(a)
|
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
28
|
|
Trustees and Officers of the Fund
|
29
|
|
Expense Example
|
34
|
|
Proxy Voting Policy and Proxy Voting Records
|
36
|
|
Availability of Quarterly Portfolio Schedule
|
36
|
|
Federal Tax Distribution Information
|
36
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
36
|
|
Electronic Delivery
|
36
|
|
Liquidity Risk Management Program
|
37
|
|
Privacy Policy
|
37
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The acronym, MT. FAANNG, refers to the following companies: Microsoft Corporation, Tesla, Inc., Meta Platforms, Inc., Amazon.com, Inc., Apple, Inc., Netflix, Inc., NVIDIA Corporation, and Alphabet, Inc.
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
|
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Cornerstone Growth Fund –
|
|||
Investor Class (HFCGX)
|
2.54%
|
9.19%
|
8.21%
|
Hennessy Cornerstone Growth Fund –
|
|||
Institutional Class (HICGX)
|
2.85%
|
9.55%
|
8.54%
|
Russell 2000® Index
|
-8.56%
|
3.31%
|
5.63%
|
S&P 500® Index
|
10.14%
|
11.01%
|
11.18%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Super Micro Computer, Inc.
|
4.60%
|
Sterling Infrastructure, Inc.
|
3.42%
|
Modine Manufacturing Co.
|
3.01%
|
Jabil, Inc.
|
2.81%
|
Weatherford International PLC
|
2.72%
|
Carpenter Technology Corp.
|
2.54%
|
Alpha Metallurgical Resources, Inc.
|
2.42%
|
Comfort Systems USA, Inc.
|
2.40%
|
EMCOR Group, Inc.
|
2.39%
|
Green Brick Partners, Inc.
|
2.28%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 95.93%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Consumer Discretionary – 14.74%
|
||||||||||||
Academy Sports & Outdoors, Inc.
|
51,300
|
$
|
2,300,292
|
1.41
|
%
|
|||||||
BorgWarner, Inc.
|
64,000
|
2,361,600
|
1.44
|
%
|
||||||||
Dillard’s, Inc., Class A
|
9,200
|
2,856,140
|
1.75
|
%
|
||||||||
Green Brick Partners, Inc. (a)
|
96,300
|
3,726,810
|
2.28
|
%
|
||||||||
Modine Manufacturing Co. (a)
|
125,300
|
4,949,350
|
3.01
|
%
|
||||||||
Oxford Industries, Inc.
|
27,800
|
2,346,320
|
1.43
|
%
|
||||||||
Penske Automotive Group, Inc.
|
21,700
|
3,104,836
|
1.90
|
%
|
||||||||
Phinia, Inc.
|
12,800
|
331,264
|
0.20
|
%
|
||||||||
Visteon Corp. (a)
|
18,700
|
2,152,931
|
1.32
|
%
|
||||||||
|
24,129,543
|
14.74
|
%
|
|||||||||
|
||||||||||||
Energy – 24.90%
|
||||||||||||
CVR Energy, Inc.
|
99,300
|
3,252,075
|
1.99
|
%
|
||||||||
Exxon Mobil Corp.
|
28,600
|
3,027,310
|
1.85
|
%
|
||||||||
Marathon Petroleum Corp.
|
24,200
|
3,660,250
|
2.23
|
%
|
||||||||
Oceaneering International, Inc. (a)
|
153,200
|
3,368,868
|
2.06
|
%
|
||||||||
Oil States International, Inc. (a)
|
337,300
|
2,448,798
|
1.50
|
%
|
||||||||
Par Pacific Holdings, Inc. (a)
|
111,300
|
3,652,866
|
2.22
|
%
|
||||||||
PBF Energy, Inc., Class A
|
69,800
|
3,317,594
|
2.03
|
%
|
||||||||
Teekay Corp. (a)
|
513,700
|
3,611,311
|
2.21
|
%
|
||||||||
Tsakos Energy Navigation Ltd.
|
132,400
|
2,916,772
|
1.78
|
%
|
||||||||
Valero Energy Corp.
|
23,400
|
2,971,800
|
1.82
|
%
|
||||||||
Vertex Energy, Inc. (a)
|
322,100
|
1,388,251
|
0.85
|
%
|
||||||||
Weatherford International PLC (a)
|
47,900
|
4,459,011
|
2.72
|
%
|
||||||||
YPF SA – ADR (a)
|
270,500
|
2,686,065
|
1.64
|
%
|
||||||||
|
40,760,971
|
24.90
|
%
|
|||||||||
|
||||||||||||
Financials – 3.98%
|
||||||||||||
StoneX Group, Inc. (a)
|
30,500
|
2,907,260
|
1.78
|
%
|
||||||||
Unum Group
|
73,600
|
3,599,040
|
2.20
|
%
|
||||||||
|
6,506,300
|
3.98
|
%
|
|||||||||
|
||||||||||||
Industrials – 29.98%
|
||||||||||||
Applied Industrial Technologies, Inc.
