(a)
|
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Electronic Delivery
|
26
|
|
Board Approval of Investment Advisory Agreement
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
1
|
S&P 500® Index monthly total returns: +5.59% in November 2022, -5.76% in December 2022, +6.28% in January 2023, -2.44% in February
2023, +3.67% in March 2023, and +1.56% in April 2023.
|
2
|
S&P 500® Financial Sector monthly total return: -9.55% in March 2023. KBW Bank Index monthly total return: -24.87% in March 2023.
S&P 500® Information Technology sector total return: +18.88% for the six months ended April 30, 2023. S&P 500® Communication Services sector total return: +23.15% for the six months ended April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
|
Months(1)
|
Year
|
Years
|
Years
|
|
Hennessy Cornerstone Growth Fund –
|
||||
Investor Class (HFCGX)
|
-7.67%
|
-3.50%
|
5.69%
|
8.41%
|
Hennessy Cornerstone Growth Fund –
|
||||
Institutional Class (HICGX)
|
-7.56%
|
-3.21%
|
6.03%
|
8.73%
|
Russell 2000® Index
|
-3.45%
|
-3.65%
|
4.15%
|
7.88%
|
S&P 500® Index
|
8.63%
|
2.66%
|
11.45%
|
12.20%
|
(1)
|
Periods of less than one year are not annualized.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April
30, 2023 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Green Brick Partners, Inc.
|
2.43%
|
Carpenter Technology Corp.
|
2.37%
|
Exxon Mobil Corp.
|
2.30%
|
Super Micro Computer, Inc.
|
2.25%
|
Clean Harbors, Inc.
|
2.24%
|
Academy Sports & Outdoors, Inc.
|
2.21%
|
EMCOR Group, Inc.
|
2.19%
|
Comfort Systems USA, Inc.
|
2.18%
|
Insperity, Inc.
|
2.16%
|
O-I Glass, Inc.
|
2.16%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 95.48%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Consumer Discretionary – 16.14%
|
||||||||||||
Academy Sports & Outdoors, Inc.
|
51,300
|
$
|
3,258,576
|
2.21
|
%
|
|||||||
BorgWarner, Inc.
|
64,000
|
3,080,320
|
2.09
|
%
|
||||||||
Dillard’s, Inc.
|
9,200
|
2,745,188
|
1.86
|
%
|
||||||||
Green Brick Partners, Inc. (a)
|
96,300
|
3,589,101
|
2.43
|
%
|
||||||||
Modine Manufacturing Co. (a)
|
125,300
|
2,620,023
|
1.78
|
%
|
||||||||
Oxford Industries, Inc.
|
27,800
|
2,868,682
|
1.95
|
%
|
||||||||
Penske Automotive Group, Inc.
|
21,700
|
3,007,186
|
2.04
|
%
|
||||||||
Visteon Corp. (a)
|
18,700
|
2,625,293
|
1.78
|
%
|
||||||||
|
23,794,369
|
16.14
|
%
|
|||||||||
Energy – 24.15%
|
||||||||||||
CVR Energy, Inc.
|
99,300
|
2,615,562
|
1.78
|
%
|
||||||||
Exxon Mobil Corp.
|
28,600
|
3,384,524
|
2.30
|
%
|
||||||||
Marathon Petroleum Corp.
|
24,200
|
2,952,400
|
2.00
|
%
|
||||||||
Oceaneering International, Inc. (a)
|
153,200
|
2,716,236
|
1.84
|
%
|
||||||||
Oil States International, Inc. (a)
|
337,300
|
2,374,592
|
1.61
|
%
|
||||||||
Par Pacific Holdings, Inc. (a)
|
111,300
|
2,607,759
|
1.77
|
%
|
||||||||
PBF Energy, Inc., Class A
|
69,800
|
2,433,228
|
1.65
|
%
|
||||||||
Teekay Corp. (a)(b)
|
513,700
|
2,902,405
|
1.97
|
%
|
||||||||
Tsakos Energy Navigation Ltd. (b)
|
132,400
|
2,271,984
|
1.54
|
%
|
||||||||
Valero Energy Corp.
|
23,400
|
2,683,278
|
1.82
|
%
|
||||||||
Vertex Energy, Inc. (a)
|
322,100
|
2,544,590
|
1.73
|
%
|
||||||||
Weatherford International PLC – (a)(b)
|
47,900
|
3,095,777
|
2.10
|
%
|
||||||||
YPF SA – ADR (a)(b)
|
270,500
|
3,007,960
|
2.04
|
%
|
||||||||
|
35,590,295
|
24.15
|
%
|
|||||||||
Financials – 4.14%
|
||||||||||||
StoneX Group, Inc. (a)
|
30,500
|
2,991,135
|
2.03
|
%
|
||||||||
Unum Group
|
73,600
|
3,105,920
|
2.11
|
%
|
||||||||
|
6,097,055
|
4.14
|
%
|
|||||||||
Industrials – 30.55%
|
||||||||||||
Applied Industrial Technologies, Inc.
|
22,400
|
3,038,784
|
2.06
|
%
|
||||||||
CECO Environmental Corp. (a)
|
204,800
|
2,377,728
|
1.61
|
%
|
||||||||
Clean Harbors, Inc. (a)
|
22,700
|
3,295,132
|
2.24
|
%
|
||||||||
Comfort Systems USA, Inc.
|
21,500
|
3,214,035
|
2.18
|
%
|
||||||||
EMCOR Group, Inc.
|
18,900
|
3,231,900
|
2.19
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Industrials (Continued)
|
||||||||||||
Encore Wire Corp.
|
16,400
|
$
|
2,563,812
|
1.74
|
%
|
|||||||
Fluor Corp. (a)
|
89,500
|
2,600,870
|
1.77
|
%
|
||||||||
Granite Construction, Inc.
|
75,000
|
2,859,750
|
1.94
|
%
|
||||||||
Insperity, Inc.
|
26,000
|
3,183,960
|
2.16
|
%
|
||||||||
Sterling Infrastructure, Inc. (a)
|
76,800
|
2,835,456
|
1.92
|
%
|
||||||||
Terex Corp.
|
54,000
|
2,407,860
|
1.63
|
%
|
||||||||
The Timken Co.
|
36,100
|
2,774,285
|
1.88
|
%
|
||||||||
Titan Machinery, Inc. (a)
|
75,100
|
2,354,385
|
1.60
|
%
|
||||||||
United Airlines Holdings, Inc. (a)
|
58,900
|
2,579,820
|
1.75
|
%
|
||||||||
Wabash National Corp.
|
117,500
|
3,016,225
|
2.05
|
%
|
||||||||
WESCO International, Inc.
|
18,700
|
2,692,800
|
1.83
|
%
|
||||||||
|
45,026,802
|
30.55
|
%
|
|||||||||
Information Technology – 6.22%
|
||||||||||||
Belden, Inc.
|
37,000
|
2,918,930
|
1.98
|
%
|
||||||||
Jabil, Inc.
|
37,500
|
2,930,625
|
1.99
|
%
|
||||||||
Super Micro Computer, Inc. (a)
|
31,400
|
3,310,502
|
2.25
|
%
|
||||||||
|
9,160,057
|
6.22
|
%
|
|||||||||
Materials – 14.28%
|
||||||||||||
Alpha Metallurgical Resources, Inc.
|
18,000
|
2,638,080
|
1.79
|
%
|
||||||||
ATI, Inc. (a)
|
77,200
|
2,981,464
|
2.02
|
%
|
||||||||
Carpenter Technology Corp.
|
66,300
|
3,496,662
|
2.37
|
%
|
||||||||
Materion Corp.
|
28,400
|
3,076,004
|
2.09
|
%
|
||||||||
O-I Glass, Inc. (a)
|
141,900
|
3,188,493
|
2.16
|
%
|
||||||||
Reliance Steel & Aluminum Co.
|
12,600
|
3,122,280
|
2.12
|
%
|
||||||||
Steel Dynamics, Inc.
|
24,500
|
2,546,775
|
1.73
|
%
|
||||||||
|
21,049,758
|
14.28
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $138,088,146)
|
140,718,336
|
95.48
|
%
|
|||||||||
|
||||||||||||
REITS – 1.73%
|
||||||||||||
Real Estate – 1.73%
|
||||||||||||
Service Properties Trust
|
290,900
|
2,551,193
|
1.73
|
%
|
||||||||
|
||||||||||||
Total REITS
|
||||||||||||
(Cost $2,849,799)
|
2,551,193
|
1.73
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 2.83%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 2.83%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 4.73% (c)
|
4,173,805
|
$
|
4,173,805
|
2.83
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $4,173,805)
|
4,173,805
|
2.83
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $145,111,750) – 100.04%
|
147,443,334
|
100.04
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.04)%
|
(65,276
|
)
|
(0.04
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
147,378,058
|
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 April 30, 2023.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Consumer Discretionary
|
$
|
23,794,369
|
$
|
—
|
$
|
—
|
$
|
23,794,369
|
||||||||
Energy
|
35,590,295
|
—
|
—
|
35,590,295
|
||||||||||||
Financials
|
6,097,055
|
—
|
—
|
6,097,055
|
||||||||||||
Industrials
|
45,026,802
|
—
|
—
|
45,026,802
|
||||||||||||
Information Technology
|
9,160,057
|
—
|
—
|
9,160,057
|
||||||||||||
Materials
|
21,049,758
|
—
|
—
|
21,049,758
|
||||||||||||
Total Common Stocks
|
$
|
140,718,336
|
$
|
—
|
$
|
—
|
$
|
140,718,336
|
||||||||
REITS
|
||||||||||||||||
Real Estate
|
$
|
2,551,193
|
$
|
—
|
$
|
—
|
$
|
2,551,193
|
||||||||
Total REITS
|
$
|
2,551,193
|
$
|
—
|
$
|
—
|
$
|
2,551,193
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
4,173,805
|
$
|
—
|
$
|
—
|
$
|
4,173,805
|
||||||||
Total Short-Term Investments
|
$
|
4,173,805
|
$
|
—
|
$
|
—
|
$
|
4,173,805
|
||||||||
Total Investments
|
$
|
147,443,334
|
$
|
—
|
$
|
—
|
$
|
147,443,334
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2023 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $145,111,750)
|
$
|
147,443,334
|
||
Dividends and interest receivable
|
101,826
|
|||
Receivable for fund shares sold
|
306,138
|
|||
Prepaid expenses and other assets
|
25,182
|
|||
Total assets
|
147,876,480
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
326,322
|
|||
Payable to advisor
|
92,177
|
|||
Payable to administrator
|
28,038
|
|||
Payable to auditor
|
11,226
|
|||
Accrued distribution fees
|
18,939
|
|||
Accrued service fees
|
11,093
|
|||
Accrued interest payable
|
1,652
|
|||
Accrued trustees fees
|
4,733
|
|||
Accrued expenses and other payables
|
4,242
|
|||
Total liabilities
|
498,422
|
|||
NET ASSETS
|
$
|
147,378,058
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
149,882,997
|
||
Accumulated deficit
|
(2,504,939
|
)
|
||
Total net assets
|
$
|
147,378,058
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
130,580,523
|
||
Shares issued and outstanding
|
6,088,633
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
21.45
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
16,797,535
|
||
Shares issued and outstanding
|
750,158
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
22.39
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2023 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
2,781,781
|
||
Interest income
|
77,316
|
|||
Total investment income
|
2,859,097
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
623,300
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
113,041
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
7,507
|
|||
Distribution fees – Investor Class (See Note 5)
|
113,218
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
84,734
|
|||
Service fees – Investor Class (See Note 5)
|
75,479
|
|||
Federal and state registration fees
|
18,500
|
|||
Compliance expense (See Note 5)
|
11,844
|
|||
Audit fees
|
11,227
|
|||
Trustees’ fees and expenses
|
10,403
|
|||
Reports to shareholders
|
7,576
|
|||
Interest expense (See Note 7)
|
1,652
|
|||
Legal fees
|
1,484
|
|||
Other expenses
|
14,977
|
|||
Total expenses
|
1,094,942
|
|||
NET INVESTMENT INCOME
|
$
|
1,764,155
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized loss on investments
|
$
|
(4,171,171
|
)
|
|
Net change in unrealized appreciation/depreciation on investments
|
(10,536,283
|
)
|
||
Net loss on investments
|
(14,707,454
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(12,943,299
|
)
|
(1)
|
Net of foreign taxes withheld and issuance fees of $97,491.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2023
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
1,764,155
|
$
|
1,821,004
|
||||
Net realized gain (loss) on investments
|
(4,171,171
|
)
|
4,008,127
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(10,536,283
|
)
|
(4,443,482
|
)
|
||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
(12,943,299
|
)
|
1,385,649
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(5,391,788
|
)
|
(33,524,164
|
)
|
||||
Distributable earnings – Institutional Class
|
(694,551
|
)
|
(3,505,908
|
)
|
||||
Total distributions
|
(6,086,339
|
)
|
(37,030,072
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
6,066,479
|
21,825,715
|
||||||
Proceeds from shares subscribed – Institutional Class
|
4,293,630
|
21,704,478
|
||||||
Dividends reinvested – Investor Class
|
5,220,465
|
32,429,645
|
||||||
Dividends reinvested – Institutional Class
|
627,346
|
3,066,398
|
||||||
Cost of shares redeemed – Investor Class
|
(17,904,448
|
)
|
(21,756,715
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(4,666,414
|
)
|
(16,595,253
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
(6,362,942
|
)
|
40,674,268
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(25,392,580
|
)
|
5,029,845
|
|||||
NET ASSETS:
|
||||||||
Beginning of period
|
172,770,638
|
167,740,793
|
||||||
End of period
|
$
|
147,378,058
|
$
|
172,770,638
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
252,082
|
919,385
|
||||||
Shares sold – Institutional Class
|
179,997
|
849,055
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
227,645
|
1,319,351
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
26,211
|
119,641
|
||||||
Shares redeemed – Investor Class
|
(798,483
|
)
|
(925,080
|
)
|
||||
Shares redeemed – Institutional Class
|
(191,967
|
)
|
(740,429
|
)
|
||||
Net increase (decrease) in shares outstanding
|
(304,515
|
)
|
1,541,923
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
24.07
|
||
Income from investment operations:
|
||||
Net investment income (loss)
|
0.24
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
(2.04
|
)
|
||
Total from investment operations
|
(1.80
|
)
|
||
Less distributions:
|
||||
Dividends from net investment income
|
(0.27
|
)
|
||
Dividends from net realized gains
|
(0.55
|
)
|
||
Total distributions
|
(0.82
|
)
|
||
Net asset value, end of period
|
$
|
21.45
|
||
TOTAL RETURN
|
-7.67
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
130.58
|
||
Ratio of expenses to average net assets
|
1.33
|
%(3)
|
||
Ratio of net investment income (loss) to average net assets
|
2.06
|
%(3)
|
||
Portfolio turnover rate(4)
|
90
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
25.17
|
||
Income from investment operations:
|
||||
Net investment income (loss)
|
0.29
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
(2.14
|
)
|
||
Total from investment operations
|
(1.85
|
)
|
||
Less distributions:
|
||||
Dividends from net investment income
|
(0.35
|
)
|
||
Dividends from net realized gains
|
(0.58
|
)
|
||
Total distributions
|
(0.93
|
)
|
||
Net asset value, end of period
|
$
|
22.39
|
||
TOTAL RETURN
|
-7.56
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
16.80
|
||
Ratio of expenses to average net assets:
|
1.02
|
%(3)
|
||
Ratio of net investment income (loss) to average net assets:
|
2.43
|
%(3)
|
||
Portfolio turnover rate(4)
|
90
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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 April 30, 2023 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of partnership
income and wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book
purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized
gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund for the
prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax
benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of discount,
is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or decrease, as
applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of the property
received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class),
and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and
paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption price per share
for the Fund is equal to the Fund’s NAV per share.
|
i).
|
REIT Equity Securities – Distributions received from real estate investment trusts (“REITs”) may be classified as dividends, capital gains, or return of capital. Investments in REITs may require the Fund to accrue
and distribute income not yet received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it otherwise would have
continued to hold. At other times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings. If the Fund distributes these amounts, these distributions could constitute a return of capital to Fund
shareholders for U.S. federal income tax purposes. Dividends received by the Fund from a REIT generally do not constitute qualified dividend income and do not qualify for the dividends-received deduction.
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that the Fund
limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven calendar days or
less without the sale or disposition significantly changing the market value of the investment.
|
HENNESSY FUNDS
|
1-800-966-4354
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (the “SEC”) adopted new regulations under the 1940 Act 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, generally eliminates the asset segregation framework 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 does not utilize derivatives and
therefore has not adopted a derivatives risk management program.
|
In December 2020, the SEC adopted a new rule under the 1940 Act 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. The Fund has designated Hennessy Advisors, Inc., the Fund’s investment advisor (the “Advisor”), as its valuation designee under 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
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
reported. Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are
actively traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV because most
foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In certain circumstances, it may be
determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded,
but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an
effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending NAV
provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S. government
agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently
executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate observable market data,
such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified in Level 2 of the fair value
hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as of the
61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below.
Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
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
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
2,073,342
|
$
|
—
|
|||||
Long-term capital gains
|
4,012,997
|
37,030,072
|
|||||||
Total distributions
|
$
|
6,086,339
|
$
|
37,030,072
|
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
November 1, 2022 –
|
|
November 1, 2022
|
April 30, 2023
|
April 30, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 923.30
|
$12.79
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,036.70
|
$13.54
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 924.40
|
$ 9.81
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,039.80
|
$10.40
|
(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 181/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help the Board assess
each such factor;
|
|
(3)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
|
|
(4)
|
A summary of the advisory agreement;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor provides
high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the Fund
by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as appropriate),
conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance providers for fidelity bond,
D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers, and maintains books and records.
|
||
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services to the
Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor participates
in “no transaction fee” (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor compensates, in part, a
number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight
personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to various indices
at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The Trustees concluded that the
performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials considered at the meeting.
The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are reasonable and warranted
continuation of the advisory agreement.
|
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the Fund were
variable asset-based fees, so the Advisor would not realize material economies of scale relating to these expenses as the assets of the Fund increased. For example, third-party platform fees increase as the Fund’s assets grow.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor has put
into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by way of example,
its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any such products and services have
been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the Advisor from its relationship with the Fund were
reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are merely supplemental to the Advisor’s own efforts in the
performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Electronic Delivery
|
26
|
|
Board Approval of Investment Advisory Agreements
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
1
|
S&P 500® Index monthly total returns: +5.59% in November 2022, -5.76% in December 2022, +6.28% in January 2023, -2.44% in February
2023, +3.67% in March 2023, and +1.56% in April 2023.
|
2
|
S&P 500® Financial Sector monthly total return: -9.55% in March 2023. KBW Bank Index monthly total return: -24.87% in March 2023.
S&P 500® Information Technology sector total return: +18.88% for the six months ended April 30, 2023. S&P 500® Communication Services sector total return: +23.15% for the six months ended April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
|
Months(1)
|
Year
|
Years
|
Years
|
|
Hennessy Focus Fund –
|
||||
Investor Class (HFCSX)
|
7.67%
|
-3.37%
|
6.50%
|
8.68%
|
Hennessy Focus Fund –
|
||||
Institutional Class (HFCIX)
|
7.85%
|
-3.04%
|
6.89%
|
9.07%
|
Russell 3000® Index
|
7.30%
|
1.50%
|
10.60%
|
11.67%
|
Russell Midcap® Growth Index
|
6.60%
|
1.60%
|
8.96%
|
10.84%
|
(1)
|
Periods of less than one year are not annualized.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2023 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Markel Corp.
|
8.23%
|
CarMax, Inc.
|
8.12%
|
Encore Capital Group, Inc.
|
8.05%
|
Aon PLC
|
7.98%
|
American Tower Corp., Class A
|
7.90%
|
O’Reilly Automotive, Inc.
|
7.57%
|
Brookfield Corp.
|
7.31%
|
Ashtead Group PLC
|
7.17%
|
SS&C Technologies Holdings, Inc.
|
5.16%
|
Restoration Hardware Holdings, Inc.
|
4.61%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 90.34%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 8.09%
|
||||||||||||
AST SpaceMobile, Inc. (a)
|
1,997,902
|
$
|
10,608,860
|
1.60
|
%
|
|||||||
Cogent Communications Holdings, Inc.
|
308,047
|
21,267,565
|
3.22
|
%
|
||||||||
Shenandoah Telecommunications Co.
|
796,737
|
16,580,097
|
2.51
|
%
|
||||||||
Warner Music Group Corp.
|
165,601
|
5,045,862
|
0.76
|
%
|
||||||||
|
53,502,384
|
8.09
|
%
|
|||||||||
Consumer Discretionary – 23.40%
|
||||||||||||
CarMax, Inc. (a)
|
766,122
|
53,651,524
|
8.12
|
%
|
||||||||
Hilton Worldwide Holdings, Inc.
|
39,481
|
5,686,054
|
0.86
|
%
|
||||||||
NVR, Inc. (a)
|
2,537
|
14,816,080
|
2.24
|
%
|
||||||||
O’Reilly Automotive, Inc. (a)
|
54,531
|
50,021,831
|
7.57
|
%
|
||||||||
Restoration Hardware Holdings, Inc. (a)
|
119,446
|
30,474,258
|
4.61
|
%
|
||||||||
|
154,649,747
|
23.40
|
%
|
|||||||||
Financials – 33.56%
|
||||||||||||
Aon PLC (b)
|
162,177
|
52,736,717
|
7.98
|
%
|
||||||||
Brookfield Asset Management Ltd. (b)
|
376,240
|
12,622,852
|
1.91
|
%
|
||||||||
Brookfield Corp. (b)
|
1,489,242
|
48,340,795
|
7.31
|
%
|
||||||||
Brookfield Reinsurance Ltd. (b)
|
15,721
|
510,933
|
0.08
|
%
|
||||||||
Encore Capital Group, Inc. (a)(d)
|
1,035,743
|
53,216,475
|
8.05
|
%
|
||||||||
Markel Corp. (a)
|
39,760
|
54,412,753
|
8.23
|
%
|
||||||||
|
221,840,525
|
33.56
|
%
|
|||||||||
Health Care – 0.74%
|
||||||||||||
Danaher Corp.
|
20,677
|
4,898,588
|
0.74
|
%
|
||||||||
Industrials – 17.40%
|
||||||||||||
American Woodmark Corp. (a)
|
524,614
|
26,503,500
|
4.01
|
%
|
||||||||
Ashtead Group PLC (b)
|
824,513
|
47,427,372
|
7.17
|
%
|
||||||||
Mistras Group, Inc. (a)
|
21,401
|
173,776
|
0.03
|
%
|
||||||||
SS&C Technologies Holdings, Inc.
|
582,330
|
34,089,598
|
5.16
|
%
|
||||||||
TransDigm Group, Inc.
|
8,873
|
6,787,845
|
1.03
|
%
|
||||||||
|
114,982,091
|
17.40
|
%
|
|||||||||
Information Technology – 7.15%
|
||||||||||||
Applied Materials, Inc.
|
166,465
|
18,815,539
|
2.85
|
%
|
||||||||
CDW Corp.
|
167,589
|
28,421,418
|
4.30
|
%
|
||||||||
|
47,236,957
|
7.15
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $271,530,612)
|
597,110,292
|
90.34
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
REITS – 7.90%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Real Estate – 7.90%
|
||||||||||||
American Tower Corp., Class A
|
255,468
|
$
|
52,215,105
|
7.90
|
%
|
|||||||
|
||||||||||||
Total REITS
|
||||||||||||
(Cost $196,711)
|
52,215,105
|
7.90
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS – 1.64%
|
||||||||||||
Money Market Funds – 1.64%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 4.73% (c)
|
10,854,925
|
10,854,925
|
1.64
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $10,854,925)
|
10,854,925
|
1.64
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $282,582,248) – 99.88%
|
660,180,322
|
99.88
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.12%
|
781,490
|
0.12
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
660,961,812
|
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 April 30, 2023.
|
(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 six months ended April 30, 2023, are as follows:
|
Value at
|
Sales
|
Realized
|
|||||||||||||||
Common Stocks
|
November 1, 2022
|
Purchases
|
Proceeds
|
Gain/Loss
|
|||||||||||||
Encore Capital Group, Inc.(1)(2)
|
$
|
74,084,017
|
$
|
—
|
$
|
(21,351,134
|
)
|
$
|
5,553,024
|
||||||||
$
|
74,084,017
|
$
|
—
|
$
|
(21,351,134
|
)
|
$
|
5,553,024
|
|||||||||
Net Change
|
|||||||||||||||||
in Unrealized
|
|||||||||||||||||
Appreciation /
|
Value at
|
||||||||||||||||
Common Stocks
|
Depreciation
|
Dividends
|
April 30, 2023
|
Shares
|
|||||||||||||
Encore Capital Group, Inc.(1)(2)
|
$
|
(5,069,432
|
)
|
$
|
—
|
$
|
53,216,475
|
1,035,743
|
|||||||||
$
|
(5,069,432
|
)
|
$
|
—
|
$
|
53,216,475
|
1,035,743
|
(1)
|
As of April 30, 2023, this security represented 8.05% of the Fund’s net assets.
|
(2)
|
As of April 30, 2023, 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
|
$
|
53,502,384
|
$
|
—
|
$
|
—
|
$
|
53,502,384
|
||||||||
Consumer Discretionary
|
154,649,747
|
—
|
—
|
154,649,747
|
||||||||||||
Financials
|
221,840,525
|
—
|
—
|
221,840,525
|
||||||||||||
Health Care
|
4,898,588
|
—
|
—
|
4,898,588
|
||||||||||||
Industrials
|
114,982,091
|
—
|
—
|
114,982,091
|
||||||||||||
Information Technology
|
47,236,957
|
—
|
—
|
47,236,957
|
||||||||||||
Total Common Stocks
|
$
|
597,110,292
|
$
|
—
|
$
|
—
|
$
|
597,110,292
|
||||||||
REITS
|
||||||||||||||||
Real Estate
|
$
|
52,215,105
|
$
|
—
|
$
|
—
|
$
|
52,215,105
|
||||||||
Total REITS
|
$
|
52,215,105
|
$
|
—
|
$
|
—
|
$
|
52,215,105
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
10,854,925
|
$
|
—
|
$
|
—
|
$
|
10,854,925
|
||||||||
Total Short-Term Investments
|
$
|
10,854,925
|
$
|
—
|
$
|
—
|
$
|
10,854,925
|
||||||||
Total Investments
|
$
|
660,180,322
|
$
|
—
|
$
|
—
|
$
|
660,180,322
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2023 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $282,582,248)
|
$
|
660,180,322
|
||
Dividends and interest receivable
|
144,238
|
|||
Receivable for fund shares sold
|
66,866
|
|||
Receivable for securities sold
|
1,581,500
|
|||
Prepaid expenses and other assets
|
37,278
|
|||
Total assets
|
$
|
662,010,204
|
||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
206,819
|
|||
Payable to advisor
|
485,523
|
|||
Payable to sub-transfer agents
|
109,322
|
|||
Payable to administrator
|
122,824
|
|||
Payable to auditor
|
11,221
|
|||
Accrued distribution fees
|
68,058
|
|||
Accrued service fees
|
33,372
|
|||
Accrued trustees fees
|
9,179
|
|||
Accrued expenses and other payables
|
2,074
|
|||
Total liabilities
|
1,048,392
|
|||
NET ASSETS
|
$
|
660,961,812
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
192,038,790
|
||
Total distributable earnings
|
468,923,022
|
|||
Total net assets
|
$
|
660,961,812
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
409,362,594
|
||
Shares issued and outstanding
|
8,530,622
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
47.99
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
251,599,218
|
||
Shares issued and outstanding
|
5,015,676
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
50.16
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2023 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
2,408,378
|
||
Interest income
|
214,844
|
|||
Total investment income
|
2,623,222
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
3,112,654
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
479,092
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
147,980
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
340,091
|
|||
Distribution fees – Investor Class (See Note 5)
|
316,058
|
|||
Service fees – Investor Class (See Note 5)
|
210,705
|
|||
Reports to shareholders
|
26,648
|
|||
Federal and state registration fees
|
23,953
|
|||
Trustees’ fees and expenses
|
14,760
|
|||
Compliance expense (See Note 5)
|
11,844
|
|||
Audit fees
|
11,227
|
|||
Legal fees
|
8,636
|
|||
Interest expense (See Note 7)
|
1,138
|
|||
Other expenses
|
68,766
|
|||
Total expenses
|
4,773,552
|
|||
NET INVESTMENT LOSS
|
$
|
(2,150,330
|
)
|
|
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments:
|
||||
Unaffiliated investments
|
$
|
102,036,728
|
||
Affiliated investments
|
5,553,024
|
|||
Net change in unrealized appreciation/depreciation on investments
|
||||
Unaffiliated investments
|
(47,076,334
|
)
|
||
Affiliated investments
|
(5,069,432
|
)
|
||
Net gain on investments
|
55,443,986
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
53,293,656
|
(1)
|
Net of foreign taxes withheld of $68,016.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2023
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment loss
|
$
|
(2,150,330
|
)
|
$
|
(7,213,114
|
)
|
||
Net realized gain on investments
|
107,589,752
|
107,121,107
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(52,145,766
|
)
|
(377,001,093
|
)
|
||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
53,293,656
|
(277,093,100
|
)
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(55,979,529
|
)
|
(102,832,917
|
)
|
||||
Distributable earnings – Institutional Class
|
(38,238,761
|
)
|
(74,423,824
|
)
|
||||
Total distributions
|
(94,218,290
|
)
|
(177,256,741
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
3,172,952
|
13,194,104
|
||||||
Proceeds from shares subscribed – Institutional Class
|
23,166,044
|
64,242,530
|
||||||
Dividends reinvested – Investor Class
|
54,418,111
|
100,142,196
|
||||||
Dividends reinvested – Institutional Class
|
35,095,377
|
68,169,964
|
||||||
Cost of shares redeemed – Investor Class
|
(55,616,816
|
)
|
(125,473,751
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(98,970,623
|
)
|
(133,218,468
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(38,734,955
|
)
|
(12,943,425
|
)
|
||||
TOTAL DECREASE IN NET ASSETS
|
(79,659,589
|
)
|
(467,293,266
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of period
|
740,621,401
|
1,207,914,667
|
||||||
End of period
|
$
|
660,961,812
|
$
|
740,621,401
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
66,049
|
208,254
|
||||||
Shares sold – Institutional Class
|
461,182
|
993,681
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
1,168,021
|
1,451,336
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
721,681
|
950,104
|
||||||
Shares redeemed – Investor Class
|
(1,148,276
|
)
|
(2,029,388
|
)
|
||||
Shares redeemed – Institutional Class
|
(1,959,785
|
)
|
(2,110,055
|
)
|
||||
Net decrease in shares outstanding
|
(691,128
|
)
|
(536,068
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
51.12
|
||
Income from investment operations:
|
||||
Net investment loss
|
(0.19
|
)(1)
|
||
Net realized and unrealized gains (losses) on investments
|
3.90
|
|||
Total from investment operations
|
3.71
|
|||
Less distributions:
|
||||
Dividends from net realized gains
|
(6.84
|
)
|
||
Total distributions
|
(6.84
|
)
|
||
Net asset value, end of period
|
$
|
47.99
|
||
TOTAL RETURN
|
7.67
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
409.36
|
||
Ratio of expenses to average net assets
|
1.52
|
%(3)
|
||
Ratio of net investment loss to average net assets
|
(0.76
|
)%(3)
|
||
Portfolio turnover rate(4)
|
9
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
53.34
|
||
Income from investment operations:
|
||||
Net investment loss
|
(0.10
|
)(1)
|
||
Net realized and unrealized gains (losses) on investments
|
4.06
|
|||
Total from investment operations
|
3.96
|
|||
Less distributions:
|
||||
Dividends from net realized gains
|
(7.14
|
)
|
||
Total distributions
|
(7.14
|
)
|
||
Net asset value, end of period
|
$
|
50.16
|
||
TOTAL RETURN
|
7.85
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
251.60
|
||
Ratio of expenses to average net assets
|
1.16
|
%(3)
|
||
Ratio of net investment loss to average net assets
|
(0.40
|
)%(3)
|
||
Portfolio turnover rate(4)
|
9
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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 April 30, 2023 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash sales
for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may include
short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to
shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund for the
prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax
benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of discount,
is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or decrease, as
applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of the property
received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class),
and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and
paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption price per share
for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Foreign Currency – Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market exchange rate at the time of valuation. Purchases and sales of investments and income
are translated into U.S. dollars using the spot market exchange rate prevailing on the respective dates of such transactions. The Fund does not isolate the portion of the results of operations resulting from fluctuations in foreign exchange
rates on investments from fluctuations resulting from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain/loss on investments. Foreign investments present additional risks
due to currency fluctuations, economic and political factors, lower liquidity, government regulations, differences in accounting standards, and other factors.
|
j).
|
REIT Equity Securities – Distributions received from real estate investment trusts (“REITs”) may be classified as dividends, capital gains, or return of capital. Investments in REITs may require the Fund to accrue
and distribute income not yet received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it otherwise would have
continued to hold. At other
|
HENNESSY FUNDS
|
1-800-966-4354
|
times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings. If the Fund distributes these amounts, these distributions could constitute a return of capital to Fund
shareholders for U.S. federal income tax purposes. Dividends received by the Fund from a REIT generally do not constitute qualified dividend income and do not qualify for the dividends-received deduction.
|
|
k).
|
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 (the “SEC”) adopted new regulations under the 1940 Act 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, generally eliminates the asset segregation framework 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 does not utilize derivatives and
therefore has not adopted a derivatives risk management program.
|
In December 2020, the SEC adopted a new rule under the 1940 Act 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. The Fund has designated Hennessy Advisors, Inc., the Fund’s investment advisor (the “Advisor”), as its valuation designee under 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
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates,
prepayment speeds, credit risk curves, default rates, and similar data).
|
||
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable inputs are
unavailable.
|
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
|
HENNESSY FUNDS
|
1-800-966-4354
|
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
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
—
|
$
|
—
|
|||||
Long-term capital gains
|
94,218,290
|
177,256,741
|
|||||||
Total distributions
|
$
|
94,218,290
|
$
|
177,256,741
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
November 1, 2022 –
|
|
November 1, 2022
|
April 30, 2023
|
April 30, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,076.70
|
$15.78
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,034.80
|
$15.46
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,078.50
|
$12.06
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,038.40
|
$11.82
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.52% for Investor Class shares or 1.16% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 181/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory and sub-advisory agreements and the relevant factors for
consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory and sub-advisory agreements and also referenced the documents that had been provided to help
the Board assess each such factor;
|
|
(3)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
|
|
(4)
|
Summaries of the advisory and sub-advisory agreements;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the Sub-Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund;
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale;
|
|
(9)
|
A completed questionnaire from the Sub-Advisor;
|
|
(10)
|
A summary of the Sub-Advisor’s responses to the questionnaire, as well as relevant information from the Sub-Advisor’s Form ADVs Parts 1 and 2 and the certifications submitted by the Sub-Advisor each quarter;
|
|
(11)
|
Financial information of the Sub-Advisor; and
|
|
(12)
|
The Sub-Advisor’s Code of Ethics.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The nature and quality of the advisory services provided by the Advisor and the Sub-Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor and the Sub-Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor and the Sub-Advisor from serving as an investment advisor to the Fund (other than the advisory and sub-advisory fees).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor provides
high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the Fund
by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor oversees the Sub-Advisor for the Fund, and the Sub-Advisor acts as the portfolio manager for the Fund by providing portfolio management services.
|
||
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Sub-Advisor and the Fund’s other service providers (including their codes of
ethics, as appropriate), conducts on-site visits to the Sub-Advisor and the Fund’s other service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios,
evaluates insurance providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by
service providers, and maintains books and records.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(f)
|
The Advisor oversees the selection and continued employment of the Sub-Advisor, reviews the Fund’s investment performance, and monitors the Sub-Advisor’s adherence to the Fund’s investment objectives, policies, and
restrictions.
|
||
(g)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services to the
Fund.
|
||
(h)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(i)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(j)
|
For each annual report of the Fund, the Advisor reviews the written summary prepared by the Sub-Advisor of the Fund’s performance during the most recent 12-month period.
|
||
(k)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor participates
in “no transaction fee” (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor compensates, in part, a
number of these third-party providers of NTF programs out of its own revenues.
|
||
(l)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight
personnel, as well as management executives.
|
||
(m)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(n)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees considered the services identified below that are provided by the Sub-Advisor. Based on this review and an assessment of the Sub-Advisor’s performance, the Trustees concluded that the Sub-Advisor
provides high-quality services to the Fund. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the Fund by the Sub-Advisor and that the nature and extent of the
services provided by the Sub-Advisor were appropriate to assure that the Fund’s portfolio aligns properly with its investment objective and principal investment strategies.
|
(a)
|
The Sub-Advisor acts as the portfolio manager for the Fund. In this capacity, the Sub-Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s
investment objectives, policies, and restrictions;
|
HENNESSY FUNDS
|
1-800-966-4354
|
(ii)
|
seeks best execution for the Fund’s portfolio; and
|
|||
(iii)
|
manages proxy voting for the Fund.
|
(b)
|
The Sub-Advisor ensures that its compliance program includes policies and procedures relevant to the Fund and the Sub-Advisor’s duties as a portfolio manager to the Fund.
|
||
(c)
|
For each annual report of the Fund, the Sub-Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(d)
|
The Sub-Advisor provides a quarterly compliance certification to the Board regarding trading and allocation practices, supervisory matters, the Sub-Advisor’s compliance program (including its code of ethics),
compliance with the Fund’s policies, and general firm updates.
|
(3)
|
Trustees considered the distinction between the services performed by the Advisor and the Sub-Advisor. The Trustees noted that the management of the Fund, including the oversight of the Sub-Advisor, involves more
comprehensive and substantive duties than the duties of the Sub-Advisor. Specifically, the Trustees considered the lists of Advisor services previously identified and concluded that the services performed by the Advisor for the Fund require a
higher level of service and oversight than the services performed by the Sub-Advisor. Based on this determination, the Trustees concluded that the differential in advisory fees between the Advisor and the Sub-Advisor is reasonable.
|
|
(4)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to various indices
at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor and the Sub-Advisor manage the Fund in a manner materially consistent with its stated investment objective and style. The Trustees concluded
that the performance of the Fund over various periods warranted the continuation of the advisory and sub-advisory agreements.
|
|
(5)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials considered at the meeting.
The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are reasonable and warranted
continuation of the advisory and sub-advisory agreements.
|
|
(6)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the Fund were
variable asset-based fees, so the Advisor would not realize material economies of scale relating to these expenses as the assets of the Fund increased. For example, third-party platform fees and sub-advisory fees increase as the Fund’s assets
grow.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(7)
|
The Trustees considered the profitability of the Advisor and the Sub-Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and revenues that the
Advisor has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor and the Sub-Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court
cases.
|
|
(8)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(9)
|
The Trustees considered any benefits to the Advisor and the Sub-Advisor from serving as an advisor to the Fund (other than the advisory and sub-advisory fees). The Trustees noted that the Advisor and the Sub-Advisor
may derive ancillary benefits from, by way of example, their association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The
Trustees determined that any such products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits
realized by the Advisor and the Sub-Advisor from their relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ findings that (i) the research, analytical, statistical, and other information and
services provided by brokers are merely supplemental to the Advisor’s and the Sub-Advisor’s own efforts in the performance of their duties under the advisory and sub-advisory agreements and (ii) although the Sub-Advisor could derive benefits
from the conversion of Fund shareholders into separate account clients, the Fund also could benefit from potential institutional shareholders who might choose to invest in the Fund.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Electronic Delivery
|
26
|
|
Board Approval of Investment Advisory Agreement
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
1
|
S&P 500® Index monthly total returns: +5.59% in November 2022, -5.76% in December 2022, +6.28% in January 2023, -2.44% in February
2023, +3.67% in March 2023, and +1.56% in April 2023.
|
2
|
S&P 500® Financial Sector monthly total return: -9.55% in March 2023. KBW Bank Index monthly total return: -24.87% in March 2023.
