
	(2.41	)%		(2.74	)%		(2.59	)%		(1.92	)%		(2.23	)%
	(0.12	)%		(0.77	)%(1)		(2.59	)%		(1.60	)%		(1.33	)%
	225	%		267	%		80	%		163	%		204	%

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

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Financial Statements

Notes to the Financial Statements October 31, 2018

1).  ORGANIZATION

The Hennessy Technology 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 capital appreciation. The Fund is a diversified fund.

The Fund offers Investor Class and Institutional Class shares. Each class of shares differs principally in its respective 12b-1 distribution and service, shareholder servicing, and sub-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 to U.S. generally accepted accounting principles (“GAAP”).

a).	Securities 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 because 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/loss and realized gains/losses for federal income tax purposes may differ from those reported in 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. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
	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 fiscal year 2018 have been identified and appropriately reclassified in the Statement of Assets and Liabilities. The adjustments are as follows:

Total
Distributable
Earnings	Capital Stock
$(52,368)	$52,368

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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. Other non-cash dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
e).	Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and paid annually, usually in December.
f).	Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
g).	Use of Estimates – 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 (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by (ii) the total number of 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).	New Accounting Pronouncements – In August 2018, the FASB issued Accounting Standards Update No. 2018-13 “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the timing of transfers between levels of the fair value hierarchy, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 does not eliminate the requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, and the changes in unrealized gains and losses for recurring Level 3 fair value measurements. ASU 2018-13 requires that information is provided about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management has

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evaluated the impact of this change in guidance, and due to the permissibility of early adoption, modified the Fund’s fair value disclosures for the current reporting period.

j).

New Rule Issuances – In August 2018, the Securities and Exchange Commission issued Final Rule Release No. 33 10532, Disclosure Update and Simplification, which in part amends certain financial statement disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, GAAP, or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The amendments to Rule 6-04.17 of Regulation S-X (balance sheet) were amended to require presentation of the total, rather than the components of net assets, of distributable earnings on the balance sheet. Consistent with GAAP, funds will be required to disclose total distributable earnings. The amendments to Rule 6-09 of Regulation S-X (statement of changes in net assets) omit the requirement to separately state the sources of distributions paid as well as omit the requirement to parenthetically state the book basis amount of undistributed net investment income. Instead, consistent with GAAP, funds will be required to disclose the total amount of distributions paid, except that any tax return of capital must be separately disclosed. The requirements of the Final Rule Release are effective November 5, 2018 and the Fund’s Statement of Assets and Liabilities and the Statement of Changes in Net Assets for the current and prior reporting period have been modified accordingly.

3).  SECURITIES VALUATION

The Fund follows 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 of 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 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”)

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NOTES TO THE FINANCIAL STATEMENTS

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 foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).

Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, are generally priced at the ending NAV provided by the applicable mutual fund’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.

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 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 values of other similar securities, and news events with direct bearing on a security or markets. Fair value pricing results in an estimated price for a

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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’ values as determined by the Board or its designee, pursuant to the fair value pricing procedures adopted by the Board, instead of being determined by the market. Using a fair value pricing methodology to price a foreign security may result in a value that is different from such foreign security’s most recent closing price and from the value used by other investment companies to calculate their NAVs. Such securities are generally classified in Level 2 of 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 “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 determinations. Various inputs are used to determine 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, 2018, are included in the Schedule of Investments.

4).  INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding government and short-term investments) for the Fund during fiscal year 2018 were $9,788,697 and $10,204,517, respectively.

There were no purchases or sales/maturities of long-term U.S. government securities for the Fund during fiscal year 2018.

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. 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, as amended. During fiscal year 2018, the Fund did not engage in purchases or sales of securities pursuant to Rule 17a-7 of the Investment Company Act of 1940, as amended.

5).  INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

The Advisor provides the Fund with investment advisory services under an Investment Advisory Agreement. The Advisor furnishes all investment advice, office space, and facilities, as well as 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 an annual rate of 0.74%, effective as of February 28, 2017. Prior to that date, the annual rate was 0.90%. The net investment advisory fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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NOTES TO THE FINANCIAL STATEMENTS

The Advisor has contractually agreed to limit total annual operating expenses of the Fund to 0.98% of the Fund’s net assets for both Investor Class shares and Institutional Class shares (excluding all federal, state and local taxes, interest, brokerage commissions, 12b-1 fees, shareholder servicing fees payable to the Advisor, acquired fund fees and expenses and other costs incurred in connection with the purchase and sale of securities, and extraordinary items) through February 28, 2019. In addition, in the past, the Advisor had contractually agreed to limit total annual operating expenses to 1.95% and 1.70% of the Fund’s net assets for Investor Class shares and Institutional Class shares, respectively (excluding interest, taxes, brokerage commissions, dividend expenses, acquired fund fees and expenses, extraordinary legal expenses, any other extraordinary expenses and, from and after November 1, 2014, 12b-1 fees). This prior expense limitation agreement for the Fund expired on February 28, 2015.

For a period of three years after the year in which the Advisor waives or reimburses 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, 2018, cumulative expenses subject to potential recovery under the aforementioned conditions and year of expiration were as follows:

	October 31,		October 31,
	2020		2021		Total
Investor Class	$	58,612	$	83,351	$	141,963
Institutional Class	$	20,906	$	26,820	$	47,726

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 advisory 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. The shareholder service fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 is currently only using up to 0.15% of its average daily net assets attributable to Investor Class shares 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, printing and mailing of prospectuses to other than current shareholders, 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 distribution fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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. The sub-transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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U.S. Bancorp Fund Services, LLC, d/b/a U.S. Bank Global Fund Services (“Fund Services”) provides the Fund with administrative, fund accounting, and transfer agent services. As administrator, Fund Services 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. U.S. Bank N.A., an affiliate of Fund Services, serves as the Fund’s custodian. The servicing agreements between the Trust and Fund Services and U.S. Bank N.A. contain a fee schedule that is inclusive of administrative, fund accounting, custody, and transfer agent fees. The administrative, fund accounting, custody, and transfer agent fees expensed by the Fund during fiscal year 2018 are included in the Statement of Operations.

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 Fund Services 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. The compliance fees expensed by the Fund during fiscal year 2018 are included in 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 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 fiscal year 2018, the Fund had an outstanding average daily balance and a weighted average interest rate of $630 and 4.56%, respectively. The interest expensed by the Fund during fiscal year 2018 is included in the Statement of Operations. The maximum amount outstanding for the Fund during fiscal year 2018 was $171,000. As of October 31, 2018, the Fund did not have any borrowings outstanding under the line of credit.

8).  FEDERAL TAX INFORMATION

As of October 31, 2018, the components of accumulated earnings (losses) for income tax purposes were as follows:

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NOTES TO THE FINANCIAL STATEMENTS

	Investments
Cost of investments for tax purposes	$	4,400,905
Gross tax unrealized appreciation	$	423,601
Gross tax unrealized depreciation		(402,056	)
Net tax unrealized appreciation/(depreciation)	$	21,545
Undistributed ordinary income	$	381,138
Undistributed long-term capital gains		166,307
Total distributable earnings	$	547,445
Other accumulated gain/(loss)	$	(10	)
Total accumulated gain/(loss)	$	568,980

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.

As of October 31, 2018, the Fund had no tax basis capital losses to offset future capital gains.

As of October 31, 2018, the Fund did not defer, on a tax basis, any late-year ordinary losses. Late-year ordinary losses are net ordinary losses incurred after December 31, 2017, but within the taxable year, that are deemed to arise on the first day of the Fund’s next taxable year.

