(a)
|
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
28
|
|
Trustees and Officers of the Fund
|
29
|
|
Expense Example
|
32
|
|
Proxy Voting Policy and Proxy Voting Records
|
34
|
|
Availability of Quarterly Portfolio Schedule
|
34
|
|
Federal Tax Distribution Information
|
34
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
34
|
|
Electronic Delivery
|
34
|
|
Liquidity Risk Management Program
|
35
|
|
Privacy Policy
|
35
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Cornerstone Growth Fund –
|
|||
Investor Class (HFCGX)
|
2.51%
|
6.80%
|
10.50%
|
Hennessy Cornerstone Growth Fund –
|
|||
Institutional Class (HICGX)
|
2.84%
|
7.16%
|
10.84%
|
Russell 2000® Index
|
-18.54%
|
5.56%
|
9.93%
|
S&P 500® Index
|
-14.61%
|
10.44%
|
12.79%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October
31, 2022
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
PBF Energy, Inc., Class A
|
4.52%
|
Alpha Metallurgical Resources, Inc.
|
3.48%
|
Alliance Resource Partners LP
|
3.46%
|
Antero Resources Corp.
|
3.11%
|
Chesapeake Energy Corp.
|
2.86%
|
Marathon Petroleum Corp.
|
2.71%
|
McKesson Corp.
|
2.64%
|
Peabody Energy Corp.
|
2.62%
|
EnLink Midstream LLC
|
2.59%
|
Ranger Oil Corp.
|
2.58%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 91.97%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 1.63%
|
||||||||||||
Scholastic Corp.
|
73,900
|
$
|
2,818,546
|
1.63
|
%
|
|||||||
Consumer Discretionary – 3.10%
|
||||||||||||
Build-A-Bear Workshop, Inc.
|
151,900
|
2,671,921
|
1.55
|
%
|
||||||||
Movado Group, Inc.
|
81,300
|
2,688,591
|
1.55
|
%
|
||||||||
|
5,360,512
|
3.10
|
%
|
|||||||||
Consumer Staples – 8.79%
|
||||||||||||
BJ’s Wholesale Club Holdings, Inc. (a)
|
48,300
|
3,738,420
|
2.16
|
%
|
||||||||
Coca-Cola Consolidated, Inc.
|
5,500
|
2,678,555
|
1.55
|
%
|
||||||||
Ingles Markets, Inc.
|
37,600
|
3,548,312
|
2.05
|
%
|
||||||||
The Andersons, Inc.
|
81,300
|
2,867,451
|
1.66
|
%
|
||||||||
Tyson Foods, Inc., Class A
|
34,500
|
2,358,075
|
1.37
|
%
|
||||||||
|
15,190,813
|
8.79
|
%
|
|||||||||
Energy – 38.49%
|
||||||||||||
Antero Resources Corp. (a)
|
146,600
|
5,374,356
|
3.11
|
%
|
||||||||
Arch Resources, Inc.
|
28,100
|
4,279,349
|
2.48
|
%
|
||||||||
Cenovus Energy, Inc. (b)
|
206,800
|
4,177,360
|
2.42
|
%
|
||||||||
Chesapeake Energy Corp.
|
48,300
|
4,939,641
|
2.86
|
%
|
||||||||
EnLink Midstream LLC
|
376,200
|
4,469,256
|
2.59
|
%
|
||||||||
Equinor ASA – ADR (b)
|
105,900
|
3,842,052
|
2.22
|
%
|
||||||||
Imperial Oil Ltd. (b)
|
73,200
|
3,987,936
|
2.31
|
%
|
||||||||
Laredo Petroleum, Inc. (a)
|
46,200
|
2,986,830
|
1.73
|
%
|
||||||||
Marathon Petroleum Corp.
|
41,300
|
4,692,506
|
2.71
|
%
|
||||||||
Nabors Industries Ltd. (a)(b)
|
25,200
|
4,385,556
|
2.54
|
%
|
||||||||
Oceaneering International, Inc. (a)
|
218,800
|
3,061,012
|
1.77
|
%
|
||||||||
PBF Energy, Inc., Class A (a)
|
176,500
|
7,810,125
|
4.52
|
%
|
||||||||
Peabody Energy Corp. (a)
|
189,500
|
4,529,050
|
2.62
|
%
|
||||||||
Ranger Oil Corp.
|
109,100
|
4,462,190
|
2.58
|
%
|
||||||||
Targa Resources Corp.
|
51,200
|
3,500,544
|
2.03
|
%
|
||||||||
|
66,497,763
|
38.49
|
%
|
|||||||||
Financials – 7.75%
|
||||||||||||
American International Group, Inc.
|
51,500
|
2,935,500
|
1.70
|
%
|
||||||||
Encore Capital Group, Inc. (a)
|
44,400
|
2,260,848
|
1.31
|
%
|
||||||||
Mr. Cooper Group, Inc. (a)
|
62,000
|
2,448,380
|
1.42
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Financials (Continued)
|
||||||||||||
Old Republic International Corp.
|
120,800
|
$
|
2,803,768
|
1.62
|
%
|
|||||||
Prudential Financial, Inc.
|
27,900
|
2,934,801
|
1.70
|
%
|
||||||||
|
13,383,297
|
7.75
|
%
|
|||||||||
Health Care – 7.60%
|
||||||||||||
CVS Health Corp.
|
31,100
|
2,945,170
|
1.70
|
%
|
||||||||
Elevance Health Inc.
|
7,100
|
3,882,067
|
2.25
|
%
|
||||||||
McKesson Corp.
|
11,700
|
4,555,629
|
2.64
|
%
|
||||||||
Tenet Healthcare Corp. (a)
|
39,500
|
1,752,220
|
1.01
|
%
|
||||||||
|
13,135,086
|
7.60
|
%
|
|||||||||
Industrials – 14.68%
|
||||||||||||
BlueLinx Holdings, Inc. (a)
|
37,100
|
2,614,066
|
1.51
|
%
|
||||||||
Boise Cascade Co.
|
38,500
|
2,570,645
|
1.49
|
%
|
||||||||
Builders FirstSource, Inc. (a)
|
44,300
|
2,731,538
|
1.58
|
%
|
||||||||
Daseke, Inc. (a)
|
279,600
|
1,666,416
|
0.96
|
%
|
||||||||
Eagle Bulk Shipping, Inc. (b)
|
58,800
|
2,844,744
|
1.65
|
%
|
||||||||
Grindrod Shipping Holdings Ltd. (b)
|
141,300
|
3,652,605
|
2.11
|
%
|
||||||||
Titan International, Inc. (a)
|
284,100
|
4,250,136
|
2.46
|
%
|
||||||||
Triumph Group, Inc. (a)
|
133,400
|
1,207,270
|
0.70
|
%
|
||||||||
Univar, Inc. (a)
|
108,500
|
2,764,580
|
1.60
|
%
|
||||||||
ZIM Integrated Shipping Services Ltd. (b)
|
45,500
|
1,068,795
|
0.62
|
%
|
||||||||
|
25,370,795
|
14.68
|
%
|
|||||||||
Materials – 9.93%
|
||||||||||||
Alcoa Corp.
|
40,700
|
1,588,521
|
0.92
|
%
|
||||||||
Alpha Metallurgical Resources, Inc.
|
35,600
|
6,011,060
|
3.48
|
%
|
||||||||
Cabot Corp.
|
42,900
|
3,152,292
|
1.83
|
%
|
||||||||
Commercial Metals Co.
|
86,500
|
3,935,750
|
2.28
|
%
|
||||||||
Sasol Ltd. – ADR (b)
|
146,200
|
2,460,546
|
1.42
|
%
|
||||||||
|
17,148,169
|
9.93
|
%
|
|||||||||
Total Common Stocks
|
||||||||||||
(Cost $149,471,600)
|
158,904,981
|
91.97
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
PARTNERSHIPS & TRUSTS – 5.80%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Energy – 5.80%
|
||||||||||||
Alliance Resource Partners LP
|
246,400
|
$
|
5,982,592
|
3.46
|
%
|
|||||||
Energy Transfer Equity LP
|
316,300
|
4,039,151
|
2.34
|
%
|
||||||||
|
||||||||||||
Total Partnerships & Trusts
|
||||||||||||
(Cost $6,587,257)
|
10,021,743
|
5.80
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS – 2.26%
|
||||||||||||
|
||||||||||||
Money Market Funds – 2.26%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 2.93% (c)
|
3,904,581
|
3,904,581
|
2.26
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $3,904,581)
|
3,904,581
|
2.26
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $159,963,438) – 100.03%
|
172,831,305
|
100.03
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.03)%
|
(60,667
|
)
|
(0.03
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
172,770,638
|
100.00
|
%
|
(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, 2022.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
2,818,546
|
$
|
—
|
$
|
—
|
$
|
2,818,546
|
||||||||
Consumer Discretionary
|
5,360,512
|
—
|
—
|
5,360,512
|
||||||||||||
Consumer Staples
|
15,190,813
|
—
|
—
|
15,190,813
|
||||||||||||
Energy
|
66,497,763
|
—
|
—
|
66,497,763
|
||||||||||||
Financials
|
13,383,297
|
—
|
—
|
13,383,297
|
||||||||||||
Health Care
|
13,135,086
|
—
|
—
|
13,135,086
|
||||||||||||
Industrials
|
25,370,795
|
—
|
—
|
25,370,795
|
||||||||||||
Materials
|
17,148,169
|
—
|
—
|
17,148,169
|
||||||||||||
Total Common Stocks
|
$
|
158,904,981
|
$
|
—
|
$
|
—
|
$
|
158,904,981
|
||||||||
Partnerships & Trusts
|
||||||||||||||||
Energy
|
$
|
10,021,743
|
$
|
—
|
$
|
—
|
$
|
10,021,743
|
||||||||
Total Partnerships & Trusts
|
$
|
10,021,743
|
$
|
—
|
$
|
—
|
$
|
10,021,743
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
3,904,581
|
$
|
—
|
$
|
—
|
$
|
3,904,581
|
||||||||
Total Short-Term Investments
|
$
|
3,904,581
|
$
|
—
|
$
|
—
|
$
|
3,904,581
|
||||||||
Total Investments
|
$
|
172,831,305
|
$
|
—
|
$
|
—
|
$
|
172,831,305
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2022
|
ASSETS:
|
||||
Investments in securities, at value (cost $159,963,438)
|
$
|
172,831,305
|
||
Dividends and interest receivable
|
58,114
|
|||
Receivable for fund shares sold
|
19,745
|
|||
Return of capital receivable
|
60,243
|
|||
Prepaid expenses and other assets
|
28,362
|
|||
Total assets
|
172,997,769
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
20,133
|
|||
Payable to advisor
|
100,275
|
|||
Payable to administrator
|
32,019
|
|||
Payable to auditor
|
22,749
|
|||
Accrued distribution fees
|
19,604
|
|||
Accrued service fees
|
12,203
|
|||
Accrued trustees fees
|
6,152
|
|||
Accrued expenses and other payables
|
13,996
|
|||
Total liabilities
|
227,131
|
|||
NET ASSETS
|
$
|
172,770,638
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
156,245,939
|
||
Total distributable earnings
|
16,524,699
|
|||
Total net assets
|
$
|
172,770,638
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
154,248,000
|
||
Shares issued and outstanding
|
6,407,389
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
24.07
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
18,522,638
|
||
Shares issued and outstanding
|
735,917
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
25.17
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2022
|
INVESTMENT INCOME:
|
||||
Distributions received from master limited partnerships
|
$
|
293,568
|
||
Return of capital on distributions received
|
(293,568
|
)
|
||
Dividend income from common stock(1)
|
3,887,533
|
|||
Interest income
|
36,687
|
|||
Total investment income
|
3,924,220
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
1,197,953
|
|||
Distribution fees – Investor Class (See Note 5)
|
217,930
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
191,867
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
10,384
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
191,675
|
|||
Service fees – Investor Class (See Note 5)
|
145,286
|
|||
Federal and state registration fees
|
32,636
|
|||
Compliance expense (See Note 5)
|
24,516
|
|||
Audit fees
|
22,743
|
|||
Trustees’ fees and expenses
|
19,923
|
|||
Reports to shareholders
|
15,534
|
|||
Legal fees
|
2,732
|
|||
Interest expense (See Note 7)
|
2,514
|
|||
Other expenses
|
27,523
|
|||
Total expenses
|
2,103,216
|
|||
NET INVESTMENT INCOME
|
$
|
1,821,004
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
4,008,127
|
||
Net change in unrealized appreciation/depreciation on investments
|
(4,443,482
|
)
|
||
Net loss on investments
|
(435,355
|
)
|
||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
1,385,649
|
(1)
|
Net of foreign taxes withheld and issuance fees of $312,074.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
OPERATIONS:
|
||||||||
Net investment income (loss)
|
$
|
1,821,004
|
$
|
(785,532
|
)
|
|||
Net realized gain on investments
|
4,008,127
|
41,914,519
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(4,443,482
|
)
|
18,604,616
|
|||||
Net increase in net assets resulting from operations
|
1,385,649
|
59,733,603
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(33,524,164
|
)
|
—
|
|||||
Distributable earnings – Institutional Class
|
(3,505,908
|
)
|
—
|
|||||
Total distributions
|
(37,030,072
|
)
|
—
|
|||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
21,825,715
|
7,853,848
|
||||||
Proceeds from shares subscribed – Institutional Class
|
21,704,478
|
1,438,342
|
||||||
Dividends reinvested – Investor Class
|
32,429,645
|
—
|
||||||
Dividends reinvested – Institutional Class
|
3,066,398
|
—
|
||||||
Cost of shares redeemed – Investor Class
|
(21,756,715
|
)
|
(20,954,269
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(16,595,253
|
)
|
(2,945,640
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
40,674,268
|
(14,607,719
|
)
|
|||||
TOTAL INCREASE IN NET ASSETS
|
5,029,845
|
45,125,884
|
||||||
NET ASSETS:
|
||||||||
Beginning of year
|
167,740,793
|
122,614,909
|
||||||
End of year
|
$
|
172,770,638
|
$
|
167,740,793
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
919,385
|
276,838
|
||||||
Shares sold – Institutional Class
|
849,055
|
49,401
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
1,319,351
|
—
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
119,641
|
—
|
||||||
Shares redeemed – Investor Class
|
(925,080
|
)
|
(755,784
|
)
|
||||
Shares redeemed – Institutional Class
|
(740,429
|
)
|
(105,327
|
)
|
||||
Net increase (decrease) in shares outstanding
|
1,541,923
|
(534,872
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
29.83
|
$
|
19.91
|
$
|
19.15
|
$
|
22.17
|
$
|
24.16
|
|||||||||
0.26
|
(1)
|
(0.14
|
)(1)
|
(0.08
|
)(1)
|
(0.01
|
)(1)
|
(0.17
|
)
|
|||||||||
0.62
|
10.06
|
0.84
|
(1.19
|
)
|
(1.82
|
)
|
||||||||||||
0.88
|
9.92
|
0.76
|
(1.20
|
)
|
(1.99
|
)
|
||||||||||||
(6.64
|
)
|
—
|
—
|
(1.82
|
)
|
—
|
||||||||||||
(6.64
|
)
|
—
|
—
|
(1.82
|
)
|
—
|
||||||||||||
$
|
24.07
|
$
|
29.83
|
$
|
19.91
|
$
|
19.15
|
$
|
22.17
|
|||||||||
2.51
|
%
|
49.82
|
%
|
3.97
|
%
|
-5.19
|
%
|
-8.24
|
%
|
|||||||||
$
|
154.25
|
$
|
151.96
|
$
|
110.96
|
$
|
125.10
|
$
|
158.98
|
|||||||||
1.33
|
%
|
1.34
|
%
|
1.36
|
%
|
1.34
|
%
|
1.30
|
%
|
|||||||||
1.10
|
%
|
(0.51
|
)%
|
(0.45
|
)%
|
(0.07
|
)%
|
(0.56
|
)%
|
|||||||||
102
|
%
|
98
|
%
|
98
|
%
|
95
|
%
|
133
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
31.09
|
$
|
20.68
|
$
|
19.83
|
$
|
22.88
|
$
|
24.85
|
|||||||||
0.34
|
(1)
|
(0.05
|
)(1)
|
(0.03
|
)(1)
|
0.05
|
(1)
|
0.11
|
||||||||||
0.67
|
10.46
|
0.88
|
(1.22
|
)
|
(2.08
|
)
|
||||||||||||
1.01
|
10.41
|
0.85
|
(1.17
|
)
|
(1.97
|
)
|
||||||||||||
(6.93
|
)
|
—
|
—
|
(1.88
|
)
|
—
|
||||||||||||
(6.93
|
)
|
—
|
—
|
(1.88
|
)
|
—
|
||||||||||||
$
|
25.17
|
$
|
31.09
|
$
|
20.68
|
$
|
19.83
|
$
|
22.88
|
|||||||||
2.84
|
%
|
50.34
|
%
|
4.29
|
%
|
-4.86
|
%
|
-7.93
|
%
|
|||||||||
$
|
18.52
|
$
|
15.78
|
$
|
11.65
|
$
|
14.62
|
$
|
20.52
|
|||||||||
1.01
|
%
|
1.01
|
%
|
1.05
|
%
|
1.01
|
%
|
0.96
|
%
|
|||||||||
1.38
|
%
|
(0.17
|
)%
|
(0.14
|
)%
|
0.27
|
%
|
(0.23
|
)%
|
|||||||||
102
|
%
|
98
|
%
|
98
|
%
|
95
|
%
|
133
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2022
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of partnership
income and wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book
purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized
gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
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 are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2022 are as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(1,181,652)
|
$1,181,652
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund for the
prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax
benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of discount,
is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or decrease, as
applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of the property
received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class),
and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets. Distributions received from the Fund’s investments in master limited partnerships (“MLPs”) generally consist of
ordinary income, capital gains, and return of capital. The Fund records investment income on the ex-date of the distributions. For financial statement purposes, the Fund uses return of capital and income estimates to allocate the dividend
income received. Such estimates are based on historical information available from the MLPs and other industry sources. These estimates may subsequently be revised based on information received from the MLPs after their tax reporting periods
are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Fund.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and
paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption price per share
for the Fund is equal to the Fund’s NAV per share.
|
HENNESSY FUNDS
|
1-800-966-4354
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that the Fund
limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven calendar days or
less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment companies
(“Rule 18f-4”). Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, and requires funds whose use of
derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager. The Fund has adopted procedures in accordance with Rule 18f-4.
|
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5 establishes
requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other conditions. Rule
2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule 2a-5, the SEC also adopted related
recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund investments. The Fund has adopted procedures in
accordance with Rule 2a-5.
|
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.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual funds, partnerships,
rights, MLPs, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on which the
securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for
which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in
Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV because most foreign markets close well before such time. The earlier close of most foreign
markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears
that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that
affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending NAV
provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S. government
agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently
executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate observable market data,
such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified in Level 2 of the fair value
hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as of the
61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below.
Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
||||
Cost of investments for tax purposes
|
$
|
161,148,951
|
||
Gross tax unrealized appreciation
|
$
|
28,530,051
|
||
Gross tax unrealized depreciation
|
(16,847,697
|
)
|
||
Net tax unrealized appreciation/(depreciation)
|
$
|
11,682,354
|
||
Undistributed ordinary income
|
$
|
829,382
|
||
Undistributed long-term capital gains
|
4,012,963
|
|||
Total distributable earnings
|
$
|
4,842,345
|
||
Other accumulated gain/(loss)
|
$
|
—
|
||
Total accumulated gain/(loss)
|
$
|
16,524,699
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
Ordinary income(1)
|
$
|
—
|
$
|
—
|
||||
Long-term capital gains
|
37,030,072
|
—
|
||||||
Total distributions
|
$
|
37,030,072
|
$
|
—
|
Long-term
|
|||
Investor Class
|
0.55021
|
||
Institutional Class
|
0.57544
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees and Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
86
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
75
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 – June 2022.
|
||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
48
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board
|
Officer since 2004. Kiosk is a full-
|
|
and
|
service marketing agency with
|
||
December 2021
|
offices in the San Francisco Bay Area
|
||
as a Trustee
|
and Liverpool, UK and staff across
|
||
nine states in the U.S.
|
|||
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
77
|
consultant in the securities industry.
|
||
Trustee
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Brian Alexander
|
March 2015
|
Mr. Alexander has worked for the
|
None.
|
41
|
Sutter Health organization since
|
||
Adviser to the Board
|
2011 in various positions. He has
|
||
served as the Chief Executive Officer
|
|||
of the North Valley Hospital Area
|
|||
since 2021. From 2018 to 2021, he
|
|||
served as the Chief Executive Officer
|
|||
of Sutter Roseville Medical Center.
|
|||
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.
|
|||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
58
|
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.
|
|||
Interested Trustee(1)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Hennessy has been employed
|
Hennessy
|
66
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
Name, Age,
|
||
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.
|
56
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
66
|
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.
|
50
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Jennifer Cheskiewicz(2)
|
June 2013
|
Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
|
45
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc. since
|
64
|
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 their 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 Kelley(4)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
50
|
October 2012. He has served as Chief Investment Officer of the
|
|
Chief Investment Officer,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Senior Vice President,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He 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 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He served as Co-Portfolio Manager of the Hennessy
|
||
Technology Fund from February 2017 until May 2018. Mr. Kelley
|
||
served as Portfolio Manager of FBR Fund Advisers, Inc. from
|
||
January 2008 to October 2012.
|
||
L. Joshua Wein(4)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
49
|
2018. He has served as Co-Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone
|
|
Co-Portfolio Manager
|
Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth
|
|
Fund, the Hennessy Cornerstone Value Fund, Hennessy Total
|
||
Return Fund, the Hennessy Balanced Fund, the Hennessy Gas
|
||
Utility Fund, and the Hennessy Technology Fund since February
|
||
2019. He served as a Senior Analyst of these same funds from
|
||
September 2018 through February 2019. Mr. Wein served as
|
||
Director of Alternative Investments and Co-Portfolio Manager
|
||
at Sterling Capital Management from 2008 to 2018.
|
(1)
|
Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust.
|
(2)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2022 –
|
|
May 1, 2022
|
October 31, 2022
|
October 31, 2022
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,045.20
|
$6.86
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.50
|
$6.77
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,047.00
|
$5.26
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,020.06
|
$5.19
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.33% for Investor Class shares or 1.02% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund has historically
been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future during both normal and reasonably
foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is therefore not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to a
highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make any material changes to the Liquidity Program during the review period and was not recommending any changes to the Liquidity Program or the model inputs used to determine the
liquidity classification of each security held by the Fund.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was operating as
intended during the review period.
|
1.
|
Information we receive from you 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;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis information, and other
financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
28
|
|
Trustees and Officers of the Fund
|
29
|
|
Expense Example
|
32
|
|
Proxy Voting Policy and Proxy Voting Records
|
34
|
|
Availability of Quarterly Portfolio Schedule
|
34
|
|
Federal Tax Distribution Information
|
34
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
34
|
|
Electronic Delivery
|
34
|
|
Liquidity Risk Management Program
|
35
|
|
Privacy Policy
|
35
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Focus Fund –
|
|||
Investor Class (HFCSX)
|
-25.55%
|
5.23%
|
9.73%
|
Hennessy Focus Fund –
|
|||
Institutional Class (HFCIX)
|
-25.27%
|
5.62%
|
10.12%
|
Russell 3000® Index
|
-16.52%
|
9.87%
|
12.46%
|
Russell Mid Cap® Growth Index
|
-28.94%
|
8.66%
|
11.95%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2022
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Markel Corp.
|
10.98%
|
Brookfield Asset Management, Inc., Class A
|
10.40%
|
Encore Capital Group, Inc.
|
10.00%
|
Aon PLC
|
9.68%
|
American Tower Corp., Class A
|
9.60%
|
O’Reilly Automotive, Inc.
|
8.75%
|
CarMax, Inc.
|
6.52%
|
Ashtead Group PLC
|
6.06%
|
SS&C Technologies Holdings, Inc.
|
5.21%
|
CDW Corp.
|
4.25%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 88.26%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 3.41%
|
||||||||||||
AST SpaceMobile, Inc. (a)
|
1,247,902
|
$
|
9,022,332
|
1.22
|
%
|
|||||||
Shenandoah Telecommunications Co.
|
716,737
|
16,241,260
|
2.19
|
%
|
||||||||
|
25,263,592
|
3.41
|
%
|
|||||||||
Consumer Discretionary – 21.35%
|
||||||||||||
CarMax, Inc. (a)
|
766,122
|
48,273,347
|
6.52
|
%
|
||||||||
NVR, Inc. (a)
|
4,388
|
18,595,247
|
2.51
|
%
|
||||||||
O’Reilly Automotive, Inc. (a)
|
77,416
|
64,810,353
|
8.75
|
%
|
||||||||
Restoration Hardware Holdings, Inc. (a)
|
104,116
|
26,438,176
|
3.57
|
%
|
||||||||
|
158,117,123
|
21.35
|
%
|
|||||||||
Financials – 41.14%
|
||||||||||||
Aon PLC (b)
|
254,710
|
71,698,318
|
9.68
|
%
|
||||||||
Brookfield Asset Management, Inc., Class A (b)
|
1,944,242
|
77,011,425
|
10.40
|
%
|
||||||||
Brookfield Asset Management Reinsurance Partners Ltd. (b)
|
15,721
|
622,473
|
0.08
|
%
|
||||||||
Encore Capital Group, Inc. (a)(d)
|
1,454,910
|
74,084,017
|
10.00
|
%
|
||||||||
Markel Corp. (a)
|
67,398
|
81,288,728
|
10.98
|
%
|
||||||||
|
304,704,961
|
41.14
|
%
|
|||||||||
Industrials – 10.79%
|
||||||||||||
Allegiant Travel Co. (a)
|
1,000
|
75,050
|
0.01
|
%
|
||||||||
American Woodmark Corp. (a)
|
691,441
|
31,356,849
|
4.24
|
%
|
||||||||
Ashtead Group PLC (b)
|
860,196
|
44,884,595
|
6.06
|
%
|
||||||||
Mistras Group, Inc. (a)
|
778,984
|
3,583,327
|
0.48
|
%
|
||||||||
|
79,899,821
|
10.79
|
%
|
|||||||||
Information Technology – 11.57%
|
||||||||||||
Applied Materials, Inc.
|
1,000
|
88,290
|
0.01
|
%
|
||||||||
CDW Corp.
|
182,239
|
31,492,721
|
4.25
|
%
|
||||||||
Lam Research Corp.
|
38,460
|
15,567,839
|
2.10
|
%
|
||||||||
SS&C Technologies Holdings, Inc.
|
749,303
|
38,529,160
|
5.21
|
%
|
||||||||
|
85,678,010
|
11.57
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $294,777,048)
|
653,663,507
|
88.26
|
%
|
|||||||||
|
||||||||||||
REITS – 9.60%
|
||||||||||||
Real Estate – 9.60%
|
||||||||||||
American Tower Corp., Class A
|
343,268
|
71,121,697
|
9.60
|
%
|
||||||||
|
||||||||||||
Total REITS
|
||||||||||||
(Cost $264,316)
|
71,121,697
|
9.60
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 2.13%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 2.13%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 2.93% (c)
|
15,804,549
|
$
|
15,804,549
|
2.13
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $15,804,549)
|
15,804,549
|
2.13
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $310,845,913) – 99.99%
|
740,589,753
|
99.99
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.01%
|
31,648
|
0.01
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
740,621,401
|
100.00
|
%
|
(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, 2022.
|
(d)
|
Investment in affiliated security. Investment represents five percent or more of the outstanding voting securities of the issuer, making the issuer an affiliate of the Fund, as defined in the Investment Company
Act of 1940, as amended. Details of transactions with affiliated companies for the year ended October 31, 2022, are as follows:
|
Value at
|
Sales
|
Realized
|
Corporate
|
||||||||||||||||||
Common Stocks
|
November 1, 2021
|
Purchases
|
Proceeds
|
Gain/Loss
|
Actions
|
||||||||||||||||
Encore Capital Group, Inc.
|
$
|
113,892,311
|
$
|
—
|
$
|
(39,916,395
|
)
|
$
|
14,414,103
|
$
|
—
|
||||||||||
Sub-total for affiliates
|
|||||||||||||||||||||
held as of 10/31/2022(1)
|
113,892,311
|
—
|
(39,916,395
|
)
|
14,414,103
|
—
|
|||||||||||||||
Marlin Business Services Corp
|
22,009,457
|
—
|
(12,347,191
|
)
|
7,721,670
|
(10,183,161
|
)
|
||||||||||||||
Sub-total for securities
|
|||||||||||||||||||||
no longer affiliates
|
|||||||||||||||||||||
as of 10/31/2022(2)
|
22,009,457
|
—
|
(12,347,191
|
)
|
7,721,670
|
(10,183,161
|
)
|
||||||||||||||
$
|
135,901,768
|
$
|
—
|
$
|
(52,263,586
|
)
|
$
|
22,135,773
|
$
|
(10,183,161
|
)
|
||||||||||
Net Change
|
|||||||||||||||||||||
in Unrealized
|
Value at
|
||||||||||||||||||||
Appreciation /
|
October 31,
|
||||||||||||||||||||
Common Stocks
|
Depreciation
|
Dividends
|
2022
|
Shares
|
|||||||||||||||||
Encore Capital Group, Inc.
|
$
|
(14,306,002
|
)
|
$
|
—
|
$
|
74,084,017
|
1,454,910
|
|||||||||||||
Sub-total for affiliates
|
|||||||||||||||||||||
held as of 10/31/2022(1)
|
(14,306,002
|
)
|
—
|
74,084,017
|
1,454,910
|
||||||||||||||||
Marlin Business Services Corp
|
(7,200,775
|
)
|
134,438
|
—
|
—
|
||||||||||||||||
Sub-total for securities
|
|||||||||||||||||||||
no longer affiliates
|
|||||||||||||||||||||
as of 10/31/2022(2)
|
(7,200,775
|
)
|
134,438
|
—
|
—
|
||||||||||||||||
$
|
(21,506,777
|
)
|
$
|
134,438
|
$
|
74,084,017
|
1,454,910
|
(1)
|
At October 31, 2022, this security represented 10.00% of the Fund’s net assets.
|
(2)
|
At October 31, 2022, this security was no longer an affiliate of the Fund.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
25,263,592
|
$
|
—
|
$
|
—
|
$
|
25,263,592
|
||||||||
Consumer Discretionary
|
158,117,123
|
—
|
—
|
158,117,123
|
||||||||||||
Financials
|
304,704,961
|
—
|
—
|
304,704,961
|
||||||||||||
Industrials
|
79,899,821
|
—
|
—
|
79,899,821
|
||||||||||||
Information Technology
|
85,678,010
|
—
|
—
|
85,678,010
|
||||||||||||
Total Common Stocks
|
$
|
653,663,507
|
$
|
—
|
$
|
—
|
$
|
653,663,507
|
||||||||
REITS
|
||||||||||||||||
Real Estate
|
$
|
71,121,697
|
$
|
—
|
$
|
—
|
$
|
71,121,697
|
||||||||
Total REITS
|
$
|
71,121,697
|
$
|
—
|
$
|
—
|
$
|
71,121,697
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
15,804,549
|
$
|
—
|
$
|
—
|
$
|
15,804,549
|
||||||||
Total Short-Term Investments
|
$
|
15,804,549
|
$
|
—
|
$
|
—
|
$
|
15,804,549
|
||||||||
Total Investments
|
$
|
740,589,753
|
$
|
—
|
$
|
—
|
$
|
740,589,753
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2022
|
ASSETS:
|
||||
Investments in unaffiliated securities, at value (cost $274,749,448)
|
$
|
666,505,736
|
||
Investments in affiliated securities, at value (cost $36,096,465)
|
74,084,017
|
|||
Total investments in securities, at value (cost $310,845,913)
|
740,589,753
|
|||
Dividends and interest receivable
|
179,219
|
|||
Receivable for fund shares sold
|
396,799
|
|||
Receivable for securities sold
|
1,451,847
|
|||
Prepaid expenses and other assets
|
63,472
|
|||
Total assets
|
742,681,090
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
1,133,622
|
|||
Payable to advisor
|
546,817
|
|||
Payable to administrator
|
146,252
|
|||
Payable to auditor
|
22,744
|
|||
Accrued distribution fees
|
78,028
|
|||
Accrued service fees
|
35,352
|
|||
Accrued trustees fees
|
15,560
|
|||
Accrued expenses and other payables
|
81,314
|
|||
Total liabilities
|
2,059,689
|
|||
NET ASSETS
|
$
|
740,621,401
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
230,773,745
|
||
Total distributable earnings
|
509,847,656
|
|||
Total net assets
|
$
|
740,621,401
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
431,667,610
|
||
Shares issued and outstanding
|
8,444,828
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
51.12
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
308,953,791
|
||
Shares issued and outstanding
|
5,792,598
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
53.34
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2022
|
INVESTMENT INCOME:
|
||||
Dividend income from unaffiliated securities(1)
|
$
|
5,464,602
|
||
Dividend income from affiliated securities
|
134,438
|
|||
Interest income
|
124,356
|
|||
Total investment income
|
5,723,396
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
8,586,390
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
1,194,214
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
327,115
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
1,068,471
|
|||
Distribution fees – Investor Class (See Note 5)
|
834,666
|
|||
Service fees – Investor Class (See Note 5)
|
556,444
|
|||
Federal and state registration fees
|
55,206
|
|||
Reports to shareholders
|
53,911
|
|||
Trustees’ fees and expenses
|
44,654
|
|||
Compliance expense (See Note 5)
|
24,507
|
|||
Audit fees
|
22,743
|
|||
Legal fees
|
16,017
|
|||
Other expenses
|
152,172
|
|||
Total expenses
|
12,936,510
|
|||
NET INVESTMENT LOSS
|
$
|
(7,213,114
|
)
|
|
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments:
|
||||
Unaffiliated investments
|
$
|
84,985,334
|
||
Affiliated investments
|
22,135,773
|
|||
Net change in unrealized appreciation/depreciation on investments
|
||||
Unaffiliated investments
|
(355,494,316
|
)
|
||
Affiliated investments
|
(21,506,777
|
)
|
||
Net loss on investments
|
(269,879,986
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(277,093,100
|
)
|
(1)
|
Net of foreign taxes withheld of $169,166.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
OPERATIONS:
|
||||||||
Net investment loss
|
$
|
(7,213,114
|
)
|
$
|
(8,433,350
|
)
|
||
Net realized gain on investments
|
107,121,107
|
223,830,997
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(377,001,093
|
)
|
262,240,110
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
(277,093,100
|
)
|
477,637,757
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(102,832,917
|
)
|
(202,897,649
|
)
|
||||
Distributable earnings – Institutional Class
|
(74,423,824
|
)
|
(111,878,455
|
)
|
||||
Total distributions
|
(177,256,741
|
)
|
(314,776,104
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
13,194,104
|
38,949,266
|
||||||
Proceeds from shares subscribed – Institutional Class
|
64,242,530
|
214,555,313
|
||||||
Dividends reinvested – Investor Class
|
100,142,196
|
198,099,143
|
||||||
Dividends reinvested – Institutional Class
|
68,169,964
|
100,565,261
|
||||||
Cost of shares redeemed – Investor Class
|
(125,473,751
|
)
|
(305,916,863
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(133,218,468
|
)
|
(267,470,520
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(12,943,425
|
)
|
(21,218,400
|
)
|
||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(467,293,266
|
)
|
141,643,253
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
1,207,914,667
|
1,066,271,414
|
||||||
End of year
|
$
|
740,621,401
|
$
|
1,207,914,667
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
208,254
|
541,194
|
||||||
Shares sold – Institutional Class
|
993,681
|
2,870,484
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
1,451,336
|
3,250,724
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
950,104
|
1,592,734
|
||||||
Shares redeemed – Investor Class
|
(2,029,388
|
)
|
(4,446,090
|
)
|
||||
Shares redeemed – Institutional Class
|
(2,110,055
|
)
|
(3,724,618
|
)
|
||||
Net increase (decrease) in shares outstanding
|
(536,068
|
)
|
84,428
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
80.48
|
$
|
71.68
|
$
|
85.11
|
$
|
83.20
|
$
|
84.92
|
|||||||||
(0.56
|
)(1)
|
(0.63
|
)(1)
|
(0.66
|
)(1)
|
(0.52
|
)(1)
|
(0.86
|
)
|
|||||||||
(16.93
|
)
|
31.46
|
(4.21
|
)
|
16.90
|
(0.85
|
)
|
|||||||||||
(17.49
|
)
|
30.83
|
(4.87
|
)
|
16.38
|
(1.71
|
)
|
|||||||||||
(11.87
|
)
|
(22.03
|
)
|
(8.56
|
)
|
(14.47
|
)
|
(0.01
|
)
|
|||||||||
(11.87
|
)
|
(22.03
|
)
|
(8.56
|
)
|
(14.47
|
)
|
(0.01
|
)
|
|||||||||
$
|
51.12
|
$
|
80.48
|
$
|
71.68
|
$
|
85.11
|
$
|
83.20
|
|||||||||
-25.55
|
%
|
52.87
|
%
|
-6.79
|
%
|
24.16
|
%
|
-2.02
|
%
|
|||||||||
$
|
431.67
|
$
|
709.40
|
$
|
678.72
|
$
|
1,213.20
|
$
|
1,339.45
|
|||||||||
1.52
|
%
|
1.49
|
%
|
1.51
|
%
|
1.47
|
%
|
1.47
|
%
|
|||||||||
(0.92
|
)%
|
(0.88
|
)%
|
(0.88
|
)%
|
(0.67
|
)%
|
(0.72
|
)%
|
|||||||||
5
|
%
|
4
|
%
|
5
|
%
|
2
|
%
|
13
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
83.66
|
$
|
74.24
|
$
|
87.83
|
$
|
85.66
|
$
|
87.10
|
|||||||||
(0.34
|
)(1)
|
(0.37
|
)(1)
|
(0.39
|
)(1)
|
(0.25
|
)(1)
|
(0.28
|
)
|
|||||||||
(17.63
|
)
|
32.62
|
(4.36
|
)
|
17.41
|
(1.15
|
)
|
|||||||||||
(17.97
|
)
|
32.25
|
(4.75
|
)
|
17.16
|
(1.43
|
)
|
|||||||||||
(12.35
|
)
|
(22.83
|
)
|
(8.84
|
)
|
(14.99
|
)
|
(0.01
|
)
|
|||||||||
(12.35
|
)
|
(22.83
|
)
|
(8.84
|
)
|
(14.99
|
)
|
(0.01
|
)
|
|||||||||
$
|
53.34
|
$
|
83.66
|
$
|
74.24
|
$
|
87.83
|
$
|
85.66
|
|||||||||
-25.27
|
%
|
53.43
|
%
|
-6.45
|
%
|
24.59
|
%
|
-1.65
|
%
|
|||||||||
$
|
308.95
|
$
|
498.51
|
$
|
387.55
|
$
|
586.25
|
$
|
811.96
|
|||||||||
1.13
|
%
|
1.12
|
%
|
1.14
|
%
|
1.12
|
%
|
1.09
|
%
|
|||||||||
(0.53
|
)%
|
(0.50
|
)%
|
(0.51
|
)%
|
(0.32
|
)%
|
(0.34
|
)%
|
|||||||||
5
|
%
|
4
|
%
|
5
|
%
|
2
|
%
|
13
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2022
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash sales
for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may include
short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to
shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
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 are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2022 are as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(11,368,006)
|
$11,368,006
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund for
the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax
benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or
decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of the
property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a
specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets. Distributions received from the Fund’s investments in master limited partnerships (“MLPs”)
generally consist of ordinary income, capital gains, and return of capital. The Fund records investment income on the ex-date of the distributions. For financial statement purposes, the Fund uses return of capital and income estimates to
allocate the dividend income received. Such estimates are based on historical information available from the MLPs and other industry sources. These estimates may subsequently be revised based on information received from the MLPs after
their tax reporting periods are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Fund.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and
paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption price per share
for the Fund is equal to the Fund’s NAV per share.
|
HENNESSY FUNDS
|
1-800-966-4354
|
i).
|
Foreign Currency – Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market exchange rate at the time of valuation. Purchases and sales of investments and
income are translated into U.S. dollars using the spot market exchange rate prevailing on the respective dates of such transactions. The Fund does not isolate the portion of the results of operations resulting from fluctuations in foreign
exchange rates on investments from fluctuations resulting from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain/loss on investments. Foreign investments present
additional risks due to currency fluctuations, economic and political factors, lower liquidity, government regulations, differences in accounting standards, and other factors.
|
j).
|
REIT Equity Securities – Distributions received from real estate investment trusts (“REITs”) may be classified as dividends, capital gains, or return of capital. Investments in REITs may require the Fund to accrue
and distribute income not yet received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it otherwise would
have continued to hold. At other times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings. If the Fund distributes these amounts, these distributions could constitute a return of capital to Fund
shareholders for U.S. federal income tax purposes. Dividends received by the Fund from a REIT generally do not constitute qualified dividend income and do not qualify for the dividends-received deduction.
|
k).
|
Partnership Accounting Policy – To the extent the Fund receives distributions from underlying partnerships in which it invests, the Fund records its pro rata share of income/loss and capital gains/losses and
accordingly adjusts the cost basis of the underlying partnerships for return of capital.
|
l).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that the
Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven calendar
days or less without the sale or disposition significantly changing the market value of the investment.
|
m).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment companies
(“Rule 18f-4”). Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, and requires funds whose use of
derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager. The Fund has adopted procedures in accordance with Rule 18f-4.
|
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5 establishes
requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other conditions.
Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule 2a-5, the SEC also adopted related
recordkeeping requirements and is rescinding
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund investments. The Fund has adopted procedures in accordance with Rule
2a-5.
|
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.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual funds,
partnerships, rights, MLPs, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary
exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a
securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied,
they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV because most foreign markets close well before such time. The earlier
close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In certain circumstances, it may be determined that a foreign security needs to be fair
valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV,
such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending
|
HENNESSY FUNDS
|
1-800-966-4354
|
NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S. government
agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently
executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate observable market data,
such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified in Level 2 of the fair value
hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as of the
61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below.
Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
310,845,913
|
|||
Gross tax unrealized appreciation
|
$
|
447,244,293
|
|||
Gross tax unrealized depreciation
|
(17,500,453
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
429,743,840
|
|||
Undistributed ordinary income
|
$
|
—
|
|||
Undistributed long-term capital gains
|
94,218,241
|
||||
Total distributable earnings
|
$
|
94,218,241
|
|||
Other accumulated gain/(loss)
|
$
|
(14,114,425
|
)
|
||
Total accumulated gain/(loss)
|
$
|
509,847,656
|
Year Ended
|
Year Ended
|
||||||||
October 31, 2022
|
October 31, 2021
|
||||||||
Ordinary income(1)
|
$
|
—
|
$
|
—
|
|||||
Long-term capital gains
|
177,256,741
|
314,776,104
|
|||||||
Total distributions
|
$
|
177,256,741
|
$
|
314,776,104
|
Long-term
|
|||
Investor Class
|
6.84360
|
||
Institutional Class
|
7.14363
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees and Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
86
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
75
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 – June 2022.
|
||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
48
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board
|
Officer since 2004. Kiosk is a full-
|
|
and
|
service marketing agency with
|
||
December 2021
|
offices in the San Francisco Bay Area
|
||
as a Trustee
|
and Liverpool, UK and staff across
|
||
nine states in the U.S.
|
|||
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
77
|
consultant in the securities industry.
|
||
Trustee
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Brian Alexander
|
March 2015
|
Mr. Alexander has worked for the
|
None.
|
41
|
Sutter Health organization since
|
||
Adviser to the Board
|
2011 in various positions. He has
|
||
served as the Chief Executive Officer
|
|||
of the North Valley Hospital Area
|
|||
since 2021. From 2018 to 2021, he
|
|||
served as the Chief Executive Officer
|
|||
of Sutter Roseville Medical Center.
|
|||
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.
|
|||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
58
|
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.
|
|||
Interested Trustee(1)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Hennessy has been employed
|
Hennessy
|
66
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
Name, Age,
|
||
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.
|
56
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
66
|
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.
|
50
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Jennifer Cheskiewicz(2)
|
June 2013
|
Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
|
45
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc. since
|
64
|
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 their 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 Kelley(4)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
50
|
October 2012. He has served as Chief Investment Officer of the
|
|
Chief Investment Officer,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Senior Vice President,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He 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 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He served as Co-Portfolio Manager of the Hennessy
|
||
Technology Fund from February 2017 until May 2018. Mr. Kelley
|
||
served as Portfolio Manager of FBR Fund Advisers, Inc. from
|
||
January 2008 to October 2012.
|
||
L. Joshua Wein(4)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
49
|
2018. He has served as Co-Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone
|
|
Co-Portfolio Manager
|
Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth
|
|
Fund, the Hennessy Cornerstone Value Fund, Hennessy Total
|
||
Return Fund, the Hennessy Balanced Fund, the Hennessy Gas
|
||
Utility Fund, and the Hennessy Technology Fund since February
|
||
2019. He served as a Senior Analyst of these same funds from
|
||
September 2018 through February 2019. Mr. Wein served as
|
||
Director of Alternative Investments and Co-Portfolio Manager
|
||
at Sterling Capital Management from 2008 to 2018.
|
(1)
|
Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust.
|
(2)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2022 –
|
|
May 1, 2022
|
October 31, 2022
|
October 31, 2022
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 897.50
|
$7.17
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,017.64
|
$7.63
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 899.00
|
$5.46
|
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 1.50% 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 the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund has
historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future during both normal
and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is therefore not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to a
highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make any material changes to the Liquidity Program during the review period and was not recommending any changes to the Liquidity Program or the model inputs used to determine the
liquidity classification of each security held by the Fund.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was operating as
intended during the review period.
|
1.
|
Information we receive from you 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;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis information, and other
financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
28
|
|
Trustees and Officers of the Fund
|
29
|
|
Expense Example
|
32
|
|
Proxy Voting Policy and Proxy Voting Records
|
34
|
|
Availability of Quarterly Portfolio Schedule
|
34
|
|
Federal Tax Distribution Information
|
34
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
34
|
|
Electronic Delivery
|
34
|
|
Liquidity Risk Management Program
|
35
|
|
Privacy Policy
|
35
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Cornerstone Mid Cap 30 Fund –
|
|||
Investor Class (HFMDX)
|
7.12%
|
9.29%
|
11.34%
|
Hennessy Cornerstone Mid Cap 30 Fund –
|
|||
Institutional Class (HIMDX)
|
7.52%
|
9.68%
|
11.72%
|
Russell Midcap® Index
|
-17.17%
|
7.95%
|
11.36%
|
S&P 500® Index
|
-14.61%
|
10.44%
|
12.79%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October
31, 2022
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
PBF Energy, Inc., Class A
|
4.01%
|
AdaptHealth Corp.
|
3.89%
|
Unum Group
|
3.68%
|
EMCOR Group, Inc.
|
3.64%
|
CVR Energy, Inc.
|
3.58%
|
W&T Offshore, Inc.
|
3.57%
|
Commercial Metals Co.
|
3.44%
|
Murphy USA, Inc.
|
3.43%
|
Visteon Corp.
|
3.38%
|
Casey’s General Stores, Inc.
|
3.32%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 94.46%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Consumer Discretionary – 21.56%
|
||||||||||||
Academy Sports & Outdoors, Inc.
|
283,100
|
$
|
12,464,893
|
3.20
|
%
|
|||||||
AutoNation, Inc. (a)
|
97,700
|
10,386,487
|
2.67
|
%
|
||||||||
Dick’s Sporting Goods, Inc.
|
113,100
|
12,866,256
|
3.30
|
%
|
||||||||
Murphy USA, Inc.
|
42,500
|
13,366,675
|
3.43
|
%
|
||||||||
Penske Automotive Group, Inc.
|
102,900
|
11,485,698
|
2.95
|
%
|
||||||||
Sonic Automotive, Inc.
|
219,500
|
10,261,625
|
2.63
|
%
|
||||||||
Visteon Corp. (a)
|
100,800
|
13,151,376
|
3.38
|
%
|
||||||||
|
83,983,010
|
21.56
|
%
|
|||||||||
Consumer Staples – 9.85%
|
||||||||||||
BJ’s Wholesale Club Holdings, Inc. (a)
|
165,900
|
12,840,660
|
3.30
|
%
|
||||||||
Cal-Maine Foods, Inc.
|
222,900
|
12,596,079
|
3.23
|
%
|
||||||||
Casey’s General Stores, Inc.
|
55,600
|
12,938,676
|
3.32
|
%
|
||||||||
|
38,375,415
|
9.85
|
%
|
|||||||||
Energy – 23.05%
|
||||||||||||
CVR Energy, Inc.
|
357,300
|
13,956,138
|
3.58
|
%
|
||||||||
Delek US Holdings, Inc.
|
424,100
|
12,578,806
|
3.23
|
%
|
||||||||
Green Plains, Inc. (a)
|
337,600
|
9,753,264
|
2.50
|
%
|
||||||||
PBF Energy, Inc., Class A (a)
|
352,634
|
15,604,054
|
4.01
|
%
|
||||||||
Peabody Energy Corp. (a)
|
487,600
|
11,653,640
|
2.99
|
%
|
||||||||
Plains GP Holdings LP, Class A
|
985,700
|
12,360,678
|
3.17
|
%
|
||||||||
W&T Offshore, Inc. (a)
|
1,834,000
|
13,920,060
|
3.57
|
%
|
||||||||
|
89,826,640
|
23.05
|
%
|
|||||||||
Financials – 3.68%
|
||||||||||||
Unum Group
|
314,300
|
14,328,937
|
3.68
|
%
|
||||||||
Health Care – 3.89%
|
||||||||||||
AdaptHealth Corp. (a)
|
664,900
|
15,159,720
|
3.89
|
%
|
||||||||
Industrials – 16.56%
|
||||||||||||
Clean Harbors, Inc. (a)
|
101,300
|
12,405,198
|
3.18
|
%
|
||||||||
Dycom Industries, Inc. (a)
|
107,000
|
12,645,260
|
3.25
|
%
|
||||||||
EMCOR Group, Inc.
|
100,600
|
14,194,660
|
3.64
|
%
|
||||||||
Encore Wire Corp.
|
90,800
|
12,493,172
|
3.21
|
%
|
||||||||
WESCO International, Inc. (a)
|
92,800
|
12,785,056
|
3.28
|
%
|
||||||||
|
64,523,346
|
16.56
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Information Technology – 3.28%
|
||||||||||||
Super Micro Computer, Inc. (a)
|
183,400
|
$
|
12,762,806
|
3.28
|
%
|
|||||||
Materials – 12.59%
|
||||||||||||
ATI, Inc. (a)
|
393,800
|
11,719,488
|
3.01
|
%
|
||||||||
Commercial Metals Co.
|
294,400
|
13,395,200
|
3.44
|
%
|
||||||||
Graphic Packaging Holding Co.
|
533,000
|
12,237,680
|
3.14
|
%
|
||||||||
Sonoco Products Co.
|
188,600
|
11,708,288
|
3.00
|
%
|
||||||||
|
49,060,656
|
12.59
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $331,754,351)
|
368,020,530
|
94.46
|
%
|
|||||||||
|
||||||||||||
PARTNERSHIPS & TRUSTS – 3.18%
|
||||||||||||
Energy – 3.18%
|
||||||||||||
Plains All American Pipeline LP
|
1,036,100
|
12,402,117
|
3.18
|
%
|
||||||||
|
||||||||||||
Total Partnerships & Trusts
|
||||||||||||
(Cost $10,138,592)
|
12,402,117
|
3.18
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS – 2.13%
|
||||||||||||
Money Market Funds – 2.13%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 2.93% (b)
|
8,302,627
|
8,302,627
|
2.13
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $8,302,627)
|
8,302,627
|
2.13
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $350,195,570) – 99.77%
|
388,725,274
|
99.77
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.23%
|
895,222
|
0.23
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
389,620,496
|
100.00
|
%
|
(a)
|
Non-income-producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2022.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Consumer Discretionary
|
$
|
83,983,010
|
$
|
—
|
$
|
—
|
$
|
83,983,010
|
||||||||
Consumer Staples
|
38,375,415
|
—
|
—
|
38,375,415
|
||||||||||||
Energy
|
89,826,640
|
—
|
—
|
89,826,640
|
||||||||||||
Financials
|
14,328,937
|
—
|
—
|
14,328,937
|
||||||||||||
Health Care
|
15,159,720
|
—
|
—
|
15,159,720
|
||||||||||||
Industrials
|
64,523,346
|
—
|
—
|
64,523,346
|
||||||||||||
Information Technology
|
12,762,806
|
—
|
—
|
12,762,806
|
||||||||||||
Materials
|
49,060,656
|
—
|
—
|
49,060,656
|
||||||||||||
Total Common Stocks
|
$
|
368,020,530
|
$
|
—
|
$
|
—
|
$
|
368,020,530
|
||||||||
Partnerships & Trusts
|
||||||||||||||||
Energy
|
$
|
12,402,117
|
$
|
—
|
$
|
—
|
$
|
12,402,117
|
||||||||
Total Partnerships & Trusts
|
$
|
12,402,117
|
$
|
—
|
$
|
—
|
$
|
12,402,117
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
8,302,627
|
$
|
—
|
$
|
—
|
$
|
8,302,627
|
||||||||
Total Short-Term Investments
|
$
|
8,302,627
|
$
|
—
|
$
|
—
|
$
|
8,302,627
|
||||||||
Total Investments
|
$
|
388,725,274
|
$
|
—
|
$
|
—
|
$
|
388,725,274
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2022
|
ASSETS:
|
||||
Investments in securities, at value (cost $350,195,570)
|
$
|
388,725,274
|
||
Dividends and interest receivable
|
376,802
|
|||
Receivable for fund shares sold
|
709,112
|
|||
Return of capital receivable
|
439,742
|
|||
Prepaid expenses and other assets
|
30,822
|
|||
Total assets
|
390,281,752
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
242,669
|
|||
Payable to advisor
|
228,156
|
|||
Payable to administrator
|
70,979
|
|||
Payable to auditor
|
22,749
|
|||
Accrued distribution fees
|
30,212
|
|||
Accrued service fees
|
17,141
|
|||
Accrued trustees fees
|
8,164
|
|||
Accrued expenses and other payables
|
41,186
|
|||
Total liabilities
|
661,256
|
|||
NET ASSETS
|
$
|
389,620,496
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
288,704,651
|
||
Total distributable earnings
|
100,915,845
|
|||
Total net assets
|
$
|
389,620,496
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
214,996,177
|
||
Shares issued and outstanding
|
10,320,377
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
20.83
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
174,624,319
|
||
Shares issued and outstanding
|
7,996,169
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
21.84
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2022
|
INVESTMENT INCOME:
|
||||
Distributions received from master limited partnerships
|
$
|
995,060
|
||
Return of capital on distributions received
|
(995,060
|
)
|
||
Dividend income from common stock
|
8,145,662
|
|||
Interest income
|
70,836
|
|||
Total investment income
|
8,216,498
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
2,779,195
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
412,030
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
150,373
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
429,912
|
|||
Distribution fees – Investor Class (See Note 5)
|
314,642
|
|||
Service fees – Investor Class (See Note 5)
|
209,761
|
|||
Federal and state registration fees
|
35,080
|
|||
Reports to shareholders
|
30,626
|
|||
Trustees’ fees and expenses
|
25,308
|
|||
Compliance expense (See Note 5)
|
24,516
|
|||
Audit fees
|
22,743
|
|||
Legal fees
|
6,261
|
|||
Other expenses
|
57,356
|
|||
Total expenses
|
4,497,803
|
|||
NET INVESTMENT INCOME
|
$
|
3,718,695
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
112,575,778
|
||
Net change in unrealized appreciation/depreciation on investments
|
(90,874,972
|
)
|
||
Net gain on investments
|
21,700,806
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
25,419,501
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
OPERATIONS:
|
||||||||
Net investment income (loss)
|
$
|
3,718,695
|
$
|
(2,309,361
|
)
|
|||
Net realized gain on investments
|
112,575,778
|
20,131,190
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(90,874,972
|
)
|
130,334,890
|
|||||
Net increase in net assets resulting from operations
|
25,419,501
|
148,156,719
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(3,694,691
|
)
|
—
|
|||||
Distributable earnings – Institutional Class
|
(2,816,027
|
)
|
—
|
|||||
Total distributions
|
(6,510,718
|
)
|
—
|
|||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
15,003,867
|
27,799,744
|
||||||
Proceeds from shares subscribed – Institutional Class
|
31,051,642
|
11,595,887
|
||||||
Dividends reinvested – Investor Class
|
3,639,869
|
—
|
||||||
Dividends reinvested – Institutional Class
|
2,742,901
|
—
|
||||||
Cost of shares redeemed – Investor Class
|
(33,887,466
|
)
|
(81,876,744
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(36,606,351
|
)
|
(41,705,014
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(18,055,538
|
)
|
(84,186,127
|
)
|
||||
TOTAL INCREASE IN NET ASSETS
|
853,245
|
63,970,592
|
||||||
NET ASSETS:
|
||||||||
Beginning of year
|
388,767,251
|
324,796,659
|
||||||
End of year
|
$
|
389,620,496
|
$
|
388,767,251
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
762,770
|
1,537,236
|
||||||
Shares sold – Institutional Class
|
1,496,059
|
580,302
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
184,671
|
—
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
133,150
|
—
|
||||||
Shares redeemed – Investor Class
|
(1,726,740
|
)
|
(4,659,617
|
)
|
||||
Shares redeemed – Institutional Class
|
(1,822,025
|
)
|
(2,247,525
|
)
|
||||
Net decrease in shares outstanding
|
(972,115
|
)
|
(4,789,604
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
19.78
|
$
|
13.27
|
$
|
12.01
|
$
|
16.87
|
$
|
22.46
|
|||||||||
0.17
|
(1)
|
(0.14
|
)(1)
|
(0.03
|
)(1)
|
(0.02
|
)(1)
|
(0.06
|
)
|
|||||||||
1.22
|
6.65
|
1.29
|
(0.34
|
)
|
(1.87
|
)
|
||||||||||||
1.39
|
6.51
|
1.26
|
(0.36
|
)
|
(1.93
|
)
|
||||||||||||
(0.34
|
)
|
—
|
—
|
—
|
—
|
|||||||||||||
—
|
—
|
—
|
(4.50
|
)
|
(3.66
|
)
|
||||||||||||
(0.34
|
)
|
—
|
—
|
(4.50
|
)
|
(3.66
|
)
|
|||||||||||
$
|
20.83
|
$
|
19.78
|
$
|
13.27
|
$
|
12.01
|
$
|
16.87
|
|||||||||
7.12
|
%
|
49.06
|
%
|
10.49
|
%
|
-1.22
|
%
|
-10.54
|
%
|
|||||||||
$
|
215.00
|
$
|
219.58
|
$
|
188.71
|
$
|
206.11
|
$
|
338.39
|
|||||||||
1.35
|
%
|
1.36
|
%
|
1.37
|
%
|
1.36
|
%
|
1.31
|
%
|
|||||||||
0.84
|
%
|
(0.74
|
)%
|
(0.27
|
)%
|
(0.15
|
)%
|
(0.47
|
)%
|
|||||||||
176
|
%
|
0
|
%
|
94
|
%
|
70
|
%
|
181
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
20.66
|
$
|
13.81
|
$
|
12.46
|
$
|
17.38
|
$
|
23.07
|
|||||||||
0.24
|
(1)
|
(0.07
|
)(1)
|
0.01
|
(1)
|
0.03
|
(1)
|
(0.00
|
)(2)
|
|||||||||
1.29
|
6.92
|
1.34
|
(0.36
|
)
|
(1.92
|
)
|
||||||||||||
1.53
|
6.85
|
1.35
|
(0.33
|
)
|
(1.92
|
)
|
||||||||||||
(0.35
|
)
|
—
|
—
|
—
|
—
|
|||||||||||||
—
|
—
|
—
|
(4.59
|
)
|
(3.77
|
)
|
||||||||||||
(0.35
|
)
|
—
|
—
|
(4.59
|
)
|
(3.77
|
)
|
|||||||||||
$
|
21.84
|
$
|
20.66
|
$
|
13.81
|
$
|
12.46
|
$
|
17.38
|
|||||||||
7.52
|
%
|
49.60
|
%
|
10.83
|
%
|
-0.84
|
%
|
-10.22
|
%
|
|||||||||
$
|
174.62
|
$
|
169.19
|
$
|
136.09
|
$
|
168.79
|
$
|
329.30
|
|||||||||
1.00
|
%
|
0.99
|
%
|
1.01
|
%
|
1.00
|
%
|
0.95
|
%
|
|||||||||
1.18
|
%
|
(0.38
|
)%
|
0.09
|
%
|
0.20
|
%
|
(0.12
|
)%
|
|||||||||
176
|
%
|
0
|
%
|
94
|
%
|
70
|
%
|
181
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2022
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash
sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains
distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
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 are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2022 are as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(14,078,053)
|
$14,078,053
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund for
the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax
benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or
decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of
the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a
specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets. Distributions received from the Fund’s investments in master limited partnerships (“MLPs”)
generally consist of ordinary income, capital gains, and return of capital. The Fund records investment income on the ex-date of the distributions. For financial statement purposes, the Fund uses return of capital and income estimates to
allocate the dividend income received. Such estimates are based on historical information available from the MLPs and other industry sources. These estimates may subsequently be revised based on information received from the MLPs after
their tax reporting periods are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Fund.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared
and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption price per
share for the Fund is equal to the Fund’s NAV per share.
|
HENNESSY FUNDS
|
1-800-966-4354
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that the
Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven calendar
days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment
companies (“Rule 18f-4”). Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, and requires funds whose
use of derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager. The Fund has adopted procedures in accordance with Rule
18f-4.
|
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5 establishes
requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other conditions.
Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule 2a-5, the SEC also adopted related
recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund investments. The Fund has adopted procedures in
accordance with Rule 2a-5.
|
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.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Equity Securities – Equity securities, including common stocks, preferred stocks, exchange-traded funds, closed-end mutual funds, partnerships, rights, MLPs, and real
estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on which the securities are
listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for which a
last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in Level 1
of the fair value hierarchy.
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending NAV
provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S. government
agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently
executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate observable market data,
such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified in Level 2 of the fair value
hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as of
the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below.
Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
350,134,418
|
|||
Gross tax unrealized appreciation
|
$
|
46,088,095
|
|||
Gross tax unrealized depreciation
|
(7,497,239
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
38,590,856
|
|||
Undistributed ordinary income
|
$
|
—
|
|||
Undistributed long-term capital gains
|
67,483,803
|
||||
Total distributable earnings
|
$
|
67,483,803
|
|||
Other accumulated gain/(loss)
|
$
|
(5,158,814
|
)
|
||
Total accumulated gain/(loss)
|
$
|
100,915,845
|
Year Ended
|
Year Ended
|
||||||||
October 31, 2022
|
October 31, 2021
|
||||||||
Ordinary income(1)
|
$
|
6,510,718
|
$
|
—
|
|||||
Long-term capital gains
|
—
|
—
|
|||||||
Total distributions
|
$
|
6,510,718
|
$
|
—
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Long-term
|
|||
Investor Class
|
3.60395
|
||
Institutional Class
|
3.77950
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees and Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
86
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
75
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 – June 2022.
|
||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
48
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board
|
Officer since 2004. Kiosk is a full-
|
|
and
|
service marketing agency with
|
||
December 2021
|
offices in the San Francisco Bay Area
|
||
as a Trustee
|
and Liverpool, UK and staff across
|
||
nine states in the U.S.
|
|||
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
77
|
consultant in the securities industry.
|
||
Trustee
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Brian Alexander
|
March 2015
|
Mr. Alexander has worked for the
|
None.
|
41
|
Sutter Health organization since
|
||
Adviser to the Board
|
2011 in various positions. He has
|
||
served as the Chief Executive Officer
|
|||
of the North Valley Hospital Area
|
|||
since 2021. From 2018 to 2021, he
|
|||
served as the Chief Executive Officer
|
|||
of Sutter Roseville Medical Center.
|
|||
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.
|
|||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
58
|
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.
|
|||
Interested Trustee(1)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Hennessy has been employed
|
Hennessy
|
66
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
Name, Age,
|
||
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.
|
56
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
66
|
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.
|
50
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Jennifer Cheskiewicz(2)
|
June 2013
|
Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
|
45
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc. since
|
64
|
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 their 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 Kelley(4)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
50
|
October 2012. He has served as Chief Investment Officer of the
|
|
Chief Investment Officer,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Senior Vice President,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He 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 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He served as Co-Portfolio Manager of the Hennessy
|
||
Technology Fund from February 2017 until May 2018. Mr. Kelley
|
||
served as Portfolio Manager of FBR Fund Advisers, Inc. from
|
||
January 2008 to October 2012.
|
||
L. Joshua Wein(4)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
49
|
2018. He has served as Co-Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone
|
|
Co-Portfolio Manager
|
Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth
|
|
Fund, the Hennessy Cornerstone Value Fund, Hennessy Total
|
||
Return Fund, the Hennessy Balanced Fund, the Hennessy Gas
|
||
Utility Fund, and the Hennessy Technology Fund since February
|
||
2019. He served as a Senior Analyst of these same funds from
|
||
September 2018 through February 2019. Mr. Wein served as
|
||
Director of Alternative Investments and Co-Portfolio Manager
|
||
at Sterling Capital Management from 2008 to 2018.
|
(1)
|
Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust.
|
(2)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2022 –
|
|
May 1, 2022
|
October 31, 2022
|
October 31, 2022
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,053.60
|
$7.04
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.35
|
$6.92
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,055.60
|
$5.18
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,020.16
|
$5.09
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.36% for Investor Class shares or 1.00% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund has
historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future during both
normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is therefore not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to a
highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make any material changes to the Liquidity Program during the review period and was not recommending any changes to the Liquidity Program or the model inputs used to determine
the liquidity classification of each security held by the Fund.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was operating as
intended during the review period.
|
1.
|
Information we receive from you 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;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis information, and
other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
28
|
|
Trustees and Officers of the Fund
|
29
|
|
Expense Example
|
32
|
|
Proxy Voting Policy and Proxy Voting Records
|
34
|
|
Availability of Quarterly Portfolio Schedule
|
34
|
|
Federal Tax Distribution Information
|
34
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
34
|
|
Electronic Delivery
|
34
|
|
Liquidity Risk Management Program
|
35
|
|
Privacy Policy
|
35
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Cornerstone Large Growth Fund –
|
|||
Investor Class (HFLGX)
|
-12.76%
|
8.44%
|
10.53%
|
Hennessy Cornerstone Large Growth Fund –
|
|||
Institutional Class (HILGX)
|
-12.52%
|
8.74%
|
10.80%
|
Russell 1000® Index
|
-16.38%
|
10.19%
|
12.66%
|
S&P 500® Index
|
-14.61%
|
10.44%
|
12.79%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October
31, 2022
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Cardinal Health, Inc.
|
3.05%
|
Gilead Sciences Inc.
|
3.04%
|
Northrop Grumman Corp.
|
2.96%
|
Steel Dynamics, Inc.
|
2.66%
|
APA Corp.
|
2.65%
|
Regeneron Pharmaceuticals, Inc.
|
2.54%
|
CF Industries Holdings, Inc.
|
2.53%
|
Darden Restaurants, Inc.
|
2.52%
|
Snap-on, Inc.
|
2.43%
|
Reliance Steel & Aluminum Co.
|
2.42%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 98.49%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 3.20%
|
||||||||||||
Meta Platforms, Inc. (a)
|
13,700
|
$
|
1,276,292
|
0.98
|
%
|
|||||||
Sirius XM Holdings, Inc.
|
477,500
|
2,884,100
|
2.22
|
%
|
||||||||
|
4,160,392
|
3.20
|
%
|
|||||||||
Consumer Discretionary – 17.05%
|
||||||||||||
Bath & Body Works, Inc. (a)
|
58,400
|
1,949,392
|
1.50
|
%
|
||||||||
Best Buy Co., Inc.
|
30,100
|
2,059,141
|
1.59
|
%
|
||||||||
Darden Restaurants, Inc.
|
22,900
|
3,277,906
|
2.52
|
%
|
||||||||
DR Horton, Inc.
|
35,900
|
2,759,992
|
2.12
|
%
|
||||||||
NVR, Inc. (a)
|
600
|
2,542,650
|
1.96
|
%
|
||||||||
PulteGroup, Inc.
|
63,000
|
2,519,370
|
1.94
|
%
|
||||||||
Tapestry, Inc.
|
79,700
|
2,524,896
|
1.94
|
%
|
||||||||
Target Corp.
|
13,500
|
2,217,375
|
1.71
|
%
|
||||||||
Williams-Sonoma, Inc.
|
18,600
|
2,303,238
|
1.77
|
%
|
||||||||
|
22,153,960
|
17.05
|
%
|
|||||||||
Consumer Staples – 2.26%
|
||||||||||||
Philip Morris International, Inc.
|
32,000
|
2,939,200
|
2.26
|
%
|
||||||||
Energy – 2.65%
|
||||||||||||
APA Corp.
|
75,700
|
3,441,322
|
2.65
|
%
|
||||||||
Financials – 9.81%
|
||||||||||||
Ameriprise Financial, Inc.
|
10,000
|
3,091,200
|
2.38
|
%
|
||||||||
Cincinnati Financial Corp.
|
22,600
|
2,335,032
|
1.80
|
%
|
||||||||
Coinbase Global, Inc. (a)
|
16,100
|
1,066,625
|
0.82
|
%
|
||||||||
Fidelity National Financial, Inc.
|
60,700
|
2,390,366
|
1.84
|
%
|
||||||||
T. Rowe Price Group, Inc.
|
20,300
|
2,155,048
|
1.66
|
%
|
||||||||
The Carlyle Group, Inc.
|
60,300
|
1,705,284
|
1.31
|
%
|
||||||||
|
12,743,555
|
9.81
|
%
|
|||||||||
Health Care – 19.15%
|
||||||||||||
AbbVie, Inc.
|
18,800
|
2,752,320
|
2.12
|
%
|
||||||||
AmerisourceBergen Corp.
|
19,600
|
3,081,512
|
2.37
|
%
|
||||||||
Cardinal Health, Inc.
|
52,200
|
3,961,980
|
3.05
|
%
|
||||||||
Gilead Sciences, Inc.
|
50,400
|
3,954,384
|
3.04
|
%
|
||||||||
HCA Healthcare, Inc.
|
11,200
|
2,435,664
|
1.87
|
%
|
||||||||
Hologic, Inc. (a)
|
40,400
|
2,739,120
|
2.11
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Health Care (Continued)
|
||||||||||||
Moderna, Inc. (a)
|
17,700
|
$
|
2,660,841
|
2.05
|
%
|
|||||||
Regeneron Pharmaceuticals, Inc. (a)
|
4,400
|
3,294,500
|
2.54
|
%
|
||||||||
|
24,880,321
|
19.15
|
%
|
|||||||||
Industrials – 19.09%
|
||||||||||||
3M Co.
|
20,200
|
2,540,958
|
1.95
|
%
|
||||||||
Avis Budget Group, Inc. (a)
|
9,500
|
2,246,370
|
1.73
|
%
|
||||||||
Builders FirstSource, Inc. (a)
|
38,800
|
2,392,408
|
1.84
|
%
|
||||||||
C.H. Robinson Worldwide, Inc.
|
28,700
|
2,804,564
|
2.16
|
%
|
||||||||
Caterpillar, Inc.
|
13,500
|
2,922,210
|
2.25
|
%
|
||||||||
Expeditors International of Washington, Inc.
|
28,200
|
2,759,370
|
2.12
|
%
|
||||||||
Northrop Grumman Corp.
|
7,000
|
3,843,070
|
2.96
|
%
|
||||||||
Snap-on, Inc.
|
14,200
|
3,153,110
|
2.43
|
%
|
||||||||
United Parcel Service, Inc., Class B
|
12,800
|
2,147,456
|
1.65
|
%
|
||||||||
|
24,809,516
|
19.09
|
%
|
|||||||||
Information Technology – 7.28%
|
||||||||||||
HP, Inc.
|
86,500
|
2,389,130
|
1.84
|
%
|
||||||||
Lam Research Corp.
|
5,400
|
2,185,812
|
1.68
|
%
|
||||||||
NortonLifeLock, Inc.
|
115,100
|
2,593,203
|
1.99
|
%
|
||||||||
QUALCOMM, Inc.
|
19,500
|
2,294,370
|
1.77
|
%
|
||||||||
|
9,462,515
|
7.28
|
%
|
|||||||||
Materials – 18.00%
|
||||||||||||
Alcoa Corp.
|
35,200
|
1,373,856
|
1.06
|
%
|
||||||||
Celanese Corp.
|
20,000
|
1,922,400
|
1.48
|
%
|
||||||||
CF Industries Holdings, Inc.
|
30,900
|
3,283,434
|
2.53
|
%
|
||||||||
Cleveland-Cliffs, Inc. (a)
|
103,700
|
1,347,063
|
1.03
|
%
|
||||||||
Dow, Inc.
|
45,300
|
2,117,322
|
1.63
|
%
|
||||||||
Freeport-McMoRan, Inc.
|
58,600
|
1,857,034
|
1.43
|
%
|
||||||||
Nucor Corp.
|
22,100
|
2,903,498
|
2.23
|
%
|
||||||||
Reliance Steel & Aluminum Co.
|
15,600
|
3,143,088
|
2.42
|
%
|
||||||||
Sealed Air Corp.
|
41,700
|
1,985,754
|
1.53
|
%
|
||||||||
Steel Dynamics, Inc.
|
36,800
|
3,461,040
|
2.66
|
%
|
||||||||
|
23,394,489
|
18.00
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $136,134,630)
|
127,985,270
|
98.49
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS –1.53%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 1.53%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 2.93% (b)
|
1,994,491
|
$
|
1,994,491
|
1.53
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $1,994,491)
|
1,994,491
|
1.53
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $138,129,121) – 100.02%
|
129,979,761
|
100.02
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.02)%
|
(27,894
|
)
|
(0.02
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
129,951,867
|
100.00
|
%
|
(a)
|
Non-income-producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2022.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
4,160,392
|
$
|
—
|
$
|
—
|
$
|
4,160,392
|
||||||||
Consumer Discretionary
|
22,153,960
|
—
|
—
|
22,153,960
|
||||||||||||
Consumer Staples
|
2,939,200
|
—
|
—
|
2,939,200
|
||||||||||||
Energy
|
3,441,322
|
—
|
—
|
3,441,322
|
||||||||||||
Financials
|
12,743,555
|
—
|
—
|
12,743,555
|
||||||||||||
Health Care
|
24,880,321
|
—
|
—
|
24,880,321
|
||||||||||||
Industrials
|
24,809,516
|
—
|
—
|
24,809,516
|
||||||||||||
Information Technology
|
9,462,515
|
—
|
—
|
9,462,515
|
||||||||||||
Materials
|
23,394,489
|
—
|
—
|
23,394,489
|
||||||||||||
Total Common Stocks
|
$
|
127,985,270
|
$
|
—
|
$
|
—
|
$
|
127,985,270
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
1,994,491
|
$
|
—
|
$
|
—
|
$
|
1,994,491
|
||||||||
Total Short-Term Investments
|
$
|
1,994,491
|
$
|
—
|
$
|
—
|
$
|
1,994,491
|
||||||||
Total Investments
|
$
|
129,979,761
|
$
|
—
|
$
|
—
|
$
|
129,979,761
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2022
|
ASSETS:
|
||||
Investments in securities, at value (cost $138,129,121)
|
$
|
129,979,761
|
||
Dividends and interest receivable
|
146,710
|
|||
Receivable for fund shares sold
|
1,963
|
|||
Prepaid expenses and other assets
|
20,743
|
|||
Total assets
|
130,149,177
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
19,736
|
|||
Payable to advisor
|
77,611
|
|||
Payable to administrator
|
25,680
|
|||
Payable to auditor
|
22,749
|
|||
Accrued distribution fees
|
17,661
|
|||
Accrued service fees
|
9,296
|
|||
Accrued trustees fees
|
6,083
|
|||
Accrued expenses and other payables
|
18,494
|
|||
Total liabilities
|
197,310
|
|||
NET ASSETS
|
$
|
129,951,867
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
116,238,176
|
||
Total distributable earnings
|
13,713,691
|
|||
Total net assets
|
$
|
129,951,867
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
115,150,691
|
||
Shares issued and outstanding
|
10,546,592
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
10.92
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
14,801,176
|
||
Shares issued and outstanding
|
1,339,056
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
11.05
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2022
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
2,987,746
|
||
Interest income
|
16,800
|
|||
Total investment income
|
3,004,546
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
1,077,348
|
|||
Distribution fees – Investor Class (See Note 5)
|
193,285
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
173,218
|
|||
Service fees – Investor Class (See Note 5)
|
128,856
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
117,928
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
4,270
|
|||
Federal and state registration fees
|
37,681
|
|||
Compliance expense (See Note 5)
|
24,516
|
|||
Audit fees
|
22,743
|
|||
Trustees’ fees and expenses
|
19,794
|
|||
Reports to shareholders
|
11,824
|
|||
Legal fees
|
2,511
|
|||
Interest expense (See Note 7)
|
28
|
|||
Other expenses
|
24,840
|
|||
Total expenses before recoupment by advisor
|
1,838,842
|
|||
Expense recoupment by advisor – Investor Class (See Note 5)
|
3,336
|
|||
Expense recoupment by advisor – Institutional Class (See Note 5)
|
611
|
|||
Net expenses
|
1,842,789
|
|||
NET INVESTMENT INCOME
|
$
|
1,161,757
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
22,369,171
|
||
Net change in unrealized appreciation/depreciation on investments
|
(43,346,819
|
)
|
||
Net loss on investments
|
(20,977,648
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(19,815,891
|
)
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
1,161,757
|
$
|
1,077,347
|
||||
Net realized gain on investments
|
22,369,171
|
23,137,704
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(43,346,819
|
)
|
30,012,110
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
(19,815,891
|
)
|
54,227,161
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(18,524,443
|
)
|
(5,878,284
|
)
|
||||
Distributable earnings – Institutional Class
|
(2,507,385
|
)
|
(758,549
|
)
|
||||
Total distributions
|
(21,031,828
|
)
|
(6,636,833
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
3,741,686
|
8,018,607
|
||||||
Proceeds from shares subscribed – Institutional Class
|
1,400,184
|
16,491,311
|
||||||
Dividends reinvested – Investor Class
|
17,953,867
|
5,574,991
|
||||||
Dividends reinvested – Institutional Class
|
2,397,570
|
740,220
|
||||||
Cost of shares redeemed – Investor Class
|
(13,588,755
|
)
|
(15,731,261
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(2,613,279
|
)
|
(16,883,651
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
9,291,273
|
(1,789,783
|
)
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(31,556,446
|
)
|
45,800,545
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
161,508,313
|
115,707,768
|
||||||
End of year
|
$
|
129,951,867
|
$
|
161,508,313
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
304,353
|
592,099
|
||||||
Shares sold – Institutional Class
|
105,369
|
1,203,797
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
1,400,177
|
501,827
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
184,777
|
65,913
|
||||||
Shares redeemed – Investor Class
|
(1,132,049
|
)
|
(1,214,696
|
)
|
||||
Shares redeemed – Institutional Class
|
(218,737
|
)
|
(1,221,754
|
)
|
||||
Net increase (decrease) in shares outstanding
|
643,890
|
(72,814
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
The Fund had an expense limitation agreement in place through November 30, 2019.
|
(3)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
14.35
|
$
|
10.21
|
$
|
10.54
|
$
|
12.24
|
$
|
11.75
|
|||||||||
0.09
|
(1)
|
0.09
|
(1)
|
0.09
|
(1)
|
0.13
|
(1)
|
0.06
|
||||||||||
(1.66
|
)
|
4.64
|
(0.15
|
)
|
0.56
|
0.94
|
||||||||||||
(1.57
|
)
|
4.73
|
(0.06
|
)
|
0.69
|
1.00
|
||||||||||||
(0.08
|
)
|
(0.10
|
)
|
(0.14
|
)
|
(0.09
|
)
|
(0.08
|
)
|
|||||||||
(1.78
|
)
|
(0.49
|
)
|
(0.13
|
)
|
(2.30
|
)
|
(0.43
|
)
|
|||||||||
(1.86
|
)
|
(0.59
|
)
|
(0.27
|
)
|
(2.39
|
)
|
(0.51
|
)
|
|||||||||
$
|
10.92
|
$
|
14.35
|
$
|
10.21
|
$
|
10.54
|
$
|
12.24
|
|||||||||
-12.76
|
%
|
48.00
|
%
|
-0.75
|
%
|
7.84
|
%
|
8.53
|
%
|
|||||||||
$
|
115.15
|
$
|
143.11
|
$
|
103.11
|
$
|
117.62
|
$
|
125.91
|
|||||||||
1.30
|
%
|
1.29
|
%
|
1.31
|
%
|
1.31
|
%
|
1.24
|
%
|
|||||||||
1.30
|
%
|
1.29
|
%
|
1.31
|
%(2)
|
1.29
|
%
|
1.24
|
%
|
|||||||||
0.76
|
%
|
0.69
|
%
|
0.93
|
%
|
1.24
|
%
|
0.81
|
%
|
|||||||||
0.76
|
%
|
0.69
|
%
|
0.93
|
%
|
1.26
|
%
|
0.81
|
%
|
|||||||||
76
|
%
|
68
|
%
|
62
|
%
|
57
|
%
|
70
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
The Fund had an expense limitation agreement in place through November 30, 2019.
|
(3)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
14.51
|
$
|
10.33
|
$
|
10.65
|
$
|
12.38
|
$
|
11.87
|
|||||||||
0.13
|
(1)
|
0.12
|
(1)
|
0.13
|
(1)
|
0.16
|
(1)
|
0.14
|
||||||||||
(1.68
|
)
|
4.68
|
(0.15
|
)
|
0.56
|
0.90
|
||||||||||||
(1.55
|
)
|
4.80
|
(0.02
|
)
|
0.72
|
1.04
|
||||||||||||
(0.11
|
)
|
(0.13
|
)
|
(0.17
|
)
|
(0.12
|
)
|
(0.10
|
)
|
|||||||||
(1.80
|
)
|
(0.49
|
)
|
(0.13
|
)
|
(2.33
|
)
|
(0.43
|
)
|
|||||||||
(1.91
|
)
|
(0.62
|
)
|
(0.30
|
)
|
(2.45
|
)
|
(0.53
|
)
|
|||||||||
$
|
11.05
|
$
|
14.51
|
$
|
10.33
|
$
|
10.65
|
$
|
12.38
|
|||||||||
-12.52
|
%
|
48.30
|
%
|
-0.40
|
%
|
8.12
|
%
|
8.82
|
%
|
|||||||||
$
|
14.80
|
$
|
18.39
|
$
|
12.60
|
$
|
18.42
|
$
|
19.25
|
|||||||||
0.99
|
%
|
1.04
|
%
|
1.01
|
%
|
1.00
|
%
|
0.96
|
%
|
|||||||||
0.99
|
%
|
1.04
|
%
|
1.01
|
%(2)
|
0.98
|
%
|
0.96
|
%
|
|||||||||
1.08
|
%
|
0.91
|
%
|
1.23
|
%
|
1.56
|
%
|
1.08
|
%
|
|||||||||
1.08
|
%
|
0.91
|
%
|
1.23
|
%
|
1.58
|
%
|
1.08
|
%
|
|||||||||
76
|
%
|
68
|
%
|
62
|
%
|
57
|
%
|
70
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2022
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash
sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains
distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
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 are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2022 are as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(1,635,991)
|
$1,635,991
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund
for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or
decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of
the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to
a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared
and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption
price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that the
Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven
calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing
|
HENNESSY FUNDS
|
1-800-966-4354
|
the use of derivatives by registered investment companies (“Rule 18f-4”). Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation framework currently used
by funds to comply with Section 18 of the 1940 Act, and requires funds whose use of derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives risk management program and appoint a
derivatives risk manager. The Fund has adopted procedures in accordance with Rule 18f-4.
|
|
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5 establishes
requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other
conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule 2a-5, the SEC also
adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund investments. The Fund has adopted
procedures in accordance with Rule 2a-5.
|
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.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, exchange-traded funds, closed-end mutual funds, partnerships, rights, and real estate
investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on which the securities are listed.
Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for which a last-quoted
sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
securities are actively traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy.
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending NAV
provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S. government
agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently
executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate observable market
data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified in Level 2 of the
fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as of
the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below.
Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
||||
Cost of investments for tax purposes
|
$
|
138,138,700
|
||
Gross tax unrealized appreciation
|
$
|
12,856,051
|
||
Gross tax unrealized depreciation
|
(21,015,025
|
)
|
||
Net tax unrealized appreciation/(depreciation)
|
$
|
(8,158,974
|
)
|
|
Undistributed ordinary income
|
$
|
1,161,564
|
||
Undistributed long-term capital gains
|
20,711,101
|
|||
Total distributable earnings
|
$
|
21,872,665
|
||
Other accumulated gain/(loss)
|
$
|
—
|
||
Total accumulated gain/(loss)
|
$
|
13,713,691
|
Year Ended
|
Year Ended
|
||||||||
October 31, 2022
|
October 31, 2021
|
||||||||
Ordinary income(1)
|
$
|
1,496,384
|
$
|
1,164,101
|
|||||
Long-term capital gains
|
19,535,444
|
5,472,732
|
|||||||
Total distributions
|
$
|
21,031,828
|
$
|
6,636,833
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Long-term
|
|||
Investor Class
|
1.76094
|
||
Institutional Class
|
1.78324
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees and Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
86
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
75
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 – June 2022.
|
||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
48
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board
|
Officer since 2004. Kiosk is a full-
|
|
and
|
service marketing agency with
|
||
December 2021
|
offices in the San Francisco Bay Area
|
||
as a Trustee
|
and Liverpool, UK and staff across
|
||
nine states in the U.S.
|
|||
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
77
|
consultant in the securities industry.
|
||
Trustee
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Brian Alexander
|
March 2015
|
Mr. Alexander has worked for the
|
None.
|
41
|
Sutter Health organization since
|
||
Adviser to the Board
|
2011 in various positions. He has
|
||
served as the Chief Executive Officer
|
|||
of the North Valley Hospital Area
|
|||
since 2021. From 2018 to 2021, he
|
|||
served as the Chief Executive Officer
|
|||
of Sutter Roseville Medical Center.
|
|||
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.
|
|||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
58
|
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.
|
|||
Interested Trustee(1)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Hennessy has been employed
|
Hennessy
|
66
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
Name, Age,
|
||
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.
|
56
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
66
|
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.
|
50
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Jennifer Cheskiewicz(2)
|
June 2013
|
Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
|
45
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc. since
|
64
|
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 their 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 Kelley(4)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
50
|
October 2012. He has served as Chief Investment Officer of the
|
|
Chief Investment Officer,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Senior Vice President,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He 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 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He served as Co-Portfolio Manager of the Hennessy
|
||
Technology Fund from February 2017 until May 2018. Mr. Kelley
|
||
served as Portfolio Manager of FBR Fund Advisers, Inc. from
|
||
January 2008 to October 2012.
|
||
L. Joshua Wein(4)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
49
|
2018. He has served as Co-Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone
|
|
Co-Portfolio Manager
|
Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth
|
|
Fund, the Hennessy Cornerstone Value Fund, Hennessy Total
|
||
Return Fund, the Hennessy Balanced Fund, the Hennessy Gas
|
||
Utility Fund, and the Hennessy Technology Fund since February
|
||
2019. He served as a Senior Analyst of these same funds from
|
||
September 2018 through February 2019. Mr. Wein served as
|
||
Director of Alternative Investments and Co-Portfolio Manager
|
||
at Sterling Capital Management from 2008 to 2018.
|
(1)
|
Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust.
|
(2)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2022 –
|
|
May 1, 2022
|
October 31, 2022
|
October 31, 2022
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 930.20
|
$6.42
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.55
|
$6.72
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 930.90
|
$4.82
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,020.21
|
$5.04
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.32% for Investor Class shares or 0.99% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund has
historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future during both
normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is therefore not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to
a highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make any material changes to the Liquidity Program during the review period and was not recommending any changes to the Liquidity Program or the model inputs used to determine
the liquidity classification of each security held by the Fund.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was operating as
intended during the review period.
|
1.
|
Information we receive from you 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;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis information, and
other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
28
|
|
Trustees and Officers of the Fund
|
29
|
|
Expense Example
|
32
|
|
Proxy Voting Policy and Proxy Voting Records
|
34
|
|
Availability of Quarterly Portfolio Schedule
|
34
|
|
Federal Tax Distribution Information
|
34
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
34
|
|
Electronic Delivery
|
34
|
|
Liquidity Risk Management Program
|
35
|
|
Privacy Policy
|
35
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Cornerstone Value Fund –
|
|||
Investor Class (HFCVX)
|
8.68%
|
7.83%
|
9.69%
|
Hennessy Cornerstone Value Fund –
|
|||
Institutional Class (HICVX)
|
8.92%
|
8.06%
|
9.91%
|
Russell 1000® Value Index
|
-7.00%
|
7.21%
|
10.30%
|
S&P 500® Index
|
-14.61%
|
10.44%
|
12.79%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2022
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Marathon Petroleum Corp.
|
2.91%
|
Exxon Mobil Corp.
|
2.76%
|
Gilead Sciences, Inc.
|
2.69%
|
General Mills, Inc.
|
2.66%
|
Merck & Co., Inc.
|
2.62%
|
Devon Energy Corp.
|
2.58%
|
ConocoPhillips
|
2.51%
|
Amgen, Inc.
|
2.34%
|
BP PLC – ADR
|
2.29%
|
PepsiCo, Inc.
|
2.29%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 98.51%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 6.14%
|
||||||||||||
AT&T, Inc.
|
259,260
|
$
|
4,726,310
|
1.61
|
%
|
|||||||
BCE, Inc. (b)
|
111,100
|
5,010,610
|
1.71
|
%
|
||||||||
Paramount Global
|
164,900
|
3,020,968
|
1.03
|
%
|
||||||||
Verizon Communications, Inc.
|
117,500
|
4,390,975
|
1.50
|
%
|
||||||||
Warner Bros. Discovery, Inc. (a)
|
65,342
|
849,446
|
0.29
|
%
|
||||||||
|
17,998,309
|
6.14
|
%
|
|||||||||
|
||||||||||||
Consumer Staples – 20.79%
|
||||||||||||
Altria Group, Inc.
|
114,900
|
5,316,423
|
1.81
|
%
|
||||||||
British American Tobacco PLC – ADR (b)
|
143,500
|
5,685,470
|
1.94
|
%
|
||||||||
Colgate-Palmolive Co.
|
81,000
|
5,981,040
|
2.04
|
%
|
||||||||
General Mills, Inc.
|
95,600
|
7,799,048
|
2.66
|
%
|
||||||||
Haleon PLC – ADR (a)(b)
|
140,100
|
857,412
|
0.29
|
%
|
||||||||
PepsiCo, Inc.
|
36,900
|
6,700,302
|
2.29
|
%
|
||||||||
Philip Morris International, Inc.
|
63,800
|
5,860,030
|
2.00
|
%
|
||||||||
The Coca-Cola Co.
|
99,100
|
5,931,135
|
2.02
|
%
|
||||||||
The Kraft Heinz Co.
|
159,600
|
6,139,812
|
2.09
|
%
|
||||||||
Unilever PLC – ADR (b)
|
133,200
|
6,061,932
|
2.07
|
%
|
||||||||
Walgreens Boots Alliance, Inc.
|
126,700
|
4,624,550
|
1.58
|
%
|
||||||||
|
60,957,154
|
20.79
|
%
|
|||||||||
|
||||||||||||
Energy – 23.94%
|
||||||||||||
BP PLC – ADR (b)
|
201,500
|
6,705,920
|
2.29
|
%
|
||||||||
Canadian Natural Resources Ltd. (b)
|
96,000
|
5,754,240
|
1.96
|
%
|
||||||||
Chevron Corp.
|
36,475
|
6,598,328
|
2.25
|
%
|
||||||||
ConocoPhillips
|
58,400
|
7,363,656
|
2.51
|
%
|
||||||||
Devon Energy Corp.
|
97,700
|
7,557,095
|
2.58
|
%
|
||||||||
EOG Resources, Inc.
|
49,000
|
6,689,480
|
2.28
|
%
|
||||||||
Exxon Mobil Corp.
|
73,010
|
8,090,238
|
2.76
|
%
|
||||||||
Marathon Petroleum Corp.
|
75,100
|
8,532,862
|
2.91
|
%
|
||||||||
Suncor Energy, Inc. (b)
|
185,000
|
6,362,150
|
2.17
|
%
|
||||||||
TotalEnergies SE – ADR (b)
|
119,300
|
6,534,061
|
2.23
|
%
|
||||||||
|
70,188,030
|
23.94
|
%
|
|||||||||
|
||||||||||||
Financials – 16.17%
|
||||||||||||
Aflac, Inc.
|
94,700
|
6,165,917
|
2.10
|
%
|
||||||||
Citigroup, Inc.
|
105,400
|
4,833,644
|
1.65
|
%
|
||||||||
JPMorgan Chase & Co.
|
43,000
|
5,412,840
|
1.85
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Financials (Continued)
|
||||||||||||
Manulife Financial Corp. (b)
|
292,000
|
$
|
4,832,600
|
1.65
|
%
|
|||||||
MetLife, Inc.
|
87,300
|
6,391,233
|
2.18
|
%
|
||||||||
Morgan Stanley
|
64,800
|
5,324,616
|
1.82
|
%
|
||||||||
Royal Bank of Canada (b)
|
52,900
|
4,891,663
|
1.67
|
%
|
||||||||
The Bank of New York Mellon Corp.
|
115,100
|
4,846,861
|
1.65
|
%
|
||||||||
Toronto-Dominion Bank (b)
|
73,500
|
4,703,265
|
1.60
|
%
|
||||||||
|
47,402,639
|
16.17
|
%
|
|||||||||
|
||||||||||||
Health Care – 14.76%
|
||||||||||||
AbbVie, Inc.
|
37,500
|
5,490,000
|
1.87
|
%
|
||||||||
Amgen, Inc.
|
25,400
|
6,866,890
|
2.34
|
%
|
||||||||
Bristol-Myers Squibb Co.
|
84,500
|
6,546,215
|
2.24
|
%
|
||||||||
Gilead Sciences, Inc.
|
100,600
|
7,893,076
|
2.69
|
%
|
||||||||
GSK PLC – ADR (b)
|
109,460
|
3,630,788
|
1.24
|
%
|
||||||||
Merck & Co., Inc.
|
75,900
|
7,681,080
|
2.62
|
%
|
||||||||
Pfizer, Inc.
|
110,800
|
5,157,740
|
1.76
|
%
|
||||||||
|
43,265,789
|
14.76
|
%
|
|||||||||
|
||||||||||||
Industrials – 3.31%
|
||||||||||||
3M Co.
|
40,400
|
5,081,916
|
1.73
|
%
|
||||||||
United Parcel Service, Inc., Class B
|
27,500
|
4,613,675
|
1.58
|
%
|
||||||||
|
9,695,591
|
3.31
|
%
|
|||||||||
|
||||||||||||
Information Technology – 11.89%
|
||||||||||||
Cisco Systems, Inc.
|
107,200
|
4,870,096
|
1.66
|
%
|
||||||||
Corning, Inc.
|
158,800
|
5,108,596
|
1.74
|
%
|
||||||||
Hewlett Packard Enterprise Co.
|
352,100
|
5,024,467
|
1.71
|
%
|
||||||||
HP, Inc.
|
159,900
|
4,416,438
|
1.51
|
%
|
||||||||
Intel Corp.
|
126,700
|
3,602,081
|
1.23
|
%
|
||||||||
International Business Machines Corp.
|
46,900
|
6,485,801
|
2.21
|
%
|
||||||||
Texas Instruments, Inc.
|
33,300
|
5,348,979
|
1.83
|
%
|
||||||||
|
34,856,458
|
11.89
|
%
|
|||||||||
|
||||||||||||
Materials – 1.51%
|
||||||||||||
Dow, Inc.