S&P 500® Information Technology sector total return: +18.88% for the six months ended April 30, 2023. S&P 500® Communication Services sector total return: +23.15% for the six months ended April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
|
Months(1)
|
Year
|
Years
|
Years
|
|
Hennessy Cornerstone
|
||||
Mid Cap 30 Fund –
|
||||
Investor Class (HFMDX)
|
1.71%
|
7.17%
|
9.68%
|
9.76%
|
Hennessy Cornerstone
|
||||
Mid Cap 30 Fund –
|
||||
Institutional Class (HIMDX)
|
1.89%
|
7.55%
|
10.08%
|
10.13%
|
Russell Midcap® Index
|
3.80%
|
-1.69%
|
7.97%
|
9.85%
|
S&P 500® Index
|
8.63%
|
2.66%
|
11.45%
|
12.20%
|
(1)
|
Periods of less than one year are not annualized.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April
30, 2023 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Super Micro Computer, Inc.
|
4.88%
|
Academy Sports & Outdoors, Inc.
|
4.45%
|
EMCOR Group, Inc.
|
4.34%
|
Dicks Sporting Goods, Inc.
|
4.14%
|
ATI, Inc.
|
3.84%
|
Clean Harbors, Inc.
|
3.71%
|
Encore Wire Corp.
|
3.58%
|
Visteon Corp.
|
3.57%
|
Penske Automotive Group, Inc.
|
3.53%
|
Commercial Metals Co.
|
3.47%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 93.31%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Consumer Discretionary – 24.24%
|
||||||||||||
Academy Sports & Outdoors, Inc.
|
280,200
|
$
|
17,798,304
|
4.45
|
%
|
|||||||
AutoNation, Inc. (a)
|
96,700
|
12,735,390
|
3.19
|
%
|
||||||||
Dick’s Sporting Goods, Inc.
|
114,100
|
16,545,641
|
4.14
|
%
|
||||||||
Murphy USA, Inc.
|
42,200
|
11,614,706
|
2.90
|
%
|
||||||||
Penske Automotive Group, Inc.
|
101,900
|
14,121,302
|
3.53
|
%
|
||||||||
Sonic Automotive, Inc.
|
221,300
|
9,852,276
|
2.46
|
%
|
||||||||
Visteon Corp. (a)
|
101,600
|
14,263,624
|
3.57
|
%
|
||||||||
|
96,931,243
|
24.24
|
%
|
|||||||||
Consumer Staples – 9.01%
|
||||||||||||
BJ’s Wholesale Club Holdings, Inc. (a)
|
164,100
|
12,532,317
|
3.13
|
%
|
||||||||
Cal-Maine Foods, Inc.
|
224,700
|
10,673,250
|
2.67
|
%
|
||||||||
Casey’s General Stores, Inc.
|
56,000
|
12,813,920
|
3.21
|
%
|
||||||||
|
36,019,487
|
9.01
|
%
|
|||||||||
Energy – 18.93%
|
||||||||||||
CVR Energy, Inc.
|
360,300
|
9,490,302
|
2.37
|
%
|
||||||||
Delek US Holdings, Inc.
|
427,600
|
9,300,300
|
2.33
|
%
|
||||||||
Green Plains, Inc. (a)
|
334,100
|
11,416,197
|
2.86
|
%
|
||||||||
PBF Energy, Inc., Class A
|
351,634
|
12,257,961
|
3.07
|
%
|
||||||||
Peabody Energy Corp. (a)
|
491,600
|
11,808,232
|
2.95
|
%
|
||||||||
Plains GP Holdings LP, Class A
|
993,800
|
13,316,920
|
3.33
|
%
|
||||||||
W&T Offshore, Inc. (a)
|
1,849,200
|
8,081,004
|
2.02
|
%
|
||||||||
|
75,670,916
|
18.93
|
%
|
|||||||||
Financials – 3.34%
|
||||||||||||
Unum Group
|
316,900
|
13,373,180
|
3.34
|
%
|
||||||||
Health Care – 1.98%
|
||||||||||||
AdaptHealth Corp. (a)
|
666,200
|
7,914,456
|
1.98
|
%
|
||||||||
Industrials – 17.43%
|
||||||||||||
Clean Harbors, Inc. (a)
|
102,200
|
14,835,352
|
3.71
|
%
|
||||||||
Dycom Industries, Inc. (a)
|
107,900
|
9,993,698
|
2.50
|
%
|
||||||||
EMCOR Group, Inc.
|
101,400
|
17,339,400
|
4.34
|
%
|
||||||||
Encore Wire Corp.
|
91,500
|
14,304,195
|
3.58
|
%
|
||||||||
WESCO International, Inc.
|
91,700
|
13,204,800
|
3.30
|
%
|
||||||||
|
69,677,445
|
17.43
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Information Technology – 4.88%
|
||||||||||||
Super Micro Computer, Inc. (a)
|
184,900
|
$
|
19,494,007
|
4.88
|
%
|
|||||||
Materials – 13.50%
|
||||||||||||
ATI, Inc. (a)
|
397,100
|
15,336,002
|
3.84
|
%
|
||||||||
Commercial Metals Co.
|
296,800
|
13,857,592
|
3.47
|
%
|
||||||||
Graphic Packaging Holding Co.
|
537,400
|
13,252,284
|
3.31
|
%
|
||||||||
Sonoco Products Co.
|
190,100
|
11,523,862
|
2.88
|
%
|
||||||||
|
53,969,740
|
13.50
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $333,270,292)
|
373,050,474
|
93.31
|
%
|
|||||||||
|
||||||||||||
PARTNERSHIPS & TRUSTS – 3.31%
|
||||||||||||
Energy – 3.31%
|
||||||||||||
Plains All American Pipeline LP
|
1,025,400
|
13,227,660
|
3.31
|
%
|
||||||||
|
||||||||||||
Total Partnerships & Trusts
|
||||||||||||
(Cost $9,559,583)
|
13,227,660
|
3.31
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS – 3.30%
|
||||||||||||
Money Market Funds – 3.30%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 4.73% (b)
|
13,207,277
|
13,207,277
|
3.30
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $13,207,277)
|
13,207,277
|
3.30
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $356,037,152) – 99.92%
|
399,485,411
|
99.92
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.08%
|
301,417
|
0.08
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
399,786,828
|
100.00
|
%
|
(a)
|
Non-income-producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Consumer Discretionary
|
$
|
96,931,243
|
$
|
—
|
$
|
—
|
$
|
96,931,243
|
||||||||
Consumer Staples
|
36,019,487
|
—
|
—
|
36,019,487
|
||||||||||||
Energy
|
75,670,916
|
—
|
—
|
75,670,916
|
||||||||||||
Financials
|
13,373,180
|
—
|
—
|
13,373,180
|
||||||||||||
Health Care
|
7,914,456
|
—
|
—
|
7,914,456
|
||||||||||||
Industrials
|
69,677,445
|
—
|
—
|
69,677,445
|
||||||||||||
Information Technology
|
19,494,007
|
—
|
—
|
19,494,007
|
||||||||||||
Materials
|
53,969,740
|
—
|
—
|
53,969,740
|
||||||||||||
Total Common Stocks
|
$
|
373,050,474
|
$
|
—
|
$
|
—
|
$
|
373,050,474
|
||||||||
Partnerships & Trusts
|
||||||||||||||||
Energy
|
$
|
13,227,660
|
—
|
—
|
$
|
13,227,660
|
||||||||||
Total Partnerships & Trusts
|
$
|
13,227,660
|
$
|
—
|
$
|
—
|
$
|
13,227,660
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
13,207,277
|
$
|
—
|
$
|
—
|
$
|
13,207,277
|
||||||||
Total Short-Term Investments
|
$
|
13,207,277
|
$
|
—
|
$
|
—
|
$
|
13,207,277
|
||||||||
Total Investments
|
$
|
399,485,411
|
$
|
—
|
$
|
—
|
$
|
399,485,411
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2023 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $356,037,152)
|
$
|
399,485,411
|
||
Dividends and interest receivable
|
671,759
|
|||
Receivable for fund shares sold
|
274,709
|
|||
Return of capital receivable
|
540,136
|
|||
Prepaid expenses and other assets
|
30,345
|
|||
Total assets
|
401,002,360
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
795,459
|
|||
Payable to advisor
|
246,062
|
|||
Payable to administrator
|
71,809
|
|||
Payable to auditor
|
11,226
|
|||
Accrued distribution fees
|
31,430
|
|||
Accrued service fees
|
18,554
|
|||
Accrued trustees fees
|
4,726
|
|||
Accrued expenses and other payables
|
36,266
|
|||
Total liabilities
|
1,215,532
|
|||
NET ASSETS
|
$
|
399,786,828
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
359,877,186
|
||
Total distributable earnings
|
39,909,642
|
|||
Total net assets
|
$
|
399,786,828
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
223,030,998
|
||
Shares issued and outstanding
|
12,751,821
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
17.49
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
176,755,830
|
||
Shares issued and outstanding
|
9,622,351
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
18.37
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2023 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Distributions received from master limited partnerships
|
$
|
542,303
|
||
Return of capital on distributions received
|
(542,303
|
)
|
||
Dividend income from common stock
|
2,898,294
|
|||
Interest income
|
221,248
|
|||
Total investment income
|
3,119,542
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
1,454,696
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
237,907
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
79,694
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
192,789
|
|||
Distribution fees – Investor Class (See Note 5)
|
163,246
|
|||
Service fees – Investor Class (See Note 5)
|
108,830
|
|||
Federal and state registration fees
|
17,253
|
|||
Reports to shareholders
|
15,078
|
|||
Trustees’ fees and expenses
|
11,952
|
|||
Compliance expense (See Note 5)
|
11,844
|
|||
Audit fees
|
11,227
|
|||
Legal fees
|
3,511
|
|||
Other expenses
|
31,331
|
|||
Total expenses
|
2,339,358
|
|||
NET INVESTMENT INCOME
|
$
|
780,184
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
778,897
|
||
Net change in unrealized appreciation/depreciation on investments
|
4,918,555
|
|||
Net gain on investments
|
5,697,452
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
6,477,636
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2023
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
780,184
|
$
|
3,718,695
|
||||
Net realized gain on investments
|
778,897
|
112,575,778
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
4,918,555
|
(90,874,972
|
)
|
|||||
Net increase in net assets resulting from operations
|
6,477,636
|
25,419,501
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(37,371,548
|
)
|
(3,694,691
|
)
|
||||
Distributable earnings – Institutional Class
|
(30,112,291
|
)
|
(2,816,027
|
)
|
||||
Total distributions
|
(67,483,839
|
)
|
(6,510,718
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
26,386,649
|
15,003,867
|
||||||
Proceeds from shares subscribed – Institutional Class
|
18,223,486
|
31,051,642
|
||||||
Dividends reinvested – Investor Class
|
36,888,251
|
3,639,869
|
||||||
Dividends reinvested – Institutional Class
|
29,290,876
|
2,742,901
|
||||||
Cost of shares redeemed – Investor Class
|
(21,128,083
|
)
|
(33,887,466
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(18,488,644
|
)
|
(36,606,351
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
71,172,535
|
(18,055,538
|
)
|
|||||
TOTAL INCREASE IN NET ASSETS
|
10,166,332
|
853,245
|
||||||
NET ASSETS:
|
||||||||
Beginning of period
|
389,620,496
|
388,767,251
|
||||||
End of period
|
$
|
399,786,828
|
$
|
389,620,496
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
1,440,041
|
762,770
|
||||||
Shares sold – Institutional Class
|
966,925
|
1,496,059
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
2,163,534
|
184,671
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
1,638,192
|
133,150
|
||||||
Shares redeemed – Investor Class
|
(1,172,131
|
)
|
(1,726,740
|
)
|
||||
Shares redeemed – Institutional Class
|
(978,935
|
)
|
(1,822,025
|
)
|
||||
Net increase (decrease) in shares outstanding
|
4,057,626
|
(972,115
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
20.83
|
||
Income from investment operations:
|
||||
Net investment income (loss)
|
0.02
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
0.24
|
|||
Total from investment operations
|
0.26
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
—
|
|||
Dividends from net realized gains
|
(3.60
|
)
|
||
Total distributions
|
(3.60
|
)
|
||
Net asset value, end of period
|
$
|
17.49
|
||
TOTAL RETURN
|
1.71
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
223.03
|
||
Ratio of expenses to average net assets
|
1.36
|
%(3)
|
||
Ratio of net investment income (loss) to average net assets
|
0.23
|
%(3)
|
||
Portfolio turnover rate(4)
|
2
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
21.84
|
||
Income from investment operations:
|
||||
Net investment income (loss)
|
0.06
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
0.25
|
|||
Total from investment operations
|
0.31
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
—
|
|||
Dividends from net realized gains
|
(3.78
|
)
|
||
Total distributions
|
(3.78
|
)
|
||
Net asset value, end of period
|
$
|
18.37
|
||
TOTAL RETURN
|
1.89
|
%(3)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
176.76
|
||
Ratio of expenses to average net assets
|
0.98
|
%(4)
|
||
Ratio of net investment income (loss) to average net assets
|
0.61
|
%(4)
|
||
Portfolio turnover rate(5)
|
2
|
%(3)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Not annualized.
|
(4)
|
Annualized.
|
(5)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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 April 30, 2023 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash sales
for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may include
short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to
shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund for the
prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax
benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of discount,
is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or decrease, as
applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of the property
received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class),
and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets. Distributions received from the Fund’s investments in master limited partnerships (“MLPs”) generally consist of
ordinary income, capital gains, and return of capital. The Fund records investment income on the ex-date of the distributions. For financial statement purposes, the Fund uses return of capital and income estimates to allocate the dividend
income received. Such estimates are based on historical information available from the MLPs and other industry sources. These estimates may subsequently be revised based on information received from the MLPs after their tax reporting periods
are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Fund.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and
paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption price per share
for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that the Fund
limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven calendar days or
less without the sale or disposition significantly changing the market value of the investment.
|
HENNESSY FUNDS
|
1-800-966-4354
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (the “SEC”) adopted new regulations under the 1940 Act 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, generally eliminates the asset segregation framework 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 does not utilize derivatives and
therefore has not adopted a derivatives risk management program.
|
In December 2020, the SEC adopted a new rule under the 1940 Act 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. The Fund has designated Hennessy Advisors, Inc., the Fund’s investment advisor (the “Advisor”), as its valuation designee under 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, MLPs, and real estate
investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on which the securities are listed.
Securities listed
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for which a
last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in Level 1 of
the fair value hierarchy.
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending NAV
provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S. government
agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently
executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate observable market data,
such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified in Level 2 of the fair value
hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as of the
61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below.
Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
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
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
—
|
$
|
6,510,718
|
|||||
Long-term capital gains
|
67,483,839
|
—
|
|||||||
Total distributions
|
$
|
67,483,839
|
$
|
6,510,718
|
|||||
(1) Ordinary income includes short-term capital gains.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
November 1, 2022 –
|
|
November 1, 2022
|
April 30, 2023
|
April 30, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,017.10
|
$13.72
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,036.40
|
$13.85
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,018.90
|
$ 9.89
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,040.20
|
$10.00
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.36% for Investor Class shares or 0.98% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 181/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help the Board assess
each such factor;
|
|
(3)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
|
|
(4)
|
A summary of the advisory agreement;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor provides
high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the Fund
by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as appropriate),
conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance providers for fidelity bond,
D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers, and maintains books and records.
|
||
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services to the
Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor participates
in “no transaction fee” (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor compensates, in part, a
number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight
personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to various indices
at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The Trustees concluded that the
performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials considered at the meeting.
The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are reasonable and warranted
continuation of the advisory agreement.
|
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the Fund were
variable asset-based fees, so the Advisor would not realize material economies of scale relating to these expenses as the assets of the Fund increased. For example, third-party platform fees increase as the Fund’s assets grow.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor has put
into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by way of example,
its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any such products and services have
been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the Advisor from its relationship with the Fund were
reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are merely supplemental to the Advisor’s own efforts in the
performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
23
|
|
Proxy Voting Policy and Proxy Voting Records
|
25
|
|
Availability of Quarterly Portfolio Schedule
|
25
|
|
Federal Tax Distribution Information
|
25
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
25
|
|
Electronic Delivery
|
25
|
|
Board Approval of Investment Advisory Agreement
|
26
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
1
|
S&P 500® Index monthly total returns: +5.59% in November 2022, -5.76% in December 2022, +6.28% in January 2023, -2.44% in
February 2023, +3.67% in March 2023, and +1.56% in April 2023.
|
2
|
S&P 500® Financial Sector monthly total return: -9.55% in March 2023. KBW Bank Index monthly total return: -24.87% in March
2023. S&P 500® Information Technology sector total return: +18.88% for the six months ended April 30, 2023. S&P 500® Communication Services sector total return: +23.15% for the six months ended April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
|
Months(1)
|
Year
|
Years
|
Years
|
|
Hennessy Cornerstone
|
||||
Large Growth Fund –
|
||||
Investor Class (HFLGX)
|
6.76%
|
-0.70%
|
8.63%
|
10.04%
|
Hennessy Cornerstone
|
||||
Large Growth Fund –
|
||||
Institutional Class (HILGX)
|
6.94%
|
-0.45%
|
8.95%
|
10.31%
|
Russell 1000® Index
|
8.01%
|
1.82%
|
11.07%
|
11.95%
|
S&P 500® Index
|
8.63%
|
2.66%
|
11.45%
|
12.20%
|
(1)
|
Periods of less than one year are not annualized.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April
30, 2023 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Builders FirstSource, Inc.
|
2.51%
|
PulteGroup, Inc.
|
2.49%
|
DR Horton, Inc.
|
2.37%
|
Reliance Steel & Aluminum Co.
|
2.30%
|
Dell Technologies, Inc.
|
2.24%
|
NVR, Inc.
|
2.23%
|
Coterra Energy, Inc.
|
2.22%
|
Darden Restaurants, Inc
|
2.21%
|
Lam Research Corp.
|
2.17%
|
AmerisourceBergen Corp.
|
2.16%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 98.77%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 1.38%
|
||||||||||||
Sirius XM Holdings, Inc.
|
472,900
|
$
|
1,797,020
|
1.38
|
%
|
|||||||
Consumer Discretionary – 16.68%
|
||||||||||||
Bath & Body Works, Inc.
|
59,100
|
2,074,410
|
1.59
|
%
|
||||||||
Best Buy Co., Inc.
|
31,400
|
2,339,928
|
1.79
|
%
|
||||||||
Darden Restaurants, Inc.
|
19,000
|
2,886,670
|
2.21
|
%
|
||||||||
DR Horton, Inc.
|
28,200
|
3,096,924
|
2.37
|
%
|
||||||||
Lowe’s Companies, Inc.
|
13,300
|
2,764,139
|
2.12
|
%
|
||||||||
NVR, Inc. (a)
|
500
|
2,920,000
|
2.23
|
%
|
||||||||
PulteGroup, Inc.
|
48,400
|
3,250,060
|
2.49
|
%
|
||||||||
Tapestry, Inc.
|
60,200
|
2,456,762
|
1.88
|
%
|
||||||||
|
21,788,893
|
16.68
|
%
|
|||||||||
Energy – 19.43%
|
||||||||||||
APA Corp.
|
65,500
|
2,413,675
|
1.85
|
%
|
||||||||
Chesapeake Energy Corp.
|
32,900
|
2,720,172
|
2.08
|
%
|
||||||||
ConocoPhillips
|
23,600
|
2,428,204
|
1.86
|
%
|
||||||||
Coterra Energy, Inc.
|
113,200
|
2,897,920
|
2.22
|
%
|
||||||||
Devon Energy Corp.
|
45,000
|
2,404,350
|
1.84
|
%
|
||||||||
Diamondback Energy, Inc.
|
19,300
|
2,744,460
|
2.10
|
%
|
||||||||
EOG Resources, Inc.
|
21,800
|
2,604,446
|
1.99
|
%
|
||||||||
Ovintiv, Inc.
|
59,200
|
2,135,936
|
1.64
|
%
|
||||||||
Pioneer Natural Resources Co.
|
12,400
|
2,697,620
|
2.07
|
%
|
||||||||
Valero Energy Corp.
|
20,300
|
2,327,801
|
1.78
|
%
|
||||||||
|
25,374,584
|
19.43
|
%
|
|||||||||
Financials – 7.33%
|
||||||||||||
Ameriprise Financial, Inc.
|
7,900
|
2,410,448
|
1.84
|
%
|
||||||||
Equitable Holdings, Inc.
|
86,500
|
2,248,135
|
1.72
|
%
|
||||||||
Principal Financial Group, Inc.
|
30,400
|
2,270,576
|
1.74
|
%
|
||||||||
T. Rowe Price Group, Inc.
|
23,600
|
2,650,988
|
2.03
|
%
|
||||||||
|
9,580,147
|
7.33
|
%
|
|||||||||
Health Care – 5.67%
|
||||||||||||
AmerisourceBergen Corp.
|
16,900
|
2,819,765
|
2.16
|
%
|
||||||||
Moderna, Inc. (a)
|
16,200
|
2,152,818
|
1.65
|
%
|
||||||||
Pfizer, Inc.
|
62,700
|
2,438,403
|
1.86
|
%
|
||||||||
|
7,410,986
|
5.67
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Industrials – 16.58%
|
||||||||||||
Builders FirstSource, Inc. (a)
|
34,600
|
$
|
3,279,042
|
2.51
|
%
|
|||||||
C.H. Robinson Worldwide, Inc.
|
27,300
|
2,753,751
|
2.11
|
%
|
||||||||
Caterpillar, Inc.
|
11,100
|
2,428,680
|
1.86
|
%
|
||||||||
Deere & Co.
|
6,500
|
2,457,130
|
1.88
|
%
|
||||||||
Expeditors International of Washington, Inc.
|
24,700
|
2,811,848
|
2.15
|
%
|
||||||||
J.B. Hunt Transport Services, Inc.
|
14,200
|
2,489,118
|
1.90
|
%
|
||||||||
Masco Corp.
|
51,000
|
2,729,010
|
2.09
|
%
|
||||||||
United Parcel Service, Inc., Class B
|
15,100
|
2,715,131
|
2.08
|
%
|
||||||||
|
21,663,710
|
16.58
|
%
|
|||||||||
Information Technology – 20.69%
|
||||||||||||
Applied Materials, Inc.
|
24,000
|
2,712,720
|
2.08
|
%
|
||||||||
Cisco Systems, Inc.
|
57,600
|
2,721,600
|
2.08
|
%
|
||||||||
Dell Technologies, Inc.
|
67,300
|
2,926,877
|
2.24
|
%
|
||||||||
HP, Inc.
|
94,000
|
2,792,740
|
2.14
|
%
|
||||||||
Jabil, Inc.
|
34,800
|
2,719,620
|
2.08
|
%
|
||||||||
KLA Corp.
|
6,900
|
2,667,126
|
2.04
|
%
|
||||||||
Lam Research Corp.
|
5,400
|
2,830,032
|
2.17
|
%
|
||||||||
NetApp, Inc.
|
41,700
|
2,622,513
|
2.01
|
%
|
||||||||
ON Semiconductor Corp. (a)
|
36,800
|
2,648,128
|
2.03
|
%
|
||||||||
QUALCOMM, Inc.
|
20,400
|
2,382,720
|
1.82
|
%
|
||||||||
|
27,024,076
|
20.69
|
%
|
|||||||||
Materials – 11.01%
|
||||||||||||
CF Industries Holdings, Inc.
|
32,200
|
2,304,876
|
1.76
|
%
|
||||||||
Cleveland-Cliffs, Inc. (a)
|
129,000
|
1,984,020
|
1.52
|
%
|
||||||||
Nucor Corp.
|
16,100
|
2,385,698
|
1.83
|
%
|
||||||||
Reliance Steel & Aluminum Co.
|
12,100
|
2,998,380
|
2.30
|
%
|
||||||||
Steel Dynamics, Inc.
|
22,400
|
2,328,480
|
1.78
|
%
|
||||||||
The Mosaic Co.
|
55,600
|
2,382,460
|
1.82
|
%
|
||||||||
|
14,383,914
|
11.01
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $133,642,573)
|
129,023,330
|
98.77
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 1.24%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 1.24%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 4.73% (b)
|
1,624,435
|
$
|
1,624,435
|
1.24
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $1,624,435)
|
1,624,435
|
1.24
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $135,267,008) – 100.01%
|
130,647,765
|
100.01
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.01)%
|
(13,724
|
)
|
(0.01
|
)%
|
||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
130,634,041
|
100.00
|
%
|
(a)
|
Non-income-producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of April 30, 2023.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
1,797,020
|
$
|
—
|
$
|
—
|
$
|
1,797,020
|
||||||||
Consumer Discretionary
|
21,788,893
|
—
|
—
|
21,788,893
|
||||||||||||
Energy
|
25,374,584
|
—
|
—
|
25,374,584
|
||||||||||||
Financials
|
9,580,147
|
—
|
—
|
9,580,147
|
||||||||||||
Health Care
|
7,410,986
|
—
|
—
|
7,410,986
|
||||||||||||
Industrials
|
21,663,710
|
—
|
—
|
21,663,710
|
||||||||||||
Information Technology
|
27,024,076
|
—
|
—
|
27,024,076
|
||||||||||||
Materials
|
14,383,914
|
—
|
—
|
14,383,914
|
||||||||||||
Total Common Stocks
|
$
|
129,023,330
|
$
|
—
|
$
|
—
|
$
|
129,023,330
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
1,624,435
|
$
|
—
|
$
|
—
|
$
|
1,624,435
|
||||||||
Total Short-Term Investments
|
$
|
1,624,435
|
$
|
—
|
$
|
—
|
$
|
1,624,435
|
||||||||
Total Investments
|
$
|
130,647,765
|
$
|
—
|
$
|
—
|
$
|
130,647,765
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2023 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $135,267,008)
|
$
|
130,647,765
|
||
Dividends and interest receivable
|
115,384
|
|||
Receivable for fund shares sold
|
8,881
|
|||
Prepaid expenses and other assets
|
24,085
|
|||
Total assets
|
130,796,115
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
5,000
|
|||
Payable to advisor
|
79,893
|
|||
Payable to administrator
|
23,318
|
|||
Payable to auditor
|
11,226
|
|||
Accrued distribution fees
|
17,276
|
|||
Accrued service fees
|
9,518
|
|||
Accrued trustees fees
|
5,100
|
|||
Accrued expenses and other payables
|
10,743
|
|||
Total liabilities
|
162,074
|
|||
NET ASSETS
|
$
|
130,634,041
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
129,970,957
|
||
Total distributable earnings
|
663,084
|
|||
Total net assets
|
$
|
130,634,041
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
115,117,702
|
||
Shares issued and outstanding
|
11,736,750
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
9.81
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
15,516,339
|
|||
Shares issued and outstanding
|
1,565,766
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
9.91
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2023 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
1,650,290
|
||
Interest income
|
43,647
|
|||
Total investment income
|
1,693,937
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
491,933
|
|||
Distribution fees – Investor Class (See Note 5)
|
88,087
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
68,036
|
|||
Service fees – Investor Class (See Note 5)
|
58,725
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
49,302
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
4,239
|
|||
Federal and state registration fees
|
17,038
|
|||
Compliance expense (See Note 5)
|
11,844
|
|||
Audit fees
|
11,227
|
|||
Trustees’ fees and expenses
|
10,193
|
|||
Reports to shareholders
|
5,611
|
|||
Interest expense (See Note 7)
|
1,659
|
|||
Legal fees
|
1,378
|
|||
Other expenses
|
12,433
|
|||
Total expenses
|
831,705
|
|||
NET INVESTMENT INCOME
|
$
|
862,232
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
4,429,755
|
||
Net change in unrealized appreciation/depreciation on investments
|
3,530,152
|
|||
Net gain on investments
|
7,959,907
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
8,822,139
|
(1)
|
Net of foreign taxes withheld of $463.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2023
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
862,232
|
$
|
1,161,757
|
||||
Net realized gain on investments
|
4,429,755
|
22,369,171
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
3,530,152
|
(43,346,819
|
)
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
8,822,139
|
(19,815,891
|
)
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(19,315,910
|
)
|
(18,524,443
|
)
|
||||
Distributable earnings – Institutional Class
|
(2,556,836
|
)
|
(2,507,385
|
)
|
||||
Total distributions
|
(21,872,746
|
)
|
(21,031,828
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
746,742
|
3,741,686
|
||||||
Proceeds from shares subscribed – Institutional Class
|
467,369
|
1,400,184
|
||||||
Dividends reinvested – Investor Class
|
18,623,427
|
17,953,867
|
||||||
Dividends reinvested – Institutional Class
|
2,501,083
|
2,397,570
|
||||||
Cost of shares redeemed – Investor Class
|
(7,894,391
|
)
|
(13,588,755
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(711,449
|
)
|
(2,613,279
|
)
|
||||
Net increase in net assets derived
|
||||||||
from capital share transactions
|
13,732,781
|
9,291,273
|
||||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
682,174
|
(31,556,446
|
)
|
|||||
NET ASSETS:
|
||||||||
Beginning of period
|
129,951,867
|
161,508,313
|
||||||
End of period
|
$
|
130,634,041
|
$
|
129,951,867
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
74,093
|
304,353
|
||||||
Shares sold – Institutional Class
|
45,755
|
105,369
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
1,887,812
|
1,400,177
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
250,554
|
184,777
|
||||||
Shares redeemed – Investor Class
|
(771,747
|
)
|
(1,132,049
|
)
|
||||
Shares redeemed – Institutional Class
|
(69,599
|
)
|
(218,737
|
)
|
||||
Net increase in shares outstanding
|
1,416,868
|
643,890
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
10.92
|
||
Income from investment operations:
|
||||
Net investment income
|
0.06
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
0.67
|
|||
Total from investment operations
|
0.73
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.08
|
)
|
||
Dividends from net realized gains
|
(1.76
|
)
|
||
Total distributions
|
(1.84
|
)
|
||
Net asset value, end of period
|
$
|
9.81
|
||
TOTAL RETURN
|
6.76
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
115.12
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement/recoupment
|
1.28
|
%(3)
|
||
After expense reimbursement/recoupment
|
1.28
|
%(3)
|
||
Ratio of net investment income to average net assets:
|
||||
Before expense reimbursement/recoupment
|
1.26
|
%(3)
|
||
After expense reimbursement/recoupment
|
1.26
|
%(3)
|
||
Portfolio turnover rate(5)
|
54
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
The Fund had an expense limitation agreement in place through November 30, 2019.
|
(5)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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
|
%(4)
|
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
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
11.05
|
||
Income from investment operations:
|
||||
Net investment income
|
0.08
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
0.68
|
|||
Total from investment operations
|
0.76
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.12
|
)
|
||
Dividends from net realized gains
|
(1.78
|
)
|
||
Total distributions
|
(1.90
|
)
|
||
Net asset value, end of period
|
$
|
9.91
|
||
TOTAL RETURN
|
6.94
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
15.52
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement/recoupment
|
1.00
|
%(3)
|
||
After expense reimbursement/recoupment
|
1.00
|
%(3)
|
||
Ratio of net investment income to average net assets:
|
||||
Before expense reimbursement/recoupment
|
1.54
|
%(3)
|
||
After expense reimbursement/recoupment
|
1.54
|
%(3)
|
||
Portfolio turnover rate(5)
|
54
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
The Fund had an expense limitation agreement in place through November 30, 2019.
|
(5)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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
|
%(4)
|
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 April 30, 2023 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash sales
for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may include
short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to
shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund for
the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax
benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or
decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of the
property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a
specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and
paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption price per share
for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that the
Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven calendar
days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (the “SEC”) adopted new regulations under the 1940 Act 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, generally eliminates the asset segregation framework 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 does not utilize derivatives
and therefore has not adopted a derivatives risk management program.
|
HENNESSY FUNDS
|
1-800-966-4354
|
In December 2020, the SEC adopted a new rule under the 1940 Act 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. The Fund has designated Hennessy Advisors, Inc., the Fund’s investment advisor (the “Advisor”), as its valuation designee under 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
|
$
|
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
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
1,161,563
|
$
|
1,496,384
|
|||||
Long-term capital gains
|
20,711,183
|
19,535,444
|
|||||||
Total distributions
|
$
|
21,872,746
|
$
|
21,031,828
|
|||||
(1) Ordinary income includes short-term capital gains.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS/EXPENSE EXAMPLE
|
HENNESSY FUNDS
|
1-800-966-4354
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
November 1, 2022 –
|
|
November 1, 2022
|
April 30, 2023
|
April 30, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,067.60
|
$13.23
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,037.20
|
$13.04
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,069.40
|
$10.35
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,040.00
|
$10.20
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.28% for Investor Class shares or 1.00% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 181/365 days (to reflect the half-year period).
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE — ELECTRONIC DELIVERY
|
![]() |
![]() |
![]() |
![]() |
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help the Board
assess each such factor;
|
|
(3)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
|
|
(4)
|
A summary of the advisory agreement;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor provides
high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the Fund
by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as appropriate),
conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance providers for fidelity bond,
D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers, and maintains books and records.
|
||
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services to
the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor participates
in “no transaction fee” (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor compensates, in part, a
number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight
personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to various
indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The Trustees concluded that the
performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials considered at the meeting.
The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are reasonable and
warranted continuation of the advisory agreement.
|
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the Fund were
variable asset-based fees, so the Advisor would not realize material economies of scale relating to these expenses as the assets of the Fund increased. For example, third-party platform fees increase as the Fund’s assets grow.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor has put
into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by way of example,
its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any such products and services
have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the Advisor from its relationship with the Fund
were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are merely supplemental to the Advisor’s own efforts in the
performance of its duties under the advisory agreement.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Electronic Delivery
|
26
|
|
Board Approval of Investment Advisory Agreement
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
1
|
S&P 500® Index monthly total returns: +5.59% in November 2022, -5.76% in December 2022, +6.28% in January 2023, -2.44% in
February 2023, +3.67% in March 2023, and +1.56% in April 2023.
|
2
|
S&P 500® Financial Sector monthly total return: -9.55% in March 2023. KBW Bank Index monthly total return: -24.87% in March
2023. S&P 500® Information Technology sector total return: +18.88% for the six months ended April 30, 2023. S&P 500® Communication Services sector total return: +23.15% for the six months ended April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
|
Months(1)
|
Year
|
Years
|
Years
|
|
Hennessy Cornerstone Value Fund –
|
||||
Investor Class (HFCVX)
|
4.15%
|
4.92%
|
7.77%
|
8.68%
|
Hennessy Cornerstone Value Fund –
|
||||
Institutional Class (HICVX)
|
4.23%
|
5.11%
|
7.99%
|
8.89%
|
Russell 1000® Value Index
|
4.54%
|
1.21%
|
7.75%
|
9.13%
|
S&P 500® Index
|
8.63%
|
2.66%
|
11.45%
|
12.20%
|
(1)
|
Periods of less than one year are not annualized.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April
30, 2023 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Canadian Natural Resources Ltd.
|
2.20%
|
Medtronic PLC
|
2.18%
|
Comcast Corp.
|
2.14%
|
Devon Energy Corp.
|
2.13%
|
Exxon Mobil Corp.
|
2.12%
|
MetLife, Inc.
|
2.10%
|
TotalEnergies SE – ADR
|
2.08%
|
Manulife Financial Corp.
|
2.07%
|
Colgate-Palmolive Co.
|
2.06%
|
Shell PLC – ADR
|
2.06%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 99.09%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 7.88%
|
||||||||||||
AT&T, Inc.
|
295,560
|
$
|
5,222,545
|
1.78
|
%
|
|||||||
BCE, Inc. (a)
|
124,200
|
5,970,294
|
2.03
|
%
|
||||||||
Comcast Corp.
|
151,700
|
6,275,829
|
2.14
|
%
|
||||||||
Verizon Communications, Inc.
|
146,000
|
5,669,180
|
1.93
|
%
|
||||||||
|
23,137,848
|
7.88
|
%
|
|||||||||
Consumer Discretionary – 3.90%
|
||||||||||||
Ford Motor Co.
|
477,700
|
5,675,076
|
1.93
|
%
|
||||||||
The Home Depot, Inc.
|
19,200
|
5,770,368
|
1.97
|
%
|
||||||||
|
11,445,444
|
3.90
|
%
|
|||||||||
Consumer Staples – 14.10%
|
||||||||||||
Altria Group, Inc.
|
125,500
|
5,962,505
|
2.03
|
%
|
||||||||
British American Tobacco PLC – ADR (a)
|
157,700
|
5,842,785
|
1.99
|
%
|
||||||||
Colgate-Palmolive Co.
|
75,900
|
6,056,820
|
2.06
|
%
|
||||||||
Philip Morris International, Inc.
|
60,400
|
6,038,188
|
2.06
|
%
|
||||||||
The Coca-Cola Co.
|
91,000
|
5,837,650
|
1.99
|
%
|
||||||||
The Kraft Heinz Co.
|
145,800
|
5,725,566
|
1.95
|
%
|
||||||||
Unilever PLC – ADR (a)
|
107,000
|
5,941,710
|
2.02
|
%
|
||||||||
|
41,405,224
|
14.10
|
%
|
|||||||||
Energy – 20.64%
|
||||||||||||
BP PLC – ADR (a)
|
149,500
|
6,021,860
|
2.05
|
%
|
||||||||
Canadian Natural Resources Ltd. (a)
|
105,900
|
6,456,723
|
2.20
|
%
|
||||||||
Chevron Corp.
|
35,275
|
5,946,660
|
2.03
|
%
|
||||||||
Devon Energy Corp.
|
116,800
|
6,240,624
|
2.13
|
%
|
||||||||
Equinor ASA – ADR (a)
|
198,700
|
5,710,638
|
1.95
|
%
|
||||||||
Exxon Mobil Corp.
|
52,710
|
6,237,701
|
2.12
|
%
|
||||||||
Petroleo Brasileiro SA – ADR (a)
|
566,500
|
6,016,230
|
2.05
|
%
|
||||||||
Shell PLC – ADR (a)
|
97,500
|
6,043,050
|
2.06
|
%
|
||||||||
Suncor Energy, Inc. (a)
|
184,200
|
5,769,144
|
1.97
|
%
|
||||||||
TotalEnergies SE – ADR (a)
|
95,600
|
6,111,708
|
2.08
|
%
|
||||||||
|
60,554,338
|
20.64
|
%
|
|||||||||
Financials – 20.18%
|
||||||||||||
Bank of America Corp.
|
202,300
|
5,923,344
|
2.02
|
%
|
||||||||
Citigroup, Inc.
|
125,600
|
5,911,992
|
2.01
|
%
|
||||||||
HSBC Holdings PLC – ADR (a)
|
162,900
|
5,872,545
|
2.00
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Financials (Continued)
|
||||||||||||
JPMorgan Chase & Co.
|
43,000
|
$
|
5,944,320
|
2.02
|
%
|
|||||||
Manulife Financial Corp. (a)
|
307,300
|
6,069,175
|
2.07
|
%
|
||||||||
MetLife, Inc.
|
100,500
|
6,163,665
|
2.10
|
%
|
||||||||
Morgan Stanley
|
63,600
|
5,722,092
|
1.95
|
%
|
||||||||
Royal Bank of Canada (a)
|
58,900
|
5,849,359
|
1.99
|
%
|
||||||||
Toronto-Dominion Bank (a)
|
96,800
|
5,868,984
|
2.00
|
%
|
||||||||
Wells Fargo & Co.
|
149,000
|
5,922,750
|
2.02
|
%
|
||||||||
|
59,248,226
|
20.18
|
%
|
|||||||||
Health Care – 17.43%
|
||||||||||||
AbbVie, Inc.
|
35,100
|
5,304,312
|
1.81
|
%
|
||||||||
Bristol-Myers Squibb Co.