During fiscal year 2018 and fiscal year 2017, the tax character of distributions paid by the Fund was as follows:

	Year Ended		Year Ended
	October 31, 2018		October 31, 2017
Ordinary income	$	—	$	—
Long-term capital gain		391,429		—
	$	391,429	$	—

9).  EVENTS SUBSEQUENT TO YEAR END

Management has evaluated the Fund’s related events and transactions that occurred subsequent to October 31, 2018, 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, 2018, capital gains were declared and paid to shareholders of record on December 6, 2018, as follows:

	Long-term	Short-term
Investor Class	$0.68615	$1.57251
Institutional Class	$0.70239	$1.60970

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Report of Independent Registered Public

Accounting Firm

To the Board of Trustees of Hennessy Funds Trust

and the shareholders of Hennessy Technology Fund

Novato, CA

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Hennessy Technology Fund (the “Fund”), a series of Hennessy Funds Trust, including the schedule of investments, as of October 31, 2018, 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, financial highlights for each of the five years in the period then ended, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, 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.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management.  Our responsibility is to express an opinion on the Fund’s financial statements based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We have served as the auditor of one or more of the funds in the Trust since 2002.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.  The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2018 by correspondence with the custodian.  We believe that our audits provide a reasonable basis for our opinion.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2018

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS

Trustees and Officers of the Fund (Unaudited)

The business and affairs of the Funds 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 to the Board of Trustees (“Advisers”) 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: Brian Alexander, Doug Franklin, and Claire Knoles. As Advisers, Mr. Alexander, Mr. Franklin, and Ms. Knoles attend meetings of the Board of Trustees 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 Trustee oversees the 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 worked for the	None.
(1981)		Sutter Health organization since
Adviser to the Board		2011 in various positions. He has
		served as the Chief Executive Officer
		of the Sutter Roseville Medical
		Center since 2018. From 2016 through
		2018, he served as the Vice President
		of Strategy for the Sutter Health Valley
		Area, which includes 11 hospitals,
		13 ambulatory surgery centers,
		16,000 employees, and 1,900 physicians.
		From 2013 through 2016, Mr. Alexander
		served as Sutter Novato Community
		Hospital’s Chief Administrative Officer,
		and from 2011 through 2012, he
		served as a Director of Strategy
		within Sutter’s West Bay Region.

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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. Neil Hennessy has been employed	Hennessy
(1956)	a Trustee and	by Hennessy Advisors, Inc. since	Advisors, Inc.
Trustee, Chairman of	June 2008 as	1989 and currently serves as its
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 President, Chief Operating
Executive Vice President		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 Secretary
Brian Carlson	December 2013	Mr. Carlson has been employed by Hennessy Advisors, Inc.
(1972)		since December 2013 and currently serves as its Chief
Senior Vice President		Compliance Officer and Senior Vice President.
and Head of Distribution
Jennifer Cheskiewicz	June 2013	Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
(1977)(3)		as its General Counsel since June 2013.
Senior Vice President and
Chief Compliance Officer

HENNESSYFUNDS.COM

28

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)(4)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Large Cap Financial Fund and the Hennessy Small
and Portfolio Manager		Cap Financial Fund since inception. Mr. Ellison also served as a
		Portfolio Manager of the Hennessy Technology Fund from its
		inception until February 2017. Mr. Ellison served as Director,
		CIO and President of FBR Fund Advisers, Inc. from December
		1999 to October 2012.
Ryan C. Kelley	March 2013	Mr. Kelley has been employed by Hennessy Advisors, Inc. since
(1972)(5)		October 2012. He has served as a Portfolio Manager of the
Senior Vice President		Hennessy Gas Utility Fund, the Hennessy Large Cap Financial
and Portfolio Manager		Fund, and the Hennessy Small 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. Mr. Kelley has also served as a Portfolio
		Manager of the Hennessy Cornerstone Growth Fund, the
		Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
		Cornerstone Large Growth Fund, and the Hennessy
		Cornerstone Value Fund since February 2017, as a Co-Portfolio
		Manager of the Hennessy Technology Fund since February
		2017, and as a Portfolio Manager of the Hennessy Total Return
		Fund and the Hennessy Balanced Fund since May 2018.
		Mr. Kelley served as Portfolio Manager of FBR Fund Advisers,
		Inc. from January 2008 to October 2012.
Tania Kelley	October 2003	Ms. Kelley has been employed by Hennessy Advisors, Inc.
(1965)		since October 2003.
Senior Vice President
and Head of Marketing
Daniel P. Hennessy	December 2016	Mr. Daniel Hennessy has been employed by Hennessy Advisors,
(1990)		Inc. since 2015. He has served as an Associate Analyst or
Vice President		Analyst of the Hennessy Technology Fund since February 2017.
and Analyst		Mr. Daniel Hennessy previously served as a Mutual Fund
		Specialist at U.S. Bancorp Fund Services, LLC (now doing
		business as U.S. Bank Global Fund Services) from November
		2014 to July 2015. Prior to that, he attended the University of
		San Diego, where he earned a degree in Political Science.

_______________

(1)	Messrs. DeSousa, Doyle, N. 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 the Trust that mirrored them. Subsequent to the reorganization, HFMI, HFI, and HSFT were dissolved.
(2)	Mr. N. 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 this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
(4)	The address of this officer is 101 Federal Street, Suite 1900, Boston, MA 02110.
(5)	The address of this officer is 1340 Environ Way, Suite 332, Chapel Hill, NC 27517.

HENNESSY FUNDS 1-800-966-4354

29

Expense Example (Unaudited)

October 31, 2018

As a shareholder of the Fund, you incur 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, 2018, through October 31, 2018.

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. Bank Global Fund Services, 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” or “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. 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.

HENNESSYFUNDS.COM

30

EXPENSE EXAMPLE

			Expenses Paid
	Beginning	Ending	During Period(1)
	Account Value	Account Value	May 1, 2018 –
	May 1, 2018	October 31, 2018	October 31, 2018
Investor Class
Actual	$1,000.00	$   992.80	$6.18
Hypothetical (5% return before expenses)	$1,000.00	$1,019.00	$6.26
Institutional Class
Actual	$1,000.00	$   994.60	$4.93
Hypothetical (5% return before expenses)	$1,000.00	$1,020.27	$4.99

⁽¹⁾ Expenses are equal to the Fund’s annualized expense ratio of 1.23% for Investor Class shares or 0.98% for Institutional Class shares, as applicable, multiplied by the average account value over the period, multiplied by 184/365 days (to reflect one-half year period).

HENNESSY FUNDS 1-800-966-4354

31

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 www.hennessyfunds.com/proxy-voting/voting-policy; or (3) on the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. The Fund’s proxy voting record is available without charge on both the Hennessy Funds’ website at www.hennessyfunds.com/proxy-voting/voting-record 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 a 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 Forms N-Q are available on the SEC’s website at www.sec.gov.  Information included in the Fund’s Forms N-Q will also be available upon request by calling 1-800-966-4354.

Federal Tax Distribution Information

(Unaudited)

For fiscal year 2018, 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 0.00%.

For corporate shareholders, the percent of ordinary income distributions that qualified for the corporate dividends received deduction for fiscal year 2018 was 0.00%.

The percentage of taxable ordinary income distributions that were 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 0.00%.

Important Notice Regarding Delivery

of Shareholder Documents

To help keep the Fund’s costs as low as possible, we generally deliver a single copy of shareholder reports, proxy statements, and prospectuses to shareholders who share an address and have the same last name. This process does not apply to account statements. You may request an individual copy of a shareholder document at any time. If you would like to receive separate mailings of shareholder documents, please call U.S. Bank Global Fund Services at 1-800-261-6950 or 1-414-765-4124, and individual delivery will begin within 30 days of your request. If your account is held through a financial institution or other intermediary, please contact such intermediary directly to request individual delivery.

HENNESSYFUNDS.COM

32

PROXY VOTING — PRIVACY POLICY

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 will be shared with non-affiliated third parties.

HENNESSY FUNDS 1-800-966-4354

33

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 Boulevard, Suite 200

Novato, California 94945

ADMINISTRATOR,

TRANSFER AGENT,

DIVIDEND PAYING AGENT, &

SHAREHOLDER SERVICING AGENT

U.S. Bancorp Fund Services, LLC

d/b/a U.S. Bank Global Fund Services

P.O. Box 701

Milwaukee, Wisconsin 53201-0701

CUSTODIAN

U.S. Bank N.A.