|
94,800
|
4,430,952
|
1.51
|
%
|
||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $263,513,208)
|
288,794,922
|
98.51
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 1.41%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 1.41%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 2.93% (c)
|
4,124,456
|
$
|
4,124,456
|
1.41
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $4,124,456)
|
4,124,456
|
1.41
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $267,637,664) – 99.92%
|
292,919,378
|
99.92
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.08%
|
240,314
|
0.08
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
293,159,692
|
100.00
|
%
|
(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, 2022.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
17,998,309
|
$
|
—
|
$
|
—
|
$
|
17,998,309
|
||||||||
Consumer Staples
|
60,957,154
|
—
|
—
|
60,957,154
|
||||||||||||
Energy
|
70,188,030
|
—
|
—
|
70,188,030
|
||||||||||||
Financials
|
47,402,639
|
—
|
—
|
47,402,639
|
||||||||||||
Health Care
|
43,265,789
|
—
|
—
|
43,265,789
|
||||||||||||
Industrials
|
9,695,591
|
—
|
—
|
9,695,591
|
||||||||||||
Information Technology
|
34,856,458
|
—
|
—
|
34,856,458
|
||||||||||||
Materials
|
4,430,952
|
—
|
—
|
4,430,952
|
||||||||||||
Total Common Stocks
|
$
|
288,794,922
|
$
|
—
|
$
|
—
|
$
|
288,794,922
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
4,124,456
|
$
|
—
|
$
|
—
|
$
|
4,124,456
|
||||||||
Total Short-Term Investments
|
$
|
4,124,456
|
$
|
—
|
$
|
—
|
$
|
4,124,456
|
||||||||
Total Investments
|
$
|
292,919,378
|
$
|
—
|
$
|
—
|
$
|
292,919,378
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2022
|
ASSETS:
|
||||
Investments in securities, at value (cost $267,637,664)
|
$
|
292,919,378
|
||
Cash
|
40,724
|
|||
Dividends and interest receivable
|
624,838
|
|||
Dividend tax reclaim receivable
|
64,463
|
|||
Receivable for fund shares sold
|
106,853
|
|||
Prepaid expenses and other assets
|
34,324
|
|||
Total assets
|
293,790,580
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
285,154
|
|||
Payable to advisor
|
173,045
|
|||
Payable to administrator
|
54,728
|
|||
Payable to auditor
|
22,749
|
|||
Accrued distribution fees
|
47,376
|
|||
Accrued service fees
|
21,476
|
|||
Accrued trustees fees
|
7,014
|
|||
Accrued expenses and other payables
|
19,346
|
|||
Total liabilities
|
630,888
|
|||
NET ASSETS
|
$
|
293,159,692
|
||
NET ASSETS CONSIST OF:
|
||||
Capital stock
|
$
|
242,235,955
|
||
Total distributable earnings
|
50,923,737
|
|||
Total net assets
|
$
|
293,159,692
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
268,805,342
|
||
Shares issued and outstanding
|
13,243,777
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
20.30
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
24,354,350
|
||
Shares issued and outstanding
|
1,197,416
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
20.34
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2022
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
11,291,835
|
||
Interest income
|
52,271
|
|||
Total investment income
|
11,344,106
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
2,113,590
|
|||
Distribution fees – Investor Class (See Note 5)
|
399,661
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
330,192
|
|||
Service fees – Investor Class (See Note 5)
|
266,441
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
188,287
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
16,644
|
|||
Federal and state registration fees
|
32,469
|
|||
Compliance expense (See Note 5)
|
24,516
|
|||
Audit fees
|
22,743
|
|||
Trustees’ fees and expenses
|
22,387
|
|||
Reports to shareholders
|
16,634
|
|||
Legal fees
|
5,070
|
|||
Interest expense (See Note 7)
|
177
|
|||
Other expenses
|
41,671
|
|||
Total expenses
|
3,480,482
|
|||
NET INVESTMENT INCOME
|
$
|
7,863,624
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
22,098,599
|
||
Net change in unrealized appreciation/depreciation on investments
|
(8,218,181
|
)
|
||
Net gain on investments
|
13,880,418
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
21,744,042
|
(1)
|
Net of foreign taxes withheld and issuance fees of $358,327.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
7,863,624
|
$
|
5,989,743
|
||||
Net realized gain on investments
|
22,098,599
|
5,839,377
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(8,218,181
|
)
|
75,931,568
|
|||||
Net increase in net assets resulting from operations
|
21,744,042
|
87,760,688
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(12,280,194
|
)
|
(5,556,028
|
)
|
||||
Distributable earnings – Institutional Class
|
(284,427
|
)
|
(127,258
|
)
|
||||
Total distributions
|
(12,564,621
|
)
|
(5,683,286
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
14,142,871
|
1,114,552
|
||||||
Proceeds from shares subscribed – Institutional Class
|
29,565,728
|
578,755
|
||||||
Dividends reinvested – Investor Class
|
11,605,966
|
5,201,166
|
||||||
Dividends reinvested – Institutional Class
|
250,047
|
108,613
|
||||||
Cost of shares redeemed – Investor Class
|
(20,443,989
|
)
|
(21,989,301
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(10,861,538
|
)
|
(1,257,956
|
)
|
||||
Net increase (decrease) in net assets
|
||||||||
derived from capital share transactions
|
24,259,085
|
(16,244,171
|
)
|
|||||
TOTAL INCREASE IN NET ASSETS
|
33,438,506
|
65,833,231
|
||||||
NET ASSETS:
|
||||||||
Beginning of year
|
259,721,186
|
193,887,955
|
||||||
End of year
|
$
|
293,159,692
|
$
|
259,721,186
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
699,608
|
62,162
|
||||||
Shares sold – Institutional Class
|
1,444,370
|
32,026
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
593,352
|
331,073
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
12,768
|
6,909
|
||||||
Shares redeemed – Investor Class
|
(1,029,071
|
)
|
(1,262,841
|
)
|
||||
Shares redeemed – Institutional Class
|
(539,739
|
)
|
(71,863
|
)
|
||||
Net increase (decrease) in shares outstanding
|
1,181,288
|
(902,534
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
19.59
|
$
|
13.69
|
$
|
17.43
|
$
|
19.29
|
$
|
21.48
|
|||||||||
0.55
|
(1)
|
0.44
|
(1)
|
0.41
|
(1)
|
0.47
|
(1)
|
0.41
|
||||||||||
1.10
|
5.87
|
(3.01
|
)
|
0.30
|
0.35
|
|||||||||||||
1.65
|
6.31
|
(2.60
|
)
|
0.77
|
0.76
|
|||||||||||||
(0.51
|
)
|
(0.41
|
)
|
(0.47
|
)
|
(0.41
|
)
|
(0.42
|
)
|
|||||||||
(0.43
|
)
|
—
|
(0.67
|
)
|
(2.22
|
)
|
(2.53
|
)
|
||||||||||
(0.94
|
)
|
(0.41
|
)
|
(1.14
|
)
|
(2.63
|
)
|
(2.95
|
)
|
|||||||||
$
|
20.30
|
$
|
19.59
|
$
|
13.69
|
$
|
17.43
|
$
|
19.29
|
|||||||||
8.68
|
%
|
46.82
|
%
|
-16.22
|
%
|
5.22
|
%
|
3.64
|
%
|
|||||||||
$
|
268.81
|
$
|
254.23
|
$
|
189.60
|
$
|
253.95
|
$
|
266.76
|
|||||||||
1.23
|
%
|
1.23
|
%
|
1.30
|
%
|
1.23
|
%
|
1.21
|
%
|
|||||||||
2.74
|
%
|
2.43
|
%
|
2.71
|
%
|
2.75
|
%
|
2.21
|
%
|
|||||||||
36
|
%
|
41
|
%
|
32
|
%
|
27
|
%
|
41
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
19.63
|
$
|
13.71
|
$
|
17.45
|
$
|
19.33
|
$
|
21.52
|
|||||||||
0.58
|
(1)
|
0.48
|
(1)
|
0.44
|
(1)
|
0.50
|
(1)
|
0.45
|
||||||||||
1.12
|
5.88
|
(3.01
|
)
|
0.29
|
0.35
|
|||||||||||||
1.70
|
6.36
|
(2.57
|
)
|
0.79
|
0.80
|
|||||||||||||
(0.56
|
)
|
(0.44
|
)
|
(0.49
|
)
|
(0.45
|
)
|
(0.46
|
)
|
|||||||||
(0.43
|
)
|
—
|
(0.68
|
)
|
(2.22
|
)
|
(2.53
|
)
|
||||||||||
(0.99
|
)
|
(0.44
|
)
|
(1.17
|
)
|
(2.67
|
)
|
(2.99
|
)
|
|||||||||
$
|
20.34
|
$
|
19.63
|
$
|
13.71
|
$
|
17.45
|
$
|
19.33
|
|||||||||
8.92
|
%
|
47.19
|
%
|
-16.06
|
%
|
5.37
|
%
|
3.88
|
%
|
|||||||||
$
|
24.35
|
$
|
5.50
|
$
|
4.29
|
$
|
6.44
|
$
|
7.22
|
|||||||||
1.00
|
%
|
0.99
|
%
|
1.08
|
%
|
1.08
|
%
|
0.98
|
%
|
|||||||||
2.92
|
%
|
2.67
|
%
|
2.94
|
%
|
2.92
|
%
|
2.43
|
%
|
|||||||||
36
|
%
|
41
|
%
|
32
|
%
|
27
|
%
|
41
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2022
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash
sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains
distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
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 are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2022 are as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(1,876,339)
|
$1,876,339
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund
for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or
decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value
of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses
attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are
declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that
the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven
calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing
|
HENNESSY FUNDS
|
1-800-966-4354
|
the use of derivatives by registered investment companies (“Rule 18f-4”). Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation framework currently
used by funds to comply with Section 18 of the 1940 Act, and requires funds whose use of derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives risk management program and appoint
a derivatives risk manager. The Fund has adopted procedures in accordance with Rule 18f-4.
|
|
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5 establishes
requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other
conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule 2a-5, the SEC also
adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund investments. The Fund has adopted
procedures in accordance with Rule 2a-5.
|
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.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual funds,
partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary
exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on
a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges
generally are not valued at the same time the Fund calculates its NAV because most foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including
broad market moves, may have occurred in the interim. In certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected
by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related
event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending
NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may
consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate
observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified
in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as
of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described
below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
||||
Cost of investments for tax purposes
|
$
|
268,867,244
|
||
Gross tax unrealized appreciation
|
$
|
50,048,760
|
||
Gross tax unrealized depreciation
|
(25,996,350
|
)
|
||
Net tax unrealized appreciation/(depreciation)
|
$
|
24,052,410
|
||
Undistributed ordinary income
|
$
|
6,105,919
|
||
Undistributed long-term capital gains
|
20,765,408
|
|||
Total distributable earnings
|
$
|
26,871,327
|
||
Other accumulated gain/(loss)
|
$
|
—
|
||
Total accumulated gain/(loss)
|
$
|
50,923,737
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
Ordinary income(1)
|
$
|
6,908,914
|
$
|
5,683,286
|
||||
Long-term capital gains
|
5,655,707
|
—
|
||||||
Total distributions
|
$
|
12,654,621
|
$
|
5,683,286
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Long-term
|
|||
Investor Class
|
1.44668
|
||
Institutional Class
|
1.44995
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees and Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
86
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
75
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 – June 2022.
|
||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
48
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board
|
Officer since 2004. Kiosk is a full-
|
|
and
|
service marketing agency with
|
||
December 2021
|
offices in the San Francisco Bay Area
|
||
as a Trustee
|
and Liverpool, UK and staff across
|
||
nine states in the U.S.
|
|||
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
77
|
consultant in the securities industry.
|
||
Trustee
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Brian Alexander
|
March 2015
|
Mr. Alexander has worked for the
|
None.
|
41
|
Sutter Health organization since
|
||
Adviser to the Board
|
2011 in various positions. He has
|
||
served as the Chief Executive Officer
|
|||
of the North Valley Hospital Area
|
|||
since 2021. From 2018 to 2021, he
|
|||
served as the Chief Executive Officer
|
|||
of Sutter Roseville Medical Center.
|
|||
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.
|
|||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
58
|
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.
|
|||
Interested Trustee(1)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Hennessy has been employed
|
Hennessy
|
66
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
Name, Age,
|
||
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.
|
56
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
66
|
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.
|
50
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Jennifer Cheskiewicz(2)
|
June 2013
|
Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
|
45
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc. since
|
64
|
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 their 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 Kelley(4)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
50
|
October 2012. He has served as Chief Investment Officer of the
|
|
Chief Investment Officer,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Senior Vice President,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He 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 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He served as Co-Portfolio Manager of the Hennessy
|
||
Technology Fund from February 2017 until May 2018. Mr. Kelley
|
||
served as Portfolio Manager of FBR Fund Advisers, Inc. from
|
||
January 2008 to October 2012.
|
||
L. Joshua Wein(4)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
49
|
2018. He has served as Co-Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone
|
|
Co-Portfolio Manager
|
Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth
|
|
Fund, the Hennessy Cornerstone Value Fund, Hennessy Total
|
||
Return Fund, the Hennessy Balanced Fund, the Hennessy Gas
|
||
Utility Fund, and the Hennessy Technology Fund since February
|
||
2019. He served as a Senior Analyst of these same funds from
|
||
September 2018 through February 2019. Mr. Wein served as
|
||
Director of Alternative Investments and Co-Portfolio Manager
|
||
at Sterling Capital Management from 2008 to 2018.
|
(1)
|
Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust.
|
(2)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2022 –
|
|
May 1, 2022
|
October 31, 2022
|
October 31, 2022
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,007.40
|
$6.32
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.90
|
$6.36
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,008.40
|
$5.16
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,020.06
|
$5.19
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.25% for Investor Class shares or 1.02% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund has
historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future during both
normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is therefore not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding
to a highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make any material changes to the Liquidity Program during the review period and was not recommending any changes to the Liquidity Program or the model inputs used to
determine the liquidity classification of each security held by the Fund.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was operating
as intended during the review period.
|
1.
|
Information we receive from you 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;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis information, and
other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Statement of Cash Flows
|
16
|
|
Financial Highlights
|
18
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
29
|
|
Trustees and Officers of the Fund
|
30
|
|
Expense Example
|
33
|
|
Proxy Voting Policy and Proxy Voting Records
|
34
|
|
Availability of Quarterly Portfolio Schedule
|
34
|
|
Federal Tax Distribution Information
|
34
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
34
|
|
Electronic Delivery
|
34
|
|
Liquidity Risk Management Program
|
35
|
|
Privacy Policy
|
35
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Total Return Fund (HDOGX)
|
1.12%
|
4.10%
|
6.43%
|
75/25 Blended DJIA/Treasury Index
|
-4.51%
|
7.57%
|
9.43%
|
Dow Jones Industrial Average
|
-6.74%
|
9.33%
|
12.19%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2022
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
U.S. Treasury Bill, 3.510%, 01/12/2023
|
27.89%
|
U.S. Treasury Bill, 3.075%, 12/15/2022
|
22.40%
|
U.S. Treasury Bill, 2.580%, 11/10/2022
|
16.86%
|
Chevron Corp.
|
10.48%
|
Merck & Co., Inc.
|
8.82%
|
Amgen, Inc.
|
8.56%
|
International Business Machines Corp.
|
7.54%
|
The Coca-Cola Co.
|
6.98%
|
Dow, Inc.
|
5.89%
|
Walgreens Boots Alliance, Inc.
|
5.38%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 70.47%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 5.28%
|
||||||||||||
Verizon Communications, Inc.
|
75,400
|
$
|
2,817,698
|
5.28
|
%
|
|||||||
|
||||||||||||
Consumer Staples – 12.36%
|
||||||||||||
The Coca-Cola Co.
|
62,200
|
3,722,670
|
6.98
|
%
|
||||||||
Walgreens Boots Alliance, Inc.
|
78,700
|
2,872,550
|
5.38
|
%
|
||||||||
|
6,595,220
|
12.36
|
%
|
|||||||||
Energy – 10.48%
|
||||||||||||
Chevron Corp.
|
30,900
|
5,589,810
|
10.48
|
%
|
||||||||
|
||||||||||||
Financials – 3.04%
|
||||||||||||
JPMorgan Chase & Co.
|
12,900
|
1,623,852
|
3.04
|
%
|
||||||||
|
||||||||||||
Health Care – 17.38%
|
||||||||||||
Amgen, Inc.
|
16,900
|
4,568,915
|
8.56
|
%
|
||||||||
Merck & Co., Inc.
|
46,500
|
4,705,800
|
8.82
|
%
|
||||||||
|
9,274,715
|
17.38
|
%
|
|||||||||
Industrials – 5.33%
|
||||||||||||
3M Co.
|
22,600
|
2,842,854
|
5.33
|
%
|
||||||||
|
||||||||||||
Information Technology – 10.71%
|
||||||||||||
Cisco Systems, Inc.
|
6,500
|
295,295
|
0.55
|
%
|
||||||||
Intel Corp.
|
49,100
|
1,395,913
|
2.62
|
%
|
||||||||
International Business Machines Corp.
|
29,100
|
4,024,239
|
7.54
|
%
|
||||||||
|
5,715,447
|
10.71
|
%
|
|||||||||
Materials – 5.89%
|
||||||||||||
Dow, Inc.
|
67,200
|
3,140,928
|
5.89
|
%
|
||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $35,254,006)
|
37,600,524
|
70.47
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 70.21%
|
Number of Shares/
|
% of
|
||||||||||
|
Par Amount
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 3.06%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 2.93% (a)
|
1,631,649
|
$
|
1,631,649
|
3.06
|
%
|
|||||||
U.S. Treasury Bills – 67.15%
|
||||||||||||
2.580%, 11/10/2022 (b)(c)
|
9,000,000
|
8,994,398
|
16.86
|
%
|
||||||||
3.075%, 12/15/2022 (b)(c)
|
12,000,000
|
11,954,093
|
22.40
|
%
|
||||||||
3.510%, 01/12/2023 (b)(c)
|
15,000,000
|
14,881,800
|
27.89
|
%
|
||||||||
|
35,830,291
|
67.15
|
%
|
|||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $37,472,740)
|
37,461,940
|
70.21
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $72,726,746) – 140.68%
|
75,062,464
|
140.68
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (40.68)%
|
(21,706,150
|
)
|
(40.68
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
53,356,314
|
100.00
|
%
|
(a)
|
The rate listed is the fund’s seven-day yield as of October 31, 2022.
|
(b)
|
The rate listed is the discount rate at issue.
|
(c)
|
All or a portion of this security is pledged as collateral for securities sold subject to repurchase. The aggregate fair value of the collateral is $23,886,860.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
2,817,698
|
$
|
—
|
$
|
—
|
$
|
2,817,698
|
||||||||
Consumer Staples
|
6,595,220
|
—
|
—
|
6,595,220
|
||||||||||||
Energy
|
5,589,810
|
—
|
—
|
5,589,810
|
||||||||||||
Financials
|
1,623,852
|
—
|
—
|
1,623,852
|
||||||||||||
Health Care
|
9,274,715
|
—
|
—
|
9,274,715
|
||||||||||||
Industrials
|
2,842,854
|
—
|
—
|
2,842,854
|
||||||||||||
Information Technology
|
5,715,447
|
—
|
—
|
5,715,447
|
||||||||||||
Materials
|
3,140,928
|
—
|
—
|
3,140,928
|
||||||||||||
Total Common Stocks
|
$
|
37,600,524
|
$
|
—
|
$
|
—
|
$
|
37,600,524
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
1,631,649
|
$
|
—
|
$
|
—
|
$
|
1,631,649
|
||||||||
U.S. Treasury Bills
|
—
|
35,830,291
|
—
|
35,830,291
|
||||||||||||
Total Short-Term Investments
|
$
|
1,631,649
|
$
|
35,830,291
|
$
|
—
|
$
|
37,461,940
|
||||||||
Total Investments
|
$
|
39,232,173
|
$
|
35,830,291
|
$
|
—
|
$
|
75,062,464
|
HENNESSY FUNDS
|
1-800-966-4354
|
Principal
|
Maturity
|
Maturity
|
|||||||||||
Face Value
|
Counterparty
|
Rate
|
Trade Date
|
Date
|
Amount
|
||||||||
$
|
5,397,000
|
Jefferies LLC
|
2.90%
|
|
8/11/22
|
11/10/22
|
$
|
5,436,128
|
|||||
7,196,000
|
Jefferies LLC
|
3.55%
|
|
9/15/22
|
12/15/22
|
7,259,865
|
|||||||
8,995,000
|
Jefferies LLC
|
4.15%
|
|
10/13/22
|
1/12/23
|
9,088,323
|
|||||||
$
|
21,588,000
|
$
|
21,784,316
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2022
|
ASSETS:
|
||||
Investments in securities, at value (cost $72,726,746)
|
$
|
75,062,464
|
||
Dividends and interest receivable
|
53,597
|
|||
Receivable for fund shares sold
|
6,198
|
|||
Prepaid expenses and other assets
|
11,301
|
|||
Total assets
|
75,133,560
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
3,206
|
|||
Payable to advisor
|
25,781
|
|||
Payable to administrator
|
11,453
|
|||
Payable to auditor
|
22,749
|
|||
Accrued distribution fees
|
20,652
|
|||
Accrued service fees
|
4,297
|
|||
Reverse repurchase agreements
|
21,588,000
|
|||
Accrued interest payable
|
86,522
|
|||
Accrued trustees fees
|
5,126
|
|||
Accrued expenses and other payables
|
9,460
|
|||
Total liabilities
|
21,777,246
|
|||
NET ASSETS
|
$
|
53,356,314
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
48,376,076
|
||
Total distributable earnings
|
4,980,238
|
|||
Total net assets
|
$
|
53,356,314
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
53,356,314
|
||
Shares issued and outstanding
|
3,959,732
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
13.47
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2022
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
1,462,592
|
||
Interest income
|
358,316
|
|||
Total investment income
|
1,820,908
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
321,805
|
|||
Interest expense (See Notes 7 and 9)
|
279,882
|
|||
Distribution fees – Investor Class (See Note 5)
|
80,451
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
71,616
|
|||
Service fees – Investor Class (See Note 5)
|
53,634
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
38,082
|
|||
Compliance expense (See Note 5)
|
24,516
|
|||
Audit fees
|
22,743
|
|||
Federal and state registration fees
|
19,758
|
|||
Trustees’ fees and expenses
|
17,194
|
|||
Reports to shareholders
|
10,113
|
|||
Legal fees
|
2,114
|
|||
Other expenses
|
8,760
|
|||
Total expenses
|
950,668
|
|||
NET INVESTMENT INCOME
|
$
|
870,240
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
3,139,523
|
||
Net change in unrealized appreciation/depreciation on investments
|
(3,362,849
|
)
|
||
Net loss on investments
|
(223,326
|
)
|
||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
646,914
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
870,240
|
$
|
843,922
|
||||
Net realized gain (loss) on investments
|
3,139,523
|
(185,169
|
)
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(3,362,849
|
)
|
9,981,646
|
|||||
Net increase in net assets resulting from operations
|
646,914
|
10,640,399
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(852,484
|
)
|
(3,994,715
|
)
|
||||
Total distributions
|
(852,484
|
)
|
(3,994,715
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
3,818,336
|
575,745
|
||||||
Dividends reinvested – Investor Class
|
810,781
|
3,786,662
|
||||||
Cost of shares redeemed – Investor Class
|
(5,519,799
|
)
|
(7,221,451
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(890,682
|
)
|
(2,859,044
|
)
|
||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(1,096,252
|
)
|
3,786,640
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
54,452,566
|
50,665,926
|
||||||
End of year
|
$
|
53,356,314
|
$
|
54,452,566
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
278,708
|
43,131
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
60,970
|
294,662
|
||||||
Shares redeemed – Investor Class
|
(402,382
|
)
|
(548,584
|
)
|
||||
Net decrease in shares outstanding
|
(62,704
|
)
|
(210,791
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Cash Flows for the year ended October 31, 2022
|
Cash flows from operating activities:
|
||||
Net increase in net assets from operations
|
$
|
646,914
|
||
Adjustments to reconcile net increase in net assets resulting
|
||||
from operations to net cash provided by operating activities:
|
||||
Payments to purchase securities
|
(8,924,195
|
)
|
||
Proceeds from sale of securities
|
9,183,542
|
|||
Net sale of short term investments
|
904,476
|
|||
Realized gain on investments in securities
|
(3,139,523
|
)
|
||
Net accretion of discount on securities
|
(346,115
|
)
|
||
Change in unrealized appreciation/depreciation
|
||||
on investments in securities
|
3,362,849
|
|||
(Increases) decreases in operating assets:
|
||||
Increase in dividends and interest receivable
|
(251
|
)
|
||
Increase in prepaid expenses and other assets
|
(186
|
)
|
||
Increases (decreases) in operating liabilities:
|
||||
Decrease in payable to advisor
|
(2,063
|
)
|
||
Decrease in payable to administrator
|
(6,717
|
)
|
||
Decrease in payable for distribution fees
|
(11,983
|
)
|
||
Decrease in payable for service fees
|
(343
|
)
|
||
Increase in accrued interest payable
|
81,475
|
|||
Increase in accrued audit fees
|
193
|
|||
Decrease in accrued trustee fees
|
(1,477
|
)
|
||
Decrease in other accrued expenses and payables
|
(424
|
)
|
||
Net cash provided by operating securities
|
1,746,172
|
|||
Cash flows from financing activities:
|
||||
Proceeds on shares sold
|
3,812,174
|
|||
Payment on shares redeemed
|
(5,516,643
|
)
|
||
Distributions paid in cash, net of reinvestments
|
(41,703
|
)
|
||
Net cash used for financing activities
|
(1,746,172
|
)
|
||
Net increase in cash
|
—
|
|||
Cash:
|
||||
Beginning balance
|
—
|
|||
Ending balance
|
$
|
—
|
||
Supplemental information:
|
||||
Non-cash financing activities not included herein, consisting
|
||||
of dividend reinvestment of dividends and distributions
|
$
|
810,781
|
||
Cash paid for interest
|
$
|
198,407
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF CASH FLOWS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
13.54
|
$
|
11.97
|
$
|
13.98
|
$
|
13.57
|
$
|
14.66
|
|||||||||
0.22
|
(1)
|
0.20
|
(1)
|
0.27
|
(1)
|
0.24
|
(1)
|
0.23
|
||||||||||
(0.07
|
)
|
2.33
|
(1.99
|
)
|
0.81
|
0.43
|
||||||||||||
0.15
|
2.53
|
(1.72
|
)
|
1.05
|
0.66
|
|||||||||||||
(0.22
|
)
|
(0.20
|
)
|
(0.29
|
)
|
(0.24
|
)
|
(0.23
|
)
|
|||||||||
—
|
(0.76
|
)
|
—
|
(0.40
|
)
|
(1.52
|
)
|
|||||||||||
(0.22
|
)
|
(0.96
|
)
|
(0.29
|
)
|
(0.64
|
)
|
(1.75
|
)
|
|||||||||
$
|
13.47
|
$
|
13.54
|
$
|
11.97
|
$
|
13.98
|
$
|
13.57
|
|||||||||
1.12
|
%
|
21.72
|
%
|
-12.36
|
%
|
7.93
|
%
|
4.92
|
%
|
|||||||||
$
|
53.36
|
$
|
54.45
|
$
|
50.67
|
$
|
72.94
|
$
|
71.60
|
|||||||||
1.77
|
%
|
1.35
|
%
|
1.73
|
%
|
2.31
|
%
|
1.95
|
%
|
|||||||||
1.62
|
%
|
1.52
|
%
|
2.05
|
%
|
1.74
|
%
|
1.67
|
%
|
|||||||||
24
|
%
|
19
|
%
|
39
|
%
|
30
|
%
|
10
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2022
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of
wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book
purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net
realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
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 are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2022 are as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(229,241)
|
$229,241
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the
Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase
or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair
value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of
the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Reverse Repurchase Agreements – Transactions involving reverse repurchase agreements are treated as collateralized financing transactions and are recorded at their contracted resell or repurchase amounts,
which approximates fair value. Upon entering into a reverse repurchase agreement transaction, the Fund establishes a segregated account in which it maintains liquid assets in an amount at least equal to the repurchase price marked
to market daily (including accrued interest), and the Fund subsequently monitors the account to ensure that it maintains such equivalent value. Interest on reverse repurchase agreements is included in interest payable.
|
As of October 31, 2022, securities with a fair value of $23,886,860, which are included in investments in securities in the Statement
of Assets and Liabilities, were pledged to collateralize reverse repurchase agreements.
|
HENNESSY FUNDS
|
1-800-966-4354
|
j).
|
Offsetting Assets and Liabilities – The Fund follows the financial reporting rules regarding offsetting assets and liabilities and related netting arrangements to enable users of its financial statements
to understand the effect of those arrangements on its financial position. Reverse repurchase transactions are entered into by the Fund under Master Repurchase Agreements (“MRAs”) that permit the Fund, under certain circumstances,
including an event of default (such as bankruptcy or insolvency), to offset payables under the MRA with collateral held with the counterparty and create one single net payment from the Fund. Upon a bankruptcy or insolvency of the
MRA counterparty, the Fund is considered an unsecured creditor with respect to excess collateral and, as such, the return of excess collateral may be delayed. In the event the buyer of securities under an MRA files for bankruptcy or
becomes insolvent, the Fund’s use of the proceeds of the MRA may be restricted while the other party, or its trustee or receiver, determines whether or not to enforce the Fund’s obligation to repurchase the securities. For
additional information regarding the offsetting of assets and liabilities as of October 31, 2022, please refer to the table in Note 9.
|
k).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that
the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven
calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
l).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment
companies (“Rule 18f-4”). Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, and requires funds
whose use of derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager. The Fund has adopted procedures in accordance
with Rule 18f-4.
|
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5 establishes
requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other
conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule 2a-5, the SEC also
adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund investments. The Fund has
adopted procedures in accordance with Rule 2a-5.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, exchange-traded funds, closed-end mutual funds, partnerships, rights, and real
estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on which the securities are
listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for which a
last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in
Level 1 of the fair value hierarchy.
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending
NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may
consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate
observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally
classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values
as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the
|
HENNESSY FUNDS
|
1-800-966-4354
|
security’s fair value would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market
activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
||||
Cost of investments for tax purposes
|
$
|
72,745,712
|
||
Gross tax unrealized appreciation
|
$
|
6,521,426
|
||
Gross tax unrealized depreciation
|
(4,204,674
|
)
|
||
Net tax unrealized appreciation/(depreciation)
|
$
|
2,316,752
|
||
Undistributed ordinary income
|
$
|
38,590
|
||
Undistributed long-term capital gains
|
2,624,896
|
|||
Total distributable earnings
|
$
|
2,663,486
|
||
Other accumulated gain/(loss)
|
$
|
—
|
||
Total accumulated gain/(loss)
|
$
|
4,980,238
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
Ordinary income(1)
|
$
|
852,484
|
$
|
844,427
|
||||
Long-term capital gains
|
—
|
3,150,288
|
||||||
Total distributions
|
$
|
852,484
|
$
|
3,994,715
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Maturity Date
|
Amount
|
Interest Rate
|
||
November 10, 2022
|
$5,397,000
|
2.90%
|
||
December 15, 2022
|
$7,196,000
|
3.55%
|
||
January 12, 2023
|
$8,995,000
|
4.15%
|
Gross
|
Net
|
Gross Amounts Not
Offset in the Statement
of Assets and Liabilities
|
|||||||||||||||||||||
Amounts
|
Amounts
|
||||||||||||||||||||||
Offset
|
Presented
|
||||||||||||||||||||||
Gross
|
in the
|
in the
|
|||||||||||||||||||||
Amounts of
|
Statement of
|
Statement of
|
Collateral
|
||||||||||||||||||||
Recognized
|
Assets and
|
Assets and
|
Financial
|
Pledged
|
Net
|
||||||||||||||||||
Liabilities
|
Liabilities
|
Liabilities
|
Instruments
|
(Received)
|
Amount
|
||||||||||||||||||
$
|
21,588,000
|
$
|
—
|
$
|
21,588,000
|
$
|
21,588,000
|
$
|
—
|
$
|
—
|
||||||||||||
$
|
21,588,000
|
$
|
—
|
$
|
21,588,000
|
$
|
21,588,000
|
$
|
—
|
$
|
—
|
HENNESSY FUNDS
|
1-800-966-4354
|
Long-term
|
|||
Investor Class
|
0.65896
|
WWW.HENNESSYFUNDS.COM
|
NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
![]() |
|
TAIT, WELLER & BAKER LLP
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees and Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
86
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
75
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 – June 2022.
|
||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
48
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board
|
Officer since 2004. Kiosk is a full-
|
|
and
|
service marketing agency with
|
||
December 2021
|
offices in the San Francisco Bay Area
|
||
as a Trustee
|
and Liverpool, UK and staff across
|
||
nine states in the U.S.
|
|||
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
77
|
consultant in the securities industry.
|
||
Trustee
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Brian Alexander
|
March 2015
|
Mr. Alexander has worked for the
|
None.
|
41
|
Sutter Health organization since
|
||
Adviser to the Board
|
2011 in various positions. He has
|
||
served as the Chief Executive Officer
|
|||
of the North Valley Hospital Area
|
|||
since 2021. From 2018 to 2021, he
|
|||
served as the Chief Executive Officer
|
|||
of Sutter Roseville Medical Center.
|
|||
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.
|
|||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
58
|
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.
|
|||
Interested Trustee(1)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Hennessy has been employed
|
Hennessy
|
66
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
Name, Age,
|
|||
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.
|
|
56
|
since 1989 and currently serves as its President, Chief
|
||
Executive Vice President
|
Operating Officer, and Secretary.
|
||
and Treasurer
|
|||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
|
66
|
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.
|
|
50
|
since December 2013 and currently serves as its Chief
|
||
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
||
and Head of Distribution
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Jennifer Cheskiewicz(2)
|
June 2013
|
Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
|
45
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc. since
|
64
|
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 their 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 Kelley(4)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
50
|
October 2012. He has served as Chief Investment Officer of the
|
|
Chief Investment Officer,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Senior Vice President,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He 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 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He served as Co-Portfolio Manager of the Hennessy
|
||
Technology Fund from February 2017 until May 2018. Mr. Kelley
|
||
served as Portfolio Manager of FBR Fund Advisers, Inc. from
|
||
January 2008 to October 2012.
|
||
L. Joshua Wein(4)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
49
|
2018. He has served as Co-Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone
|
|
Co-Portfolio Manager
|
Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth
|
|
Fund, the Hennessy Cornerstone Value Fund, Hennessy Total
|
||
Return Fund, the Hennessy Balanced Fund, the Hennessy Gas
|
||
Utility Fund, and the Hennessy Technology Fund since February
|
||
2019. He served as a Senior Analyst of these same funds from
|
||
September 2018 through February 2019. Mr. Wein served as
|
||
Director of Alternative Investments and Co-Portfolio Manager
|
||
at Sterling Capital Management from 2008 to 2018.
|
(1)
|
Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust.
|
(2)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND/EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2022 –
|
|
May 1, 2022
|
October 31, 2022
|
October 31, 2022
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 980.10
|
$10.78
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,014.32
|
$10.97
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 2.16%, multiplied by the average account value over the period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund has
historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future during
both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is therefore not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding
to a highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make any material changes to the Liquidity Program during the review period and was not recommending any changes to the Liquidity Program or the model inputs used to
determine the liquidity classification of each security held by the Fund.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you 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;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis information,
and other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
10
|
|
Statement of Assets and Liabilities
|
21
|
|
Statement of Operations
|
22
|
|
Statements of Changes in Net Assets
|
23
|
|
Financial Highlights
|
24
|
|
Notes to the Financial Statements
|
28
|
|
Report of Independent Registered Public Accounting Firm
|
37
|
|
Trustees and Officers of the Fund
|
38
|
|
Expense Example
|
42
|
|
Proxy Voting Policy and Proxy Voting Records
|
44
|
|
Availability of Quarterly Portfolio Schedule
|
44
|
|
Federal Tax Distribution Information
|
44
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
44
|
|
Electronic Delivery
|
44
|
|
Liquidity Risk Management Program
|
45
|
|
Privacy Policy
|
45
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Equity and Income Fund –
|
|||
Investor Class (HEIFX)
|
-12.60%
|
4.27%
|
6.07%
|
Hennessy Equity and Income Fund –
|
|||
Institutional Class (HEIIX)
|
-12.25%
|
4.67%
|
6.45%
|
S&P 500® Index
|
-14.61%
|
10.44%
|
12.79%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
Schedule of Investments as of October 31, 2022
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Berkshire Hathaway, Inc., Class B
|
4.61%
|
Apple, Inc.
|
4.58%
|
O’Reilly Automotive, Inc.
|
3.80%
|
The Charles Schwab Corp.
|
3.34%
|
Alphabet, Inc., Class C
|
3.27%
|
BlackRock, Inc.
|
3.05%
|
Visa, Inc., Class A
|
2.62%
|
The Home Depot, Inc.
|
2.52%
|
Martin Marietta Materials, Inc.
|
2.49%
|
The Progressive Corp.
|
2.48%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS – 63.38%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 4.47%
|
||||||||||||
Alphabet, Inc., Class C (a)
|
30,026
|
$
|
2,842,261
|
3.27
|
%
|
|||||||
Verizon Communications, Inc.
|
27,989
|
1,045,949
|
1.20
|
%
|
||||||||
|
3,888,210
|
4.47
|
%
|
|||||||||
Consumer Discretionary – 10.53%
|
||||||||||||
CarMax, Inc. (a)
|
15,549
|
979,742
|
1.13
|
%
|
||||||||
Lowe’s Companies, Inc.
|
6,342
|
1,236,373
|
1.42
|
%
|
||||||||
O’Reilly Automotive, Inc. (a)
|
3,946
|
3,303,473
|
3.80
|
%
|
||||||||
Starbucks Corp.
|
16,701
|
1,446,140
|
1.66
|
%
|
||||||||
The Home Depot, Inc.
|
7,402
|
2,191,954
|
2.52
|
%
|
||||||||
|
9,157,682
|
10.53
|
%
|
|||||||||
Consumer Staples – 6.20%
|
||||||||||||
Altria Group, Inc.
|
44,519
|
2,059,894
|
2.37
|
%
|
||||||||
Church & Dwight Co., Inc.
|
20,648
|
1,530,636
|
1.76
|
%
|
||||||||
Nestlé S.A. – ADR (b)
|
16,594
|
1,803,934
|
2.07
|
%
|
||||||||
|
5,394,464
|
6.20
|
%
|
|||||||||
Energy – 0.18%
|
||||||||||||
Enbridge, Inc. (b)
|
925
|
36,029
|
0.04
|
%
|
||||||||
Kinder Morgan, Inc.
|
2,200
|
39,864
|
0.05
|
%
|
||||||||
Targa Resources Corp.
|
550
|
37,604
|
0.04
|
%
|
||||||||
The Williams Companies, Inc.
|
1,225
|
40,094
|
0.05
|
%
|
||||||||
|
153,591
|
0.18
|
%
|
|||||||||
Financials – 13.48%
|
||||||||||||
Berkshire Hathaway, Inc., Class B (a)
|
13,576
|
4,006,142
|
4.61
|
%
|
||||||||
BlackRock, Inc.
|
4,103
|
2,650,169
|
3.05
|
%
|
||||||||
The Charles Schwab Corp.
|
36,402
|
2,900,147
|
3.34
|
%
|
||||||||
The Progressive Corp.
|
16,812
|
2,158,661
|
2.48
|
%
|
||||||||
|
11,715,119
|
13.48
|
%
|
|||||||||
Health Care – 3.74%
|
||||||||||||
Johnson & Johnson
|
10,249
|
1,783,018
|
2.05
|
%
|
||||||||
Pfizer, Inc.
|
31,485
|
1,465,627
|
1.69
|
%
|
||||||||
|
3,248,645
|
3.74
|
%
|
|||||||||
Industrials – 5.57%
|
||||||||||||
FedEx Corp.
|
8,790
|
1,408,861
|
1.62
|
%
|
||||||||
Norfolk Southern Corp.
|
8,787
|
2,004,051
|
2.31
|
%
|
||||||||
Old Dominion Freight Line, Inc.
|
5,193
|
1,425,998
|
1.64
|
%
|
||||||||
|
4,838,910
|
5.57
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Information Technology – 13.31%
|
||||||||||||
Apple, Inc.
|
25,961
|
$
|
3,980,860
|
4.58
|
%
|
|||||||
Cisco Systems, Inc.
|
29,058
|
1,320,105
|
1.52
|
%
|
||||||||
Fiserv, Inc. (a)
|
17,982
|
1,847,471
|
2.13
|
%
|
||||||||
Texas Instruments, Inc.
|
13,337
|
2,142,322
|
2.46
|
%
|
||||||||
Visa, Inc., Class A
|
10,984
|
2,275,445
|
2.62
|
%
|
||||||||
|
11,566,203
|
13.31
|
%
|
|||||||||
Materials – 5.90%
|
||||||||||||
Air Products and Chemicals, Inc.
|
6,407
|
1,604,313
|
1.85
|
%
|
||||||||
Martin Marietta Materials, Inc.
|
6,437
|
2,162,703
|
2.49
|
%
|
||||||||
NewMarket Corp.
|
4,467
|
1,359,487
|
1.56
|
%
|
||||||||
|
5,126,503
|
5.90
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $34,478,508)
|
55,089,327
|
63.38
|
%
|
|||||||||
|
||||||||||||
PREFERRED STOCKS – 1.75%
|
||||||||||||
Communication Services – 0.06%
|
||||||||||||
AT&T, Inc.
|
||||||||||||
Series A, 5.000%, Perpetual
|
860
|
16,160
|
0.02
|
%
|
||||||||
Series C, 4.750%, Perpetual
|
1,935
|
33,514
|
0.04
|
%
|
||||||||
|
49,674
|
0.06
|
%
|
|||||||||
Consumer Discretionary – 0.03%
|
||||||||||||
Ford Motor Co.
|
||||||||||||
6.000%, 12/01/2059
|
515
|
11,381
|
0.01
|
%
|
||||||||
6.200%, 06/01/2059
|
513
|
11,717
|
0.02
|
%
|
||||||||
|
23,098
|
0.03
|
%
|
|||||||||
Consumer Staples – 0.03%
|
||||||||||||
CHS, Inc., Series 3, 6.750% to 09/30/2024 then
|
||||||||||||
3 Month LIBOR USD + 4.155%, Perpetual (c)
|
355
|
8,673
|
0.01
|
%
|
||||||||
CHS, Inc., Series 4, 7.500%, Perpetual
|
840
|
21,571
|
0.02
|
%
|
||||||||
|
30,244
|
0.03
|
%
|
|||||||||
Financials – 1.63%
|
||||||||||||
AEGON Funding Co. LLC, 5.100%, 12/15/2049
|
1,175
|
22,912
|
0.03
|
%
|
||||||||
American International Group, Inc., Series A, 5.850%, Perpetual
|
1,435
|
31,570
|
0.04
|
%
|
||||||||
Arch Capital Group Ltd.
|
||||||||||||
Series F, 5.450%, Perpetual (b)
|
401
|
8,124
|
0.01
|
%
|
||||||||
Series G, 4.550%, Perpetual (b)
|
1,010
|
17,736
|
0.02
|
%
|
||||||||
Axis Capital Holdings Ltd., Series E, 5.500%, Perpetual (b)
|
905
|
17,883
|
0.02
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
PREFERRED STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Financials (Continued)
|
||||||||||||
Bank of America Corp.
|
||||||||||||
Series QQ, 4.250%, Perpetual
|
1,575
|
$
|
26,271
|
0.03
|
%
|
|||||||
Series LL, 5.000%, Perpetual
|
1,420
|
28,315
|
0.03
|
%
|
||||||||
Series KK, 5.375%, Perpetual
|
815
|
17,441
|
0.02
|
%
|
||||||||
Bank of Hawaii Corp., Series A, 4.375%, Perpetual
|
1,060
|
18,020
|
0.02
|
%
|
||||||||
Bank OZK, Series A, 4.625%, Perpetual
|
1,395
|
23,157
|
0.03
|
%
|
||||||||
Cadence Bank, Series A, 5.500%, Perpetual
|
565
|
11,407
|
0.01
|
%
|
||||||||
Capital One Financial Corp.
|
||||||||||||
Series J, 4.800%, Perpetual
|
2,060
|
35,844
|
0.04
|
%
|
||||||||
Series I, 5.000%, Perpetual
|
1,900
|
35,207
|
0.04
|
%
|
||||||||
Carlyle Finance LLC, 4.625%, 05/15/2061
|
995
|
15,811
|
0.02
|
%
|
||||||||
Citigroup, Inc., Series K, 6.875% to 11/15/2023 then
|
||||||||||||
3 Month LIBOR USD + 4.130%, Perpetual (c)
|
780
|
19,687
|
0.02
|
%
|
||||||||
Citizens Financial Group, Inc.
|
||||||||||||
Series E, 5.000%, Perpetual
|
550
|
10,604
|
0.01
|
%
|
||||||||
Series D, 6.350% to 04/06/2024 then
|
||||||||||||
3 Month LIBOR USD + 3.642%, Perpetual (c)
|
980
|
22,981
|
0.03
|
%
|
||||||||
ConnectOne Bancorp, Inc., Series A, 5.250% to 09/01/2026 then
|
||||||||||||
5 Year CMT Rate + 4.420%, Perpetual (c)
|
625
|
12,856
|
0.01
|
%
|
||||||||
Cullen/Frost Bankers, Inc., Series B, 4.450%, Perpetual
|
860
|
16,641
|
0.02
|
%
|
||||||||
Equitable Holdings, Inc., Series A, 5.250%, Perpetual
|
1,270
|
23,647
|
0.03
|
%
|
||||||||
Federal Agricultural Mortgage Corp, Series F, 5.250%, Perpetual
|
585
|
11,144
|
0.01
|
%
|
||||||||
Fifth Third Bancorp, Series K, 4.950%, Perpetual
|
1,580
|
30,320
|
0.03
|
%
|
||||||||
First Citizens BancShares, Inc., Series A, 5.375%, Perpetual
|
1,495
|
30,498
|
0.03
|
%
|
||||||||
First Horizon Corp.
|
||||||||||||
Series D, 6.100% to 05/01/2024 then
|
||||||||||||
3 Month LIBOR USD + 3.859%, Perpetual (c)
|
530
|
11,946
|
0.01
|
%
|
||||||||
Series B, 6.625% to 08/01/2025 then
|
||||||||||||
3 Month LIBOR USD + 4.262%, Perpetual (c)
|
700
|
16,905
|
0.02
|
%
|
||||||||
First Republic Bank, Series N, 4.500%, Perpetual
|
1,625
|
27,365
|
0.03
|
%
|
||||||||
Hartford Financial Services Group, Inc., Series G, 6.000%, Perpetual
|
1,505
|
36,933
|
0.04
|
%
|
||||||||
Huntington Bancshares, Inc., Series H, 4.500%, Perpetual
|
2,275
|
39,630
|
0.05
|
%
|
||||||||
JPMorgan Chase & Co.
|
||||||||||||
Series JJ, 4.550%, Perpetual
|
1,900
|
34,599
|
0.04
|
%
|
||||||||
Series LL, 4.625%, Perpetual
|
1,875
|
34,762
|
0.04
|
%
|
||||||||
KeyCorp
|
||||||||||||
Series G, 5.625%, Perpetual
|
535
|
11,315
|
0.01
|
%
|
||||||||
Series F, 5.650%, Perpetual
|
755
|
15,961
|
0.02
|
%
|
||||||||
Series E, 6.125% to 12/15/2026 then
|
||||||||||||
3 Month LIBOR USD + 3.892%, Perpetual (c)
|
412
|
9,616
|
0.01
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
PREFERRED STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Financials (Continued)
|
||||||||||||
MetLife, Inc., Series F, 4.750%, Perpetual
|
1,725
|
$
|
33,914
|
0.04
|
%
|
|||||||
Morgan Stanley
|
||||||||||||
Series O, 4.250%, Perpetual
|
2,365
|
38,502
|
0.04
|
%
|
||||||||
Series K, 5.850% to 04/15/2027 then
|
||||||||||||
3 Month LIBOR USD + 3.491%, Perpetual (c)
|
735
|
16,839
|
0.02
|
%
|
||||||||
Series I, 6.375% to 10/15/2024 then
|
||||||||||||
3 Month LIBOR USD + 3.708%, Perpetual (c)
|
790
|
19,189
|
0.02
|
%
|
||||||||
PacWest Bancorp, Series A, 7.750% to 09/01/2027 then
|
||||||||||||
5 Year CMT Rate + 4.820%, Perpetual (c)
|
350
|
8,687
|
0.01
|
%
|
||||||||
Regions Financial Corp.