|
81,400
|
5,435,078
|
1.85
|
%
|
||||||||
CVS Health Corp.
|
75,400
|
5,527,574
|
1.88
|
%
|
||||||||
Gilead Sciences, Inc.
|
69,300
|
5,697,153
|
1.94
|
%
|
||||||||
GSK PLC – ADR (a)
|
154,860
|
5,579,606
|
1.90
|
%
|
||||||||
Johnson & Johnson
|
36,100
|
5,909,570
|
2.01
|
%
|
||||||||
Medtronic PLC (a)
|
70,300
|
6,393,785
|
2.18
|
%
|
||||||||
Merck & Co., Inc.
|
52,300
|
6,039,081
|
2.06
|
%
|
||||||||
Pfizer, Inc.
|
135,800
|
5,281,262
|
1.80
|
%
|
||||||||
|
51,167,421
|
17.43
|
%
|
|||||||||
Industrials – 3.75%
|
||||||||||||
Union Pacific Corp.
|
29,300
|
5,734,010
|
1.95
|
%
|
||||||||
United Parcel Service, Inc., Class B
|
29,400
|
5,286,414
|
1.80
|
%
|
||||||||
|
11,020,424
|
3.75
|
%
|
|||||||||
Information Technology – 9.25%
|
||||||||||||
Cisco Systems, Inc.
|
109,700
|
5,183,325
|
1.77
|
%
|
||||||||
Hewlett Packard Enterprise Co.
|
382,300
|
5,474,536
|
1.86
|
%
|
||||||||
HP, Inc.
|
196,800
|
5,846,928
|
1.99
|
%
|
||||||||
International Business Machines Corp.
|
44,200
|
5,587,322
|
1.90
|
%
|
||||||||
Texas Instruments, Inc.
|
30,300
|
5,066,160
|
1.73
|
%
|
||||||||
|
27,158,271
|
9.25
|
%
|
|||||||||
Materials – 1.96%
|
||||||||||||
Dow, Inc.
|
105,600
|
5,744,640
|
1.96
|
%
|
||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $255,102,271)
|
290,881,836
|
99.09
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 0.51%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 0.51%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 4.73% (b)
|
1,507,726
|
$
|
1,507,726
|
0.51
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $1,507,726)
|
1,507,726
|
0.51
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $256,609,997) – 99.60%
|
292,389,562
|
99.60
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.40%
|
1,174,001
|
0.40
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
293,563,563
|
100.00
|
%
|
(a)
|
U.S.-traded security of a foreign corporation.
|
(b)
|
The rate listed is the fund’s seven-day yield as of April 30, 2023.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
23,137,848
|
$
|
—
|
$
|
—
|
$
|
23,137,848
|
||||||||
Consumer Discretionary
|
11,445,444
|
—
|
—
|
11,445,444
|
||||||||||||
Consumer Staples
|
41,405,224
|
—
|
—
|
41,405,224
|
||||||||||||
Energy
|
60,554,338
|
—
|
—
|
60,554,338
|
||||||||||||
Financials
|
59,248,226
|
—
|
—
|
59,248,226
|
||||||||||||
Health Care
|
51,167,421
|
—
|
—
|
51,167,421
|
||||||||||||
Industrials
|
11,020,424
|
—
|
—
|
11,020,424
|
||||||||||||
Information Technology
|
27,158,271
|
—
|
—
|
27,158,271
|
||||||||||||
Materials
|
5,744,640
|
—
|
—
|
5,744,640
|
||||||||||||
Total Common Stocks
|
$
|
290,881,836
|
$
|
—
|
$
|
—
|
$
|
290,881,836
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
1,507,726
|
$
|
—
|
$
|
—
|
$
|
1,507,726
|
||||||||
Total Short-Term Investments
|
$
|
1,507,726
|
$
|
—
|
$
|
—
|
$
|
1,507,726
|
||||||||
Total Investments
|
$
|
292,389,562
|
$
|
—
|
$
|
—
|
$
|
292,389,562
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2023 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $256,609,997)
|
$
|
292,389,562
|
||
Dividends and interest receivable
|
1,457,349
|
|||
Dividend tax reclaim receivable
|
95,208
|
|||
Receivable for fund shares sold
|
138,115
|
|||
Prepaid expenses and other assets
|
25,934
|
|||
Total assets
|
294,106,168
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
234,806
|
|||
Payable to advisor
|
178,345
|
|||
Payable to administrator
|
51,363
|
|||
Payable to auditor
|
11,226
|
|||
Accrued distribution fees
|
37,140
|
|||
Accrued service fees
|
22,560
|
|||
Accrued trustees fees
|
4,430
|
|||
Accrued expenses and other payables
|
2,735
|
|||
Total liabilities
|
542,605
|
|||
NET ASSETS
|
$
|
293,563,563
|
||
NET ASSETS CONSIST OF:
|
||||
Capital stock
|
$
|
259,215,282
|
||
Total distributable earnings
|
34,348,281
|
|||
Total net assets
|
$
|
293,563,563
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
274,611,949
|
||
Shares issued and outstanding
|
14,326,667
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
19.17
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
18,951,614
|
||
Shares issued and outstanding
|
988,040
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
19.18
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2023 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
6,582,375
|
||
Interest income
|
103,417
|
|||
Total investment income
|
6,685,792
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
1,088,414
|
|||
Distribution fees – Investor Class (See Note 5)
|
204,800
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
144,873
|
|||
Service fees – Investor Class (See Note 5)
|
136,533
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
95,573
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
15,952
|
|||
Federal and state registration fees
|
18,032
|
|||
Compliance expense (See Note 5)
|
11,844
|
|||
Trustees’ fees and expenses
|
11,337
|
|||
Audit fees
|
11,227
|
|||
Reports to shareholders
|
7,943
|
|||
Legal fees
|
2,757
|
|||
Other expenses
|
25,038
|
|||
Total expenses
|
1,774,323
|
|||
NET INVESTMENT INCOME
|
$
|
4,911,469
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized loss on investments
|
$
|
(3,417,798
|
)
|
|
Net change in unrealized appreciation/depreciation on investments
|
10,497,575
|
|||
Net gain on investments
|
7,079,777
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
11,991,246
|
(1)
|
Net of foreign taxes withheld and issuance fees of $167,536.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2023
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
4,911,469
|
$
|
7,863,624
|
||||
Net realized gain (loss) on investments
|
(3,417,798
|
)
|
22,098,599
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
10,497,575
|
(8,218,181
|
)
|
|||||
Net increase in net assets resulting from operations
|
11,991,246
|
21,744,042
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(26,252,846
|
)
|
(12,280,194
|
)
|
||||
Distributable earnings – Institutional Class
|
(2,313,856
|
)
|
(284,427
|
)
|
||||
Total distributions
|
(28,566,702
|
)
|
(12,564,621
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
10,720,191
|
14,142,871
|
||||||
Proceeds from shares subscribed – Institutional Class
|
6,158,271
|
29,565,728
|
||||||
Dividends reinvested – Investor Class
|
24,939,854
|
11,605,966
|
||||||
Dividends reinvested – Institutional Class
|
2,247,245
|
250,047
|
||||||
Cost of shares redeemed – Investor Class
|
(14,611,700
|
)
|
(20,443,989
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(12,474,534
|
)
|
(10,861,538
|
)
|
||||
Net increase in net assets derived
|
||||||||
from capital share transactions
|
16,979,327
|
24,259,085
|
||||||
TOTAL INCREASE IN NET ASSETS
|
403,871
|
33,438,506
|
||||||
NET ASSETS:
|
||||||||
Beginning of period
|
293,159,692
|
259,721,186
|
||||||
End of period
|
$
|
293,563,563
|
$
|
293,159,692
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
547,895
|
699,608
|
||||||
Shares sold – Institutional Class
|
304,100
|
1,444,370
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
1,290,673
|
593,352
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
116,262
|
12,768
|
||||||
Shares redeemed – Investor Class
|
(755,678
|
)
|
(1,029,071
|
)
|
||||
Shares redeemed – Institutional Class
|
(629,738
|
)
|
(539,739
|
)
|
||||
Net increase in shares outstanding
|
873,514
|
1,181,288
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
20.30
|
||
Income from investment operations:
|
||||
Net investment income
|
0.32
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
0.50
|
|||
Total from investment operations
|
0.82
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.50
|
)
|
||
Dividends from net realized gains
|
(1.45
|
)
|
||
Total distributions
|
(1.95
|
)
|
||
Net asset value, end of period
|
$
|
19.17
|
||
TOTAL RETURN
|
4.15
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
274.61
|
||
Ratio of expenses to average net assets
|
1.22
|
%(3)
|
||
Ratio of net investment income to average net assets
|
3.33
|
%(3)
|
||
Portfolio turnover rate(4)
|
30
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
20.34
|
||
Income from investment operations:
|
||||
Net investment income
|
0.34
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
0.50
|
|||
Total from investment operations
|
0.84
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.55
|
)
|
||
Dividends from net realized gains
|
(1.45
|
)
|
||
Total distributions
|
(2.00
|
)
|
||
Net asset value, end of period
|
$
|
19.18
|
||
TOTAL RETURN
|
4.23
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
18.95
|
||
Ratio of expenses to average net assets:
|
1.05
|
%(3)
|
||
Ratio of net investment income to average net assets:
|
3.50
|
%(3)
|
||
Portfolio turnover rate(4)
|
30
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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 April 30, 2023 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash
sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains
distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund for
the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or
decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of
the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a
specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared
and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption price per
share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that the
Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven calendar
days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (the “SEC”) adopted new regulations under the 1940 Act 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, generally eliminates the asset segregation framework 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
|
HENNESSY FUNDS
|
1-800-966-4354
|
derivatives risk management program and appoint a derivatives risk manager. The Fund does not utilize derivatives and therefore has not adopted a derivatives risk management program.
|
|
In December 2020, the SEC adopted a new rule under the 1940 Act 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. The Fund has designated Hennessy Advisors, Inc., the Fund’s investment advisor (the “Advisor”), as its valuation designee under 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 ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are
classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV because most foreign markets close well before such time. The earlier close of
most foreign markets gives rise to the possibility that significant
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
events, including broad market moves, may have occurred in the interim. In certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the
security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire
market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending NAV
provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S. government
agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently
executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate observable market data,
such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified in Level 2 of the fair value
hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as of
the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below.
Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
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
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
7,797,976
|
$
|
6,908,914
|
|||||
Long-term capital gains
|
20,768,726
|
5,655,707
|
|||||||
Total distributions
|
$
|
28,566,702
|
$
|
12,654,621
|
|||||
(1) Ordinary income includes short-term capital gains.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
November 1, 2022 –
|
|
November 1, 2022
|
April 30, 2023
|
April 30, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,041.50
|
$12.45
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,037.80
|
$12.43
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,042.30
|
$10.72
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,039.50
|
$10.71
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.22% for Investor Class shares or 1.05% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 181/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help the Board
assess each such factor;
|
|
(3)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
|
|
(4)
|
A summary of the advisory agreement;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor provides
high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the
Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as appropriate),
conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance providers for fidelity bond,
D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers, and maintains books and
records.
|
||
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services to
the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor
participates in “no transaction fee” (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor
compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight
personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to various
indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The Trustees concluded that
the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials considered at the
meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are reasonable
and warranted continuation of the advisory agreement.
|
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the Fund were
variable asset-based fees, so the Advisor would not realize material economies of scale relating to these expenses as the assets of the Fund increased. For example, third-party platform fees increase as the Fund’s assets grow.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor has put
into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by way of
example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any such products and
services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the Advisor from its relationship with
the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are merely supplemental to the Advisor’s own
efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Statement of Cash Flows
|
12
|
|
Financial Highlights
|
14
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
25
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Electronic Delivery
|
26
|
|
Board Approval of Investment Advisory Agreement
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
1
|
S&P 500® Index monthly total returns: +5.59% in November 2022, -5.76% in December 2022, +6.28% in January 2023, -2.44% in
February 2023, +3.67% in March 2023, and +1.56% in April 2023.
|
2
|
S&P 500® Financial Sector monthly total return: -9.55% in March 2023. KBW Bank Index monthly total return: -24.87% in March
2023. S&P 500® Information Technology sector total return: +18.88% for the six months ended April 30, 2023. S&P 500® Communication Services sector total return: +23.15% for the six months ended April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
|
Months(1)
|
Year
|
Years
|
Years
|
|
Hennessy Total Return
|
||||
Fund (HDOGX)
|
2.62%
|
0.58%
|
4.36%
|
5.57%
|
75/25 Blended DJIA/Treasury Index
|
4.57%
|
5.37%
|
7.77%
|
8.78%
|
Dow Jones Industrial Average
|
5.29%
|
5.64%
|
9.49%
|
11.22%
|
(1)
|
Periods of less than one year are not annualized.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2023 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
U.S. Treasury Bill, 4.980%, 07/13/2023
|
34.02%
|
U.S. Treasury Bill, 4.590%, 05/11/2023
|
22.88%
|
U.S. Treasury Bill, 4.750%, 06/15/2023
|
17.08%
|
JPMorgan Chase & Co.
|
7.65%
|
Verizon Communications, Inc.
|
7.18%
|
Intel Corp.
|
7.06%
|
Chevron Corp.
|
7.01%
|
Walgreens Boots Alliance, Inc.
|
6.97%
|
Dow, Inc.
|
6.91%
|
Cisco Systems, Inc.
|
6.81%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 69.69%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 7.18%
|
||||||||||||
Verizon Communications, Inc.
|
96,900
|
$
|
3,762,627
|
7.18
|
%
|
|||||||
Consumer Staples – 10.52%
|
||||||||||||
The Coca-Cola Co.
|
29,000
|
1,860,350
|
3.55
|
%
|
||||||||
Walgreens Boots Alliance, Inc.
|
103,600
|
3,651,900
|
6.97
|
%
|
||||||||
|
5,512,250
|
10.52
|
%
|
|||||||||
Energy – 7.01%
|
||||||||||||
Chevron Corp.
|
21,800
|
3,675,044
|
7.01
|
%
|
||||||||
Financials – 7.65%
|
||||||||||||
JPMorgan Chase & Co.
|
29,000
|
4,008,960
|
7.65
|
%
|
||||||||
Health Care – 3.25%
|
||||||||||||
Amgen, Inc.
|
7,100
|
1,702,154
|
3.25
|
%
|
||||||||
Industrials – 6.79%
|
||||||||||||
3M Co.
|
33,500
|
3,558,370
|
6.79
|
%
|
||||||||
Information Technology – 20.38%
|
||||||||||||
Cisco Systems, Inc.
|
75,500
|
3,567,375
|
6.81
|
%
|
||||||||
Intel Corp.
|
119,000
|
3,696,140
|
7.06
|
%
|
||||||||
International Business Machines Corp.
|
27,000
|
3,413,070
|
6.51
|
%
|
||||||||
|
10,676,585
|
20.38
|
%
|
|||||||||
Materials – 6.91%
|
||||||||||||
Dow, Inc.
|
66,500
|
3,617,600
|
6.91
|
%
|
||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $36,336,794)
|
36,513,590
|
69.69
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 75.18%
|
Number of Shares/
|
% of
|
||||||||||
|
Par Amount
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 1.20%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 4.73% (a)
|
629,449
|
$
|
629,449
|
1.20
|
%
|
|||||||
U.S. Treasury Bills – 73.98%
|
||||||||||||
4.590%, 05/11/2023 (b)(c)
|
12,000,000
|
11,984,800
|
22.88
|
%
|
||||||||
4.750%, 06/15/2023 (b)(c)
|
9,000,000
|
8,949,150
|
17.08
|
%
|
||||||||
4.980%, 07/13/2023 (b)(c)
|
18,000,000
|
17,822,428
|
34.02
|
%
|
||||||||
|
38,756,378
|
73.98
|
%
|
|||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $39,387,469)
|
39,385,827
|
75.18
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $75,724,263) – 144.87%
|
75,899,417
|
144.87
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (44.87)%
|
(23,508,441
|
)
|
(44.87
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
52,390,976
|
100.00
|
%
|
(a)
|
The rate listed is the fund’s seven-day yield as of April 30, 2023.
|
(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 $25,837,584.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
3,762,627
|
$
|
—
|
$
|
—
|
$
|
3,762,627
|
||||||||
Consumer Staples
|
5,512,250
|
—
|
—
|
5,512,250
|
||||||||||||
Energy
|
3,675,044
|
—
|
—
|
3,675,044
|
||||||||||||
Financials
|
4,008,960
|
—
|
—
|
4,008,960
|
||||||||||||
Health Care
|
1,702,154
|
—
|
—
|
1,702,154
|
||||||||||||
Industrials
|
3,558,370
|
—
|
—
|
3,558,370
|
||||||||||||
Information Technology
|
10,676,585
|
—
|
—
|
10,676,585
|
||||||||||||
Materials
|
3,617,600
|
—
|
—
|
3,617,600
|
||||||||||||
Total Common Stocks
|
$
|
36,513,590
|
$
|
—
|
$
|
—
|
$
|
36,513,590
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
629,449
|
$
|
—
|
$
|
—
|
$
|
629,449
|
||||||||
U.S. Treasury Bills
|
—
|
38,756,378
|
—
|
38,756,378
|
||||||||||||
Total Short-Term Investments
|
$
|
629,449
|
$
|
38,756,378
|
$
|
—
|
$
|
39,385,827
|
||||||||
Total Investments
|
$
|
37,143,039
|
$
|
38,756,378
|
$
|
—
|
$
|
75,899,417
|
HENNESSY FUNDS
|
1-800-966-4354
|
Principal
|
Maturity
|
Maturity
|
||||||||||||
Face Value
|
Counterparty
|
Rate
|
Trade Date
|
Date
|
Amount
|
|||||||||
$
|
7,196,000
|
Jefferies LLC
|
4.90%
|
|
2/9/23
|
5/11/23
|
$
|
7,284,151
|
||||||
5,397,000
|
Jefferies LLC
|
5.10%
|
|
3/16/23
|
6/15/23
|
5,465,812
|
||||||||
10,794,000
|
Jefferies LLC
|
5.25%
|
|
4/13/23
|
7/13/23
|
10,935,671
|
||||||||
$
|
23,387,000
|
$
|
23,685,634
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2023 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $75,724,263)
|
$
|
75,899,417
|
||
Dividends and interest receivable
|
96,916
|
|||
Receivable for fund shares sold
|
192
|
|||
Prepaid expenses and other assets
|
12,268
|
|||
Total assets
|
76,008,793
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
23,561
|
|||
Payable to advisor
|
26,218
|
|||
Payable to administrator
|
9,568
|
|||
Payable to auditor
|
11,226
|
|||
Accrued distribution fees
|
8,054
|
|||
Accrued service fees
|
4,370
|
|||
Reverse repurchase agreements
|
23,387,000
|
|||
Accrued interest payable
|
139,522
|
|||
Accrued trustees fees
|
4,846
|
|||
Accrued expenses and other payables
|
3,452
|
|||
Total liabilities
|
23,617,817
|
|||
NET ASSETS
|
$
|
52,390,976
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
49,420,341
|
||
Total distributable earnings
|
2,970,635
|
|||
Total net assets
|
$
|
52,390,976
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
52,390,976
|
||
Shares issued and outstanding
|
4,030,877
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
13.00
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2023 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
837,337
|
||
Interest income
|
816,781
|
|||
Total investment income
|
1,654,118
|
|||
EXPENSES:
|
||||
Interest expense (See Notes 7 and 9)
|
521,493
|
|||
Investment advisory fees (See Note 5)
|
163,625
|
|||
Distribution fees – Investor Class (See Note 5)
|
40,906
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
30,649
|
|||
Service fees – Investor Class (See Note 5)
|
27,271
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
19,161
|
|||
Compliance expense (See Note 5)
|
11,844
|
|||
Audit fees
|
11,227
|
|||
Federal and state registration fees
|
10,098
|
|||
Trustees’ fees and expenses
|
9,588
|
|||
Reports to shareholders
|
4,454
|
|||
Legal fees
|
901
|
|||
Other expenses
|
4,701
|
|||
Total expenses
|
855,918
|
|||
NET INVESTMENT INCOME
|
$
|
798,200
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
2,689,175
|
||
Net change in unrealized appreciation/depreciation on investments
|
(2,160,564
|
)
|
||
Net gain on investments
|
528,611
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
1,326,811
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2023
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
798,200
|
$
|
870,240
|
||||
Net realized gain on investments
|
2,689,175
|
3,139,523
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(2,160,564
|
)
|
(3,362,849
|
)
|
||||
Net increase in net assets resulting from operations
|
1,326,811
|
646,914
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(3,336,414
|
)
|
(852,484
|
)
|
||||
Total distributions
|
(3,336,414
|
)
|
(852,484
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
3,847,809
|
3,818,336
|
||||||
Dividends reinvested – Investor Class
|
3,192,537
|
810,781
|
||||||
Cost of shares redeemed – Investor Class
|
(5,996,081
|
)
|
(5,519,799
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
1,044,265
|
(890,682
|
)
|
|||||
TOTAL DECREASE IN NET ASSETS
|
(965,338
|
)
|
(1,096,252
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of period
|
53,356,314
|
54,452,566
|
||||||
End of period
|
$
|
52,390,976
|
$
|
53,356,314
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
287,282
|
278,708
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
240,542
|
60,970
|
||||||
Shares redeemed – Investor Class
|
(456,679
|
)
|
(402,382
|
)
|
||||
Net increase (decrease) in shares outstanding
|
71,145
|
(62,704
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Cash Flows for the six months ended April 30, 2023 (Unaudited)
|
Cash flows from operating activities:
|
||||
Net increase in net assets from operations
|
$
|
1,326,811
|
||
Adjustments to reconcile net increase in net assets resulting
|
||||
from operations to net cash provided by operating activities:
|
||||
Payments to purchase securities
|
(12,374,610
|
)
|
||
Proceeds from sale of securities
|
13,980,875
|
|||
Proceeds from securities litigation
|
122
|
|||
Net sale of short term investments
|
(1,133,225
|
)
|
||
Realized gain on investments in securities
|
(2,689,175
|
)
|
||
Net accretion of discount on securities
|
(781,504
|
)
|
||
Change in unrealized appreciation/depreciation
|
||||
on investments in securities
|
2,160,564
|
|||
(Increases) decreases in operating assets:
|
||||
Increase in dividends and interest receivable
|
(43,319
|
)
|
||
Increase in prepaid expenses and other assets
|
(967
|
)
|
||
Increases (decreases) in operating liabilities:
|
||||
Increase in payable to advisor
|
437
|
|||
Decrease in payable to administrator
|
(1,885
|
)
|
||
Decrease in payable for distribution fees
|
(12,598
|
)
|
||
Increase in payable for service fees
|
73
|
|||
Increase in accrued interest payable
|
53,000
|
|||
Decrease in accrued audit fees
|
(11,523
|
)
|
||
Decrease in accrued trustee fees
|
(280
|
)
|
||
Decrease in other accrued expenses and payables
|
(6,008
|
)
|
||
Net cash provided by operating securities
|
466,788
|
|||
Cash flows from financing activities:
|
||||
Increase in reverse repurchase agreements
|
1,799,000
|
|||
Proceeds on shares sold
|
3,853,815
|
|||
Payment on shares redeemed
|
(5,975,726
|
)
|
||
Distributions paid in cash, net of reinvestments
|
(143,877
|
)
|
||
Net cash used for financing activities
|
(466,788
|
)
|
||
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
|
$
|
3,192,537
|
||
Cash paid for interest
|
$
|
468,493
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF CASH FLOWS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
13.47
|
||
Income from investment operations:
|
||||
Net investment income
|
0.19
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
0.17
|
|||
Total from investment operations
|
0.36
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.17
|
)
|
||
Dividends from net realized gains
|
(0.66
|
)
|
||
Total distributions
|
(0.83
|
)
|
||
Net asset value, end of period
|
$
|
13.00
|
||
TOTAL RETURN
|
2.62
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
52.39
|
||
Ratio of expenses, including interest expense, to average net assets
|
3.14
|
%(3)
|
||
Ratio of net investment income to average net assets
|
2.93
|
%(3)
|
||
Portfolio turnover rate
|
32
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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 April 30, 2023 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash
sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains
distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund
for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
amortization of premium and accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest
income over the life of a security with a corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash
dividends are recognized as investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder
service fees.
|
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if any, are
declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption
price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Reverse Repurchase Agreements – Transactions involving reverse repurchase agreements are treated as collateralized financing transactions and are recorded at their contracted resell or repurchase amounts,
which approximates fair value. Upon entering into a reverse repurchase agreement transaction, the Fund establishes a segregated account in which it maintains liquid assets in an amount at least equal to the repurchase price marked to
market daily (including accrued interest), and the Fund subsequently monitors the account to ensure that it maintains such equivalent value. Interest on reverse repurchase agreements is included in interest payable.
|
As of April 30, 2023, securities with a fair value of $25,837,584, which are included in investments in securities in the Statement of
Assets and Liabilities, were pledged to collateralize reverse repurchase agreements.
|
|
j).
|
Offsetting Assets and Liabilities – The Fund follows the financial reporting rules regarding offsetting assets and liabilities and related netting arrangements to enable users of its financial statements to
understand the effect of those arrangements on its financial position. Reverse repurchase transactions are entered into by the Fund under Master Repurchase Agreements (“MRAs”) that permit the Fund, under certain circumstances, including
an event of default (such as bankruptcy or insolvency), to offset payables under the MRA with collateral held with the counterparty and create one single net payment from the Fund. Upon a bankruptcy or insolvency of the MRA
|
HENNESSY FUNDS
|
1-800-966-4354
|
counterparty, the Fund is considered an unsecured creditor with respect to excess collateral and, as such, the return of excess collateral may be delayed. In the event the buyer of securities under an MRA
files for bankruptcy or becomes insolvent, the Fund’s use of the proceeds of the MRA may be restricted while the other party, or its trustee or receiver, determines whether or not to enforce the Fund’s obligation to repurchase the
securities. For additional information regarding the offsetting of assets and liabilities as of April 30, 2023, 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 (the “SEC”) adopted new regulations under the 1940 Act 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, generally eliminates the asset segregation framework 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 does not utilize
derivatives and therefore has not adopted a derivatives risk management program. With regard to reverse repurchase agreements, the Fund complies with the asset coverage requirements of Section 18 of the 1940 Act, and does not treat them
as derivatives transactions, as permitted by Rule 18f-4.
|
In December 2020, the SEC adopted a new rule under the 1940 Act 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. The Fund has designated Hennessy Advisors, Inc., the Fund’s investment advisor (the “Advisor”), as its valuation designee under 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, exchange-traded funds, closed-end mutual funds, partnerships, rights, and real estate
investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on which the securities are listed.
Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for which a last-quoted
sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in Level 1 of the
fair value hierarchy.
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending NAV
provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S. government
agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently
executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate observable market
data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified in Level 2 of the
fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as of
the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below.
Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
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
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
711,497
|
$
|
852,484
|
|||||
Long-term capital gains
|
2,624,917
|
—
|
|||||||
Total distributions
|
$
|
3,336,414
|
$
|
852,484
|
|||||
(1) Ordinary income includes short-term capital gains.
|
Maturity Date
|
Amount
|
Interest Rate
|
||
May 11, 2023
|
$ 7,196,000
|
4.90%
|
||
June 15, 2023
|
$ 5,397,000
|
5.10%
|
||
July 13, 2023
|
$10,794,000
|
5.25%
|
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
|
||||||||||||||||||
$
|
23,387,000
|
$
|
—
|
$
|
23,387,000
|
$
|
23,387,000
|
$
|
—
|
$
|
—
|
||||||||||||
$
|
23,387,000
|
$
|
—
|
$
|
23,387,000
|
$
|
23,387,000
|
$
|
—
|
$
|
—
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS — EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
November 1, 2022 –
|
|
November 1, 2022
|
April 30, 2023
|
April 30, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,026.20
|
$31.81
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.60
|
$31.69
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 3.14%, multiplied by the average account value over the period, multiplied by 181/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
|
![]() |
![]() |
![]() |
![]() |
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help the Board
assess each such factor;
|
|
(3)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
|
|
(4)
|
A summary of the advisory agreement;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
HENNESSY FUNDS
|
1-800-966-4354
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor provides
high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the
Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as appropriate),
conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance providers for fidelity bond,
D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers, and maintains books and
records.
|
||
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services
to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor
participates in “no transaction fee” (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor
compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight
personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to various
indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The Trustees concluded that
the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials considered at the
meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are
reasonable and warranted continuation of the advisory agreement.
|
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the Fund
were variable asset-based fees, so the Advisor would not realize material economies of scale relating to these expenses as the assets of the Fund increased. For example, third-party platform fees increase as the Fund’s assets grow.
|
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor has
put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by way of
example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any such products and
services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the Advisor from its relationship
with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are merely supplemental to the Advisor’s own
efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
5
|
|
Financial Statements
|
||
Schedule of Investments
|
6
|
|
Statement of Assets and Liabilities
|
17
|
|
Statement of Operations
|
18
|
|
Statements of Changes in Net Assets
|
19
|
|
Financial Highlights
|
20
|
|
Notes to the Financial Statements
|
24
|
|
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
|
|
Board Approval of Investment Advisory Agreements
|
37
|
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
|
1
|
S&P 500® Index monthly total returns: +5.59% in November 2022, -5.76% in December 2022, +6.28% in January 2023, -2.44% in
February 2023, +3.67% in March 2023, and +1.56% in April 2023.
|
2
|
S&P 500® Financial Sector monthly total return: -9.55% in March 2023. KBW Bank Index monthly total return: -24.87% in
March 2023. S&P 500® Information Technology sector total return: +18.88% for the six months ended April 30, 2023. S&P 500® Communication Services sector total return: +23.15% for the six months ended April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
Six
|
One
|
Five
|
Ten
|
|
Months(1)
|
Year
|
Years
|
Years
|
|
Hennessy Equity and Income Fund –
|
||||
Investor Class (HEIFX)
|
6.73%
|
1.61%
|
5.37%
|
5.77%
|
Hennessy Equity and Income Fund –
|
||||
Institutional Class (HEIIX)
|
6.81%
|
1.88%
|
5.75%
|
6.14%
|
S&P 500® Index
|
8.63%
|
2.66%
|
11.45%
|
12.20%
|
(1)
|
Periods of less than one year are not annualized.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Schedule of Investments as of April 30, 2023 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Berkshire Hathaway, Inc., Class B
|
4.76%
|
Apple, Inc.
|
4.69%
|
O’Reilly Automotive, Inc.
|
3.86%
|
Alphabet, Inc., Class C
|
3.46%
|
BlackRock, Inc.
|
2.94%
|
Starbucks Corp.
|
2.78%
|
Visa, Inc., Class A
|
2.72%
|
Martin Marietta Materials, Inc.
|
2.49%
|
The Progressive Corp.
|
2.44%
|
Texas Instruments, Inc.
|
2.38%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS – 66.39%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 4.62%
|
||||||||||||
Alphabet, Inc., Class C (a)
|
26,364
|
$
|
2,853,112
|
3.46
|
%
|
|||||||
Verizon Communications, Inc.
|
24,575
|
954,247
|
1.16
|
%
|
||||||||
|
3,807,359
|
4.62
|
%
|
|||||||||
Consumer Discretionary – 11.58%
|
||||||||||||
CarMax, Inc. (a)
|
13,653
|
956,120
|
1.16
|
%
|
||||||||
Lowe’s Companies, Inc.
|
5,569
|
1,157,405
|
1.41
|
%
|
||||||||
O’Reilly Automotive, Inc. (a)
|
3,465
|
3,178,479
|
3.86
|
%
|
||||||||
Starbucks Corp.
|
20,061
|
2,292,772
|
2.78
|
%
|
||||||||
The Home Depot, Inc.
|
6,499
|
1,953,209
|
2.37
|
%
|
||||||||
|
9,537,985
|
11.58
|
%
|
|||||||||
Consumer Staples – 6.66%
|
||||||||||||
Altria Group, Inc.
|
39,089
|
1,857,118
|
2.25
|
%
|
||||||||
Church & Dwight Co., Inc.
|
18,131
|
1,760,883
|
2.14
|
%
|
||||||||
Nestlé S.A. – ADR (b)
|
14,569
|
1,868,620
|
2.27
|
%
|
||||||||
|
5,486,621
|
6.66
|
%
|
|||||||||
Energy – 2.46%
|
||||||||||||
Chevron Corp.
|
11,350
|
1,913,383
|
2.32
|
%
|
||||||||
Enbridge, Inc. (b)
|
925
|
36,778
|
0.04
|
%
|
||||||||
Kinder Morgan, Inc.
|
2,200
|
37,730
|
0.05
|
%
|
||||||||
The Williams Companies, Inc.
|
1,225
|
37,068
|
0.05
|
%
|
||||||||
|
2,024,959
|
2.46
|
%
|
|||||||||
Financials – 17.23%
|
||||||||||||
Berkshire Hathaway, Inc., Class B (a)
|
11,922
|
3,916,973
|
4.76
|
%
|
||||||||
BlackRock, Inc.
|
3,603
|
2,418,334
|
2.94
|
%
|
||||||||
Fiserv, Inc. (a)
|
15,790
|
1,928,275
|
2.34
|
%
|
||||||||
The Charles Schwab Corp.
|
31,963
|
1,669,747
|
2.03
|
%
|
||||||||
The Progressive Corp.
|
14,763
|
2,013,673
|
2.44
|
%
|
||||||||
Visa, Inc., Class A
|
9,644
|
2,244,448
|
2.72
|
%
|
||||||||
|
14,191,450
|
17.23
|
%
|
|||||||||
Health Care – 3.09%
|
||||||||||||
Johnson & Johnson
|
8,998
|
1,472,973
|
1.79
|
%
|
||||||||
Pfizer, Inc.
|
27,645
|
1,075,114
|
1.30
|
%
|
||||||||
|
2,548,087
|
3.09
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Industrials – 5.81%
|
||||||||||||
FedEx Corp.
|
7,720
|
$
|
1,758,462
|
2.14
|
%
|
|||||||
Norfolk Southern Corp.
|
7,717
|
1,566,782
|
1.90
|
%
|
||||||||
Old Dominion Freight Line, Inc.
|
4,561
|
1,461,299
|
1.77
|
%
|
||||||||
|
4,786,543
|
5.81
|
%
|
|||||||||
Information Technology – 8.53%
|
||||||||||||
Apple, Inc.
|
22,794
|
3,867,686
|
4.69
|
%
|
||||||||
Cisco Systems, Inc.
|
25,514
|
1,205,537
|
1.46
|
%
|
||||||||
Texas Instruments, Inc.
|
11,712
|
1,958,246
|
2.38
|
%
|
||||||||
|
7,031,469
|
8.53
|
%
|
|||||||||
Materials – 6.41%
|
||||||||||||
Air Products and Chemicals, Inc.
|
5,627
|
1,656,364
|
2.01
|
%
|
||||||||
Martin Marietta Materials, Inc.
|
5,652
|
2,052,806
|
2.49
|
%
|
||||||||
NewMarket Corp.
|
3,923
|
1,567,631
|
1.91
|
%
|
||||||||
|
5,276,801
|
6.41
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $32,622,909)
|
54,691,274
|
66.39
|
%
|
|||||||||
|
||||||||||||
PREFERRED STOCKS – 2.14%
|
||||||||||||
Communication Services – 0.07%
|
||||||||||||
AT&T, Inc.
|
||||||||||||
Series A, 5.000%, Perpetual
|
860
|
19,144
|
0.02
|
%
|
||||||||
Series C, 4.750%, Perpetual
|
1,935
|
40,403
|
0.05
|
%
|
||||||||
|
59,547
|
0.07
|
%
|
|||||||||
Consumer Discretionary – 0.03%
|
||||||||||||
Ford Motor Co.
|
||||||||||||
6.000%, 12/01/2059
|
515
|
12,535
|
0.01
|
%
|
||||||||
6.200%, 06/01/2059
|
613
|
15,386
|
0.02
|
%
|
||||||||
|
27,921
|
0.03
|
%
|
|||||||||
Consumer Staples – 0.06%
|
||||||||||||
CHS, Inc.
|
||||||||||||
Series 3, 6.750% to 09/30/2024 then
|
||||||||||||
3 Month LIBOR USD + 4.155%, Perpetual (c)
|
840
|
21,067
|
0.03
|
%
|
||||||||
Series 4, 7.500%, Perpetual
|
940
|
24,826
|
0.03
|
%
|
||||||||
|
45,893
|
0.06
|
%
|
|||||||||
Financials – 1.96%
|
||||||||||||
AEGON Funding Co. LLC, 5.100%, 12/15/2049
|
1,175
|
26,120
|
0.03
|
%
|
||||||||
American International Group, Inc., Series A, 5.850%, Perpetual
|
1,635
|
41,186
|
0.05
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
PREFERRED STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Financials (Continued)
|
||||||||||||
Arch Capital Group Ltd.
|
||||||||||||
Series G, 4.550%, Perpetual (b)
|
1,010
|
$
|
19,372
|
0.02
|
%
|
|||||||
Series F, 5.450%, Perpetual (b)
|
726
|
16,850
|
0.02
|
%
|
||||||||
Axis Capital Holdings Ltd., Series E, 5.500%, Perpetual (b)
|
1,005
|
22,824
|
0.03
|
%
|
||||||||
Bank of America Corp.
|
||||||||||||
Series QQ, 4.250%, Perpetual
|
1,575
|
29,752
|
0.04
|
%
|
||||||||
Series LL, 5.000%, Perpetual
|
1,420
|
31,623
|
0.04
|
%
|
||||||||
Series KK, 5.375%, Perpetual
|
1,675
|
39,664
|
0.05
|
%
|
||||||||
Bank of Hawaii Corp., Series A, 4.375%, Perpetual
|
1,160
|
18,166
|
0.02
|
%
|
||||||||
Bank OZK, Series A, 4.625%, Perpetual
|
1,495
|
23,397
|
0.03
|
%
|
||||||||
Cadence Bank, Series A, 5.500%, Perpetual
|
715
|
15,208
|
0.02
|
%
|
||||||||
Capital One Financial Corp.
|
||||||||||||
Series J, 4.800%, Perpetual
|
2,060
|
40,088
|
0.05
|
%
|
||||||||
Series I, 5.000%, Perpetual
|
1,900
|
38,988
|
0.05
|
%
|
||||||||
Carlyle Finance LLC, 4.625%, 05/15/2061
|
995
|
18,786
|
0.02
|
%
|
||||||||
Citigroup, Inc., Series K, 6.875% to 11/15/2023 then
|
||||||||||||
3 Month CME Term SOFR + 4.392%, Perpetual (c)
|
780
|
19,789
|
0.02
|
%
|
||||||||
Citizens Financial Group, Inc.
|
||||||||||||
Series E, 5.000%, Perpetual
|
1,095
|
21,462
|
0.03
|
%
|
||||||||
Series D, 6.350% to 04/06/2024 then
|
||||||||||||
3 Month LIBOR USD + 3.642%, Perpetual (c)
|
1,180
|
27,069
|
0.03
|
%
|
||||||||
ConnectOne Bancorp, Inc., Series A, 5.250% to 09/01/2026
|
||||||||||||
then 5 Year CMT Rate + 4.420%, Perpetual (c)
|
625
|
10,156
|
0.01
|
%
|
||||||||
Cullen/Frost Bankers, Inc., Series B, 4.450%, Perpetual
|
860
|
16,761
|
0.02
|
%
|
||||||||
Equitable Holdings, Inc., Series A, 5.250%, Perpetual
|
1,270
|
27,267
|
0.03
|
%
|
||||||||
Federal Agricultural Mortgage Corp., Series F, 5.250%, Perpetual
|
585
|
13,127
|
0.02
|
%
|
||||||||
Fifth Third Bancorp
|
||||||||||||
Series K, 4.950%, Perpetual
|
1,580
|
36,024
|
0.04
|
%
|
||||||||
Series I, 6.625% to 12/31/2023 then
|
||||||||||||
3 Month LIBOR USD + 3.710%, Perpetual (c)
|
765
|
18,742
|
0.02
|
%
|
||||||||
First Citizens BancShares, Inc.