Custody Operations

1555 North River Center Drive, 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

Two Liberty Place

50 South 16th Street, Suite 2900

Philadelphia, Pennsylvania 19102-2529

DISTRIBUTOR

Quasar Distributors, LLC

777 East Wisconsin Avenue

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.

Item 2. Code of Ethics.

The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer and principal financial officer. The registrant amended its code of ethics in February 2018 to (i) remove the employee pre-clearance requirement for transactions in the Hennessy Funds, (ii) clarify that the exceptions to the pre-clearance requirements include gifts of exempted securities, and (iii) make certain administrative amendments to reflect the registrant’s use of a third-party website to report employee securities holdings and seek pre-clearance. The registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report.

A copy of the registrant’s Code of Ethics is filed herewith, along with an exhibit that shows the portions of the Code of Ethics that were updated, as discussed above.

Item 3. Audit Committee Financial Expert.

The registrant’s board of directors has determined that it does not have an audit committee financial expert serving on its audit committee. At this time, the registrant believes that the financial and business experience provided by each member of the audit committee together offers the registrant adequate oversight for the registrant’s level of financial complexity.

Item 4. Principal Accountant Fees and Services.

The registrant has engaged the principal accountant to the Hennessy Funds, Tait, Weller & Baker LLP, to perform audit services, audit-related services, tax services and other services during the past two fiscal years. “Audit services” refer to performing an audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. “Audit‑related services” refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit. “Tax services” refer to professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. The following table details the aggregate fees billed or expected to be billed for each of the last two fiscal years for audit fees, audit-related fees, tax fees and other fees by the principal accountant to the Hennessy Funds.

	FYE 10/31/2018	FYE 10/31/2017
Audit Fees	$313,500	$249,200
Audit-Related Fees	-	-
Tax Fees	$64,200	$49,000
All Other Fees	-	-

The audit committee has adopted pre-approval procedures for audit and non-audit services provided to the registrant. Under the procedures, at any regularly scheduled audit committee meeting, the audit committee may pre-approve any audit, audit-related, tax and other non-audit services to be rendered or that may be rendered by a principal accountant to the registrant and certain non-audit services to be rendered by a principal accountant to the investment advisor to the registrant’s series or such advisor’s affiliates that provide ongoing services to the registrant. The audit committee either specifically pre-approves the services or pre-approves a type of a service. No pre-approval is required for non-audit services that meet the following criteria: (1) the aggregate amount of fees to be paid for all such non-audit services is not more than 5% of the total revenues paid by the registrant to the principal accountant in the fiscal year in which the non-audit services are provided; (2) such services were not recognized by the registrant at the time of the engagement to be non-audit services; and (3) such services are promptly brought to the attention of the audit committee and approved prior to the completion of the audit.

The audit committee must pre-approve a principal accountant’s engagements for non-audit services with the investment advisor to the registrant’s series and such advisor’s affiliates that provide ongoing services to the registrant, if the engagement relates directly to the operations and financial reporting of the registrant, unless the aggregate amount of fees to be paid for all such services provided constitutes no more than 5% of the aggregate revenues paid to the principal accountant by the registrant, the investment advisor and such advisor’s affiliates that provide ongoing services to the registrant, during the fiscal year in which the services are to be provided.

If a service has not been pre-approved at a regularly scheduled audit committee meeting, and if, in the opinion of the Chief Compliance Officer of the registrant, a proposed engagement must commence before the next regularly scheduled audit committee meeting, any member of the audit committee is authorized under the procedures to pre-approve the engagement. The Chief Compliance Officer of the registrant will arrange for this interim review, coordinate with the designated member of the audit committee and provide, with the assistance of the principal accountant, information about the service to be pre-approved for the interim period. Any interim pre-approval decisions are reported (for informational purposes) to the audit committee at its next regularly scheduled meeting.

All of the tax services referenced above were pre-approved in accordance with the pre-approval procedures for audit and non-audit services.

The percentage of fees billed by Tait, Weller & Baker LLP applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows:

	FYE 10/31/2018	FYE 10/31/2017
Audit-Related Fees	0%	0%
Tax Fees	0%	0%
All Other Fees	0%	0%

All of the principal accountant’s hours spent on auditing the registrant’s financial statements were attributed to work performed by full‑time permanent employees of the principal accountant.

In assessing the independence of the registrant’s principal accountant, the registrant’s board of trustees noted that the principal accountant has not provided any audit or non-audit services to the investment advisor to the registrant’s series, Hennessy Advisors, Inc., or any entity controlling, controlled by, or under common control with Hennessy Advisors, Inc.

Item 5. Audit Committee of Listed Registrants.

Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).

Item 6. Investments.

The Schedules of Investments are included as part of the reports to shareholders filed under Item 1 of this Form.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to open-end investment companies.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to open-end investment companies.

Item 9. Purchases of Equity Securities by Closed‑End Management Investment Company and Affiliated Purchasers.

Not applicable to open-end investment companies.

Item 10. Submission of Matters to a Vote of Security Holders.

Not Applicable.

Item 11. Controls and Procedures.

(a) The Registrant’s President and Treasurer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a‑3(b) under the Act and Rules 13a-15(b) or 15d‑15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service providers.

(b) There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not applicable to open-end investment companies.

Item 13. Exhibits.

(a) (1) Code of ethics, or amendments thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing of an exhibit. Filed herewith.

(2) A separate certification for each principal executive and principal financial officer pursuant to Rule 30a‑2(a) under the Act and Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

(3) Any written solicitation to purchase securities under Rule 23c‑1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable to open-end investment companies.

(4) Change in the registrant’s independent public accountant. Provide the information called for by Item 4 of Form 8-K under the Exchange Act (17 CFR 249.308). Unless otherwise specified by Item 4, or related to and necessary for a complete understanding of information not previously disclosed, the information should relate to events occurring during the reporting period. There was no change in the registrant's independent public accountant for the period covered by this report.

(b) Certifications pursuant to Rule 30a‑2(b) under the Act and Section 906 of the Sarbanes‑Oxley Act of 2002. Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

HENNESSY FUNDS TRUST

(Registrant)

By:      /s/ Neil J. Hennessy

Neil J. Hennessy

President

Date:  January 9, 2019

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:          /s/ Neil J. HennessyNeil J. Hennessy, President

Date:       January 9, 2019

By:          /s/ Teresa M. NilsenTeresa M. Nilsen, Treasurer

Date:       January 9, 2019

EX-99.CODE ETH

Code of Ethics

for

Hennessy Funds Trust

and

Hennessy Advisors, Inc.

__________________________

February 2018

__________________________

TABLE OF CONTENTS

Page

I.	GENERAL	1
A.	Introduction	1
B.	Definitions	1
II.	STANDARDS OF BUSINESS CONDUCT	2
A.	General Standards	2
B.	Specific Duties and Responsibilities	3
C.	Reporting Violations	4
III.	PERSONAL SECURITIES INVESTMENT TRANSACTIONS POLICY	5
A.	General	5
B.	Accounts Covered	6
C.	Exempt Securities and Transactions	6
D.	Restrictions and Limitations on Personal Securities Transactions	7
E.	Reporting Procedures	8
IV.	INSIDER TRADING POLICY	11
A.	What is Material Information?	11
B.	What is Non Public Information?	12
C.	What are the Penalties for Insider Trading?	12
D.	Compliance Procedures	13
E.	Securities Issued By the Adviser	14
V.	COMPLIANCE	16
A.	Approval of the Code of Ethics	16
B.	Annual Certification	16
C.	Prohibition on Self Clearance	16
D.	Other Obligations	17
E.	Maintenance of Records	17
F.	Interpretation and Enforcement	17

i

I.GENERAL

A.Introduction

Hennessy Funds Trust (“HFT”) and Hennessy Advisors, Inc. (the “Adviser”) have adopted this Code of Ethics (this “Code”).  This Code is designed to comply with Rule 17j‑1 of the Investment Company Act of 1940, as amended (the “Investment Company Act”), and Rule 204A‑1 of the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”).  It is based on the principle that we owe a fiduciary duty of undivided loyalty to our shareholders.  Accordingly, we must avoid transactions, activities and relationships that conflict or appear to conflict with making decisions in the best interests of our shareholders.  HFT and the Adviser expect all of their directors, trustees, officers and employees to maintain high ethical standards of conduct and to comply with applicable laws and governmental regulations.