|
||||||||||||
Series E, 4.450%, Perpetual
|
1,960
|
34,261
|
0.04
|
%
|
||||||||
Series C, 5.700% to 05/15/2029 then
|
||||||||||||
3 Month LIBOR USD + 3.148%, Perpetual (c)
|
1,035
|
21,549
|
0.02
|
%
|
||||||||
Signature Bank, Series A, 5.000%, Perpetual
|
1,460
|
25,725
|
0.03
|
%
|
||||||||
State Street Corp., Series D, 5.900% to 03/15/2024 then
|
||||||||||||
3 Month LIBOR USD + 3.108%, Perpetual (c)
|
1,975
|
48,131
|
0.06
|
%
|
||||||||
SVB Financial Group, Series A, 5.250%, Perpetual
|
1,185
|
21,425
|
0.02
|
%
|
||||||||
Synchrony Financial, Series A, 5.625%, Perpetual
|
1,815
|
30,801
|
0.04
|
%
|
||||||||
Synovus Financial Corp.
|
||||||||||||
Series E, 5.875% to 07/01/2024 then
|
||||||||||||
5 Year CMT Rate + 4.127%, Perpetual (c)
|
710
|
15,691
|
0.02
|
%
|
||||||||
Series D, 6.300% to 06/21/2023 then
|
||||||||||||
3 Month LIBOR USD + 3.352%, Perpetual (c)
|
740
|
17,316
|
0.02
|
%
|
||||||||
Texas Capital Bancshares, Inc., Series B, 5.750%, Perpetual
|
595
|
11,799
|
0.01
|
%
|
||||||||
The Allstate Corp., Series H, 5.100%, Perpetual
|
1,120
|
22,008
|
0.03
|
%
|
||||||||
The Charles Schwab Corp., Series J, 4.450%, Perpetual
|
1,495
|
27,463
|
0.03
|
%
|
||||||||
The Goldman Sachs Group, Inc.
|
||||||||||||
Series J, 5.500% to 05/10/2023 then
|
||||||||||||
3 Month LIBOR USD + 3.640%, Perpetual (c)
|
955
|
23,503
|
0.03
|
%
|
||||||||
Series K, 6.375% to 05/10/2024 then
|
||||||||||||
3 Month LIBOR USD + 3.550%, Perpetual (c)
|
895
|
22,151
|
0.03
|
%
|
||||||||
Truist Financial Corp.
|
||||||||||||
Series R, 4.750%, Perpetual
|
2,190
|
41,500
|
0.05
|
%
|
||||||||
Series O, 5.250%, Perpetual
|
1,625
|
34,239
|
0.04
|
%
|
||||||||
US Bancorp
|
||||||||||||
Series O, 4.500%, Perpetual
|
1,295
|
23,958
|
0.03
|
%
|
||||||||
Series B, 4.679% to 11/30/2022 then
|
||||||||||||
3 Month LIBOR USD + 0.600%, Perpetual (c)
|
1,970
|
35,243
|
0.04
|
%
|
||||||||
Voya Financial, Inc., Series B, 5.350% to 09/15/2029 then
|
||||||||||||
5 Year CMT Rate + 3.210%, Perpetual (c)
|
1,105
|
23,415
|
0.03
|
%
|
||||||||
Washington Federal, Inc., Series A, 4.875%, Perpetual
|
1,395
|
24,315
|
0.03
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
PREFERRED STOCKS
|
Number of Shares/
|
% of
|
||||||||||
|
Par Amount
|
Value
|
Net Assets
|
|||||||||
Financials (Continued)
|
||||||||||||
Wells Fargo & Co.
|
||||||||||||
Series Z, 4.750%, Perpetual
|
1,930
|
$
|
34,740
|
0.04
|
%
|
|||||||
Series R, 6.625% to 03/15/2024 then
|
||||||||||||
3 Month LIBOR USD + 3.690%, Perpetual (c)
|
1,505
|
37,640
|
0.04
|
%
|
||||||||
|
1,421,112
|
1.63
|
%
|
|||||||||
|
||||||||||||
Total Preferred Stocks
|
||||||||||||
(Cost $1,895,371)
|
1,524,128
|
1.75
|
%
|
|||||||||
|
||||||||||||
REITS – 2.70%
|
||||||||||||
Financials – 0.17%
|
||||||||||||
Annaly Capital Management Inc, Series I, 6.750% to 06/30/2024
|
||||||||||||
then 3 Month LIBOR USD + 4.989%, Perpetual (c)
|
1,195
|
24,880
|
0.03
|
%
|
||||||||
Apollo Commercial Real Estate Finance, Inc.
|
3,130
|
35,244
|
0.04
|
%
|
||||||||
Chimera Investment Corp.
|
2,930
|
19,778
|
0.02
|
%
|
||||||||
Chimera Investment Corp.
|
||||||||||||
Series C, 7.750% to 09/30/2025 then
|
||||||||||||
3 Month LIBOR USD + 4.743%, Perpetual (c)
|
1,265
|
21,505
|
0.03
|
%
|
||||||||
Series B, 8.000% to 03/30/2024 then
|
||||||||||||
3 Month LIBOR USD + 5.791%, Perpetual (c)
|
575
|
10,695
|
0.01
|
%
|
||||||||
Starwood Property Trust, Inc.
|
1,805
|
37,291
|
0.04
|
%
|
||||||||
|
149,393
|
0.17
|
%
|
|||||||||
Real Estate – 2.53%
|
||||||||||||
Kimco Realty Corp., Series M, 5.250%, Perpetual
|
955
|
18,756
|
0.02
|
%
|
||||||||
Public Storage, Series P, 4.000%, Perpetual
|
1,185
|
19,292
|
0.02
|
%
|
||||||||
STORE Capital Corp.
|
67,869
|
2,158,234
|
2.49
|
%
|
||||||||
|
2,196,282
|
2.53
|
%
|
|||||||||
|
||||||||||||
Total REITS
|
||||||||||||
(Cost $1,888,938)
|
2,345,675
|
2.70
|
%
|
|||||||||
|
||||||||||||
CORPORATE BONDS – 17.48%
|
||||||||||||
Communication Services – 1.23%
|
||||||||||||
AT&T, Inc., 4.250%, 03/01/2027
|
$
|
980,000
|
936,465
|
1.08
|
%
|
|||||||
T-Mobile USA, Inc., 3.875%, 04/15/2030
|
150,000
|
132,519
|
0.15
|
%
|
||||||||
|
1,068,984
|
1.23
|
%
|
|||||||||
Consumer Discretionary – 1.39%
|
||||||||||||
Alibaba Group Holding Ltd., 3.600%, 11/28/2024 (b)
|
615,000
|
582,964
|
0.67
|
%
|
||||||||
Lowe’s Companies, Inc., 2.625%, 04/01/2031
|
325,000
|
260,208
|
0.30
|
%
|
||||||||
Starbucks Corp., 3.500%, 03/01/2028
|
400,000
|
366,777
|
0.42
|
%
|
||||||||
|
1,209,949
|
1.39
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
CORPORATE BONDS
|
% of
|
|||||||||||
|
Par Amount
|
Value
|
Net Assets
|
|||||||||
Energy – 1.54%
|
||||||||||||
Canadian Natural Resources Ltd., 3.900%, 02/01/2025 (b)
|
1,000,000
|
$
|
964,551
|
1.11
|
%
|
|||||||
The Williams Companies, Inc., 2.600%, 03/15/2031
|
475,000
|
372,254
|
0.43
|
%
|
||||||||
|
1,336,805
|
1.54
|
%
|
|||||||||
Financials – 8.57%
|
||||||||||||
Aflac, Inc., 3.600%, 04/01/2030
|
300,000
|
265,826
|
0.31
|
%
|
||||||||
Bank of America Corp., 2.299% to 07/21/2031
|
||||||||||||
then SOFR + 1.220%, 07/21/2032 (c)
|
575,000
|
426,060
|
0.49
|
%
|
||||||||
Dell International LLC / EMC Corp., 5.450%, 06/15/2023
|
322,000
|
321,559
|
0.37
|
%
|
||||||||
Fifth Third Bancorp, 3.650%, 01/25/2024
|
225,000
|
219,723
|
0.25
|
%
|
||||||||
General Motors Financial Co, Inc., 3.700%, 05/09/2023
|
1,075,000
|
1,064,982
|
1.23
|
%
|
||||||||
Huntington Bancshares, Inc.
|
||||||||||||
2.550%, 02/04/2030
|
525,000
|
417,515
|
0.48
|
%
|
||||||||
4.000%, 05/15/2025
|
365,000
|
351,898
|
0.41
|
%
|
||||||||
JPMorgan Chase & Co., 2.069% to 06/01/2028
|
||||||||||||
then SOFR + 1.015%, 06/01/2029 (c)
|
325,000
|
262,847
|
0.30
|
%
|
||||||||
Marsh & McLennan Companies, Inc., 4.375%, 03/15/2029
|
275,000
|
259,766
|
0.30
|
%
|
||||||||
Morgan Stanley
|
||||||||||||
1.593% to 05/04/2026 then SOFR + 0.879%, 05/04/2027 (c)
|
295,000
|
252,566
|
0.29
|
%
|
||||||||
2.239% to 07/21/2031 then SOFR + 1.178%, 07/21/2032 (c)
|
330,000
|
244,426
|
0.28
|
%
|
||||||||
Prudential Financial, Inc., 3.878%, 03/27/2028
|
260,000
|
243,989
|
0.28
|
%
|
||||||||
Regions Financial Corp., 1.800%, 08/12/2028
|
325,000
|
264,310
|
0.30
|
%
|
||||||||
Synchrony Financial, 3.950%, 12/01/2027
|
650,000
|
558,894
|
0.64
|
%
|
||||||||
Synovus Financial Corp., 3.125%, 11/01/2022
|
1,300,000
|
1,300,000
|
1.50
|
%
|
||||||||
The Goldman Sachs Group, Inc., 4.223% to 05/01/2028
|
||||||||||||
then 3 Month LIBOR USD + 1.301%, 05/01/2029 (c)
|
300,000
|
271,583
|
0.31
|
%
|
||||||||
Willis North America, Inc., 3.600%, 05/15/2024
|
750,000
|
725,858
|
0.83
|
%
|
||||||||
|
7,451,802
|
8.57
|
%
|
|||||||||
Health Care – 1.90%
|
||||||||||||
Edwards Lifesciences Corp., 4.300%, 06/15/2028
|
700,000
|
651,142
|
0.75
|
%
|
||||||||
Evernorth Health, Inc., 3.500%, 06/15/2024
|
700,000
|
677,269
|
0.78
|
%
|
||||||||
Regeneron Pharmaceuticals, Inc., 1.750%, 09/15/2030
|
425,000
|
320,256
|
0.37
|
%
|
||||||||
|
1,648,667
|
1.90
|
%
|
|||||||||
Industrials – 0.60%
|
||||||||||||
General Electric Co., 3.625%, 05/01/2030
|
380,000
|
326,403
|
0.37
|
%
|
||||||||
The Boeing Co., 2.196%, 02/04/2026
|
225,000
|
199,144
|
0.23
|
%
|
||||||||
|
525,547
|
0.60
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
CORPORATE BONDS
|
% of
|
|||||||||||
|
Par Amount
|
Value
|
Net Assets
|
|||||||||
Information Technology – 2.25%
|
||||||||||||
Autodesk, Inc., 2.850%, 01/15/2030
|
675,000
|
$
|
564,541
|
0.65
|
%
|
|||||||
Broadcom, Inc., 4.110%, 09/15/2028
|
425,000
|
381,599
|
0.44
|
%
|
||||||||
International Business Machines Corp.
|
||||||||||||
2.200%, 02/09/2027
|
125,000
|
110,741
|
0.13
|
%
|
||||||||
2.720%, 02/09/2032
|
325,000
|
260,883
|
0.30
|
%
|
||||||||
PayPal Holdings, Inc., 2.850%, 10/01/2029
|
750,000
|
637,906
|
0.73
|
%
|
||||||||
|
1,955,670
|
2.25
|
%
|
|||||||||
|
||||||||||||
Total Corporate Bonds
|
||||||||||||
Cost $17,051,762)
|
15,197,424
|
17.48
|
%
|
|||||||||
|
||||||||||||
MORTGAGE-BACKED SECURITIES – 2.48%
|
||||||||||||
|
||||||||||||
Federal Agency Mortgage-Backed Obligations – 2.48%
|
||||||||||||
Fannie Mae Pool
|
||||||||||||
3.000%, 10/01/2043
|
851,075
|
746,179
|
0.86
|
%
|
||||||||
3.500%, 01/01/2042
|
157,445
|
143,133
|
0.16
|
%
|
||||||||
6.000%, 10/01/2037
|
76,447
|
77,328
|
0.09
|
%
|
||||||||
Fannie Mae REMICS
|
||||||||||||
Series 2013-52, 1.250%, 06/25/2043
|
40,997
|
33,224
|
0.04
|
%
|
||||||||
Series 2012-16, 2.000%, 11/25/2041
|
39,040
|
33,843
|
0.04
|
%
|
||||||||
Series 2010-134, 2.250%, 03/25/2039
|
1,181
|
1,177
|
0.00
|
%
|
||||||||
Freddie Mac Gold Pool
|
||||||||||||
3.000%, 05/01/2042
|
451,943
|
397,166
|
0.46
|
%
|
||||||||
3.000%, 09/01/2042
|
577,766
|
507,752
|
0.58
|
%
|
||||||||
5.500%, 04/01/2037
|
32,915
|
33,792
|
0.04
|
%
|
||||||||
Freddie Mac REMICS
|
||||||||||||
Series 4146, 1.500%, 10/15/2042
|
14,168
|
13,526
|
0.01
|
%
|
||||||||
Series 4309, 2.000%, 10/15/2043
|
35,952
|
32,709
|
0.04
|
%
|
||||||||
Series 3870, 2.750%, 01/15/2041
|
12,653
|
12,124
|
0.01
|
%
|
||||||||
Series 4322, 3.000%, 05/15/2043
|
54,688
|
52,323
|
0.06
|
%
|
||||||||
Government National Mortgage Association,
|
||||||||||||
Series 2013-24, 1.750%, 02/16/2043
|
88,067
|
76,126
|
0.09
|
%
|
||||||||
|
||||||||||||
Total Mortgage-Backed Securities
|
||||||||||||
(Cost $2,439,653)
|
2,160,402
|
2.48
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
U.S. TREASURY OBLIGATIONS – 9.60%
|
Par Amount/
|
% of
|
||||||||||
|
Number os Shares
|
Value
|
Net Assets
|
|||||||||
U.S. Treasury Notes – 9.60%
|
||||||||||||
0.250%, 08/31/2025
|
1,250,000
|
$
|
1,111,621
|
1.28
|
%
|
|||||||
0.625%, 03/31/2027
|
450,000
|
384,047
|
0.44
|
%
|
||||||||
0.750%, 04/30/2026
|
1,500,000
|
1,323,281
|
1.52
|
%
|
||||||||
1.000%, 07/31/2028
|
500,000
|
417,461
|
0.48
|
%
|
||||||||
1.250%, 12/31/2026
|
625,000
|
552,148
|
0.64
|
%
|
||||||||
1.250%, 04/30/2028
|
425,000
|
362,478
|
0.42
|
%
|
||||||||
1.500%, 02/15/2025
|
200,000
|
187,008
|
0.22
|
%
|
||||||||
1.500%, 11/30/2028
|
75,000
|
64,025
|
0.07
|
%
|
||||||||
1.875%, 07/31/2026
|
1,550,000
|
1,416,979
|
1.63
|
%
|
||||||||
2.500%, 03/31/2027
|
200,000
|
185,547
|
0.21
|
%
|
||||||||
2.625%, 04/15/2025
|
300,000
|
287,215
|
0.33
|
%
|
||||||||
2.750%, 08/15/2032
|
750,000
|
670,488
|
0.77
|
%
|
||||||||
3.000%, 10/31/2025
|
450,000
|
431,842
|
0.50
|
%
|
||||||||
4.125%, 09/30/2027
|
350,000
|
348,018
|
0.40
|
%
|
||||||||
4.250%, 09/30/2024
|
600,000
|
596,812
|
0.69
|
%
|
||||||||
|
||||||||||||
Total U.S. Treasury Obligations
|
||||||||||||
(Cost $9,170,733)
|
8,338,970
|
9.60
|
%
|
|||||||||
|
||||||||||||
INVESTMENT COMPANIES (EXCLUDING
|
||||||||||||
MONEY MARKET FUNDS) – 0.53%
|
||||||||||||
Financials – 0.53%
|
||||||||||||
Ares Capital Corp.
|
1,995
|
38,763
|
0.05
|
%
|
||||||||
Bain Capital Specialty Finance, Inc.
|
2,655
|
33,453
|
0.04
|
%
|
||||||||
BlackRock TCP Capital Corp.
|
3,015
|
35,667
|
0.04
|
%
|
||||||||
Carlyle Secured Lending, Inc.
|
2,935
|
36,834
|
0.04
|
%
|
||||||||
FS KKR Capital Corp.
|
1,865
|
35,808
|
0.04
|
%
|
||||||||
Golub Capital BDC, Inc.
|
2,775
|
35,992
|
0.04
|
%
|
||||||||
Hercules Capital, Inc.
|
2,325
|
33,782
|
0.04
|
%
|
||||||||
MidCap Financial Investment Corp.
|
3,225
|
35,346
|
0.04
|
%
|
||||||||
Monroe Capital Corp.
|
4,000
|
30,320
|
0.04
|
%
|
||||||||
New Mountain Finance Corp.
|
3,130
|
38,030
|
0.04
|
%
|
||||||||
Oaktree Specialty Lending Corp.
|
5,730
|
37,818
|
0.04
|
%
|
||||||||
Sixth Street Specialty Lending, Inc.
|
1,825
|
33,142
|
0.04
|
%
|
||||||||
TriplePoint Venture Growth BDC Corp.
|
2,500
|
31,950
|
0.04
|
%
|
||||||||
|
||||||||||||
Total Investment Companies
|
||||||||||||
(Excluding Money Market Funds)
|
||||||||||||
(Cost $550,540)
|
456,905
|
0.53
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 1.85%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 1.85%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 2.93% (d)
|
1,603,926
|
$
|
1,603,926
|
1.85
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $1,603,926)
|
1,603,926
|
1.85
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $69,079,431) – 99.77%
|
86,716,757
|
99.77
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.23%
|
197,481
|
0.23
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
86,914,238
|
100.00
|
%
|
(a)
|
Non-income-producing security.
|
(b)
|
U.S.-traded security of a foreign corporation.
|
(c)
|
Variable rate security; rate disclosed is the rate as of October 31, 2022.
|
(d)
|
The rate listed is the fund’s seven-day yield as of October 31, 2022.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
3,888,210
|
$
|
—
|
$
|
—
|
$
|
3,888,210
|
||||||||
Consumer Discretionary
|
9,157,682
|
—
|
—
|
9,157,682
|
||||||||||||
Consumer Staples
|
5,394,464
|
—
|
—
|
5,394,464
|
||||||||||||
Energy
|
153,591
|
—
|
—
|
153,591
|
||||||||||||
Financials
|
11,715,119
|
—
|
—
|
11,715,119
|
||||||||||||
Health Care
|
3,248,645
|
—
|
—
|
3,248,645
|
||||||||||||
Industrials
|
4,838,910
|
—
|
—
|
4,838,910
|
||||||||||||
Information Technology
|
11,566,203
|
—
|
—
|
11,566,203
|
||||||||||||
Materials
|
5,126,503
|
—
|
—
|
5,126,503
|
||||||||||||
Total Common Stocks
|
$
|
55,089,327
|
$
|
—
|
$
|
—
|
$
|
55,089,327
|
||||||||
Preferred Stocks
|
||||||||||||||||
Communication Services
|
$
|
49,674
|
$
|
—
|
$
|
—
|
$
|
49,674
|
||||||||
Consumer Discretionary
|
23,098
|
—
|
—
|
23,098
|
||||||||||||
Consumer Staples
|
30,244
|
—
|
—
|
30,244
|
||||||||||||
Financials
|
1,421,112
|
—
|
—
|
1,421,112
|
||||||||||||
Total Preferred Stocks
|
$
|
1,524,128
|
$
|
—
|
$
|
—
|
$
|
1,524,128
|
||||||||
REITS
|
||||||||||||||||
Financials
|
$
|
149,393
|
$
|
—
|
$
|
—
|
$
|
149,393
|
||||||||
Real Estate
|
2,196,282
|
—
|
—
|
2,196,282
|
||||||||||||
Total REITS
|
$
|
2,345,675
|
$
|
—
|
$
|
—
|
$
|
2,345,675
|
||||||||
Corporate Bonds
|
||||||||||||||||
Communication Services
|
$
|
—
|
$
|
1,068,984
|
$
|
—
|
$
|
1,068,984
|
||||||||
Consumer Discretionary
|
—
|
1,209,949
|
—
|
1,209,949
|
||||||||||||
Energy
|
—
|
1,336,805
|
—
|
1,336,805
|
||||||||||||
Financials
|
—
|
7,451,802
|
—
|
7,451,802
|
||||||||||||
Health Care
|
—
|
1,648,667
|
—
|
1,648,667
|
||||||||||||
Industrials
|
—
|
525,547
|
—
|
525,547
|
||||||||||||
Information Technology
|
—
|
1,955,670
|
—
|
1,955,670
|
||||||||||||
Total Corporate Bonds
|
$
|
—
|
$
|
15,197,424
|
$
|
—
|
$
|
15,197,424
|
||||||||
Mortgage-Backed Securities
|
||||||||||||||||
Federal Agency Mortgage-Backed Obligations
|
$
|
—
|
$
|
2,160,402
|
$
|
—
|
$
|
2,160,402
|
||||||||
Total Mortgage-Backed Securities
|
$
|
—
|
$
|
2,160,402
|
$
|
—
|
$
|
2,160,402
|
||||||||
U.S. Treasury Obligations
|
||||||||||||||||
U.S. Treasury Notes
|
$
|
—
|
$
|
8,338,970
|
$
|
—
|
$
|
8,338,970
|
||||||||
Total U.S. Treasury Obligations
|
$
|
—
|
$
|
8,338,970
|
$
|
—
|
$
|
8,338,970
|
||||||||
Investment Companies
|
||||||||||||||||
(Excluding Money Market Funds)
|
||||||||||||||||
Financials
|
$
|
456,905
|
$
|
—
|
$
|
—
|
$
|
456,905
|
||||||||
Total Investment Companies
|
||||||||||||||||
(Excluding Money Market Funds)
|
$
|
456,905
|
$
|
—
|
$
|
—
|
$
|
456,905
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
1,603,926
|
$
|
—
|
$
|
—
|
$
|
1,603,926
|
||||||||
Total Short-Term Investments
|
$
|
1,603,926
|
$
|
—
|
$
|
—
|
$
|
1,603,926
|
||||||||
Total Investments
|
$
|
61,019,961
|
$
|
25,696,796
|
$
|
—
|
$
|
86,716,757
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2022
|
ASSETS:
|
||||
Investments in securities, at value (cost $69,079,431)
|
$
|
86,716,757
|
||
Dividends and interest receivable
|
285,218
|
|||
Receivable for fund shares sold
|
67,994
|
|||
Return of capital receivable
|
803
|
|||
Prepaid expenses and other assets
|
19,861
|
|||
Total assets
|
87,090,633
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
41,961
|
|||
Payable to advisor
|
58,067
|
|||
Payable to administrator
|
18,773
|
|||
Payable to auditor
|
22,749
|
|||
Accrued distribution fees
|
7,826
|
|||
Accrued service fees
|
3,291
|
|||
Accrued trustees fees
|
5,725
|
|||
Accrued expenses and other payables
|
18,003
|
|||
Total liabilities
|
176,395
|
|||
NET ASSETS
|
$
|
86,914,238
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
67,222,043
|
||
Total distributable earnings
|
19,692,195
|
|||
Total net assets
|
$
|
86,914,238
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
39,171,092
|
||
Shares issued and outstanding
|
2,785,320
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
14.06
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
47,743,146
|
||
Shares issued and outstanding
|
3,615,343
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
13.21
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2022
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
1,343,700
|
||
Interest income
|
762,892
|
|||
Total investment income
|
2,106,592
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
828,962
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
97,981
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
49,741
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
128,779
|
|||
Distribution fees – Investor Class (See Note 5)
|
70,015
|
|||
Service fees – Investor Class (See Note 5)
|
46,676
|
|||
Federal and state registration fees
|
31,638
|
|||
Compliance expense (See Note 5)
|
24,508
|
|||
Audit fees
|
22,755
|
|||
Trustees’ fees and expenses
|
18,803
|
|||
Reports to shareholders
|
13,100
|
|||
Legal fees
|
1,026
|
|||
Interest expense (See Note 7)
|
32
|
|||
Other expenses
|
15,458
|
|||
Total expenses
|
1,349,474
|
|||
NET INVESTMENT INCOME
|
$
|
757,118
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments:
|
$
|
2,841,084
|
||
Net change in unrealized appreciation/depreciation on investments:
|
(17,205,736
|
)
|
||
Net loss on investments
|
(14,364,652
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(13,607,534
|
)
|
(1)
|
Net of foreign taxes withheld and issuance fees of $9,442.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
757,118
|
$
|
890,714
|
||||
Net realized gain on investments
|
2,841,084
|
8,268,323
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(17,205,736
|
)
|
13,894,367
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
(13,607,534
|
)
|
23,053,404
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(3,654,611
|
)
|
(3,200,223
|
)
|
||||
Distributable earnings – Institutional Class
|
(4,723,563
|
)
|
(4,139,573
|
)
|
||||
Total distributions
|
(8,378,174
|
)
|
(7,339,796
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
1,881,768
|
1,376,547
|
||||||
Proceeds from shares subscribed – Institutional Class
|
2,382,337
|
3,724,722
|
||||||
Dividends reinvested – Investor Class
|
3,556,955
|
3,106,285
|
||||||
Dividends reinvested – Institutional Class
|
3,602,091
|
3,180,592
|
||||||
Cost of shares redeemed – Investor Class
|
(10,361,778
|
)
|
(8,925,766
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(12,193,431
|
)
|
(11,189,372
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(11,132,058
|
)
|
(8,726,992
|
)
|
||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(33,117,766
|
)
|
6,986,616
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
120,032,004
|
113,045,388
|
||||||
End of year
|
$
|
86,914,238
|
$
|
120,032,004
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
115,566
|
83,494
|
||||||
Shares sold – Institutional Class
|
160,649
|
245,309
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
217,125
|
200,751
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
234,876
|
217,790
|
||||||
Shares redeemed – Investor Class
|
(673,769
|
)
|
(549,400
|
)
|
||||
Shares redeemed – Institutional Class
|
(853,794
|
)
|
(732,371
|
)
|
||||
Net decrease in shares outstanding
|
(799,347
|
)
|
(534,427
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
17.26
|
$
|
15.12
|
$
|
15.72
|
$
|
15.82
|
$
|
16.24
|
|||||||||
0.08
|
(1)
|
0.09
|
(1)
|
0.16
|
(1)
|
0.18
|
(1)
|
0.16
|
||||||||||
(2.09
|
)
|
3.01
|
0.40
|
1.02
|
0.40
|
|||||||||||||
(2.01
|
)
|
3.10
|
0.56
|
1.20
|
0.56
|
|||||||||||||
(0.08
|
)
|
(0.10
|
)
|
(0.16
|
)
|
(0.17
|
)
|
(0.14
|
)
|
|||||||||
(1.11
|
)
|
(0.86
|
)
|
(1.00
|
)
|
(1.13
|
)
|
(0.84
|
)
|
|||||||||
(1.19
|
)
|
(0.96
|
)
|
(1.16
|
)
|
(1.30
|
)
|
(0.98
|
)
|
|||||||||
$
|
14.06
|
$
|
17.26
|
$
|
15.12
|
$
|
15.72
|
$
|
15.82
|
|||||||||
-12.60
|
%
|
21.24
|
%
|
3.74
|
%
|
8.39
|
%
|
3.44
|
%
|
|||||||||
$
|
39.17
|
$
|
53.97
|
$
|
51.29
|
$
|
93.51
|
$
|
121.32
|
|||||||||
1.51
|
%
|
1.49
|
%
|
1.49
|
%
|
1.46
|
%
|
1.42
|
%
|
|||||||||
0.53
|
%
|
0.54
|
%
|
1.08
|
%
|
1.16
|
%
|
0.89
|
%
|
|||||||||
15
|
%
|
26
|
%
|
22
|
%
|
16
|
%
|
18
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
16.22
|
$
|
14.22
|
$
|
14.80
|
$
|
14.93
|
$
|
15.34
|
|||||||||
0.13
|
(1)
|
0.14
|
(1)
|
0.20
|
(1)
|
0.22
|
(1)
|
0.19
|
||||||||||
(1.97
|
)
|
2.83
|
0.38
|
0.96
|
0.39
|
|||||||||||||
(1.84
|
)
|
2.97
|
0.58
|
1.18
|
0.58
|
|||||||||||||
(0.13
|
)
|
(0.16
|
)
|
(0.22
|
)
|
(0.24
|
)
|
(0.20
|
)
|
|||||||||
(1.04
|
)
|
(0.81
|
)
|
(0.94
|
)
|
(1.07
|
)
|
(0.79
|
)
|
|||||||||
(1.17
|
)
|
(0.97
|
)
|
(1.16
|
)
|
(1.31
|
)
|
(0.99
|
)
|
|||||||||
$
|
13.21
|
$
|
16.22
|
$
|
14.22
|
$
|
14.80
|
$
|
14.93
|
|||||||||
-12.25
|
%
|
21.68
|
%
|
4.16
|
%
|
8.76
|
%
|
3.86
|
%
|
|||||||||
$
|
47.74
|
$
|
66.06
|
$
|
61.75
|
$
|
80.40
|
$
|
97.86
|
|||||||||
1.13
|
%
|
1.12
|
%
|
1.12
|
%
|
1.09
|
%
|
1.02
|
%
|
|||||||||
0.90
|
%
|
0.91
|
%
|
1.44
|
%
|
1.53
|
%
|
1.28
|
%
|
|||||||||
15
|
%
|
26
|
%
|
22
|
%
|
16
|
%
|
18
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2022
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with
the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and
realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the
treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains
for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits,
including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
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 are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2022 are as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(515,309)
|
$515,309
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the
Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion
of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding
increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at
the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than
expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of
the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
REIT Equity Securities – Distributions received from real estate investment trusts (“REITs”) may be classified as dividends, capital gains, or return of capital. Investments in REITs may require the Fund
to accrue and distribute income not yet received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that
it otherwise would have continued to hold. At other times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings. If the Fund distributes these amounts, these distributions could
constitute a return of capital to Fund shareholders for U.S. federal income tax
|
HENNESSY FUNDS
|
1-800-966-4354
|
purposes. Dividends received by the Fund from a REIT generally do not constitute qualified dividend income and do not qualify for the dividends-received deduction.
|
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things,
that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions
in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment
companies (“Rule 18f-4”). Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, and requires
funds whose use of derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager. The Fund has adopted procedures in
accordance with Rule 18f-4.
|
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5 establishes
requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other
conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule 2a-5, the SEC also
adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund investments. The Fund has
adopted procedures in accordance with Rule 2a-5.
|
|
In March 2020, FASB issued Accounting Standards Update 2020 04, Reference Rate Reform: Facilitation of the Effects of Reference Rate
Reform on Financial Reporting. The main objective of the new guidance was to provide relief to companies that would be impacted by the expected change in benchmark interest rates at the end of 2021, when participating banks would
no longer be required to submit London Interbank Offered Rate (“LIBOR”) quotes by the UK Financial Conduct Authority. The new guidance allows companies to account for contract modifications as a continuance of the existing
contract without additional analysis, provided that the only change to existing contracts is a change to an approved benchmark interest rate. In addition, derivative contracts that qualified for hedge accounting prior to contract
modification will be allowed to continue to receive such treatment even if critical terms change due to a change in the benchmark interest rate. For new and existing contracts, the Fund may elect to apply the amendments as of
March 12, 2020 through December 31, 2022. See Note 9 for more information.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual funds,
partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary
exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded
on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments
are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV because most foreign markets close well
before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In certain circumstances, it may be determined that
a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but
before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to
have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the
ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may
consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may
incorporate observable market data, such as reported sales
|
HENNESSY FUNDS
|
1-800-966-4354
|
of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified in Level 2 of
the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term
debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the
values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined
as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Investments
|
||||
Cost of investments for tax purposes
|
$
|
69,340,330
|
||
Gross tax unrealized appreciation
|
$
|
22,371,738
|
||
Gross tax unrealized depreciation
|
(4,995,353
|
)
|
||
Net tax unrealized appreciation/(depreciation)
|
$
|
17,376,385
|
||
Undistributed ordinary income
|
$
|
17,120
|
||
Undistributed long-term capital gains
|
2,298,690
|
|||
Total distributable earnings
|
$
|
2,315,810
|
||
Other accumulated gain/(loss)
|
$
|
—
|
||
Total accumulated gain/(loss)
|
$
|
19,692,195
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
Ordinary income(1)
|
$
|
779,687
|
$
|
990,650
|
||||
Long-term capital gains
|
7,598,487
|
6,349,146
|
||||||
Total distributions
|
$
|
8,378,174
|
$
|
7,339,796
|
HENNESSY FUNDS
|
1-800-966-4354
|
Long-term
|
|||
Investor Class
|
0.37982
|
||
Institutional Class
|
0.35677
|
WWW.HENNESSYFUNDS.COM
|
NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
![]() |
|
TAIT, WELLER & BAKER LLP
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees and Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
86
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
75
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 – June 2022.
|
||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
48
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board
|
Officer since 2004. Kiosk is a full-
|
|
and
|
service marketing agency with
|
||
December 2021
|
offices in the San Francisco Bay Area
|
||
as a Trustee
|
and Liverpool, UK and staff across
|
||
nine states in the U.S.
|
|||
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
77
|
consultant in the securities industry.
|
||
Trustee
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Brian Alexander
|
March 2015
|
Mr. Alexander has worked for the
|
None.
|
41
|
Sutter Health organization since
|
||
Adviser to the Board
|
2011 in various positions. He has
|
||
served as the Chief Executive Officer
|
|||
of the North Valley Hospital Area
|
|||
since 2021. From 2018 to 2021, he
|
|||
served as the Chief Executive Officer
|
|||
of Sutter Roseville Medical Center.
|
|||
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.
|
|||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
58
|
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.
|
|||
Interested Trustee(1)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Hennessy has been employed
|
Hennessy
|
66
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
Name, Age,
|
|||
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.
|
|
56
|
since 1989 and currently serves as its President, Chief
|
||
Executive Vice President
|
Operating Officer, and Secretary.
|
||
and Treasurer
|
|||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
|
66
|
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.
|
|
50
|
since December 2013 and currently serves as its Chief
|
||
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
||
and Head of Distribution
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Jennifer Cheskiewicz(2)
|
June 2013
|
Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
|
45
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc. since
|
64
|
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 their 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 Kelley(4)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
50
|
October 2012. He has served as Chief Investment Officer of the
|
|
Chief Investment Officer,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Senior Vice President,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He 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 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He served as Co-Portfolio Manager of the Hennessy
|
||
Technology Fund from February 2017 until May 2018. Mr. Kelley
|
||
served as Portfolio Manager of FBR Fund Advisers, Inc. from
|
||
January 2008 to October 2012.
|
||
L. Joshua Wein(4)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
49
|
2018. He has served as Co-Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone
|
|
Co-Portfolio Manager
|
Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth
|
|
Fund, the Hennessy Cornerstone Value Fund, Hennessy Total
|
||
Return Fund, the Hennessy Balanced Fund, the Hennessy Gas
|
||
Utility Fund, and the Hennessy Technology Fund since February
|
||
2019. He served as a Senior Analyst of these same funds from
|
||
September 2018 through February 2019. Mr. Wein served as
|
||
Director of Alternative Investments and Co-Portfolio Manager
|
||
at Sterling Capital Management from 2008 to 2018.
|
(1)
|
Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust.
|
(2)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2022 –
|
|
May 1, 2022
|
October 31, 2022
|
October 31, 2022
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 952.00
|
$7.43
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,017.59
|
$7.68
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 953.90
|
$5.71
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.36
|
$5.90
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.51% for Investor Class shares or 1.16% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund has
historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future during
both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is therefore not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for
responding to a highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make any material changes to the Liquidity Program during the review period and was not recommending any changes to the Liquidity Program or the model inputs used to
determine the liquidity classification of each security held by the Fund.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you 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;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis information,
and other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
8
|
|
Statement of Assets and Liabilities
|
11
|
|
Statement of Operations
|
12
|
|
Statements of Changes in Net Assets
|
13
|
|
Financial Highlights
|
14
|
|
Notes to the Financial Statements
|
16
|
|
Report of Independent Registered Public Accounting Firm
|
23
|
|
Trustees and Officers of the Fund
|
24
|
|
Expense Example
|
27
|
|
Proxy Voting Policy and Proxy Voting Records
|
28
|
|
Availability of Quarterly Portfolio Schedule
|
28
|
|
Federal Tax Distribution Information
|
28
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
28
|
|
Electronic Delivery
|
28
|
|
Liquidity Risk Management Program
|
29
|
|
Privacy Policy
|
29
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Balanced Fund (HBFBX)
|
-0.70%
|
2.85%
|
4.18%
|
50/50 Blended DJIA/Treasury Index
|
-3.79%
|
5.51%
|
6.58%
|
Dow Jones Industrial Average
|
-6.74%
|
9.33%
|
12.19%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
Schedule of Investments as of October 31, 2022
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
U.S. Treasury Bill, 4.000%, 01/26/2023
|
19.21%
|
U.S. Treasury Bill, 3.020%, 06/15/2023
|
9.06%
|
U.S. Treasury Bill, 2.880%, 12/01/2022
|
7.75%
|
U.S. Treasury Bill, 2.100%, 05/18/2023
|
6.82%
|
U.S. Treasury Bill, 2.490%, 11/03/2022
|
5.43%
|
JPMorgan Chase & Co.
|
5.22%
|
International Business Machines Corp.
|
5.15%
|
Amgen Inc.
|
5.14%
|
Chevron Corp.
|
4.98%
|
3M Co.
|
4.59%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS – 45.83%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 4.02%
|
||||||||||||
Verizon Communications, Inc.
|
13,850
|
$
|
517,575
|
4.02
|
%
|
|||||||
|
||||||||||||
Consumer Staples – 4.66%
|
||||||||||||
The Coca-Cola Co.
|
900
|
53,865
|
0.42
|
%
|
||||||||
Walgreens Boots Alliance, Inc.
|
15,000
|
547,500
|
4.24
|
%
|
||||||||
|
601,365
|
4.66
|
%
|
|||||||||
Energy – 4.98%
|
||||||||||||
Chevron Corp.
|
3,550
|
642,195
|
4.98
|
%
|
||||||||
|
||||||||||||
Financials – 5.22%
|
||||||||||||
JPMorgan Chase & Co.
|
5,350
|
673,458
|
5.22
|
%
|
||||||||
|
||||||||||||
Health Care – 5.69%
|
||||||||||||
Amgen, Inc.
|
2,450
|
662,357
|
5.14
|
%
|
||||||||
Merck & Co., Inc.
|
700
|
70,840
|
0.55
|
%
|
||||||||
|
733,197
|
5.69
|
%
|
|||||||||
Industrials – 4.59%
|
||||||||||||
3M Co.
|
4,700
|
591,213
|
4.59
|
%
|
||||||||
|
||||||||||||
Information Technology – 12.79%
|
||||||||||||
Cisco Systems, Inc.
|
11,900
|
540,617
|
4.19
|
%
|
||||||||
Intel Corp.
|
15,650
|
444,930
|
3.45
|
%
|
||||||||
International Business Machines Corp.
|
4,800
|
663,792
|
5.15
|
%
|
||||||||
|
1,649,339
|
12.79
|
%
|
|||||||||
Materials – 3.88%
|
||||||||||||
Dow, Inc.
|
10,700
|
500,118
|
3.88
|
%
|
||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $5,825,062)
|
5,908,460
|
45.83
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 54.40%
|
Number of Shares/
|
% of
|
||||||||||
|
Par Amount
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 2.31%
|
||||||||||||
First American Government Obligations
|
||||||||||||
Fund, Institutional Class, 2.93% (a)
|
297,696
|
$
|
297,696
|
2.31
|
%
|
|||||||
|
||||||||||||
U.S. Treasury Bills – 52.09%
|
||||||||||||
2.490%, 11/03/2022 (b)
|
700,000
|
699,995
|
5.43
|
%
|
||||||||
2.880%, 12/01/2022 (b)
|
1,000,000
|
999,800
|
7.75
|
%
|
||||||||
4.000%, 01/26/2023 (b)
|
2,500,000
|
2,476,201
|
19.21
|
%
|
||||||||
3.780%, 03/23/2023 (b)
|
500,000
|
491,727
|
3.82
|
%
|
||||||||
2.100%, 05/18/2023 (b)
|
900,000
|
879,426
|
6.82
|
%
|
||||||||
3.020%, 06/15/2023 (b)
|
1,200,000
|
1,168,454
|
9.06
|
%
|
||||||||
|
||||||||||||
|
6,715,603
|
52.09
|
%
|
|||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $7,058,613)
|
7,013,299
|
54.40
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $12,883,675) – 100.23%
|
12,921,759
|
100.23
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.23)%
|
(29,242
|
)
|
(0.23
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
12,892,517
|
100.00
|
%
|
(a)
|
The rate listed is the fund’s seven-day yield as of October 31, 2022.
|
(b)
|
The rate listed is the discount rate at issue.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
517,575
|
$
|
—
|
$
|
—
|
$
|
517,575
|
||||||||
Consumer Staples
|
601,365
|
—
|
—
|
601,365
|
||||||||||||
Energy
|
642,195
|
—
|
—
|
642,195
|
||||||||||||
Financials
|
673,458
|
—
|
—
|
673,458
|
||||||||||||
Health Care
|
733,197
|
—
|
—
|
733,197
|
||||||||||||
Industrials
|
591,213
|
—
|
—
|
591,213
|
||||||||||||
Information Technology
|
1,649,339
|
—
|
—
|
1,649,339
|
||||||||||||
Materials
|
500,118
|
—
|
—
|
500,118
|
||||||||||||
Total Common Stocks
|
$
|
5,908,460
|
$
|
—
|
$
|
—
|
$
|
5,908,460
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
297,696
|
$
|
—
|
$
|
—
|
$
|
297,696
|
||||||||
U.S. Treasury Bills
|
—
|
6,715,603
|
—
|
6,715,603
|
||||||||||||
Total Short-Term Investments
|
$
|
297,696
|
$
|
6,715,603
|
$
|
—
|
$
|
7,013,299
|
||||||||
Total Investments
|
$
|
6,206,156
|
$
|
6,715,603
|
$
|
—
|
$
|
12,921,759
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2022
|
ASSETS:
|
||||
Investments in securities, at value (cost $12,883,675)
|
$
|
12,921,759
|
||
Dividends and interest receivable
|
9,742
|
|||
Receivable for fund shares sold
|
168
|
|||
Prepaid expenses and other assets
|
7,453
|
|||
Total assets
|
12,939,122
|
|||
LIABILITIES:
|
||||
Payable to advisor
|
6,346
|
|||
Payable to administrator
|
4,137
|
|||
Payable to auditor
|
22,749
|
|||
Accrued distribution fees
|
1,786
|
|||
Accrued service fees
|
1,058
|
|||
Accrued trustees fees
|
4,755
|
|||
Accrued expenses and other payables
|
5,774
|
|||
Total liabilities
|
46,605
|
|||
NET ASSETS
|
$
|
12,892,517
|
||
NET ASSETS CONSIST OF:
|
||||
Capital stock
|
$
|
12,391,605
|
||
Total distributable earnings
|
500,912
|
|||
Total net assets
|
$
|
12,892,517
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
12,892,517
|
||
Shares issued and outstanding
|
1,090,302
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
11.82
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2022
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
265,638
|
||
Interest income
|
46,562
|
|||
Total investment income
|
312,200
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
81,722
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
27,143
|
|||
Compliance expense (See Note 5)
|
24,510
|
|||
Audit fees
|
22,743
|
|||
Distribution fees – Investor Class (See Note 5)
|
20,430
|
|||
Federal and state registration fees
|
19,458
|
|||
Trustees’ fees and expenses
|
16,181
|
|||
Service fees – Investor Class (See Note 5)
|
13,620
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
7,062
|
|||
Reports to shareholders
|
5,858
|
|||
Interest expense (See Note 7)
|
1,735
|
|||
Legal fees
|
219
|
|||
Other expenses
|
4,580
|
|||
Total expenses
|
245,261
|
|||
NET INVESTMENT INCOME
|
$
|
66,939
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
492,822
|
||
Net change in unrealized appreciation/depreciation on investments
|
(683,111
|
)
|
||
Net loss on investments
|
(190,289
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(123,350
|
)
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
66,939
|
$
|
22,631
|
||||
Net realized gain on investments
|
492,822
|
528,693
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(683,111
|
)
|
1,167,646
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
(123,350
|
)
|
1,718,970
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(524,145
|
)
|
(35,846
|
)
|
||||
Total distributions
|
(524,145
|
)
|
(35,846
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
2,103,328
|
1,324,997
|
||||||
Dividends reinvested – Investor Class
|
519,982
|
35,297
|
||||||
Cost of shares redeemed – Investor Class
|
(2,614,494
|
)
|
(1,500,429
|
)
|
||||
Net increase (decrease) in net assets
|
||||||||
derived from capital share transactions
|
8,816
|
(140,135
|
)
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(638,679
|
)
|
1,542,989
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
13,531,196
|
11,988,207
|
||||||
End of year
|
$
|
12,892,517
|
$
|
13,531,196
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
173,711
|
107,079
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
43,919
|
2,986
|
||||||
Shares redeemed – Investor Class
|
(219,333
|
)
|
(124,203
|
)
|
||||
Net decrease in shares outstanding
|
(1,703
|
)
|
(14,138
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
12.39
|
$
|
10.84
|
$
|
12.38
|
$
|
12.34
|
$
|
12.88
|
|||||||||
0.06
|
(1)
|
0.02
|
(1)
|
0.12
|
(1)
|
0.13
|
(1)
|
0.09
|
||||||||||
(0.15
|
)
|
1.56
|
(1.04
|
)
|
0.59
|
0.33
|
||||||||||||
(0.09
|
)
|
1.58
|
(0.92
|
)
|
0.72
|
0.42
|
||||||||||||
(0.05
|
)
|
(0.03
|
)
|
(0.12
|
)
|
(0.13
|
)
|
(0.08
|
)
|
|||||||||
(0.43
|
)
|
—
|
(0.50
|
)
|
(0.55
|
)
|
(0.88
|
)
|
||||||||||
(0.48
|
)
|
(0.03
|
)
|
(0.62
|
)
|
(0.68
|
)
|
(0.96
|
)
|
|||||||||
$
|
11.82
|
$
|
12.39
|
$
|
10.84
|
$
|
12.38
|
$
|
12.34
|
|||||||||
-0.70
|
%
|
14.62
|
%
|
-7.84
|
%
|
6.05
|
%
|
3.46
|
%
|
|||||||||
$
|
12.89
|
$
|
13.53
|
$
|
11.99
|
$
|
12.30
|
$
|
11.62
|
|||||||||
1.80
|
%
|
1.85
|
%
|
1.89
|
%
|
1.88
|
%
|
1.84
|
%
|
|||||||||
0.49
|
%
|
0.17
|
%
|
1.05
|
%
|
1.04
|
%
|
0.70
|
%
|
|||||||||
29
|
%
|
31
|
%
|
42
|
%
|
52
|
%
|
21
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2022
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with
the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and
realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the
treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains
for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits,
including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
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 are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2022 are as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(31,912)
|
$31,912
|
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
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized
tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion
of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding
increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at
the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of
the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things,
that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions
in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment
companies (“Rule 18f-4”). Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, and requires
funds whose use of derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives risk
|
HENNESSY FUNDS
|
1-800-966-4354
|
management program and appoint a derivatives risk manager. The Fund has adopted procedures in accordance with Rule 18f-4.
|
|
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5 establishes
requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other
conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule 2a-5, the SEC also
adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund investments. The Fund has
adopted procedures in accordance with Rule 2a-5.
|
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.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, exchange-traded funds, closed-end mutual funds, partnerships, rights, and real
estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on which the securities
are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for
which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are
classified in Level 1 of the fair value hierarchy.