|
22,400
|
3,438,624
|
2.10
|
%
|
||||||||
CECO Environmental Corp. (a)
|
204,800
|
3,313,664
|
2.02
|
%
|
||||||||
Clean Harbors, Inc. (a)
|
22,700
|
3,488,309
|
2.13
|
%
|
||||||||
Comfort Systems USA, Inc.
|
21,500
|
3,909,775
|
2.40
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Industrials (Continued)
|
||||||||||||
EMCOR Group, Inc.
|
18,900
|
$
|
3,905,685
|
2.39
|
%
|
|||||||
Encore Wire Corp.
|
16,400
|
2,932,812
|
1.79
|
%
|
||||||||
Fluor Corp. (a)
|
89,500
|
2,979,455
|
1.82
|
%
|
||||||||
Granite Construction, Inc.
|
75,000
|
3,036,000
|
1.85
|
%
|
||||||||
Insperity, Inc.
|
26,000
|
2,751,840
|
1.68
|
%
|
||||||||
Sterling Infrastructure, Inc. (a)
|
76,800
|
5,594,880
|
3.42
|
%
|
||||||||
Terex Corp.
|
54,000
|
2,473,200
|
1.51
|
%
|
||||||||
The Timken Co.
|
36,100
|
2,495,232
|
1.52
|
%
|
||||||||
Titan Machinery, Inc. (a)
|
75,100
|
1,865,484
|
1.14
|
%
|
||||||||
United Airlines Holdings, Inc. (a)
|
58,900
|
2,062,089
|
1.26
|
%
|
||||||||
Wabash National Corp.
|
117,500
|
2,431,075
|
1.49
|
%
|
||||||||
WESCO International, Inc.
|
18,700
|
2,397,340
|
1.46
|
%
|
||||||||
|
49,075,464
|
29.98
|
%
|
|||||||||
Information Technology – 9.01%
|
||||||||||||
Belden, Inc.
|
37,000
|
2,623,300
|
1.60
|
%
|
||||||||
Jabil, Inc.
|
37,500
|
4,605,000
|
2.81
|
%
|
||||||||
Super Micro Computer, Inc. (a)
|
31,400
|
7,519,358
|
4.60
|
%
|
||||||||
|
14,747,658
|
9.01
|
%
|
|||||||||
Materials – 13.32%
|
||||||||||||
Alpha Metallurgical Resources, Inc.
|
18,000
|
3,959,280
|
2.42
|
%
|
||||||||
ATI, Inc. (a)
|
77,200
|
2,915,844
|
1.78
|
%
|
||||||||
Carpenter Technology Corp.
|
66,300
|
4,158,336
|
2.54
|
%
|
||||||||
Materion Corp.
|
28,400
|
2,754,232
|
1.68
|
%
|
||||||||
O-I Glass, Inc. (a)
|
141,900
|
2,192,355
|
1.34
|
%
|
||||||||
Reliance Steel & Aluminum Co.
|
12,600
|
3,205,188
|
1.96
|
%
|
||||||||
Steel Dynamics, Inc.
|
24,500
|
2,609,495
|
1.60
|
%
|
||||||||
|
21,794,730
|
13.32
|
%
|
|||||||||
Total Common Stocks
|
||||||||||||
(Cost $138,088,146)
|
157,014,666
|
95.93
|
%
|
|||||||||
|
||||||||||||
REITS – 1.29%
|
||||||||||||
Real Estate – 1.29%
|
||||||||||||
Service Properties Trust
|
290,900
|
2,109,025
|
1.29
|
%
|
||||||||
|
||||||||||||
Total REITS
|
||||||||||||
(Cost $2,733,439)
|
2,109,025
|
1.29
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 3.04%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 3.04%
|
||||||||||||
First American Treasury Obligations Fund – Class X, 5.275% (b)
|
4,978,236
|
$
|
4,978,236
|
3.04
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $4,978,236)
|
4,978,236
|
3.04
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $145,799,821) – 100.26%
|
164,101,927
|
100.26
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.26)%
|
(426,419
|
)
|
(0.26
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
163,675,508
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2023.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Consumer Discretionary
|
$
|
24,129,543
|
$
|
—
|
$
|
—
|
$
|
24,129,543
|
||||||||
Energy
|
40,760,971
|
—
|
—
|
40,760,971
|
||||||||||||
Financials
|
6,506,300
|
—
|
—
|
6,506,300
|
||||||||||||
Industrials
|
49,075,464
|
—
|
—
|
49,075,464
|
||||||||||||
Information Technology
|
14,747,658
|
—
|
—
|
14,747,658
|
||||||||||||
Materials
|
21,794,730
|
—
|
—
|
21,794,730
|
||||||||||||
Total Common Stocks
|
$
|
157,014,666
|
$
|
—
|
$
|
—
|
$
|
157,014,666
|
||||||||
REITS
|
||||||||||||||||
Real Estate
|
$
|
2,109,025
|
$
|
—
|
$
|
—
|
$
|
2,109,025
|
||||||||
Total REITS
|
$
|
2,109,025
|
$
|
—
|
$
|
—
|
$
|
2,109,025
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
4,978,236
|
$
|
—
|
$
|
—
|
$
|
4,978,236
|
||||||||
Total Short-Term Investments
|
$
|
4,978,236
|
$
|
—
|
$
|
—
|
$
|
4,978,236
|
||||||||
Total Investments
|
$
|
164,101,927
|
$
|
—
|
$
|
—
|
$
|
164,101,927
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $145,799,821)
|
$
|
164,101,927
|
||
Dividends and interest receivable
|
122,312
|
|||
Receivable for fund shares sold
|
30,497
|
|||
Prepaid expenses and other assets
|
25,934
|
|||
Total assets
|
164,280,670
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
392,133
|
|||
Payable to advisor
|
104,921
|
|||
Payable to administrator
|
27,909
|
|||
Payable to auditor
|
22,746
|
|||
Accrued distribution fees
|
20,884
|
|||
Accrued service fees
|
12,297
|
|||
Accrued trustees fees
|
6,841
|
|||
Accrued expenses and other payables
|
17,431
|
|||
Total liabilities
|
605,162
|
|||
NET ASSETS
|
$
|
163,675,508
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
150,311,735
|
||
Total distributable earnings
|
13,363,773
|
|||
Total net assets
|
$
|
163,675,508
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
141,356,398
|
||
Shares issued and outstanding
|
5,935,203
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
23.82
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
22,319,110
|
||
Shares issued and outstanding
|
896,126