B.Definitions

The following definitions apply for purposes of this Code.

1. “Access Person” means any director, trustee, officer or employee of HFT or the Adviser, but excluding any director of the Adviser who meets independence requirements under applicable law.

2. “Adviser” has the meaning set forth in Section I.A.

3. A Covered Security is “being considered for purchase or sale” when a recommendation to purchase or sell such Covered Security has been made and communicated and, with respect to the person making the recommendation, when such person seriously considers making such a recommendation.

4. “beneficial ownership” shall be interpreted in the same manner as it would be under Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, as amended, in determining whether a person has a pecuniary interest in a security for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

5. “CCO” means Chief Compliance Officer per Rule 38a-1 of the Investment Company Act and Rule 206(4)-7 of the Investment Advisers Act.

6. “control” has the meaning set forth in Section 2(a)(9) of the Investment Company Act.

7. “Covered Security” means a security as defined in Section 2(a)(36) of the Investment Company Act, except that it does not include:

a. direct obligations of the Government of the United States;

1

b. bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements; and

c. shares issued by open-end registered investment companies (but not exchange‑traded funds) other than HFT.

8. “Disinterested Trustee” means a trustee of HFT who is not an “interested person” of HFT within the meaning of Section 2(a)(19) of the Investment Company Act and the rules and regulations promulgated thereunder.

9. “Fund” means, individually, any series of HFT and collectively all such series shall be referred to as the “Funds”.

10. “HFT” has the meaning set forth in Section I.A.

11. “Initial Public Offering” means an offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before the registration, was not subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended.

12. “Investment Advisers Act” has the meaning set forth in Section I.A.

13. “Investment Company Act” has the meaning set forth in Section I.A.

14. “Investment Personnel” means (1) any employee of HFT or the Adviser or of any company in a control relationship to HFT or the Adviser who, in connection with his or her regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of securities by a Fund and (2) any natural person who controls HFT or the Adviser and who obtains information concerning recommendations made to a Fund regarding the purchase or sale of securities by such Fund.

15. “Laws” means the laws, rules and regulations of federal, state and local governments (both United States and foreign) and other applicable regulatory agencies.

16. “personal securities transaction” has the meaning set forth in Section III.A.

17. “SEC” means the Securities and Exchange Commission.

II.STANDARDS OF BUSINESS CONDUCT

A.General Standards

HFT and the Adviser hold their directors, trustees, officers, and employees accountable for adhering to and advocating the following standards to the best of their knowledge and ability.

2

1. always act in an honest and ethical manner, including in connection with, and the handling and avoidance of, actual or apparent conflicts of interest between personal and professional relationships;

2. fully comply with all applicable Laws;

3. proactively promote full, fair, accurate, timely and understandable disclosure in reports and documents that HFT and the Adviser file with or submit to the SEC and in other public communications made by HFT or the Adviser; and

4. proactively promote ethical and honest behavior with HFT and the Adviser, including, without limitation, by promptly reporting violations of, and being accountable for adherence to, this Code.

B.Specific Duties and Responsibilities

In adhering to and advocating the general standards set forth above, the directors, trustees, officers and employees of HFT and the Adviser shall fulfill the following duties and responsibilities to the best of their knowledge and ability.

1. They shall handle all conflicts of interest between personal and professional relationships in an ethical and honest manner, and shall disclose in advance to the CCO of HFT or the Adviser, as applicable, the relevant details of any transaction or relationship that reasonably could be expected to give rise to an actual or apparent conflict of interest between themselves and HFT or the Adviser.  Such CCO shall, as appropriate, discuss such disclosures with the Board of Trustees of HFT or the Board of Directors of the Adviser, as applicable, which Board shall thereafter take such action with respect to the conflict of interest as it deems appropriate.  The general policy of HFT and the Adviser is to avoid conflicts of interest whenever practicable.

2. They shall use their best efforts to ensure the timely and understandable disclosure of information that, in all material respects, is accurate, complete, objective and relevant in all reports and documents HFT or the Adviser file with or submit to the SEC or in any other public communications made by HFT or the Adviser.

3. They shall use their best efforts to ensure compliance in all material respects with all applicable Laws by HFT and the Adviser.

4. They shall respect the confidentiality of information acquired in the course of their work and shall not disclose confidential information, except when they believe they are authorized for business purposes or legally obliged to disclose confidential information. They may not use confidential information acquired in the course of their work for their personal advantage.

3

5. They shall not take or direct or allow any other person to take or direct any action to fraudulently influence, coerce, manipulate or mislead the independent auditing firm of HFT or the Adviser.

6. They may not engage the auditing firms of HFT or the Adviser to perform audit or non-audit services without the prior approval of the Board of Trustees of HFT or the Board of Directors or Audit Committee of the Adviser.

7. The independent directors of the Adviser shall not have access to, and shall not seek from any employee of the Adviser, any of the portfolio rebalancing information related to any of the Funds until such time as the rebalancing of such Funds has been entirely concluded except that certain limited access to such information may be granted with permission, in advance, from the CCO of HFT.

8. If they are Investment Personnel, they shall not, without the prior approval of the CCO of HFT or the Adviser, as applicable, receive any gift or participate in any entertainment event of more than de minimis value from or with any person or entity that does or is seeking to do business with or on behalf of a Fund or the Adviser.  The annual receipt of gifts from the same source valued at $100 or less shall be considered de minimis, while the annual receipt of entertainment from the same source valued at $1,000 or less shall be considered de minimis.  Additionally, the receipt of an occasional dinner, a ticket to a sporting event or the theater or comparable entertainment event also shall be considered to be of de minimis value.

9. If they are Investment Personnel, except for service that began prior to March 2, 1996, they shall not serve on the board of directors of publicly traded companies absent prior authorization of the Board of Trustees of HFT.  The Board of Trustees of HFT may so authorize such board service only if it determines that such board service is consistent with the interests of the Funds and their shareholders.

10. They shall promptly report any suspected violations of this Code to the CCOs of HFT and the Adviser in accordance with Section II.C below.

C.Reporting Violations

Each director, trustee, officer or employee of HFT or the Adviser must promptly report any of the following matters to the CCOs of HFT and the Adviser:

● a violation or potential violation of a Law by HFT or the Adviser;

● a belief that such director, trustee, officer or employee is being asked to violate this Code or any Law in the performance of his or her duties for HFT or the Adviser; or

● any other violation or potential violation of this Code by any person.

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If desired, such matters may, in addition to being reported to the CCOs of HFT and the Adviser, also be reported to the Chairman of the Audit Committee of the Board of Directors of the Adviser.  Appropriate steps will be taken to maintain the confidentiality of the reporting person’s identity to the extent consistent with the obligations of HFT and the Adviser to investigate and remedy the matter and, if appropriate, report the matter to government officials.  Persons may report violations of the Code on an anonymous basis.  No retribution will be taken against a person who makes a report in good faith of a violation or potential violation of this Code.

III.PERSONAL SECURITIES INVESTMENT TRANSACTIONS POLICY

Rule 17j‑1 under the Investment Company Act and Rule 240A‑1 under the Advisers Act require the reporting of all personal securities transactions (with certain limited exceptions) and pre‑clearance of certain personal securities investment transactions by persons who are involved in the investment activities of HFT or the Adviser or who have access to non‑public information regarding purchases or sales of securities or the portfolio holdings of any of the Funds.  This policy implements the requirements of those rules and also sets forth additional procedures that are intended to avoid any actual or apparent conflicts of interest that may arise from personal securities investment transactions.