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the
ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may
consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may
incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are
generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term
debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the
values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined
as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Investments
|
||||
Cost of investments for tax purposes
|
$
|
12,906,958
|
||
Gross tax unrealized appreciation
|
$
|
727,978
|
||
Gross tax unrealized depreciation
|
(713,177
|
)
|
||
Net tax unrealized appreciation/(depreciation)
|
$
|
14,801
|
||
Undistributed ordinary income
|
$
|
7,523
|
||
Undistributed long-term capital gains
|
478,588
|
|||
Total distributable earnings
|
$
|
486,111
|
||
Other accumulated gain/(loss)
|
$
|
—
|
||
Total accumulated gain/(loss)
|
$
|
500,912
|
HENNESSY FUNDS
|
1-800-966-4354
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
Ordinary income(1)
|
$
|
70,052
|
$
|
35,846
|
||||
Long-term capital gains
|
454,093
|
—
|
||||||
Total distributions
|
$
|
524,145
|
$
|
35,846
|
Long-term
|
|||
Investor Class
|
0.44262
|
WWW.HENNESSYFUNDS.COM
|
NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
![]() |
|
TAIT, WELLER & BAKER LLP
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees and Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
86
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
75
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 – June 2022.
|
||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
48
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board
|
Officer since 2004. Kiosk is a full-
|
|
and
|
service marketing agency with
|
||
December 2021
|
offices in the San Francisco Bay Area
|
||
as a Trustee
|
and Liverpool, UK and staff across
|
||
nine states in the U.S.
|
|||
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
77
|
consultant in the securities industry.
|
||
Trustee
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Brian Alexander
|
March 2015
|
Mr. Alexander has worked for the
|
None.
|
41
|
Sutter Health organization since
|
||
Adviser to the Board
|
2011 in various positions. He has
|
||
served as the Chief Executive Officer
|
|||
of the North Valley Hospital Area
|
|||
since 2021. From 2018 to 2021, he
|
|||
served as the Chief Executive Officer
|
|||
of Sutter Roseville Medical Center.
|
|||
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.
|
|||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
58
|
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.
|
|||
Interested Trustee(1)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Hennessy has been employed
|
Hennessy
|
66
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
Name, Age,
|
|||
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.
|
|
56
|
since 1989 and currently serves as its President, Chief
|
||
Executive Vice President
|
Operating Officer, and Secretary.
|
||
and Treasurer
|
|||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
|
66
|
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.
|
|
50
|
since December 2013 and currently serves as its Chief
|
||
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
||
and Head of Distribution
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Jennifer Cheskiewicz(2)
|
June 2013
|
Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
|
45
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc. since
|
64
|
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 their 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 Kelley(4)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
50
|
October 2012. He has served as Chief Investment Officer of the
|
|
Chief Investment Officer,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Senior Vice President,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He 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 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He served as Co-Portfolio Manager of the Hennessy
|
||
Technology Fund from February 2017 until May 2018. Mr. Kelley
|
||
served as Portfolio Manager of FBR Fund Advisers, Inc. from
|
||
January 2008 to October 2012.
|
||
L. Joshua Wein(4)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
49
|
2018. He has served as Co-Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone
|
|
Co-Portfolio Manager
|
Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth
|
|
Fund, the Hennessy Cornerstone Value Fund, Hennessy Total
|
||
Return Fund, the Hennessy Balanced Fund, the Hennessy Gas
|
||
Utility Fund, and the Hennessy Technology Fund since February
|
||
2019. He served as a Senior Analyst of these same funds from
|
||
September 2018 through February 2019. Mr. Wein served as
|
||
Director of Alternative Investments and Co-Portfolio Manager
|
||
at Sterling Capital Management from 2008 to 2018.
|
(1)
|
Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust.
|
(2)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND/EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2022 –
|
|
May 1, 2022
|
October 31, 2022
|
October 31, 2022
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 979.10
|
$8.88
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,016.23
|
$9.05
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.78%, multiplied by the average account value over the period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund has
historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future during
both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is therefore not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for
responding to a highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make any material changes to the Liquidity Program during the review period and was not recommending any changes to the Liquidity Program or the model inputs used to
determine the liquidity classification of each security held by the Fund.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you 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;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis information,
and other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
10
|
|
Statement of Assets and Liabilities
|
14
|
|
Statement of Operations
|
15
|
|
Statements of Changes in Net Assets
|
17
|
|
Financial Highlights
|
18
|
|
Notes to the Financial Statements
|
22
|
|
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
|
|
Availability of Quarterly Portfolio Schedule
|
38
|
|
Federal Tax Distribution Information
|
38
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
38
|
|
Electronic Delivery
|
38
|
|
Liquidity Risk Management Program
|
39
|
|
Privacy Policy
|
39
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Since Inception
|
|
Year
|
Years
|
(12/31/13)
|
|
Hennessy Energy Transition Fund –
|
|||
Investor Class (HNRGX)
|
49.24%
|
7.54%
|
3.91%
|
Hennessy Energy Transition Fund –
|
|||
Institutional Class (HNRIX)
|
49.71%
|
7.84%
|
4.18%
|
S&P 500® Energy Index
|
64.97%
|
11.07%
|
4.32%
|
S&P 500® Index
|
-14.61%
|
10.44%
|
10.82%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
Schedule of Investments as of October 31, 2022
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% TOTAL ASSETS
|
Schlumberger Ltd.
|
5.80%
|
EOG Resources, Inc.
|
5.11%
|
Solaris Oilfield Infrastructure, Inc.
|
5.07%
|
Suncor Energy, Inc.
|
5.06%
|
ConocoPhillips
|
4.88%
|
Antero Resources Corp.
|
4.81%
|
Phillips 66
|
4.64%
|
Exxon Mobil Corp.
|
4.22%
|
Halliburton Co.
|
4.19%
|
Diamondback Energy, Inc.
|
4.07%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS – 92.72%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Downstream – 7.98%
|
||||||||||||
Marathon Petroleum Corp.
|
6,900
|
$
|
783,978
|
3.33
|
%
|
|||||||
Phillips 66
|
10,500
|
1,095,045
|
4.65
|
%
|
||||||||
|
1,879,023
|
7.98
|
%
|
|||||||||
Exploration & Production – 43.97%
|
||||||||||||
Antero Resources Corp. (a)
|
31,000
|
1,136,460
|
4.83
|
%
|
||||||||
ConocoPhillips
|
9,145
|
1,153,093
|
4.90
|
%
|
||||||||
Coterra Energy, Inc.
|
25,510
|
794,126
|
3.37
|
%
|
||||||||
Diamondback Energy, Inc.
|
6,120
|
961,513
|
4.08
|
%
|
||||||||
EOG Resources, Inc.
|
8,830
|
1,205,472
|
5.12
|
%
|
||||||||
EQT Corp.
|
22,600
|
945,584
|
4.02
|
%
|
||||||||
Magnolia Oil & Gas Corp.
|
25,800
|
662,544
|
2.81
|
%
|
||||||||
Marathon Oil Corp.
|
16,000
|
487,200
|
2.07
|
%
|
||||||||
PDC Energy, Inc.
|
12,090
|
872,173
|
3.71
|
%
|
||||||||
Pioneer Natural Resources Co.
|
3,650
|
935,896
|
3.98
|
%
|
||||||||
Suncor Energy, Inc. (b)
|
34,760
|
1,195,396
|
5.08
|
%
|
||||||||
|
10,349,457
|
43.97
|
%
|
|||||||||
Integrated – 6.97%
|
||||||||||||
Chevron Corp.
|
3,550
|
642,195
|
2.73
|
%
|
||||||||
Exxon Mobil Corp.
|
9,000
|
997,290
|
4.24
|
%
|
||||||||
|
1,639,485
|
6.97
|
%
|
|||||||||
Materials – 2.59%
|
||||||||||||
Freeport-McMoRan, Inc.
|
19,220
|
609,082
|
2.59
|
%
|
||||||||
Midstream – 5.13%
|
||||||||||||
Antero Midstream Corp.
|
45,500
|
484,575
|
2.06
|
%
|
||||||||
Cheniere Energy, Inc.
|
4,100
|
723,281
|
3.07
|
%
|
||||||||
|
1,207,856
|
5.13
|
%
|
|||||||||
Oil Services – 24.51%
|
||||||||||||
Halliburton Co.
|
27,150
|
988,803
|
4.20
|
%
|
||||||||
Newpark Resources, Inc. (a)
|
70,950
|
259,677
|
1.10
|
%
|
||||||||
Schlumberger Ltd. (b)
|
26,310
|
1,368,909
|
5.81
|
%
|
||||||||
Select Energy Services, Inc. (a)
|
49,660
|
479,219
|
2.04
|
%
|
||||||||
Solaris Oilfield Infrastructure, Inc.
|
87,920
|
1,197,470
|
5.09
|
%
|
||||||||
TechnipFMC PLC – (a)(b)
|
65,240
|
690,892
|
2.93
|
%
|
||||||||
Tenaris SA – ADR (b)
|
25,000
|
785,500
|
3.34
|
%
|
||||||||
|
5,770,470
|
24.51
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Utility – 1.57%
|
||||||||||||
NextEra Energy, Inc.
|
4,770
|
$
|
369,675
|
1.57
|
%
|
|||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $13,358,968)
|
21,825,048
|
92.72
|
%
|
|||||||||
|
||||||||||||
PARTNERSHIPS & TRUSTS – 4.95%
|
||||||||||||
Midstream – 4.95%
|
||||||||||||
MPLX LP
|
15,104
|
506,588
|
2.15
|
%
|
||||||||
Plains All American Pipeline LP
|
55,010
|
658,470
|
2.80
|
%
|
||||||||
|
||||||||||||
Total Partnerships & Trusts
|
||||||||||||
(Cost $963,001)
|
1,165,058
|
4.95
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS – 1.40%
|
||||||||||||
Money Market Funds – 1.40%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 2.93% (c)
|
329,996
|
329,996
|
1.40
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $329,996)
|
329,996
|
1.40
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $14,651,965) – 99.07%
|
23,320,102
|
99.07
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.93%
|
219,654
|
0.93
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
23,539,756
|
100.00
|
%
|
(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, 2022.
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Downstream
|
$
|
1,879,023
|
$
|
—
|
$
|
—
|
$
|
1,879,023
|
||||||||
Exploration & Production
|
10,349,457
|
—
|
—
|
10,349,457
|
||||||||||||
Integrated
|
1,639,485
|
—
|
—
|
1,639,485
|
||||||||||||
Materials
|
609,082
|
—
|
—
|
609,082
|
||||||||||||
Midstream
|
1,207,856
|
—
|
—
|
1,207,856
|
||||||||||||
Oil Services
|
5,770,470
|
—
|
—
|
5,770,470
|
||||||||||||
Utility
|
369,675
|
—
|
—
|
369,675
|
||||||||||||
Total Common Stocks
|
$
|
21,825,048
|
$
|
—
|
$
|
—
|
$
|
21,825,048
|
||||||||
Partnerships & Trusts
|
||||||||||||||||
Midstream
|
$
|
1,165,058
|
$
|
—
|
$
|
—
|
$
|
1,165,058
|
||||||||
Total Partnerships & Trusts
|
$
|
1,165,058
|
$
|
—
|
$
|
—
|
$
|
1,165,058
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
329,996
|
$
|
—
|
$
|
—
|
$
|
329,996
|
||||||||
Total Short-Term Investments
|
$
|
329,996
|
$
|
—
|
$
|
—
|
$
|
329,996
|
||||||||
Total Investments
|
$
|
23,320,102
|
$
|
—
|
$
|
—
|
$
|
23,320,102
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Assets and Liabilities as of October 31, 2022
|
ASSETS:
|
||||
Investments in securities, at value (cost $14,651,965)
|
$
|
23,320,102
|
||
Dividends and interest receivable
|
4,512
|
|||
Receivable for fund shares sold
|
251,682
|
|||
Return of capital receivable
|
20,974
|
|||
Prepaid expenses and other assets
|
8,787
|
|||
Total assets
|
23,606,057
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
6,013
|
|||
Payable to advisor
|
22,632
|
|||
Payable to auditor
|
23,405
|
|||
Accrued distribution fees
|
1,860
|
|||
Accrued service fees
|
784
|
|||
Accrued trustees fees
|
4,768
|
|||
Accrued expenses and other payables
|
6,839
|
|||
Total liabilities
|
66,301
|
|||
NET ASSETS
|
$
|
23,539,756
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
56,076,672
|
||
Accumulated deficit
|
(32,536,916
|
)
|
||
Total net assets
|
$
|
23,539,756
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
10,213,489
|
||
Shares issued and outstanding
|
422,896
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
24.15
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
13,326,267
|
||
Shares issued and outstanding
|
541,880
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
24.59
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS
|
Statement of Operations for the year ended October 31, 2022
|
INVESTMENT INCOME:
|
||||
Distributions received from master limited partnerships
|
$
|
114,520
|
||
Return of capital on distributions received
|
(114,520
|
)
|
||
Dividend income from common stock(1)
|
621,728
|
|||
Interest income
|
1,473
|
|||
Total investment income
|
623,201
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
255,316
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
34,994
|
|||
Federal and state registration fees
|
33,490
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
15,082
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
11,074
|
|||
Compliance expense (See Note 5)
|
24,520
|
|||
Audit fees
|
23,397
|
|||
Trustees’ fees and expenses
|
16,247
|
|||
Distribution fees – Investor Class (See Note 5)
|
12,587
|
|||
Reports to shareholders
|
11,489
|
|||
Service fees – Investor Class (See Note 5)
|
8,391
|
|||
Interest expense (See Note 7)
|
1,096
|
|||
Legal Fees
|
866
|
|||
Other expenses
|
5,850
|
|||
Total expenses before waiver
|
454,399
|
|||
Service provider expense waiver (See Note 5)
|
(34,994
|
)
|
||
Net expenses
|
419,405
|
|||
NET INVESTMENT INCOME
|
$
|
203,796
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
1,336,639
|
||
Net change in unrealized appreciation/depreciation on investments
|
6,207,910
|
|||
Net gain on investments
|
7,544,549
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
7,748,345
|
(1)
|
Net of foreign taxes withheld of $5,125.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
203,796
|
$
|
45,083
|
||||
Net realized gain on investments
|
1,336,639
|
1,234,155
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
6,207,910
|
5,107,361
|
||||||
Net increase in net assets resulting from operations
|
7,748,345
|
6,386,599
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(751,147
|
)
|
—
|
|||||
Distributable earnings – Institutional Class
|
(1,188,176
|
)
|
—
|
|||||
Total distributions
|
(1,939,323
|
)
|
—
|
|||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
8,234,369
|
7,710,426
|
||||||
Proceeds from shares subscribed – Institutional Class
|
6,681,659
|
5,598,042
|
||||||
Dividends reinvested – Investor Class
|
698,292
|
—
|
||||||
Dividends reinvested – Institutional Class
|
1,181,355
|
—
|
||||||
Cost of shares redeemed – Investor Class
|
(7,622,351
|
)
|
(6,158,757
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(7,693,364
|
)
|
(3,599,017
|
)
|
||||
Net increase in net assets derived
|
||||||||
from capital share transactions
|
1,479,960
|
3,550,694
|
||||||
TOTAL INCREASE IN NET ASSETS
|
7,288,982
|
9,937,293
|
||||||
NET ASSETS:
|
||||||||
Beginning of year
|
16,250,774
|
6,313,481
|
||||||
End of year
|
$
|
23,539,756
|
$
|
16,250,774
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
394,224
|
521,054
|
||||||
Shares sold – Institutional Class
|
331,064
|
329,240
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
44,449
|
—
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
74,066
|
—
|
||||||
Shares redeemed – Investor Class
|
(387,313
|
)
|
(435,171
|
)
|
||||
Shares redeemed – Institutional Class
|
(371,343
|
)
|
(252,362
|
)
|
||||
Net increase in shares outstanding
|
85,147
|
162,761
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(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)
|
Calculated using the average shares outstanding method.
|
(3)
|
Not annualized.
|
(4)
|
Annualized.
|
(5)
|
The Fund had an expense limitation agreement in place through October 25, 2020.
|
(6)
|
Certain service provider expenses were voluntarily waived during the fiscal year.
|
(7)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
Period Ended
|
Year Ended
|
||||||||||||||||||||
October 31,
|
November 30,
|
|||||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018(1)
|
2017
|
|||||||||||||||||
$
|
18.31
|
$
|
8.74
|
$
|
14.08
|
$
|
18.32
|
$
|
19.47
|
$
|
20.54
|
|||||||||||
0.16
|
0.06
|
0.04
|
(0.07
|
)
|
(0.20
|
)
|
(0.23
|
)
|
||||||||||||||
7.74
|
9.51
|
(5.38
|
)
|
(4.17
|
)
|
(0.95
|
)
|
(0.84
|
)
|
|||||||||||||
7.90
|
9.57
|
(5.34
|
)
|
(4.24
|
)
|
(1.15
|
)
|
(1.07
|
)
|
|||||||||||||
(2.06
|
)
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||
(2.06
|
)
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||
$
|
24.15
|
$
|
18.31
|
$
|
8.74
|
$
|
14.08
|
$
|
18.32
|
$
|
19.47
|
|||||||||||
49.24
|
%
|
109.50
|
%
|
-37.93
|
%
|
-23.14
|
%
|
-5.91
|
%(3)
|
-5.21
|
%
|
|||||||||||
$
|
10.21
|
$
|
6.80
|
$
|
2.50
|
$
|
6.83
|
$
|
18.16
|
$
|
22.66
|
|||||||||||
2.42
|
%
|
2.96
|
%
|
2.59
|
%
|
1.97
|
%
|
1.82
|
%(4)
|
1.87
|
%
|
|||||||||||
2.25
|
%(6)
|
2.74
|
%(6)
|
2.03
|
%(5)(6)
|
1.97
|
%
|
1.82
|
%(4)
|
1.87
|
%
|
|||||||||||
0.64
|
%
|
0.16
|
%
|
(0.18
|
)%
|
(0.46
|
)%
|
(1.05
|
)%(4)
|
(1.21
|
)%
|
|||||||||||
0.81
|
%
|
0.38
|
%
|
0.38
|
%
|
(0.46
|
)%
|
(1.05
|
)%(4)
|
(1.21
|
)%
|
|||||||||||
31
|
%
|
74
|
%
|
73
|
%
|
87
|
%
|
72
|
%(3)
|
84
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(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)
|
Calculated using the average shares outstanding method.
|
(3)
|
Not annualized.
|
(4)
|
Annualized.
|
(5)
|
The Fund had an expense limitation agreement in place through October 25, 2020.
|
(6)
|
Certain service provider expenses were voluntarily waived during the fiscal year.
|
(7)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
Period Ended
|
Year Ended
|
||||||||||||||||||||
October 31,
|
November 30,
|
|||||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018(1)
|
2017
|
|||||||||||||||||
$
|
18.60
|
$
|
8.85
|
$
|
14.26
|
$
|
18.50
|
$
|
19.61
|
$
|
20.64
|
|||||||||||
0.23
|
0.07
|
0.12
|
(0.02
|
)
|
(0.15
|
)
|
(0.19
|
)
|
||||||||||||||
7.87
|
9.68
|
(5.50
|
)
|
(4.22
|
)
|
(0.96
|
)
|
(0.84
|
)
|
|||||||||||||
8.10
|
9.75
|
(5.38
|
)
|
(4.24
|
)
|
(1.11
|
)
|
(1.03
|
)
|
|||||||||||||
(2.11
|
)
|
—
|
(0.03
|
)
|
—
|
—
|
—
|
|||||||||||||||
(2.11
|
)
|
—
|
(0.03
|
)
|
—
|
—
|
—
|
|||||||||||||||
$
|
24.59
|
$
|
18.60
|
$
|
8.85
|
$
|
14.26
|
$
|
18.50
|
$
|
19.61
|
|||||||||||
49.71
|
%
|
110.17
|
%
|
-37.80
|
%
|
-22.92
|
%
|
-5.66
|
%(3)
|
-4.99
|
%
|
|||||||||||
$
|
13.33
|
$
|
9.45
|
$
|
3.82
|
$
|
44.37
|
$
|
78.81
|
$
|
122.45
|
|||||||||||
2.09
|
%
|
2.61
|
%
|
2.01
|
%
|
1.66
|
%
|
1.57
|
%(4)
|
1.62
|
%
|
|||||||||||
1.92
|
%(6)
|
2.39
|
%(6)
|
1.77
|
%(5)(6)
|
1.66
|
%
|
1.57
|
%(4)
|
1.62
|
%
|
|||||||||||
0.96
|
%
|
0.22
|
%
|
0.79
|
%
|
(0.12
|
)%
|
(0.79
|
)%(4)
|
(0.98
|
)%
|
|||||||||||
1.13
|
%
|
0.44
|
%
|
1.03
|
%
|
(0.12
|
)%
|
(0.79
|
)%(4)
|
(0.98
|
)%
|
|||||||||||
31
|
%
|
74
|
%
|
73
|
%
|
87
|
%
|
72
|
%(3)
|
84
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2022
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with
the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and
realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the
treatment of wash sales for tax reporting purposes and investments in companies organized as partnerships for tax purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of
Operations as an income tax expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize
equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
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 are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2022 are as
follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$701
|
$(701)
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of
the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion
of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding
increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income
at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other
than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets. Distributions received from the Fund’s investments
in master limited partnerships (“MLPs”) generally consist of ordinary income, capital gains, and return of capital. The Fund records investment income on the ex-date of the distributions. For financial statement purposes, the
Fund uses return of capital and income estimates to allocate the dividend income received. Such estimates are based on historical information available from the MLPs and other industry sources. These estimates may subsequently
be revised based on information received from the MLPs after their tax reporting periods are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Fund.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are
declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost
of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Partnership Accounting Policy – To the extent the Fund receives distributions from underlying partnerships in which it invests, the Fund records its pro rata share of
|
HENNESSY FUNDS
|
1-800-966-4354
|
income/loss and capital gains/losses and accordingly adjusts the cost basis of the underlying partnerships for return of capital.
|
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things,
that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions
in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered
investment companies (“Rule 18f-4”). Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, and
requires funds whose use of derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager. The Fund has adopted
procedures in accordance with Rule 18f-4.
|
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5
establishes requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight and
certain other conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule
2a-5, the SEC also adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund
investments. The Fund has adopted procedures in accordance with Rule 2a-5.
|
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.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual funds,
partnerships, rights, MLPs, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the
primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported.
Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and
valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV because most foreign
markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In certain circumstances, it
may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is
principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack
that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the
ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may
consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may
incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are
generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term
debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the
values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be
determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
|
Investments
|
|||
Cost of investments for tax purposes
|
$
|
15,700,710
|
||
Gross tax unrealized appreciation
|
$
|
8,830,273
|
||
Gross tax unrealized depreciation
|
(1,210,881
|
)
|
||
Net tax unrealized appreciation/(depreciation)
|
$
|
7,619,392
|
||
Undistributed ordinary income
|
$
|
138,769
|
||
Undistributed long-term capital gains
|
—
|
|||
Total distributable earnings
|
$
|
138,769
|
||
Other accumulated gain/(loss)
|
$
|
(40,295,077
|
)
|
|
Total accumulated gain/(loss)
|
$
|
(32,536,916
|
)
|
|
Year Ended
|
Year Ended
|
||||||
|
October 31, 2022
|
October 31, 2021
|
||||||
Ordinary income(1)
|
$
|
1,939,323
|
$
|
—
|
||||
Long-term capital gains
|
—
|
—
|
||||||
Total distributions
|
$
|
1,939,323
|
$
|
—
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
![]() |
|
TAIT, WELLER & BAKER LLP
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees and Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
86
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
75
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 – June 2022.
|
||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
48
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board
|
Officer since 2004. Kiosk is a full-
|
|
and
|
service marketing agency with
|
||
December 2021
|
offices in the San Francisco Bay Area
|
||
as a Trustee
|
and Liverpool, UK and staff across
|
||
nine states in the U.S.
|
|||
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
77
|
consultant in the securities industry.
|
||
Trustee
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Brian Alexander
|
March 2015
|
Mr. Alexander has worked for the
|
None.
|
41
|
Sutter Health organization since
|
||
Adviser to the Board
|
2011 in various positions. He has
|
||
served as the Chief Executive Officer
|
|||
of the North Valley Hospital Area
|
|||
since 2021. From 2018 to 2021, he
|
|||
served as the Chief Executive Officer
|
|||
of Sutter Roseville Medical Center.
|
|||
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.
|
|||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
58
|
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.
|
|||
Interested Trustee(1)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Hennessy has been employed
|
Hennessy
|
66
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
Name, Age,
|
|||
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.
|
|
56
|
since 1989 and currently serves as its President, Chief
|
||
Executive Vice President
|
Operating Officer, and Secretary.
|
||
and Treasurer
|
|||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
|
66
|
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.
|
|
50
|
since December 2013 and currently serves as its Chief
|
||
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
||
and Head of Distribution
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Jennifer Cheskiewicz(2)
|
June 2013
|
Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
|
45
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc. since
|
64
|
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 their 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 Kelley(4)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
50
|
October 2012. He has served as Chief Investment Officer of the
|
|
Chief Investment Officer,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Senior Vice President,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He 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 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He served as Co-Portfolio Manager of the Hennessy
|
||
Technology Fund from February 2017 until May 2018. Mr. Kelley
|
||
served as Portfolio Manager of FBR Fund Advisers, Inc. from
|
||
January 2008 to October 2012.
|
||
L. Joshua Wein(4)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
49
|
2018. He has served as Co-Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone
|
|
Co-Portfolio Manager
|
Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth
|
|
Fund, the Hennessy Cornerstone Value Fund, Hennessy Total
|
||
Return Fund, the Hennessy Balanced Fund, the Hennessy Gas
|
||
Utility Fund, and the Hennessy Technology Fund since February
|
||
2019. He served as a Senior Analyst of these same funds from
|
||
September 2018 through February 2019. Mr. Wein served as
|
||
Director of Alternative Investments and Co-Portfolio Manager
|
||
at Sterling Capital Management from 2008 to 2018.
|
(1)
|
Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust.
|
(2)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2022 –
|
|
May 1, 2022
|
October 31, 2022
|
October 31, 2022
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,158.80
|
$12.24
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,013.86
|
$11.42
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,161.00
|
$10.35
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,015.63
|
$ 9.65
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 2.25% for Investor Class shares or 1.90% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund
has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future
during both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is therefore not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for
responding to a highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make any material changes to the Liquidity Program during the review period and was not recommending any changes to the Liquidity Program or the model inputs used to
determine the liquidity classification of each security held by the Fund.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you 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;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
10
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
30
|
|
Trustees and Officers of the Fund
|
31
|
|
Expense Example
|
34
|
|
Proxy Voting Policy and Proxy Voting Records
|
36
|
|
Availability of Quarterly Portfolio Schedule
|
36
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
36
|
|
Electronic Delivery
|
36
|
|
Liquidity Risk Management Program
|
37
|
|
Privacy Policy
|
37
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Since Inception
|
|
Year
|
Years
|
(12/31/13)
|
|
Hennessy Midstream Fund –
|
|||
Investor Class (HMSFX)
|
24.03%
|
2.18%
|
-0.02%
|
Hennessy Midstream Fund –
|
|||
Institutional Class (HMSIX)
|
24.41%
|
2.44%
|
0.23%
|
Alerian US Midstream Energy Index
|
26.22%
|
9.11%
|
3.49%
|
S&P 500® Index
|
-14.61%
|
10.44%
|
10.82%
|
Expense ratios:
|
Gross 2.11%, Net 1.76%(1) (Investor Class);
|
Gross 1.74%, Net 1.51%(1) (Institutional Class)
|
(1)
|
The Fund’s investment advisor has contractually agreed to limit expenses until February 28, 2023.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
Schedule of Investments as of October 31, 2022
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% TOTAL ASSETS
|
Energy Transfer LP
|
13.78%
|
Enterprise Products Partners LP
|
10.25%
|
MPLX LP
|
9.20%
|
Plains All American Pipeline LP
|
8.23%
|
Antero Midstream Corp.
|
8.22%
|
The Williams Companies, Inc.
|
7.76%
|
Targa Resources Corp.
|
7.17%
|
Magellan Midstream Partners LP
|
5.96%
|
ONEOK, Inc.
|
5.84%
|
Western Midstream Partners LP
|
4.59%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS – 42.41%
|
Number of
|
% of
|
||||||||||
|
Shares
|
Value
|
Net Assets
|
|||||||||
Gathering & Processing – 13.82%
|
||||||||||||
EnLink Midstream LLC
|
109,000
|
$
|
1,294,920
|
2.91
|
%
|
|||||||
Equitrans Midstream Corp.
|
194,500
|
1,637,690
|
3.68
|
%
|
||||||||
Targa Resources Corp.
|
47,100
|
3,220,227
|
7.23
|
%
|
||||||||
|
6,152,837
|
13.82
|
%
|
|||||||||
Midstream – 8.29%
|
||||||||||||
Antero Midstream Corp.
|
346,600
|
3,691,290
|
8.29
|
%
|
||||||||
|
||||||||||||
Natural Gas/NGL Transportation – 20.30%
|
||||||||||||
DT Midstream, Inc.
|
19,800
|
1,182,060
|
2.65
|
%
|
||||||||
Kinder Morgan, Inc.
|
96,790
|
1,753,835
|
3.94
|
%
|
||||||||
ONEOK, Inc.
|
44,226
|
2,623,486
|
5.89
|
%
|
||||||||
The Williams Companies, Inc.
|
106,452
|
3,484,174
|
7.82
|
%
|
||||||||
|
9,043,555
|
20.30
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $12,266,447)
|
18,887,682
|
42.41
|
%
|
|||||||||
|
||||||||||||
PARTNERSHIPS & TRUSTS – 55.89%
|
||||||||||||
|
||||||||||||
Crude Oil & Refined Products – 23.60%
|
||||||||||||
Magellan Midstream Partners LP
|
49,600
|
2,675,920
|
6.01
|
%
|
||||||||
MPLX LP
|
123,249
|
4,133,772
|
9.28
|
%
|
||||||||
Plains All American Pipeline LP
|
309,026
|
3,699,041
|
8.31
|
%
|
||||||||
|
10,508,733
|
23.60
|
%
|
|||||||||
Gathering & Processing – 4.63%
|
||||||||||||
Western Midstream Partners LP
|
71,800
|
2,061,378
|
4.63
|
%
|
||||||||
|
||||||||||||
Natural Gas/NGL Transportation – 27.66%
|
||||||||||||
DCP Midstream LP
|
38,300
|
1,522,425
|
3.42
|
%
|
||||||||
Energy Transfer LP
|
484,900
|
6,192,173
|
13.90
|
%
|
||||||||
Enterprise Products Partners LP
|
182,400
|
4,605,600
|
10.34
|
%
|
||||||||
|
12,320,198
|
27.66
|
%
|
|||||||||
|
||||||||||||
Total Partnerships & Trusts
|
||||||||||||
(Cost $14,985,305)
|
24,890,309
|
55.89
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 0.00%
|
Number of
|
% of
|
||||||||||
|
Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 0.00%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 2.93% (a)
|
980
|
$
|
980
|
0.00
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $980)
|
980
|
0.00
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $27,252,732) – 98.30%
|
43,778,971
|
98.30
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 1.70%
|
755,222
|
1.70
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
44,534,193
|
100.00
|
%
|
(a)
|
The rate listed is the fund’s seven-day yield as of October 31, 2022.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Gathering & Processing
|
$
|
6,152,837
|
$
|
—
|
$
|
—
|
$
|
6,152,837
|
||||||||
Midstream
|
3,691,290
|
—
|
—
|
3,691,290
|
||||||||||||
Natural Gas/NGL Transportation
|
9,043,555
|
—
|
—
|
9,043,555
|
||||||||||||
Total Common Stocks
|
$
|
18,887,682
|
$
|
—
|
$
|
—
|
$
|
18,887,682
|
||||||||
Partnerships & Trusts
|
||||||||||||||||
Crude Oil & Refined Products
|
$
|
10,508,733
|
$
|
—
|
$
|
—
|
$
|
10,508,733
|
||||||||
Gathering & Processing
|
2,061,378
|
—
|
—
|
2,061,378
|
||||||||||||
Natural Gas/NGL Transportation
|
12,320,198
|
—
|
—
|
12,320,198
|
||||||||||||
Total Partnerships & Trusts
|
$
|
24,890,309
|
$
|
—
|
$
|
—
|
$
|
24,890,309
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
980
|
$
|
—
|
$
|
—
|
$
|
980
|
||||||||
Total Short-Term Investments
|
$
|
980
|
$
|
—
|
$
|
—
|
$
|
980
|
||||||||
Total Investments
|
$
|
43,778,971
|
$
|
—
|
$
|
—
|
$
|
43,778,971
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2022
|
ASSETS:
|
||||
Investments in securities, at value (cost $27,252,732)
|
$
|
43,778,971
|
||
Dividends and interest receivable
|
31,256
|
|||
Receivable for fund shares sold
|
133,946
|
|||
Receivable for securities sold
|
604,600
|
|||
Return of capital receivable
|
360,427
|
|||
Deferred income tax
|
—
|
|||
Prepaid expenses and other assets
|
11,383
|
|||
Total assets
|
44,920,583
|
|||
LIABILITIES:
|
||||
Loans payable
|
287,000
|
|||
Payable for fund shares redeemed
|
6,249
|
|||
Payable to advisor
|
34,446
|
|||
Payable to auditor
|
41,301
|
|||
Accrued distribution fees
|
1,512
|
|||
Accrued service fees
|
880
|
|||
Accrued trustees fees
|
4,982
|
|||
Accrued expenses and other payables
|
10,020
|
|||
Total liabilities
|
386,390
|
|||
NET ASSETS
|
$
|
44,534,193
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
51,940,352
|
||
Accumulated deficit
|
(7,406,159
|
)
|
||
Total net assets
|
$
|
44,534,193
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
11,472,490
|
||
Shares issued and outstanding
|
1,197,523
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
9.58
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
33,061,703
|
||
Shares issued and outstanding
|
3,337,488
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
9.91
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2022
|
INVESTMENT INCOME:
|
||||
Distributions received from master limited partnerships
|
$
|
1,856,527
|
||
Return of capital on distributions received
|
(1,856,527
|
)
|
||
Dividend income(1)
|
401,703
|
|||
Interest income
|
7,677
|
|||
Total investment income
|
409,380
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
460,970
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
58,901
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
18,228
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
30,390
|
|||
Audit fees
|
41,294
|
|||
Federal and state registration fees
|
33,827
|
|||
Compliance expense (See Note 5)
|
24,508
|
|||
Trustees’ fees and expenses
|
16,399
|
|||
Reports to shareholders
|
13,808
|
|||
Distribution fees – Investor Class (See Note 5)
|
13,343
|
|||
Service fees – Investor Class (See Note 5)
|
8,895
|
|||
Interest expense (See Note 7)
|
4,060
|
|||
Legal fees
|
1,474
|
|||
Income tax expense
|
800
|
|||
Other expenses
|
12,184
|
|||
Total expenses before waivers and reimbursements
|
739,081
|
|||
Service provider expense waiver (See Note 5)
|
(58,901
|
)
|
||
Expense reimbursement by advisor – Investor Class (See Note 5)
|
(13,391
|
)
|
||
Expense reimbursement by advisor – Institutional Class (See Note 5)
|
(11,297
|
)
|
||
Net expenses
|
655,492
|
|||
NET INVESTMENT LOSS
|
$
|
(246,112
|
)
|
|
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
2,241,454
|
||
Net change in unrealized appreciation/depreciation on investments
|
6,041,810
|
|||
Income tax expense
|
—
|
|||
Net gain on investments
|
8,283,264
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
8,037,152
|
(1)
|
Net of foreign taxes withheld of $8,845.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
OPERATIONS:
|
||||||||
Net investment loss
|
$
|
(246,112
|
)
|
$
|
(230,996
|
)
|
||
Net realized gain on investments
|
2,241,454
|
357,263
|
||||||
Net change in unrealized
|
||||||||
appreciation/deprecation on investments
|
6,041,810
|
17,111,950
|
||||||
Net increase in net assets resulting from operations
|
8,037,152
|
17,238,217
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM:
|
||||||||
Distributable earnings – Investor Class
|
(56,001
|
)
|
—
|
|||||
Return of capital – Investor Class
|
(932,728
|
)
|
(756,323
|
)
|
||||
Distributable earning – Institutional Class
|
(205,718
|
)
|
—
|
|||||
Return of capital – Institutional Class
|
(3,426,419
|
)
|
(3,420,217
|
)
|
||||
Total distributions
|
(4,620,866
|
)
|
(4,176,540
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
5,720,090
|
2,502,132
|
||||||
Proceeds from shares subscribed – Institutional Class
|
11,963,118
|
3,761,293
|
||||||
Dividends reinvested – Investor Class
|
840,503
|
677,429
|
||||||
Dividends reinvested – Institutional Class
|
3,393,598
|
3,185,818
|
||||||
Cost of shares redeemed – Investor Class
|
(2,598,309
|
)
|
(2,532,516
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(15,368,206
|
)
|
(5,635,003
|
)
|
||||
Net increase in net assets derived
|
||||||||
from capital share transactions
|
3,950,794
|
1,959,153
|
||||||
TOTAL INCREASE IN NET ASSETS
|
7,367,080
|
15,020,830
|
||||||
NET ASSETS:
|
||||||||
Beginning of year
|
37,167,113
|
22,146,283
|
||||||
End of year
|
$
|
44,534,193
|
$
|
37,167,113
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
634,991
|
321,069
|
||||||
Shares sold – Institutional Class
|
1,295,385
|
490,595
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
93,668
|
89,396
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
369,848
|
410,703
|
||||||
Shares redeemed – Investor Class
|
(307,053
|
)
|
(320,846
|
)
|
||||
Shares redeemed – Institutional Class
|
(1,747,350
|
)
|
(711,400
|
)
|
||||
Net increase in shares outstanding
|
339,489
|
279,517
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(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)
|
Calculated using the average shares outstanding method.
|
(3)
|
Includes current and deferred tax benefit/expense from net investment income/loss only.
|
(4)
|
Not annualized.
|
(5)
|
Annualized.
|
(6)
|
Certain service provider expenses were voluntarily waived during the fiscal year.
|
(7)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Period Ended
|
Year Ended
|
|||||||||||||||||||||
Year Ended October 31,
|
October 31,
|
November 30,
|
||||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018(1)
|
2017
|
|||||||||||||||||
$
|
8.66
|
$
|
5.55
|
$
|
10.90
|
$
|
12.66
|
$
|
14.51
|
$
|
16.54
|
|||||||||||
(0.07
|
)
|
(0.07
|
)
|
(0.10
|
)
|
(0.10
|
)
|
(0.16
|
)
|
(0.22
|
)
|
|||||||||||
2.02
|
4.21
|
(4.22
|
)
|
(0.63
|
)
|
(0.66
|
)
|
(0.78
|
)
|
|||||||||||||
1.95
|
4.14
|
(4.32
|
)
|
(0.73
|
)
|
(0.82
|
)
|
(1.00
|
)
|
|||||||||||||
(0.06
|
)
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||
(0.97
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
|||||||||||
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
|||||||||||
$
|
9.58
|
$
|
8.66
|
$
|
5.55
|
$
|
10.90
|
$
|
12.66
|
$
|
14.51
|
|||||||||||
24.03
|
%
|
78.41
|
%
|
-42.13
|
%
|
-6.28
|
%
|
-6.15
|
%(4)
|
-6.49
|
%
|
|||||||||||
$
|
11.47
|
$
|
6.72
|
$
|
3.81
|
$
|
9.20
|
$
|
20.07
|
$
|
16.86
|
|||||||||||
2.05
|
%
|
2.11
|
%
|
2.12
|
%
|
1.89
|
%
|
1.86
|
%(5)
|
1.91
|
%
|
|||||||||||
1.76
|
%(6)
|
1.76
|
%(6)
|
1.76
|
%(6)
|
1.76
|
%
|
1.78
|
%(5)
|
1.77
|
%
|
|||||||||||
(1.08
|
)%
|
(1.26
|
)%
|
(1.63
|
)%
|
(0.92
|
)%
|
(1.34
|
)%(5)
|
(1.50
|
)%
|
|||||||||||
(0.79
|
)%
|
(0.91
|
)%
|
(1.27
|
)%
|
(0.79
|
)%
|
(1.26
|
)%(5)
|
(1.36
|
)%
|
|||||||||||
33
|
%
|
40
|
%
|
53
|
%
|
41
|
%
|
64
|
%(4)
|
63
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(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)
|
Calculated using the average shares outstanding method.
|
(3)
|
Includes current and deferred tax benefit/expense from net investment income/loss only.
|
(4)
|
Not annualized.
|
(5)
|
Annualized.
|
(6)
|
Certain service provider expenses were voluntarily waived during the fiscal year.
|
(7)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Period Ended
|
Year Ended
|
|||||||||||||||||||||
Year Ended October 31,
|
October 31,
|
November 30,
|
||||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018(1)
|
2017
|
|||||||||||||||||
$
|
8.90
|
$
|
5.68
|
$
|
11.09
|
$
|
12.83
|
$
|
14.66
|
$
|
16.66
|
|||||||||||
(0.05
|
)
|
(0.05
|
)
|
(0.10
|
)
|
(0.09
|
)
|
(0.14
|
)
|
(0.18
|
)
|
|||||||||||
2.09
|
4.30
|
(4.28
|
)
|
(0.62
|
)
|
(0.66
|
)
|
(0.79
|
)
|
|||||||||||||
2.04
|
4.25
|
(4.38
|
)
|
(0.71
|
)
|
(0.80
|
)
|
(0.97
|
)
|
|||||||||||||
(0.06
|
)
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||
(0.97
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
|||||||||||
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
|||||||||||
$
|
9.91
|
$
|
8.90
|
$
|
5.68
|
$
|
11.09
|
$
|
12.83
|
$
|
14.66
|
|||||||||||
24.41
|
%
|
78.57
|
%
|
-41.93
|
%
|
-6.10
|
%
|
-5.94
|
%(4)
|
-6.25
|
%
|
|||||||||||
$
|
33.06
|
$
|
30.45
|
$
|
18.33
|
$
|
31.78
|
$
|
61.92
|
$
|
82.59
|
|||||||||||
1.69
|
%
|
1.74
|
%
|
1.79
|
%
|
1.56
|
%
|
1.58
|
%(5)
|
1.66
|
%
|
|||||||||||
1.51
|
%(6)
|
1.51
|
%(6)
|
1.51
|
%(6)
|
1.51
|
%
|
1.52
|
%(5)
|
1.52
|
%
|
|||||||||||
(0.71
|
)%
|
(0.89
|
)%
|
(1.55
|
)%
|
(0.76
|
)%
|
(1.15
|
)%(5)
|
(1.28
|
)%
|
|||||||||||
(0.53
|
)%
|
(0.66
|
)%
|
(1.27
|
)%
|
(0.71
|
)%
|
(1.09
|
)%(5)
|
(1.14
|
)%
|
|||||||||||
33
|
%
|
40
|
%
|
53
|
%
|
41
|
%
|
64
|
%(4)
|
63
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2022
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund is taxed as a corporation and is obligated to pay U.S. federal and state income tax on its taxable income. Currently, the maximum marginal regular federal income tax
rate for a corporation is 21%. The Fund invests a substantial portion of its assets in master limited partnerships (“MLPs”), which are treated as partnerships for federal income tax purposes. As a limited partner in MLPs, the
Fund reports its allocable share of each MLP’s taxable income in computing its own taxable income.
|
The Fund includes any tax expense or benefit in the Statement of Operations based on the component of income or gains/losses to
which such expense or benefit relates. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the carrying amount
of assets and liabilities for income tax purposes. The Fund recognizes a valuation allowance if, based on the weight of available evidence, it is more likely than not that the Fund will not realize some portion or all of the
deferred income tax assets. As of October 31, 2022, the Fund has placed a full valuation allowance on its deferred tax assets.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of
the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund files U.S. federal income tax returns and various state income tax returns.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as
investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets. Distributions received
from the Fund’s investments in MLPs generally consist of ordinary income, capital gains, and return of capital. The Fund records investment income on the ex-date of the distributions. For financial statement purposes, the Fund
uses return of capital and income estimates to allocate the dividend income received. Such estimates are based on historical information available from the MLPs and other industry sources. These estimates may subsequently be
revised based on information received from the MLPs after their tax reporting periods are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Fund.
|
e).
|
Distributions to Shareholders – The Fund typically makes cash distributions to its shareholders quarterly at the beginning of the months of March, June, September, and December. Due to the tax
treatment of the Fund’s allocations and distributions from MLPs, a significant portion of the Fund’s distributions to shareholders typically is treated as return of capital to shareholders for U.S. federal income tax purposes
(i.e., as distributions in excess of the Fund’s current and accumulated earnings and profits as described below). However, no assurance can be given in this regard; just as the Fund’s corporate income tax liability can
fluctuate materially from year to year, the extent to which the Fund is able to make return-of-capital distributions also can vary materially from year to year depending on a number of different factors, including the
composition of the Fund’s portfolio, the level of allocations of net income and other tax items for the Fund from its underlying MLP investments, the length of time the Fund has owned the MLP equity securities in its
portfolio, and the extent to which the Fund disposes of MLP equity securities during a particular year, including to meet Fund shareholder redemption requests as necessary.
|
In general, a distribution constitutes a return of capital to a shareholder rather than a dividend to the extent such
distribution exceeds the Fund’s current and accumulated earnings and profits. The portion of any distribution treated as a return of capital constitutes a tax-free return of capital to the extent of a shareholder’s cost basis
in Fund shares and thereafter generally is taxable to the shareholder as a capital gain. A return-of-capital distribution also reduces the shareholder’s cost basis in Fund
|
HENNESSY FUNDS
|
1-800-966-4354
|
shares (but not below zero). A lower cost basis means that a shareholder recognizes more gain or less loss when the shareholder eventually sells Fund shares, which increases the shareholder’s tax
liability.
|
|
The Fund attempts to maintain a stable distribution rate and therefore may distribute more or less than the actual amount of
cash it receives from its investments in a particular period. Any undistributed cash would be available to supplement future distributions, and until distributed would increase the Fund’s net asset value (“NAV”).
Correspondingly, such amounts, once distributed, decrease the Fund’s NAV. In addition, the Fund may opt not to make distributions in quarters in which the Fund believes that a distribution could cause adverse tax consequences
to shareholders, including when the Fund believes that a distribution may not constitute a tax-free return of capital as described above.
|
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original
cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The NAV per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption
price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Partnership Accounting Policy – To the extent the Fund receives distributions from underlying partnerships in which it invests, the Fund records its pro rata share of income/loss and capital
gains/losses and accordingly adjusts the cost basis of the underlying partnerships for return of capital.
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market
conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered
investment companies (“Rule 18f-4”). Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act,
and requires funds whose use of derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager. The Fund has adopted
procedures in accordance with Rule 18f-4.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5
establishes requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight and
certain other conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule
2a-5, the SEC also adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund
investments. The Fund has adopted procedures in accordance with Rule 2a-5.
|
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.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual
funds, partnerships, rights, MLPs, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported
by the primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price
reported. Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively
traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV because
most foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In certain
|
HENNESSY FUNDS
|
1-800-966-4354
|
circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the
close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a
potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the
ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service
may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may
incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are
generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities.
Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60
days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value
would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Fiscal Year
|
Fiscal Year
|
Fiscal Year
|
||||||||||||||
2023
|
2024
|
2025
|
Total
|
|||||||||||||
Investor Class
|
$
|
22,658
|
$
|
12,376
|
$
|
13,391
|
$
|
48,425
|
||||||||
Institutional Class
|
$
|
60,422
|
$
|
26,693
|
$
|
11,840
|
$
|
98,955
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Investments
|
||||
Cost of investments for tax purposes
|
$
|
24,505,040
|
||
Gross tax unrealized appreciation
|
$
|
19,354,933
|
||
Gross tax unrealized depreciation
|
(81,002
|
)
|
||
Net tax unrealized appreciation/(depreciation)
|
$
|
19,273,931
|
HENNESSY FUNDS
|
1-800-966-4354
|
Deferred tax assets (liabilities):
|
||||
Net operating losses
|
$
|
348,392
|
||
Capital loss
|
4,677,896
|
|||
Unrealized (gain) loss on investments
|
(3,062,109
|
)
|
||
Total deferred tax assets, net
|
1,964,179
|
|||
Valuation allowance
|
(1,964,179
|
)
|
||
Net
|
$
|
—
|
Amount
|
Expiration
|
||||
$
|
4,512,944
|
10/31/2023
|
|||
8,971,423
|
10/31/2024
|
||||
7,178,863
|
10/31/2025
|
Amount
|
Expiration
|
||||
$
|
1,587,454
|
Indefinite
|
Tax expense (benefit) at statutory rates
|
$
|
1,687,801
|
|||
State income tax expense, net of federal benefit
|
103,750
|
||||
Tax expense (benefit) on permanent items(1)
|
(22,052
|
)
|
|||
Tax expense (benefit) on expired carryforwards
|
—
|
||||
Tax expense (benefit) due to change in effective state rates
|
—
|
||||
Total current tax expense (benefit)
|
—
|
||||
Change in valuation allowance
|
(1,769,499
|
)
|
|||
Total tax expense
|
$
|
—
|
(1) Permanent items consist of dividends-received deductions.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
Ordinary income(1)
|
$
|
261,719
|
$
|
—
|
||||
Long-term capital gains
|
—
|
—
|
||||||
Return of capital
|
4,359,147
|
4,176,540
|
||||||
Total distributions
|
$
|
4,620,866
|
$
|
4,176,540
|
Return of Capital
|
|||
Investor Class
|
$0.2575
|
||
Institutional Class
|
$0.2575
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees and Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
86
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
75
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 – June 2022.
|
||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
48
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board
|
Officer since 2004. Kiosk is a full-
|
|
and
|
service marketing agency with
|
||
December 2021
|
offices in the San Francisco Bay Area
|
||
as a Trustee
|
and Liverpool, UK and staff across
|
||
nine states in the U.S.
|
|||
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
77
|
consultant in the securities industry.
|
||
Trustee
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Brian Alexander
|
March 2015
|
Mr. Alexander has worked for the
|
None.
|
41
|
Sutter Health organization since
|
||
Adviser to the Board
|
2011 in various positions. He has
|
||
served as the Chief Executive Officer
|
|||
of the North Valley Hospital Area
|
|||
since 2021. From 2018 to 2021, he
|
|||
served as the Chief Executive Officer
|
|||
of Sutter Roseville Medical Center.
|
|||
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.
|
|||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
58
|
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.
|
|||
Interested Trustee(1)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Hennessy has been employed
|
Hennessy
|
66
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
Name, Age,
|
|||
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.
|
|
56
|
since 1989 and currently serves as its President, Chief
|
||
Executive Vice President
|
Operating Officer, and Secretary.
|
||
and Treasurer
|
|||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
|
66
|
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.
|
|
50
|
since December 2013 and currently serves as its Chief
|
||
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
||
and Head of Distribution
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Jennifer Cheskiewicz(2)
|
June 2013
|
Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
|
45
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc. since
|
64
|
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 their 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 Kelley(4)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
50
|
October 2012. He has served as Chief Investment Officer of the
|
|
Chief Investment Officer,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Senior Vice President,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He 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 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He served as Co-Portfolio Manager of the Hennessy
|
||
Technology Fund from February 2017 until May 2018. Mr. Kelley
|
||
served as Portfolio Manager of FBR Fund Advisers, Inc. from
|
||
January 2008 to October 2012.
|
||
L. Joshua Wein(4)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
49
|
2018. He has served as Co-Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone
|
|
Co-Portfolio Manager
|
Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth
|
|
Fund, the Hennessy Cornerstone Value Fund, Hennessy Total
|
||
Return Fund, the Hennessy Balanced Fund, the Hennessy Gas
|
||
Utility Fund, and the Hennessy Technology Fund since February
|
||
2019. He served as a Senior Analyst of these same funds from
|
||
September 2018 through February 2019. Mr. Wein served as
|
||
Director of Alternative Investments and Co-Portfolio Manager
|
||
at Sterling Capital Management from 2008 to 2018.
|
(1)
|
Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust.
|
(2)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2022 –
|
|
May 1, 2022
|
October 31, 2022
|
October 31, 2022
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,083.10
|
$9.29
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,016.28
|
$9.00
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,084.80
|
$7.99
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,017.54
|
$7.73
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.77% for Investor Class shares or 1.52% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund
has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future
during both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is therefore not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for
responding to a highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make any material changes to the Liquidity Program during the review period and was not recommending any changes to the Liquidity Program or the model inputs used to
determine the liquidity classification of each security held by the Fund.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you 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;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
29
|
|
Trustees and Officers of the Fund
|
30
|
|
Expense Example
|
34
|
|
Proxy Voting Policy and Proxy Voting Records
|
36
|
|
Availability of Quarterly Portfolio Schedule
|
36
|
|
Federal Tax Distribution Information
|
36
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
36
|
|
Electronic Delivery
|
36
|
|
Liquidity Risk Management Program
|
37
|
|
Privacy Policy
|
37
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Gas Utility Fund –
|
|||
Investor Class (GASFX)
|
10.14%
|
5.29%
|
8.00%
|
Hennessy Gas Utility Fund –
|
|||
Institutional Class (HGASX)(1)
|
10.53%
|
5.64%
|
8.20%
|
AGA Stock Index
|
11.32%
|
6.49%
|
9.19%
|
S&P 500® Index
|
-14.61%
|
10.44%
|
12.79%
|
(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.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2022
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
EQT Corp.
|
5.20%
|
Atmos Energy Corp.
|
4.99%
|
Sempra Energy
|
4.93%
|
Berkshire Hathaway, Inc., Class A
|
4.91%
|
Kinder Morgan, Inc.
|
4.90%
|
Enbridge, Inc.
|
4.88%
|
TC Energy Corp.
|
4.83%
|
Cheniere Energy, Inc.
|
4.76%
|
Dominion Energy, Inc.
|
4.68%
|
The Southern Co.
|
4.42%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 99.26%
|
Number of
|
% of
|
||||||||||
|
Shares
|
Value
|
Net Assets
|
|||||||||
Energy – 30.75%
|
||||||||||||
Cheniere Energy, Inc.
|
149,217
|
$
|
26,323,371
|
4.76
|
%
|
|||||||
DT Midstream, Inc.
|
171,500
|
10,238,550
|
1.85
|
%
|
||||||||
Enbridge, Inc. (a)
|
692,865
|
26,987,092
|
4.88
|
%
|
||||||||
EQT Corp.
|
687,300
|
28,756,632
|
5.20
|
%
|
||||||||
Kinder Morgan, Inc.
|
1,496,801
|
27,122,034
|
4.90
|
%
|
||||||||
ONEOK, Inc.
|
368,800
|
21,877,216
|
3.96
|
%
|
||||||||
TC Energy Corp. (a)
|
608,200
|
26,712,144
|
4.83
|
%
|
||||||||
Tellurian, Inc. (b)
|
746,690
|
2,016,063
|
0.37
|
%
|
||||||||
|
170,033,102
|
30.75
|
%
|
|||||||||
|
||||||||||||
Financials – 4.91%
|
||||||||||||
Berkshire Hathaway, Inc., Class A (b)
|
61
|
27,148,050
|
4.91
|
%
|
||||||||
|
||||||||||||
Industrials – 0.87%
|
||||||||||||
MDU Resources Group, Inc.
|
169,407
|
4,824,711
|
0.87
|
%
|
||||||||
|
||||||||||||
Utilities – 62.73%
|
||||||||||||
Algonquin Power & Utilities Corp. (a)
|
122,664
|
1,356,664
|
0.25
|
%
|
||||||||
ALLETE, Inc.
|
425
|
23,915
|
0.00
|
%
|
||||||||
Alliant Energy Corp.
|
39,300
|
2,050,281
|
0.37
|
%
|
||||||||
Ameren Corp.
|
49,840
|
4,062,957
|
0.73
|
%
|
||||||||
Atmos Energy Corp.
|
258,886
|
27,584,303
|
4.99
|
%
|
||||||||
Avangrid, Inc.
|
103,100
|
4,194,108
|
0.76
|
%
|
||||||||
Avista Corp.
|
28,372
|
1,164,103
|
0.21
|
%
|
||||||||
Black Hills Corp.
|
73,247
|
4,788,156
|
0.87
|
%
|
||||||||
Centerpoint Energy, Inc.
|
515,728
|
14,754,978
|
2.67
|
%
|
||||||||
Chesapeake Utilities Corp.
|
23,558
|
2,930,144
|
0.53
|
%
|
||||||||
CMS Energy Corp.
|
203,398
|
11,603,856
|
2.10
|
%
|
||||||||
Consolidated Edison, Inc.
|
160,536
|
14,120,747
|
2.55
|
%
|
||||||||
Dominion Energy, Inc.
|
369,977
|
25,887,291
|
4.68
|
%
|
||||||||
DTE Energy Co.
|
59,904
|
6,715,837
|
1.21
|
%
|
||||||||
Duke Energy Corp.
|
131,987
|
12,298,549
|
2.22
|
%
|
||||||||
Entergy Corp.
|
3,760
|
402,846
|
0.07
|
%
|
||||||||
Essential Utilities, Inc.
|
205,400
|
9,082,788
|
1.64
|
%
|
||||||||
Eversource Energy
|
68,875
|
5,253,785
|
0.95
|
%
|
||||||||
Exelon Corp.
|
123,531
|
4,767,061
|
0.86
|
%
|
||||||||
Fortis, Inc. (a)
|
147,976
|
5,771,064
|
1.04
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number of
|
% of
|
||||||||||
|
Shares
|
Value
|
Net Assets
|
|||||||||
Utilities (Continued)
|
||||||||||||
MGE Energy, Inc.
|
12,029
|
$
|
819,055
|
0.15
|
%
|
|||||||
National Fuel Gas Co.
|
102,824
|
6,939,592
|
1.25
|
%
|
||||||||
National Grid PLC – ADR (a)
|
262,944
|
14,362,001
|
2.60
|
%
|
||||||||
New Jersey Resources Corp.
|
147,134
|
6,568,062
|
1.19
|
%
|
||||||||
NiSource, Inc.
|
487,881
|
12,533,663
|
2.27
|
%
|
||||||||
Northwest Natural Holding Co.
|
63,903
|
3,073,095
|
0.56
|
%
|
||||||||
NorthWestern Corp.
|
20,698
|
1,093,475
|
0.20
|
%
|
||||||||
ONE Gas, Inc.
|
103,775
|
8,040,487
|
1.45
|
%
|
||||||||
PG&E Corp. (b)
|
999,649
|
14,924,760
|
2.70
|
%
|
||||||||
PPL Corp.
|
118,119
|
3,128,972
|
0.57
|
%
|
||||||||
Public Service Enterprise Group, Inc.
|
214,890
|
12,048,882
|
2.18
|
%
|
||||||||
RGC Resources, Inc.
|
20,254
|
434,448
|
0.08
|
%
|
||||||||
Sempra Energy
|
180,540
|
27,250,708
|
4.93
|
%
|
||||||||
South Jersey Industries, Inc.
|
203,271
|
7,047,406
|
1.27
|
%
|
||||||||
Southwest Gas Holdings, Inc.
|
80,917
|
5,912,605
|
1.07
|
%
|
||||||||
Spire, Inc.
|
74,091
|
5,172,293
|
0.94
|
%
|
||||||||
The Southern Co.
|
373,700
|
24,469,876
|
4.42
|
%
|
||||||||
UGI Corp.
|
117,652
|
4,156,645
|
0.75
|
%
|
||||||||
Unitil Corp.
|
18,998
|
1,001,385
|
0.18
|
%
|
||||||||
WEC Energy Group, Inc.
|
224,340
|
20,488,972
|
3.71
|
%
|
||||||||
Xcel Energy, Inc.
|
132,299
|
8,613,988
|
1.56
|
%
|
||||||||
|
346,893,803
|
62.73
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $310,414,943)
|
548,899,666
|
99.26
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 0.64%
|
Number of
|
% of
|
||||||||||
|
Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 0.64%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 2.93% (c)
|
3,567,053
|
$
|
3,567,053
|
0.64
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $3,567,053)
|
3,567,053
|
0.64
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $313,981,996) – 99.90%
|
552,466,719
|
99.90
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.10%
|
532,587
|
0.10
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
552,999,306
|
100.00
|
%
|
(a)
|
U.S.-traded security of a foreign corporation.
|
(b)
|
Non-income-producing security.
|
(c)
|
The rate listed is the fund’s seven-day yield as of October 31, 2022.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Energy
|
$
|
170,033,102
|
$
|
—
|
$
|
—
|
$
|
170,033,102
|
||||||||
Financials
|
27,148,050
|
—
|
—
|
27,148,050
|
||||||||||||
Industrials
|
4,824,711
|
—
|
—
|
4,824,711
|
||||||||||||
Utilities
|
346,893,803
|
—
|
—
|
346,893,803
|
||||||||||||
Total Common Stocks
|
$
|
548,899,666
|
$
|
—
|
$
|
—
|
$
|
548,899,666
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
3,567,053
|
$
|
—
|
$
|
—
|
$
|
3,567,053
|
||||||||
Total Short-Term Investments
|
$
|
3,567,053
|
$
|
—
|
$
|
—
|
$
|
3,567,053
|
||||||||
Total Investments
|
$
|
552,466,719
|
$
|
—
|
$
|
—
|
$
|
552,466,719
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2022
|
ASSETS:
|
||||
Investments in securities, at value (cost $313,981,996)
|
$
|
552,466,719
|
||
Cash
|
351,979
|
|||
Dividends and interest receivable
|
337,308
|
|||
Receivable for fund shares sold
|
133,867
|
|||
Return of capital receivable
|
598,121
|
|||
Prepaid expenses and other assets
|
46,623
|
|||
Total assets
|
553,934,617
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
451,135
|
|||
Payable to advisor
|
181,507
|
|||
Payable to administrator
|
110,206
|
|||
Payable to auditor
|
22,749
|
|||
Accrued distribution fees
|
66,418
|
|||
Accrued service fees
|
37,612
|
|||
Accrued trustees fees
|
9,430
|
|||
Accrued expenses and other payables
|
56,254
|
|||
Total liabilities
|
935,311
|
|||
NET ASSETS
|
$
|
552,999,306
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
304,605,370
|
||
Total distributable earnings
|
248,393,936
|
|||
Total net assets
|
$
|
552,999,306
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
459,414,406
|
||
Shares issued and outstanding
|
17,729,771
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
25.91
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
93,584,900
|
||
Shares issued and outstanding
|
3,621,840
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
25.84
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2022
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
16,196,201
|
||
Interest income
|
45,199
|
|||
Total investment income
|
16,241,400
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
2,265,385
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
755,765
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
72,294
|
|||
Distribution fees – Investor Class (See Note 5)
|
721,911
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
642,113
|
|||
Service fees – Investor Class (See Note 5)
|
481,274
|
|||
Federal and state registration fees
|
43,184
|
|||
Reports to shareholders
|
40,196
|
|||
Trustees’ fees and expenses
|
28,813
|
|||
Compliance expense (See Note 5)
|
24,504
|
|||
Audit fees
|
22,743
|
|||
Legal fees
|
9,653
|
|||
Interest expense (See Note 7)
|
3,528
|
|||
Other expenses
|
286,858
|
|||
Total expenses
|
5,398,221
|
|||
NET INVESTMENT INCOME
|
$
|
10,843,179
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
49,402,174
|
||
Net change in unrealized appreciation/depreciation on investments
|
(11,790,358
|
)
|
||
Net gain on investments
|
37,611,816
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
48,454,995
|
(1)
|
Net of foreign taxes withheld and issuance fees of $440,164.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
10,843,179
|
$
|
11,225,332
|
||||
Net realized gain on investments
|
49,402,174
|
69,474,485
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(11,790,358
|
)
|
17,334,029
|
|||||
Net increase in net assets resulting from operations
|
48,454,995
|
98,033,846
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(46,296,164
|
)
|
(48,578,658
|
)
|
||||
Distributable earnings – Institutional Class
|
(7,042,572
|
)
|
(6,556,181
|
)
|
||||
Total distributions
|
(53,338,736
|
)
|
(55,134,839
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
38,263,106
|
10,282,767
|
||||||
Proceeds from shares subscribed – Institutional Class
|
60,525,251
|
16,158,873
|
||||||
Dividends reinvested – Investor Class
|
43,695,547
|
46,063,257
|
||||||
Dividends reinvested – Institutional Class
|
6,632,283
|
5,933,451
|
||||||
Cost of shares redeemed – Investor Class
|
(77,677,738
|
)
|
(121,059,136
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(33,930,524
|
)
|
(29,927,336
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
37,507,925
|
(72,548,124
|
)
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
32,624,184
|
(29,649,117
|
)
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
520,375,122
|
550,024,239
|
||||||
End of year
|
$
|
552,999,306
|
$
|
520,375,122
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
1,378,820
|
412,697
|
||||||
Shares sold – Institutional Class
|
2,219,309
|
624,642
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
1,762,321
|
1,920,697
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
266,844
|
247,846
|
||||||
Shares redeemed – Investor Class
|
(2,942,205
|
)
|
(4,884,070
|
)
|
||||
Shares redeemed – Institutional Class
|
(1,288,690
|
)
|
(1,215,733
|
)
|
||||
Net increase (decrease) in shares outstanding
|
1,396,399
|
(2,893,921
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
26.09
|
$
|
24.08
|
$
|
29.64
|
$
|
28.68
|
$
|
30.35
|
|||||||||
0.50
|
(1)
|
0.52
|
(1)
|
0.58
|
(1)
|
0.56
|
(1)
|
0.65
|
||||||||||
1.98
|
4.00
|
(4.14
|
)
|
3.50
|
(1.52
|
)
|
||||||||||||
2.48
|
4.52
|
(3.56
|
)
|
4.06
|
(0.87
|
)
|
||||||||||||
(0.50
|
)
|
(0.57
|
)
|
(0.56
|
)
|
(0.62
|
)
|
(0.64
|
)
|
|||||||||
(2.16
|
)
|
(1.94
|
)
|
(1.44
|
)
|
(2.48
|
)
|
(0.16
|
)
|
|||||||||
(2.66
|
)
|
(2.51
|
)
|
(2.00
|
)
|
(3.10
|
)
|
(0.80
|
)
|
|||||||||
$
|
25.91
|
$
|
26.09
|
$
|
24.08
|
$
|
29.64
|
$
|
28.68
|
|||||||||
10.14
|
%
|
19.91
|
%
|
-12.49
|
%
|
15.28
|
%
|
-2.86
|
%
|
|||||||||
$
|
459.41
|
$
|
457.31
|
$
|
483.56
|
$
|
764.10
|
$
|
825.18
|
|||||||||
1.00
|
%
|
1.00
|
%
|
1.02
|
%
|
1.00
|
%
|
1.01
|
%
|
|||||||||
1.88
|
%
|
2.06
|
%
|
2.24
|
%
|
1.98
|
%
|
2.18
|
%
|
|||||||||
31
|
%
|
15
|
%
|
16
|
%
|
12
|
%
|
14
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
26.01
|
$
|
24.01
|
$
|
29.56
|
$
|
28.65
|
$
|
30.32
|
|||||||||
0.57
|
(1)
|
0.59
|
(1)
|
0.66
|
(1)
|
0.64
|
(1)
|
0.71
|
||||||||||
1.99
|
3.99
|
(4.13
|
)
|
3.50
|
(1.47
|
)
|
||||||||||||
2.56
|
4.58
|
(3.47
|
)
|
4.14
|
(0.76
|
)
|
||||||||||||
(0.58
|
)
|
(0.65
|
)
|
(0.64
|
)
|
(0.73
|
)
|
(0.75
|
)
|
|||||||||
(2.15
|
)
|
(1.93
|
)
|
(1.44
|
)
|
(2.50
|
)
|
(0.16
|
)
|
|||||||||
(2.73
|
)
|
(2.58
|
)
|
(2.08
|
)
|
(3.23
|
)
|
(0.91
|
)
|
|||||||||
$
|
25.84
|
$
|
26.01
|
$
|
24.01
|
$
|
29.56
|
$
|
28.65
|
|||||||||
10.53
|
%
|
20.29
|
%
|
-12.22
|
%
|
15.63
|
%
|
-2.51
|
%
|
|||||||||
$
|
93.58
|
$
|
63.06
|
$
|
66.46
|
$
|
107.18
|
$
|
107.75
|
|||||||||
0.68
|
%
|
0.69
|
%
|
0.70
|
%
|
0.69
|
%
|
0.65
|
%
|
|||||||||
2.13
|
%
|
2.35
|
%
|
2.57
|
%
|
2.25
|
%
|
2.47
|
%
|
|||||||||
31
|
%
|
15
|
%
|
16
|
%
|
12
|
%
|
14
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2022
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply
with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment
income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily
the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions
from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and
designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
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 are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2022 are as
follows:
|
Total Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(4,544,581)
|
$4,544,581
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns
of the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as
investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets. Distributions received
from the Fund’s investments in master limited partnerships (“MLPs”) generally consist of ordinary income, capital gains, and return of capital. The Fund records investment income on the ex-date of the distributions. For
financial statement purposes, the Fund uses return of capital and income estimates to allocate the dividend income received. Such estimates are based on historical information available from the MLPs and other industry
sources. These estimates may subsequently be revised based on information received from the MLPs after their tax reporting periods are concluded, as the actual character of these distributions is not known until after the
fiscal year end of the Fund.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if
any, are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original
cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all
liabilities (including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The
offering and redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
HENNESSY FUNDS
|
1-800-966-4354
|
i).
|
Partnership Accounting Policy – To the extent the Fund receives distributions from underlying partnerships in which it invests, the Fund records its pro rata share of income/loss and capital
gains/losses and accordingly adjusts the cost basis of the underlying partnerships for return of capital.
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current
market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered
investment companies (“Rule 18f-4”). Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act,
and requires funds whose use of derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager. The Fund has
adopted procedures in accordance with Rule 18f-4.
|
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5 establishes requirements for determining fair
value in good faith for purposes of the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other conditions. Rule 2a-5 also
defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule 2a-5, the SEC also adopted related
recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund investments. The Fund has adopted
procedures in accordance with Rule 2a-5.
|
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).
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when
observable inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual
funds, partnerships, rights, MLPs, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported
by the primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price
reported. Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively
traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV
because most foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In
certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the
market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global
development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the
ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and
U.S. government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing
service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the
model may incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These
securities are generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities.
Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60
days, then the values as of the
|
HENNESSY FUNDS
|
1-800-966-4354
|
61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value
would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Investments
|
||||
Cost of investments for tax purposes
|
$
|
338,135,370
|
||
Gross tax unrealized appreciation
|
$
|
253,222,529
|
||
Gross tax unrealized depreciation
|
(38,891,180
|
)
|
||
Net tax unrealized appreciation/(depreciation)
|
$
|
214,331,349
|
||
Undistributed ordinary income
|
$
|
2,970,511
|
||
Undistributed long-term capital gains
|
31,092,076
|
|||
Total distributable earnings
|
$
|
34,062,587
|
||
Other accumulated gain/(loss)
|
$
|
—
|
||
Total accumulated gain/(loss)
|
$
|
248,393,936
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
Ordinary income(1)
|
$
|
10,974,058
|
$
|
12,094,090
|
||||
Long-term capital gains
|
42,364,678
|
43,040,749
|
||||||
Total distributions
|
$
|
53,338,736
|
$
|
55,134,839
|
HENNESSY FUNDS
|
1-800-966-4354
|
Long-term
|
Short-term
|
|||
Investor Class
|
1.50647
|
0.14394
|
||
Institutional Class
|
1.50271
|
0.14357
|
WWW.HENNESSYFUNDS.COM
|
NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
![]() |
|
TAIT, WELLER & BAKER LLP
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees and Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
86
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
75
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 – June 2022.
|
||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
48
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board
|
Officer since 2004. Kiosk is a full-
|
|
and
|
service marketing agency with
|
||
December 2021
|
offices in the San Francisco Bay Area
|
||
as a Trustee
|
and Liverpool, UK and staff across
|
||
nine states in the U.S.
|
|||
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
77
|
consultant in the securities industry.
|
||
Trustee
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Brian Alexander
|
March 2015
|
Mr. Alexander has worked for the
|
None.
|
41
|
Sutter Health organization since
|
||
Adviser to the Board
|
2011 in various positions. He has
|
||
served as the Chief Executive Officer
|
|||
of the North Valley Hospital Area
|
|||
since 2021. From 2018 to 2021, he
|
|||
served as the Chief Executive Officer
|
|||
of Sutter Roseville Medical Center.
|
|||
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.
|
|||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
58
|
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.
|
|||
Interested Trustee(1)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Hennessy has been employed
|
Hennessy
|
66
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
Name, Age,
|
|||
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.
|
|
56
|
since 1989 and currently serves as its President, Chief
|
||
Executive Vice President
|
Operating Officer, and Secretary.
|
||
and Treasurer
|
|||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
|
66
|
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.
|
|
50
|
since December 2013 and currently serves as its Chief
|
||
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
||
and Head of Distribution
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Jennifer Cheskiewicz(2)
|
June 2013
|
Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
|
45
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc. since
|
64
|
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 their 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 Kelley(4)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
50
|
October 2012. He has served as Chief Investment Officer of the
|
|
Chief Investment Officer,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Senior Vice President,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He 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 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He served as Co-Portfolio Manager of the Hennessy
|
||
Technology Fund from February 2017 until May 2018. Mr. Kelley
|
||
served as Portfolio Manager of FBR Fund Advisers, Inc. from
|
||
January 2008 to October 2012.
|
||
L. Joshua Wein(4)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
49
|
2018. He has served as Co-Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone
|
|
Co-Portfolio Manager
|
Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth
|
|
Fund, the Hennessy Cornerstone Value Fund, Hennessy Total
|
||
Return Fund, the Hennessy Balanced Fund, the Hennessy Gas
|
||
Utility Fund, and the Hennessy Technology Fund since February
|
||
2019. He served as a Senior Analyst of these same funds from
|
||
September 2018 through February 2019. Mr. Wein served as
|
||
Director of Alternative Investments and Co-Portfolio Manager
|
||
at Sterling Capital Management from 2008 to 2018.
|
(1)
|
Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust.
|
(2)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2022 –
|
|
May 1, 2022
|
October 31, 2022
|
October 31, 2022
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 944.60
|
$4.90
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,020.16
|
$5.09
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 946.50
|
$3.34
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,021.78
|
$3.47
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.00% for Investor Class shares or 0.68% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the
Fund has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the
future during both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is therefore not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for
responding to a highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make any material changes to the Liquidity Program during the review period and was not recommending any changes to the Liquidity Program or the model inputs used
to determine the liquidity classification of each security held by the Fund.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you 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;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
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
|
|
Availability of Quarterly Portfolio Schedule
|
34
|
|
Federal Tax Distribution Information
|
34
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
34
|
|
Electronic Delivery
|
35
|
|
Liquidity Risk Management Program
|
35
|
|
Privacy Policy
|
36
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
![]() |
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.
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Japan Fund –
|
|||
Investor Class (HJPNX)
|
-37.86%
|
-1.91%
|
6.81%
|
Hennessy Japan Fund –
|
|||
Institutional Class (HJPIX)
|
-37.63%
|
-1.51%
|
7.18%
|
Russell/Nomura Total MarketTM Index
|
-24.27%
|
-1.13%
|
5.80%
|
Tokyo Stock Price Index (TOPIX)
|
-24.05%
|
-1.23%
|
5.70%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2022
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Hitachi Ltd.
|
8.46%
|
Mitsubishi Corp.
|
7.86%
|
Sony Group Corp.
|
6.75%
|
Keyence Corp.
|
5.66%
|
Tokio Marine Holdings, Inc.
|
5.58%
|
Recruit Holdings Co., Ltd.
|
4.94%
|
Rohto Pharmaceutical Co., Ltd.
|
4.72%
|
Terumo Corp.
|
4.17%
|
Seven & i Holdings Co., Ltd.
|
4.09%
|
Daikin Industries, Ltd.
|
3.81%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 94.01%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 2.60%
|
||||||||||||
Dentsu Group, Inc.
|
73,600
|
$
|
2,289,208
|
0.73
|
%
|
|||||||
SoftBank Group Corp.
|
94,600
|
4,060,821
|
1.29
|
%
|
||||||||
Z Holdings Corp.
|
712,600
|
1,839,049
|
0.58
|
%
|
||||||||
|
8,189,078
|
2.60
|
%
|
|||||||||
Consumer Discretionary – 13.42%
|
||||||||||||
Asics Corp.
|
240,800
|
3,689,957
|
1.17
|
%
|
||||||||
Fast Retailing Co., Ltd.
|
12,700
|
7,075,693
|
2.25
|
%
|
||||||||
Mercari, Inc. (a)
|
196,700
|
3,265,428
|
1.04
|
%
|
||||||||
Shimano, Inc.
|
45,100
|
6,978,922
|
2.21
|
%
|
||||||||
Sony Group Corp.
|
315,100
|
21,248,662
|
6.75
|
%
|
||||||||
|
42,258,662
|
13.42
|
%
|
|||||||||
Consumer Staples – 15.53%
|
||||||||||||
Ariake Japan Co., Ltd.
|
93,400
|
3,235,777
|
1.03
|
%
|
||||||||
Kao Corp.
|
195,200
|
7,291,100
|
2.32
|
%
|
||||||||
Pigeon Corp.
|
150,000
|
1,964,859
|
0.63
|
%
|
||||||||
Rohto Pharmaceutical Co., Ltd.
|
477,900
|
14,866,538
|
4.72
|
%
|
||||||||
Seven & i Holdings Co., Ltd.
|
345,200
|
12,885,755
|
4.09
|
%
|
||||||||
Unicharm Corp.
|
284,000
|
8,631,166
|
2.74
|
%
|
||||||||
|
48,875,195
|
15.53
|
%
|
|||||||||
Financials – 12.97%
|
||||||||||||
Anicom Holdings, Inc.
|
485,800
|
1,940,969
|
0.62
|
%
|
||||||||
MS&AD Insurance Group Holdings, Inc. (a)
|
194,800
|
5,158,538
|
1.64
|
%
|
||||||||
ORIX Corp.
|
686,500
|
10,083,108
|
3.20
|
%
|
||||||||
Sompo Holdings, Inc.
|
146,100
|
6,091,245
|
1.93
|
%
|
||||||||
Tokio Marine Holdings, Inc.
|
969,400
|
17,551,153
|
5.58
|
%
|
||||||||
|
40,825,013
|
12.97
|
%
|
|||||||||
Health Care – 8.10%
|
||||||||||||
Hoya Corp.
|
44,200
|
4,108,893
|
1.30
|
%
|
||||||||
Olympus Corp.
|
138,700
|
2,924,419
|
0.93
|
%
|
||||||||
Santen Pharmaceutical Co., Ltd.
|
781,900
|
5,350,542
|
1.70
|
%
|
||||||||
Terumo Corp.
|
432,100
|
13,113,805
|
4.17
|
%
|
||||||||
|
25,497,659
|
8.10
|
%
|
|||||||||
Industrials – 32.58%
|
||||||||||||
Daikin Industries, Ltd.
|
80,100
|
11,997,953
|
3.81
|
%
|
||||||||
Hitachi Ltd.
|
586,800
|
26,625,362
|
8.46
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Industrials (Continued)
|
||||||||||||
Kubota Corp.
|
448,400
|
$
|
6,254,997
|
1.99
|
%
|
|||||||
MISUMI Group, Inc.
|
494,800
|
10,538,972
|
3.35
|
%
|
||||||||
Mitsubishi Corp.
|
914,000
|
24,759,240
|
7.86
|
%
|
||||||||
Nidec Corp.
|
124,600
|
6,851,009
|
2.17
|
%
|
||||||||
Recruit Holdings Co., Ltd.
|
505,000
|
15,539,440
|
4.94
|
%
|
||||||||
|
102,566,973
|
32.58
|
%
|
|||||||||
Information Technology – 8.74%
|
||||||||||||
FUJIFILM Holdings Corp.
|
96,800
|
4,428,590
|
1.41
|
%
|
||||||||
Keyence Corp.
|
47,300
|
17,835,189
|
5.66
|
%
|
||||||||
Murata Manufacturing Co., Ltd.
|
111,100
|
5,259,412
|
1.67
|
%
|
||||||||
|
27,523,191
|
8.74
|
%
|
|||||||||
Materials – 0.07%
|
||||||||||||
Nissan Chemical Corp.
|
4,800
|
216,074
|
0.07
|
%
|
||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $252,432,435)
|
295,951,845
|
94.01
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS – 5.29%
|
||||||||||||
Money Market Funds – 5.29%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 2.93% (b)
|
15,505,000
|
15,505,000
|
4.93
|
%
|
||||||||
First American Treasury Obligations Fund,
|
||||||||||||
Institutional Class, 3.06% (b)
|
1,142,718
|
1,142,718
|
0.36
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $16,647,718)
|
16,647,718
|
5.29
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $269,080,153) – 99.30%
|
312,599,563
|
99.30
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.70%
|
2,189,798
|
0.70
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
314,789,361
|
100.00
|
%
|
(a)
|
Non-income-producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2022.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
—
|
$
|
8,189,078
|
$
|
—
|
$
|
8,189,078
|
||||||||
Consumer Discretionary
|
—
|
42,258,662
|
—
|
42,258,662
|
||||||||||||
Consumer Staples
|
—
|
48,875,195
|
—
|
48,875,195
|
||||||||||||
Financials
|
—
|
40,825,013
|
—
|
40,825,013
|
||||||||||||
Health Care
|
—
|
25,497,659
|
—
|
25,497,659
|
||||||||||||
Industrials
|
—
|
102,566,973
|
—
|
102,566,973
|
||||||||||||
Information Technology
|
—
|
27,523,191
|
—
|
27,523,191
|
||||||||||||
Materials
|
—
|
216,074
|
—
|
216,074
|
||||||||||||
Total Common Stocks
|
$
|
—
|
$
|
295,951,845
|
$
|
—
|
$
|
295,951,845
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
16,647,718
|
$
|
—
|
$
|
—
|
$
|
16,647,718
|
||||||||
Total Short-Term Investments
|
$
|
16,647,718
|
$
|
—
|
$
|
—
|
$
|
16,647,718
|
||||||||
Total Investments
|
$
|
16,647,718
|
$
|
295,951,845
|
$
|
—
|
$
|
312,599,563
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2022
|
ASSETS:
|
||||
Investments in securities, at value (cost $269,080,153)
|
$
|
312,599,563
|
||
Dividends and interest receivable
|
2,061,121
|
|||
Receivable for fund shares sold
|
1,903,386
|
|||
Receivable for securities sold
|
937,564
|
|||
Dividend tax reclaim receivable
|
127,737
|
|||
Prepaid expenses and other assets
|
44,538
|
|||
Total assets
|
317,673,909
|
|||
LIABILITIES:
|
||||
Payable for securities purchased
|
797,402
|
|||
Payable for fund shares redeemed
|
1,669,926
|
|||
Payable to advisor
|
214,861
|
|||
Payable to administrator
|
65,601
|
|||
Payable to auditor
|
22,753
|
|||
Accrued distribution fees
|
6,467
|
|||
Accrued service fees
|
3,392
|
|||
Accrued trustees fees
|
12,178
|
|||
Accrued expenses and other payables
|
91,968
|
|||
Total liabilities
|
2,884,548
|
|||
NET ASSETS
|
$
|
314,789,361
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
303,550,861
|
||
Total distributable earnings
|
11,238,500
|
|||
Total net assets
|
$
|
314,789,361
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
39,549,766
|
||
Shares issued and outstanding
|
1,343,938
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
29.43
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
275,239,595
|
||
Shares issued and outstanding
|
9,044,141
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
30.43
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2022
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
5,799,286
|
||
Interest income
|
117,538
|
|||
Total investment income
|
5,916,824
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
4,320,459
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
610,229
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
137,352
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
408,121
|
|||
Distribution fees – Investor Class (See Note 5)
|
92,682
|
|||
Service fees – Investor Class (See Note 5)
|
61,788
|
|||
Federal and state registration fees
|
53,418
|
|||
Trustees’ fees and expenses
|
35,776
|
|||
Reports to shareholders
|
34,508
|
|||
Compliance expense (See Note 5)
|
24,512
|
|||
Audit fees
|
22,752
|
|||
Interest expense (See Note 7)
|
12,682
|
|||
Legal fees
|
8,512
|
|||
Other expenses
|
89,222
|
|||
Total expenses
|
5,912,013
|
|||
NET INVESTMENT INCOME
|
$
|
4,811
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized loss on investments
|
$
|
(12,342,481
|
)
|
|
Net change in unrealized appreciation/depreciation on investments
|
(265,779,808
|
)
|
||
Net loss on investments
|
(278,122,289
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(278,117,478
|
)
|
(1)
|
Net of foreign taxes withheld of $644,349.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
OPERATIONS:
|
||||||||
Net investment income (loss)
|
$
|
4,811
|
$
|
(1,149,197
|
)
|
|||
Net realized gain (loss) on investments
|
(12,342,481
|
)
|
19,086,546
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(265,779,808
|
)
|
68,905,761
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
(278,117,478
|
)
|
86,843,110
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(747,296
|
)
|
—
|
|||||
Distributable earnings – Institutional Class
|
(11,015,401
|
)
|
(48,044
|
)
|
||||
Total distributions
|
(11,762,697
|
)
|
(48,044
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
15,554,341
|
61,092,843
|
||||||
Proceeds from shares subscribed – Institutional Class
|
190,629,014
|
227,381,324
|
||||||
Dividends reinvested – Investor Class
|
703,285
|
—
|
||||||
Dividends reinvested – Institutional Class
|
10,598,719
|
47,024
|
||||||
Cost of shares redeemed – Investor Class
|
(30,693,545
|
)
|
(129,927,285
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(395,706,790
|
)
|
(182,214,241
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(208,914,976
|
)
|
(23,620,335
|
)
|
||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(498,795,151
|
)
|
63,174,731
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
813,584,512
|
750,409,781
|
||||||
End of year
|
$
|
314,789,361
|
$
|
813,584,512
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
403,264
|
1,302,489
|
||||||
Shares sold – Institutional Class
|
4,980,990
|
4,688,665
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
15,157
|
—
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
221,545
|
944
|
||||||
Shares redeemed – Investor Class
|
(876,884
|
)
|
(2,825,915
|
)
|
||||
Shares redeemed – Institutional Class
|
(10,842,081
|
)
|
(3,765,795
|
)
|
||||
Net decrease in shares outstanding
|
(6,098,009
|
)
|
(599,612
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
47.78
|
$
|
42.79
|
$
|
37.17
|
$
|
33.63
|
$
|
32.75
|
|||||||||
(0.11
|
)(1)
|
(0.23
|
)(1)
|
(0.14
|
)(1)
|
0.05
|
(1)
|
(0.00
|
)(2)
|
|||||||||
(17.83
|
)
|
5.22
|
5.81
|
3.50
|
0.89
|
|||||||||||||
(17.94
|
)
|
4.99
|
5.67
|
3.55
|
0.89
|
|||||||||||||
(0.41
|
)
|
—
|
(0.02
|
)
|
(0.01
|
)
|
(0.01
|
)
|
||||||||||
—
|
—
|
(0.03
|
)
|
—
|
—
|
|||||||||||||
(0.41
|
)
|
—
|
(0.05
|
)
|
(0.01
|
)
|
(0.01
|
)
|
||||||||||
$
|
29.43
|
$
|
47.78
|
$
|
42.79
|
$
|
37.17
|
$
|
33.63
|
|||||||||
-37.86
|
%
|
11.66
|
%
|
15.27
|
%
|
10.60
|
%
|
2.70
|
%
|
|||||||||
$
|
39.55
|
$
|
86.11
|
$
|
142.30
|
$
|
87.22
|
$
|
103.33
|
|||||||||
1.44
|
%
|
1.43
|
%
|
1.43
|
%
|
1.43
|
%
|
1.43
|
%
|
|||||||||
(0.30
|
)%
|
(0.49
|
)%
|
(0.37
|
)%
|
0.14
|
%
|
(0.02
|
)%
|
|||||||||
21
|
%
|
16
|
%
|
23
|
%
|
9
|
%
|
1
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
49.54
|
$
|
44.19
|
$
|
38.37
|
$
|
34.67
|
$
|
33.64
|
|||||||||
0.02
|
(1)
|
(0.03
|
)(1)
|
0.02
|
(1)
|
0.21
|
(1)
|
0.15
|
||||||||||
(18.39
|
)
|
5.38
|
5.99
|
3.60
|
0.91
|
|||||||||||||
(18.37
|
)
|
5.35
|
6.01
|
3.81
|
1.06
|
|||||||||||||
(0.74
|
)
|
(0.00
|
)(2)
|
(0.16
|
)
|
(0.11
|
)
|
(0.03
|
)
|
|||||||||
—
|
—
|
(0.03
|
)
|
—
|
—
|
|||||||||||||
(0.74
|
)
|
(0.00
|
)(2)
|
(0.19
|
)
|
(0.11
|
)
|
(0.03
|
)
|
|||||||||
$
|
30.43
|
$
|
49.54
|
$
|
44.19
|
$
|
38.37
|
$
|
34.67
|
|||||||||
-37.63
|
%
|
12.11
|
%
|
15.72
|
%
|
11.02
|
%
|
3.14
|
%
|
|||||||||
$
|
275.24
|
$
|
727.47
|
$
|
608.11
|
$
|
611.41
|
$
|
399.76
|
|||||||||
1.05
|
%
|
1.04
|
%
|
1.04
|
%
|
1.03
|
%
|
1.01
|
%
|
|||||||||
0.04
|
%
|
(0.07
|
)%
|
0.04
|
%
|
0.59
|
%
|
0.49
|
%
|
|||||||||
21
|
%
|
16
|
%
|
23
|
%
|
9
|
%
|
1
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2022
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply
with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment
income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily
the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions
from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and
designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
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 are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2022 are as
follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$723,897
|
$(723,897)
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of
the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as
investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original
cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Foreign Currency – Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market exchange rate at the time of valuation. Purchases and sales of
investments and income are translated into U.S. dollars using the spot market exchange rate prevailing on the respective dates of such transactions. The Fund does not isolate the portion of the results of operations resulting
from fluctuations in foreign exchange rates on investments from fluctuations resulting from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain/loss on
investments. Foreign investments present additional risks due to currency fluctuations, economic and political factors, lower liquidity, government regulations, differences in accounting standards, and other factors.
|
HENNESSY FUNDS
|
1-800-966-4354
|
j.)
|
REIT Equity Securities – Distributions received from real estate investment trusts (“REITs”) may be classified as dividends, capital gains, or return of capital. Investments in REITs may require the
Fund to accrue and distribute income not yet received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do
so) that it otherwise would have continued to hold. At other times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings. If the Fund distributes these amounts, these distributions
could constitute a return of capital to Fund shareholders for U.S. federal income tax purposes. Dividends received by the Fund from a REIT generally do not constitute qualified dividend income and do not qualify for the
dividends-received deduction.
|
k).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market
conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
l).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered
investment companies (“Rule 18f-4”). Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act,
and requires funds whose use of derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager. The Fund has adopted
procedures in accordance with Rule 18f-4.
|
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5
establishes requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight and
certain other conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule
2a-5, the SEC also adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund
investments. The Fund has adopted procedures in accordance with Rule 2a-5.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual
funds, partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the
primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported.
Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and
valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV because most
foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In certain
circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in
which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development
(e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the
ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service
may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may
incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are
generally classified in Level 2 of the fair value hierarchy.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities.
Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60
days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value
would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Investments
|
||||
Cost of investments for tax purposes
|
$
|
270,720,134
|
||
Gross tax unrealized appreciation
|
$
|
72,298,598
|
||
Gross tax unrealized depreciation
|
(30,493,857
|
)
|
||
Net tax unrealized appreciation/(depreciation)
|
$
|
41,804,741
|
||
Undistributed ordinary income
|
$
|
—
|
||
Undistributed long-term capital gains
|
—
|
|||
Total distributable earnings
|
$
|
—
|
||
Other accumulated gain/(loss)
|
$
|
(30,566,241
|
)
|
|
Total accumulated gain/(loss)
|
$
|
11,238,500
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
Ordinary income(1)
|
$
|
11,762,697
|
$
|
48,044
|
||||
Long-term capital gains
|
—
|
—
|
||||||
Total distributions
|
$
|
11,762,697
|
$
|
48,044
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
![]() |
|
TAIT, WELLER & BAKER LLP
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees and Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
86
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
75
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 – June 2022.
|
||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
48
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board
|
Officer since 2004. Kiosk is a full-
|
|
and
|
service marketing agency with
|
||
December 2021
|
offices in the San Francisco Bay Area
|
||
as a Trustee
|
and Liverpool, UK and staff across
|
||
nine states in the U.S.
|
|||
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
77
|
consultant in the securities industry.
|
||
Trustee
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Brian Alexander
|
March 2015
|
Mr. Alexander has worked for the
|
None.
|
41
|
Sutter Health organization since
|
||
Adviser to the Board
|
2011 in various positions. He has
|
||
served as the Chief Executive Officer
|
|||
of the North Valley Hospital Area
|
|||
since 2021. From 2018 to 2021, he
|
|||
served as the Chief Executive Officer
|
|||
of Sutter Roseville Medical Center.
|
|||
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.
|
|||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
58
|
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.
|
|||
Interested Trustee(1)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Hennessy has been employed
|
Hennessy
|
66
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
Name, Age,
|
|||
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.
|
|
56
|
since 1989 and currently serves as its President, Chief
|
||
Executive Vice President
|
Operating Officer, and Secretary.
|
||
and Treasurer
|
|||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
|
66
|
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.
|
|
50
|
since December 2013 and currently serves as its Chief
|
||
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
||
and Head of Distribution
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Jennifer Cheskiewicz(2)
|
June 2013
|
Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
|
45
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc. since
|
64
|
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 their 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 Kelley(4)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
50
|
October 2012. He has served as Chief Investment Officer of the
|
|
Chief Investment Officer,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Senior Vice President,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He 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 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He served as Co-Portfolio Manager of the Hennessy
|
||
Technology Fund from February 2017 until May 2018. Mr. Kelley
|
||
served as Portfolio Manager of FBR Fund Advisers, Inc. from
|
||
January 2008 to October 2012.
|
||
L. Joshua Wein(4)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
49
|
2018. He has served as Co-Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone
|
|
Co-Portfolio Manager
|
Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth
|
|
Fund, the Hennessy Cornerstone Value Fund, Hennessy Total
|
||
Return Fund, the Hennessy Balanced Fund, the Hennessy Gas
|
||
Utility Fund, and the Hennessy Technology Fund since February
|
||
2019. He served as a Senior Analyst of these same funds from
|
||
September 2018 through February 2019. Mr. Wein served as
|
||
Director of Alternative Investments and Co-Portfolio Manager
|
||
at Sterling Capital Management from 2008 to 2018.
|
(1)
|
Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust.
|
(2)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2022 –
|
|
May 1, 2022
|
October 31, 2022
|
October 31, 2022
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 894.80
|
$6.83
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.00
|
$7.27
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 896.10
|
$5.26
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.66
|
$5.60
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.43% for Investor Class shares or 1.10% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — LIQUIDITY RISK MANAGEMENT PROGRAM
|
![]() |
![]() |
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund
has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future
during both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is therefore not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for
responding to a highly liquid investment minimum shortfall.