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
24.91
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2023
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
3,662,204
|
||
Interest income
|
123,946
|
|||
Total investment income
|
3,786,150
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
1,232,434
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
218,709
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
15,731
|
|||
Distribution fees – Investor Class (See Note 5)
|
221,184
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
163,019
|
|||
Service fees – Investor Class (See Note 5)
|
147,456
|
|||
Federal and state registration fees
|
37,492
|
|||
Audit fees
|
22,747
|
|||
Compliance expense (See Note 5)
|
22,676
|
|||
Trustees’ fees and expenses
|
22,448
|
|||
Reports to shareholders
|
17,862
|
|||
Legal fees
|
4,214
|
|||
Interest expense (See Note 7)
|
1,652
|
|||
Other expenses
|
31,693
|
|||
Total expenses
|
2,159,317
|
|||
NET INVESTMENT INCOME
|
$
|
1,626,833
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized loss on investments
|
$
|
(4,138,289
|
)
|
|
Net change in unrealized appreciation/depreciation on investments
|
5,434,239
|
|||
Net gain on investments
|
1,295,950
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
2,922,783
|
(1)
|
Net of foreign taxes withheld and issuance fees of $102,901.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2023
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
1,626,833
|
$
|
1,821,004
|
||||
Net realized gain (loss) on investments
|
(4,138,289
|
)
|
4,008,127
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
5,434,239
|
(4,443,482
|
)
|
|||||
Net increase in net assets resulting from operations
|
2,922,783
|
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
|
11,362,449
|
21,825,715
|
||||||
Proceeds from shares subscribed – Institutional Class
|
9,926,784
|
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
|
(26,505,700
|
)
|
(21,756,715
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(6,562,918
|
)
|
(16,595,253
|
)
|
||||
Net increase (decrease) in net assets
|
||||||||
derived from capital share transactions
|
(5,931,574
|
)
|
40,674,268
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(9,095,130
|
)
|
5,029,845
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
172,770,638
|
167,740,793
|
||||||
End of year
|
$
|
163,675,508
|
$
|
172,770,638
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
465,038
|
919,385
|
||||||
Shares sold – Institutional Class
|
400,968
|
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
|
26,210
|
119,641
|
||||||
Shares redeemed – Investor Class
|
(1,164,869
|
)
|
(925,080
|
)
|
||||
Shares redeemed – Institutional Class
|
(266,969
|
)
|
(740,429
|
)
|
||||
Net increase (decrease) in shares outstanding
|
(311,977
|
)
|
1,541,923
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
24.07
|
$
|
29.83
|
$
|
19.91
|
$
|
19.15
|
$
|
22.17
|
|||||||||
0.22
|
0.26
|
(0.14
|
)
|
(0.08
|
)
|
(0.01
|
)
|
|||||||||||
0.35
|
0.62
|
10.06
|
0.84
|
(1.19
|
)
|
|||||||||||||
0.57
|
0.88
|
9.92
|
0.76
|
(1.20
|
)
|
|||||||||||||
(0.27
|
)
|
—
|
—
|
—
|
—
|
|||||||||||||
(0.55
|
)
|
(6.64
|
)
|
—
|
—
|
(1.82
|
)
|
|||||||||||
(0.82
|
)
|
(6.64
|
)
|
—
|
—
|
(1.82
|
)
|
|||||||||||
$
|
23.82
|
$
|
24.07
|
$
|
29.83
|
$
|
19.91
|
$
|
19.15
|
|||||||||
2.54
|
%
|
2.51
|
%
|
49.82
|
%
|
3.97
|
%
|
-5.19
|
%
|
|||||||||
$
|
141.36
|
$
|
154.25
|
$
|
151.96
|
$
|
110.96
|
$
|
125.10
|
|||||||||
1.33
|
%
|
1.33
|
%
|
1.34
|
%
|
1.36
|
%
|
1.34
|
%
|
|||||||||
0.95
|
%
|
1.10
|
%
|
(0.51
|
)%
|
(0.45
|
)%
|
(0.07
|
)%
|
|||||||||
90
|
%
|
102
|
%
|
98
|
%
|
98
|
%
|
95
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
25.17
|
$
|
31.09
|
$
|
20.68
|
$
|
19.83
|
$
|
22.88
|
|||||||||
0.29
|
0.34
|
(0.05
|
)
|
(0.03
|
)
|
0.05
|
||||||||||||
0.38
|
0.67
|
10.46
|
0.88
|
(1.22
|
)
|
|||||||||||||
0.67
|
1.01
|
10.41
|
0.85
|
(1.17
|
)
|
|||||||||||||
(0.35
|
)
|
—
|
—
|
—
|
—
|
|||||||||||||
(0.58
|
)
|
(6.93
|
)
|
—
|
—
|
(1.88
|
)
|
|||||||||||
(0.93
|
)
|
(6.93
|
)
|
—
|
—
|
(1.88
|
)
|
|||||||||||
$
|
24.91
|
$
|
25.17
|
$
|
31.09
|
$
|
20.68
|
$
|
19.83
|
|||||||||
2.85
|
%
|
2.84
|
%
|
50.34
|
%
|
4.29
|
%
|
-4.86
|
%
|
|||||||||
$
|
22.32
|
$
|
18.52
|
$
|
15.78
|
$
|
11.65
|
$
|
14.62
|
|||||||||
1.02
|
%
|
1.01
|
%
|
1.01
|
%
|
1.05
|
%
|
1.01
|
%
|
|||||||||
1.18
|
%
|
1.38
|
%
|
(0.17
|
)%
|
(0.14
|
)%
|
0.27
|
%
|
|||||||||
90
|
%
|
102
|
%
|
98
|
%
|
98
|
%
|
95
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of partnership
income and wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book
purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized
gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax regulations, permanent differences between book and tax basis
for reporting are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2023 are as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$2,630
|
$(2,630)