A.General

Subject to the limited exclusions set forth in Section III.C below, all Access Persons are required to report holdings and transactions in Covered Securities with respect to which they have discretionary authority or beneficial ownership.  In addition, subject to the limited exclusions set forth in Section III.C below, no Access Person (or certain of his or her family members as described in Section III.B below) shall buy or sell any Covered Security for any account over which such Access Person has discretionary authority or for an account in which such Access Person has, or as a result of the transaction acquires, any direct or indirect beneficial ownership (referred to herein as a “personal securities transaction”) unless:

· such Access Person has obtained pre‑clearance of such transaction in accordance with the procedures described in Section III.D.7 below; and

· the transaction is reported in writing to the CCOs of HFT and the Adviser on a quarterly basis in accordance with the requirements of Section III.E.3 below.

Except as otherwise specifically provided therein, (1) Disinterested Trustees are not subject to the restrictions and limitations or reporting requirements set forth in Sections III.D and III.E and (2) non‑executive directors of the Advisor who do not have access to nonpublic information regarding securities recommendations, securities transactions or portfolio holdings for the Funds and are not involved in making securities recommendations to clients are not subject to the restrictions and limitations set forth in Section III.D.

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B.Accounts Covered

The term “beneficial ownership” is defined by the rules of the SEC.  Generally, a person is deemed to have beneficial ownership of securities held in the name of:

● such person;

● such person’s spouse or minor child;

● a relative (including in‑laws, stepchildren or stepparents) sharing the same house; or

● anyone else if such person is able to:

o obtain benefits substantially equivalent to ownership of the securities; or

o obtain ownership of the securities immediately or at some future time.

C.Exempt Securities and Transactions

1. Exemptions from Pre‑Clearance and Reporting Requirements

The pre‑clearance and reporting requirements set forth in this Section III do not apply to:

a. purchases or sales effected in any account over which the Access Person has no direct or indirect influence or control; and

b. purchases or sales that are non-volitional on the part of the Access Person.

2. Exemptions from Pre‑Clearance Requirements Only

The pre‑clearance requirements set forth in this Section III do not apply to:

a. purchases that are part of an automatic dividend reinvestment plan;

b. purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired;

c. purchases, sales, or gifts of common stock of issuers in the Dow Jones Industrial Average provided that the number of shares purchased or sold of any one such issuer on any day does not exceed 5,000 shares;

d. purchases, sales, or gifts of shares issued by HFT; and

e. purchases, sales, or gifts of exchange‑traded funds.

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D.Restrictions and Limitations on Personal Securities Transactions

The provisions of this Section III.D apply to all Access Persons, except they do not apply to Disinterested Trustees other than as specifically set forth in Section III.D.3below and they do not apply to non‑executive directors of the Advisor who do not have access to nonpublic information regarding securities recommendations, securities transactions or portfolio holdings for the Funds and are not involved in making securities recommendations to clients.

Any personal securities transaction by an Access Person in violation of this Code may be required to be reversed and any resulting profits may be subject to disgorgement.

1. Participation in Initial Public Offerings

No Access Person may acquire any Covered Security in an Initial Public Offering without the prior approval of the CCOs of HFT and the Adviser.

2. Participation in Private Placements

No Access Person may participate in a private placement of any kind (including, but not limited to, investments in limited partnership, limited liability companies, hedge funds, private equity funds, PIPEs, real estate, oil and gas partnerships and venture capital investments) without the prior approval of the CCOs of HFT and the Adviser.

3. Trading in a Security on a Day When There is a “Buy” or “Sell” Order or Serious Consideration Thereof

No Access Person may purchase or sell, directly or indirectly, any Covered Security on any day during which (a) the Adviser has placed a “buy” or “sell” order in the same security for a Fund or (b) to the actual knowledge of such Access Person at the time of such purchase or sale, the same security is being considered for purchase or sale by a Fund.

Disinterested Trustees are subject to this prohibition if they know or should have known at the time of such purchase or sale that the Adviser has such a pending “buy” or “sell” order in the same security for the Fund.

4.  Blackout Period

No Access Person may purchase or sell, directly or indirectly, a Covered Security within seven calendar days after the Adviser has purchased or sold the same security for a Fund.

5. Short‑Swing Profits; Day Trading

No Access Person may (a) engage in frequent trading of securities (e.g., day trading) or (b) profit from the purchase and sale or sale and purchase of the same or equivalent Covered Security within 30 days.  Nothing in this Section III.D.5 shall be deemed to prohibit avoidance of loss through trading within a period shorter than 30 days.

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6. Restricted List

HFT and the Adviser may from time to time establish a Restricted List that includes the names of companies for which HFT or the Adviser may have, or are in a position to receive, material non‑public information.  Access Persons are not allowed to trade or investment in the securities of any company on the Restricted List.

7. Pre‑Clearance Requirements

Access Persons must obtain pre‑clearance of all personal securities transactions in Covered Securities that are not exempted by Section III.C through the Compliance ELF system or any alternative procedures as may be announced following the approval of the CCOs of HFT and the Adviser.  Access Persons will receive notification regarding whether their pre‑clearance request is approved or denied, but the specific reason for the decision is not required to be provided.  If a pre‑clearance request for a personal securities transaction submitted by an Access Person is denied, such Access Person is prohibited from executing such personal securities transaction.  If the personal securities transaction is not completed on the date of pre‑clearance, a new pre‑clearance must be obtained prior to executing any remaining portion of such personal securities transaction (unless the approval specifically states that it will remain in effect for a longer period of time, in which case the specified time period applies).  If an Access Person believes he or she may not be able to complete a personal securities transaction in a single trading day because of limited liquidity in the applicable security, he or she may request that the pre‑clearance approval extend for up to five days.  Such requests will be considered on a case‑by‑case basis based on the facts and circumstances known at the time.  Approval of a pre‑clearance request for a personal securities transaction that has not yet been executed may be revoked at any time if new information makes revocation advisable.

Post‑approval of personal securities transactions is not permitted under any circumstances.

E.Reporting Procedures

The provisions of this Section III.E apply to all Access Persons, except they do not apply to Disinterested Trustees other than as specifically set forth in Section III.E.1below.  If desired, an Access Person may include a statement on any report filed pursuant to Sections III.E.2‑III.E.4 below that the report shall not be construed as an admission by such Access Person that he or she has any beneficial ownership in the security to which the report relates.

1. Limited Reporting Obligations for Disinterested Trustees

Disinterested Trustees do not need to file an initial holdings report or annual holdings report pursuant to Sections III.E.2 or III.E.4 below.  Additionally, Disinterested Trustees do not need to file a quarterly transaction report pursuant to Section III.E.3 below except to report a personal securities transaction in a Covered Security if such Disinterested Trustee, at the time of making such personal securities transaction, knew or, in the ordinary course of fulfilling his or her official duties as a trustee of HFT, should have known that, during the 15-day period immediately before or after the date of such personal securities transaction, such Covered

8

Security was purchased or sold by a Fund or was being considered by a Fund or the Adviser for purchase or sale by a Fund.

2. Initial Holdings Report

Each Access Person shall, no later than ten days after such person becomes an Access Person, file an initial holdings report with the CCOs of HFT and the Adviser containing the following information (which information must be current as of a date no more than 45 days prior to the date such person becomes an Access Person):

a. the title and type of security, the exchange ticker symbol or CUSIP number, number of shares and principal amount of each Covered Security in which such Access Person had any direct or indirect beneficial ownership at the time the person became an Access Person;

b. the name of any broker, dealer or bank with whom such Access Person maintained an account in which any securities (regardless of whether such securities were Covered Securities) were held for the direct or indirect benefit of such Access Person; and

c. the date the report is submitted by such Access Person.

3. Quarterly Transaction Report

Each Access Person shall, no later than 30 days after the end of each calendar quarter, file a quarterly transaction report with the CCOs of HFT and the Adviser containing the following information:

a. with respect to any personal securities transaction during the quarter in a Covered Security in which the Access Person had any direct or indirect beneficial ownership (except that personal securities transactions pursuant to an automatic dividend reinvestment plan do not need to be reported in a quarterly transaction report):

i. the date of the personal securities transaction, the title, exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares and the principal amount of each security involved;

ii. the nature of the personal securities transaction (i.e., purchase, sale or any other type of acquisition or disposition);

iii. the price of the Covered Security at which the personal securities transaction was effected;

iv. the name of the broker, dealer or bank with or through whom the personal securities transaction was effected; and

9

v. the date that the report is submitted by such Access Person.

b. with respect to any account established by such Access Person during the quarter in which any securities (regardless of whether such securities were Covered Securities) were held for the direct or indirect benefit of such Access Person:

i. the name of the broker, dealer or bank with whom such Access Person established the account;

ii. the date the account was established; and

iii. the date the report is submitted by such Access Person.