|
||||||||||||
Series A, 5.375%, Perpetual
|
1,695
|
37,307
|
0.05
|
%
|
||||||||
Series C, 5.625%, Perpetual
|
675
|
14,431
|
0.02
|
%
|
||||||||
First Horizon Corp.
|
||||||||||||
Series D, 6.100% to 05/01/2024 then
|
||||||||||||
3 Month LIBOR USD + 3.859%, Perpetual (c)
|
530
|
11,761
|
0.01
|
%
|
||||||||
Series B, 6.625% to 08/01/2025 then
|
||||||||||||
3 Month LIBOR USD + 4.262%, Perpetual (c)
|
700
|
16,247
|
0.02
|
%
|
||||||||
Hartford Financial Services Group, Inc., Series G, 6.000%, Perpetual
|
1,605
|
39,740
|
0.05
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
PREFERRED STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Financials (Continued)
|
||||||||||||
Huntington Bancshares, Inc.
|
||||||||||||
Series H, 4.500%, Perpetual
|
2,275
|
$
|
43,589
|
0.06
|
%
|
|||||||
Series J, 6.875% to 04/15/2028 then
|
||||||||||||
5 Year CMT Rate + 2.704%, Perpetual (c)
|
1,400
|
34,720
|
0.04
|
%
|
||||||||
JPMorgan Chase & Co.
|
||||||||||||
Series JJ, 4.550%, Perpetual
|
1,900
|
40,470
|
0.05
|
%
|
||||||||
Series LL, 4.625%, Perpetual
|
1,875
|
40,237
|
0.05
|
%
|
||||||||
KeyCorp
|
||||||||||||
Series G, 5.625%, Perpetual
|
955
|
20,083
|
0.03
|
%
|
||||||||
Series F, 5.650%, Perpetual
|
755
|
16,225
|
0.02
|
%
|
||||||||
Series E, 6.125% to 12/15/2026 then
|
||||||||||||
3 Month LIBOR USD + 3.892%, Perpetual (c)
|
512
|
11,515
|
0.01
|
%
|
||||||||
MetLife, Inc.
|
||||||||||||
Series F, 4.750%, Perpetual
|
1,725
|
37,657
|
0.04
|
%
|
||||||||
Series E, 5.625%, Perpetual
|
580
|
14,500
|
0.02
|
%
|
||||||||
Morgan Stanley
|
||||||||||||
Series O, 4.250%, Perpetual
|
2,365
|
46,141
|
0.06
|
%
|
||||||||
Series K, 5.850% to 04/15/2027 then
|
||||||||||||
3 Month LIBOR USD + 3.491%, Perpetual (c)
|
1,150
|
28,762
|
0.03
|
%
|
||||||||
Series I, 6.375% to 10/15/2024 then
|
||||||||||||
3 Month LIBOR USD + 3.708%, Perpetual (c)
|
790
|
19,853
|
0.02
|
%
|
||||||||
Regions Financial Corp.
|
||||||||||||
Series E, 4.450%, Perpetual
|
1,960
|
37,044
|
0.04
|
%
|
||||||||
Series C, 5.700% to 05/15/2029 then
|
||||||||||||
3 Month LIBOR USD + 3.148%, Perpetual (c)
|
1,035
|
23,950
|
0.03
|
%
|
||||||||
State Street Corp., Series D, 5.900% to 03/15/2024 then
|
||||||||||||
3 Month LIBOR USD + 3.108%, Perpetual (c)
|
1,975
|
47,992
|
0.06
|
%
|
||||||||
Synchrony Financial, Series A, 5.625%, Perpetual
|
1,815
|
30,764
|
0.04
|
%
|
||||||||
Synovus Financial Corp.
|
||||||||||||
Series E, 5.875% to 07/01/2024 then
|
||||||||||||
5 Year CMT Rate + 4.127%, Perpetual (c)
|
1,270
|
26,873
|
0.03
|
%
|
||||||||
Series D, 6.300% to 06/21/2023 then
|
||||||||||||
3 Month LIBOR USD + 3.352%, Perpetual (c)
|
740
|
16,628
|
0.02
|
%
|
||||||||
Texas Capital Bancshares, Inc., Series B, 5.750%, Perpetual
|
1,110
|
22,577
|
0.03
|
%
|
||||||||
The Allstate Corp., Series H, 5.100%, Perpetual
|
1,120
|
26,712
|
0.03
|
%
|
||||||||
The Charles Schwab Corp.
|
||||||||||||
Series J, 4.450%, Perpetual
|
1,495
|
30,976
|
0.04
|
%
|
||||||||
Series D, 5.950%, Perpetual
|
765
|
19,255
|
0.02
|
%
|
||||||||
The Goldman Sachs Group, Inc., Series K, 6.375% to 05/10/2024
|
||||||||||||
then 3 Month CME Term SOFR + 3.550%, Perpetual (c)
|
895
|
22,581
|
0.03
|
%
|
||||||||
Truist Financial Corp.
|
||||||||||||
Series R, 4.750%, Perpetual
|
2,190
|
47,063
|
0.06
|
%
|
||||||||
Series O, 5.250%, Perpetual
|
1,625
|
38,253
|
0.04
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
PREFERRED STOCKS
|
Number of Shares/
|
% of
|
||||||||||
|
Par Amount
|
Value
|
Net Assets
|
|||||||||
Financials (Continued)
|
||||||||||||
US Bancorp
|
||||||||||||
Series O, 4.500%, Perpetual
|
1,295
|
$
|
26,521
|
0.03
|
%
|
|||||||
Series B, 5.860% to 5/30/2023 then
|
||||||||||||
3 Month LIBOR USD + 0.600%, Perpetual (c)
|
1,970
|
36,721
|
0.05
|
%
|
||||||||
Washington Federal, Inc., Series A, 4.875%, Perpetual
|
1,395
|
21,902
|
0.03
|
%
|
||||||||
Wells Fargo & Co.
|
||||||||||||
Series Z, 4.750%, Perpetual
|
1,930
|
38,832
|
0.05
|
%
|
||||||||
Series Y, 5.625%, Perpetual
|
780
|
18,447
|
0.02
|
%
|
||||||||
Series R, 6.625% to 03/15/2024 then
|
||||||||||||
3 Month LIBOR USD + 3.690%, Perpetual (c)
|
1,505
|
37,339
|
0.04
|
%
|
||||||||
|
1,616,089
|
1.96
|
%
|
|||||||||
Utilities – 0.02%
|
||||||||||||
Entergy Arkansas LLC, 4.875%, 09/01/2066
|
770
|
17,987
|
0.02
|
%
|
||||||||
|
||||||||||||
Total Preferred Stocks
|
||||||||||||
(Cost $2,000,091)
|
1,767,437
|
2.14
|
%
|
|||||||||
|
||||||||||||
REITS – 0.03%
|
||||||||||||
Real Estate – 0.03%
|
||||||||||||
Public Storage, Series P, 4.000%, Perpetual
|
1,185
|
22,882
|
0.03
|
%
|
||||||||
|
||||||||||||
Total REITS
|
||||||||||||
(Cost $21,072)
|
22,882
|
0.03
|
%
|
|||||||||
|
||||||||||||
CORPORATE BONDS – 16.43%
|
||||||||||||
Communication Services – 1.66%
|
||||||||||||
AT&T, Inc., 4.250%, 03/01/2027
|
$
|
980,000
|
973,735
|
1.18
|
%
|
|||||||
Comcast Corp., 4.650%, 02/15/2033
|
250,000
|
253,059
|
0.31
|
%
|
||||||||
T-Mobile USA, Inc., 3.875%, 04/15/2030
|
150,000
|
141,132
|
0.17
|
%
|
||||||||
|
1,367,926
|
1.66
|
%
|
|||||||||
Consumer Discretionary – 0.81%
|
||||||||||||
Lowe’s Companies, Inc., 2.625%, 04/01/2031
|
325,000
|
279,409
|
0.34
|
%
|
||||||||
Starbucks Corp., 3.500%, 03/01/2028
|
400,000
|
386,434
|
0.47
|
%
|
||||||||
|
665,843
|
0.81
|
%
|
|||||||||
Energy – 1.68%
|
||||||||||||
Canadian Natural Resources Ltd., 3.900%, 02/01/2025 (b)
|
1,000,000
|
979,208
|
1.19
|
%
|
||||||||
The Williams Companies, Inc., 2.600%, 03/15/2031
|
475,000
|
403,138
|
0.49
|
%
|
||||||||
|
1,382,346
|
1.68
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
CORPORATE BONDS
|
% of
|
|||||||||||
|
Par Amount
|
Value
|
Net Assets
|
|||||||||
Financials – 7.65%
|
||||||||||||
Aflac, Inc., 3.600%, 04/01/2030
|
300,000
|
$
|
282,821
|
0.34
|
%
|
|||||||
Bank of America Corp., 2.299% to 07/21/2031 then
|
||||||||||||
SOFR + 1.220%, 07/21/2032 (c)
|
575,000
|
463,493
|
0.56
|
%
|
||||||||
Fifth Third Bancorp, 3.650%, 01/25/2024
|
225,000
|
221,268
|
0.27
|
%
|
||||||||
General Motors Financial Co., Inc., 3.700%, 05/09/2023
|
1,075,000
|
1,074,567
|
1.30
|
%
|
||||||||
Huntington Bancshares, Inc.
|
||||||||||||
2.550%, 02/04/2030
|
525,000
|
427,131
|
0.52
|
%
|
||||||||
4.000%, 05/15/2025
|
365,000
|
348,291
|
0.42
|
%
|
||||||||
JPMorgan Chase & Co., 2.069% to 06/01/2028 then
|
||||||||||||
SOFR + 1.015%, 06/01/2029 (c)
|
325,000
|
282,258
|
0.34
|
%
|
||||||||
Marsh & McLennan Companies, Inc., 4.375%, 03/15/2029
|
275,000
|
272,889
|
0.33
|
%
|
||||||||
Morgan Stanley
|
||||||||||||
1.593% to 05/04/2026 then SOFR + 0.879%, 05/04/2027 (c)
|
295,000
|
265,230
|
0.32
|
%
|
||||||||
2.239% to 07/21/2031 then SOFR + 1.178%, 07/21/2032 (c)
|
330,000
|
266,117
|
0.33
|
%
|
||||||||
PayPal Holdings, Inc., 2.850%, 10/01/2029
|
750,000
|
679,806
|
0.83
|
%
|
||||||||
Prudential Financial, Inc., 3.878%, 03/27/2028
|
260,000
|
253,499
|
0.31
|
%
|
||||||||
Regions Financial Corp., 1.800%, 08/12/2028
|
325,000
|
269,845
|
0.33
|
%
|
||||||||
State Street Corp., 4.821% to 01/26/2033 then
|
||||||||||||
SOFR + 1.567%, 01/26/2034 (c)
|
175,000
|
174,124
|
0.21
|
%
|
||||||||
The Goldman Sachs Group, Inc., 4.223% to 05/01/2028 then
|
||||||||||||
3 Month CME Term SOFR + 1.301%, 05/01/2029 (c)
|
300,000
|
287,855
|
0.35
|
%
|
||||||||
Willis North America, Inc., 3.600%, 05/15/2024
|
750,000
|
735,408
|
0.89
|
%
|
||||||||
|
6,304,602
|
7.65
|
%
|
|||||||||
Health Care – 2.11%
|
||||||||||||
Edwards Lifesciences Corp., 4.300%, 06/15/2028
|
700,000
|
699,679
|
0.85
|
%
|
||||||||
Evernorth Health, Inc., 3.500%, 06/15/2024
|
700,000
|
689,580
|
0.84
|
%
|
||||||||
Regeneron Pharmaceuticals, Inc., 1.750%, 09/15/2030
|
425,000
|
346,839
|
0.42
|
%
|
||||||||
|
1,736,098
|
2.11
|
%
|
|||||||||
Industrials – 0.81%
|
||||||||||||
General Electric Co., 3.625%, 05/01/2030
|
380,000
|
345,144
|
0.42
|
%
|
||||||||
The Boeing Co., 2.196%, 02/04/2026
|
225,000
|
208,905
|
0.25
|
%
|
||||||||
The Timken Co., 6.875%, 05/08/2028
|
110,000
|
116,347
|
0.14
|
%
|
||||||||
|
670,396
|
0.81
|
%
|
|||||||||
Information Technology – 1.71%
|
||||||||||||
Autodesk, Inc., 2.850%, 01/15/2030
|
675,000
|
602,683
|
0.73
|
%
|
||||||||
Broadcom, Inc., 4.110%, 09/15/2028
|
425,000
|
408,310
|
0.50
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
CORPORATE BONDS
|
% of
|
|||||||||||
|
Par Amount
|
Value
|
Net Assets
|
|||||||||
Information Technology (Continued)
|
||||||||||||
International Business Machines Corp.
|
||||||||||||
2.200%, 02/09/2027
|
125,000
|
$
|
115,470
|
0.14
|
%
|
|||||||
2.720%, 02/09/2032
|
325,000
|
281,683
|
0.34
|
%
|
||||||||
|
1,408,146
|
1.71
|
%
|
|||||||||
|
||||||||||||
Total Corporate Bonds
|
||||||||||||
(Cost $14,655,128)
|
13,535,357
|
16.43
|
%
|
|||||||||
|
||||||||||||
MORTGAGE-BACKED SECURITIES – 2.58%
|
||||||||||||
Federal Agency Mortgage-Backed Obligations – 2.58%
|
||||||||||||
Fannie Mae Pool
|
||||||||||||
3.000%, 10/01/2043
|
809,059
|
744,088
|
0.90
|
%
|
||||||||
3.500%, 01/01/2042
|
149,831
|
142,858
|
0.18
|
%
|
||||||||
6.000%, 10/01/2037
|
74,929
|
76,910
|
0.09
|
%
|
||||||||
Fannie Mae REMICS
|
||||||||||||
Series 2013-52, 1.250%, 06/25/2043
|
38,120
|
32,140
|
0.04
|
%
|
||||||||
Series 2012-16, 2.000%, 11/25/2041
|
36,993
|
33,150
|
0.04
|
%
|
||||||||
Freddie Mac Gold Pool
|
||||||||||||
3.000%, 05/01/2042
|
431,638
|
397,402
|
0.48
|
%
|
||||||||
3.000%, 09/01/2042
|
542,724
|
499,684
|
0.61
|
%
|
||||||||
5.500%, 04/01/2037
|
30,133
|
31,239
|
0.04
|
%
|
||||||||
Freddie Mac REMICS
|
||||||||||||
Series 4146, 1.500%, 10/15/2042
|
9,866
|
9,452
|
0.01
|
%
|
||||||||
Series 4309, 2.000%, 10/15/2043
|
32,859
|
29,955
|
0.04
|
%
|
||||||||
Series 3870, 2.750%, 01/15/2041
|
10,839
|
10,426
|
0.01
|
%
|
||||||||
Series 4322, 3.000%, 05/15/2043
|
48,051
|
46,309
|
0.05
|
%
|
||||||||
Government National Mortgage Association,
|
||||||||||||
Series 2013-24, 1.750%, 02/16/2043
|
82,404
|
72,518
|
0.09
|
%
|
||||||||
|
||||||||||||
Total Mortgage-Backed Securities
|
||||||||||||
(Cost $2,301,627)
|
2,126,131
|
2.58
|
%
|
|||||||||
|
||||||||||||
U.S. TREASURY OBLIGATIONS – 9.80%
|
||||||||||||
U.S. Treasury Notes – 9.80%
|
||||||||||||
0.250%, 08/31/2025
|
1,250,000
|
1,147,876
|
1.39
|
%
|
||||||||
0.625%, 03/31/2027
|
450,000
|
401,027
|
0.49
|
%
|
||||||||
0.750%, 04/30/2026
|
1,500,000
|
1,372,735
|
1.67
|
%
|
||||||||
1.250%, 12/31/2026
|
625,000
|
573,425
|
0.70
|
%
|
||||||||
1.250%, 04/30/2028
|
425,000
|
380,192
|
0.46
|
%
|
||||||||
1.500%, 02/15/2025
|
200,000
|
190,684
|
0.23
|
%
|
||||||||
1.875%, 07/31/2026
|
1,550,000
|
1,462,328
|
1.78
|
%
|
||||||||
2.125%, 03/31/2024
|
100,000
|
97,559
|
0.12
|
%
|
||||||||
2.500%, 03/31/2027
|
200,000
|
191,668
|
0.23
|
%
|
||||||||
2.625%, 04/15/2025
|
300,000
|
291,609
|
0.35
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
U.S. TREASURY OBLIGATIONS
|
Par Amount/
|
% of
|
||||||||||
|
Number of Shares
|
Value
|
Net Assets
|
|||||||||
U.S. Treasury Notes (Continued)
|
||||||||||||
2.750%, 08/15/2032
|
550,000
|
$
|
519,535
|
0.63
|
%
|
|||||||
3.000%, 10/31/2025
|
450,000
|
440,350
|
0.53
|
%
|
||||||||
3.500%, 02/15/2033
|
50,000
|
50,207
|
0.06
|
%
|
||||||||
4.125%, 09/30/2027
|
350,000
|
357,362
|
0.43
|
%
|
||||||||
4.250%, 09/30/2024
|
600,000
|
598,254
|
0.73
|
%
|
||||||||
|
||||||||||||
Total U.S. Treasury Obligations
|
||||||||||||
(Cost $8,556,188)
|
8,074,811
|
9.80
|
%
|
|||||||||
|
||||||||||||
INVESTMENT COMPANIES (EXCLUDING
|
||||||||||||
MONEY MARKET FUNDS) – 0.54%
|
||||||||||||
Financials – 0.54%
|
||||||||||||
Ares Capital Corp.
|
1,995
|
36,867
|
0.04
|
%
|
||||||||
Bain Capital Specialty Finance, Inc.
|
2,655
|
31,090
|
0.04
|
%
|
||||||||
BlackRock TCP Capital Corp.
|
3,015
|
30,271
|
0.04
|
%
|
||||||||
Carlyle Secured Lending, Inc.
|
2,935
|
41,295
|
0.05
|
%
|
||||||||
FS KKR Capital Corp.
|
1,865
|
35,081
|
0.04
|
%
|
||||||||
Golub Capital BDC, Inc.
|
2,775
|
37,407
|
0.05
|
%
|
||||||||
Hercules Capital, Inc.
|
2,325
|
30,783
|
0.04
|
%
|
||||||||
MidCap Financial Investment Corp.
|
3,225
|
36,507
|
0.04
|
%
|
||||||||
Monroe Capital Corp.
|
4,000
|
29,160
|
0.04
|
%
|
||||||||
New Mountain Finance Corp.
|
3,130
|
37,216
|
0.04
|
%
|
||||||||
Oaktree Specialty Lending Corp.
|
1,910
|
36,061
|
0.04
|
%
|
||||||||
Sixth Street Specialty Lending, Inc.
|
1,825
|
33,361
|
0.04
|
%
|
||||||||
TriplePoint Venture Growth BDC Corp.
|
2,500
|
29,675
|
0.04
|
%
|
||||||||
|
||||||||||||
Total Investment Companies
|
||||||||||||
(Excluding Money Market Funds)
|
||||||||||||
(Cost $550,539)
|
444,774
|
0.54
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 1.76%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 1.76%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 4.73% (d)
|
1,448,949
|
$
|
1,448,949
|
1.76
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $1,448,949)
|
1,448,949
|
1.76
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $62,156,503) – 99.67%
|
82,111,615
|
99.67
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.33%
|
271,012
|
0.33
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
82,382,627
|
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 April 30, 2023.
|
(d)
|
The rate listed is the fund’s seven-day yield as of April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
3,807,359
|
$
|
—
|
$
|
—
|
$
|
3,807,359
|
||||||||
Consumer Discretionary
|
9,537,985
|
—
|
—
|
9,537,985
|
||||||||||||
Consumer Staples
|
5,486,621
|
—
|
—
|
5,486,621
|
||||||||||||
Energy
|
2,024,959
|
—
|
—
|
2,024,959
|
||||||||||||
Financials
|
14,191,450
|
—
|
—
|
14,191,450
|
||||||||||||
Health Care
|
2,548,087
|
—
|
—
|
2,548,087
|
||||||||||||
Industrials
|
4,786,543
|
—
|
—
|
4,786,543
|
||||||||||||
Information Technology
|
7,031,469
|
—
|
—
|
7,031,469
|
||||||||||||
Materials
|
5,276,801
|
—
|
—
|
5,276,801
|
||||||||||||
Total Common Stocks
|
$
|
54,691,274
|
$
|
—
|
$
|
—
|
$
|
54,691,274
|
||||||||
Preferred Stocks
|
||||||||||||||||
Communication Services
|
$
|
59,547
|
$
|
—
|
$
|
—
|
$
|
59,547
|
||||||||
Consumer Discretionary
|
27,921
|
—
|
—
|
27,921
|
||||||||||||
Consumer Staples
|
45,893
|
—
|
—
|
45,893
|
||||||||||||
Financials
|
1,616,089
|
—
|
—
|
1,616,089
|
||||||||||||
Utilities
|
17,987
|
—
|
—
|
17,987
|
||||||||||||
Total Preferred Stocks
|
$
|
1,767,437
|
$
|
—
|
$
|
—
|
$
|
1,767,437
|
||||||||
REITS
|
||||||||||||||||
Real Estate
|
$
|
22,882
|
$
|
—
|
$
|
—
|
$
|
22,882
|
||||||||
Total REITS
|
$
|
22,882
|
$
|
—
|
$
|
—
|
$
|
22,882
|
||||||||
Corporate Bonds
|
||||||||||||||||
Communication Services
|
$
|
—
|
$
|
1,367,926
|
$
|
—
|
$
|
1,367,926
|
||||||||
Consumer Discretionary
|
—
|
665,843
|
—
|
665,843
|
||||||||||||
Energy
|
—
|
1,382,346
|
—
|
1,382,346
|
||||||||||||
Financials
|
—
|
6,304,602
|
—
|
6,304,602
|
||||||||||||
Health Care
|
—
|
1,736,098
|
—
|
1,736,098
|
||||||||||||
Industrials
|
—
|
670,396
|
—
|
670,396
|
||||||||||||
Information Technology
|
—
|
1,408,146
|
—
|
1,408,146
|
||||||||||||
Total Corporate Bonds
|
$
|
—
|
$
|
13,535,357
|
$
|
—
|
$
|
13,535,357
|
||||||||
Mortgage-Backed Securities
|
||||||||||||||||
Federal Agency Mortgage-Backed Obligations
|
$
|
—
|
$
|
2,126,131
|
$
|
—
|
$
|
2,126,131
|
||||||||
Total Mortgage-Backed Securities
|
$
|
—
|
$
|
2,126,131
|
$
|
—
|
$
|
2,126,131
|
||||||||
U.S. Treasury Obligations
|
||||||||||||||||
U.S. Treasury Notes
|
$
|
—
|
$
|
8,074,811
|
$
|
—
|
$
|
8,074,811
|
||||||||
Total U.S. Treasury Obligations
|
$
|
—
|
$
|
8,074,811
|
$
|
—
|
$
|
8,074,811
|
||||||||
Investment Companies
|
||||||||||||||||
(Excluding Money Market Funds)
|
||||||||||||||||
Financials
|
$
|
444,774
|
$
|
—
|
$
|
—
|
$
|
444,774
|
||||||||
Total Investment Companies
|
||||||||||||||||
(Excluding Money Market Funds)
|
$
|
444,774
|
$
|
—
|
$
|
—
|
$
|
444,774
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
1,448,949
|
$
|
—
|
$
|
—
|
$
|
1,448,949
|
||||||||
Total Short-Term Investments
|
$
|
1,448,949
|
$
|
—
|
$
|
—
|
$
|
1,448,949
|
||||||||
Total Investments
|
$
|
58,375,316
|
$
|
23,736,299
|
$
|
—
|
$
|
82,111,615
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2023 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $62,156,503)
|
$
|
82,111,615
|
||
Dividends and interest receivable
|
278,054
|
|||
Receivable for fund shares sold
|
408
|
|||
Receivable for securities sold
|
118,551
|
|||
Prepaid expenses and other assets
|
20,353
|
|||
Total assets
|
82,528,981
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
31,491
|
|||
Payable to advisor
|
53,917
|
|||
Payable to sub-transfer agents
|
16,365
|
|||
Payable to administrator
|
14,596
|
|||
Payable to auditor
|
11,226
|
|||
Accrued distribution fees
|
7,460
|
|||
Accrued service fees
|
3,104
|
|||
Accrued trustees fees
|
5,129
|
|||
Accrued expenses and other payables
|
3,066
|
|||
Total liabilities
|
146,354
|
|||
NET ASSETS
|
$
|
82,382,627
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
59,741,787
|
||
Total distributable earnings
|
22,640,840
|
|||
Total net assets
|
$
|
82,382,627
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
37,995,897
|
||
Shares issued and outstanding
|
2,608,234
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
14.57
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
44,386,730
|
||
Shares issued and outstanding
|
3,246,038
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
13.67
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2023 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
578,194
|
||
Interest income
|
391,246
|
|||
Total investment income
|
969,440
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
338,644
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
42,668
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
26,982
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
45,326
|
|||
Distribution fees – Investor Class (See Note 5)
|
28,793
|
|||
Service fees – Investor Class (See Note 5)
|
19,195
|
|||
Federal and state registration fees
|
15,461
|
|||
Compliance expense (See Note 5)
|
11,844
|
|||
Audit fees
|
11,227
|
|||
Trustees’ fees and expenses
|
9,831
|
|||
Reports to shareholders
|
6,340
|
|||
Legal fees
|
806
|
|||
Interest expense (See Note 7)
|
90
|
|||
Other expenses
|
7,421
|
|||
Total expenses
|
564,628
|
|||
NET INVESTMENT INCOME
|
$
|
404,812
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments:
|
$
|
2,889,815
|
||
Net change in unrealized appreciation/depreciation on investments:
|
2,317,802
|
|||
Net gain on investments
|
5,207,617
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
5,612,429
|
(1)
|
Net of foreign taxes withheld and issuance fees of $7,191.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2023
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
404,812
|
$
|
757,118
|
||||
Net realized gain on investments
|
2,889,815
|
2,841,084
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
2,317,802
|
(17,205,736
|
)
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
5,612,429
|
(13,607,534
|
)
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(1,161,239
|
)
|
(3,654,611
|
)
|
||||
Distributable earnings – Institutional Class
|
(1,502,545
|
)
|
(4,723,563
|
)
|
||||
Total distributions
|
(2,663,784
|
)
|
(8,378,174
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
189,433
|
1,881,768
|
||||||
Proceeds from shares subscribed – Institutional Class
|
862,846
|
2,382,337
|
||||||
Dividends reinvested – Investor Class
|
1,127,928
|
3,556,955
|
||||||
Dividends reinvested – Institutional Class
|
1,107,029
|
3,602,091
|
||||||
Cost of shares redeemed – Investor Class
|
(3,853,644
|
)
|
(10,361,778
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(6,913,848
|
)
|
(12,193,431
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(7,480,256
|
)
|
(11,132,058
|
)
|
||||
TOTAL DECREASE IN NET ASSETS
|
(4,531,611
|
)
|
(33,117,766
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of period
|
86,914,238
|
120,032,004
|
||||||
End of period
|
$
|
82,382,627
|
$
|
86,914,238
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
13,356
|
115,566
|
||||||
Shares sold – Institutional Class
|
64,444
|
160,649
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
79,239
|
217,125
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
82,887
|
234,876
|
||||||
Shares redeemed – Investor Class
|
(269,681
|
)
|
(673,769
|
)
|
||||
Shares redeemed – Institutional Class
|
(516,636
|
)
|
(853,794
|
)
|
||||
Net decrease in shares outstanding
|
(546,391
|
)
|
(799,347
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
14.06
|
||
Income from investment operations:
|
||||
Net investment income
|
0.06
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
0.88
|
|||
Total from investment operations
|
0.94
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.05
|
)
|
||
Dividends from net realized gains
|
(0.38
|
)
|
||
Total distributions
|
(0.43
|
)
|
||
Net asset value, end of period
|
$
|
14.57
|
||
TOTAL RETURN
|
6.73
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
38.00
|
||
Ratio of expenses to average net assets
|
1.53
|
%(3)
|
||
Ratio of net investment income to average net assets
|
0.76
|
%(3)
|
||
Portfolio turnover rate(4)
|
4
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
13.21
|
||
Income from investment operations:
|
||||
Net investment income
|
0.08
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
0.81
|
|||
Total from investment operations
|
0.89
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.07
|
)
|
||
Dividends from net realized gains
|
(0.36
|
)
|
||
Total distributions
|
(0.43
|
)
|
||
Net asset value, end of period
|
$
|
13.67
|
||
TOTAL RETURN
|
6.81
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
44.39
|
||
Ratio of expenses to average net assets
|
1.17
|
%(3)
|
||
Ratio of net investment income to average net assets
|
1.12
|
%(3)
|
||
Portfolio turnover rate(4)
|
4
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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 April 30, 2023 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash
sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains
distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund
for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or
decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value
of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses
attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if any, are
declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
REIT Equity Securities – Distributions received from real estate investment trusts (“REITs”) may be classified as dividends, capital gains, or return of capital. Investments in REITs may require the Fund to
accrue and distribute income not yet received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it
otherwise would have continued to hold. At other times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings. If the Fund distributes these amounts, these distributions could constitute a
return of capital to Fund shareholders for U.S. federal income tax purposes. Dividends received by the Fund from a REIT generally do not constitute qualified dividend income and do not qualify for the dividends-received deduction.
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that
the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven
calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
HENNESSY FUNDS
|
1-800-966-4354
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (the “SEC”) adopted new regulations under the 1940 Act 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, generally eliminates the asset segregation framework 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 does not
utilize derivatives and therefore has not adopted a derivatives risk management program.
|
In December 2020, the SEC adopted a new rule under the 1940 Act 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. The Fund has designated Hennessy Advisors, Inc., the Fund’s investment advisor (the “Advisor”), as its valuation designee under 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
|
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
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
365,073
|
$
|
779,687
|
|||||
Long-term capital gains
|
2,298,711
|
7,598,487
|
|||||||
Total distributions
|
$
|
2,663,784
|
$
|
8,378,174
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
November 1, 2022 –
|
|
November 1, 2022
|
April 30, 2023
|
April 30, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,067.30
|
$15.81
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,034.70
|
$15.57
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,068.10
|
$12.10
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,038.30
|
$11.92
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.53% for Investor Class shares or 1.17% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 181/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory and sub-advisory agreements and the relevant factors for
consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory and sub-advisory agreements and also referenced the documents that had been provided
to help the Board assess each such factor;
|
|
(3)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
|
|
(4)
|
Summaries of the advisory and sub-advisory agreements;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the Sub-Advisors and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund;
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale;
|
|
(9)
|
A completed questionnaire from each Sub-Advisor;
|
|
(10)
|
Summaries of each Sub-Advisor’s questionnaire and relevant information from such Sub-Advisor’s Form ADV Parts I and II;
|
|
(11)
|
Financial information for the holding company of each Sub-Advisor; and
|
|
(12)
|
Each Sub-Advisor’s Code of Ethics.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The nature and quality of the advisory services provided by the Advisor and the Sub-Advisors;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor and the Sub-Advisors;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor and the Sub-Advisors from serving as an investment advisor to the Fund (other than the advisory and sub-advisory fees).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor provides
high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to
the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor oversees the Sub-Advisors for the Fund, and the Sub-Advisors act as the portfolio managers for the Fund by providing portfolio management services.
|
||
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Sub-Advisors and the Fund’s other service providers (including their codes
of ethics, as appropriate), conducts on-site visits to the Sub-Advisors and the Fund’s other service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense
ratios, evaluates insurance providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports
provided by service providers, and maintains books and records.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(f)
|
The Advisor oversees the selection and continued employment of each Sub-Advisor, reviews the Fund’s investment performance, and monitors each Sub-Advisor’s adherence to the Fund’s investment objectives,
policies, and restrictions.
|
||
(g)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services
to the Fund.
|
||
(h)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(i)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(j)
|
For each annual report of the Fund, the Advisor reviews the written summaries prepared by the Sub-Advisors of the Fund’s performance during the most recent 12-month period.
|
||
(k)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor
participates in “no transaction fee” (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor
compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(l)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight
personnel, as well as management executives.
|
||
(m)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(n)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees considered the services identified below that are provided by each Sub-Advisor. Based on this review and an assessment of each Sub-Advisor’s performance, the Trustees concluded that each
Sub-Advisor provides high-quality services to the Fund. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the Fund by each Sub-Advisor and that the nature
and extent of the services provided by each Sub-Advisor were appropriate to assure that the Fund’s portfolio aligns properly with its investment objective and principal investment strategies.
|
(a)
|
Each Sub-Advisor acts as the portfolio manager for the Fund. In this capacity, each Sub-Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
|
HENNESSY FUNDS
|
1-800-966-4354
|
(ii)
|
seeks best execution for the Fund’s portfolio; and
|
|||
(iii)
|
manages proxy voting for the Fund.
|
(b)
|
Each Sub-Advisor ensures that its compliance program includes policies and procedures relevant to the Fund and the Sub-Advisor’s duties as a portfolio manager to the Fund.
|
||
(c)
|
For each annual report of the Fund, each Sub-Advisor prepares a written summary of the Fund’s performance (with respect to the equity allocation or the fixed income allocation, as applicable) during the most
recent 12-month period.
|
||
(d)
|
Each Sub-Advisor provides a quarterly compliance certification to the Board regarding trading and allocation practices, supervisory matters, the Sub-Advisor’s compliance program (including its code of
ethics), compliance with the Fund’s policies, and general firm updates.
|
(3)
|
Trustees considered the distinction between the services performed by the Advisor and the Sub-Advisors. The Trustees noted that the management of the Fund, including the oversight of the Sub-Advisors,
involves more comprehensive and substantive duties than the duties of the Sub-Advisors. Specifically, the Trustees considered the lists of Advisor services previously identified and concluded that the services performed by the Advisor
for the Fund require a higher level of service and oversight than the services performed by the Sub-Advisors. Based on this determination, the Trustees concluded that the differential in advisory fees between the Advisor and the
Sub-Advisors is reasonable.
|
|
(4)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to various
indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor and the Sub-Advisors manage the Fund in a manner materially consistent with its stated investment objective and style. The
Trustees concluded that the performance of the Fund over various periods warranted the continuation of the advisory and sub-advisory agreements.
|
|
(5)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials considered at the
meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are
reasonable and warranted continuation of the advisory and sub-advisory agreements.
|
|
(6)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the Fund
were variable asset-based fees, so the Advisor would not realize material economies of scale relating to these expenses as the assets of the Fund increased. For example, third-party platform fees and sub-advisory fees increase as the
Fund’s assets grow.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(7)
|
The Trustees considered the profitability of the Advisor and the Sub-Advisors, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and revenues
that the Advisor has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor and the Sub-Advisors are reasonable and not excessive when compared to profitability guidelines set forth in
relevant court cases.
|
|
(8)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(9)
|
The Trustees considered any benefits to the Advisor and the Sub-Advisors from serving as an advisor to the Fund (other than the advisory and sub-advisory fees). The Trustees noted that the Advisor and the
Sub-Advisors may derive ancillary benefits from, by way of example, their association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades
for the Fund. The Trustees determined that any such products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any
additional benefits realized by the Advisor and the Sub-Advisors from their relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ findings that (i) the research, analytical, statistical, and
other information and services provided by brokers are merely supplemental to the Advisor’s and the Sub-Advisors’ own efforts in the performance of their duties under the advisory and sub-advisory agreements and (ii) although the
Sub-Advisors could derive benefits from the conversion of Fund shareholders into separate account clients, the Fund also could benefit from potential institutional shareholders who might choose to invest in the Fund.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
8
|
|
Statement of Operations
|
9
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
14
|
|
Expense Example
|
21
|
|
Proxy Voting Policy and Proxy Voting Records
|
22
|
|
Availability of Quarterly Portfolio Schedule
|
22
|
|
Federal Tax Distribution Information
|
22
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
22
|
|
Electronic Delivery
|
22
|
|
Board Approval of Investment Advisory Agreement
|
23
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
1
|
S&P 500® Index monthly total returns: +5.59% in November 2022, -5.76% in December 2022, +6.28% in January 2023, -2.44%
in February 2023, +3.67% in March 2023, and +1.56% in April 2023.
|
2
|
S&P 500® Financial Sector monthly total return: -9.55% in March 2023. KBW Bank Index monthly total return: -24.87% in
March 2023. S&P 500® Information Technology sector total return: +18.88% for the six months ended April 30, 2023. S&P 500® Communication Services sector total return: +23.15% for the six months ended April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
|
Months(1)
|
Year
|
Years
|
Years
|
|
Hennessy Balanced Fund (HBFBX)
|
0.96%
|
-1.15%
|
2.72%
|
3.57%
|
50/50 Blended DJIA/Treasury Index
|
3.83%
|
4.09%
|
5.79%
|
6.23%
|
Dow Jones Industrial Average
|
5.29%
|
5.64%
|
9.49%
|
11.22%
|
(1)
|
Periods of less than one year are not annualized.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2023 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
U.S. Treasury Bill, 4.470%, 01/25/2024
|
19.79%
|
U.S. Treasury Bill, 4.555%, 11/30/2023
|
10.36%
|
U.S. Treasury Bill, 4.750%, 06/15/2023
|
9.79%
|
U.S. Treasury Bill, 4.350%, 05/18/2023
|
7.36%
|
Cisco Systems Inc.
|
5.38%
|
Intel Corp.
|
5.33%
|
Walgreens Boots Alliance, Inc.
|
5.13%
|
Dow, Inc.
|
5.03%
|
Verizon Communications, Inc.
|
4.99%
|
Chevron Corp.
|
4.90%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 49.23%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 4.99%
|
||||||||||||
Verizon Communications, Inc.
|
15,700
|
$
|
609,631
|
4.99
|
%
|
|||||||
Consumer Staples – 5.13%
|
||||||||||||
Walgreens Boots Alliance, Inc.
|
17,800
|
627,450
|
5.13
|
%
|
||||||||
Energy – 4.90%
|
||||||||||||
Chevron Corp.
|
3,550
|
598,459
|
4.90
|
%
|
||||||||
Financials – 4.19%
|
||||||||||||
JPMorgan Chase & Co.
|
3,700
|
511,488
|
4.19
|
%
|
||||||||
Health Care – 4.81%
|
||||||||||||
Amgen, Inc.
|
2,450
|
587,363
|
4.81
|
%
|
||||||||
Industrials – 4.61%
|
||||||||||||
3M Co.
|
5,300
|
562,966
|
4.61
|
%
|
||||||||
Information Technology – 15.57%
|
||||||||||||
Cisco Systems, Inc.
|
13,900
|
656,775
|
5.38
|
%
|
||||||||
Intel Corp.
|
20,950
|
650,707
|
5.33
|
%
|
||||||||
International Business Machines Corp.
|
4,700
|
594,127
|
4.86
|
%
|
||||||||
|
1,901,609
|
15.57
|
%
|
|||||||||
Materials – 5.03%
|
||||||||||||
Dow, Inc.