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund for the
prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax
benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of discount,
is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or decrease, as
applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of the property
received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a specific class),
and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and
paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption price per share
for the Fund is equal to the Fund’s NAV per share.
|
i).
|
REIT Equity Securities – Distributions received from real estate investment trusts (“REITs”) may be classified as dividends, capital gains, or return of capital. Investments in REITs may require the Fund to accrue
and distribute income not yet received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it otherwise would have
continued to hold. At other times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings. If the Fund distributes these amounts, these distributions could constitute a return of capital to Fund
shareholders for U.S. federal income tax
|
HENNESSY FUNDS
|
1-800-966-4354
|
purposes. Dividends received by the Fund from a REIT generally do not constitute qualified dividend income and do not qualify for the dividends-received deduction.
|
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that the Fund
limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven calendar days or
less without the sale or disposition significantly changing the market value of the investment.
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds and
Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight key information.
The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and available for delivery free of charge
to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale
Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring the fair value. The
amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that are not active
for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit risk curves, default rates,
and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable inputs are
unavailable.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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 security’s fair value would be determined as described below.
Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
146,542,218
|
|||
Gross tax unrealized appreciation
|
$
|
28,373,689
|
|||
Gross tax unrealized depreciation
|
(10,813,980
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
17,559,709
|
|||
Undistributed ordinary income
|
$
|
462,915
|
|||
Undistributed long-term capital gains
|
—
|
||||
Total distributable earnings
|
$
|
462,915
|
|||
Other accumulated gain/(loss)
|
$
|
(4,658,851
|
)
|
||
Total accumulated gain/(loss)
|
$
|
13,363,773
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Year Ended
|
Year Ended
|
||||||||
October 31, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
2,073,376
|
$
|
—
|
|||||
Long-term capital gains
|
4,012,963
|
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
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the Investment Manager or of any
predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,110.50
|
$7.08
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.50
|
$6.77
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,112.60
|
$5.43
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,020.06
|
$5.19
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.33% for Investor Class shares or 1.02% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund has historically
been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future during both normal and reasonably
foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to a highly liquid
investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make or recommend any material changes to the Liquidity Program during the review period.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was operating as
intended during the review period.
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income, and date of
birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis information, and other
financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
29
|
|
Trustees and Officers of the Fund
|
30
|
|
Expense Example
|
34
|
|
Proxy Voting Policy and Proxy Voting Records
|
36
|
|
Availability of Quarterly Portfolio Schedule
|
36
|
|
Federal Tax Distribution Information
|
36
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
36
|
|
Electronic Delivery
|
36
|
|
Liquidity Risk Management Program
|
37
|
|
Privacy Policy
|
37
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The acronym, MT. FAANNG, refers to the following companies: Microsoft Corporation, Tesla, Inc., Meta Platforms, Inc., Amazon.com, Inc., Apple, Inc., Netflix, Inc., NVIDIA Corporation, and Alphabet, Inc.