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
The Program Administrator did not make any material changes to the Liquidity Program during the review period and was not recommending any changes to the Liquidity Program or the model inputs used to
determine the liquidity classification of each security held by the Fund.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you 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;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
LIQUIDITY RISK MANAGEMENT PROGRAM — PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
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
|
|
Availability of Quarterly Portfolio Schedule
|
34
|
|
Federal Tax Distribution Information
|
34
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
34
|
|
Electronic Delivery
|
35
|
|
Liquidity Risk Management Program
|
35
|
|
Privacy Policy
|
36
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
![]() |
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.
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Japan Small Cap Fund –
|
|||
Investor Class (HJPSX)
|
-27.41%
|
-1.14%
|
9.53%
|
Hennessy Japan Small Cap Fund –
|
|||
Institutional Class (HJSIX)(1)
|
-27.05%
|
-0.71%
|
9.83%
|
Russell/Nomura Small CapTM Index
|
-24.44%
|
-3.76%
|
5.61%
|
Tokyo Stock Price Index (TOPIX)
|
-24.05%
|
-1.23%
|
5.70%
|
(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.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2022
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Ship Healthcare Holdings, Inc.
|
2.32%
|
Musashi Seimitsu Industry Co., Ltd.
|
2.26%
|
Nihon Kohden Corp.
|
2.21%
|
SIIX Corp.
|
2.17%
|
Yamaichi Electronics Industry Co., Ltd.
|
2.09%
|
AEON Financial Service Co., Ltd.
|
2.00%
|
Asia Pile Holdings Corp.
|
1.99%
|
Musashino Bank, Ltd.
|
1.99%
|
Penta-Ocean Construction Co., Ltd.
|
1.99%
|
NGK Spark Plug Co., Ltd.
|
1.97%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 94.34%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 4.72%
|
||||||||||||
Imagica Group, Inc.
|
144,100
|
$
|
857,135
|
1.09
|
%
|
|||||||
Kufu Co, Inc. (a)
|
123,500
|
429,524
|
0.54
|
%
|
||||||||
Macromill, Inc.
|
151,200
|
1,126,984
|
1.43
|
%
|
||||||||
ValueCommerce Co., Ltd.
|
89,800
|
1,309,987
|
1.66
|
%
|
||||||||
|
3,723,630
|
4.72
|
%
|
|||||||||
Consumer Discretionary – 13.37%
|
||||||||||||
Aeon Fantasy Co., Ltd.
|
59,300
|
1,175,456
|
1.49
|
%
|
||||||||
Benesse Holdings, Inc.
|
95,700
|
1,411,813
|
1.79
|
%
|
||||||||
J Front Retailing Co., Ltd.
|
50,100
|
404,960
|
0.51
|
%
|
||||||||
Matsuoka Corp.
|
57,900
|
355,638
|
0.45
|
%
|
||||||||
Musashi Seimitsu Industry Co., Ltd.
|
154,200
|
1,779,657
|
2.26
|
%
|
||||||||
NGK Spark Plug Co., Ltd.
|
85,300
|
1,556,218
|
1.97
|
%
|
||||||||
Nojima Corp.
|
146,200
|
1,217,604
|
1.54
|
%
|
||||||||
Sac’s Bar Holdings, Inc.
|
287,400
|
1,361,712
|
1.73
|
%
|
||||||||
Saizeriya Co., Ltd.
|
68,800
|
1,283,607
|
1.63
|
%
|
||||||||
|
10,546,665
|
13.37
|
%
|
|||||||||
Consumer Staples – 3.20%
|
||||||||||||
Nishimoto Co., Ltd.
|
53,000
|
1,483,826
|
1.88
|
%
|
||||||||
Sugi Holdings Co., Ltd.
|
26,000
|
1,042,733
|
1.32
|
%
|
||||||||
|
2,526,559
|
3.20
|
%
|
|||||||||
Energy – 1.70%
|
||||||||||||
Iwatani Corp.
|
36,300
|
1,336,618
|
1.70
|
%
|
||||||||
Financials – 5.95%
|
||||||||||||
AEON Financial Service Co., Ltd.
|
161,500
|
1,580,538
|
2.00
|
%
|
||||||||
Lifenet Insurance Co. (a)
|
231,500
|
1,543,708
|
1.96
|
%
|
||||||||
Musashino Bank, Ltd.
|
135,600
|
1,565,908
|
1.99
|
%
|
||||||||
|
4,690,154
|
5.95
|
%
|
|||||||||
Health Care – 4.53%
|
||||||||||||
Nihon Kohden Corp.
|
77,700
|
1,739,870
|
2.21
|
%
|
||||||||
Ship Healthcare Holdings, Inc.
|
95,500
|
1,831,582
|
2.32
|
%
|
||||||||
|
3,571,452
|
4.53
|
%
|
|||||||||
Industrials – 32.46%
|
||||||||||||
Amada Co., Ltd.
|
173,200
|
1,218,215
|
1.54
|
%
|
||||||||
Benefit One, Inc.
|
78,600
|
1,087,362
|
1.38
|
%
|
||||||||
Creek & River Co., Ltd.
|
100,900
|
1,385,391
|
1.76
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Industrials (Continued)
|
||||||||||||
Daihen Corp.
|
30,300
|
$
|
781,340
|
0.99
|
%
|
|||||||
Glory Ltd.
|
57,400
|
885,030
|
1.12
|
%
|
||||||||
Hanwa Co., Ltd.
|
56,400
|
1,363,976
|
1.73
|
%
|
||||||||
Hito Communications Holdings, Inc.
|
30,900
|
345,775
|
0.44
|
%
|
||||||||
Kawada Technologies, Inc.
|
32,200
|
784,255
|
0.99
|
%
|
||||||||
Mitsubishi Logisnext Co., Ltd.
|
144,700
|
745,724
|
0.95
|
%
|
||||||||
Nichiha Corp.
|
60,700
|
1,149,446
|
1.46
|
%
|
||||||||
Nippon Koei Co., Ltd.
|
67,500
|
1,510,110
|
1.91
|
%
|
||||||||
Nissei ASB Machine Co., Ltd.
|
50,300
|
1,254,467
|
1.59
|
%
|
||||||||
Nittoku Co., Ltd.
|
71,400
|
1,215,449
|
1.54
|
%
|
||||||||
Penta-Ocean Construction Co., Ltd.
|
316,200
|
1,572,527
|
1.99
|
%
|
||||||||
Sato Holdings Corp.
|
110,800
|
1,366,856
|
1.73
|
%
|
||||||||
SBS Holdings, Inc.
|
61,300
|
1,193,564
|
1.51
|
%
|
||||||||
Tadano Ltd.
|
110,900
|
677,897
|
0.86
|
%
|
||||||||
Takasago Thermal Engineering Co., Ltd.
|
64,500
|
784,647
|
0.99
|
%
|
||||||||
Tanseisha Co., Ltd.
|
263,200
|
1,418,600
|
1.80
|
%
|
||||||||
Tocalo Co., Ltd.
|
92,400
|
738,240
|
0.94
|
%
|
||||||||
TRE Holdings Corp.
|
141,200
|
1,522,892
|
1.93
|
%
|
||||||||
Tsubakimoto Chain Co.
|
71,000
|
1,520,092
|
1.93
|
%
|
||||||||
Tsukishima Kikai Co., Ltd.
|
160,000
|
1,084,682
|
1.38
|
%
|
||||||||
|
25,606,537
|
32.46
|
%
|
|||||||||
Information Technology – 17.61%
|
||||||||||||
Anritsu Corp.
|
79,900
|
804,183
|
1.02
|
%
|
||||||||
Digital Garage, Inc.
|
27,600
|
660,874
|
0.84
|
%
|
||||||||
Elecom Co., Ltd.
|
72,600
|
672,555
|
0.85
|
%
|
||||||||
Macnica Fuji Electronics Holdings, Inc.
|
63,900
|
1,278,069
|
1.62
|
%
|
||||||||
Maxell Ltd.
|
113,200
|
939,101
|
1.19
|
%
|
||||||||
Mimaki Engineering Co., Ltd.
|
280,200
|
1,384,079
|
1.76
|
%
|
||||||||
Nippon Signal Company, Ltd.
|
200,000
|
1,355,638
|
1.72
|
%
|
||||||||
SIIX Corp.
|
222,000
|
1,711,590
|
2.17
|
%
|
||||||||
Towa Corp.
|
99,400
|
1,199,612
|
1.52
|
%
|
||||||||
Transcosmos, Inc.
|
59,400
|
1,365,562
|
1.73
|
%
|
||||||||
WingArc1st, Inc.
|
54,200
|
869,290
|
1.10
|
%
|
||||||||
Yamaichi Electronics Co., Ltd.
|
114,700
|
1,647,212
|
2.09
|
%
|
||||||||
|
13,887,765
|
17.61
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Materials – 6.34%
|
||||||||||||
Asia Pile Holdings Corp.
|
463,200
|
$
|
1,571,185
|
1.99
|
%
|
|||||||
Kyoei Steel Ltd.
|
160,600
|
1,418,085
|
1.80
|
%
|
||||||||
Rengo Co., Ltd.
|
144,800
|
804,454
|
1.02
|
%
|
||||||||
Tokyo Ohka Kogyo Co., Ltd.
|
28,000
|
1,207,128
|
1.53
|
%
|
||||||||
|
5,000,852
|
6.34
|
%
|
|||||||||
Real Estate – 3.48%
|
||||||||||||
Star Mica Holdings Co., Ltd.
|
147,900
|
1,393,974
|
1.77
|
%
|
||||||||
Tosei Corp.
|
141,900
|
1,353,304
|
1.71
|
%
|
||||||||
|
2,747,278
|
3.48
|
%
|
|||||||||
Utilities – 0.98%
|
||||||||||||
EF-ON, Inc.
|
179,900
|
774,609
|
0.98
|
%
|
||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $85,755,753)
|
74,412,119
|
94.34
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS – 4.30%
|
||||||||||||
Money Market Funds – 4.30%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 2.93% (b)
|
3,392,742
|
3,392,742
|
4.30
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $3,392,742)
|
3,392,742
|
4.30
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $89,148,495) – 98.64%
|
77,804,861
|
98.64
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 1.36%
|
1,075,258
|
1.36
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
78,880,119
|
100.00
|
%
|
(a)
|
Non-income-producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2022.
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
—
|
$
|
3,723,630
|
$
|
—
|
$
|
3,723,630
|
||||||||
Consumer Discretionary
|
—
|
10,546,665
|
—
|
10,546,665
|
||||||||||||
Consumer Staples
|
—
|
2,526,559
|
—
|
2,526,559
|
||||||||||||
Energy
|
—
|
1,336,618
|
—
|
1,336,618
|
||||||||||||
Financials
|
—
|
4,690,154
|
—
|
4,690,154
|
||||||||||||
Health Care
|
—
|
3,571,452
|
—
|
3,571,452
|
||||||||||||
Industrials
|
—
|
25,606,537
|
—
|
25,606,537
|
||||||||||||
Information Technology
|
—
|
13,887,765
|
—
|
13,887,765
|
||||||||||||
Materials
|
—
|
5,000,852
|
—
|
5,000,852
|
||||||||||||
Real Estate
|
—
|
2,747,278
|
—
|
2,747,278
|
||||||||||||
Utilities
|
—
|
774,609
|
—
|
774,609
|
||||||||||||
Total Common Stocks
|
$
|
—
|
$
|
74,412,119
|
$
|
—
|
$
|
74,412,119
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
3,392,742
|
$
|
—
|
$
|
—
|
$
|
3,392,742
|
||||||||
Total Short-Term Investments
|
$
|
3,392,742
|
$
|
—
|
$
|
—
|
$
|
3,392,742
|
||||||||
Total Investments
|
$
|
3,392,742
|
$
|
74,412,119
|
$
|
—
|
$
|
77,804,861
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Assets and Liabilities as of October 31, 2022
|
ASSETS:
|
||||
Investments in securities, at value (cost $89,148,495)
|
$
|
77,804,861
|
||
Cash
|
1,528
|
|||
Dividends and interest receivable
|
567,994
|
|||
Receivable for fund shares sold
|
81,860
|
|||
Receivable for securities sold
|
630,128
|
|||
Dividend tax reclaim receivable
|
112,873
|
|||
Prepaid expenses and other assets
|
23,834
|
|||
Total assets
|
79,223,078
|
|||
LIABILITIES:
|
||||
Payable for securities purchased
|
92,422
|
|||
Payable for fund shares redeemed
|
118,430
|
|||
Payable to advisor
|
54,289
|
|||
Payable to administrator
|
17,427
|
|||
Payable to auditor
|
22,749
|
|||
Accrued distribution fees
|
5,176
|
|||
Accrued service fees
|
2,683
|
|||
Accrued trustees fees
|
5,624
|
|||
Accrued expenses and other payables
|
24,159
|
|||
Total liabilities
|
342,959
|
|||
NET ASSETS
|
$
|
78,880,119
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
91,504,922
|
||
Accumulated deficit
|
(12,624,803
|
)
|
||
Total net assets
|
$
|
78,880,119
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
31,228,193
|
||
Shares issued and outstanding
|
2,382,955
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
13.10
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
47,651,926
|
||
Shares issued and outstanding
|
3,675,009
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
12.97
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS
|
Statement of Operations for the year ended October 31, 2022
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
2,106,060
|
||
Interest income
|
46,333
|
|||
Total investment income
|
2,152,393
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
719,729
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
89,542
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
50,328
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
112,336
|
|||
Distribution fees – Investor Class (See Note 5)
|
56,437
|
|||
Service fees – Investor Class (See Note 5)
|
37,624
|
|||
Federal and state registration fees
|
36,827
|
|||
Compliance expense (See Note 5)
|
24,516
|
|||
Audit fees
|
22,743
|
|||
Trustees’ fees and expenses
|
18,509
|
|||
Reports to shareholders
|
14,571
|
|||
Interest expense (See Note 7)
|
1,702
|
|||
Legal fees
|
1,530
|
|||
Other expenses
|
16,350
|
|||
Total expenses
|
1,202,744
|
|||
NET INVESTMENT INCOME
|
$
|
949,649
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized loss on investments
|
$
|
(2,110,306
|
)
|
|
Net change in unrealized appreciation/depreciation on investments
|
(29,078,282
|
)
|
||
Net loss on investments
|
(31,188,588
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(30,238,939
|
)
|
(1)
|
Net of foreign taxes withheld of $234,991.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
949,649
|
$
|
392,688
|
||||
Net realized gain (loss) on investments
|
(2,110,306
|
)
|
1,288,362
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(29,078,282
|
)
|
10,917,876
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
(30,238,939
|
)
|
12,598,926
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(186,236
|
)
|
(121,856
|
)
|
||||
Distributable earnings – Institutional Class
|
(589,255
|
)
|
(260,753
|
)
|
||||
Total distributions
|
(775,491
|
)
|
(382,609
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
6,437,217
|
10,823,523
|
||||||
Proceeds from shares subscribed – Institutional Class
|
38,467,373
|
45,926,109
|
||||||
Dividends reinvested – Investor Class
|
180,038
|
116,988
|
||||||
Dividends reinvested – Institutional Class
|
571,970
|
246,865
|
||||||
Cost of shares redeemed – Investor Class
|
(8,822,706
|
)
|
(18,166,242
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(39,666,483
|
)
|
(19,434,438
|
)
|
||||
Net increase (decrease) in net assets
|
||||||||
derived from capital share transactions
|
(2,832,591
|
)
|
19,512,805
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(33,847,021
|
)
|
31,729,122
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
112,727,140
|
80,998,018
|
||||||
End of year
|
$
|
78,880,119
|
$
|
112,727,140
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
424,356
|
607,997
|
||||||
Shares sold – Institutional Class
|
2,624,209
|
2,575,700
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
10,154
|
6,496
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
33,206
|
13,885
|
||||||
Shares redeemed – Investor Class
|
(598,751
|
)
|
(1,018,588
|
)
|
||||
Shares redeemed – Institutional Class
|
(2,693,301
|
)
|
(1,098,633
|
)
|
||||
Net increase (decrease) in shares outstanding
|
(200,127
|
)
|
1,086,857
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
18.12
|
$
|
15.73
|
$
|
15.43
|
$
|
14.99
|
$
|
14.92
|
|||||||||
0.12
|
(1)
|
0.03
|
(1)
|
0.01
|
(1)
|
0.03
|
(1)
|
0.05
|
||||||||||
(5.07
|
)
|
2.40
|
0.50
|
0.88
|
0.35
|
|||||||||||||
(4.95
|
)
|
2.43
|
0.51
|
0.91
|
0.40
|
|||||||||||||
(0.00
|
)(2)
|
(0.04
|
)
|
(0.21
|
)
|
—
|
(0.05
|
)
|
||||||||||
(0.07
|
)
|
—
|
—
|
(0.47
|
)
|
(0.28
|
)
|
|||||||||||
(0.07
|
)
|
(0.04
|
)
|
(0.21
|
)
|
(0.47
|
)
|
(0.33
|
)
|
|||||||||
$
|
13.10
|
$
|
18.12
|
$
|
15.73
|
$
|
15.43
|
$
|
14.99
|
|||||||||
-27.41
|
%
|
15.46
|
%
|
3.27
|
%
|
6.30
|
%
|
2.64
|
%
|
|||||||||
$
|
31.23
|
$
|
46.15
|
$
|
46.41
|
$
|
66.30
|
$
|
100.93
|
|||||||||
1.57
|
%
|
1.53
|
%
|
1.55
|
%
|
1.52
|
%
|
1.46
|
%
|
|||||||||
0.83
|
%
|
0.16
|
%
|
0.09
|
%
|
0.23
|
%
|
0.21
|
%
|
|||||||||
45
|
%
|
24
|
%
|
17
|
%
|
21
|
%
|
35
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
17.94
|
$
|
15.58
|
$
|
15.28
|
$
|
14.83
|
$
|
14.72
|
|||||||||
0.18
|
(1)
|
0.11
|
(1)
|
0.07
|
(1)
|
0.09
|
(1)
|
0.11
|
||||||||||
(4.99
|
)
|
2.37
|
0.50
|
0.86
|
0.36
|
|||||||||||||
(4.81
|
)
|
2.48
|
0.57
|
0.95
|
0.47
|
|||||||||||||
(0.09
|
)
|
(0.12
|
)
|
(0.27
|
)
|
(0.04
|
)
|
(0.08
|
)
|
|||||||||
(0.07
|
)
|
—
|
—
|
(0.46
|
)
|
(0.28
|
)
|
|||||||||||
(0.16
|
)
|
(0.12
|
)
|
(0.27
|
)
|
(0.50
|
)
|
(0.36
|
)
|
|||||||||
$
|
12.97
|
$
|
17.94
|
$
|
15.58
|
$
|
15.28
|
$
|
14.83
|
|||||||||
-27.05
|
%
|
15.90
|
%
|
3.69
|
%
|
6.73
|
%
|
3.12
|
%
|
|||||||||
$
|
47.65
|
$
|
66.58
|
$
|
34.58
|
$
|
63.78
|
$
|
98.42
|
|||||||||
1.17
|
%
|
1.13
|
%
|
1.13
|
%
|
1.12
|
%
|
1.04
|
%
|
|||||||||
1.22
|
%
|
0.63
|
%
|
0.45
|
%
|
0.61
|
%
|
0.77
|
%
|
|||||||||
45
|
%
|
24
|
%
|
17
|
%
|
21
|
%
|
35
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2022
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply
with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment
income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily
the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions
from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and
designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
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 are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. As of October 31, 2022, no such
reclassifications were required for fiscal year 2022.
|
|
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
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as
investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original
cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all
liabilities (including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The
offering and redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Foreign Currency – Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market exchange rate at the time of valuation. Purchases and sales of
investments and income are translated into U.S. dollars using the spot market exchange rate prevailing on the respective dates of such transactions. The Fund does not isolate the portion of the results of operations
resulting from fluctuations in foreign exchange rates on investments from fluctuations resulting from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized
gain/loss on investments. Foreign investments present additional risks due to currency fluctuations, economic and political factors, lower liquidity, government regulations, differences in accounting standards, and other
factors.
|
j.)
|
REIT Equity Securities – Distributions received from real estate investment trusts (“REITs”) may be classified as dividends, capital gains, or return of capital. Investments in REITs may require
the Fund to accrue and distribute income not yet
|
HENNESSY FUNDS
|
1-800-966-4354
|
received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it
otherwise would have continued to hold. At other times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings. If the Fund distributes these amounts, these distributions could
constitute a return of capital to Fund shareholders for U.S. federal income tax purposes. Dividends received by the Fund from a REIT generally do not constitute qualified dividend income and do not qualify for the
dividends-received deduction.
|
|
k).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current
market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
l).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered
investment companies (“Rule 18f-4”). Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act,
and requires funds whose use of derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager. The Fund has
adopted procedures in accordance with Rule 18f-4.
|
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5
establishes requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight and
certain other conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with
Rule 2a-5, the SEC also adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund
investments. The Fund has adopted procedures in accordance with Rule 2a-5.
|
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
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit risk curves, default rates, and similar
data).
|
||
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when
observable inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual
funds, partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by
the primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported.
Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and
valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV because most
foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In certain
circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in
which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development
(e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the
ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and
U.S. government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing
service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the
model may incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These
securities are generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities.
Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60
days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would
|
HENNESSY FUNDS
|
1-800-966-4354
|
be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below. Short-term securities are generally classified in
Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
||||
Cost of investments for tax purposes
|
$
|
89,768,318
|
||
Gross tax unrealized appreciation
|
$
|
5,052,323
|
||
Gross tax unrealized depreciation
|
(17,054,423
|
)
|
||
Net tax unrealized appreciation/(depreciation)
|
$
|
(12,002,100
|
)
|
|
Undistributed ordinary income
|
$
|
812,870
|
||
Undistributed long-term capital gains
|
—
|
|||
Total distributable earnings
|
$
|
812,870
|
||
Other accumulated gain/(loss)
|
$
|
(1,435,573
|
)
|
|
Total accumulated gain/(loss)
|
$
|
(12,624,803
|
)
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
Ordinary income(1)
|
$
|
327,698
|
$
|
382,609
|
||||
Long-term capital gains
|
447,793
|
—
|
||||||
Total distributions
|
$
|
775,491
|
$
|
382,609
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees and Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
86
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
75
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 – June 2022.
|
||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
48
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board
|
Officer since 2004. Kiosk is a full-
|
|
and
|
service marketing agency with
|
||
December 2021
|
offices in the San Francisco Bay Area
|
||
as a Trustee
|
and Liverpool, UK and staff across
|
||
nine states in the U.S.
|
|||
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
77
|
consultant in the securities industry.
|
||
Trustee
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Brian Alexander
|
March 2015
|
Mr. Alexander has worked for the
|
None.
|
41
|
Sutter Health organization since
|
||
Adviser to the Board
|
2011 in various positions. He has
|
||
served as the Chief Executive Officer
|
|||
of the North Valley Hospital Area
|
|||
since 2021. From 2018 to 2021, he
|
|||
served as the Chief Executive Officer
|
|||
of Sutter Roseville Medical Center.
|
|||
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.
|
|||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
58
|
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.
|
|||
Interested Trustee(1)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Hennessy has been employed
|
Hennessy
|
66
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
Name, Age,
|
|||
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.
|
|
56
|
since 1989 and currently serves as its President, Chief
|
||
Executive Vice President
|
Operating Officer, and Secretary.
|
||
and Treasurer
|
|||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
|
66
|
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.
|
|
50
|
since December 2013 and currently serves as its Chief
|
||
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
||
and Head of Distribution
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Jennifer Cheskiewicz(2)
|
June 2013
|
Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
|
45
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc. since
|
64
|
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 their 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 Kelley(4)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
50
|
October 2012. He has served as Chief Investment Officer of the
|
|
Chief Investment Officer,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Senior Vice President,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He 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 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He served as Co-Portfolio Manager of the Hennessy
|
||
Technology Fund from February 2017 until May 2018. Mr. Kelley
|
||
served as Portfolio Manager of FBR Fund Advisers, Inc. from
|
||
January 2008 to October 2012.
|
||
L. Joshua Wein(4)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
49
|
2018. He has served as Co-Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone
|
|
Co-Portfolio Manager
|
Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth
|
|
Fund, the Hennessy Cornerstone Value Fund, Hennessy Total
|
||
Return Fund, the Hennessy Balanced Fund, the Hennessy Gas
|
||
Utility Fund, and the Hennessy Technology Fund since February
|
||
2019. He served as a Senior Analyst of these same funds from
|
||
September 2018 through February 2019. Mr. Wein served as
|
||
Director of Alternative Investments and Co-Portfolio Manager
|
||
at Sterling Capital Management from 2008 to 2018.
|
(1)
|
Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust.
|
(2)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2022 –
|
|
May 1, 2022
|
October 31, 2022
|
October 31, 2022
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 942.40
|
$7.78
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,017.19
|
$8.08
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 945.30
|
$5.88
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.16
|
$6.11
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.59% for Investor Class shares or 1.20% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
Country
|
Gross Foreign Income
|
Foreign Tax Paid
|
||
Japan
|
$2,341,032
|
$234,991
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — LIQUIDITY RISK MANAGEMENT PROGRAM
|
![]() |
![]() |
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the
Fund has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the
future during both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is therefore not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for
responding to a highly liquid investment minimum shortfall.
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
The Program Administrator did not make any material changes to the Liquidity Program during the review period and was not recommending any changes to the Liquidity Program or the model inputs used
to determine the liquidity classification of each security held by the Fund.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you 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;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
LIQUIDITY RISK MANAGEMENT PROGRAM — PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
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
|
29
|
|
Trustees and Officers of the Fund
|
30
|
|
Expense Example
|
34
|
|
Proxy Voting Policy and Proxy Voting Records
|
36
|
|
Availability of Quarterly Portfolio Schedule
|
36
|
|
Federal Tax Distribution Information
|
36
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
36
|
|
Electronic Delivery
|
36
|
|
Liquidity Risk Management Program
|
37
|
|
Privacy Policy
|
37
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Large Cap Financial Fund –
|
|||
Investor Class (HLFNX)
|
-26.22%
|
4.98%
|
9.63%
|
Hennessy Large Cap Financial Fund –
|
|||
Institutional Class (HILFX)(1)
|
-25.95%
|
5.35%
|
9.93%
|
Russell 1000® Index Financials
|
-13.72%
|
10.49%
|
13.67%
|
Russell 1000® Index
|
-16.38%
|
10.19%
|
12.66%
|
(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.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2022
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Citizens Financial Group, Inc.
|
5.72%
|
Bank of America Corp.
|
5.67%
|
JPMorgan Chase & Co.
|
5.50%
|
Wells Fargo & Co.
|
5.42%
|
Berkshire Hathaway, Inc., Class B
|
5.16%
|
Capital One Financial Corp.
|
4.98%
|
State Street Corp.
|
4.53%
|
Fifth Third Bancorp
|
4.52%
|
The Goldman Sachs Group, Inc.
|
4.52%
|
KeyCorp
|
4.25%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 91.67%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Financials – 79.97%
|
||||||||||||
Bank of America Corp.
|
72,000
|
$
|
2,594,880
|
5.67
|
%
|
|||||||
Berkshire Hathaway, Inc., Class B (a)
|
8,000
|
2,360,720
|
5.16
|
%
|
||||||||
BlackRock, Inc.
|
600
|
387,546
|
0.85
|
%
|
||||||||
Capital One Financial Corp.
|
21,500
|
2,279,430
|
4.98
|
%
|
||||||||
Citigroup, Inc.
|
41,000
|
1,880,260
|
4.11
|
%
|
||||||||
Citizens Financial Group, Inc.
|
64,000
|
2,617,600
|
5.72
|
%
|
||||||||
Comerica, Inc.
|
25,000
|
1,762,500
|
3.85
|
%
|
||||||||
Fifth Third Bancorp
|
58,000
|
2,070,020
|
4.52
|
%
|
||||||||
Huntington Bancshares, Inc.
|
128,000
|
1,943,040
|
4.24
|
%
|
||||||||
JPMorgan Chase & Co.
|
20,000
|
2,517,600
|
5.50
|
%
|
||||||||
KeyCorp
|
109,000
|
1,947,830
|
4.25
|
%
|
||||||||
M&T Bank Corp.
|
7,000
|
1,178,590
|
2.57
|
%
|
||||||||
Morgan Stanley
|
20,000
|
1,643,400
|
3.59
|
%
|
||||||||
Regions Financial Corp.
|
12,000
|
263,400
|
0.58
|
%
|
||||||||
Signature Bank
|
11,500
|
1,823,095
|
3.98
|
%
|
||||||||
State Street Corp.
|
28,000
|
2,072,000
|
4.53
|
%
|
||||||||
The Goldman Sachs Group, Inc.
|
6,000
|
2,067,060
|
4.52
|
%
|
||||||||
The PNC Financial Services Group, Inc.
|
2,500
|
404,575
|
0.88
|
%
|
||||||||
Truist Financial Corp.
|
20,000
|
895,800
|
1.96
|
%
|
||||||||
U.S. Bancorp
|
15,000
|
636,750
|
1.39
|
%
|
||||||||
Wells Fargo & Co.
|
54,000
|
2,483,460
|
5.42
|
%
|
||||||||
Zions Bancorp NA
|
15,000
|
779,100
|
1.70
|
%
|
||||||||
|
36,608,656
|
79.97
|
%
|
|||||||||
Information Technology – 11.70%
|
||||||||||||
Apple, Inc.
|
5,500
|
843,370
|
1.84
|
%
|
||||||||
Mastercard, Inc., Class A
|
4,500
|
1,476,810
|
3.23
|
%
|
||||||||
PayPal Holdings, Inc. (a)
|
16,000
|
1,337,280
|
2.92
|
%
|
||||||||
Visa, Inc., Class A
|
8,200
|
1,698,712
|
3.71
|
%
|
||||||||
|
5,356,172
|
11.70
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $36,081,067)
|
41,964,828
|
91.67
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
REITS – 6.80%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Financials – 6.80%
|
||||||||||||
AGNC Investment Corp.
|
110,000
|
$
|
904,200
|
1.97
|
%
|
|||||||
Annaly Capital Management, Inc.
|
50,000
|
927,500
|
2.03
|
%
|
||||||||
Starwood Property Trust, Inc.
|
62,000
|
1,280,920
|
2.80
|
%
|
||||||||
|
||||||||||||
Total REITS
|
||||||||||||
(Cost $3,247,355)
|
3,112,620
|
6.80
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS – 3.62%
|
||||||||||||
Money Market Funds – 3.62%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 2.93% (b)
|
1,658,427
|
1,658,427
|
3.62
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $1,658,427)
|
1,658,427
|
3.62
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $40,986,849) – 102.09%
|
46,735,875
|
102.09
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (2.09)%
|
(959,284
|
)
|
(2.09
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
45,776,591
|
100.00
|
%
|
(a)
|
Non-income-producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2022.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Financials
|
$
|
36,608,656
|
$
|
—
|
$
|
—
|
$
|
36,608,656
|
||||||||
Information Technology
|
5,356,172
|
—
|
—
|
5,356,172
|
||||||||||||
Total Common Stocks
|
$
|
41,964,828
|
$
|
—
|
$
|
—
|
$
|
41,964,828
|
||||||||
REITS
|
||||||||||||||||
Financials
|
$
|
3,112,620
|
$
|
—
|
$
|
—
|
$
|
3,112,620
|
||||||||
Total REITS
|
$
|
3,112,620
|
$
|
—
|
$
|
—
|
$
|
3,112,620
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
1,658,427
|
$
|
—
|
$
|
—
|
$
|
1,658,427
|
||||||||
Total Short-Term Investments
|
$
|
1,658,427
|
$
|
—
|
$
|
—
|
$
|
1,658,427
|
||||||||
Total Investments
|
$
|
46,735,875
|
$
|
—
|
$
|
—
|
$
|
46,735,875
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Assets and Liabilities as of October 31, 2022
|
ASSETS:
|
||||
Investments in securities, at value (cost $40,986,849)
|
$
|
46,735,875
|
||
Cash
|
11,440
|
|||
Dividends and interest receivable
|
49,034
|
|||
Receivable for fund shares sold
|
10,503
|
|||
Prepaid expenses and other assets
|
16,028
|
|||
Total assets
|
46,822,880
|
|||
LIABILITIES:
|
||||
Payable for securities purchased
|
410,654
|
|||
Payable for fund shares redeemed
|
545,578
|
|||
Payable to advisor
|
33,776
|
|||
Payable to administrator
|
10,529
|
|||
Payable to auditor
|
22,749
|
|||
Accrued distribution fees
|
3,376
|
|||
Accrued service fees
|
1,917
|
|||
Accrued trustees fees
|
5,274
|
|||
Accrued expenses and other payables
|
12,436
|
|||
Total liabilities
|
1,046,289
|
|||
NET ASSETS
|
$
|
45,776,591
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
38,296,281
|
||
Total distributable earnings
|
7,480,310
|
|||
Total net assets
|
$
|
45,776,591
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
23,625,419
|
||
Shares issued and outstanding
|
952,453
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
24.80
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
22,151,172
|
||
Shares issued and outstanding
|
882,256
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
25.11
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS
|
Statement of Operations for the year ended October 31, 2022
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
1,265,636
|
||
Interest income
|
17,937
|
|||
Total investment income
|
1,283,573
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
518,101
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
53,767
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
25,212
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
76,387
|
|||
Distribution fees – Investor Class (See Note 5)
|
42,271
|
|||
Federal and state registration fees
|
34,417
|
|||
Service fees – Investor Class (See Note 5)
|
28,180
|
|||
Compliance expense (See Note 5)
|
24,516
|
|||
Audit fees
|
22,743
|
|||
Trustees’ fees and expenses
|
17,595
|
|||
Reports to shareholders
|
11,019
|
|||
Legal fees
|
1,004
|
|||
Interest expense (See Note 7)
|
716
|
|||
Other expenses
|
12,401
|
|||
Total expenses
|
868,329
|
|||
NET INVESTMENT INCOME
|
$
|
415,244
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments:
|
3,448,215
|
|||
Net change in unrealized appreciation/deprecation on investments:
|
(23,178,978
|
)
|
||
Net loss on investments
|
(19,730,763
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(19,315,519
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
OPERATIONS:
|
||||||||
Net investment income (loss)
|
$
|
415,244
|
$
|
(190,967
|
)
|
|||
Net realized gain on investments
|
3,448,215
|
4,934,331
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(23,178,978
|
)
|
21,198,437
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
(19,315,519
|
)
|
25,941,801
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(1,687,916
|
)
|
—
|
|||||
Distributable earnings – Institutional Class
|
(1,797,726
|
)
|
—
|
|||||
Total distributions
|
(3,485,642
|
)
|
—
|
|||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
2,685,032
|
10,760,638
|
||||||
Proceeds from shares subscribed – Institutional Class
|
11,877,575
|
24,725,649
|
||||||
Dividends reinvested – Investor Class
|
1,636,787
|
—
|
||||||
Dividends reinvested – Institutional Class
|
1,782,399
|
—
|
||||||
Cost of shares redeemed – Investor Class
|
(6,195,638
|
)
|
(10,552,763
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(14,692,333
|
)
|
(23,051,103
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
(2,906,178
|
)
|
1,882,421
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(25,707,339
|
)
|
27,824,222
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
71,483,930
|
43,659,708
|
||||||
End of year
|
$
|
45,776,591
|
$
|
71,483,930
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
92,861
|
356,674
|
||||||
Shares sold – Institutional Class
|
380,400
|
786,529
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
50,270
|
—
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
54,242
|
—
|
||||||
Shares redeemed – Investor Class
|
(221,850
|
)
|
(333,681
|
)
|
||||
Shares redeemed – Institutional Class
|
(536,409
|
)
|
(744,960
|
)
|
||||
Net increase (decrease) in shares outstanding
|
(180,486
|
)
|
64,562
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
35.32
|
$
|
22.33
|
$
|
22.63
|
$
|
21.43
|
$
|
22.02
|
|||||||||
0.15
|
(1)
|
(0.15
|
)(1)
|
(0.05
|
)(1)
|
(0.05
|
)(1)
|
(0.07
|
)
|
|||||||||
(9.02
|
)
|
13.14
|
(0.25
|
)
|
1.84
|
0.48
|
||||||||||||
(8.87
|
)
|
12.99
|
(0.30
|
)
|
1.79
|
0.41
|
||||||||||||
(1.65
|
)
|
—
|
—
|
(0.59
|
)
|
(1.00
|
)
|
|||||||||||
(1.65
|
)
|
—
|
—
|
(0.59
|
)
|
(1.00
|
)
|
|||||||||||
$
|
24.80
|
$
|
35.32
|
$
|
22.33
|
$
|
22.63
|
$
|
21.43
|
|||||||||
-26.22
|
%
|
58.17
|
%
|
-1.33
|
%
|
8.75
|
%
|
1.82
|
%
|
|||||||||
$
|
23.63
|
$
|
36.42
|
$
|
22.51
|
$
|
23.63
|
$
|
40.99
|
|||||||||
1.69
|
%
|
1.68
|
%
|
1.75
|
%
|
1.82
|
%
|
1.69
|
%
|
|||||||||
0.55
|
%
|
(0.47
|
)%
|
(0.21
|
)%
|
(0.23
|
)%
|
(0.44
|
)%
|
|||||||||
78
|
%
|
62
|
%
|
88
|
%
|
83
|
%
|
64
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
35.63
|
$
|
22.44
|
$
|
22.68
|
$
|
21.39
|
$
|
21.91
|
|||||||||
0.25
|
(1)
|
(0.03
|
)(1)
|
0.02
|
(1)
|
0.01
|
(1)
|
0.03
|
||||||||||
(9.10
|
)
|
13.22
|
(0.26
|
)
|
1.87
|
0.45
|
||||||||||||
(8.85
|
)
|
13.19
|
(0.24
|
)
|
1.88
|
0.48
|
||||||||||||
(1.67
|
)
|
—
|
—
|
(0.59
|
)
|
(1.00
|
)
|
|||||||||||
(1.67
|
)
|
—
|
—
|
(0.59
|
)
|
(1.00
|
)
|
|||||||||||
$
|
25.11
|
$
|
35.63
|
$
|
22.44
|
$
|
22.68
|
$
|
21.39
|
|||||||||
-25.95
|
%
|
58.78
|
%
|
-1.06
|
%
|
9.16
|
%
|
2.16
|
%
|
|||||||||
$
|
22.15
|
$
|
35.06
|
$
|
21.15
|
$
|
21.97
|
$
|
8.85
|
|||||||||
1.33
|
%
|
1.32
|
%
|
1.45
|
%
|
1.43
|
%
|
1.34
|
%
|
|||||||||
0.89
|
%
|
(0.11
|
)%
|
0.08
|
%
|
0.05
|
%
|
(0.07
|
)%
|
|||||||||
78
|
%
|
62
|
%
|
88
|
%
|
83
|
%
|
64
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2022
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise
comply with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net
investment income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences
are primarily the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax
expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting
for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
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 are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2022 are
as follows:
|
Total Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(878,646)
|
$878,646
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns
of the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as
investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if
any, are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original
cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all
liabilities (including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading.
The offering and redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current
market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing
|
HENNESSY FUNDS
|
1-800-966-4354
|
the use of derivatives by registered investment companies (“Rule 18f-4”). Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation framework
currently used by funds to comply with Section 18 of the 1940 Act, and requires funds whose use of derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives risk
management program and appoint a derivatives risk manager. The Fund has adopted procedures in accordance with Rule 18f-4.
|
|
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5
establishes requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight
and certain other conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection
with Rule 2a-5, the SEC also adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing
of fund investments. The Fund has adopted procedures in accordance with Rule 2a-5.
|
|
In March 2020, FASB issued Accounting Standards Update 2020 04, Reference Rate Reform: Facilitation of the Effects of
Reference Rate Reform on Financial Reporting. The main objective of the new guidance was to provide relief to companies that would be impacted by the expected change in benchmark interest rates at the end of 2021, when
participating banks would no longer be required to submit London Interbank Offered Rate (“LIBOR”) quotes by the UK Financial Conduct Authority. The new guidance allows companies to account for contract modifications as a
continuance of the existing contract without additional analysis, provided that the only change to existing contracts is a change to an approved benchmark interest rate. In addition, derivative contracts that qualified for
hedge accounting prior to contract modification will be allowed to continue to receive such treatment even if critical terms change due to a change in the benchmark interest rate. For new and existing contracts, the Fund
may elect to apply the amendments as of March 12, 2020 through December 31, 2022. See Note 9 for more information.
|
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).
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when
observable inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual
funds, partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by
the primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price
reported. Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively
traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV
because most foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In
certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the
market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global
development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at
the ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and
U.S. government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing
service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the
model may incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These
securities are generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities.
Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds
60 days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would
|
HENNESSY FUNDS
|
1-800-966-4354
|
be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below. Short-term securities are generally classified
in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
||||
Cost of investments for tax purposes
|
$
|
42,121,163
|
||
Gross tax unrealized appreciation
|
$
|
8,915,170
|
||
Gross tax unrealized depreciation
|
(4,300,458
|
)
|
||
Net tax unrealized appreciation/(depreciation)
|
$
|
4,614,712
|
||
Undistributed ordinary income
|
$
|
127,166
|
||
Undistributed long-term capital gains
|
2,738,432
|
|||
Total distributable earnings
|
$
|
2,865,598
|
||
Other accumulated gain/(loss)
|
$
|
—
|
||
Total accumulated gain/(loss)
|
$
|
7,480,310
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
Ordinary income(1)
|
$
|
—
|
$
|
—
|
||||
Long-term capital gains
|
3,485,642
|
—
|
||||||
Total distributions
|
$
|
3,485,642
|
$
|
—
|
HENNESSY FUNDS
|
1-800-966-4354
|
Long-term
|
|||
Investor Class
|
1.52629
|
||
Institutional Class
|
1.54542
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
|
![]() |
|
TAIT, WELLER & BAKER LLP
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees and Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
86
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
75
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 – June 2022.
|
||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
48
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board
|
Officer since 2004. Kiosk is a full-
|
|
and
|
service marketing agency with
|
||
December 2021
|
offices in the San Francisco Bay Area
|
||
as a Trustee
|
and Liverpool, UK and staff across
|
||
nine states in the U.S.
|
|||
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
77
|
consultant in the securities industry.
|
||
Trustee
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Brian Alexander
|
March 2015
|
Mr. Alexander has worked for the
|
None.
|
41
|
Sutter Health organization since
|
||
Adviser to the Board
|
2011 in various positions. He has
|
||
served as the Chief Executive Officer
|
|||
of the North Valley Hospital Area
|
|||
since 2021. From 2018 to 2021, he
|
|||
served as the Chief Executive Officer
|
|||
of Sutter Roseville Medical Center.
|
|||
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.
|
|||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
58
|
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.
|
|||
Interested Trustee(1)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Hennessy has been employed
|
Hennessy
|
66
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
Name, Age,
|
|||
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.
|
|
56
|
since 1989 and currently serves as its President, Chief
|
||
Executive Vice President
|
Operating Officer, and Secretary.
|
||
and Treasurer
|
|||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
|
66
|
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.
|
|
50
|
since December 2013 and currently serves as its Chief
|
||
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
||
and Head of Distribution
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Jennifer Cheskiewicz(2)
|
June 2013
|
Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
|
45
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc. since
|
64
|
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 their 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 Kelley(4)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
50
|
October 2012. He has served as Chief Investment Officer of the
|
|
Chief Investment Officer,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Senior Vice President,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He 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 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He served as Co-Portfolio Manager of the Hennessy
|
||
Technology Fund from February 2017 until May 2018. Mr. Kelley
|
||
served as Portfolio Manager of FBR Fund Advisers, Inc. from
|
||
January 2008 to October 2012.
|
||
L. Joshua Wein(4)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
49
|
2018. He has served as Co-Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone
|
|
Co-Portfolio Manager
|
Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth
|
|
Fund, the Hennessy Cornerstone Value Fund, Hennessy Total
|
||
Return Fund, the Hennessy Balanced Fund, the Hennessy Gas
|
||
Utility Fund, and the Hennessy Technology Fund since February
|
||
2019. He served as a Senior Analyst of these same funds from
|
||
September 2018 through February 2019. Mr. Wein served as
|
||
Director of Alternative Investments and Co-Portfolio Manager
|
||
at Sterling Capital Management from 2008 to 2018.
|
(1)
|
Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust.
|
(2)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2022 –
|
|
May 1, 2022
|
October 31, 2022
|
October 31, 2022
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 977.50
|
$8.52
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,016.59
|
$8.69
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 979.30
|
$7.03
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.10
|
$7.17
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.71% for Investor Class shares or 1.41% for Institutional Class shares, as applicable, multiplied by the average account value over
the period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the
Fund has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in
the future during both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is therefore not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for
responding to a highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make any material changes to the Liquidity Program during the review period and was not recommending any changes to the Liquidity Program or the model inputs
used to determine the liquidity classification of each security held by the Fund.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and
was operating as intended during the review period.
|
1.
|
Information we receive from you 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;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
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
|
29
|
|
Trustees and Officers of the Fund
|
30
|
|
Expense Example
|
34
|
|
Proxy Voting Policy and Proxy Voting Records
|
36
|
|
Availability of Quarterly Portfolio Schedule
|
36
|
|
Federal Tax Distribution Information
|
36
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
36
|
|
Electronic Delivery
|
36
|
|
Liquidity Risk Management Program
|
37
|
|
Privacy Policy
|
37
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Small Cap Financial Fund –
|
|||
Investor Class (HSFNX)
|
-5.60%
|
6.67%
|
10.74%
|
Hennessy Small Cap Financial Fund –
|
|||
Institutional Class (HISFX)
|
-5.21%
|
7.07%
|
11.14%
|
Russell 2000® Index Financials
|
-9.81%
|
4.99%
|
10.05%
|
Russell 2000® Index
|
-18.54%
|
5.56%
|
9.93%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2022
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Old National Bancorp
|
5.42%
|
Hancock Whitney Corp.
|
5.31%
|
Independent Bank Corp.
|
5.06%
|
First BanCorp.
|
5.00%
|
First Citizens BancShares, Inc.
|
4.99%
|
Texas Capital Bancshares, Inc.
|
4.75%
|
Associated Banc-Corp.
|
4.72%
|
Banner Corp.
|
4.61%
|
Lakeland Bancorp, Inc.
|
4.24%
|
Hingham Institution for Savings
|
4.14%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 95.25%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Financials – 95.25%
|
||||||||||||
Associated Banc-Corp.
|
220,000
|
$
|
5,357,000
|
4.72
|
%
|
|||||||
BankUnited, Inc.
|
35,000
|
1,258,250
|
1.11
|
%
|
||||||||
Banner Corp.
|
70,000
|
5,232,500
|
4.61
|
%
|
||||||||
Cadence Bank
|
76,000
|
2,101,400
|
1.85
|
%
|
||||||||
Cambridge Bancorp
|
38,000
|
3,338,300
|
2.94
|
%
|
||||||||
ConnectOne Bancorp, Inc.
|
150,000
|
3,757,500
|
3.31
|
%
|
||||||||
Customers Bancorp, Inc. (a)
|
58,000
|
1,954,020
|
1.72
|
%
|
||||||||
Eastern Bankshares, Inc.
|
163,000
|
3,124,710
|
2.75
|
%
|
||||||||
First BanCorp. (b)
|
360,000
|
5,684,400
|
5.00
|
%
|
||||||||
First Citizens BancShares, Inc.
|
6,900
|
5,672,628
|
4.99
|
%
|
||||||||
Flushing Financial Corp.
|
160,000
|
3,152,000
|
2.78
|
%
|
||||||||
Hancock Whitney Corp.
|
108,000
|
6,033,960
|
5.31
|
%
|
||||||||
Hingham Institution for Savings
|
19,000
|
4,697,750
|
4.14
|
%
|
||||||||
HomeTrust Bancshares, Inc.
|
135,000
|
3,244,050
|
2.86
|
%
|
||||||||
Independent Bank Corp.
|
66,000
|
5,742,660
|
5.06
|
%
|
||||||||
Kearny Financial Corp. of Maryland
|
255,000
|
2,585,700
|
2.28
|
%
|
||||||||
Lakeland Bancorp, Inc.
|
258,000
|
4,811,700
|
4.24
|
%
|
||||||||
Luther Burbank Corp.
|
55,000
|
694,650
|
0.61
|
%
|
||||||||
New York Community Bancorp, Inc.
|
320,000
|
2,979,200
|
2.62
|
%
|
||||||||
Northeast Community Bancorp, Inc.