|
11,300
|
614,720
|
5.03
|
%
|
||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $5,990,220)
|
6,013,686
|
49.23
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 50.79%
|
Number of Shares/
|
% of
|
||||||||||
|
Par Amount
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 3.49%
|
||||||||||||
First American Government Obligations
|
||||||||||||
Fund, Institutional Class, 4.73% (a)
|
426,855
|
$
|
426,855
|
3.49
|
%
|
|||||||
|
||||||||||||
U.S. Treasury Bills – 47.30%
|
||||||||||||
4.350%, 05/18/2023 (b)
|
900,000
|
899,143
|
7.36
|
%
|
||||||||
4.750%, 06/15/2023 (b)
|
1,200,000
|
1,195,725
|
9.79
|
%
|
||||||||
4.555%, 11/30/2023 (b)
|
1,300,000
|
1,266,010
|
10.36
|
%
|
||||||||
4.470%, 1/25/2024 (b)
|
2,500,000
|
2,416,475
|
19.79
|
%
|
||||||||
|
5,777,353
|
47.30
|
%
|
|||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $6,204,850)
|
6,204,208
|
50.79
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $12,195,070) – 100.02%
|
12,217,894
|
100.02
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.02)%
|
(2,723
|
)
|
(0.02
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
12,215,171
|
100.00
|
%
|
(a)
|
The rate listed is the fund’s seven-day yield as of April 30, 2023.
|
(b)
|
The rate listed is the discount rate at issue.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
609,631
|
$
|
—
|
$
|
—
|
$
|
609,631
|
||||||||
Consumer Staples
|
627,450
|
—
|
—
|
627,450
|
||||||||||||
Energy
|
598,459
|
—
|
—
|
598,459
|
||||||||||||
Financials
|
511,488
|
—
|
—
|
511,488
|
||||||||||||
Health Care
|
587,363
|
—
|
—
|
587,363
|
||||||||||||
Industrials
|
562,966
|
—
|
—
|
562,966
|
||||||||||||
Information Technology
|
1,901,609
|
—
|
—
|
1,901,609
|
||||||||||||
Materials
|
614,720
|
—
|
—
|
614,720
|
||||||||||||
Total Common Stocks
|
$
|
6,013,686
|
$
|
—
|
$
|
—
|
$
|
6,013,686
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
426,855
|
$
|
—
|
$
|
—
|
$
|
426,855
|
||||||||
U.S. Treasury Bills
|
—
|
5,777,353
|
—
|
5,777,353
|
||||||||||||
Total Short-Term Investments
|
$
|
426,855
|
$
|
5,777,353
|
$
|
—
|
$
|
6,204,208
|
||||||||
Total Investments
|
$
|
6,440,541
|
$
|
5,777,353
|
$
|
—
|
$
|
12,217,894
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Assets and Liabilities as of April 30, 2023 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $12,195,070)
|
$
|
12,217,894
|
||
Dividends and interest receivable
|
15,623
|
|||
Receivable for fund shares sold
|
298
|
|||
Prepaid expenses and other assets
|
11,064
|
|||
Total assets
|
12,244,879
|
|||
LIABILITIES:
|
||||
Payable to advisor
|
6,053
|
|||
Payable to administrator
|
2,430
|
|||
Payable to auditor
|
11,226
|
|||
Accrued distribution fees
|
1,663
|
|||
Accrued service fees
|
1,009
|
|||
Accrued trustees fees
|
4,823
|
|||
Accrued expenses and other payables
|
2,504
|
|||
Total liabilities
|
29,708
|
|||
NET ASSETS
|
$
|
12,215,171
|
||
NET ASSETS CONSIST OF:
|
||||
Capital stock
|
$
|
12,178,459
|
||
Total distributable earnings
|
36,712
|
|||
Total net assets
|
$
|
12,215,171
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
12,215,171
|
||
Shares issued and outstanding
|
1,071,338
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
11.40
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS
|
Statement of Operations for the six months ended April 30, 2023 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
136,464
|
||
Interest income
|
97,630
|
|||
Total investment income
|
234,094
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
38,008
|
|||
Compliance expense (See Note 5)
|
11,844
|
|||
Audit fees
|
11,227
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
10,787
|
|||
Distribution fees – Investor Class (See Note 5)
|
9,502
|
|||
Federal and state registration fees
|
9,363
|
|||
Trustees’ fees and expenses
|
9,226
|
|||
Service fees – Investor Class (See Note 5)
|
6,334
|
|||
Reports to shareholders
|
2,921
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
2,517
|
|||
Legal fees
|
186
|
|||
Other expenses
|
2,353
|
|||
Total expenses
|
114,268
|
|||
NET INVESTMENT INCOME
|
$
|
119,826
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
16,046
|
||
Net change in unrealized appreciation/depreciation on investments
|
(15,260
|
)
|
||
Net gain on investments
|
786
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
120,612
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2023
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
119,826
|
$
|
66,939
|
||||
Net realized gain on investments
|
16,046
|
492,822
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(15,260
|
)
|
(683,111
|
)
|
||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
120,612
|
(123,350
|
)
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(584,812
|
)
|
(524,145
|
)
|
||||
Total distributions
|
(584,812
|
)
|
(524,145
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
511,125
|
2,103,328
|
||||||
Dividends reinvested – Investor Class
|
577,328
|
519,982
|
||||||
Cost of shares redeemed – Investor Class
|
(1,301,599
|
)
|
(2,614,494
|
)
|
||||
Net increase (decrease) in net assets
|
||||||||
derived from capital share transactions
|
(213,146
|
)
|
8,816
|
|||||
TOTAL DECREASE IN NET ASSETS
|
(677,346
|
)
|
(638,679
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of period
|
12,892,517
|
13,531,196
|
||||||
End of period
|
$
|
12,215,171
|
$
|
12,892,517
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
44,385
|
173,711
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
49,647
|
43,919
|
||||||
Shares redeemed – Investor Class
|
(112,996
|
)
|
(219,333
|
)
|
||||
Net decrease in shares outstanding
|
(18,964
|
)
|
(1,703
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
11.82
|
||
Income from investment operations:
|
||||
Net investment income
|
0.11
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
0.01
|
|||
Total from investment operations
|
0.12
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.10
|
)
|
||
Dividends from net realized gains
|
(0.44
|
)
|
||
Total distributions
|
(0.54
|
)
|
||
Net asset value, end of period
|
$
|
11.40
|
||
TOTAL RETURN
|
0.96
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
12.22
|
||
Ratio of expenses to average net assets
|
1.80
|
%(3)
|
||
Ratio of net investment income to average net assets
|
1.89
|
%(3)
|
||
Portfolio turnover rate
|
6
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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 April 30, 2023 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of
wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book
purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net
realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the
Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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 (he “SEC”) adopted new regulations under the 1940 Act 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, generally eliminates the asset segregation framework 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 does not
utilize derivatives and therefore has not adopted a derivatives risk management program.
|
In December 2020, the SEC adopted a new rule under the 1940 Act 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
|
HENNESSY FUNDS
|
1-800-966-4354
|
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. The Fund has designated Hennessy
Advisors, Inc., the Fund’s investment advisor (the “Advisor”), as its valuation designee under 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.
|
|
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
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
106,614
|
$
|
70,052
|
|||||
Long-term capital gains
|
478,198
|
454,093
|
|||||||
Total distributions
|
$
|
584,812
|
$
|
524,145
|
|||||
(1) Ordinary income includes short-term capital gains.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS /EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
November 1, 2022 –
|
|
November 1, 2022
|
April 30, 2023
|
April 30, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,009.60
|
$18.09
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,032.00
|
$18.29
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.80%, multiplied by the average account value over the period, multiplied by 181/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help the
Board assess each such factor;
|
|
(3)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
|
|
(4)
|
A summary of the advisory agreement;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
HENNESSY FUNDS
|
1-800-966-4354
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor provides
high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to
the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as
appropriate), conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance providers
for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers, and
maintains books and records.
|
||
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal
services to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor
participates in “no transaction fee” (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor
compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight
personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to
various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The Trustees
concluded that the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials considered at the
meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are
reasonable and warranted continuation of the advisory agreement.
|
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the
Fund were variable asset-based fees, so the Advisor would not realize material economies of scale relating to these expenses as the assets of the Fund increased. For example, third-party platform fees increase as the Fund’s assets
grow.
|
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor
has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by way of
example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any such products
and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the Advisor from its
relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are merely supplemental to
the Advisor’s own efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Electronic Delivery
|
26
|
|
Board Approval of Investment Advisory Agreement
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
1
|
S&P 500® Index monthly total returns: +5.59% in November 2022, -5.76% in December 2022, +6.28% in January 2023, -2.44%
in February 2023, +3.67% in March 2023, and +1.56% in April 2023.
|
2
|
S&P 500® Financial Sector monthly total return: -9.55% in March 2023. KBW Bank Index monthly total return: -24.87% in
March 2023. S&P 500® Information Technology sector total return: +18.88% for the six months ended April 30, 2023. S&P 500® Communication Services sector total return: +23.15% for the six months ended April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Since Inception
|
|
Months(1)
|
Year
|
Years
|
(12/31/13)
|
|
Hennessy Energy Transition Fund –
|
||||
Investor Class (HNRGX)
|
-8.68%
|
5.83%
|
3.19%
|
2.70%
|
Hennessy Energy Transition Fund –
|
||||
Institutional Class (HNRIX)
|
-8.53%
|
6.20%
|
3.49%
|
2.96%
|
S&P 500® Energy Index
|
-3.22%
|
19.22%
|
8.29%
|
3.72%
|
S&P 500® Index
|
8.63%
|
2.66%
|
11.45%
|
11.20%
|
Expense ratios:
|
Gross 2.42%, Net 2.25%(2) (Investor Class);
|
Gross 2.09%, Net 1.92%(2) (Institutional Class)
|
(1)
|
Periods of less than one year are not annualized.
|
(2)
|
Certain service provider expenses will be voluntarily waived through July 31, 2025, at which time the arrangement will automatically terminate. In addition, the arrangement will not apply at any time the
Fund’s net assets exceed $125 million.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2023 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% TOTAL ASSETS
|
Suncor Energy, Inc.
|
5.74%
|
Canadian Natural Resources Ltd.
|
5.72%
|
Exxon Mobil Corp.
|
5.61%
|
Cheniere Energy, Inc.
|
5.40%
|
Schlumberger NV
|
5.28%
|
Pioneer Natural Resources Co.
|
5.10%
|
EOG Resources, Inc.
|
5.05%
|
TechnipFMC PLC
|
4.71%
|
Halliburton Co.
|
4.68%
|
Freeport-McMoRan, Inc.
|
4.66%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 96.35%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Downstream – 5.33%
|
||||||||||||
Marathon Petroleum Corp.
|
1,500
|
$
|
183,000
|
0.97
|
%
|
|||||||
Phillips 66
|
4,000
|
396,000
|
2.09
|
%
|
||||||||
Valero Energy Corp.
|
3,750
|
430,013
|
2.27
|
%
|
||||||||
|
1,009,013
|
5.33
|
%
|
|||||||||
Exploration & Production – 48.11%
|
||||||||||||
Antero Resources Corp. (a)
|
33,900
|
779,361
|
4.12
|
%
|
||||||||
Canadian Natural Resources Ltd. (b)
|
17,800
|
1,085,266
|
5.74
|
%
|
||||||||
Comstock Resources, Inc.
|
40,000
|
460,000
|
2.43
|
%
|
||||||||
ConocoPhillips
|
8,245
|
848,328
|
4.48
|
%
|
||||||||
Diamondback Energy, Inc.
|
6,120
|
870,264
|
4.60
|
%
|
||||||||
EOG Resources, Inc.
|
8,030
|
959,344
|
5.07
|
%
|
||||||||
EQT Corp.
|
22,600
|
787,384
|
4.16
|
%
|
||||||||
Marathon Oil Corp.
|
19,300
|
466,288
|
2.47
|
%
|
||||||||
PDC Energy, Inc.
|
12,090
|
786,454
|
4.16
|
%
|
||||||||
Pioneer Natural Resources Co.
|
4,450
|
968,098
|
5.12
|
%
|
||||||||
Suncor Energy, Inc. (b)
|
34,760
|
1,088,683
|
5.76
|
%
|
||||||||
|
9,099,470
|
48.11
|
%
|
|||||||||
Integrated – 8.80%
|
||||||||||||
Chevron Corp.
|
3,550
|
598,459
|
3.17
|
%
|
||||||||
Exxon Mobil Corp.
|
9,000
|
1,065,060
|
5.63
|
%
|
||||||||
|
1,663,519
|
8.80
|
%
|
|||||||||
Midstream – 5.42%
|
||||||||||||
Cheniere Energy, Inc.
|
6,700
|
1,025,100
|
5.42
|
%
|
||||||||
Oil Services – 22.09%
|
||||||||||||
Halliburton Co.
|
27,150
|
889,162
|
4.70
|
%
|
||||||||
Schlumberger NV (b)
|
20,310
|
1,002,298
|
5.30
|
%
|
||||||||
Solaris Oilfield Infrastructure, Inc. – Class A
|
87,920
|
675,226
|
3.57
|
%
|
||||||||
TechnipFMC PLC (a)(b)
|
65,240
|
893,136
|
4.72
|
%
|
||||||||
Tenaris SA – ADR (b)
|
25,000
|
717,750
|
3.80
|
%
|
||||||||
|
4,177,572
|
22.09
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Utility – 6.60%
|
||||||||||||
Freeport-McMoRan, Inc.
|
23,320
|
$
|
884,061
|
4.67
|
%
|
|||||||
NextEra Energy, Inc.
|
4,770
|
365,525
|
1.93
|
%
|
||||||||
|
1,249,586
|
6.60
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $13,162,156)
|
18,224,260
|
96.35
|
%
|
|||||||||
|
||||||||||||
PARTNERSHIPS & TRUSTS – 3.75%
|
||||||||||||
Midstream – 3.75%
|
||||||||||||
Plains All American Pipeline LP
|
55,010
|
709,629
|
3.75
|
%
|
||||||||
|
||||||||||||
Total Partnerships & Trusts
|
||||||||||||
(Cost $613,665)
|
709,629
|
3.75
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS– 0.00%
|
||||||||||||
Money Market Funds – 0.00%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 4.73% (c)
|
701
|
701
|
0.00
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $701)
|
701
|
0.00
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $13,776,522) – 101.10%
|
18,934,590
|
100.10
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.10)%
|
(20,139
|
)
|
(0.10
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
18,914,451
|
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 April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Downstream
|
$
|
1,009,013
|
$
|
—
|
$
|
—
|
$
|
1,009,013
|
||||||||
Exploration & Production
|
9,099,470
|
—
|
—
|
9,099,470
|
||||||||||||
Integrated
|
1,663,519
|
—
|
—
|
1,663,519
|
||||||||||||
Midstream
|
1,025,100
|
—
|
—
|
1,025,100
|
||||||||||||
Oil Services
|
4,177,572
|
—
|
—
|
4,177,572
|
||||||||||||
Utility
|
1,249,586
|
—
|
—
|
1,249,586
|
||||||||||||
Total Common Stocks
|
$
|
18,224,260
|
$
|
—
|
$
|
—
|
$
|
18,224,260
|
||||||||
Partnerships & Trusts
|
||||||||||||||||
Midstream
|
$
|
709,629
|
$
|
—
|
$
|
—
|
$
|
709,629
|
||||||||
Total Partnerships & Trusts
|
$
|
709,629
|
$
|
—
|
$
|
—
|
$
|
709,629
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
701
|
$
|
—
|
$
|
—
|
$
|
701
|
||||||||
Total Short-Term Investments
|
$
|
701
|
$
|
—
|
$
|
—
|
$
|
701
|
||||||||
Total Investments
|
$
|
18,934,590
|
$
|
—
|
$
|
—
|
$
|
18,934,590
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2023 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $13,776,522)
|
$
|
18,934,590
|
||
Dividends and interest receivable
|
4,298
|
|||
Receivable for fund shares sold
|
6,241
|
|||
Return of capital receivable
|
14,716
|
|||
Prepaid expenses and other assets
|
19,119
|
|||
Total assets
|
18,978,964
|
|||
LIABILITIES:
|
||||
Payable to custodian
|
1,000
|
|||
Payable for fund shares redeemed
|
22,546
|
|||
Payable to advisor
|
19,968
|
|||
Payable to auditor
|
11,589
|
|||
Accrued distribution fees
|
1,556
|
|||
Accrued service fees
|
709
|
|||
Accrued trustees fees
|
4,776
|
|||
Accrued expenses and other payables
|
2,369
|
|||
Total liabilities
|
64,513
|
|||
NET ASSETS
|
$
|
18,914,451
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
53,636,782
|
||
Accumulated deficit
|
(34,722,331
|
)
|
||
Total net assets
|
$
|
18,914,451
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
8,254,517
|
||
Shares issued and outstanding
|
376,316
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
21.94
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
10,659,934
|
||
Shares issued and outstanding
|
477,651
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
22.32
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2023 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Distributions received from master limited partnerships
|
$
|
41,136
|
||
Return of capital on distributions received
|
(41,136
|
)
|
||
Dividend income from common stock(1)
|
347,006
|
|||
Interest income
|
4,701
|
|||
Total investment income
|
351,707
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
133,270
|
|||
Federal and state registration fees
|
16,606
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
9,723
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
6,706
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
15,944
|
|||
Compliance expense (See Note 5)
|
11,844
|
|||
Audit fees
|
11,584
|
|||
Trustees' fees and expenses
|
9,321
|
|||
Distribution fees – Investor Class (See Note 5)
|
7,266
|
|||
Service fees – Investor Class (See Note 5)
|
4,844
|
|||
Reports to shareholders
|
4,198
|
|||
Interest expense (See Note 7)
|
940
|
|||
Legal fees
|
172
|
|||
Other expenses
|
3,429
|
|||
Total expenses before waiver
|
235,847
|
|||
Service provider expense waiver (See Note 5)
|
(15,944
|
)
|
||
Net expenses
|
219,903
|
|||
NET INVESTMENT INCOME
|
$
|
131,804
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
1,331,619
|
||
Net change in unrealized appreciation/depreciation on investments
|
(3,510,069
|
)
|
||
Net loss on investments
|
(2,178,450
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(2,046,646
|
)
|
(1)
|
Net of foreign taxes withheld of $5,770.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2023
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
131,804
|
$
|
203,796
|
||||
Net realized gain on investments
|
1,331,619
|
1,336,639
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(3,510,069
|
)
|
6,207,910
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
(2,046,646
|
)
|
7,748,345
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(51,574
|
)
|
(751,147
|
)
|
||||
Distributable earnings – Institutional Class
|
(87,195
|
)
|
(1,188,176
|
)
|
||||
Total distributions
|
(138,769
|
)
|
(1,939,323
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
2,315,324
|
8,234,369
|
||||||
Proceeds from shares subscribed – Institutional Class
|
1,076,746
|
6,681,659
|
||||||
Dividends reinvested – Investor Class
|
47,756
|
698,292
|
||||||
Dividends reinvested – Institutional Class
|
86,765
|
1,181,355
|
||||||
Cost of shares redeemed – Investor Class
|
(3,356,067
|
)
|
(7,622,351
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(2,610,414
|
)
|
(7,693,364
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
(2,439,890
|
)
|
1,479,960
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(4,625,305
|
)
|
7,288,982
|
|||||
NET ASSETS:
|
||||||||
Beginning of period
|
23,539,756
|
16,250,774
|
||||||
End of period
|
$
|
18,914,451
|
$
|
23,539,756
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
98,415
|
394,224
|
||||||
Shares sold – Institutional Class
|
45,824
|
331,064
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
2,122
|
44,449
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
3,794
|
74,066
|
||||||
Shares redeemed – Investor Class
|
(147,117
|
)
|
(387,313
|
)
|
||||
Shares redeemed – Institutional Class
|
(113,847
|
)
|
(371,343
|
)
|
||||
Net increase (decrease) in shares outstanding
|
(110,809
|
)
|
85,147
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
24.15
|
||
Income from investment operations:
|
||||
Net investment income (loss)(2)
|
0.12
|
|||
Net realized and unrealized gains (losses) on investments
|
(2.21
|
)
|
||
Total from investment operations
|
(2.09
|
)
|
||
Less distributions:
|
||||
Dividends from net investment income
|
(0.12
|
)
|
||
Total distributions
|
(0.12
|
)
|
||
Net asset value, end of period
|
$
|
21.94
|
||
TOTAL RETURN
|
-8.68
|
%(3)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
8.25
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement
|
2.40
|
%(4)
|
||
After expense reimbursement
|
2.25
|
%(4)(6)
|
||
Ratio of net investment income (loss) to average net assets:
|
||||
Before expense reimbursement
|
0.90
|
%(4)
|
||
After expense reimbursement
|
1.05
|
%(4)
|
||
Portfolio turnover rate(7)
|
18
|
%(3)
|
(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 period.
|
(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
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
24.59
|
||
Income from investment operations:
|
||||
Net investment income (loss)(2)
|
0.16
|
|||
Net realized and unrealized gains (losses) on investments
|
(2.25
|
)
|
||
Total from investment operations
|
(2.09
|
)
|
||
Less distributions:
|
||||
Dividends from net investment income
|
(0.18
|
)
|
||
Total distributions
|
(0.18
|
)
|
||
Net asset value, end of period
|
$
|
22.32
|
||
TOTAL RETURN
|
-8.53
|
%(3)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
10.66
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement
|
2.06
|
%(4)
|
||
After expense reimbursement
|
1.91
|
%(4)(6)
|
||
Ratio of net investment income (loss) to average net assets:
|
||||
Before expense reimbursement
|
1.24
|
%(4)
|
||
After expense reimbursement
|
1.39
|
%(4)
|
||
Portfolio turnover rate(7)
|
18
|
%(3)
|
(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 period.
|
(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 April 30, 2023 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of
wash sales for tax reporting purposes and investments in companies organized as partnerships for tax purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an
income tax expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting
for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the
Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase
or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair
value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses
attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets. Distributions received from the Fund’s investments in master limited
partnerships (“MLPs”) generally consist of ordinary income, capital gains, and return of capital. The Fund records investment income on the ex-date of the distributions. For financial statement purposes, the Fund uses return of
capital and income estimates to allocate the dividend income received. Such estimates are based on historical information available from the MLPs and other industry sources. These estimates may subsequently be revised based on
information received from the MLPs after their tax reporting periods are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Fund.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are
declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of
the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
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
|
HENNESSY FUNDS
|
1-800-966-4354
|
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 (the “SEC”) adopted new regulations under the 1940 Act 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, generally eliminates the asset segregation framework 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 does not
utilize derivatives and therefore has not adopted a derivatives risk management program.
|
In December 2020, the SEC adopted a new rule under the 1940 Act 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. The Fund has designated Hennessy Advisors, Inc., the Fund’s investment advisor (the “Advisor”), as its valuation designee under 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
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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
|
$
|
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
|
)
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
138,769
|
$
|
1,939,323
|
|||||
Long-term capital gains
|
—
|
—
|
|||||||
Total distributions
|
$
|
138,769
|
$
|
1,939,323
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
November 1, 2022 –
|
|
November 1, 2022
|
April 30, 2023
|
April 30, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 913.20
|
$21.52
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,027.50
|
$22.81
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 914.70
|
$18.29
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,030.90
|
$19.40
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 2.25% for Investor Class shares or 1.91% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 181/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help the
Board assess each such factor;
|
|
(3)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
|
|
(4)
|
A summary of the advisory agreement;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor provides
high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to
the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as
appropriate), conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance providers
for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers, and
maintains books and records.
|
||
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal
services to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor
participates in “no transaction fee” (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor
compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight
personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to
various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The Trustees
concluded that the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials considered at the
meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are
reasonable and warranted continuation of the advisory agreement.
|
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the
Fund were variable asset-based fees, so the Advisor would not realize material economies of scale relating to these expenses as the assets of the Fund increased. For example, third-party platform fees increase as the Fund’s assets
grow.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor
has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by way of
example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any such products
and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the Advisor from its
relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are merely supplemental to
the Advisor’s own efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
8
|
|
Statement of Operations
|
9
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
26
|
|
Proxy Voting Policy and Proxy Voting Records
|
28
|
|
Availability of Quarterly Portfolio Schedule
|
28
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
28
|
|
Electronic Delivery
|
28
|
|
Board Approval of Investment Advisory Agreement
|
29
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
1
|
S&P 500® Index monthly total returns: +5.59% in November 2022, -5.76% in December 2022, +6.28% in January 2023, -2.44%
in February 2023, +3.67% in March 2023, and +1.56% in April 2023.
|
2
|
S&P 500® Financial Sector monthly total return: -9.55% in March 2023. KBW Bank Index monthly total return: -24.87% in
March 2023. S&P 500® Information Technology sector total return: +18.88% for the six months ended April 30, 2023. S&P 500® Communication Services sector total return: +23.15% for the six months ended April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Since Inception
|
|
Months(1)
|
Year
|
Years
|
(12/31/13)
|
|
Hennessy Midstream Fund –
|
||||
Investor Class (HMSFX)
|
2.79%
|
11.33%
|
3.89%
|
0.27%
|
Hennessy Midstream Fund –
|
||||
Institutional Class (HMSIX)
|
2.91%
|
11.63%
|
4.14%
|
0.53%
|
Alerian US Midstream Energy Index
|
0.78%
|
9.18%
|
9.26%
|
3.39%
|
S&P 500® Index
|
8.63%
|
2.66%
|
11.45%
|
11.20%
|
Expense ratios:
|
Gross 2.05%, Net 1.76%(2)(3) (Investor Class);
|
Gross 1.69%, Net 1.51%(2)(3) (Institutional Class)
|
(1)
|
Periods of less than one year are not annualized.
|
(2)
|
The Fund’s investment advisor has contractually agreed to limit expenses until February 28, 2024.
|
(3)
|
Certain service provider expenses will be voluntarily waived through July 31, 2025, at which time the arrangement will automatically terminate. In addition, the arrangement will not apply at any time the
Fund’s net assets exceed $125 million.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2023 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% TOTAL ASSETS
|
Energy Transfer LP
|
14.61%
|
Enterprise Products Partners LP
|
11.85%
|
Plains All American Pipeline LP
|
10.42%
|
MPLX LP
|
9.68%
|
Antero Midstream Corp.
|
8.00%
|
Targa Resources Corp.
|
7.63%
|
Magellan Midstream Partners LP
|
7.07%
|
The Williams Companies, Inc.
|
6.91%
|
Western Midstream Partners LP
|
5.78%
|
ONEOK, Inc.
|
4.83%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 38.46%
|
Number of
|
% of
|
||||||||||
|
Shares
|
Value
|
Net Assets
|
|||||||||
Gathering & Processing – 21.03%
|
||||||||||||
Antero Midstream Corp.
|
346,600
|
$
|
3,729,416
|
8.02
|
%
|
|||||||
EnLink Midstream LLC
|
109,000
|
1,069,290
|
2.30
|
%
|
||||||||
Equitrans Midstream Corp.
|
276,500
|
1,423,975
|
3.06
|
%
|
||||||||
Targa Resources Corp.
|
47,100
|
3,557,463
|
7.65
|
%
|
||||||||
|
9,780,144
|
21.03
|
%
|
|||||||||
Natural Gas/NGL Transportation – 17.43%
|
||||||||||||
DT Midstream, Inc.
|
19,800
|
975,546
|
2.10
|
%
|
||||||||
Kinder Morgan, Inc.
|
96,790
|
1,659,948
|
3.57
|
%
|
||||||||
ONEOK, Inc.
|
34,426
|
2,251,805
|
4.84
|
%
|
||||||||
The Williams Companies, Inc.
|
106,452
|
3,221,238
|
6.92
|
%
|
||||||||
|
8,108,537
|
17.43
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $12,049,340)
|
17,888,681
|
38.46
|
%
|
|||||||||
|
||||||||||||
PARTNERSHIPS & TRUSTS – 59.56%
|
||||||||||||
Crude Oil & Refined Products – 27.24%
|
||||||||||||
Magellan Midstream Partners LP
|
59,100
|
3,297,780
|
7.09
|
%
|
||||||||
MPLX LP
|
128,949
|
4,511,926
|
9.70
|
%
|
||||||||
Plains All American Pipeline LP
|
376,526
|
4,857,185
|
10.45
|
%
|
||||||||
|
12,666,891
|
27.24
|
%
|
|||||||||
Gathering & Processing – 5.79%
|
||||||||||||
Western Midstream Partners LP
|
101,800
|
2,694,646
|
5.79
|
%
|
||||||||
Natural Gas/NGL Transportation – 26.53%
|
||||||||||||
Energy Transfer LP
|
528,900
|
6,812,232
|
14.65
|
%
|
||||||||
Enterprise Products Partners LP
|
210,000
|
5,525,100
|
11.88
|
%
|
||||||||
|
12,337,332
|
26.53
|
%
|
|||||||||
|
||||||||||||
Total Partnerships & Trusts
|
||||||||||||
(Cost $16,668,280)
|
27,698,869
|
59.56
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 1.17%
|
Number of
|
% of
|
||||||||||
|
Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 1.17%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 4.73% (a)
|
545,159
|
$
|
545,159
|
1.17
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $545,159)
|
545,159
|
1.17
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $29,262,779) – 99.19%
|
46,132,709
|
99.19
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.81%
|
378,108
|
0.81
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
46,510,817
|
100.00
|
%
|
(a)
|
The rate listed is the fund’s seven-day yield as of April 30, 2023.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Gathering & Processing
|
$
|
9,780,144
|
$
|
—
|
$
|
—
|
$
|
9,780,144
|
||||||||
Natural Gas/NGL Transportation
|
8,108,537
|
—
|
—
|
8,108,537
|
||||||||||||
Total Common Stocks
|
$
|
17,888,681
|
$
|
—
|
$
|
—
|
$
|
17,888,681
|
||||||||
Partnerships & Trusts
|
||||||||||||||||
Crude Oil & Refined Products
|
$
|
12,666,891
|
—
|
—
|
$
|
12,666,891
|
||||||||||
Gathering & Processing
|
2,694,646
|
—
|
—
|
2,694,646
|
||||||||||||
Natural Gas/NGL Transportation
|
12,337,332
|
—
|
—
|
12,337,332
|
||||||||||||
Total Partnerships & Trusts
|
$
|
27,698,869
|
$
|
—
|
$
|
—
|
$
|
27,698,869
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
545,159
|
$
|
—
|
$
|
—
|
$
|
545,159
|
||||||||
Total Short-Term Investments
|
$
|
545,159
|
$
|
—
|
$
|
—
|
$
|
545,159
|
||||||||
Total Investments
|
$
|
46,132,709
|
$
|
—
|
$
|
—
|
$
|
46,132,709
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Assets and Liabilities as of April 30, 2023 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $29,262,779)
|
$
|
46,132,709
|
||
Dividends and interest receivable
|
76,718
|
|||
Receivable for fund shares sold
|
6,727
|
|||
Return of capital receivable
|
392,327
|
|||
Deferred income tax
|
—
|
|||
Prepaid expenses and other assets
|
21,890
|
|||
Total assets
|
46,630,371
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
46,430
|
|||
Payable to advisor
|
39,775
|
|||
Payable to auditor
|
20,454
|
|||
Accrued distribution fees
|
1,585
|
|||
Accrued service fees
|
1,034
|
|||
Accrued trustees fees
|
4,801
|
|||
Accrued expenses and other payables
|
5,475
|
|||
Total liabilities
|
119,554
|
|||
NET ASSETS
|
$
|
46,510,817
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
54,738,786
|
||
Accumulated deficit
|
(8,227,969
|
)
|
||
Total net assets
|
$
|
46,510,817
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
12,763,833
|
||
Shares issued and outstanding
|
1,367,909
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
9.33
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
33,746,984
|
||
Shares issued and outstanding
|
3,487,077
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
9.68
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS
|
Statement of Operations for the six months ended April 30, 2023 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Distributions received from master limited partnerships
|
$
|
1,121,895
|
||
Return of capital on distributions received
|
(1,121,895
|
)
|
||
Dividend income
|
336,406
|
|||
Interest income
|
11,811
|
|||
Total investment income
|
348,217
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
245,067
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
14,239
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
14,692
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
26,531
|
|||
Audit fees
|
20,453
|
|||
Federal and state registration fees
|
18,234
|
|||
Franchise tax expense
|
12,000
|
|||
Compliance expense (See Note 5)
|
11,844
|
|||
Trustees’ fees and expenses
|
9,507
|
|||
Distribution fees – Investor Class (See Note 5)
|
8,932
|
|||
Service fees – Investor Class (See Note 5)
|
5,954
|
|||
Reports to shareholders
|
5,652
|
|||
Income tax expense
|
900
|
|||
Interest expense (See Note 7)
|
511
|
|||
Legal fees
|
458
|
|||
Other expenses
|
6,521
|
|||
Total expenses before waivers and reimbursements
|
401,495
|
|||
Service provider expense waiver (See Note 5)
|
(26,531
|
)
|
||
Expense reimbursement by advisor – Investor Class (See Note 5)
|
(9,900
|
)
|
||
Expense reimbursement by advisor – Institutional Class (See Note 5)
|
(2,585
|
)
|
||
Net expenses
|
362,479
|
|||
NET INVESTMENT LOSS
|
$
|
(14,262
|
)
|
|
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
920,842
|
||
Net change in unrealized appreciation/depreciation on investments
|
343,691
|
|||
Income tax expense
|
—
|
|||
Net gain on investments
|
1,264,533
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
1,250,271
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2023
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment loss
|
$
|
(14,262
|
)
|
$
|
(246,112
|
)
|
||
Net realized gain on investments
|
920,842
|
2,241,454
|
||||||
Net change in unrealized
|
||||||||
appreciation/deprecation on investments
|
343,691
|
6,041,810
|
||||||
Net increase in net assets resulting from operations
|
1,250,271
|
8,037,152
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM:
|
||||||||
Distributable earnings – Investor Class
|
(564,187
|
)
|
(56,001
|
)
|
||||
Return of capital – Investor Class
|
(84,304
|
)
|
(932,728
|
)
|
||||
Distributable earnings – Institutional Class
|
(1,507,894
|
)
|
(205,718
|
)
|
||||
Return of capital – Institutional Class
|
(225,317
|
)
|
(3,426,419
|
)
|
||||
Total distributions
|
(2,381,702
|
)
|
(4,620,866
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
2,593,652
|
5,720,090
|
||||||
Proceeds from shares subscribed – Institutional Class
|
3,083,596
|
11,963,118
|
||||||
Dividends reinvested – Investor Class
|
478,636
|
840,503
|
||||||
Dividends reinvested – Institutional Class
|
1,621,701
|
3,393,598
|
||||||
Cost of shares redeemed – Investor Class
|
(1,470,402
|
)
|
(2,598,309
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(3,199,128
|
)
|
(15,368,206
|
)
|
||||
Net increase in net assets derived
|
||||||||
from capital share transactions
|
3,108,055
|
3,950,794
|
||||||
TOTAL INCREASE IN NET ASSETS
|
1,976,624
|
7,367,080
|
||||||
NET ASSETS:
|
||||||||
Beginning of period
|
44,534,193
|
37,167,113
|
||||||
End of period
|
$
|
46,510,817
|
$
|
44,534,193
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
276,174
|
634,991
|
||||||
Shares sold – Institutional Class
|
316,882
|
1,295,385
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
50,789
|
93,668
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
166,334
|
369,848
|
||||||
Shares redeemed – Investor Class
|
(156,577
|
)
|
(307,053
|
)
|
||||
Shares redeemed – Institutional Class
|
(333,627
|
)
|
(1,747,350
|
)
|
||||
Net increase in shares outstanding
|
319,975
|
339,489
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
9.58
|
||
Income from investment operations:
|
||||
Net investment loss(2)(3)
|
(0.01
|
)
|
||
Net realized and unrealized gains (losses) on investments
|
0.28
|
|||
Total from investment operations
|
0.27
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.45
|
)
|
||
Dividends from return of capital
|
(0.07
|
)
|
||
Total distributions
|
(0.52
|
)
|
||
Net asset value, end of period
|
$
|
9.33
|
||
TOTAL RETURN
|
2.79
|
%(4)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
12.76
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement
|
2.09
|
%(5)
|
||
After expense reimbursement
|
1.81
|
%(5)(6)
|
||
Ratio of net investment loss to average net assets:
|
||||
Before expense reimbursement(3)
|
(0.53
|
)%(5)
|
||
After expense reimbursement(3)
|
(0.25
|
)%(5)
|
||
Portfolio turnover rate(7)
|
5
|
%(4)
|
(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 period.
|
(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
|
|||||||||||||||||
$
|
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
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
9.91
|
||
Income from investment operations:
|
||||
Net investment income (loss)(2)(3)
|
0.00
|
(4)
|
||
Net realized and unrealized gains (losses) on investments
|
0.29
|
|||
Total from investment operations
|
0.29
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.45
|
)
|
||
Dividends from return of capital
|
(0.07
|
)
|
||
Total distributions
|
(0.52
|
)
|
||
Net asset value, end of period
|
$
|
9.68
|
||
TOTAL RETURN
|
2.91
|
%(5)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
33.75
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement
|
1.69
|
%(6)
|
||
After expense reimbursement
|
1.56
|
%(6)(7)
|
||
Ratio of net investment loss to average net assets:
|
||||
Before expense reimbursement(3)
|
(0.13
|
)%(6)
|
||
After expense reimbursement(3)
|
0.00
|
%(4)(6)
|
||
Portfolio turnover rate(8)
|
5
|
%(5)
|
(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)
|
Amount is between $(0.005) and $0.005.
|
(5)
|
Not annualized.
|
(6)
|
Annualized.
|
(7)
|
Certain service provider expenses were voluntarily waived during the fiscal period.
|
(8)
|
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
|
|||||||||||||||||
$
|
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
|
%(5)
|
-6.25
|
%
|
|||||||||||
$
|
33.06
|
$
|
30.45
|
$
|
18.33
|
$
|
31.78
|
$
|
61.92
|
$
|
82.59
|
|||||||||||
1.69
|
%
|
1.74
|
%
|
1.79
|
%
|
1.56
|
%
|
1.58
|
%(6)
|
1.66
|
%
|
|||||||||||
1.51
|
%(7)
|
1.51
|
%(7)
|
1.51
|
%(7)
|
1.51
|
%
|
1.52
|
%(6)
|
1.52
|
%
|
|||||||||||
(0.71
|
)%
|
(0.89
|
)%
|
(1.55
|
)%
|
(0.76
|
)%
|
(1.15
|
)%(6)
|
(1.28
|
)%
|
|||||||||||
(0.53
|
)%
|
(0.66
|
)%
|
(1.27
|
)%
|
(0.71
|
)%
|
(1.09
|
)%(6)
|
(1.14
|
)%
|
|||||||||||
33
|
%
|
40
|
%
|
53
|
%
|
41
|
%
|
64
|
%(5)
|
63
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements April 30, 2023 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund is taxed as a corporation and is obligated to pay U.S. federal and state income tax on its taxable income. Currently, the maximum marginal regular federal income tax rate
for a corporation is 21%. The Fund invests a substantial portion of its assets in master limited partnerships (“MLPs”), which are treated as partnerships for federal income tax purposes. As a limited partner in MLPs, the Fund
reports its allocable share of each MLP’s taxable income in computing its own taxable income.
|
The Fund includes any tax expense or benefit in the Statement of Operations based on the component of income or gains/losses to which
such expense or benefit relates. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the carrying amount of assets and
liabilities for income tax purposes. The Fund recognizes a valuation allowance if, based on the weight of available evidence, it is more likely than not that the Fund will not realize some portion or all of the deferred income tax
assets. As of April 30, 2023, the Fund has placed a full valuation allowance on its deferred tax assets.
|
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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 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.
|
HENNESSY FUNDS
|
1-800-966-4354
|
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 (the “SEC”) adopted new regulations under the 1940 Act 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, generally eliminates the asset segregation framework 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 does not
utilize derivatives and therefore has not adopted a derivatives risk management program.