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
|
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Focus Fund –
|
|||
Investor Class (HFCSX)
|
3.52%
|
6.40%
|
6.97%
|
Hennessy Focus Fund –
|
|||
Institutional Class (HFCIX)
|
3.90%
|
6.78%
|
7.36%
|
Russell 3000® Index
|
8.38%
|
10.23%
|
10.52%
|
Russell Midcap® Growth Index
|
3.35%
|
8.09%
|
9.09%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Markel Group, Inc.
|
8.56%
|
Aon PLC
|
8.17%
|
American Tower Corp., Class A
|
7.96%
|
O'Reilly Automotive, Inc.
|
7.89%
|
Ashtead Group PLC
|
7.51%
|
Brookfield Corp.
|
7.42%
|
CarMax, Inc.
|
6.76%
|
Encore Capital Group, Inc.
|
6.72%
|
Cogent Communication Holdings, Inc.
|
5.24%
|
CDW Corp.
|
5.16%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 90.42%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 10.61%
|
||||||||||||
AST SpaceMobile, Inc. (a)
|
1,997,902
|
$
|
6,613,056
|
1.16
|
%
|
|||||||
Cogent Communications Holdings, Inc.
|
461,996
|
30,020,500
|
5.24
|
%
|
||||||||
Shenandoah Telecommunications Co.
|
796,737
|
18,850,797
|
3.30
|
%
|
||||||||
Warner Music Group Corp.
|
165,601
|
5,183,311
|
0.91
|
%
|
||||||||
|
60,667,664
|
10.61
|
%
|
|||||||||
Consumer Discretionary – 21.13%
|
||||||||||||
CarMax, Inc. (a)
|
632,799
|
38,657,691
|
6.76
|
%
|
||||||||
Hilton Worldwide Holdings, Inc.
|
39,481
|
5,982,556
|
1.05
|
%
|
||||||||
NVR, Inc. (a)
|
2,261
|
12,237,934
|
2.14
|
%
|
||||||||
O'Reilly Automotive, Inc. (a)
|
48,439
|
45,069,582
|
7.89
|
%
|
||||||||
Restoration Hardware Holdings, Inc. (a)
|
86,384
|
18,828,257
|
3.29
|
%
|
||||||||
|
120,776,020
|
21.13
|
%
|
|||||||||
Financials – 32.84%
|
||||||||||||
Aon PLC
|
151,027
|
46,727,754
|
8.17
|
%
|
||||||||
Brookfield Asset Management Ltd.
|
376,240
|
10,786,801
|
1.89
|
%
|
||||||||
Brookfield Corp.
|
1,454,542
|
42,399,899
|
7.42
|
%
|
||||||||
Brookfield Reinsurance Ltd.
|
15,721
|
459,210
|
0.08
|
%
|
||||||||
Encore Capital Group, Inc. (a)(c)
|
1,020,143
|
38,438,988
|
6.72
|
%
|
||||||||
Markel Group, Inc. (a)
|
33,245
|
48,887,438
|
8.56
|
%
|
||||||||
|
187,700,090
|
32.84
|
%
|
|||||||||
Health Care – 0.69%
|
||||||||||||
Danaher Corp.
|
20,677
|
3,970,398
|
0.69
|
%
|
||||||||
Industrials – 15.16%
|
||||||||||||
American Woodmark Corp. (a)
|
405,322
|
27,249,797
|
4.77
|
%
|
||||||||
Ashtead Group PLC
|
751,544
|
42,969,382
|
7.51
|
%
|
||||||||
SS&C Technologies Holdings, Inc.
|
171,214
|
8,603,504
|
1.51
|
%
|
||||||||
TransDigm Group, Inc. (a)
|
8,873
|
7,347,643
|
1.29
|
%
|
||||||||
Veralto Corp. (a)
|
6,892
|
475,548
|
0.08
|
%
|
||||||||
|
86,645,874
|
15.16
|
%
|
|||||||||
Information Technology – 9.01%
|
||||||||||||
Applied Materials, Inc.
|
166,465
|
22,031,643
|
3.85
|
%
|
||||||||
CDW Corp.
|
147,147
|
29,488,259
|
5.16
|
%
|
||||||||
|
51,519,902
|
9.01
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Real Estate – 0.98%
|
||||||||||||
Altus Group Ltd.
|
164,995
|
$
|
5,603,941
|
0.98
|
%
|
|||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $251,035,657)
|
516,883,889
|
90.42
|
%
|
|||||||||
|
||||||||||||
REITS – 7.96%
|
||||||||||||
Real Estate – 7.96%
|
||||||||||||
American Tower Corp., Class A
|
255,468
|
45,521,843
|
7.96
|
%
|
||||||||
|
||||||||||||
Total REITS
|
||||||||||||
(Cost $196,710)
|
45,521,843
|
7.96
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS – 1.73%
|
||||||||||||
Money Market Funds – 1.73%
|
||||||||||||
First American Treasury Obligations Fund – Class X, 5.275% (b)
|
9,893,805
|
9,893,805
|
1.73
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $9,893,805)
|
9,893,805
|
1.73
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $261,126,172) – 100.11%
|
572,299,537
|
100.11
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.11)%
|
(640,832
|
)
|
(0.11
|
)%
|
||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
571,658,705
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2023.