|
260,000
|
3,421,600
|
3.01
|
%
|
||||||||
OceanFirst Financial Corp.
|
205,000
|
4,628,900
|
4.08
|
%
|
||||||||
Old National Bancorp
|
315,000
|
6,161,400
|
5.42
|
%
|
||||||||
Orange County Bancorp, Inc.
|
19,000
|
842,270
|
0.74
|
%
|
||||||||
PacWest Bancorp
|
140,000
|
3,480,400
|
3.06
|
%
|
||||||||
Shore Bancshares, Inc.
|
73,000
|
1,455,620
|
1.28
|
%
|
||||||||
Silvergate Capital Corp. (a)
|
5,500
|
312,180
|
0.27
|
%
|
||||||||
Synovus Financial Corp.
|
10,000
|
398,500
|
0.35
|
%
|
||||||||
Texas Capital Bancshares, Inc. (a)
|
90,000
|
5,400,000
|
4.75
|
%
|
||||||||
Western New England Bancorp, Inc.
|
435,000
|
3,806,250
|
3.35
|
%
|
||||||||
Wintrust Financial Corp.
|
27,000
|
2,527,740
|
2.23
|
%
|
||||||||
WSFS Financial Corp.
|
93,000
|
4,330,080
|
3.81
|
%
|
||||||||
|
108,187,318
|
95.25
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $80,337,415)
|
108,187,318
|
95.25
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 5.49%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 5.49%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 2.93% (c)
|
5,674,000
|
$
|
5,674,000
|
5.00
|
%
|
|||||||
First American Treasury Obligations Fund,
|
||||||||||||
Institutional Class, 3.07% (c)
|
558,184
|
558,184
|
0.49
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $6,232,184)
|
6,232,184
|
5.49
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $86,569,599) – 100.74%
|
114,419,502
|
100.74
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.74)%
|
(844,500
|
)
|
(0.74
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
113,575,002
|
100.00
|
%
|
(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, 2022.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Financials
|
$
|
108,187,318
|
$
|
—
|
$
|
—
|
$
|
108,187,318
|
||||||||
Total Common Stocks
|
$
|
108,187,318
|
$
|
—
|
$
|
—
|
$
|
108,187,318
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
6,232,184
|
$
|
—
|
$
|
—
|
$
|
6,232,184
|
||||||||
Total Short-Term Investments
|
$
|
6,232,184
|
$
|
—
|
$
|
—
|
$
|
6,232,184
|
||||||||
Total Investments
|
$
|
114,419,502
|
$
|
—
|
$
|
—
|
$
|
114,419,502
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Assets and Liabilities as of October 31, 2022
|
ASSETS:
|
||||
Investments in securities, at value (cost $86,569,599)
|
$
|
114,419,502
|
||
Dividends and interest receivable
|
79,292
|
|||
Receivable for fund shares sold
|
22,240
|
|||
Prepaid expenses and other assets
|
21,334
|
|||
Total assets
|
114,542,368
|
|||
LIABILITIES:
|
||||
Payable for securities purchased
|
781,842
|
|||
Payable for fund shares redeemed
|
5,129
|
|||
Payable to advisor
|
85,432
|
|||
Payable to administrator
|
23,061
|
|||
Payable to auditor
|
22,749
|
|||
Accrued distribution fees
|
14,566
|
|||
Accrued service fees
|
7,577
|
|||
Accrued trustees fees
|
6,133
|
|||
Accrued expenses and other payables
|
20,877
|
|||
Total liabilities
|
967,366
|
|||
NET ASSETS
|
$
|
113,575,002
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
79,043,743
|
||
Total distributable earnings
|
34,531,259
|
|||
Total net assets
|
$
|
113,575,002
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
93,403,053
|
||
Shares issued and outstanding
|
3,169,128
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
29.47
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
20,171,949
|
||
Shares issued and outstanding
|
1,170,122
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
17.24
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS
|
Statement of Operations for the year ended October 31, 2022
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
3,013,457
|
||
Interest income
|
46,027
|
|||
Total investment income
|
3,059,484
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
1,188,941
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
206,577
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
18,334
|
|||
Distribution fees – Investor Class (See Note 5)
|
159,602
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
159,143
|
|||
Service fees – Investor Class (See Note 5)
|
106,401
|
|||
Federal and state registration fees
|
47,878
|
|||
Compliance expense (See Note 5)
|
24,504
|
|||
Audit fees
|
22,743
|
|||
Trustees’ fees and expenses
|
19,902
|
|||
Reports to shareholders
|
15,291
|
|||
Interest expense (See Note 7)
|
7,476
|
|||
Legal fees
|
2,399
|
|||
Other expenses
|
23,299
|
|||
Total expenses
|
2,002,490
|
|||
NET INVESTMENT INCOME
|
$
|
1,056,994
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
12,617,156
|
||
Net change in unrealized appreciation/depreciation on investments
|
(22,730,488
|
)
|
||
Net loss on investments
|
(10,113,332
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(9,056,338
|
)
|
(1)
|
Net of foreign taxes withheld of $20,150.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
1,056,994
|
$
|
1,237,630
|
||||
Net realized gain on investments
|
12,617,156
|
7,181,600
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(22,730,488
|
)
|
46,273,638
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
(9,056,338
|
)
|
54,692,868
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(1,276,583
|
)
|
(640,077
|
)
|
||||
Distributable earnings – Institutional Class
|
(587,596
|
)
|
(266,480
|
)
|
||||
Total distributions
|
(1,864,179
|
)
|
(906,557
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
21,043,349
|
89,150,331
|
||||||
Proceeds from shares subscribed – Institutional Class
|
13,669,099
|
23,725,263
|
||||||
Dividends reinvested – Investor Class
|
1,243,912
|
621,958
|
||||||
Dividends reinvested – Institutional Class
|
549,827
|
237,659
|
||||||
Cost of shares redeemed – Investor Class
|
(60,100,417
|
)
|
(49,466,414
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(24,017,634
|
)
|
(11,517,594
|
)
|
||||
Net increase (decrease) in net assets
|
||||||||
derived from capital share transactions
|
(47,611,864
|
)
|
52,751,203
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(58,532,381
|
)
|
106,537,514
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
172,107,383
|
65,569,869
|
||||||
End of year
|
$
|
113,575,002
|
$
|
172,107,383
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
685,704
|
3,020,767
|
||||||
Shares sold – Institutional Class
|
758,917
|
1,373,793
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
39,265
|
28,361
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
29,680
|
18,452
|
||||||
Shares redeemed – Investor Class
|
(1,998,475
|
)
|
(1,754,093
|
)
|
||||
Shares redeemed – Institutional Class
|
(1,345,808
|
)
|
(688,529
|
)
|
||||
Net increase (decrease) in shares outstanding
|
(1,830,717
|
)
|
1,998,751
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
31.52
|
$
|
17.46
|
$
|
21.60
|
$
|
21.96
|
$
|
26.02
|
|||||||||
0.22
|
(1)
|
0.25
|
(1)
|
0.16
|
(1)
|
0.10
|
(1)
|
0.03
|
||||||||||
(1.96
|
)
|
14.01
|
(3.55
|
)
|
0.93
|
(2.12
|
)
|
|||||||||||
(1.74
|
)
|
14.26
|
(3.39
|
)
|
1.03
|
(2.09
|
)
|
|||||||||||
(0.22
|
)
|
(0.20
|
)
|
(0.09
|
)
|
(0.07
|
)
|
0.00
|
(2)
|
|||||||||
(0.09
|
)
|
—
|
(0.66
|
)
|
(1.32
|
)
|
(1.97
|
)
|
||||||||||
(0.31
|
)
|
(0.20
|
)
|
(0.75
|
)
|
(1.39
|
)
|
(1.97
|
)
|
|||||||||
$
|
29.47
|
$
|
31.52
|
$
|
17.46
|
$
|
21.60
|
$
|
21.96
|
|||||||||
-5.60
|
%
|
82.20
|
%
|
-16.37
|
%
|
5.27
|
%
|
-8.79
|
%
|
|||||||||
$
|
93.40
|
$
|
140.03
|
$
|
54.96
|
$
|
89.36
|
$
|
122.00
|
|||||||||
1.59
|
%
|
1.58
|
%
|
1.65
|
%
|
1.58
|
%
|
1.54
|
%
|
|||||||||
0.72
|
%
|
0.90
|
%
|
0.96
|
%
|
0.47
|
%
|
0.11
|
%
|
|||||||||
27
|
%
|
28
|
%
|
75
|
%
|
46
|
%
|
28
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
18.57
|
$
|
10.37
|
$
|
12.92
|
$
|
13.28
|
$
|
15.69
|
|||||||||
0.20
|
(1)
|
0.21
|
(1)
|
0.13
|
(1)
|
0.10
|
(1)
|
0.07
|
||||||||||
(1.14
|
)
|
8.26
|
(2.10
|
)
|
0.54
|
(1.27
|
)
|
|||||||||||
(0.94
|
)
|
8.47
|
(1.97
|
)
|
0.64
|
(1.20
|
)
|
|||||||||||
(0.34
|
)
|
(0.27
|
)
|
(0.19
|
)
|
(0.18
|
)
|
(0.02
|
)
|
|||||||||
(0.05
|
)
|
—
|
(0.39
|
)
|
(0.82
|
)
|
(1.19
|
)
|
||||||||||
(0.39
|
)
|
(0.27
|
)
|
(0.58
|
)
|
(1.00
|
)
|
(1.21
|
)
|
|||||||||
$
|
17.24
|
$
|
18.57
|
$
|
10.37
|
$
|
12.92
|
$
|
13.28
|
|||||||||
-5.21
|
%
|
82.88
|
%
|
-16.05
|
%
|
5.57
|
%
|
-8.42
|
%
|
|||||||||
$
|
20.17
|
$
|
32.08
|
$
|
10.61
|
$
|
20.74
|
$
|
35.66
|
|||||||||
1.22
|
%
|
1.20
|
%
|
1.29
|
%
|
1.23
|
%
|
1.15
|
%
|
|||||||||
1.13
|
%
|
1.31
|
%
|
1.27
|
%
|
0.84
|
%
|
0.51
|
%
|
|||||||||
27
|
%
|
28
|
%
|
75
|
%
|
46
|
%
|
28
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2022
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise
comply with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net
investment income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences
are primarily the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax
expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting
for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
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 are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2022 are
as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(4,017,913)
|
$4,017,913
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns
of the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as
investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if
any, are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original
cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all
liabilities (including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading.
The offering and redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current
market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing
|
HENNESSY FUNDS
|
1-800-966-4354
|
the use of derivatives by registered investment companies (“Rule 18f-4”). Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation framework
currently used by funds to comply with Section 18 of the 1940 Act, and requires funds whose use of derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives risk
management program and appoint a derivatives risk manager. The Fund has adopted procedures in accordance with Rule 18f-4.
|
|
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5
establishes requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight
and certain other conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection
with Rule 2a-5, the SEC also adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing
of fund investments. The Fund has adopted procedures in accordance with Rule 2a-5.
|
|
In March 2020, FASB issued Accounting Standards Update 2020 04, Reference Rate Reform: Facilitation of the Effects of
Reference Rate Reform on Financial Reporting. The main objective of the new guidance was to provide relief to companies that would be impacted by the expected change in benchmark interest rates at the end of 2021, when
participating banks would no longer be required to submit London Interbank Offered Rate (“LIBOR”) quotes by the UK Financial Conduct Authority. The new guidance allows companies to account for contract modifications as a
continuance of the existing contract without additional analysis, provided that the only change to existing contracts is a change to an approved benchmark interest rate. In addition, derivative contracts that qualified for
hedge accounting prior to contract modification will be allowed to continue to receive such treatment even if critical terms change due to a change in the benchmark interest rate. For new and existing contracts, the Fund
may elect to apply the amendments as of March 12, 2020 through December 31, 2022. See Note 9 for more information.
|
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).
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when
observable inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual
funds, partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by
the primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price
reported. Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively
traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV
because most foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In
certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the
market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global
development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at
the ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and
U.S. government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing
service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the
model may incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These
securities are generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities.
Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds
60 days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the
|
HENNESSY FUNDS
|
1-800-966-4354
|
security’s fair value would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and
market activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
||||
Cost of investments for tax purposes
|
$
|
88,473,838
|
||
Gross tax unrealized appreciation
|
$
|
29,900,101
|
||
Gross tax unrealized depreciation
|
(3,954,437
|
)
|
||
Net tax unrealized appreciation/(depreciation)
|
$
|
25,945,664
|
||
Undistributed ordinary income
|
$
|
252,167
|
||
Undistributed long-term capital gains
|
8,333,428
|
|||
Total distributable earnings
|
$
|
8,585,595
|
||
Other accumulated gain/(loss)
|
$
|
—
|
||
Total accumulated gain/(loss)
|
$
|
34,531,259
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
Ordinary income(1)
|
$
|
1,378,796
|
$
|
906,557
|
||||
Long-term capital gains
|
485,383
|
—
|
||||||
Total distributions
|
$
|
1,864,179
|
$
|
906,557
|
HENNESSY FUNDS
|
1-800-966-4354
|
Long-term
|
|||
Investor Class
|
2.16533
|
||
Institutional Class
|
1.26700
|
WWW.HENNESSYFUNDS.COM
|
NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
![]() |
|
TAIT, WELLER & BAKER LLP
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees and Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
86
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
75
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 – June 2022.
|
||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
48
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board
|
Officer since 2004. Kiosk is a full-
|
|
and
|
service marketing agency with
|
||
December 2021
|
offices in the San Francisco Bay Area
|
||
as a Trustee
|
and Liverpool, UK and staff across
|
||
nine states in the U.S.
|
|||
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
77
|
consultant in the securities industry.
|
||
Trustee
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Brian Alexander
|
March 2015
|
Mr. Alexander has worked for the
|
None.
|
41
|
Sutter Health organization since
|
||
Adviser to the Board
|
2011 in various positions. He has
|
||
served as the Chief Executive Officer
|
|||
of the North Valley Hospital Area
|
|||
since 2021. From 2018 to 2021, he
|
|||
served as the Chief Executive Officer
|
|||
of Sutter Roseville Medical Center.
|
|||
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.
|
|||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
58
|
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.
|
|||
Interested Trustee(1)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Hennessy has been employed
|
Hennessy
|
66
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
Name, Age,
|
|||
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.
|
|
56
|
since 1989 and currently serves as its President, Chief
|
||
Executive Vice President
|
Operating Officer, and Secretary.
|
||
and Treasurer
|
|||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
|
66
|
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.
|
|
50
|
since December 2013 and currently serves as its Chief
|
||
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
||
and Head of Distribution
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Jennifer Cheskiewicz(2)
|
June 2013
|
Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
|
45
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc. since
|
64
|
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 their 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 Kelley(4)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
50
|
October 2012. He has served as Chief Investment Officer of the
|
|
Chief Investment Officer,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Senior Vice President,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He 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 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He served as Co-Portfolio Manager of the Hennessy
|
||
Technology Fund from February 2017 until May 2018. Mr. Kelley
|
||
served as Portfolio Manager of FBR Fund Advisers, Inc. from
|
||
January 2008 to October 2012.
|
||
L. Joshua Wein(4)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
49
|
2018. He has served as Co-Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone
|
|
Co-Portfolio Manager
|
Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth
|
|
Fund, the Hennessy Cornerstone Value Fund, Hennessy Total
|
||
Return Fund, the Hennessy Balanced Fund, the Hennessy Gas
|
||
Utility Fund, and the Hennessy Technology Fund since February
|
||
2019. He served as a Senior Analyst of these same funds from
|
||
September 2018 through February 2019. Mr. Wein served as
|
||
Director of Alternative Investments and Co-Portfolio Manager
|
||
at Sterling Capital Management from 2008 to 2018.
|
(1)
|
Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust.
|
(2)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2022 –
|
|
May 1, 2022
|
October 31, 2022
|
October 31, 2022
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,075.50
|
$8.63
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,016.89
|
$8.39
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,078.20
|
$6.55
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.90
|
$6.36
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.65% for Investor Class shares or 1.25% for Institutional Class shares, as applicable, multiplied by the average account value over
the period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the
Fund has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in
the future during both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is therefore not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for
responding to a highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make any material changes to the Liquidity Program during the review period and was not recommending any changes to the Liquidity Program or the model inputs
used to determine the liquidity classification of each security held by the Fund.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and
was operating as intended during the review period.
|
1.
|
Information we receive from you 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;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
28
|
|
Trustees and Officers of the Fund
|
29
|
|
Expense Example
|
32
|
|
Proxy Voting Policy and Proxy Voting Records
|
34
|
|
Availability of Quarterly Portfolio Schedule
|
34
|
|
Federal Tax Distribution Information
|
34
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
34
|
|
Electronic Delivery
|
34
|
|
Liquidity Risk Management Program
|
35
|
|
Privacy Policy
|
35
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Technology Fund –
|
|||
Investor Class (HTECX)
|
-26.44%
|
8.97%
|
10.27%
|
Hennessy Technology Fund –
|
|||
Institutional Class (HTCIX)
|
-26.28%
|
9.24%
|
10.58%
|
Nasdaq Composite Index
|
-28.56%
|
11.32%
|
15.20%
|
S&P 500® Index
|
-14.61%
|
10.44%
|
12.79%
|
Expense ratios:
|
Gross 2.79%, Net 1.23%(1) (Investor Class);
|
Gross 2.44%, Net 0.98%(1) (Institutional Class)
|
(1)
|
The Fund’s investment advisor has contractually agreed to limit expenses until February 28, 2023.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2022
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Extreme Networks, Inc.
|
2.02%
|
A10 Networks, Inc.
|
1.85%
|
Enphase Energy, Inc.
|
1.85%
|
Check Point Software Technologies Ltd.
|
1.83%
|
Hewlett Packard Enterprise Co.
|
1.82%
|
Sanmina Corp.
|
1.82%
|
ScanSource, Inc.
|
1.79%
|
Visa, Inc., Class A
|
1.79%
|
Kimball Electronics, Inc.
|
1.78%
|
Sciplay Corp.
|
1.77%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 97.31%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 3.27%
|
||||||||||||
Sciplay Corp. (a)
|
6,790
|
$
|
94,992
|
1.77
|
%
|
|||||||
Shutterstock, Inc.
|
1,619
|
80,999
|
1.50
|
%
|
||||||||
|
175,991
|
3.27
|
%
|
|||||||||
Consumer Discretionary – 1.31%
|
||||||||||||
Etsy, Inc. (a)
|
749
|
70,338
|
1.31
|
%
|
||||||||
|
||||||||||||
Information Technology – 92.73%
|
||||||||||||
A10 Networks, Inc.
|
5,906
|
99,221
|
1.85
|
%
|
||||||||
Accenture PLC, Class A (b)
|
316
|
89,712
|
1.67
|
%
|
||||||||
Adobe, Inc. (a)
|
290
|
92,365
|
1.72
|
%
|
||||||||
Apple, Inc.
|
618
|
94,764
|
1.76
|
%
|
||||||||
Applied Materials, Inc.
|
988
|
87,231
|
1.62
|
%
|
||||||||
Arrow Electronics, Inc. (a)
|
883
|
89,413
|
1.66
|
%
|
||||||||
ASML Holding NV – ADR (b)
|
185
|
87,398
|
1.63
|
%
|
||||||||
Atlassian Corp. (a)
|
352
|
71,361
|
1.33
|
%
|
||||||||
Autodesk, Inc. (a)
|
422
|
90,435
|
1.68
|
%
|
||||||||
Automatic Data Processing, Inc.
|
362
|
87,495
|
1.63
|
%
|
||||||||
Avnet, Inc.
|
2,217
|
89,101
|
1.66
|
%
|
||||||||
Cadence Design Systems, Inc. (a)
|
509
|
77,058
|
1.43
|
%
|
||||||||
CDW Corp.
|
541
|
93,490
|
1.74
|
%
|
||||||||
Check Point Software Technologies Ltd. (a)(b)
|
760
|
98,215
|
1.83
|
%
|
||||||||
CommVault Systems, Inc. (a)
|
1,539
|
93,710
|
1.74
|
%
|
||||||||
Crowdstrike Holdings, Inc. (a)
|
482
|
77,698
|
1.45
|
%
|
||||||||
Dell Technologies, Inc.
|
2,271
|
87,206
|
1.62
|
%
|
||||||||
Dlocal Ltd. (a)(b)
|
3,644
|
81,261
|
1.51
|
%
|
||||||||
DocuSign, Inc. (a)
|
1,597
|
77,135
|
1.43
|
%
|
||||||||
Enphase Energy, Inc. (a)
|
324
|
99,468
|
1.85
|
%
|
||||||||
Extreme Networks, Inc. (a)
|
6,046
|
108,465
|
2.02
|
%
|
||||||||
Fortinet, Inc. (a)
|
1,600
|
91,456
|
1.70
|
%
|
||||||||
Gartner, Inc. (a)
|
290
|
87,557
|
1.63
|
%
|
||||||||
Hewlett Packard Enterprise Co.
|
6,855
|
97,821
|
1.82
|
%
|
||||||||
Intel Corp.
|
3,161
|
89,867
|
1.67
|
%
|
||||||||
Jabil, Inc.
|
1,388
|
89,179
|
1.66
|
%
|
||||||||
Kimball Electronics, Inc. (a)
|
4,639
|
95,888
|
1.78
|
%
|
||||||||
KLA-Tencor Corp.
|
262
|
82,910
|
1.54
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Information Technology (Continued)
|
||||||||||||
KnowBe4, Inc. (a)
|
3,850
|
$
|
94,633
|
1.76
|
%
|
|||||||
Lam Research Corp.
|
220
|
89,052
|
1.66
|
%
|
||||||||
Mastercard, Inc., Class A
|
286
|
93,860
|
1.75
|
%
|
||||||||
Microsoft Corp.
|
348
|
80,781
|
1.50
|
%
|
||||||||
MKS Instruments, Inc.
|
971
|
79,768
|
1.48
|
%
|
||||||||
NetApp, Inc.
|
1,304
|
90,328
|
1.68
|
%
|
||||||||
Palo Alto Networks, Inc. (a)
|
486
|
83,393
|
1.55
|
%
|
||||||||
Paychex, Inc.
|
740
|
87,549
|
1.63
|
%
|
||||||||
Paycom Software, Inc. (a)
|
246
|
85,116
|
1.58
|
%
|
||||||||
Pure Storage, Inc. (a)
|
2,968
|
91,592
|
1.70
|
%
|
||||||||
Qorvo, Inc. (a)
|
993
|
85,477
|
1.59
|
%
|
||||||||
QUALCOMM, Inc.
|
688
|
80,950
|
1.51
|
%
|
||||||||
Sanmina Corp. (a)
|
1,741
|
97,583
|
1.82
|
%
|
||||||||
ScanSource, Inc. (a)
|
3,099
|
96,007
|
1.79
|
%
|
||||||||
Seagate Technology Holdings PLC (b)
|
1,540
|
76,476
|
1.42
|
%
|
||||||||
ServiceNow, Inc. (a)
|
202
|
84,989
|
1.58
|
%
|
||||||||
SMART Global Holdings, Inc. (a)(b)
|
5,395
|
72,994
|
1.36
|
%
|
||||||||
Splunk, Inc. (a)
|
1,105
|
91,837
|
1.71
|
%
|
||||||||
STMicroelectronics NV – ADR (b)
|
2,503
|
77,893
|
1.45
|
%
|
||||||||
StoneCo Ltd. (a)(b)
|
7,268
|
76,314
|
1.42
|
%
|
||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. – ADR (b)
|
1,169
|
71,952
|
1.34
|
%
|
||||||||
Telefonaktiebolaget LM Ericsson – ADR (b)
|
13,950
|
77,702
|
1.45
|
%
|
||||||||
Teradata Corp. (a)
|
2,709
|
85,577
|
1.59
|
%
|
||||||||
Texas Instruments, Inc.
|
517
|
83,046
|
1.54
|
%
|
||||||||
The Western Union Co.
|
6,101
|
82,425
|
1.53
|
%
|
||||||||
Visa, Inc., Class A
|
464
|
96,122
|
1.79
|
%
|
||||||||
Vishay Intertechnology, Inc.
|
4,435
|
92,736
|
1.72
|
%
|
||||||||
Vontier Corp.
|
4,798
|
91,642
|
1.70
|
%
|
||||||||
Western Digital Corp. (a)
|
2,349
|
80,735
|
1.50
|
%
|
||||||||
|
4,985,409
|
92.73
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $5,349,607)
|
5,231,738
|
97.31
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 2.96%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 2.96%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 2.93% (c)
|
158,909
|
$
|
158,909
|
2.96
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $158,909)
|
158,909
|
2.96
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $5,508,516) – 100.27%
|
5,390,647
|
100.27
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.27)%
|
(14,390
|
)
|
(0.27
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
5,376,257
|
100.00
|
%
|
(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, 2022.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
175,991
|
$
|
—
|
$
|
—
|
$
|
175,991
|
||||||||
Consumer Discretionary
|
70,338
|
—
|
—
|
70,338
|
||||||||||||
Information Technology
|
4,985,409
|
—
|
—
|
4,985,409
|
||||||||||||
Total Common Stocks
|
$
|
5,231,738
|
$
|
—
|
$
|
—
|
$
|
5,231,738
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
158,909
|
$
|
—
|
$
|
—
|
$
|
158,909
|
||||||||
Total Short-Term Investments
|
$
|
158,909
|
$
|
—
|
$
|
—
|
$
|
158,909
|
||||||||
Total Investments
|
$
|
5,390,647
|
$
|
—
|
$
|
—
|
$
|
5,390,647
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2022
|
ASSETS:
|
||||
Investments in securities, at value (cost $5,508,516)
|
$
|
5,390,647
|
||
Dividends and interest receivable
|
1,616
|
|||
Prepaid expenses and other assets
|
14,040
|
|||
Due from advisor
|
4,332
|
|||
Total assets
|
5,410,635
|
|||
LIABILITIES:
|
||||
Payable to auditor
|
22,747
|
|||
Accrued distribution fees
|
685
|
|||
Accrued service fees
|
323
|
|||
Accrued trustees fees
|
4,694
|
|||
Accrued expenses and other payables
|
5,929
|
|||
Total liabilities
|
34,378
|
|||
NET ASSETS
|
$
|
5,376,257
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
6,388,291
|
||
Accumulated deficit
|
(1,012,034
|
)
|
||
Total net assets
|
$
|
5,376,257
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
3,988,788
|
||
Shares issued and outstanding
|
269,287
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
14.81
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
1,387,469
|
||
Shares issued and outstanding
|
90,893
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
15.26
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2022
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
79,326
|
||
Interest income
|
1,039
|
|||
Total investment income
|
80,365
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
47,434
|
|||
Federal and state registration fees
|
30,649
|
|||
Compliance expense (See Note 5)
|
24,520
|
|||
Audit fees
|
22,743
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
19,370
|
|||
Trustees’ fees and expenses
|
16,027
|
|||
Distribution fees – Investor Class (See Note 5)
|
7,213
|
|||
Reports to shareholders
|
6,624
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
5,939
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
629
|
|||
Service fees – Investor Class (See Note 5)
|
4,809
|
|||
Legal fees
|
101
|
|||
Other expenses
|
4,903
|
|||
Total expenses before waivers and reimbursements
|
190,961
|
|||
Service provider expense waiver (See Note 5)
|
(19,370
|
)
|
||
Expense reimbursement from advisor – Investor Class (See Note 5)
|
(73,628
|
)
|
||
Expense reimbursement from advisor – Institutional Class (See Note 5)
|
(23,122
|
)
|
||
Net expenses
|
74,841
|
|||
NET INVESTMENT INCOME
|
$
|
5,524
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized loss on investments
|
$
|
(867,706
|
)
|
|
Net change in unrealized appreciation/depreciation on investments
|
(1,169,054
|
)
|
||
Net loss on investments
|
(2,036,760
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(2,031,236
|
)
|
(1)
|
Net of foreign taxes withheld and issuance fees of $4,740.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
OPERATIONS:
|
||||||||
Net investment income (loss)
|
$
|
5,524
|
$
|
(1,224
|
)
|
|||
Net realized gain (loss) on investments
|
(867,706
|
)
|
2,211,486
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(1,169,054
|
)
|
358,442
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
(2,031,236
|
)
|
2,568,704
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(1,498,176
|
)
|
(493,580
|
)
|
||||
Distributable earnings – Institutional Class
|
(513,645
|
)
|
(175,930
|
)
|
||||
Total distributions
|
(2,011,821
|
)
|
(669,510
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
265,541
|
917,272
|
||||||
Proceeds from shares subscribed – Institutional Class
|
89,997
|
57,969
|
||||||
Dividends reinvested – Investor Class
|
1,465,101
|
482,162
|
||||||
Dividends reinvested – Institutional Class
|
513,645
|
175,930
|
||||||
Cost of shares redeemed – Investor Class
|
(779,866
|
)
|
(1,006,346
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(262,162
|
)
|
(125,590
|
)
|
||||
Net increase in net assets derived
|
||||||||
from capital share transactions
|
1,292,256
|
501,397
|
||||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(2,750,801
|
)
|
2,400,591
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
8,127,058
|
5,726,467
|
||||||
End of year
|
$
|
5,376,257
|
$
|
8,127,058
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
16,191
|
35,433
|
||||||
Shares sold – Institutional Class
|
5,427
|
2,256
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
73,365
|
21,237
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
25,019
|
7,528
|
||||||
Shares redeemed – Investor Class
|
(45,743
|
)
|
(38,822
|
)
|
||||
Shares redeemed – Institutional Class
|
(14,199
|
)
|
(4,863
|
)
|
||||
Net increase in shares outstanding
|
60,060
|
22,769
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Certain service provider expenses were voluntarily waived during the fiscal year.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
26.89
|
$
|
20.50
|
$
|
18.90
|
$
|
18.04
|
$
|
18.46
|
|||||||||
0.00
|
(1)(2)
|
(0.02
|
)(1)
|
0.02
|
(1)
|
(0.03
|
)(1)
|
(0.05
|
)
|
|||||||||
(5.38
|
)
|
8.82
|
2.10
|
3.15
|
1.26
|
|||||||||||||
(5.38
|
)
|
8.80
|
2.12
|
3.12
|
1.21
|
|||||||||||||
—
|
(0.04
|
)
|
—
|
—
|
—
|
|||||||||||||
(6.70
|
)
|
(2.37
|
)
|
(0.52
|
)
|
(2.26
|
)
|
(1.63
|
)
|
|||||||||
(6.70
|
)
|
(2.41
|
)
|
(0.52
|
)
|
(2.26
|
)
|
(1.63
|
)
|
|||||||||
$
|
14.81
|
$
|
26.89
|
$
|
20.50
|
$
|
18.90
|
$
|
18.04
|
|||||||||
-26.44
|
%
|
45.11
|
%
|
11.42
|
%
|
20.47
|
%
|
7.25
|
%
|
|||||||||
$
|
3.99
|
$
|
6.06
|
$
|
4.26
|
$
|
3.89
|
$
|
3.31
|
|||||||||
3.06
|
%
|
2.79
|
%
|
3.45
|
%
|
3.84
|
%
|
3.70
|
%
|
|||||||||
1.23
|
%(3)
|
1.23
|
%(3)
|
1.23
|
%(3)
|
1.23
|
%
|
1.23
|
%
|
|||||||||
(1.81
|
)%
|
(1.64
|
)%
|
(2.12
|
)%
|
(2.80
|
)%
|
(2.83
|
)%
|
|||||||||
0.02
|
%
|
(0.08
|
)%
|
0.10
|
%
|
(0.19
|
)%
|
(0.36
|
)%
|
|||||||||
151
|
%
|
200
|
%
|
192
|
%
|
185
|
%
|
225
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Certain service provider expenses were voluntarily waived during the fiscal year.
|
(3)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
||||||||||||||
$
|
27.65
|
$
|
21.08
|
$
|
19.40
|
$
|
18.47
|
$
|
18.85
|
|||||||||
0.05
|
(1)
|
0.05
|
(1)
|
0.07
|
(1)
|
0.01
|
(1)
|
0.01
|
||||||||||
(5.55
|
)
|
9.06
|
2.15
|
3.23
|
1.28
|
|||||||||||||
(5.50
|
)
|
9.11
|
2.22
|
3.24
|
1.29
|
|||||||||||||
—
|
(0.11
|
)
|
(0.01
|
)
|
—
|
—
|
||||||||||||
(6.89
|
)
|
(2.43
|
)
|
(0.53
|
)
|
(2.31
|
)
|
(1.67
|
)
|
|||||||||
(6.89
|
)
|
(2.54
|
)
|
(0.54
|
)
|
(2.31
|
)
|
(1.67
|
)
|
|||||||||
$
|
15.26
|
$
|
27.65
|
$
|
21.08
|
$
|
19.40
|
$
|
18.47
|
|||||||||
-26.28
|
%
|
45.49
|
%
|
11.67
|
%
|
20.77
|
%
|
7.54
|
%
|
|||||||||
$
|
1.39
|
$
|
2.06
|
$
|
1.47
|
$
|
1.34
|
$
|
1.09
|
|||||||||
2.73
|
%
|
2.44
|
%
|
3.08
|
%
|
3.47
|
%
|
3.27
|
%
|
|||||||||
0.98
|
%(2)
|
0.98
|
%(2)
|
0.98
|
%(2)
|
0.98
|
%
|
0.98
|
%
|
|||||||||
(1.48
|
)%
|
(1.29
|
)%
|
(1.74
|
)%
|
(2.43
|
)%
|
(2.41
|
)%
|
|||||||||
0.27
|
%
|
0.17
|
%
|
0.36
|
%
|
0.06
|
%
|
(0.12
|
)%
|
|||||||||
151
|
%
|
200
|
%
|
192
|
%
|
185
|
%
|
225
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2022
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise
comply with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net
investment income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences
are primarily the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax
expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting
for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
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 are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year
2022 are as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(347)
|
$347
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax
returns of the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax
liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized
as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service
fees. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if
any, are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the
original cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all
liabilities (including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading.
The offering and redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current
market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing
|
HENNESSY FUNDS
|
1-800-966-4354
|
the use of derivatives by registered investment companies (“Rule 18f-4”). Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation
framework currently used by funds to comply with Section 18 of the 1940 Act, and requires funds whose use of derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives
risk management program and appoint a derivatives risk manager. The Fund has adopted procedures in accordance with Rule 18f-4.
|
|
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5
establishes requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight
and certain other conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection
with Rule 2a-5, the SEC also adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and
auditing of fund investments. The Fund has adopted procedures in accordance with Rule 2a-5.
|
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.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual
funds, partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported
by the primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price
reported. Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on
foreign exchanges generally are not valued at the same time the Fund calculates its NAV because most foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility
that significant events, including broad market moves, may have occurred in the interim. In certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of
the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development
that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at
the ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and
U.S. government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing
service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition,
the model may incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations.
These securities are generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities.
Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment
exceeds 60 days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the
security’s fair value would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for
specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Fiscal Year
|
Fiscal Year
|
Fiscal Year
|
||||||||||||||
2023
|
2024
|
2025
|
Total
|
|||||||||||||
Investor Class
|
$
|
86,892
|
$
|
75,956
|
$
|
73,628
|
$
|
236,476
|
||||||||
Institutional Class
|
$
|
27,643
|
$
|
23,799
|
$
|
23,122
|
$
|
74,564
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
||||
Cost of investments for tax purposes
|
$
|
5,559,041
|
||
Gross tax unrealized appreciation
|
$
|
675,280
|
||
Gross tax unrealized depreciation
|
(843,674
|
)
|
||
Net tax unrealized appreciation/(depreciation)
|
$
|
(168,394
|
)
|
|
Undistributed ordinary income
|
$
|
9,231
|
||
Undistributed long-term capital gains
|
—
|
|||
Total distributable earnings
|
$
|
9,231
|
||
Other accumulated gain/(loss)
|
$
|
(852,871
|
)
|
|
Total accumulated gain/(loss)
|
$
|
(1,012,034
|
)
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2022
|
October 31, 2021
|
|||||||
Ordinary income(1)
|
$
|
1,183,102
|
$
|
239,745
|
||||
Long-term capital gains
|
828,719
|
429,765
|
||||||
Total distributions
|
$
|
2,011,821
|
$
|
669,510
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees and Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
86
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
75
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 – June 2022.
|
||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
48
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board
|
Officer since 2004. Kiosk is a full-
|
|
and
|
service marketing agency with
|
||
December 2021
|
offices in the San Francisco Bay Area
|
||
as a Trustee
|
and Liverpool, UK and staff across
|
||
nine states in the U.S.
|
|||
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
77
|
consultant in the securities industry.
|
||
Trustee
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Brian Alexander
|
March 2015
|
Mr. Alexander has worked for the
|
None.
|
41
|
Sutter Health organization since
|
||
Adviser to the Board
|
2011 in various positions. He has
|
||
served as the Chief Executive Officer
|
|||
of the North Valley Hospital Area
|
|||
since 2021. From 2018 to 2021, he
|
|||
served as the Chief Executive Officer
|
|||
of Sutter Roseville Medical Center.
|
|||
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.
|
|||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
58
|
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.
|
|||
Interested Trustee(1)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Hennessy has been employed
|
Hennessy
|
66
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
Name, Age,
|
|||
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.
|
|
56
|
since 1989 and currently serves as its President, Chief
|
||
Executive Vice President
|
Operating Officer, and Secretary.
|
||
and Treasurer
|
|||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
|
66
|
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.
|
|
50
|
since December 2013 and currently serves as its Chief
|
||
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
||
and Head of Distribution
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Jennifer Cheskiewicz(2)
|
June 2013
|
Ms. Cheskiewicz has been employed by Hennessy Advisors, Inc.
|
45
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc. since
|
64
|
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 their 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 Kelley(4)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
50
|
October 2012. He has served as Chief Investment Officer of the
|
|
Chief Investment Officer,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Senior Vice President,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He 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 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He served as Co-Portfolio Manager of the Hennessy
|
||
Technology Fund from February 2017 until May 2018. Mr. Kelley
|
||
served as Portfolio Manager of FBR Fund Advisers, Inc. from
|
||
January 2008 to October 2012.
|
||
L. Joshua Wein(4)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
49
|
2018. He has served as Co-Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone
|
|
Co-Portfolio Manager
|
Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth
|
|
Fund, the Hennessy Cornerstone Value Fund, Hennessy Total
|
||
Return Fund, the Hennessy Balanced Fund, the Hennessy Gas
|
||
Utility Fund, and the Hennessy Technology Fund since February
|
||
2019. He served as a Senior Analyst of these same funds from
|
||
September 2018 through February 2019. Mr. Wein served as
|
||
Director of Alternative Investments and Co-Portfolio Manager
|
||
at Sterling Capital Management from 2008 to 2018.
|
(1)
|
Mr. Hennessy is considered an “interested person,” as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust.
|
(2)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2022 –
|
|
May 1, 2022
|
October 31, 2022
|
October 31, 2022
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 925.60
|
$5.97
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.00
|
$6.26
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 926.50
|
$4.76
|
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 the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the
Fund has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in
the future during both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is therefore not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures
for responding to a highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make any material changes to the Liquidity Program during the review period and was not recommending any changes to the Liquidity Program or the model inputs
used to determine the liquidity classification of each security held by the Fund.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and
was operating as intended during the review period.
|
1.
|
Information we receive from you 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;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
(b)
|
Not applicable.
|
FYE 10/31/2022
|
FYE 10/31/2021
|
|
(a) Audit Fees
|
$315,800
|
$313,200
|
(b) Audit-Related Fees
|
-
|
-
|
(c) Tax Fees
|
$67,400
|
$66,600
|
(d) All Other Fees
|
-
|
-
|
FYE 10/31/2022
|
FYE 10/31/2021
|
|
Audit-Related Fees
|
0%
|
0%
|
Tax Fees
|
0%
|
0%
|
All Other Fees
|
0%
|
0%
|
(a)
|
The registrant’s principal executive officer and principal financial officer have reviewed the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a
date within 90 days of the filing date of this report, as required by Rule 30a‑3(b) under the Act and Rules 13a-15(b) or 15d‑15(b) under the Exchange Act. Based on their review, such officers have concluded that the disclosure controls
and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the registrant and by the registrant’s
service providers.
|
(b)
|
There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over financial reporting.
|
By: /s/Neil J. Hennessy
Neil J. Hennessy, President and Principal Executive Officer |
Date: January 9, 2023
|
By: /s/Teresa M. Nilsen
Teresa M. Nilsen, Treasurer and Principal Financial Officer |
Date: January 9, 2023
|
|
![]() |
|
Page
|
|||
I.
|
GENERAL
|
1
|
|
A.
|
Introduction
|
1
|
|
B.
|
Definitions
|
1
|
|
II.
|
STANDARDS OF BUSINESS CONDUCT
|
3
|
|
A.
|
General Standards
|
3
|
|
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
|
17
|
|
C.
|
Prohibition on Self-Clearance
|
17
|
|
D.
|
Other Obligations
|
17
|
|
E.
|
Maintenance of Records
|
17
|
|
F.
|
Interpretation and Enforcement
|
17
|
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 Exchange Act in determining whether a person has a pecuniary interest in a security for purposes of Section 16 of the
Exchange Act.
|
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;
|
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.
|
9.
|
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
|
10.
|
“Fund” means, individually, any series of HFT and collectively all such series shall be referred to as the “Funds.”
|
11.
|
“HFT” has the meaning set forth in Section I.A.
|
12.
|
“Initial Public Offering” means an offering of securities registered under the Securities Act of 1933, as amended, the issuer of which, immediately before the registration, was not subject to the reporting requirements of Section 13
or Section 15(d) of the Exchange Act.
|
13.
|
“Investment Advisers Act” means the Investment Advisers Act of 1940, as amended, and the rules and regulations promulgated thereunder.
|
14.
|
“Investment Company Act” means the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder.
|
15.
|
“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.
|
16.
|
“Laws” means the laws, rules, and regulations of U.S. and foreign federal, state, and local governments and other applicable regulatory agencies.
|
17.
|
“personal securities transaction” has the meaning set forth in Section III.A.
|
18.
|
“SEC” means the Securities and Exchange Commission.
|
1.
|
They shall always act in an honest and ethical manner, including in connection with the handling and avoidance of actual or apparent conflicts of interest betweenpersonal and professional relationships.
|
2.
|
They shall fully comply with all applicable Laws.
|
3.
|
They shall proactively promote full, fair, accurate, timely, and understandable disclosure in reports and documents that HFT or the Adviser file with or submit to the SEC and in other public communications made by HFT or the Adviser.
|
4.
|
They shall proactively promote ethical and honest behavior with HFT and the Adviser, including, without limitation, by adhering to and promptly reporting violations of this Code.
|
1.
|
They shall handle all conflicts of interest between personal and professional relationships in an ethical and honest manner. They 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.
|
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, as applicable.
|
7.
|
The independent directors of the Adviser shall not have access to, and shall not seek from any employee of the Adviser, any non‑public information regarding the portfolio holdings of the Funds, except that certain limited access to such
information may be granted with advance permission 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.
|
•
|
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.
|
•
|
such Access Person has obtained preclearance 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.
|
•
|
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.
|
1.
|
Exemptions from Preclearance and Reporting Requirements
|
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 Preclearance Requirements Only
|
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.
|
1.
|
Participation in Initial Public Offerings
|
2.
|
Participation in Private Placements
|
3.
|
Trading in a Security on a Day When There Is a “Buy” or “Sell” Order or Serious Consideration Thereof
|
4.
|
Blackout Period
|
5.
|
Short‑Swing Profits; Day Trading
|
6.
|
Restricted List
|
7.
|
Preclearance Requirements
|
1.
|
Limited Reporting Obligations for Disinterested Trustees
|
2.
|
Initial Holdings Report
|
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
|
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
|
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.
|
4.
|
Annual Holdings Report
|
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
|
•
|
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.
|
•
|
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.
|
•
|
civil penalties of up to the greater of $1 million or three times the amount of profits gained or losses avoided by such individual;
|
•
|
criminal fines of up to $25 million; and
|
•
|
restrictions on their ability to conduct their business activities.
|
1.
|
Identifying Inside Information
|
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?
|
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 individuals who “need to know” such information in order to perform their job
responsibilities.
|
2.
|
Restricting Access to Material Non‑Public Information
|
a.
|
Communications
|
b.
|
Information Handling
|
1.
|
General
|
•
|
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 Chief Executive Officer or 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).
|
2.
|
Quiet Period
|
3.
|
Reporting of Stock Transactions to SEC
|
4.
|
No Short Sales
|
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.
|
Any explicit or implied waivers of this Code for directors, trustees, or executive officers must be approved by the Board of Trustees of HFT and the Board of Directors or Audit Committee of the Adviser, as applicable, and must be promptly
disclosed.
|
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.
|
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.
|
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, 2023
|
/s/Neil J. Hennessy
Neil J. Hennessy
President and Principal Executive Officer
|
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, 2023
|
/s/Teresa M. Nilsen
Teresa M. Nilsen Treasurer and Principal Financial Officer
|
/s/Neil J. Hennessy
Neil J. Hennessy
President and Principal Executive Officer
Hennessy Funds Trust
|
/s/Teresa M. Nilsen
Teresa M. Nilsen
Treasurer and Principal Financial Officer
Hennessy Funds Trust
|
Date: January 9, 2023
|
Date: January 9, 2023
|
0!S &, 80!L &4 *0 $ 0
M !!P (X 0 0
M 0 &YU;&P " !F)O=6YD '!A8VME="!B96=I;CTB[[N_(B!I9#TB5S5-,$UP
M0V5H:4AZ '!A8VME="!B96=I;CTB[[N_(B!I9#TB5S5-,$UP0V5H:4AZ
ME85PZO]F;EULM]-F)4]K'
M6M9:X&VUV_Z5GT[$E-IV?=30!CY]%C6B&5U,!T^.S:U9^=GSNMRK1<=@ATD-
M9\&,%;-_[[-G_;J+U+I-M-5^;F==$5M=9;8<9I)V-W>UC+O>[:WV5U-_XM>8
MYGUCZGF'V6G'I9
M/U;Q;Z&.M OR:+!=0YVC6OVFMS6?UVN^F_\ PGI_Z-2R-5B=MY:@Q,KT4DV3>NH\3DZ'*Q
M*:2GFAC:IUB$EE(D#A+MZ[(I/N_CXYQ[J^/G6V=[FW/VUO/HS??:V!.WNC=D
M[@R.PMQX?MNBV_/D9\K .RIL#4]:8.LS,U8*C&ZJNGJ<>JFKE>HI5\:UR;A^
M.?6^>^7G6[8_JC:.8;,;5ZYR6X,;2X3I_=LFX [\/BIU=O#X6_P IVIZ!WWCL;CM_]7_'
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MW-U+AL]ONOVMMRG?-;?P%#E')+52M)%2$K
M)2QQR)'<1EU;5<0GZ%X76Q4VN/I]/=+/\USK3K79/4>[?F&:_;VT\WMG*;:P
MO9^ KI8,<>T
%S>:WKF,OV+3-18JBH)=YU$E17Y.HQD2K# H
M2.20:TAC4N-N+X8?%K#?&W%YK/Y[,1[@[X["Q6,QO8CK72TF,V[BL9,*Z/8'
M7<-1!2T^5H<;E7,E=E=)WCO>;&?
FS&Z:OIW*9^EPN#IJMX,?B::LCQ5%%Q# KWD84ML_!O=&W,A#74'\QO^9B
M?#,]3_"\G\A]G9[%RS3%O*)L9E>HZRC\;LY8HBJFLZ@ ?9AL-T3NO'2>6K^7
M7S/W&6*EDS':^QZ6(Z6U,%APW5&-6,,>"+,-/ M['/:=%D]I2&1NQ^TMUN\/
MA:+?.Z\9N.$KJU!C%3[8Q,GE0_1M8^MO:LJ<_D*G5JJ)4!MZM2(QL18 !>/I
M["W<76NQ-V9.#-;@P1R.8IVC>#)S9?<#5,3PJ4A>"%LJ]/$44V&F)0?S?VBM
M\]*ING9V6VEMKLGM?IN?*BG6'?W66?P$>_L"L4\<\S;
42O&O-;759+F;A)]C8.KG[@WZ+
M?I^]/G-