|
In December 2020, the SEC adopted a new rule under the 1940 Act 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.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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. The Fund has
designated Hennessy Advisors, Inc., the Fund’s investment advisor (the “Advisor”), as its valuation designee under 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
|
HENNESSY FUNDS
|
1-800-966-4354
|
development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor
expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending
NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may
consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate
observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally
classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values
as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as
described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Fiscal Year
|
Fiscal Year
|
Fiscal Year
|
Fiscal Year
|
|||
2023
|
2024
|
2025
|
2026
|
Total
|
||
Investor Class
|
$11,832
|
$12,376
|
$13,391
|
$9,900
|
$47,499
|
|
Institutional Class
|
$28,522
|
$26,693
|
$11,840
|
$2,585
|
$69,640
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
25,731,083
|
|||
Gross tax unrealized appreciation
|
$
|
21,196,145
|
|||
Gross tax unrealized depreciation
|
(794,519
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
20,401,626
|
Deferred tax assets (liabilities):
|
|||||
Net operating losses
|
$
|
597,532
|
|||
Capital loss
|
4,328,080
|
||||
Unrealized (gain) loss on investments
|
(3,214,233
|
)
|
|||
Total deferred tax assets, net
|
1,711,379
|
||||
Valuation allowance
|
(1,711,379
|
)
|
|||
Net
|
$
|
—
|
HENNESSY FUNDS
|
1-800-966-4354
|
Amount
|
Expiration
|
||
$3,258,843
|
10/31/2023
|
||
8,971,423
|
10/31/2024
|
||
7,178,863
|
10/31/2025
|
Amount
|
Expiration
|
||
$2,682,991
|
Indefinite
|
Tax expense (benefit) at statutory rates
|
$
|
262,557
|
|||
State income tax expense, net of federal benefit
|
14,089
|
||||
Tax expense (benefit) on permanent items(1)
|
(23,846
|
)
|
|||
Tax expense (benefit) due to change in effective state rates
|
—
|
||||
Total current tax expense (benefit)
|
—
|
||||
Change in valuation allowance
|
(252,800
|
)
|
|||
Total tax expense
|
$
|
—
|
|||
(1) Permanent items consist of dividends-received deductions.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
2,072,081
|
$
|
261,719
|
|||||
Long-term capital gains
|
—
|
—
|
|||||||
Return of capital
|
309,621
|
4,359,147
|
|||||||
Total distributions
|
$
|
2,381,702
|
$
|
4,620,866
|
|||||
(1) Ordinary income includes short-term capital gains.
|
Return of Capital
|
|||
Investor Class
|
$0.2575
|
||
Institutional Class
|
$0.2575
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
November 1, 2022 –
|
|
November 1, 2022
|
April 30, 2023
|
April 30, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,027.90
|
$18.35
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,031.90
|
$18.39
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,029.10
|
$15.83
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,034.40
|
$15.87
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.81% for Investor Class shares or 1.56% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 181/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help the
Board assess each such factor;
|
|
(3)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
|
|
(4)
|
A summary of the advisory agreement;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor provides
high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to
the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as
appropriate), conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance providers
for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers, and
maintains books and records.
|
||
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal
services to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor
participates in “no transaction fee” (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor
compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight
personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to
various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The Trustees
concluded that the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of the
discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials considered at the
meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are
reasonable and warranted continuation of the advisory agreement.
|
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the
Fund were variable asset-based fees, so the Advisor would not realize material economies of scale relating to these expenses as the assets of the Fund increased. For example, third-party platform fees increase as the Fund’s assets
grow.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor
has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by way of
example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any such products
and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the Advisor from its
relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are merely supplemental to
the Advisor’s own efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Electronic Delivery
|
26
|
|
Board Approval of Investment Advisory Agreement
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
1
|
S&P 500® Index monthly total returns: +5.59% in November 2022, -5.76% in December 2022, +6.28% in January 2023, -2.44%
in February 2023, +3.67% in March 2023, and +1.56% in April 2023.
|
2
|
S&P 500® Financial Sector monthly total return: -9.55% in March 2023. KBW Bank Index monthly total return: -24.87% in
March 2023. S&P 500® Information Technology sector total return: +18.88% for the six months ended April 30, 2023. S&P 500® Communication Services sector total return: +23.15% for the six months ended April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
|
Months(1)
|
Year
|
Years
|
Years
|
|
Hennessy Gas Utility Fund –
|
||||
Investor Class (GASFX)
|
3.02%
|
-2.70%
|
7.20%
|
6.55%
|
Hennessy Gas Utility Fund –
|
||||
Institutional Class (HGASX)(2)
|
3.17%
|
-2.35%
|
7.54%
|
6.77%
|
AGA Stock Index
|
3.57%
|
-1.67%
|
8.40%
|
7.72%
|
S&P 500® Index
|
8.63%
|
2.66%
|
11.45%
|
12.20%
|
(1)
|
Periods of less than one year are not annualized.
|
(2)
|
The inception date of Institutional Class shares is March 1, 2017. Performance shown prior to the inception of Institutional Class shares reflects the performance of Investor Class shares and includes
expenses that are not applicable to, and are higher than, those of Institutional Class shares.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2023 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Berkshire Hathaway, Inc., Class A
|
5.25%
|
TC Energy Corp.
|
5.10%
|
Sempra Energy
|
5.02%
|
The Southern Co.
|
5.01%
|
Enbridge, Inc.
|
4.99%
|
Atmos Energy Corp.
|
4.94%
|
Cheniere Energy, Inc.
|
4.72%
|
Kinder Morgan, Inc.
|
4.71%
|
ONEOK, Inc.
|
4.30%
|
EQT Corp.
|
4.19%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 99.38%
|
Number of
|
% of
|
||||||||||
|
Shares
|
Value
|
Net Assets
|
|||||||||
Energy – 29.70%
|
||||||||||||
Cheniere Energy, Inc.
|
156,617
|
$
|
23,962,401
|
4.72
|
%
|
|||||||
DT Midstream, Inc.
|
155,200
|
7,646,704
|
1.51
|
%
|
||||||||
Enbridge, Inc. (a)
|
637,765
|
25,357,536
|
4.99
|
%
|
||||||||
EQT Corp.
|
610,700
|
21,276,788
|
4.19
|
%
|
||||||||
Kinder Morgan, Inc.
|
1,396,801
|
23,955,137
|
4.71
|
%
|
||||||||
ONEOK, Inc.
|
333,900
|
21,840,399
|
4.30
|
%
|
||||||||
TC Energy Corp. (a)
|
624,100
|
25,925,114
|
5.10
|
%
|
||||||||
Tellurian, Inc. (b)
|
658,190
|
934,630
|
0.18
|
%
|
||||||||
|
150,898,709
|
29.70
|
%
|
|||||||||
Financials – 5.25%
|
||||||||||||
Berkshire Hathaway, Inc., Class A (b)
|
53
|
26,652,639
|
5.25
|
%
|
||||||||
Industrials – 0.89%
|
||||||||||||
MDU Resources Group, Inc.
|
155,607
|
4,546,837
|
0.89
|
%
|
||||||||
Utilities – 63.54%
|
||||||||||||
Algonquin Power & Utilities Corp. (a)
|
111,064
|
946,265
|
0.19
|
%
|
||||||||
ALLETE, Inc.
|
375
|
23,392
|
0.00
|
%
|
||||||||
Alliant Energy Corp.
|
34,900
|
1,924,386
|
0.38
|
%
|
||||||||
Ameren Corp.
|
45,840
|
4,078,385
|
0.80
|
%
|
||||||||
Atmos Energy Corp.
|
219,786
|
25,086,374
|
4.94
|
%
|
||||||||
Avangrid, Inc.
|
93,200
|
3,752,232
|
0.74
|
%
|
||||||||
Avista Corp.
|
27,072
|
1,193,063
|
0.23
|
%
|
||||||||
Black Hills Corp.
|
66,647
|
4,351,383
|
0.86
|
%
|
||||||||
CenterPoint Energy, Inc.
|
467,428
|
14,242,531
|
2.80
|
%
|
||||||||
Chesapeake Utilities Corp.
|
21,258
|
2,625,363
|
0.52
|
%
|
||||||||
CMS Energy Corp.
|
184,598
|
11,493,071
|
2.26
|
%
|
||||||||
Consolidated Edison, Inc.
|
145,336
|
14,311,236
|
2.82
|
%
|
||||||||
Dominion Energy, Inc.
|
335,777
|
19,186,298
|
3.78
|
%
|
||||||||
DTE Energy Co.
|
57,304
|
6,441,543
|
1.27
|
%
|
||||||||
Duke Energy Corp.
|
119,487
|
11,814,874
|
2.33
|
%
|
||||||||
Entergy Corp.
|
3,760
|
404,501
|
0.08
|
%
|
||||||||
Essential Utilities, Inc.
|
186,100
|
7,946,470
|
1.56
|
%
|
||||||||
Eversource Energy
|
62,075
|
4,817,641
|
0.95
|
%
|
||||||||
Exelon Corp.
|
111,731
|
4,741,864
|
0.93
|
%
|
||||||||
Fortis, Inc. (a)
|
133,876
|
5,878,495
|
1.16
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number of
|
% of
|
||||||||||
|
Shares
|
Value
|
Net Assets
|
|||||||||
Utilities (Continued)
|
||||||||||||
MGE Energy, Inc.
|
10,779
|
$
|
825,779
|
0.16
|
%
|
|||||||
National Fuel Gas Co.
|
95,224
|
5,323,021
|
1.05
|
%
|
||||||||
National Grid PLC – ADR (a)
|
238,944
|
17,120,338
|
3.37
|
%
|
||||||||
New Jersey Resources Corp.
|
134,034
|
6,921,516
|
1.36
|
%
|
||||||||
NiSource, Inc.
|
448,281
|
12,758,077
|
2.51
|
%
|
||||||||
Northwest Natural Holding Co.
|
58,303
|
2,737,909
|
0.54
|
%
|
||||||||
NorthWestern Corp.
|
20,698
|
1,213,317
|
0.24
|
%
|
||||||||
ONE Gas, Inc.
|
96,075
|
7,392,971
|
1.45
|
%
|
||||||||
PG&E Corp. (b)
|
904,449
|
15,475,122
|
3.05
|
%
|
||||||||
PPL Corp.
|
105,319
|
3,024,762
|
0.60
|
%
|
||||||||
Public Service Enterprise Group, Inc.
|
194,190
|
12,272,808
|
2.42
|
%
|
||||||||
RGC Resources, Inc.
|
17,154
|
328,499
|
0.06
|
%
|
||||||||
Sempra Energy
|
163,940
|
25,491,031
|
5.02
|
%
|
||||||||
Southwest Gas Holdings, Inc.
|
76,917
|
4,307,352
|
0.85
|
%
|
||||||||
Spire, Inc.
|
67,991
|
4,605,030
|
0.91
|
%
|
||||||||
The Southern Co.
|
346,300
|
25,470,365
|
5.01
|
%
|
||||||||
UGI Corp.
|
103,952
|
3,521,894
|
0.69
|
%
|
||||||||
Unitil Corp.
|
16,898
|
939,360
|
0.18
|
%
|
||||||||
WEC Energy Group, Inc.
|
202,840
|
19,507,123
|
3.84
|
%
|
||||||||
Xcel Energy, Inc.
|
118,799
|
8,305,238
|
1.63
|
%
|
||||||||
|
322,800,879
|
63.54
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $265,308,010)
|
504,899,064
|
99.38
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 0.58%
|
Number of
|
% of
|
||||||||||
|
Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 0.58%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 4.73% (c)
|
2,950,999
|
$
|
2,950,999
|
0.58
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $2,950,999)
|
2,950,999
|
0.58
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $268,259,009) – 99.96%
|
507,850,063
|
99.96
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.04%
|
206,117
|
0.04
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
508,056,180
|
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 April 30, 2023.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Energy
|
$
|
150,898,709
|
$
|
—
|
$
|
—
|
$
|
150,898,709
|
||||||||
Financials
|
26,652,639
|
—
|
—
|
26,652,639
|
||||||||||||
Industrials
|
4,546,837
|
—
|
—
|
4,546,837
|
||||||||||||
Utilities
|
322,800,879
|
—
|
—
|
322,800,879
|
||||||||||||
Total Common Stocks
|
$
|
504,899,064
|
$
|
—
|
$
|
—
|
$
|
504,899,064
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
2,950,999
|
$
|
—
|
$
|
—
|
$
|
2,950,999
|
||||||||
Total Short-Term Investments
|
$
|
2,950,999
|
$
|
—
|
$
|
—
|
$
|
2,950,999
|
||||||||
Total Investments
|
$
|
507,850,063
|
$
|
—
|
$
|
—
|
$
|
507,850,063
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2023 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $268,259,009)
|
$
|
507,850,063
|
||
Dividends and interest receivable
|
714,431
|
|||
Receivable for fund shares sold
|
103,830
|
|||
Return of capital receivable
|
172,192
|
|||
Prepaid expenses and other assets
|
35,002
|
|||
Total assets
|
508,875,518
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
370,536
|
|||
Payable to advisor
|
166,954
|
|||
Payable to administrator
|
92,611
|
|||
Payable to auditor
|
11,226
|
|||
Accrued distribution fees
|
66,376
|
|||
Accrued service fees
|
36,250
|
|||
Accrued trustees fees
|
4,461
|
|||
Accrued expenses and other payables
|
70,924
|
|||
Total liabilities
|
819,338
|
|||
NET ASSETS
|
$
|
508,056,180
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
282,298,622
|
||
Total distributable earnings
|
225,757,558
|
|||
Total net assets
|
$
|
508,056,180
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
441,598,054
|
||
Shares issued and outstanding
|
17,796,529
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
24.81
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
66,458,126
|
||
Shares issued and outstanding
|
2,685,235
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
24.75
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2023 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
7,415,529
|
||
Interest income
|
55,817
|
|||
Total investment income
|
7,471,346
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
1,044,048
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
386,048
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
49,862
|
|||
Distribution fees – Investor Class (See Note 5)
|
334,169
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
257,021
|
|||
Service fees – Investor Class (See Note 5)
|
222,779
|
|||
Federal and state registration fees
|
22,855
|
|||
Reports to shareholders
|
19,724
|
|||
Compliance expense (See Note 5)
|
13,228
|
|||
Interest expense (See Note 7)
|
12,440
|
|||
Trustees’ fees and expenses
|
11,844
|
|||
Audit fees
|
11,227
|
|||
Legal fees
|
5,317
|
|||
Other expenses
|
140,619
|
|||
Total expenses
|
2,531,181
|
|||
NET INVESTMENT INCOME
|
$
|
4,940,165
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
10,015,908
|
||
Net change in unrealized appreciation/depreciation on investments
|
1,106,331
|
|||
Net gain on investments
|
11,122,239
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
16,062,404
|
(1)
|
Net of foreign taxes withheld and issuance fees of $281,967.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2023
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
4,940,165
|
$
|
10,843,179
|
||||
Net realized gain on investments
|
10,015,908
|
49,402,174
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
1,106,331
|
(11,790,358
|
)
|
|||||
Net increase in net assets resulting from operations
|
16,062,404
|
48,454,995
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(32,871,714
|
)
|
(46,296,164
|
)
|
||||
Distributable earnings – Institutional Class
|
(5,827,068
|
)
|
(7,042,572
|
)
|
||||
Total distributions
|
(38,698,782
|
)
|
(53,338,736
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
6,023,416
|
38,263,106
|
||||||
Proceeds from shares subscribed – Institutional Class
|
4,430,093
|
60,525,251
|
||||||
Dividends reinvested – Investor Class
|
31,011,675
|
43,695,547
|
||||||
Dividends reinvested – Institutional Class
|
5,502,838
|
6,632,283
|
||||||
Cost of shares redeemed – Investor Class
|
(35,457,778
|
)
|
(77,677,738
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(33,816,992
|
)
|
(33,930,524
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
(22,306,748
|
)
|
37,507,925
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(44,943,126
|
)
|
32,624,184
|
|||||
NET ASSETS:
|
||||||||
Beginning of period
|
552,999,306
|
520,375,122
|
||||||
End of period
|
$
|
508,056,180
|
$
|
552,999,306
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
240,017
|
1,378,820
|
||||||
Shares sold – Institutional Class
|
177,406
|
2,219,309
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
1,249,571
|
1,762,321
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
222,283
|
266,844
|
||||||
Shares redeemed – Investor Class
|
(1,422,830
|
)
|
(2,942,205
|
)
|
||||
Shares redeemed – Institutional Class
|
(1,336,294
|
)
|
(1,288,690
|
)
|
||||
Net increase (decrease) in shares outstanding
|
(869,847
|
)
|
1,396,399
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
25.91
|
||
Income from investment operations:
|
||||
Net investment income
|
0.23
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
0.54
|
|||
Total from investment operations
|
0.77
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.22
|
)
|
||
Dividends from net realized gains
|
(1.65
|
)
|
||
Total distributions
|
(1.87
|
)
|
||
Net asset value, end of period
|
$
|
24.81
|
||
TOTAL RETURN
|
3.02
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
441.60
|
||
Ratio of expenses to average net assets
|
1.01
|
%(3)
|
||
Ratio of net investment income to average net assets
|
1.84
|
%(3)
|
||
Portfolio turnover rate(4)
|
5
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
25.84
|
||
Income from investment operations:
|
||||
Net investment income
|
0.27
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
0.53
|
|||
Total from investment operations
|
0.80
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.24
|
)
|
||
Dividends from net realized gains
|
(1.65
|
)
|
||
Total distributions
|
(1.89
|
)
|
||
Net asset value, end of period
|
$
|
24.75
|
||
TOTAL RETURN
|
3.17
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
66.46
|
||
Ratio of expenses to average net assets
|
0.72
|
%(3)
|
||
Ratio of net investment income to average net assets
|
2.21
|
%(3)
|
||
Portfolio turnover rate(4)
|
5
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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 April 30, 2023 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with
the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and
realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the
treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains
for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits,
including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the
Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion
of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding
increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at
the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than
expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of
the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
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 (the “SEC”) adopted new regulations under the 1940 Act 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, generally eliminates the asset segregation framework used by funds to
|
HENNESSY FUNDS
|
1-800-966-4354
|
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 does not utilize derivatives and therefore has not adopted a derivatives risk management program.
|
|
In December 2020, the SEC adopted a new rule under the 1940 Act 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. The Fund has designated Hennessy Advisors, Inc., the Fund’s investment advisor (the “Advisor”), as its valuation designee under 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 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.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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
|
$
|
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
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
7,606,890
|
$
|
10,974,058
|
|||||
Long-term capital gains
|
31,091,892
|
42,364,678
|
|||||||
Total distributions
|
$
|
38,698,782
|
$
|
53,338,736
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
November 1, 2022 –
|
|
November 1, 2022
|
April 30, 2023
|
April 30, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,030.20
|
$10.25
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,039.90
|
$10.30
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,031.70
|
$7.31
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,042.80
|
$7.35
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.01% for Investor Class shares or 0.72% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 181/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help the
Board assess each such factor;
|
|
(3)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
|
|
(4)
|
A summary of the advisory agreement;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor
provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services
provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and
regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and
restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as
appropriate), conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance providers
for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service providers, and
maintains books and records.
|
||
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal
services to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor
participates in “no transaction fee” (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor
compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading
oversight personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to
various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The Trustees
concluded that the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of
the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials considered at
the meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that they are
reasonable and warranted continuation of the advisory agreement.
|
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the
Fund were variable asset-based fees, so the Advisor would not realize material economies of scale relating to these expenses as the assets of the Fund increased. For example, third-party platform fees increase as the Fund’s assets
grow.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and revenues that the Advisor
has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by way of
example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any such
products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the Advisor from
its relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are merely
supplemental to the Advisor’s own efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Electronic Delivery
|
27
|
|
Board Approval of Investment Advisory Agreements
|
28
|
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
|
Six
|
One
|
Five
|
Ten
|
|
Months(1)
|
Year
|
Years
|
Years
|
|
Hennessy Japan Fund –
|
||||
Investor Class (HJPNX)
|
17.06%
|
4.74%
|
-0.25%
|
6.57%
|
Hennessy Japan Fund –
|
||||
Institutional Class (HJPIX)
|
17.29%
|
5.09%
|
0.14%
|
6.95%
|
Russell/Nomura Total Market™ Index
|
17.93%
|
7.09%
|
1.16%
|
4.86%
|
Tokyo Stock Price Index (TOPIX)
|
18.08%
|
7.13%
|
0.99%
|
4.67%
|
(1)
|
Periods of less than one year are not annualized.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2023 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Mitsubishi Corp.
|
8.79%
|
Hitachi Ltd.
|
8.67%
|
Rohto Pharmaceutical Co., Ltd.
|
5.24%
|
Sony Group Corp.
|
5.13%
|
Seven & i Holdings Co. Ltd.
|
5.03%
|
Tokio Marine Holdings, Inc.
|
4.49%
|
ORIX Corp.
|
4.16%
|
Keyence Corp.
|
3.82%
|
Tokyo Electron Ltd.
|
3.66%
|
Fast Retailing Co., Ltd.
|
3.50%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 95.50%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 3.00%
|
||||||||||||
Nippon Telegraph & Telephone Corp.
|
227,700
|
$
|
6,948,033
|
3.00
|
%
|
|||||||
Consumer Discretionary – 10.42%
|
||||||||||||
Asics Corp.
|
147,900
|
4,134,002
|
1.79
|
%
|
||||||||
Fast Retailing Co., Ltd.
|
34,200
|
8,098,616
|
3.50
|
%
|
||||||||
Sony Group Corp.
|
131,300
|
11,879,203
|
5.13
|
%
|
||||||||
|
24,111,821
|
10.42
|
%
|
|||||||||
Consumer Staples – 14.71%
|
||||||||||||
Ariake Japan Co., Ltd.
|
54,700
|
2,218,447
|
0.96
|
%
|
||||||||
Rohto Pharmaceutical Co., Ltd.
|
584,500
|
12,126,671
|
5.24
|
%
|
||||||||
Seven & i Holdings Co. Ltd.
|
256,700
|
11,632,990
|
5.03
|
%
|
||||||||
Unicharm Corp.
|
199,500
|
8,053,804
|
3.48
|
%
|
||||||||
|
34,031,912
|
14.71
|
%
|
|||||||||
Financials – 18.08%
|
||||||||||||
Japan Exchange Group, Inc.
|
180,100
|
2,924,424
|
1.27
|
%
|
||||||||
Mitsubishi UFJ Financial Group, Inc.
|
1,246,900
|
7,805,014
|
3.37
|
%
|
||||||||
MS&AD Insurance Group Holdings, Inc. (a)
|
171,600
|
5,632,311
|
2.44
|
%
|
||||||||
ORIX Corp.
|
566,100
|
9,630,790
|
4.16
|
%
|
||||||||
Sompo Holdings, Inc.
|
130,500
|
5,445,713
|
2.35
|
%
|
||||||||
Tokio Marine Holdings, Inc.
|
516,400
|
10,383,272
|
4.49
|
%
|
||||||||
|
41,821,524
|
18.08
|
%
|
|||||||||
Health Care – 9.55%
|
||||||||||||
Hoya Corp.
|
40,900
|
4,288,571
|
1.86
|
%
|
||||||||
Olympus Corp.
|
342,100
|
5,988,945
|
2.59
|
%
|
||||||||
Santen Pharmaceutical Co. Ltd.
|
570,100
|
4,796,610
|
2.07
|
%
|
||||||||
Terumo Corp.
|
234,200
|
7,013,305
|
3.03
|
%
|
||||||||
|
22,087,431
|
9.55
|
%
|
|||||||||
Industrials – 26.39%
|
||||||||||||
Daikin Industries, Ltd.
|
39,200
|
7,119,938
|
3.08
|
%
|
||||||||
Hitachi Ltd.
|
362,600
|
20,057,087
|
8.67
|
%
|
||||||||
MISUMI Group, Inc.
|
243,200
|
6,135,257
|
2.65
|
%
|
||||||||
Mitsubishi Corp.
|
548,500
|
20,336,116
|
8.79
|
%
|
||||||||
Recruit Holdings Co., Ltd.
|
263,800
|
7,400,542
|
3.20
|
%
|
||||||||
|
61,048,940
|
26.39
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Information Technology – 8.35%
|
||||||||||||
Keyence Corp.
|
19,600
|
$
|
8,838,743
|
3.82
|
%
|
|||||||
Renesas Electronics Corp. (a)
|
61,200
|
797,586
|
0.35
|
%
|
||||||||
Rohm Co. Ltd.
|
16,100
|
1,212,140
|
0.52
|
%
|
||||||||
Tokyo Electron Ltd.
|
73,900
|
8,461,957
|
3.66
|
%
|
||||||||
|
19,310,426
|
8.35
|
%
|
|||||||||
Materials – 5.00%
|
||||||||||||
Nissan Chemical Corp.
|
103,000
|
4,577,531
|
1.98
|
%
|
||||||||
Shin-Etsu Chemical Co. Ltd.
|
245,300
|
6,999,837
|
3.02
|
%
|
||||||||
|
11,577,368
|
5.00
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $162,192,779)
|
220,937,455
|
95.50
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS – 3.32%
|
||||||||||||
Money Market Funds – 3.32%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 4.73% (b)
|
7,690,346
|
7,690,346
|
3.32
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $7,690,346)
|
7,690,346
|
3.32
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $169,883,125) – 98.82%
|
228,627,801
|
98.82
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 1.18%
|
2,731,067
|
1.18
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
231,358,868
|
100.00
|
%
|
(a)
|
Non-income-producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
—
|
$
|
6,948,033
|
$
|
—
|
$
|
6,948,033
|
||||||||
Consumer Discretionary
|
—
|
24,111,821
|
—
|
24,111,821
|
||||||||||||
Consumer Staples
|
—
|
34,031,912
|
—
|
34,031,912
|
||||||||||||
Financials
|
—
|
41,821,524
|
—
|
41,821,524
|
||||||||||||
Health Care
|
—
|
22,087,431
|
—
|
22,087,431
|
||||||||||||
Industrials
|
—
|
61,048,940
|
—
|
61,048,940
|
||||||||||||
Information Technology
|
—
|
19,310,426
|
—
|
19,310,426
|
||||||||||||
Materials
|
—
|
11,577,368
|
—
|
11,577,368
|
||||||||||||
Total Common Stocks
|
$
|
—
|
$
|
220,937,455
|
$
|
—
|
$
|
220,937,455
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
7,690,346
|
$
|
—
|
$
|
—
|
$
|
7,690,346
|
||||||||
Total Short-Term Investments
|
$
|
7,690,346
|
$
|
—
|
$
|
—
|
$
|
7,690,346
|
||||||||
Total Investments
|
$
|
7,690,346
|
$
|
220,937,455
|
$
|
—
|
$
|
228,627,801
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2023 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $169,883,125)
|
$
|
228,627,801
|
||
Dividends and interest receivable
|
2,699,467
|
|||
Receivable for fund shares sold
|
426,498
|
|||
Prepaid expenses and other assets
|
27,305
|
|||
Total assets
|
231,781,071
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
110,071
|
|||
Payable to advisor
|
153,218
|
|||
Payable to sub-transfer agents
|
72,551
|
|||
Payable to administrator
|
45,385
|
|||
Payable to auditor
|
11,230
|
|||
Accrued distribution fees
|
6,629
|
|||
Accrued service fees
|
3,679
|
|||
Accrued trustees fees
|
9,552
|
|||
Accrued expenses and other payables
|
9,888
|
|||
Total liabilities
|
422,203
|
|||
NET ASSETS
|
$
|
231,358,868
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
169,369,024
|
||
Total distributable earnings
|
61,989,844
|
|||
Total net assets
|
$
|
231,358,868
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
44,859,701
|
||
Shares issued and outstanding
|
1,302,262
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
34.45
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
186,499,167
|
||
Shares issued and outstanding
|
5,225,793
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
35.69
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2023 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
3,027,654
|
||
Interest income
|
182,334
|
|||
Total investment income
|
3,209,988
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
1,145,284
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
47,647
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
117,202
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
143,199
|
|||
Interest expense (See Note 7)
|
40,554
|
|||
Distribution fees – Investor Class (See Note 5)
|
32,952
|
|||
Federal and state registration fees
|
22,143
|
|||
Service fees – Investor Class (See Note 5)
|
21,968
|
|||
Reports to shareholders
|
16,684
|
|||
Trustees’ fees and expenses
|
11,905
|
|||
Compliance expense (See Note 5)
|
11,844
|
|||
Audit fees
|
11,227
|
|||
Legal fees
|
4,572
|
|||
Other expenses
|
32,352
|
|||
Total expenses
|
1,659,533
|
|||
NET INVESTMENT INCOME
|
$
|
1,550,455
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
33,960,370
|
||
Net change in unrealized appreciation/depreciation on investments
|
15,240,519
|
|||
Net gain on investments
|
49,200,889
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
50,751,344
|
(1)
|
Net of foreign taxes withheld of $336,554.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2023
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
1,550,455
|
$
|
4,811
|
||||
Net realized gain (loss) on investments
|
33,960,370
|
(12,342,481
|
)
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
15,240,519
|
(265,779,808
|
)
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
50,751,344
|
(278,117,478
|
)
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
—
|
(747,296
|
)
|
|||||
Distributable earnings – Institutional Class
|
—
|
(11,015,401
|
)
|
|||||
Total distributions
|
—
|
(11,762,697
|
)
|
|||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
6,887,525
|
15,554,341
|
||||||
Proceeds from shares subscribed – Institutional Class
|
38,422,806
|
190,629,014
|
||||||
Dividends reinvested – Investor Class
|
—
|
703,285
|
||||||
Dividends reinvested – Institutional Class
|
—
|
10,598,719
|
||||||
Cost of shares redeemed – Investor Class
|
(8,370,680
|
)
|
(30,693,545
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(171,121,488
|
)
|
(395,706,790
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(134,181,837
|
)
|
(208,914,976
|
)
|
||||
TOTAL DECREASE IN NET ASSETS
|
(83,430,493
|
)
|
(498,795,151
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of period
|
314,789,361
|
813,584,512
|
||||||
End of period
|
$
|
231,358,868
|
$
|
314,789,361
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
211,937
|
403,264
|
||||||
Shares sold – Institutional Class
|
1,135,683
|
4,980,990
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
—
|
15,157
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
—
|
221,545
|
||||||
Shares redeemed – Investor Class
|
(253,613
|
)
|
(876,884
|
)
|
||||
Shares redeemed – Institutional Class
|
(4,954,031
|
)
|
(10,842,081
|
)
|
||||
Net decrease in shares outstanding
|
(3,860,024
|
)
|
(6,098,009
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
29.43
|
||
Income from investment operations:
|
||||
Net investment income (loss)
|
0.19
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
4.83
|
|||
Total from investment operations
|
5.02
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
—
|
|||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
—
|
|||
Net asset value, end of period
|
$
|
34.45
|
||
TOTAL RETURN
|
17.06
|
%(3)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
44.86
|
||
Ratio of expenses to average net assets
|
1.48
|
%(4)
|
||
Ratio of net investment income (loss) to average net assets
|
1.19
|
%(4)
|
||
Portfolio turnover rate(5)
|
25
|
%(3)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Not annualized.
|
(4)
|
Annualized.
|
(5)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
30.43
|
||
Income from investment operations:
|
||||
Net investment income (loss)
|
0.18
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
5.08
|
|||
Total from investment operations
|
5.26
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
—
|
|||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
—
|
|||
Net asset value, end of period
|
$
|
35.69
|
||
TOTAL RETURN
|
17.29
|
%(3)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
186.50
|
||
Ratio of expenses to average net assets
|
1.10
|
%(4)
|
||
Ratio of net investment income (loss) to average net assets
|
1.06
|
%(4)
|
||
Portfolio turnover rate(5)
|
25
|
%(3)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Not annualized.
|
(4)
|
Annualized.
|
(5)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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 April 30, 2023 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with
the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and
realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the
treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized
gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and
profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of
the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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).
|
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
|
HENNESSY FUNDS
|
1-800-966-4354
|
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 (the “SEC”) adopted new regulations under the 1940 Act 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, generally eliminates the asset segregation framework 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
does not utilize derivatives and therefore has not adopted a derivatives risk management program.
|
In December 2020, the SEC adopted a new rule under the 1940 Act 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. The Fund has designated Hennessy Advisors, Inc., the Fund’s investment advisor (the “Advisor”), as its valuation designee under 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
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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
|
$
|
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
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
—
|
$
|
11,762,697
|
|||||
Long-term capital gains
|
—
|
—
|
|||||||
Total distributions
|
$
|
—
|
$
|
11,762,697
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
November 1, 2022 –
|
|
November 1, 2022
|
April 30, 2023
|
April 30, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,170.60
|
$16.06
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,035.20
|
$15.06
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,172.90
|
$11.95
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,039.00
|
$11.21
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.48% for Investor Class shares or 1.10% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 181/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — ELECTRONIC DELIVERY
|
![]() |
![]() |
![]() |
![]() |
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory and sub-advisory agreements and the relevant factors
for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory and sub-advisory agreements and also referenced the documents that had been
provided to help the Board assess each such factor;
|
|
(3)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
|
|
(4)
|
Summaries of the advisory and sub-advisory agreements;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the Sub-Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund;
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale;
|
|
(9)
|
A completed questionnaire from the Sub-Advisor;
|
|
(10)
|
A summary of the Sub-Advisor’s responses to the questionnaire, as well as relevant information from the Sub-Advisor’s Form ADVs Parts 1 and 2 and the certifications submitted by the Sub-Advisor each
quarter;
|
|
(11)
|
Financial information of the Sub-Advisor and its parent company; and
|
|
(12)
|
The Sub-Advisor’s Code of Ethics.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(1)
|
The nature and quality of the advisory services provided by the Advisor and the Sub-Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor and the Sub-Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor and the Sub-Advisor from serving as an investment advisor to the Fund (other than the advisory and sub-advisory fees).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor
provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services
provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and
regulations.
|
(a)
|
The Advisor oversees the Sub-Advisor for the Fund, and the Sub-Advisor acts as the portfolio manager for the Fund by providing portfolio management services.
|
||
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Sub-Advisor and the Fund’s other service providers (including their
codes of ethics, as appropriate), conducts on-site visits to the Sub-Advisor and the Fund’s other service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and
fixed expense ratios, evaluates insurance providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance
training, reviews reports provided by service providers, and maintains books and records.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(f)
|
The Advisor oversees the selection and continued employment of the Sub-Advisor, reviews the Fund’s investment performance, and monitors the Sub-Advisor’s adherence to the Fund’s investment objectives,
policies, and restrictions.
|
||
(g)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal
services to the Fund.
|
||
(h)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(i)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(j)
|
For each annual report of the Fund, the Advisor reviews the written summary prepared by the Sub-Advisor of the Fund’s performance during the most recent 12-month period.
|
||
(k)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor
participates in “no transaction fee” (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor
compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(l)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading
oversight personnel, as well as management executives.
|
||
(m)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(n)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees considered the services identified below that are provided by the Sub-Advisor. Based on this review and an assessment of the Sub-Advisor’s performance, the Trustees concluded that the
Sub-Advisor provides high-quality services to the Fund. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the Fund by the Sub-Advisor and that the
nature and extent of the services provided by the Sub-Advisor were appropriate to assure that the Fund’s portfolio aligns properly with its investment objective and principal investment strategies.
|
(a)
|
The Sub-Advisor acts as the portfolio manager for the Fund. In this capacity, the Sub-Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and
restrictions;
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(ii)
|
seeks best execution for the Fund’s portfolio; and
|
|||
(iii)
|
manages proxy voting for the Fund.
|
(b)
|
The Sub-Advisor ensures that its compliance program includes policies and procedures relevant to the Fund and the Sub-Advisor’s duties as a portfolio manager to the Fund.
|
||
(c)
|
For each annual report of the Fund, the Sub-Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(d)
|
The Sub-Advisor provides a quarterly compliance certification to the Board regarding trading and allocation practices, supervisory matters, the Sub-Advisor’s compliance program (including its code of
ethics), compliance with the Fund’s policies, and general firm updates.
|
(3)
|
Trustees considered the distinction between the services performed by the Advisor and the Sub-Advisor. The Trustees noted that the management of the Fund, including the oversight of the Sub-Advisor,
involves more comprehensive and substantive duties than the duties of the Sub-Advisor. Specifically, the Trustees considered the lists of Advisor services previously identified and concluded that the services performed by the
Advisor for the Fund require a higher level of service and oversight than the services performed by the Sub-Advisor. Based on this determination, the Trustees concluded that the differential in advisory fees between the Advisor
and the Sub-Advisor is reasonable.
|
|
(4)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to
various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor and the Sub-Advisor manage the Fund in a manner materially consistent with its stated investment objective and
style. The Trustees concluded that the performance of the Fund over various periods warranted the continuation of the advisory and sub-advisory agreements.
|
|
(5)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of
the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials considered
at the meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that
they are reasonable and warranted continuation of the advisory and sub-advisory agreements.
|
|
(6)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the
Fund were variable asset-based fees, so the Advisor would not realize material economies of scale relating to these expenses as the assets of the Fund increased. For example, third-party platform fees and sub-advisory fees
increase as the Fund’s assets grow.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(7)
|
The Trustees considered the profitability of the Advisor and the Sub-Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and
revenues that the Advisor has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor and the Sub-Advisor are reasonable and not excessive when compared to profitability
guidelines set forth in relevant court cases.
|
|
(8)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(9)
|
The Trustees considered any benefits to the Advisor and the Sub-Advisor from serving as an advisor to the Fund (other than the advisory and sub-advisory fees). The Trustees noted that the Advisor and
the Sub-Advisor may derive ancillary benefits from, by way of example, their association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio
trades for the Fund. The Trustees determined that any such products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees
concluded that any additional benefits realized by the Advisor and the Sub-Advisor from their relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ findings that (i) the research,
analytical, statistical, and other information and services provided by brokers are merely supplemental to the Advisor’s and the Sub-Advisor’s own efforts in the performance of their duties under the advisory and sub-advisory
agreements and (ii) although the Sub-Advisor could derive benefits from the conversion of Fund shareholders into separate account clients, the Fund also could benefit from potential institutional shareholders who might choose to
invest in the Fund.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
10
|
|
Statement of Operations
|
11
|
|
Statements of Changes in Net Assets
|
13
|
|
Financial Highlights
|
14
|
|
Notes to the Financial Statements
|
18
|
|
Expense Example
|
26
|
|
Proxy Voting Policy and Proxy Voting Records
|
28
|
|
Availability of Quarterly Portfolio Schedule
|
28
|
|
Federal Tax Distribution Information
|
28
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
28
|
|
Electronic Delivery
|
29
|
|
Board Approval of Investment Advisory Agreements
|
30
|
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
|
Six
|
One
|
Five
|
Ten
|
|
Months(1)
|
Year
|
Years
|
Years
|
|
Hennessy Japan Small Cap Fund –
|
||||
Investor Class (HJPSX)
|
17.37%
|
10.61%
|
-0.25%
|
7.93%
|
Hennessy Japan Small Cap Fund –
|
||||
Institutional Class (HJSIX)(2)
|
17.50%
|
11.08%
|
0.14%
|
8.24%
|
Russell/Nomura Small Cap™ Index
|
17.25%
|
10.05%
|
-2.08%
|
4.65%
|
Tokyo Stock Price Index (TOPIX)
|
18.08%
|
7.13%
|
0.99%
|
4.67%
|
(1)
|
Periods of less than one year are not annualized.
|
(2)
|
The inception date of Institutional Class shares is June 15, 2015. Performance shown prior to the inception of Institutional Class shares reflects the performance of Investor Class shares and
includes expenses that are not applicable to, and are higher than, those of Institutional Class shares.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2023 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Nippon Koei Co., Ltd.
|
2.31%
|
Iwatani Corp.
|
2.21%
|
Musashi Seimitsu Industry Co., Ltd.
|
2.19%
|
Nihon Kohden Corp.
|
2.15%
|
Kyoei Steel Ltd.
|
2.07%
|
Aeon Fantasy Co., Ltd.
|
2.02%
|
SBS Holdings, Inc.
|
2.01%
|
Nojima Corp.
|
2.00%
|
Takasago Thermal Engineering Co., Ltd.
|
1.99%
|
J Front Retailing Co., Ltd.
|
1.98%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 94.20%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 4.16%
|
||||||||||||
Imagica Group, Inc.
|
229,600
|
$
|
1,027,531
|
0.98
|
%
|
|||||||
Kufu Co., Inc. (a)
|
235,500
|
835,417
|
0.80
|
%
|
||||||||
Macromill, Inc.