|
(c)
|
Investment in affiliated security. Investment represents five percent or more of the outstanding voting securities of the issuer, making the issuer and affiliate of the Fund, as defined in the Investment Company
Act of 1940, as amended. Details of transactions with affiliated companies for the year ended October 31, 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
|
$
|
—
|
$
|
(22,153,191
|
)
|
$
|
5,831,829
|
||||||||
$
|
74,084,017
|
$
|
—
|
$
|
(22,153,191
|
)
|
$
|
5,831,829
|
|||||||||
Net Change
|
|||||||||||||||||
in Unrealized
|
Value at
|
||||||||||||||||
Appreciation /
|
October 31,
|
||||||||||||||||
Common Stocks
|
Depreciation
|
Dividends
|
2023
|
Shares
|
|||||||||||||
Encore Capital Group, Inc.(1)(2)
|
$
|
(19,323,667
|
)
|
$
|
—
|
$
|
38,438,988
|
1,020,143
|
|||||||||
$
|
(19,323,667
|
)
|
$
|
—
|
$
|
38,438,988
|
1,020,143
|
(1)
|
As of October 31, 2023, this security represented 6.72% of the Fund’s net assets.
|
(2)
|
At October 31, 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
|
$
|
60,667,664
|
$
|
—
|
$
|
—
|
$
|
60,667,664
|
||||||||
Consumer Discretionary
|
120,776,020
|
—
|
—
|
120,776,020
|
||||||||||||
Financials
|
187,700,090
|
—
|
—
|
187,700,090
|
||||||||||||
Health Care
|
3,970,398
|
—
|
—
|
3,970,398
|
||||||||||||
Industrials
|
86,645,874
|
—
|
—
|
86,645,874
|
||||||||||||
Information Technology
|
51,519,902
|
—
|
—
|
51,519,902
|
||||||||||||
Real Estate
|
5,603,941
|
—
|
—
|
5,603,941
|
||||||||||||
Total Common Stocks
|
$
|
516,883,889
|
$
|
—
|
$
|
—
|
$
|
516,883,889
|
||||||||
REITS
|
||||||||||||||||
Real Estate
|
$
|
45,521,843
|
$
|
—
|
$
|
—
|
$
|
45,521,843
|
||||||||
Total REITS
|
$
|
45,521,843
|
$
|
—
|
$
|
—
|
$
|
45,521,843
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
9,893,805
|
$
|
—
|
$
|
—
|
$
|
9,893,805
|
||||||||
Total Short-Term Investments
|
$
|
9,893,805
|
$
|
—
|
$
|
—
|
$
|
9,893,805
|
||||||||
Total Investments
|
$
|
572,299,537
|
$
|
—
|
$
|
—
|
$
|
572,299,537
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $261,126,172)
|
$
|
572,299,537
|
||
Dividends and interest receivable
|
135,957
|
|||
Receivable for fund shares sold
|
259,619
|
|||
Receivable for securities sold
|
149,775
|
|||
Prepaid expenses and other assets
|
59,604
|
|||
Total assets
|
572,904,492
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
466,569
|
|||
Payable to advisor
|
454,305
|
|||
Payable to administrator
|
114,330
|
|||
Payable to auditor
|
22,749
|
|||
Accrued distribution fees
|
66,166
|
|||
Accrued service fees
|
31,508
|
|||
Accrued trustees fees
|
11,422
|
|||
Accrued expenses and other payables
|
78,738
|
|||
Total liabilities
|
1,245,787
|
|||
NET ASSETS
|
$
|
571,658,705
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
133,835,273
|
||
Total distributable earnings
|
437,823,432
|
|||
Total net assets
|
$
|
571,658,705
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
357,132,729
|
||
Shares issued and outstanding
|
7,740,035
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
46.14
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
214,525,976
|
||
Shares issued and outstanding
|
4,439,381
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
48.32
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2023
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
5,740,782
|
||
Interest income
|
468,014
|
|||
Total investment income
|
6,208,796
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
6,067,912
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
877,658
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
237,606
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
638,712
|
|||
Distribution fees – Investor Class (See Note 5)
|
622,366
|
|||
Service fees – Investor Class (See Note 5)
|
414,910
|
|||
Federal and state registration fees
|
46,761
|
|||
Reports to shareholders
|
46,532
|
|||
Trustees' fees and expenses
|
26,941
|
|||
Audit fees
|
22,755
|
|||
Compliance expense (See Note 5)
|
22,668
|
|||
Legal fees
|
16,068
|
|||
Interest expense (See Note 7)
|
1,138
|
|||
Other expenses
|
134,486
|
|||
Total expenses
|
9,176,513
|
|||
NET INVESTMENT LOSS
|
$
|
(2,967,717
|
)
|
|
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments:
|
||||
Unaffiliated investments
|
$
|
149,534,219
|
||
Affiliated investments
|
5,831,829
|
|||
Net change in unrealized appreciation/depreciation on investments
|
||||
Unaffiliated investments
|
(99,246,808
|
)
|
||
Affiliated investments
|
(19,323,667
|
)
|
||
Net gain on investments
|
36,795,573
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
33,827,856
|
(1)
|
Net of foreign taxes withheld of $135,044.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2023
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment loss
|
$
|
(2,967,717
|
)
|
$
|
(7,213,114
|
)
|
||
Net realized gain on investments
|