In lieu of filing a quarterly transaction report, an Access Person may provide duplicate copies of all account statements for all securities accounts in which Covered Securities were held with respect to such Access Person to the CCO of HFT within the time period set forth in this Section III.E.3, provided that all of the information required by this Section III.E.3 is contained in such account statements or in the records of the Funds.

4. Annual Holdings Report

Each Access Person shall, no later than January 30 of each year, file an annual holdings report with the CCOs of HFT and the Adviser containing the following information as of the preceding December 31:

a. the title and type of security, the exchange ticker symbol or CUSIP number, number of shares and principal amount of each Covered Security in which such Access Person had any direct or indirect beneficial ownership;

b. the name of any broker, dealer or bank with whom such Access Person maintains an account in which any securities (regardless of whether such securities were Covered Securities) are held for the direct or indirect benefit of such Access Person; and

c. the date the report is submitted by such Access Person.

5. Review of Periodic Reports; Identification of Access Person

The CCOs of HFT and the Adviser or their designees shall review all reports filed by Access Persons pursuant to this Section III.  The CCOs of HFT and the Adviser shall identify all Access Persons who are required to file reports pursuant to Section III.E and must inform such Access Persons of their reporting obligations.

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IV.INSIDER TRADING POLICY

HFT and the Adviser prohibit their directors, trustees, officers and employees from trading, either personally or on behalf of the Funds, on material non‑public information or communicating material non‑public information to others in violation of the law.  In addition, communication of inside information (“tipping”) to a third party, where improper trading can be anticipated, is also strictly prohibited.  This conduct is frequently referred to as “insider trading.”

In addition to applying to the directors, trustees, officers and employees of HFT and the Adviser, this policy also applies to their respective spouses, children, relatives sharing a home with them and certain trusts, partnerships and corporations affiliated with them.

Insider trading laws are continuously changing.  In the event an individual has any hesitation about whether or not something may be considered insider trading, such individual should immediately discuss the matter with the Chief Compliance Officer of HFT or the Adviser.  Seeking guidance if there is even the slightest hesitation is likely to prevent disciplinary action or complex legal problems.

A.What is Material Information?

“Material information” generally means information that a reasonable investor would consider important in deciding whether to buy, sell or hold a security, or information that is reasonably certain to have a substantial effect on the price of a company’s securities once such information becomes publicly available.  Both positive and negative information may be material.  Information that may be considered material includes, but is not limited to:

● earnings estimates or changes in previously released earnings estimates;

● pending changes in corporate policy (such as dividend changes or stock splits);

● significant new products, services or processes;

● pending large commercial or government contracts;

● the gain or loss of a substantial customer;

● pending litigation or changes in the status of litigation;

● a significant refinancing transaction;

● news of a pending acquisition or sale of assets or a proposed merger or tender offer;

● government investigations; or

● changes in management.

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Material information may also relate to the market for a company’s securities.  Information about a significant order to purchase or sell securities may, in some instances, be material.

No simple test exists to determine whether information is material.  Assessments of materiality involve a highly fact‑specific analysis.  Since the question of whether inside information is “material” is determined in litigation with the benefit of 20-20 hindsight, individuals should consult the CCO of HFT or the Adviser if they are in receipt of any non‑public information, regardless of whether or not they believe it is material.

B.What is Non‑Public Information?

Information is non‑public until it has been disclosed in a manner sufficient to ensure availability to the investing public and sufficient time has passed since its dissemination for investors to have absorbed the information (which is generally measured in days and not minutes).  For example, information in a report filed with the SEC or appearing in the Wall Street Journal or other publication of general circulation would be considered public after a sufficient amount of time has passed since its publication.

C.What are the Penalties for Insider Trading?

The federal securities laws impose potentially severe penalties on persons who trade securities while in possession of material non‑public information or who improperly disclose material non‑public information to others.  Individuals who trade on (or tip) inside information may face one or more of the following consequences:

· termination of such individual’s employment or other relationship with HFT and the Adviser;

· criminal sanctions, which may include a fine of up to $5 million and up to 20 years imprisonment;

· disgorgement of the profits gained or losses avoided through insider trading and a penalty of up to three times such amount;

· an SEC order permanently barring such individual from the securities industry; and

· a lawsuit by investors seeking to recover damages for insider trading violations.

Similar penalties may be imposed against so called “controlling persons” who fail to take appropriate steps to prevent or detect insider trading violations (including tipping violations) by their employees or subordinates.

HFT and the Adviser may also be subject to penalties in the event a director, trustee, officer or employee is found liable for insider trading, including:

· civil penalties of up to the greater of $1 million or three times the amount of profits gained or losses avoided by such individual;

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· criminal fines of up to $25 million; and

· restrictions on their ability to conduct their business activities.

D.Compliance Procedures

The following procedures have been established to help directors, trustees, officers and employees of HFT and the Adviser avoid insider trading and to help HFT and the Adviser prevent, detect and impose sanctions against individuals who engage in insider trading.

1. Identifying Inside Information

Before executing any personal trade or trade for the Funds, a director, trustee, officer or employee of HFT or the Adviser must determine whether they have access to material, non‑public information.  The following questions are relevant to such a determination:

a. Is the information material?  Would an investor consider this information important in making his or her investment decision?  If disclosed, would this information substantially affect the market price of the securities?

b. Is the information non‑public?  Has the information been effectively communicated to the marketplace by appearing in publications of general circulation?  Is the information readily available to a significant number of other investors in the market?  How much time has passed since the information was disseminated?

If, after consideration of the foregoing matters, an individual believes information is material and non‑public or is not sure about whether such information is material and non‑public, he or she should take the following steps:

a. immediately report the information to the CCO of HFT or the Adviser;

b. refrain from purchasing or selling any securities to which the information is relevant; and

c. refrain from communicating the information to anyone inside or outside of HFT and the Adviser other than the CCOs of HFT and the Adviser and other persons who “need to know” such information in order to perform their job responsibilities.

2. Restricting Access to Material Non‑Public Information

a. Communications

Access to material non‑public information must be limited to only those individuals who have a “need to know.”

b. Information Handling

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Directors, trustees, officers and employees of HFT and the Adviser should take all appropriate actions to safeguard any material non‑public information in their possession.  Such information should be kept secure.  For example, documents or papers containing material non‑public information should not be left on desks or otherwise where it may be seen by other people, and access to files (whether hard copy or electronic) containing material non‑public information should be restricted.

In addition, material non‑public information should not be discussed in public or quasi‑public places where conversations may be overheard by others.

E.Securities Issued By the Adviser

1. General

Insider trading laws apply to the securities of the Adviser the same as they apply to the securities of any issuer.  However, because there is a higher likelihood of access to material non‑public information regarding the Adviser than regarding other companies, additional procedures are warranted.

In addition to the procedures set forth in Section IV.D, the following additional procedures are designed to help ensure that all material non‑public information regarding the Adviser remains confidential:

● “tips” about material non‑public information regarding the Adviser should never be given to anyone who may, directly or indirectly, use such information to derive an improper personal benefit through personal trading in the Adviser’s stock or by passing the tip on to others; and

● all inquiries regarding the Adviser from the press or other news media must be referred to the President or an Executive Vice President of the Adviser (who may authorize any employee to speak to the press or other news media outlet about the Adviser on a case‑by‑case basis).

If an individual becomes aware of a leak of inside information regarding the Adviser, he or she should immediately report the leak to the CCO of the Adviser.  The Adviser is required under Regulation FD of the federal securities laws to avoid the selective disclosure of material non‑public information.