|
200,000
|
1,331,629
|
1.28
|
%
|
||||||||
ValueCommerce Co., Ltd.
|
118,600
|
1,148,804
|
1.10
|
%
|
||||||||
|
4,343,381
|
4.16
|
%
|
|||||||||
Consumer Discretionary – 14.56%
|
||||||||||||
Aeon Fantasy Co., Ltd.
|
87,900
|
2,115,154
|
2.02
|
%
|
||||||||
Benesse Holdings, Inc.
|
106,100
|
1,522,814
|
1.46
|
%
|
||||||||
J Front Retailing Co., Ltd.
|
196,800
|
2,069,796
|
1.98
|
%
|
||||||||
Matsuoka Corp.
|
127,500
|
1,348,340
|
1.29
|
%
|
||||||||
Musashi Seimitsu Industry Co., Ltd.
|
169,900
|
2,290,147
|
2.19
|
%
|
||||||||
Nojima Corp.
|
194,400
|
2,085,444
|
2.00
|
%
|
||||||||
Onward Holdings Co., Ltd.
|
187,500
|
518,837
|
0.50
|
%
|
||||||||
Sac’s Bar Holdings, Inc.
|
197,400
|
1,277,709
|
1.22
|
%
|
||||||||
Saizeriya Co., Ltd.
|
78,900
|
1,983,749
|
1.90
|
%
|
||||||||
|
15,211,990
|
14.56
|
%
|
|||||||||
Consumer Staples – 2.07%
|
||||||||||||
Ariake Japan Co., Ltd.
|
10,700
|
433,956
|
0.41
|
%
|
||||||||
Nishimoto Co., Ltd.
|
60,700
|
1,729,149
|
1.66
|
%
|
||||||||
|
2,163,105
|
2.07
|
%
|
|||||||||
Energy – 2.21%
|
||||||||||||
Iwatani Corp.
|
48,700
|
2,305,594
|
2.21
|
%
|
||||||||
Financials – 4.15%
|
||||||||||||
Lifenet Insurance Co. (a)
|
149,200
|
1,300,354
|
1.25
|
%
|
||||||||
Musashino Bank, Ltd.
|
125,600
|
2,039,183
|
1.95
|
%
|
||||||||
Zenkoku Hosho Co., Ltd.
|
27,000
|
992,362
|
0.95
|
%
|
||||||||
|
4,331,899
|
4.15
|
%
|
|||||||||
Health Care – 5.22%
|
||||||||||||
Nihon Kohden Corp.
|
81,300
|
2,249,457
|
2.15
|
%
|
||||||||
PeptiDream, Inc. (a)
|
91,900
|
1,241,658
|
1.19
|
%
|
||||||||
Ship Healthcare Holdings, Inc.
|
111,100
|
1,959,785
|
1.88
|
%
|
||||||||
|
5,450,900
|
5.22
|
%
|
|||||||||
Industrials – 36.95%
|
||||||||||||
Amada Co., Ltd.
|
209,600
|
1,957,035
|
1.87
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Industrials (Continued)
|
||||||||||||
Benefit One, Inc.
|
110,200
|
$
|
1,516,825
|
1.45
|
%
|
|||||||
Creek & River Co., Ltd.
|
106,200
|
1,661,820
|
1.59
|
%
|
||||||||
Daihen Corp.
|
53,500
|
1,761,826
|
1.69
|
%
|
||||||||
Glory Ltd.
|
94,000
|
1,998,573
|
1.91
|
%
|
||||||||
Hanwa Co., Ltd.
|
50,300
|
1,557,544
|
1.49
|
%
|
||||||||
Kawada Technologies, Inc.
|
40,600
|
1,217,960
|
1.17
|
%
|
||||||||
Keihan Holdings Co., Ltd.
|
57,000
|
1,569,000
|
1.50
|
%
|
||||||||
Mitsubishi Logisnext Co., Ltd.
|
219,400
|
1,597,805
|
1.53
|
%
|
||||||||
Nichiha Corp.
|
58,400
|
1,233,907
|
1.18
|
%
|
||||||||
Nippon Koei Co., Ltd.
|
86,400
|
2,408,866
|
2.31
|
%
|
||||||||
Nissei ASB Machine Co., Ltd.
|
54,700
|
1,715,645
|
1.64
|
%
|
||||||||
Nittoku Co., Ltd.
|
72,900
|
1,403,157
|
1.34
|
%
|
||||||||
Penta-Ocean Construction Co., Ltd.
|
220,000
|
1,069,569
|
1.02
|
%
|
||||||||
Sato Holdings Corp.
|
80,800
|
1,367,315
|
1.31
|
%
|
||||||||
SBS Holdings, Inc.
|
86,000
|
2,095,660
|
2.01
|
%
|
||||||||
Tadano Ltd.
|
237,300
|
1,857,469
|
1.78
|
%
|
||||||||
Takasago Thermal Engineering Co., Ltd.
|
124,000
|
2,082,121
|
1.99
|
%
|
||||||||
Tanseisha Co., Ltd.
|
278,200
|
1,652,263
|
1.58
|
%
|
||||||||
Tocalo Co., Ltd.
|
55,000
|
516,516
|
0.50
|
%
|
||||||||
Transcosmos, Inc.
|
59,400
|
1,385,943
|
1.33
|
%
|
||||||||
TRE Holdings Corp.
|
151,900
|
1,330,897
|
1.28
|
%
|
||||||||
Tsubakimoto Chain Co.
|
73,400
|
1,818,024
|
1.74
|
%
|
||||||||
Tsukishima Holdings Co., Ltd.
|
224,000
|
1,817,304
|
1.74
|
%
|
||||||||
|
38,593,044
|
36.95
|
%
|
|||||||||
Information Technology – 14.18%
|
||||||||||||
Macnica Holdings, Inc.
|
37,800
|
1,038,755
|
1.00
|
%
|
||||||||
Maxell Ltd.
|
181,400
|
1,997,871
|
1.91
|
%
|
||||||||
Mimaki Engineering Co., Ltd.
|
285,200
|
1,417,024
|
1.36
|
%
|
||||||||
Money Forward, Inc. (a)
|
24,400
|
1,016,122
|
0.97
|
%
|
||||||||
NEC Networks & System Integration Corp.
|
137,900
|
1,718,996
|
1.65
|
%
|
||||||||
Nippon Signal Company, Ltd.
|
237,100
|
1,936,220
|
1.85
|
%
|
||||||||
SIIX Corp.
|
180,000
|
1,807,167
|
1.73
|
%
|
||||||||
Towa Corp.
|
122,800
|
1,847,952
|
1.77
|
%
|
||||||||
WingArc1st, Inc.
|
61,700
|
1,007,137
|
0.96
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Information Technology (Continued)
|
||||||||||||
Yamaichi Electronics Co., Ltd.
|
76,900
|
$
|
1,020,920
|
0.98
|
%
|
|||||||
|
14,808,164
|
14.18
|
%
|
|||||||||
Materials – 7.23%
|
||||||||||||
Asia Pile Holdings Corp.
|
366,200
|
1,992,135
|
1.91
|
%
|
||||||||
Kyoei Steel Ltd.
|
160,200
|
2,166,016
|
2.07
|
%
|
||||||||
Maeda Kosen Co., Ltd.
|
66,000
|
1,579,253
|
1.51
|
%
|
||||||||
Tokyo Ohka Kogyo Co., Ltd.
|
34,800
|
1,816,672
|
1.74
|
%
|
||||||||
|
7,554,076
|
7.23
|
%
|
|||||||||
Real Estate – 2.37%
|
||||||||||||
Star Mica Holdings Co., Ltd.
|
165,400
|
783,327
|
0.75
|
%
|
||||||||
Tosei Corp.
|
141,900
|
1,688,632
|
1.62
|
%
|
||||||||
|
2,471,959
|
2.37
|
%
|
|||||||||
Utilities – 1.10%
|
||||||||||||
EF-ON, Inc.
|
244,900
|
1,151,829
|
1.10
|
%
|
||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $95,879,748)
|
98,385,941
|
94.20
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS – 4.49%
|
||||||||||||
Money Market Funds – 4.49%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 4.73% (b)
|
4,686,598
|
4,686,598
|
4.49
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $4,686,598)
|
4,686,598
|
4.49
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $100,566,346) – 98.69%
|
103,072,539
|
98.69
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 1.31%
|
1,363,226
|
1.31
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
104,435,765
|
100.00
|
%
|
(a)
|
Non-income-producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of April 30, 2023.
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
—
|
$
|
4,343,381
|
$
|
—
|
$
|
4,343,381
|
||||||||
Consumer Discretionary
|
—
|
15,211,990
|
—
|
15,211,990
|
||||||||||||
Consumer Staples
|
—
|
2,163,105
|
—
|
2,163,105
|
||||||||||||
Energy
|
—
|
2,305,594
|
—
|
2,305,594
|
||||||||||||
Financials
|
—
|
4,331,899
|
—
|
4,331,899
|
||||||||||||
Health Care
|
—
|
5,450,900
|
—
|
5,450,900
|
||||||||||||
Industrials
|
—
|
38,593,044
|
—
|
38,593,044
|
||||||||||||
Information Technology
|
—
|
14,808,164
|
—
|
14,808,164
|
||||||||||||
Materials
|
—
|
7,554,076
|
—
|
7,554,076
|
||||||||||||
Real Estate
|
—
|
2,471,959
|
—
|
2,471,959
|
||||||||||||
Utilities
|
—
|
1,151,829
|
—
|
1,151,829
|
||||||||||||
Total Common Stocks
|
$
|
—
|
$
|
98,385,941
|
$
|
—
|
$
|
98,385,941
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
4,686,598
|
$
|
—
|
$
|
—
|
$
|
4,686,598
|
||||||||
Total Short-Term Investments
|
$
|
4,686,598
|
$
|
—
|
$
|
—
|
$
|
4,686,598
|
||||||||
Total Investments
|
$
|
4,686,598
|
$
|
98,385,941
|
$
|
—
|
$
|
103,072,539
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Assets and Liabilities as of April 30, 2023 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $100,566,346)
|
$
|
103,072,539
|
||
Dividends and interest receivable
|
1,243,360
|
|||
Receivable for fund shares sold
|
17,740
|
|||
Receivable for securities sold
|
500,503
|
|||
Prepaid expenses and other assets
|
18,723
|
|||
Total assets
|
104,852,865
|
|||
LIABILITIES:
|
||||
Payable for securities purchased
|
277,666
|
|||
Payable for fund shares redeemed
|
10,867
|
|||
Payable to advisor
|
69,390
|
|||
Payable to administrator
|
18,328
|
|||
Payable to auditor
|
11,226
|
|||
Accrued distribution fees
|
5,106
|
|||
Accrued service fees
|
2,804
|
|||
Accrued trustees fees
|
4,935
|
|||
Accrued expenses and other payables
|
16,778
|
|||
Total liabilities
|
417,100
|
|||
NET ASSETS
|
$
|
104,435,765
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
103,438,884
|
||
Total distributable earnings
|
996,881
|
|||
Total net assets
|
$
|
104,435,765
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
34,503,882
|
||
Shares issued and outstanding
|
2,257,728
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
15.28
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
69,931,883
|
||
Shares issued and outstanding
|
4,642,309
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
15.06
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS
|
Statement of Operations for the six months ended April 30, 2023 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
1,355,582
|
||
Interest income
|
125,087
|
|||
Total investment income
|
1,480,669
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
386,670
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
36,751
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
25,944
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
50,536
|
|||
Distribution fees – Investor Class (See Note 5)
|
24,856
|
|||
Federal and state registration fees
|
20,446
|
|||
Service fees – Investor Class (See Note 5)
|
16,570
|
|||
Compliance expense (See Note 5)
|
11,844
|
|||
Audit fees
|
11,227
|
|||
Trustees’ fees and expenses
|
9,760
|
|||
Reports to shareholders
|
7,145
|
|||
Legal fees
|
840
|
|||
Other expenses
|
8,456
|
|||
Total expenses
|
611,045
|
|||
NET INVESTMENT INCOME
|
$
|
869,624
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized loss on investments
|
$
|
(243,743
|
)
|
|
Net change in unrealized appreciation/depreciation on investments
|
13,852,795
|
|||
Net gain on investments
|
13,609,052
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
14,478,676
|
(1)
|
Net of foreign taxes withheld of $150,786.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2023
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
869,624
|
$
|
949,649
|
||||
Net realized loss on investments
|
(243,743
|
)
|
(2,110,306
|
)
|
||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
13,852,795
|
(29,078,282
|
)
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
14,478,676
|
(30,238,939
|
)
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(198,569
|
)
|
(186,236
|
)
|
||||
Distributable earnings – Institutional Class
|
(658,423
|
)
|
(589,255
|
)
|
||||
Total distributions
|
(856,992
|
)
|
(775,491
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
2,546,073
|
6,437,217
|
||||||
Proceeds from shares subscribed – Institutional Class
|
27,767,152
|
38,467,373
|
||||||
Dividends reinvested – Investor Class
|
191,702
|
180,038
|
||||||
Dividends reinvested – Institutional Class
|
641,326
|
571,970
|
||||||
Cost of shares redeemed – Investor Class
|
(4,508,813
|
)
|
(8,822,706
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(14,703,478
|
)
|
(39,666,483
|
)
|
||||
Net increase (decrease) in net assets
|
||||||||
derived from capital share transactions
|
11,933,962
|
(2,832,591
|
)
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
25,555,646
|
(33,847,021
|
)
|
|||||
NET ASSETS:
|
||||||||
Beginning of period
|
78,880,119
|
112,727,140
|
||||||
End of period
|
$
|
104,435,765
|
$
|
78,880,119
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
172,406
|
424,356
|
||||||
Shares sold – Institutional Class
|
1,933,520
|
2,624,209
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
13,791
|
10,154
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
46,881
|
33,206
|
||||||
Shares redeemed – Investor Class
|
(311,424
|
)
|
(598,751
|
)
|
||||
Shares redeemed – Institutional Class
|
(1,013,101
|
)
|
(2,693,301
|
)
|
||||
Net increase (decrease) in shares outstanding
|
842,073
|
(200,127
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
13.10
|
||
Income from investment operations:
|
||||
Net investment income
|
0.10
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
2.16
|
|||
Total from investment operations
|
2.26
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.08
|
)
|
||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
(0.08
|
)
|
||
Net asset value, end of period
|
$
|
15.28
|
||
TOTAL RETURN
|
17.37
|
%(3)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
34.50
|
||
Ratio of expenses to average net assets
|
1.52
|
%(4)
|
||
Ratio of net investment income to average net assets
|
1.42
|
%(4)
|
||
Portfolio turnover rate(5)
|
19
|
%(3)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Not annualized.
|
(4)
|
Annualized.
|
(5)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
12.97
|
||
Income from investment operations:
|
||||
Net investment income
|
0.14
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
2.11
|
|||
Total from investment operations
|
2.25
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.16
|
)
|
||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
(0.16
|
)
|
||
Net asset value, end of period
|
$
|
15.06
|
||
TOTAL RETURN
|
17.50
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
69.93
|
||
Ratio of expenses to average net assets
|
1.13
|
%(3)
|
||
Ratio of net investment income to average net assets
|
2.00
|
%(3)
|
||
Portfolio turnover rate(4)
|
19
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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 April 30, 2023 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply
with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment
income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily
the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions
from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and
designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of
the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as
investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original
cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Foreign Currency – Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market exchange rate at the time of valuation. Purchases and sales of
investments and income are translated into U.S. dollars using the spot market exchange rate prevailing on the respective dates of such transactions. The Fund does not isolate the portion of the results of operations resulting
from fluctuations in foreign exchange rates on investments from fluctuations resulting from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain/loss on
investments. Foreign investments present additional risks due to currency fluctuations, economic and political factors, lower liquidity, government regulations, differences in accounting standards, and other factors.
|
j.)
|
REIT Equity Securities – Distributions received from real estate investment trusts (“REITs”) may be classified as dividends, capital gains, or return of capital. Investments in REITs may require the
Fund to accrue and distribute income not yet received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do
so) that it otherwise would have continued to hold. At other
|
HENNESSY FUNDS
|
1-800-966-4354
|
times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings. If the Fund distributes these amounts, these distributions could constitute a return of capital
to Fund shareholders for U.S. federal income tax purposes. Dividends received by the Fund from a REIT generally do not constitute qualified dividend income and do not qualify for the dividends-received deduction.
|
|
k).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market
conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
l).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (the “SEC”) adopted new regulations under the 1940 Act 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, generally eliminates the asset segregation framework 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 does not utilize derivatives and therefore has not adopted a derivatives risk management program.
|
In December 2020, the SEC adopted a new rule under the 1940 Act 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. The Fund has designated Hennessy Advisors, Inc., the Fund’s investment advisor (the “Advisor”), as its valuation designee under 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, 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
|
$
|
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
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
856,992
|
$
|
327,698
|
|||||
Long-term capital gains
|
—
|
447,793
|
|||||||
Total distributions
|
$
|
856,992
|
$
|
775,491
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
November 1, 2022 –
|
|
November 1, 2022
|
April 30, 2023
|
April 30, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,173.70
|
$16.52
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,034.80
|
$15.46
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,175.00
|
$12.29
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,038.70
|
$11.52
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.52% for Investor Class shares or 1.13% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 181/365 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 — ELECTRONIC DELIVERY
|
![]() |
![]() |
![]() |
![]() |
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory and sub-advisory agreements and the relevant
factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory and sub-advisory agreements and also referenced the documents that had been
provided to help the Board assess each such factor;
|
|
(3)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
|
|
(4)
|
Summaries of the advisory and sub-advisory agreements;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the Sub-Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund;
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale;
|
|
(9)
|
A completed questionnaire from the Sub-Advisor;
|
|
(10)
|
A summary of the Sub-Advisor’s responses to the questionnaire, as well as relevant information from the Sub-Advisor’s Form ADVs Parts 1 and 2 and the certifications submitted by the Sub-Advisor each
quarter;
|
|
(11)
|
Financial information of the Sub-Advisor and its parent company; and
|
|
(12)
|
The Sub-Advisor’s Code of Ethics.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(1)
|
The nature and quality of the advisory services provided by the Advisor and the Sub-Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
|
(4)
|
The costs and profitability of the Fund to the Advisor and the Sub-Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor and the Sub-Advisor from serving as an investment advisor to the Fund (other than the advisory and sub-advisory fees).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor
provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory
services provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules,
and regulations.
|
(a)
|
The Advisor oversees the Sub-Advisor for the Fund, and the Sub-Advisor acts as the portfolio manager for the Fund by providing portfolio management services.
|
||
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Sub-Advisor and the Fund’s other service providers (including their
codes of ethics, as appropriate), conducts on-site visits to the Sub-Advisor and the Fund’s other service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and
fixed expense ratios, evaluates insurance providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance
training, reviews reports provided by service providers, and maintains books and records.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(f)
|
The Advisor oversees the selection and continued employment of the Sub-Advisor, reviews the Fund’s investment performance, and monitors the Sub-Advisor’s adherence to the Fund’s investment
objectives, policies, and restrictions.
|
||
(g)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal
services to the Fund.
|
||
(h)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
||
(i)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(j)
|
For each annual report of the Fund, the Advisor reviews the written summary prepared by the Sub-Advisor of the Fund’s performance during the most recent 12-month period.
|
||
(k)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The
Advisor participates in “no transaction fee” (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee.
The Advisor compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(l)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading
oversight personnel, as well as management executives.
|
||
(m)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(n)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees considered the services identified below that are provided by the Sub-Advisor. Based on this review and an assessment of the Sub-Advisor’s performance, the Trustees concluded that the
Sub-Advisor provides high-quality services to the Fund. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services provided to the Fund by the Sub-Advisor and that the
nature and extent of the services provided by the Sub-Advisor were appropriate to assure that the Fund’s portfolio aligns properly with its investment objective and principal investment strategies.
|
(a)
|
The Sub-Advisor acts as the portfolio manager for the Fund. In this capacity, the Sub-Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and
restrictions;
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
(ii)
|
seeks best execution for the Fund’s portfolio; and
|
|||
(iii)
|
manages proxy voting for the Fund.
|
(b)
|
The Sub-Advisor ensures that its compliance program includes policies and procedures relevant to the Fund and the Sub-Advisor’s duties as a portfolio manager to the Fund.
|
||
(c)
|
For each annual report of the Fund, the Sub-Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(d)
|
The Sub-Advisor provides a quarterly compliance certification to the Board regarding trading and allocation practices, supervisory matters, the Sub-Advisor’s compliance program (including its code of
ethics), compliance with the Fund’s policies, and general firm updates.
|
(3)
|
Trustees considered the distinction between the services performed by the Advisor and the Sub-Advisor. The Trustees noted that the management of the Fund, including the oversight of the Sub-Advisor,
involves more comprehensive and substantive duties than the duties of the Sub-Advisor. Specifically, the Trustees considered the lists of Advisor services previously identified and concluded that the services performed by the
Advisor for the Fund require a higher level of service and oversight than the services performed by the Sub-Advisor. Based on this determination, the Trustees concluded that the differential in advisory fees between the
Advisor and the Sub-Advisor is reasonable.
|
|
(4)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to
various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor and the Sub-Advisor manage the Fund in a manner materially consistent with its stated investment objective
and style. The Trustees concluded that the performance of the Fund over various periods warranted the continuation of the advisory and sub-advisory agreements.
|
|
(5)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part
of the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials
considered at the meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and
concluded that they are reasonable and warranted continuation of the advisory and sub-advisory agreements.
|
|
(6)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage
the Fund were variable asset-based fees, so the Advisor would not realize material economies of scale relating to these expenses as the assets of the Fund increased. For example, third-party platform fees and sub-advisory fees
increase as the Fund’s assets grow.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(7)
|
The Trustees considered the profitability of the Advisor and the Sub-Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and
revenues that the Advisor has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor and the Sub-Advisor are reasonable and not excessive when compared to profitability
guidelines set forth in relevant court cases.
|
|
(8)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(9)
|
The Trustees considered any benefits to the Advisor and the Sub-Advisor from serving as an advisor to the Fund (other than the advisory and sub-advisory fees). The Trustees noted that the Advisor and
the Sub-Advisor may derive ancillary benefits from, by way of example, their association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute
portfolio trades for the Fund. The Trustees determined that any such products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The
Trustees concluded that any additional benefits realized by the Advisor and the Sub-Advisor from their relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ findings that (i) the
research, analytical, statistical, and other information and services provided by brokers are merely supplemental to the Advisor’s and the Sub-Advisor’s own efforts in the performance of their duties under the advisory and
sub-advisory agreements and (ii) although the Sub-Advisor could derive benefits from the conversion of Fund shareholders into separate account clients, the Fund also could benefit from potential institutional shareholders who
might choose to invest in the Fund.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
8
|
|
Statement of Operations
|
9
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Electronic Delivery
|
26
|
|
Board Approval of Investment Advisory Agreement
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
1
|
S&P 500® Index monthly total returns: +5.59% in November 2022, -5.76% in December 2022, +6.28% in January 2023,
-2.44% in February 2023, +3.67% in March 2023, and +1.56% in April 2023.
|
2
|
S&P 500® Financial Sector monthly total return: -9.55% in March 2023. KBW Bank Index monthly total return:
-24.87% in March 2023. S&P 500® Information Technology sector total return: +18.88% for the six months ended April 30, 2023. S&P 500® Communication Services sector total return: +23.15% for the six months ended April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
|
Months(1)
|
Year
|
Years
|
Years
|
|
Hennessy Large Cap Financial Fund –
|
||||
Investor Class (HLFNX)
|
-15.46%
|
-17.36%
|
0.43%
|
6.13%
|
Hennessy Large Cap Financial Fund –
|
||||
Institutional Class (HILFX)(2)
|
-15.33%
|
-17.08%
|
0.79%
|
6.44%
|
Russell 1000® Index Financials
|
-1.77%
|
-1.46%
|
9.20%
|
11.50%
|
Russell 1000® Index
|
8.01%
|
1.82%
|
11.07%
|
11.95%
|
(1)
|
Periods of less than one year are not annualized.
|
(2)
|
The inception date of Institutional Class shares is June 15, 2015. Performance shown prior to the inception of Institutional Class shares reflects the performance of Investor Class shares and
includes expenses that are not applicable to, and are higher than, those of Institutional Class shares.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2023 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Citizens Financial Group, Inc.
|
4.96%
|
Bank of America Corp.
|
4.87%
|
JPMorgan Chase & Co.
|
4.84%
|
Berkshire Hathaway, Inc., Class B
|
4.79%
|
M&T Bank Corp.
|
4.77%
|
Mastercard, Inc., Class A
|
4.76%
|
Visa, Inc., Class A
|
4.75%
|
Wells Fargo & Co.
|
4.75%
|
Morgan Stanley
|
4.72%
|
Webster Financial Corp.
|
4.57%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 87.42%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Financials – 87.42%
|
||||||||||||
Bank of America Corp.
|
57,000
|
$
|
1,668,960
|
4.87
|
%
|
|||||||
Berkshire Hathaway, Inc., Class B (a)
|
5,000
|
1,642,750
|
4.79
|
%
|
||||||||
Capital One Financial Corp.
|
7,000
|
681,100
|
1.99
|
%
|
||||||||
Citigroup, Inc.
|
28,000
|
1,317,960
|
3.84
|
%
|
||||||||
Citizens Financial Group, Inc.
|
55,000
|
1,701,700
|
4.96
|
%
|
||||||||
Comerica, Inc.
|
32,000
|
1,387,840
|
4.05
|
%
|
||||||||
Fidelity National Information Services, Inc.
|
26,000
|
1,526,720
|
4.45
|
%
|
||||||||
Fifth Third Bancorp
|
55,000
|
1,441,000
|
4.20
|
%
|
||||||||
Fiserv, Inc. (a)
|
10,000
|
1,221,200
|
3.56
|
%
|
||||||||
Huntington Bancshares, Inc.
|
30,000
|
336,000
|
0.98
|
%
|
||||||||
JPMorgan Chase & Co.
|
12,000
|
1,658,880
|
4.84
|
%
|
||||||||
KeyCorp
|
100,000
|
1,126,000
|
3.28
|
%
|
||||||||
M&T Bank Corp.
|
13,000
|
1,635,400
|
4.77
|
%
|
||||||||
Mastercard, Inc., Class A
|
4,300
|
1,634,129
|
4.76
|
%
|
||||||||
Morgan Stanley
|
18,000
|
1,619,460
|
4.72
|
%
|
||||||||
PayPal Holdings, Inc. (a)
|
16,000
|
1,216,000
|
3.55
|
%
|
||||||||
State Street Corp.
|
10,000
|
722,600
|
2.11
|
%
|
||||||||
The Charles Schwab Corp.
|
8,000
|
417,920
|
1.22
|
%
|
||||||||
The Goldman Sachs Group, Inc.
|
4,500
|
1,545,480
|
4.51
|
%
|
||||||||
Truist Financial Corp.
|
3,000
|
97,740
|
0.28
|
%
|
||||||||
Visa, Inc., Class A
|
7,000
|
1,629,110
|
4.75
|
%
|
||||||||
Webster Financial Corp.
|
42,000
|
1,566,600
|
4.57
|
%
|
||||||||
Wells Fargo & Co.
|
41,000
|
1,629,750
|
4.75
|
%
|
||||||||
Western Alliance Bancorp
|
15,000
|
556,800
|
1.62
|
%
|
||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $26,949,591)
|
29,981,099
|
87.42
|
%
|
|||||||||
|
||||||||||||
REITS – 2.61%
|
||||||||||||
Financials – 2.61%
|
||||||||||||
AGNC Investment Corp.
|
50,000
|
495,500
|
1.44
|
%
|
||||||||
Annaly Capital Management, Inc.
|
20,000
|
399,600
|
1.17
|
%
|
||||||||
|
||||||||||||
Total REITS
|
||||||||||||
(Cost $704,754)
|
895,100
|
2.61
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 12.40%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 12.40%
|
||||||||||||
Fidelity Government Portfolio, Institutional Class, 4.73% (b)
|
847,132
|
$
|
847,132
|
2.47
|
%
|
|||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 4.73% (b)
|
1,702,000
|
1,702,000
|
4.96
|
%
|
||||||||
First American Treasury Obligations Fund,
|
||||||||||||
Institutional Class, 4.76% (b)
|
1,702,000
|
1,702,000
|
4.97
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $4,251,132)
|
4,251,132
|
12.40
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $31,905,477) – 102.43%
|
35,127,331
|
102.43
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (2.43)%
|
(834,479
|
)
|
(2.43
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
34,292,852
|
100.00
|
%
|
(a)
|
Non-income-producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of April 30, 2023.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Financials
|
$
|
29,981,099
|
$
|
—
|
$
|
—
|
$
|
29,981,099
|
||||||||
Total Common Stocks
|
$
|
29,981,099
|
$
|
—
|
$
|
—
|
$
|
29,981,099
|
||||||||
REITS
|
||||||||||||||||
Financials
|
$
|
895,100
|
$
|
—
|
$
|
—
|
$
|
895,100
|
||||||||
Total REITS
|
$
|
895,100
|
$
|
—
|
$
|
—
|
$
|
895,100
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
4,251,132
|
$
|
—
|
$
|
—
|
$
|
4,251,132
|
||||||||
Total Short-Term Investments
|
$
|
4,251,132
|
$
|
—
|
$
|
—
|
$
|
4,251,132
|
||||||||
Total Investments
|
$
|
35,127,331
|
$
|
—
|
$
|
—
|
$
|
35,127,331
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Assets and Liabilities as of April 30, 2023 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $31,905,477)
|
$
|
35,127,331
|
||
Dividends and interest receivable
|
61,207
|
|||
Receivable for fund shares sold
|
21,617
|
|||
Prepaid expenses and other assets
|
18,580
|
|||
Total assets
|
35,228,735
|
|||
LIABILITIES:
|
||||
Payable for securities purchased
|
780,631
|
|||
Payable for fund shares redeemed
|
95,526
|
|||
Payable to advisor
|
25,216
|
|||
Payable to administrator
|
6,800
|
|||
Payable to auditor
|
11,226
|
|||
Accrued distribution fees
|
2,885
|
|||
Accrued service fees
|
1,523
|
|||
Accrued trustees fees
|
5,136
|
|||
Accrued expenses and other payables
|
6,940
|
|||
Total liabilities
|
935,883
|
|||
NET ASSETS
|
$
|
34,292,852
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
36,335,395
|
||
Accumulated deficit
|
(2,042,543
|
)
|
||
Total net assets
|
$
|
34,292,852
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
18,719,475
|
||
Shares issued and outstanding
|
958,369
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
19.53
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
15,573,377
|
||
Shares issued and outstanding
|
790,282
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
19.71
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS
|
Statement of Operations for the six months ended April 30, 2023 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
650,382
|
||
Interest income
|
58,726
|
|||
Total investment income
|
709,108
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
184,914
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
21,705
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
12,599
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
24,375
|
|||
Federal and state registration fees
|
16,598
|
|||
Distribution fees – Investor Class (See Note 5)
|
16,307
|
|||
Compliance expense (See Note 5)
|
11,844
|
|||
Audit fees
|
11,227
|
|||
Service fees – Investor Class (See Note 5)
|
10,871
|
|||
Trustees’ fees and expenses
|
9,559
|
|||
Reports to shareholders
|
5,315
|
|||
Legal fees
|
553
|
|||
Other expenses
|
5,792
|
|||
Total expenses
|
331,659
|
|||
NET INVESTMENT INCOME
|
$
|
377,449
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized loss on investments:
|
$
|
(4,300,616
|
)
|
|
Net change in unrealized appreciation/deprecation on investments:
|
(2,527,172
|
)
|
||
Net loss on investments
|
(6,827,788
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(6,450,339
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2023
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
377,449
|
$
|
415,244
|
||||
Net realized gain (loss) on investments
|
(4,300,616
|
)
|
3,448,215
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(2,527,172
|
)
|
(23,178,978
|
)
|
||||
Net decrease in net assets resulting from operations
|
(6,450,339
|
)
|
(19,315,519
|
)
|
||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(1,558,247
|
)
|
(1,687,916
|
)
|
||||
Distributable earnings – Institutional Class
|
(1,514,267
|
)
|
(1,797,726
|
)
|
||||
Total distributions
|
(3,072,514
|
)
|
(3,485,642
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
383,136
|
2,685,032
|
||||||
Proceeds from shares subscribed – Institutional Class
|
529,336
|
11,877,575
|
||||||
Dividends reinvested – Investor Class
|
1,514,582
|
1,636,787
|
||||||
Dividends reinvested – Institutional Class
|
1,483,155
|
1,782,399
|
||||||
Cost of shares redeemed – Investor Class
|
(1,770,421
|
)
|
(6,195,638
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(4,100,674
|
)
|
(14,692,333
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(1,960,886
|
)
|
(2,906,178
|
)
|
||||
TOTAL DECREASE IN NET ASSETS
|
(11,483,739
|
)
|
(25,707,339
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of period
|
45,776,591
|
71,483,930
|
||||||
End of period
|
$
|
34,292,852
|
$
|
45,776,591
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
18,998
|
92,861
|
||||||
Shares sold – Institutional Class
|
23,211
|
380,400
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
66,893
|
50,270
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
64,811
|
54,242
|
||||||
Shares redeemed – Investor Class
|
(79,975
|
)
|
(221,850
|
)
|
||||
Shares redeemed – Institutional Class
|
(179,996
|
)
|
(536,409
|
)
|
||||
Net decrease in shares outstanding
|
(86,058
|
)
|
(180,486
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
24.80
|
||
Income from investment operations:
|
||||
Net investment income (loss)
|
0.19
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
(3.80
|
)
|
||
Total from investment operations
|
(3.61
|
)
|
||
Less distributions:
|
||||
Dividends from net investment income
|
(0.13
|
)
|
||
Dividends from net realized gains
|
(1.53
|
)
|
||
Total distributions
|
(1.66
|
)
|
||
Net asset value, end of period
|
$
|
19.53
|
||
TOTAL RETURN
|
-15.46
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
18.72
|
||
Ratio of expenses to average net assets
|
1.77
|
%(3)
|
||
Ratio of net investment income (loss) to average net assets
|
1.68
|
%(3)
|
||
Portfolio turnover rate(4)
|
64
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
25.11
|
||
Income from investment operations:
|
||||
Net investment income (loss)
|
0.22
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
(3.83
|
)
|
||
Total from investment operations
|
(3.61
|
)
|
||
Less distributions:
|
||||
Dividends from net investment income
|
(0.24
|
)
|
||
Dividends from net realized gains
|
(1.55
|
)
|
||
Total distributions
|
(1.79
|
)
|
||
Net asset value, end of period
|
$
|
19.71
|
||
TOTAL RETURN
|
-15.33
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
15.57
|
||
Ratio of expenses to average net assets
|
1.44
|
%(3)
|
||
Ratio of net investment income (loss) to average net assets
|
1.91
|
%(3)
|
||
Portfolio turnover rate(4)
|
64
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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 April 30, 2023 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply
with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment
income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily
the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions
from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and
designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns
of the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as
investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original
cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all
liabilities (including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The
offering and redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i.)
|
REIT Equity Securities – Distributions received from real estate investment trusts (“REITs”) may be classified as dividends, capital gains, or return of capital. Investments in REITs may require
the Fund to accrue and distribute income not yet received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous
to do so) that it otherwise would have continued to hold. At other times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings. If the Fund distributes these amounts, these
distributions could constitute a return of capital to Fund shareholders for U.S. federal income tax purposes. Dividends received by the Fund from a REIT generally do not constitute qualified dividend income and do not
qualify for the dividends-received deduction.
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current
market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
HENNESSY FUNDS
|
1-800-966-4354
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (the “SEC”) adopted new regulations under the 1940 Act 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, generally eliminates the asset segregation framework 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 does not utilize derivatives and therefore has not adopted a derivatives risk management program.
|
In December 2020, the SEC adopted a new rule under the 1940 Act 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. The Fund has designated Hennessy Advisors, Inc., the Fund’s investment advisor (the “Advisor”), as its valuation designee under 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
|
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
|
HENNESSY FUNDS
|
1-800-966-4354
|
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
|
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
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
334,082
|
$
|
—
|
|||||
Long-term capital gains
|
2,738,432
|
3,485,642
|
|||||||
Total distributions
|
$
|
3,072,514
|
$
|
3,485,642
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
November 1, 2022 –
|
|
November 1, 2022
|
April 30, 2023
|
April 30, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 845.40
|
$16.33
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,032.30
|
$17.99
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 846.70
|
$13.30
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,035.60
|
$14.66
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.77% for Investor Class shares or 1.44% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 181/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for
consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help
the Board assess each such factor;
|
|
(3)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
|
|
(4)
|
A summary of the advisory agreement;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor
provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory
services provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws,
rules, and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and
restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as
appropriate), conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance
providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by
service providers, and maintains books and records.
|
||
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and
legal services to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The
Advisor participates in “no transaction fee” (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee.