155,366,048
|
107,121,107
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(118,570,475
|
)
|
(377,001,093
|
)
|
||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
33,827,856
|
(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
|
5,238,833
|
13,194,104
|
||||||
Proceeds from shares subscribed – Institutional Class
|
33,286,516
|
64,242,530
|
||||||
Dividends reinvested – Investor Class
|
54,418,112
|
100,142,196
|
||||||
Dividends reinvested – Institutional Class
|
35,095,377
|
68,169,964
|
||||||
Cost of shares redeemed – Investor Class
|
(97,262,475
|
)
|
(125,473,751
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(139,348,625
|
)
|
(133,218,468
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(108,572,262
|
)
|
(12,943,425
|
)
|
||||
TOTAL DECREASE IN NET ASSETS
|
(168,962,696
|
)
|
(467,293,266
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of year
|
740,621,401
|
1,207,914,667
|
||||||
End of year
|
$
|
571,658,705
|
$
|
740,621,401
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
107,578
|
208,254
|
||||||
Shares sold – Institutional Class
|
655,626
|
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
|
721,682
|
950,104
|
||||||
Shares redeemed – Investor Class
|
(1,980,392
|
)
|
(2,029,388
|
)
|
||||
Shares redeemed – Institutional Class
|
(2,730,525
|
)
|
(2,110,055
|
)
|
||||
Net decrease in shares outstanding
|
(2,058,010
|
)
|
(536,068
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
51.12
|
$
|
80.48
|
$
|
71.68
|
$
|
85.11
|
$
|
83.20
|
|||||||||
(0.29
|
)
|
(0.56
|
)
|
(0.63
|
)
|
(0.66
|
)
|
(0.52
|
)
|
|||||||||
2.15
|
(16.93
|
)
|
31.46
|
(4.21
|
)
|
16.90
|
||||||||||||
1.86
|
(17.49
|
)
|
30.83
|
(4.87
|
)
|
16.38
|
||||||||||||
(6.84
|
)
|
(11.87
|
)
|
(22.03
|
)
|
(8.56
|
)
|
(14.47
|
)
|
|||||||||
(6.84
|
)
|
(11.87
|
)
|
(22.03
|
)
|
(8.56
|
)
|
(14.47
|
)
|
|||||||||
$
|
46.14
|
$
|
51.12
|
$
|
80.48
|
$
|
71.68
|
$
|
85.11
|
|||||||||
3.52
|
%
|
-25.55
|
%
|
52.87
|
%
|
-6.79
|
%
|
24.16
|
%
|
|||||||||
$
|
357.13
|
$
|
431.67
|
$
|
709.40
|
$
|
678.72
|
$
|
1,213.20
|
|||||||||
1.50
|
%
|
1.52
|
%
|
1.49
|
%
|
1.51
|
%
|
1.47
|
%
|
|||||||||
(0.58
|
)%
|
(0.92
|
)%
|
(0.88
|
)%
|
(0.88
|
)%
|
(0.67
|
)%
|
|||||||||
12
|
%
|
5
|
%
|
4
|
%
|
5
|
%
|
2
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
53.34
|
$
|
83.66
|
$
|
74.24
|
$
|
87.83
|
$
|
85.66
|
|||||||||
(0.11
|
)
|
(0.34
|
)
|
(0.37
|
)
|
(0.39
|
)
|
(0.25
|
)
|
|||||||||
2.23
|
(17.63
|
)
|
32.62
|
(4.36
|
)
|
17.41
|
||||||||||||
2.12
|
(17.97
|
)
|
32.25
|
(4.75
|
)
|
17.16
|
||||||||||||
(7.14
|
)
|
(12.35
|
)
|
(22.83
|
)
|
(8.84
|
)
|
(14.99
|
)
|
|||||||||
(7.14
|
)
|
(12.35
|
)
|
(22.83
|
)
|
(8.84
|
)
|
(14.99
|
)
|
|||||||||
$
|
48.32
|
$
|
53.34
|
$
|
83.66
|
$
|
74.24
|
$
|
87.83
|
|||||||||
3.90
|
%
|
-25.27
|
%
|
53.43
|
%
|
-6.45
|
%
|
24.59
|
%
|
|||||||||
$
|
214.53
|
$
|
308.95
|
$
|
498.51
|
$
|
387.55
|
$
|
586.25
|
|||||||||
1.13
|
%
|
1.13
|
%
|
1.12
|
%
|
1.14
|
%
|
1.12
|
%
|
|||||||||
(0.22
|
)%
|
(0.53
|
)%
|
(0.50
|
)%
|
(0.51
|
)%
|
(0.32
|
)%
|
|||||||||
12
|
%
|
5
|
%
|
4
|
%
|
5
|
%
|
2
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash sales
for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may include
short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to
shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax regulations, permanent differences between book and tax
basis for reporting are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2023 are as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(11,633,790)
|
$11,633,790
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund for
the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax
benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or
decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of the
property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a
specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared and
paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption price per share
for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Foreign Currency – Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market exchange rate at the time of valuation. Purchases and sales of investments and
income are translated into U.S. dollars using the spot market exchange rate prevailing on the respective dates of such transactions. The Fund does not isolate the portion of the results of operations resulting from fluctuations in foreign
exchange rates on investments from fluctuations resulting from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain/loss on
|
HENNESSY FUNDS
|
1-800-966-4354
|
investments. Foreign investments present additional risks due to currency fluctuations, economic and political factors, lower liquidity, government regulations, differences in accounting standards, and other
factors.