2. Quiet Period

Directors, trustees, officers and employees of HFT and the Adviser may not purchase or sell any securities of the Adviser during the period beginning on the first day of each quarter and ending on the third business day after public announcement of quarterly or (in the case of the fourth fiscal quarter) annual results for the prior period or during any other period declared to be a quiet period by the CCO of the Adviser.  All personal securities transactions in securities of the Adviser must be pre‑cleared in accordance with Section III.D.7 regardless of whether such purchase or sale is outside of a quiet period.  Notwithstanding the foregoing, a participant in any equity incentive plan of the Adviser as may be in effect from time to time may elect, either

14

during or outside of a quiet period, to have the Adviser withhold shares of the Adviser’s common stock otherwise deliverable or vesting under an award to satisfy any Federal, state, or local tax obligations, and the Adviser may withhold such shares, in accordance with the terms and conditions of such equity incentive plan; provided that the CCO of the Adviser may in his or her discretion suspend the right to make any such election.  The submission of such an election by a participant shall serve as a pre‑clearance request under Section III.D.7.

3. Reporting of Stock Transactions to SEC

The Personal Securities Investment Transactions Policy set forth in Section III is designed to implement the requirements of Rule 17j‑1 under the Investment Company Act and Rule 240A‑1 under the Advisers Act, as well as to assist directors and executive officers in complying with the filing and short‑swing insider trading liability provisions of Section 16 of the Securities Exchange Act of 1934, as amended.  As a general rule, transactions in securities of the Adviser (including the receipt or exercise of stock options) by directors, executive officers, 10% or more shareholders and their related persons are required to be reported to the SEC on Form 4 within two business days of the transaction.  Because the Form 4 must be filed with the SEC within the two‑business day deadline, it is critical for the Adviser to be aware of transactions in its securities by insiders ahead of time so that it may assist with making the required filings.  Most changes of ownership must be reported even if there has been no net change in holdings.  Additionally, although certain transactions such as gifts may be reported on a deferred basis on Form 5, the Adviser strongly recommends that all transactions in securities of the Adviser be reported on Form 4 within two business days.  The Adviser must disclose any late filings in its annual meeting proxy statement.  Furthermore, the SEC has authority to impose civil fines and cease and desist orders for late filings.

The Form 4 and 5 reporting requirements are designed, among other things, to assist with enforcing the short‑swing insider trading liability provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended.  The Personal Securities Investment Transactions Policy set forth in Section III is also designed to help reporting persons avoid short-swing insider trading liability.  Section 16(b) of the Securities Exchange Act of 1934, as amended, provides that any “profit” on a purchase and sale of securities of an issuer by a director, executive officer or a 10% or more shareholder of such issuer within any six-month period must be paid to the issuer unless certain exemptions apply.  “Profit” will be computed by matching any sale of Company stock taking place at a higher price than a purchase taking place within six months before or after the sale, regardless of the seller’s tax basis in specifically identified shares sold.  Intent to take unfair advantage of inside information is not required for liability under Section 16(b).

4. No Short Sales

Section 16(c) of the Securities Exchange Act of 1934, as amended, prohibits directors, executive officers and 10% or more shareholders from making “short sales” of the securities of the Adviser.  A short sale occurs when an investor sells borrowed securities (in anticipation of a price decline) and is required to return an equal number of shares at some pre‑defined point in the future.

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V.COMPLIANCE

A.Approval of the Code of Ethics

1. The Board of Trustees of HFT, including a majority of the Disinterested Trustees, and the Board of Directors of the Adviser shall approve this Code and any material changes thereto.  Prior to approving this Code and any material changes thereto, the Board of Trustees of HFT, including a majority of the Disinterested Trustees, must determine that this Code contains provisions reasonably necessary to prevent Access Persons from violating Rule 17j-1(b) under the Investment Company Act.

2. No less frequently than annually, the CCOs of HFT and the Adviser shall furnish a report to the Board of Trustees of HFT and the Board of Directors of the Adviser that includes the following:

a. a description of all issues arising under the Code since the last report to such Boards, including, but not limited to, information about material violations of this Code and sanctions imposed in response to such material violations;

b. a list of Access Persons under this Code; and

c. a certification that HFT and the Adviser have adopted such procedures as are reasonably necessary to prevent Access Persons from violating this Code.

3. This Code may not be waived or amended except by the approval of the Board of Trustees of HFT and the Board of Directors or Audit Committee of the Adviser.

B.Annual Certification

Each year, the CCOs of HFT and the Adviser shall provide all directors, trustees, officers and employees with a copy of this Code.  Promptly following receipt thereof, each such person shall certify to HFT and to the Adviser that (1) they have read and understand this Code and recognize that they are subject thereto, (2) they have complied with the requirements of this Code and (3) they have disclosed or reported all personal securities transactions required to be disclosed or reported pursuant to the requirements of this Code.

C.Prohibition on Self‑Clearance

No director, trustee, officer or employee may pre-clear his or her own trades, review his or her own required trading reports or otherwise serve as the final point of review of his or her own actions under this Code.  To the extent this Code requires action by a CCO and the CCO also engages in personal securities transactions, such CCO’s responsibilities under this Code with respect to such CCO’s personal securities transactions shall be carried out by another CCO or an appropriate designee.

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D.Other Obligations

Compliance with this Code does not relieve directors, trustees, officers or employees of their obligations under any other code of ethics.

E.Maintenance of Records

This Code and the approvals and reports required by Section V.A shall be maintained by the Funds’ administrator and the CCOs of HFT and the Adviser.  The reports required by Section III.E shall be maintained by the CCO of HFT.

F.Interpretation and Enforcement

1. This is a combined Code of Ethics for HFT and the Adviser.  The Board of Directors of the Adviser (or a committee thereof) is responsible for overseeing the interpretation and enforcement of this Code in all matters related to the Adviser.  The Board of Trustees of HFT is responsible for overseeing the interpretation and enforcement of this Code in all matters related to HFT.  When either governing body considers any matter related to this Code, it shall act in executive session.

2. Each director, trustee, officer and employee will be held accountable for his or her adherence to this Code by the Board of Trustees of HFT or the Board of Directors of the Adviser, as applicable.  Directors, trustees, officers and employees who fail to adhere to this Code will be subject to appropriate disciplinary action, ranging from warnings to possible termination or removal.

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EX-99.CODE ETH

Explanatory Note: Attached hereto are the portions of the Code of Ethics that were amended since the Registrant last filed its Code of Ethics. Only the sub-sections of the Code of Ethics that were amended are included (as restated in their entirety) in this exhibit to the Registrant’s Form N-CSR.

Text that was deleted is shown with a strikethrough, and text that was added is shown with a double underline.

Code of Ethics

for

Hennessy Funds Trust

and

Hennessy Advisors, Inc.

__________________________

June 2017

February 2018

__________________________

TABLE OF CONTENTS

Page

I.	GENERAL	1
A.	Introduction	1
B.	Definitions	1
II.	STANDARDS OF BUSINESS CONDUCT	32
A.	General Standards	32
B.	Specific Duties and Responsibilities	3
C.	Reporting Violations	54
III.	PERSONAL SECURITIES INVESTMENT TRANSACTIONS POLICY	5
A.	General	5
B.	Accounts Covered	6
C.	Exempt Securities and Transactions	6
D.	Restrictions and Limitations on Personal Securities Transactions	7
E.	Reporting Procedures	98
IV.	INSIDER TRADING POLICY	11
A.	What is Material Information?	1211
B.	What is Non Public Information?	12
C.	What are the Penalties for Insider Trading?	1312
D.	Compliance Procedures	13
E.	Securities Issued By the Adviser	1514
V.	COMPLIANCE	16
A.	Approval of the Code of Ethics	16
B.	Annual Certification	1716
C.	Prohibition on Self Clearance	1716
D.	Other Obligations	17
E.	Maintenance of Records	1817
F.	Interpretation and Enforcement	1817
Appendix A     Pre-Clearance Procedures

i

I.GENERAL

. . .

B.Definitions

The following definitions apply for purposes of this Code.

. . .