The Advisor compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading
oversight personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund
to various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The
Trustees concluded that the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As
part of the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials
considered at the meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and
concluded that they are reasonable and warranted continuation of the advisory agreement.
|
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage
the Fund were variable asset-based fees, so the Advisor would not realize material economies of scale relating to these expenses as the assets of the Fund increased. For example, third-party platform fees increase as the
Fund’s assets grow.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and revenues that the
Advisor has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court
cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by
way of example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that
any such products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by
the Advisor from its relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by
brokers are merely supplemental to the Advisor’s own efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
8
|
|
Statement of Operations
|
9
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Electronic Delivery
|
26
|
|
Board Approval of Investment Advisory Agreement
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
1
|
S&P 500® Index monthly total returns: +5.59% in November 2022, -5.76% in December 2022, +6.28% in January 2023,
-2.44% in February 2023, +3.67% in March 2023, and +1.56% in April 2023.
|
2
|
S&P 500® Financial Sector monthly total return: -9.55% in March 2023. KBW Bank Index monthly total return: -24.87%
in March 2023. S&P 500® Information Technology sector total return: +18.88% for the six months ended April 30, 2023. S&P 500® Communication Services sector total return: +23.15% for the six months ended April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
|
Months(1)
|
Year
|
Years
|
Years
|
|
Hennessy Small Cap Financial Fund –
|
||||
Investor Class (HSFNX)
|
-24.64%
|
-18.95%
|
0.56%
|
6.30%
|
Hennessy Small Cap Financial Fund –
|
||||
Institutional Class (HISFX)
|
-24.51%
|
-18.61%
|
0.92%
|
6.69%
|
Russell 2000® Index Financials
|
-17.01%
|
-11.78%
|
1.12%
|
6.37%
|
Russell 2000® Index
|
-3.45%
|
-3.65%
|
4.15%
|
7.88%
|
(1)
|
Periods of less than one year are not annualized.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2023 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
New York Community Bancorp, Inc.
|
4.75%
|
Hancock Whitney Corp.
|
4.45%
|
BankUnited, Inc.
|
4.20%
|
Midland States Bancorp, Inc.
|
4.02%
|
OceanFirst Financial Corp.
|
4.02%
|
Texas Capital Bancshares, Inc.
|
3.96%
|
Old National Bancorp
|
3.94%
|
Wintrust Financial Corp.
|
3.92%
|
Lakeland Bancorp, Inc.
|
3.91%
|
Northeast Community Bancorp, Inc.
|
3.84%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 92.40%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Financials – 92.40%
|
||||||||||||
Associated Banc-Corp.
|
150,000
|
$
|
2,674,500
|
3.84
|
%
|
|||||||
BankUnited, Inc.
|
130,000
|
2,931,500
|
4.20
|
%
|
||||||||
Banner Corp.
|
23,000
|
1,148,160
|
1.65
|
%
|
||||||||
Cadence Bank
|
60,000
|
1,213,200
|
1.74
|
%
|
||||||||
Cambridge Bancorp
|
51,000
|
2,634,150
|
3.78
|
%
|
||||||||
Columbia Banking System, Inc.
|
80,000
|
1,708,800
|
2.45
|
%
|
||||||||
ConnectOne Bancorp, Inc.
|
165,000
|
2,603,700
|
3.74
|
%
|
||||||||
Eastern Bankshares, Inc.
|
200,000
|
2,330,000
|
3.34
|
%
|
||||||||
First BanCorp. (a)
|
215,000
|
2,526,250
|
3.62
|
%
|
||||||||
First Citizens BancShares, Inc.
|
2,000
|
2,014,360
|
2.89
|
%
|
||||||||
Flushing Financial Corp.
|
135,000
|
1,624,050
|
2.33
|
%
|
||||||||
Hancock Whitney Corp.
|
85,000
|
3,104,200
|
4.45
|
%
|
||||||||
Hingham Institution for Savings
|
6,000
|
1,167,360
|
1.68
|
%
|
||||||||
HomeTrust Bancshares, Inc.
|
105,000
|
2,191,350
|
3.14
|
%
|
||||||||
Independent Bank Corp.
|
43,000
|
2,408,000
|
3.45
|
%
|
||||||||
Kearny Financial Corp. of Maryland
|
45,000
|
350,550
|
0.50
|
%
|
||||||||
Lakeland Bancorp, Inc.
|
190,000
|
2,724,600
|
3.91
|
%
|
||||||||
Midland States Bancorp, Inc.
|
140,000
|
2,800,000
|
4.02
|
%
|
||||||||
New York Community Bancorp, Inc.
|
310,000
|
3,313,900
|
4.75
|
%
|
||||||||
Northeast Community Bancorp, Inc.
|
205,000
|
2,679,350
|
3.84
|
%
|
||||||||
OceanFirst Financial Corp.
|
175,000
|
2,800,000
|
4.02
|
%
|
||||||||
Old National Bancorp
|
205,000
|
2,749,050
|
3.94
|
%
|
||||||||
Orange County Bancorp, Inc.
|
21,000
|
762,510
|
1.09
|
%
|
||||||||
Pacific Premier Bancorp, Inc.
|
75,000
|
1,668,000
|
2.39
|
%
|
||||||||
PacWest Bancorp
|
205,000
|
2,080,750
|
2.99
|
%
|
||||||||
Shore Bancshares, Inc.
|
15,000
|
199,200
|
0.29
|
%
|
||||||||
Texas Capital Bancshares, Inc. (b)
|
55,000
|
2,763,750
|
3.96
|
%
|
||||||||
Washington Federal, Inc.
|
25,000
|
701,000
|
1.01
|
%
|
||||||||
Western New England Bancorp, Inc.
|
365,000
|
2,471,050
|
3.55
|
%
|
||||||||
Wintrust Financial Corp.
|
40,000
|
2,734,800
|
3.92
|
%
|
||||||||
WSFS Financial Corp.
|
38,000
|
1,336,460
|
1.92
|
%
|
||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $64,641,617)
|
64,414,550
|
92.40
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 11.80%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 11.80%
|
||||||||||||
Fidelity Government Portfolio, Institutional Class, 4.73% (c)
|
1,327,308
|
$
|
1,327,308
|
1.90
|
%
|
|||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 4.73% (c)
|
3,450,000
|
3,450,000
|
4.95
|
%
|
||||||||
First American Treasury Obligations Fund,
|
||||||||||||
Institutional Class, 4.76% (c)
|
3,450,000
|
3,450,000
|
4.95
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $8,227,308)
|
8,227,308
|
11.80
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $72,868,925) – 104.20%
|
72,641,858
|
104.20
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (4.20)%
|
(2,924,666
|
)
|
(4.20
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
69,717,192
|
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 April 30, 2023.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Financials
|
$
|
64,414,550
|
$
|
—
|
$
|
—
|
$
|
64,414,550
|
||||||||
Total Common Stocks
|
$
|
64,414,550
|
$
|
—
|
$
|
—
|
$
|
64,414,550
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
8,227,308
|
$
|
—
|
$
|
—
|
$
|
8,227,308
|
||||||||
Total Short-Term Investments
|
$
|
8,227,308
|
$
|
—
|
$
|
—
|
$
|
8,227,308
|
||||||||
Total Investments
|
$
|
72,641,858
|
$
|
—
|
$
|
—
|
$
|
72,641,858
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Assets and Liabilities as of April 30, 2023 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $72,868,925)
|
$
|
72,641,858
|
||
Dividends and interest receivable
|
47,279
|
|||
Receivable for fund shares sold
|
28,536
|
|||
Receivable for securities sold
|
102,859
|
|||
Prepaid expenses and other assets
|
21,168
|
|||
Total assets
|
72,841,700
|
|||
LIABILITIES:
|
||||
Payable for securities purchased
|
2,975,175
|
|||
Payable for fund shares redeemed
|
38,656
|
|||
Payable to advisor
|
54,112
|
|||
Payable to administrator
|
14,869
|
|||
Payable to auditor
|
11,226
|
|||
Accrued distribution fees
|
10,545
|
|||
Accrued service fees
|
5,030
|
|||
Accrued trustees fees
|
5,432
|
|||
Accrued expenses and other payables
|
9,463
|
|||
Total liabilities
|
3,124,508
|
|||
NET ASSETS
|
$
|
69,717,192
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
69,048,997
|
||
Total distributable earnings
|
668,195
|
|||
Total net assets
|
$
|
69,717,192
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
58,752,001
|
||
Shares issued and outstanding
|
2,881,231
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
20.39
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
10,965,191
|
||
Shares issued and outstanding
|
930,087
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
11.79
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS
|
Statement of Operations for the six months ended April 30, 2023 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
1,235,943
|
||
Interest income
|
138,975
|
|||
Total investment income
|
1,374,918
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
431,661
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
78,958
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
8,526
|
|||
Distribution fees – Investor Class (See Note 5)
|
59,161
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
50,621
|
|||
Service fees – Investor Class (See Note 5)
|
39,441
|
|||
Federal and state registration fees
|
20,759
|
|||
Compliance expense (See Note 5)
|
11,844
|
|||
Audit fees
|
11,227
|
|||
Trustees’ fees and expenses
|
10,078
|
|||
Reports to shareholders
|
7,511
|
|||
Legal fees
|
1,168
|
|||
Other expenses
|
10,517
|
|||
Total expenses
|
741,472
|
|||
NET INVESTMENT INCOME
|
$
|
633,446
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
2,909,617
|
||
Net change in unrealized appreciation/depreciation on investments
|
(28,076,970
|
)
|
||
Net loss on investments
|
(25,167,353
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(24,533,907
|
)
|
(1)
|
Net of foreign taxes withheld of $6,960.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2023
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
633,446
|
$
|
1,056,994
|
||||
Net realized gain on investments
|
2,909,617
|
12,617,156
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(28,076,970
|
)
|
(22,730,488
|
)
|
||||
Net decrease in net assets resulting from operations
|
(24,533,907
|
)
|
(9,056,338
|
)
|
||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(7,452,661
|
)
|
(1,276,583
|
)
|
||||
Distributable earnings – Institutional Class
|
(1,876,496
|
)
|
(587,596
|
)
|
||||
Total distributions
|
(9,329,157
|
)
|
(1,864,179
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
1,374,348
|
21,043,349
|
||||||
Proceeds from shares subscribed – Institutional Class
|
2,310,513
|
13,669,099
|
||||||
Dividends reinvested – Investor Class
|
7,283,861
|
1,243,912
|
||||||
Dividends reinvested – Institutional Class
|
1,825,197
|
549,827
|
||||||
Cost of shares redeemed – Investor Class
|
(15,578,967
|
)
|
(60,100,417
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(7,209,698
|
)
|
(24,017,634
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(9,994,746
|
)
|
(47,611,864
|
)
|
||||
TOTAL DECREASE IN NET ASSETS
|
(43,857,810
|
)
|
(58,532,381
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of period
|
113,575,002
|
172,107,383
|
||||||
End of period
|
$
|
69,717,192
|
$
|
113,575,002
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
51,785
|
685,704
|
||||||
Shares sold – Institutional Class
|
138,732
|
758,917
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
274,193
|
39,265
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
118,272
|
29,680
|
||||||
Shares redeemed – Investor Class
|
(613,875
|
)
|
(1,998,475
|
)
|
||||
Shares redeemed – Institutional Class
|
(497,039
|
)
|
(1,345,808
|
)
|
||||
Net decrease in shares outstanding
|
(527,932
|
)
|
(1,830,717
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
29.47
|
||
Income from investment operations:
|
||||
Net investment income
|
0.16
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
(6.89
|
)
|
||
Total from investment operations
|
(6.73
|
)
|
||
Less distributions:
|
||||
Dividends from net investment income
|
(0.19
|
)
|
||
Dividends from net realized gains
|
(2.16
|
)
|
||
Total distributions
|
(2.35
|
)
|
||
Net asset value, end of period
|
$
|
20.39
|
||
TOTAL RETURN
|
-24.64
|
%(3)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
58.75
|
||
Ratio of expenses to average net assets
|
1.61
|
%(4)
|
||
Ratio of net investment income to average net assets
|
1.25
|
%(4)
|
||
Portfolio turnover rate(5)
|
32
|
%(3)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Not annualized.
|
(4)
|
Annualized.
|
(5)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
17.24
|
||
Income from investment operations:
|
||||
Net investment income
|
0.12
|
(1)
|
||
Net realized and unrealized gains (losses) on investments
|
(4.00
|
)
|
||
Total from investment operations
|
(3.88
|
)
|
||
Less distributions:
|
||||
Dividends from net investment income
|
(0.30
|
)
|
||
Dividends from net realized gains
|
(1.27
|
)
|
||
Total distributions
|
(1.57
|
)
|
||
Net asset value, end of period
|
$
|
11.79
|
||
TOTAL RETURN
|
-24.51
|
%(2)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
10.97
|
||
Ratio of expenses to average net assets
|
1.26
|
%(3)
|
||
Ratio of net investment income to average net assets
|
1.63
|
%(3)
|
||
Portfolio turnover rate(4)
|
32
|
%(2)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Not annualized.
|
(3)
|
Annualized.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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 April 30, 2023 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with
the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and
realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the
treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized
gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and
profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of
the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion
of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding
increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income
at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other
than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are
declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost
of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things,
that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions
in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (the “SEC”) adopted new regulations under the 1940 Act 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, generally eliminates the asset segregation framework 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 does
not utilize derivatives and therefore has not adopted a derivatives risk management program.
|
HENNESSY FUNDS
|
1-800-966-4354
|
In December 2020, the SEC adopted a new rule under the 1940 Act 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. The Fund has designated Hennessy Advisors, Inc., the Fund’s investment advisor (the “Advisor”), as its valuation designee under 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).
|
|
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
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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
|
$
|
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
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
995,722
|
$
|
1,378,796
|
|||||
Long-term capital gains
|
8,333,435
|
485,383
|
|||||||
Total distributions
|
$
|
9,329,157
|
$
|
1,864,179
|
|||||
(1) Ordinary income includes short-term capital gains.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
November 1, 2022 –
|
|
November 1, 2022
|
April 30, 2023
|
April 30, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 753.60
|
$14.12
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,033.90
|
$16.37
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 754.90
|
$11.06
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,037.40
|
$12.84
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.61% for Investor Class shares or 1.26% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 181/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help the
Board assess each such factor;
|
|
(3)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
|
|
(4)
|
A summary of the advisory agreement;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor
provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory services
provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules, and
regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and
restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as
appropriate), conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance
providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service
providers, and maintains books and records.
|
||
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal
services to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The Advisor
participates in “no transaction fee” (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee. The Advisor
compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading
oversight personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to
various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The Trustees
concluded that the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part of
the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials considered
at the meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and concluded that
they are reasonable and warranted continuation of the advisory agreement.
|
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage the
Fund were variable asset-based fees, so the Advisor would not realize material economies of scale relating to these expenses as the assets of the Fund increased. For example, third-party platform fees increase as the Fund’s
assets grow.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and revenues that the
Advisor has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by way
of example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any such
products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the Advisor
from its relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are merely
supplemental to the Advisor’s own efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
5
|
|
Statement of Assets and Liabilities
|
9
|
|
Statement of Operations
|
10
|
|
Statements of Changes in Net Assets
|
11
|
|
Financial Highlights
|
12
|
|
Notes to the Financial Statements
|
16
|
|
Expense Example
|
24
|
|
Proxy Voting Policy and Proxy Voting Records
|
26
|
|
Availability of Quarterly Portfolio Schedule
|
26
|
|
Federal Tax Distribution Information
|
26
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
26
|
|
Electronic Delivery
|
26
|
|
Board Approval of Investment Advisory Agreement
|
27
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
![]() |
|
![]() |
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
1
|
S&P 500® Index monthly total returns: +5.59% in November 2022, -5.76% in December 2022, +6.28% in January 2023,
-2.44% in February 2023, +3.67% in March 2023, and +1.56% in April 2023.
|
2
|
S&P 500® Financial Sector monthly total return: -9.55% in March 2023. KBW Bank Index monthly total return: -24.87%
in March 2023. S&P 500® Information Technology sector total return: +18.88% for the six months ended April 30, 2023. S&P 500® Communication Services sector total return: +23.15% for the six months ended April 30, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Six
|
One
|
Five
|
Ten
|
|
Months(1)
|
Year
|
Years
|
Years
|
|
Hennessy Technology Fund –
|
||||
Investor Class (HTECX)
|
7.10%
|
-0.86%
|
8.79%
|
10.10%
|
Hennessy Technology Fund –
|
||||
Institutional Class (HTCIX)
|
7.27%
|
-0.61%
|
9.07%
|
10.40%
|
Nasdaq Composite Index
|
11.80%
|
0.02%
|
12.60%
|
15.09%
|
S&P 500® Index
|
8.63%
|
2.66%
|
11.45%
|
12.20%
|
Expense ratios:
|
Gross 3.06%, Net 1.23%(2)(3) (Investor Class);
|
Gross 2.73%, Net 0.98%(2)(3) (Institutional Class)
|
(1)
|
Periods of less than one year are not annualized.
|
(2)
|
The Fund’s investment advisor has contractually agreed to limit expenses until February 28, 2024.
|
(3)
|
Certain service provider expenses will be voluntarily waived through July 31, 2025, at which time the arrangement will automatically terminate. In addition, the arrangement will not apply at any time
the Fund’s net assets exceed $125 million.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of April 30, 2023 (Unaudited)
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Meta Platforms, Inc.
|
1.95%
|
Microsoft Corp.
|
1.85%
|
Tower Semiconductor Ltd.
|
1.84%
|
Apple, Inc.
|
1.78%
|
Automatic Data Processing, Inc.
|
1.78%
|
CommVault Systems, Inc.
|
1.78%
|
Lam Research Corp.
|
1.77%
|
Verra Mobility Corp.
|
1.77%
|
Adobe, Inc.
|
1.76%
|
Vontier Corp.
|
1.75%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 97.78%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 3.67%
|
||||||||||||
Meta Platforms, Inc. (a)
|
458
|
$
|
110,066
|
1.95
|
%
|
|||||||
Sciplay Corp. (a)
|
5,702
|
97,390
|
1.72
|
%
|
||||||||
|
207,456
|
3.67
|
%
|
|||||||||
Consumer Discretionary – 1.69%
|
||||||||||||
MercadoLibre, Inc. (a)
|
75
|
95,812
|
1.69
|
%
|
||||||||
Industrials – 5.27%
|
||||||||||||
Automatic Data Processing, Inc.
|
457
|
100,540
|
1.78
|
%
|
||||||||
Paychex, Inc.
|
887
|
97,446
|
1.72
|
%
|
||||||||
Verra Mobility Corp. (a)
|
5,893
|
99,886
|
1.77
|
%
|
||||||||
|
297,872
|
5.27
|
%
|
|||||||||
Information Technology – 87.15%
|
||||||||||||
Accenture PLC, Class A (b)
|
332
|
93,056
|
1.65
|
%
|
||||||||
Adobe, Inc. (a)
|
263
|
99,298
|
1.76
|
%
|
||||||||
Apple, Inc.
|
592
|
100,451
|
1.78
|
%
|
||||||||
Applied Materials, Inc.
|
813
|
91,893
|
1.63
|
%
|
||||||||
Arrow Electronics, Inc. (a)
|
821
|
93,947
|
1.66
|
%
|
||||||||
ASE Technology Holding Co. Ltd. – ADR (b)
|
12,500
|
85,750
|
1.52
|
%
|
||||||||
ASML Holding NV – ADR (b)
|
145
|
92,345
|
1.63
|
%
|
||||||||
Atlassian Corp. (a)
|
595
|
87,858
|
1.55
|
%
|
||||||||
Autodesk, Inc. (a)
|
480
|
93,499
|
1.65
|
%
|
||||||||
Avnet, Inc.
|
2,211
|
91,226
|
1.61
|
%
|
||||||||
Broadcom, Inc.
|
154
|
96,481
|
1.71
|
%
|
||||||||
Cadence Design Systems, Inc. (a)
|
460
|
96,347
|
1.70
|
%
|
||||||||
CDW Corp.
|
516
|
87,508
|
1.55
|
%
|
||||||||
Check Point Software Technologies Ltd. (a)(b)
|
746
|
95,011
|
1.68
|
%
|
||||||||
CommVault Systems, Inc. (a)
|
1,731
|
100,865
|
1.78
|
%
|
||||||||
Crowdstrike Holdings, Inc. (a)
|
719
|
86,316
|
1.53
|
%
|
||||||||
DocuSign, Inc. (a)
|
1,723
|
85,185
|
1.51
|
%
|
||||||||
DXC Technology Co. (a)
|
3,943
|
94,041
|
1.66
|
%
|
||||||||
Enphase Energy, Inc. (a)
|
492
|
80,786
|
1.43
|
%
|
||||||||
Extreme Networks, Inc. (a)
|
5,220
|
92,812
|
1.64
|
%
|
||||||||
Fortinet, Inc. (a)
|
1,487
|
93,755
|
1.66
|
%
|
||||||||
Gartner, Inc. (a)
|
309
|
93,460
|
1.65
|
%
|
||||||||
Hackett Group, Inc.
|
5,296
|
98,294
|
1.74
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Information Technology (Continued)
|
||||||||||||
Hewlett Packard Enterprise Co.
|
6,063
|
$
|
86,822
|
1.54
|
%
|
|||||||
Immersion Corp.
|
11,433
|
75,343
|
1.33
|
%
|
||||||||
Jabil, Inc.
|
1,145
|
89,482
|
1.58
|
%
|
||||||||
KLA Corp.
|
247
|
95,475
|
1.69
|
%
|
||||||||
Kulicke & Soffa Industries, Inc.
|
1,928
|
91,888
|
1.62
|
%
|
||||||||
Lam Research Corp.
|
191
|
100,099
|
1.77
|
%
|
||||||||
Lattice Semiconductor Corp. (a)
|
1,047
|
83,446
|
1.48
|
%
|
||||||||
MACOM Technology Solutions Holdings, Inc. (a)
|
1,402
|
81,793
|
1.45
|
%
|
||||||||
MaxLinear, Inc. (a)
|
2,844
|
68,626
|
1.21
|
%
|
||||||||
Microsoft Corp.
|
340
|
104,468
|
1.85
|
%
|
||||||||
NetApp, Inc.
|
1,545
|
97,165
|
1.72
|
%
|
||||||||
NXP Semiconductors NV (b)
|
558
|
91,367
|
1.62
|
%
|
||||||||
Palo Alto Networks, Inc. (a)
|
499
|
91,048
|
1.61
|
%
|
||||||||
Pure Storage, Inc. (a)
|
3,854
|
87,987
|
1.56
|
%
|
||||||||
QUALCOMM, Inc.
|
792
|
92,506
|
1.64
|
%
|
||||||||
RingCentral, Inc. – Class A (a)
|
3,260
|
89,846
|
1.59
|
%
|
||||||||
Sanmina Corp. (a)
|
1,673
|
87,431
|
1.55
|
%
|
||||||||
ScanSource, Inc. (a)
|
3,282
|
89,763
|
1.59
|
%
|
||||||||
Semtech Corp. (a)
|
4,457
|
86,867
|
1.54
|
%
|
||||||||
ServiceNow, Inc. (a)
|
205
|
94,181
|
1.67
|
%
|
||||||||
Splunk, Inc. (a)
|
1,055
|
90,983
|
1.61
|
%
|
||||||||
STMicroelectronics NV – ADR (b)
|
1,879
|
80,572
|
1.42
|
%
|
||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. – ADR (b)
|
1,058
|
89,189
|
1.58
|
%
|
||||||||
Telefonaktiebolaget LM Ericsson – ADR (b)
|
16,939
|
92,995
|
1.64
|
%
|
||||||||
Teradata Corp. (a)
|
2,408
|
93,214
|
1.65
|
%
|
||||||||
Texas Instruments, Inc.
|
517
|
86,442
|
1.53
|
%
|
||||||||
Tower Semiconductor Ltd. (a)(b)
|
2,314
|
104,142
|
1.84
|
%
|
||||||||
Ultra Clean Holdings, Inc. (a)
|
3,065
|
87,475
|
1.55
|
%
|
||||||||
United Microelectronics Corp. – ADR (b)
|
11,341
|
91,068
|
1.61
|
%
|
||||||||
Vishay Intertechnology, Inc.
|
4,475
|
95,273
|
1.68
|
%
|
||||||||
Vontier Corp.
|
3,655
|
99,160
|
1.75
|
%
|
||||||||
|
4,926,300
|
87.15
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $5,242,347)
|
5,527,440
|
97.78
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 2.16%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 2.16%
|
||||||||||||
First American Government Obligations Fund,
|
||||||||||||
Institutional Class, 4.73% (c)
|
122,094
|
$
|
122,094
|
2.16
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $122,094)
|
122,094
|
2.16
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $5,364,441) – 99.94%
|
5,649,534
|
99.94
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.06%
|
3,128
|
0.06
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
5,652,662
|
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 April 30, 2023.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
207,456
|
$
|
—
|
$
|
—
|
$
|
207,456
|
||||||||
Consumer Discretionary
|
95,812
|
—
|
—
|
95,812
|
||||||||||||
Industrials
|
297,872
|
—
|
—
|
297,872
|
||||||||||||
Information Technology
|
4,926,300
|
—
|
—
|
4,926,300
|
||||||||||||
Total Common Stocks
|
$
|
5,527,440
|
$
|
—
|
$
|
—
|
$
|
5,527,440
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
122,094
|
$
|
—
|
$
|
—
|
$
|
122,094
|
||||||||
Total Short-Term Investments
|
$
|
122,094
|
$
|
—
|
$
|
—
|
$
|
122,094
|
||||||||
Total Investments
|
$
|
5,649,534
|
$
|
—
|
$
|
—
|
$
|
5,649,534
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of April 30, 2023 (Unaudited)
|
ASSETS:
|
||||
Investments in securities, at value (cost $5,364,441)
|
$
|
5,649,534
|
||
Dividends and interest receivable
|
1,192
|
|||
Prepaid expenses and other assets
|
16,773
|
|||
Due from advisor
|
4,442
|
|||
Total assets
|
5,671,941
|
|||
LIABILITIES:
|
||||
Payable to auditor
|
11,224
|
|||
Accrued distribution fees
|
681
|
|||
Accrued service fees
|
354
|
|||
Accrued trustees fees
|
4,885
|
|||
Accrued expenses and other payables
|
2,135
|
|||
Total liabilities
|
19,279
|
|||
NET ASSETS
|
$
|
5,652,662
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
6,297,401
|
||
Accumulated deficit
|
(644,739
|
)
|
||
Total net assets
|
$
|
5,652,662
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
4,116,021
|
||
Shares issued and outstanding
|
259,692
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
15.85
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
1,536,641
|
||
Shares issued and outstanding
|
94,345
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
16.29
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the six months ended April 30, 2023 (Unaudited)
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
25,890
|
||
Interest income
|
2,877
|
|||
Total investment income
|
28,767
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
20,952
|
|||
Federal and state registration fees
|
14,731
|
|||
Compliance expense (See Note 5)
|
11,844
|
|||
Audit fees
|
11,227
|
|||
Trustees’ fees and expenses
|
9,221
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
8,829
|
|||
Reports to shareholders
|
3,258
|
|||
Distribution fees – Investor Class (See Note 5)
|
3,128
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
2,575
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
371
|
|||
Service fees – Investor Class (See Note 5)
|
2,085
|
|||
Legal fees
|
10
|
|||
Other expenses
|
2,353
|
|||
Total expenses before waivers and reimbursements
|
90,584
|
|||
Service provider expense waiver (See Note 5)
|
(8,829
|
)
|
||
Expense reimbursement from advisor – Investor Class
|
(36,340
|
)
|
||
Expense reimbursement from advisor – Institutional Class
|
(12,455
|
)
|
||
Net expenses
|
32,960
|
|||
NET INVESTMENT LOSS
|
$
|
(4,193
|
)
|
|
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized loss on investments
|
$
|
(22,243
|
)
|
|
Net change in unrealized appreciation/depreciation on investments
|
402,962
|
|||
Net increase on investments
|
380,719
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
376,526
|
(1)
|
Net of foreign taxes withheld and issuance fees of $1,168.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Six Months Ended
|
||||||||
April 30, 2023
|
Year Ended
|
|||||||
(Unaudited)
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income (loss)
|
$
|
(4,193
|
)
|
$
|
5,524
|
|||
Net realized loss on investments
|
(22,243
|
)
|
(867,706
|
)
|
||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
402,962
|
(1,169,054
|
)
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
376,526
|
(2,031,236
|
)
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(2,801
|
)
|
(1,498,176
|
)
|
||||
Distributable earnings – Institutional Class
|
(6,430
|
)
|
(513,645
|
)
|
||||
Total distributions
|
(9,231
|
)
|
(2,011,821
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
108,229
|
265,541
|
||||||
Proceeds from shares subscribed – Institutional Class
|
77,833
|
89,997
|
||||||
Dividends reinvested – Investor Class
|
2,743
|
1,465,101
|
||||||
Dividends reinvested – Institutional Class
|
6,430
|
513,645
|
||||||
Cost of shares redeemed – Investor Class
|
(261,526
|
)
|
(779,866
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(24,599
|
)
|
(262,162
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
(90,890
|
)
|
1,292,256
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
276,405
|
(2,750,801
|
)
|
|||||
NET ASSETS:
|
||||||||
Beginning of period
|
5,376,257
|
8,127,058
|
||||||
End of period
|
$
|
5,652,662
|
$
|
5,376,257
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
6,802
|
16,191
|
||||||
Shares sold – Institutional Class
|
4,611
|
5,427
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
190
|
73,365
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
433
|
25,019
|
||||||
Shares redeemed – Investor Class
|
(16,587
|
)
|
(45,743
|
)
|
||||
Shares redeemed – Institutional Class
|
(1,592
|
)
|
(14,199
|
)
|
||||
Net increase (decrease) in shares outstanding
|
(6,143
|
)
|
60,060
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
14.81
|
||
Income from investment operations:
|
||||
Net investment income (loss)
|
(0.02
|
)(1)
|
||
Net realized and unrealized gains (losses) on investments
|
1.07
|
|||
Total from investment operations
|
1.05
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.01
|
)
|
||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
(0.01
|
)
|
||
Net asset value, end of period
|
$
|
15.85
|
||
TOTAL RETURN
|
7.10
|
%(3)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
4.12
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement
|
3.29
|
%(4)
|
||
After expense reimbursement
|
1.23
|
%(4)(5)
|
||
Ratio of net investment income (loss) to average net assets:
|
||||
Before expense reimbursement
|
(2.27
|
)%(4)
|
||
After expense reimbursement
|
(0.21
|
)%(4)
|
||
Portfolio turnover rate(6)
|
53
|
%(3)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Not annualized.
|
(4)
|
Annualized.
|
(5)
|
Certain service provider expenses were voluntarily waived during the fiscal period.
|
(6)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
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
|
%(5)
|
1.23
|
%(5)
|
1.23
|
%(5)
|
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
|
Six Months Ended
|
||||
April 30, 2023
|
||||
(Unaudited)
|
||||
PER SHARE DATA:
|
||||
Net asset value, beginning of period
|
$
|
15.26
|
||
Income from investment operations:
|
||||
Net investment income
|
0.00
|
(1)(2)
|
||
Net realized and unrealized gains (losses) on investments
|
1.10
|
|||
Total from investment operations
|
1.10
|
|||
Less distributions:
|
||||
Dividends from net investment income
|
(0.07
|
)
|
||
Dividends from net realized gains
|
—
|
|||
Total distributions
|
(0.07
|
)
|
||
Net asset value, end of period
|
$
|
16.29
|
||
TOTAL RETURN
|
7.27
|
%(3)
|
||
SUPPLEMENTAL DATA AND RATIOS:
|
||||
Net assets, end of period (millions)
|
$
|
1.54
|
||
Ratio of expenses to average net assets:
|
||||
Before expense reimbursement
|
2.96
|
%(4)
|
||
After expense reimbursement
|
0.98
|
%(4)(5)
|
||
Ratio of net investment income (loss) to average net assets:
|
||||
Before expense reimbursement
|
(1.94
|
)%(4)
|
||
After expense reimbursement
|
0.04
|
%(4)
|
||
Portfolio turnover rate(6)
|
53
|
%(3)
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005
|
(3)
|
Not annualized.
|
(4)
|
Annualized.
|
(5)
|
Certain service provider expenses were voluntarily waived during the fiscal period.
|
(6)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — 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
|
%(5)
|
0.98
|
%(5)
|
0.98
|
%(5)
|
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 April 30, 2023 (Unaudited)
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply
with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment
income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily
the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions
from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and
designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of
the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as
investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original
cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market
conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2020, the Securities and Exchange Commission (the “SEC”) adopted new regulations under the 1940 Act 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, generally eliminates the asset segregation framework 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 does not utilize derivatives and therefore has not adopted a derivatives risk management program.
|
HENNESSY FUNDS
|
1-800-966-4354
|
In December 2020, the SEC adopted a new rule under the 1940 Act 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. The Fund has designated Hennessy Advisors, Inc., the Fund’s investment advisor (the “Advisor”), as its valuation designee under 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 ask prices. To the extent these securities are actively traded and
valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV because most
foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In certain
circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market
or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the
ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service
may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may
incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are
generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities.
Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60
days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value
would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Fiscal Year
|
Fiscal Year
|
Fiscal Year
|
Fiscal Year
|
|||
2023
|
2024
|
2025
|
2026
|
Total
|
||
Investor Class
|
$40,167
|
$75,956
|
$73,628
|
$36,340
|
$226,091
|
|
Institutional Class
|
$12,621
|
$23,799
|
$23,122
|
$12,455
|
$ 71,997
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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
|
Six Months Ended
|
Year Ended
|
||||||||
April 30, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
9,231
|
$
|
1,183,102
|
|||||
Long-term capital gains
|
—
|
828,719
|
|||||||
Total distributions
|
$
|
9,231
|
$
|
2,011,821
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
November 1, 2022 –
|
|
November 1, 2022
|
April 30, 2023
|
April 30, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,071.00
|
$12.74
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,037.70
|
$12.53
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,072.70
|
$10.16
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,040.20
|
$10.00
|
(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 181/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
![]() |
![]() |
![]() |
![]() |
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(1)
|
A memorandum from outside legal counsel that described the fiduciary duties of the Board with respect to approving the continuation of the advisory agreement and the relevant factors for
consideration;
|
|
(2)
|
A memorandum from the Advisor that listed the factors relevant to the Board’s approval of the continuation of the advisory agreement and also referenced the documents that had been provided to help
the Board assess each such factor;
|
|
(3)
|
The Advisor’s financial statements from its most recent Form 10-K and Form 10-Q;
|
|
(4)
|
A summary of the advisory agreement;
|
|
(5)
|
A recent Fund fact sheet, which included, among other things, Fund performance over various periods;
|
|
(6)
|
A description of the range of services provided by the Advisor and the distinction between the Advisor-provided services and the Sub-Advisor-provided services;
|
|
(7)
|
A peer expense comparison of the net expense ratio and investment advisory fee of the Fund; and
|
|
(8)
|
A memorandum from the Advisor regarding economies of scale.
|
(1)
|
The nature and quality of the advisory services provided by the Advisor;
|
|
(2)
|
A comparison of the fees and expenses of the Fund to other similar funds;
|
|
(3)
|
Whether economies of scale are recognized by the Fund;
|
HENNESSY FUNDS
|
1-800-966-4354
|
(4)
|
The costs and profitability of the Fund to the Advisor;
|
|
(5)
|
The performance of the Fund; and
|
|
(6)
|
Any benefits to the Advisor from serving as an investment advisor to the Fund (other than the advisory fee).
|
(1)
|
The Trustees considered the services identified below that are provided by the Advisor. Based on this review and an assessment of the Advisor’s performance, the Trustees concluded that the Advisor
provides high-quality services to the Fund, and they noted that their overall confidence in the Advisor was high. The Trustees also concluded that they were satisfied with the nature, extent, and quality of the advisory
services provided to the Fund by the Advisor and that the nature and extent of the services provided by the Advisor were appropriate to assure that the Fund’s operations are conducted in compliance with applicable laws, rules,
and regulations.
|
(a)
|
The Advisor acts as the portfolio manager for the Fund. In this capacity, the Advisor does the following:
|
(i)
|
manages the composition of the Fund’s portfolio, including the purchase, retention, and disposition of portfolio securities in accordance with the Fund’s investment objectives, policies, and
restrictions;
|
|||
(ii)
|
seeks best execution for the Fund’s portfolio;
|
|||
(iii)
|
manages the use of soft dollars for the Fund; and
|
|||
(iv)
|
manages proxy voting for the Fund.
|
(b)
|
The Advisor performs a daily reconciliation of portfolio positions and cash for the Fund.
|
||
(c)
|
The Advisor monitors the liquidity of each Fund.
|
||
(d)
|
The Advisor monitors the Fund’s compliance with its investment objectives and restrictions and federal securities laws.
|
||
(e)
|
The Advisor maintains a compliance program (including a code of ethics), conducts ongoing reviews of the compliance programs of the Fund’s service providers (including their codes of ethics, as
appropriate), conducts on-site visits to the Fund’s service providers, as feasible, monitors incidents of abusive trading practices, reviews Fund expense accruals, payments, and fixed expense ratios, evaluates insurance
providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, manages regulatory examination compliance and responses, conducts employee compliance training, reviews reports provided by service
providers, and maintains books and records.
|
||
(f)
|
The Advisor oversees service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal
services to the Fund.
|
||
(g)
|
The Advisor maintains in-house marketing and distribution departments on behalf of the Fund.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(h)
|
The Advisor prepares or directs the preparation of all regulatory filings for the Fund, including writing and annually updating the Fund’s prospectus and related documents.
|
||
(i)
|
For each annual report of the Fund, the Advisor prepares a written summary of the Fund’s performance during the most recent 12-month period.
|
||
(j)
|
The Advisor oversees distribution of the Fund through third-party broker/dealers and independent financial institutions such as Charles Schwab, Inc., Fidelity, TD Ameritrade, and Pershing. The
Advisor participates in “no transaction fee” (“NTF”) programs with these companies on behalf of the Fund, which allow customers to purchase the Fund through third-party distribution channels without paying a transaction fee.
The Advisor compensates, in part, a number of these third-party providers of NTF programs out of its own revenues.
|
||
(k)
|
The Advisor pays the incentive compensation of the Fund’s compliance officer and employs other staff, such as legal, marketing, national accounts, distribution, sales, administrative, and trading
oversight personnel, as well as management executives.
|
||
(l)
|
The Advisor provides a quarterly compliance certification to the Board.
|
||
(m)
|
The Advisor prepares or reviews all Board materials, presents to and leads discussions with the Board, prepares or reviews all meeting minutes, and arranges for Board training and education.
|
(2)
|
The Trustees compared the performance of the Fund to benchmark indices over various periods and noted that the Trustees review and discuss reports comparing the investment performance of the Fund to
various indices at each quarterly Board meeting. Based on such information, the Trustees determined that the Advisor manages the Fund in a manner materially consistent with its stated investment objective and style. The
Trustees concluded that the performance of the Fund over various periods warranted the continuation of the advisory agreement.
|
|
(3)
|
The Trustees reviewed the advisory fees and overall expense ratios of the Fund compared to other funds similar in asset size and investment objective to the Fund using data from Morningstar. As part
of the discussion with management, the Trustees ensured that they understood and were comfortable with the criteria used to determine the mutual funds included in the Morningstar categories for purposes of the materials
considered at the meeting. The Trustees determined that the advisory fee and overall expense ratio of the Fund falls within a reasonable range of the advisory fees and overall expense ratios of other comparable funds and
concluded that they are reasonable and warranted continuation of the advisory agreement.
|
|
(4)
|
The Trustees also considered whether the Advisor was realizing economies of scale that should be shared with the Fund’s shareholders. The Trustees noted that many of the expenses incurred to manage
the Fund were variable asset-based fees, so the Advisor would not realize material economies of scale relating to these expenses as the assets of the Fund increased. For example, third-party platform fees increase as the
Fund’s assets grow.
|
HENNESSY FUNDS
|
1-800-966-4354
|
(5)
|
The Trustees considered the profitability of the Advisor, including the impact of mutual fund platform fees on the Advisor’s profitability, and also considered the resources and revenues that the
Advisor has put into managing and distributing the Fund. The Trustees then concluded that the profits of the Advisor are reasonable and not excessive when compared to profitability guidelines set forth in relevant court cases.
|
|
(6)
|
The Trustees considered the high level of professionalism and knowledge of the Advisor’s employees and concluded that this was beneficial to the Fund and its shareholders.
|
|
(7)
|
The Trustees considered any benefits to the Advisor from serving as an advisor to the Fund (other than the advisory fee). The Trustees noted that the Advisor may derive ancillary benefits from, by
way of example, its association with the Fund in the form of proprietary and third-party research products and services received from broker-dealers that execute portfolio trades for the Fund. The Trustees determined that any
such products and services have been used for legitimate purposes relating to the Fund by providing assistance in the investment decision-making process. The Trustees concluded that any additional benefits realized by the
Advisor from its relationship with the Fund were reasonable, which was based on, among other things, the Trustees’ finding that the research, analytical, statistical, and other information and services provided by brokers are
merely supplemental to the Advisor’s own efforts in the performance of its duties under the advisory agreement.
|
WWW.HENNESSYFUNDS.COM
|
BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT
|
(b)
|
|
✔
|
Request a paper copy of a specific shareholder report, free of charge. Unless you contact U.S. Bank Global Fund Services, you will NOT receive a paper copy.
|
✔
|
Elect to receive paper copies of ALL future shareholder reports, free of charge.
|
✔
|
Elect to receive shareholder reports and other communications (including quarterly statements, annual tax statements, and prospectuses) electronically
delivered to your email.
|
|
![]() |
![]() |
|
(a)
|
The Schedules of Investments are included as part of the reports to shareholders filed under Item 1 of this Form.
|
(b)
|
Not applicable.
|
(a)
|
The registrant’s principal executive officer and principal financial officer have reviewed the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a
date within 90 days of the filing date of this report, as required by Rule 30a‑3(b) under the Act and Rules 13a-15(b) or 15d‑15(b) under the Exchange Act. Based on their review, such officers have concluded that the disclosure controls and
procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized, and reported and made known to them by others within the registrant and by the registrant’s
service providers.
|
(b)
|
There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over financial reporting.
|
(a)
|
(1) Code of ethics, or amendments thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing of an
exhibit. Not applicable.
|
By: /s/Neil J. Hennessy
Neil J. Hennessy, President and Principal Executive Officer |
Date: July 10, 2023
|
By: /s/Teresa M. Nilsen
Teresa M. Nilsen, Treasurer and Principal Financial Officer |
Date: July 10, 2023
|
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: July 10, 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: July 10, 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: July 10, 2023
|
Date: July 10, 2023
|
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