7. “Covered Security” means a security as defined in Section 2(a)(36) of the Investment Company Act, except that it does not include:

a. direct obligations of the Government of the United States;

b. bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements; and

c. shares issued by open-end registered investment companies (but not exchange‑traded funds) other than HFT; and

d. shares issued by HFT that are held within an Access Person’s 401(k) account.

. . .

III.PERSONAL SECURITIES INVESTMENT TRANSACTIONS POLICY

. . .

C.Exempt Securities and Transactions

1.Exemptions from Pre‑Clearance and Reporting Requirements

The pre‑clearance and reporting requirements set forth in this Section III do not apply to:

a.purchases or sales effected in any account over which the Access Person has no direct or indirect influence or control; and

b.purchases or sales that are non-volitional on the part of the Access Person.

2.Exemptions from Pre‑Clearance Requirements Only

The pre‑clearance requirements set forth in this Section III do not apply to:

a.purchases that are part of an automatic dividend reinvestment plan;

b.purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired;

c.purchases or, sales, or gifts of common stock of issuers in the Dow Jones Industrial Average provided that the number of shares purchased or sold of any one such issuer on any day does not exceed 5,000 shares; and

d.purchases or, sales, or gifts of shares issued by HFT; and

e. purchases, sales, or gifts of exchange‑traded funds.

D.Restrictions and Limitations on Personal Securities Transactions

The provisions of this Section III.D apply to all Access Persons, except they do not apply to Disinterested Trustees other than as specifically set forth in Section III.D.3 below and they do not apply to non‑executive directors of the Advisor who do not have access to nonpublic information regarding securities recommendations, securities transactions or portfolio holdings for the Funds and are not involved in making securities recommendations to clients.

Any personal securities transaction by an Access Person in violation of this Code may be required to be reversed and any resulting profits may be subject to disgorgement.

1.Participation in Initial Public Offerings

No Access Person may acquire any Covered Security in an Initial Public Offering without the prior approval of the CCOs of HFT and the Adviser.

2.Participation in Private Placements

No Access Person may participate in a private placement of any kind (including, but not limited to, investments in limited partnership, limited liability companies, hedge funds, private equity funds, PIPEs, real estate, oil and gas partnerships and venture capital investments) without the prior approval of the CCOs of HFT and the Adviser.

3.Trading in a Security on a Day When There is a “Buy” or “Sell” Order or Serious Consideration Thereof

No Access Person may purchase or sell, directly or indirectly, any Covered Security on any day during which (a) the Adviser has placed a “buy” or “sell” order in the same security for a Fund or (b) to the actual knowledge of such Access Person at the time of such purchase or sale, the same security is being considered for purchase or sale by a Fund.

Disinterested Trustees are subject to this prohibition if they know or should have known at the time of such purchase or sale that the Adviser has such a pending “buy” or “sell” order in the same security for the Fund.

4. Blackout Period

No Access Person may purchase or sell, directly or indirectly, a Covered Security within seven calendar days after the Adviser has purchased or sold the same security for a Fund.

5.Short‑Swing Profits; Day Trading

No Access Person may (a) engage in frequent trading of securities (e.g., day trading) or (b) profit from the purchase and sale or sale and purchase of the same or equivalent Covered Security within 30 days.  Nothing in this Section III.D.5 shall be deemed to prohibit avoidance of loss through trading within a period shorter than 30 days.

6.Restricted List

HFT and the Adviser may from time to time establish a Restricted List that includes the names of companies for which HFT or the Adviser may have, or are in a position to receive, material non‑public information.  Access Persons are not allowed to trade or investment in the securities of any company on the Restricted List.

7.Pre‑Clearance Requirements

Access Persons must obtain pre‑clearance of all personal securities transactions in Covered Securities that are not exempted by Section III.C by followingthrough the Compliance ELF system or any alternative procedures described in Appendix A, as may be updated from time to time uponannounced following the approval of the CCOs of HFT and the Adviser.  It is the goal of HFT and the Adviser to respond to all pre‑clearance requests within 24 hours.  Access Persons will receive notification regarding whether their pre‑clearance request is approved or denied, but the specific reason for the decision is not required to be provided.  If a pre‑clearance request for a personal securities transaction submitted by an Access Person is denied, such Access

Person is prohibited from executing such personal securities transaction.  If the personal securities transaction is not completed on the date of pre‑clearance, a new pre‑clearance must be obtained prior to executing any remaining portion of such personal securities transaction (unless the approval specifically states that it will remain in effect for a longer period of time, in which case the specified time period applies).  If an Access Person believes he or she may not be able to complete a personal securities transaction in a single trading day because of limited liquidity in the applicable security, he or she may request that the pre‑clearance approval extend for up to five days.  Such requests will be considered on a case‑by‑case basis based on the facts and circumstances known at the time.  Approval of a pre‑clearance request for a personal securities transaction that has not yet been executed may be revoked at any time if new information makes revocation advisable.

Post‑approval of personal securities transactions is not permitted under any circumstances.

. . .

APPENDIX A

PRE‑CLEARANCE PROCEDURES

To seek pre‑clearance of a personal securities transaction in a Covered Security that is required to be pre‑cleared pursuant to Section III.D.7 of the Code of Ethics, send an email to preclearance@hennessyfunds.com setting forth the following information, except that (a) if you are seeking pre‑clearance of a personal securities transaction in a Fund, you only need to complete items 1‑9 and (b) if you are seeking pre‑clearance of a personal securities transaction in the Adviser, you only need to complete items 1‑10:

1. Date of Pre‑Clearance Request:

2. Name of Issuer:

3. Ticker Symbol/CUSIP:

4. Type of Security:

5. Nature of Transaction (Purchase/Sale):

6. Number of Securities to be Purchased or Sold:

7. B/D, Dealer, or Bank Through Which the Transaction is to be Executed:

8. Last Three Digits of Account Number (can be left blank if you only hold one account at above entity):

9. Have you executed an opposite‑side trade in this security in any account within the past 30 days?  (E.g., if you are requesting a sale, have you executed a purchase in the same security within the past 30 days?)  ____ Yes  ____ No

10. Are you aware of any material non-public information (insider information) regarding the security or the issuer?  ____ Yes  ____ No

11. Are you or is a member of your immediate family an officer or director of the issuer of the securities or an affiliate of the issuer?  ____ Yes  ____ No

If yes, please describe:

12. Describe the nature of any direct or indirect professional or business relationship that you may have with the issuer of the securities (if none, please indicate “None”):

13. Does this transaction involve a private placement?  ____ Yes  ____ No

14. Is the security being purchased part of an initial public offering? ____ Yes  ____ No

EX-99.CERT

I, Neil J. Hennessy, certify that:

  1.   I have reviewed this report on Form N-CSR of Hennessy Funds Trust;

  2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

  3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

  4.   The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

  (a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

  (b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

  (c)   Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

  (d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

  5.   The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

  (a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

  (b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  January 9, 2019 /s/ Neil J. Hennessy
Neil J. Hennessy President

CERTIFICATIONS

I, Teresa M. Nilsen, certify that:

  1.   I have reviewed this report on Form N-CSR of Hennessy Funds Trust;

  2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

  3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

  4.   The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

  (a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

  (b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

  (c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

  (d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

  5.   The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

  (a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

  (b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  January 9, 2019 /s/ Teresa M. Nilsen
Teresa M. Nilsen Treasurer

EX-99.906 CERT

Certification Pursuant to Rule 30a-2(b) under the 1940 Actand Section 906 of the Sarbanes-Oxley Act

Pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 and Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of the Hennessy Funds Trust, does hereby certify, to such officer’s knowledge, that the report on Form N-CSR of Hennessy Funds Trust for the period ended October 31, 2018, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable, and that the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of Hennessy Funds Trust for the stated period.

/s/ Neil J. Hennessy Neil J. Hennessy President Hennessy Funds Trust	/s/ Teresa M. Nilsen Teresa M. Nilsen Treasurer Hennessy Funds Trust
Date: January 9, 2019	Date: January 9, 2019

This statement accompanies this report on Form N-CSR pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 and Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed as filed by the Hennessy Funds Trust for purposes of Section 18 of the Securities Exchange Act of 1934.