|
|
j).
|
REIT Equity Securities – Distributions received from real estate investment trusts (“REITs”) may be classified as dividends, capital gains, or return of capital. Investments in REITs may require the Fund to accrue
and distribute income not yet received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it otherwise would
have continued to hold. At other times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings. If the Fund distributes these amounts, these distributions could constitute a return of capital to Fund
shareholders for U.S. federal income tax purposes. Dividends received by the Fund from a REIT generally do not constitute qualified dividend income and do not qualify for the dividends-received deduction.
|
k).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that the
Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven calendar
days or less without the sale or disposition significantly changing the market value of the investment.
|
l).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds and
Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight key
information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and available for delivery
free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale
Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring the fair value. The
amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that are not
active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit risk curves, default
rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable inputs are
unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual funds,
partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on
which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities
exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are
classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV because most foreign markets close well before such time. The earlier close of
most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In certain circumstances, it may be determined that a foreign security needs to be fair valued
because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by
a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending NAV
provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S. government
agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently
executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate observable market data,
such as reported sales
|
HENNESSY FUNDS
|
1-800-966-4354
|
of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified in Level 2 of the fair
value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as of the
61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below.
Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
261,126,172
|
|||
Gross tax unrealized appreciation
|
$
|
324,894,701
|
|||
Gross tax unrealized depreciation
|
(13,721,336
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
311,173,365
|
|||
Undistributed ordinary income
|
$
|
—
|
|||
Undistributed long-term capital gains
|
129,052,636
|
||||
Total distributable earnings
|
$
|
129,052,636
|
|||
Other accumulated gain/(loss)
|
$
|
(2,402,569
|
)
|
||
Total accumulated gain/(loss)
|
$
|
437,823,432
|
Year Ended
|
Year Ended
|
||||||||
October 31, 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
|
Long-term
|
|||
Investor Class
|
10.60940
|
||
Institutional Class
|
11.11527
|
WWW.HENNESSYFUNDS.COM
|
NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
TAIT, WELLER & BAKER LLP
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the Investment Manager or of any
predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 961.50
|
$7.32
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,017.74
|
$7.53
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 963.30
|
$5.49
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.61
|
$5.65
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.48% for Investor Class shares or 1.11% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund has
historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future during both normal
and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to a highly
liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make or recommend any material changes to the Liquidity Program during the review period.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was operating as
intended during the review period.
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income, and date
of birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis information, and other
financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
28
|
|
Trustees and Officers of the Fund
|
29
|
|
Expense Example
|
34
|
|
Proxy Voting Policy and Proxy Voting Records
|
36
|
|
Availability of Quarterly Portfolio Schedule
|
36
|
|
Federal Tax Distribution Information
|
36
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
36
|
|
Electronic Delivery
|
36
|
|
Liquidity Risk Management Program
|
37
|
|
Privacy Policy
|
37
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The acronym, MT. FAANNG, refers to the following companies: Microsoft Corporation, Tesla, Inc., Meta Platforms, Inc., Amazon.com, Inc., Apple, Inc., Netflix, Inc., NVIDIA Corporation, and Alphabet, Inc.
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Cornerstone Mid Cap 30 Fund –
|
|||
Investor Class (HFMDX)
|
10.03%
|
13.91%
|
9.95%
|
Hennessy Cornerstone Mid Cap 30 Fund –
|
|||
Institutional Class (HIMDX)
|
10.43%
|
14.32%
|
10.33%
|
Russell Midcap® Index
|
-1.01%
|
7.14%
|
8.05%
|
S&P 500® Index
|
10.14%
|
11.01%
|
11.18%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Gap, Inc.
|
4.02%
|
Liberty Energy, Inc.
|
3.60%
|
Comfort Systems USA, Inc.
|
3.54%
|
Abercrombie & Fitch Co., Class A
|
3.53%
|
Parsons Corp.
|
3.39%
|
EnLink Midstream LLC
|
3.37%
|
Guess, Inc.
|
3.35%
|
XPO, Inc.
|
3.32%
|
Plains GP Holdings LP, Class A
|
3.30%
|
Sterling Infrastructure, Inc.
|
3.28%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 97.00%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 2.92%
|
||||||||||||
Cinemark Holdings, Inc. (a)
|
1,045,400
|
$
|
17,238,646
|
2.92
|
%
|
|||||||
|
||||||||||||
Consumer Discretionary – 16.95%
|
||||||||||||
Abercrombie & Fitch Co., Class A (a)
|
343,300
|
20,879,506
|
3.53
|
%
|
||||||||
Gap, Inc.
|
1,860,200
|
23,810,560
|
4.02
|
%
|
||||||||
Group 1 Automotive, Inc.
|
74,200
|
18,722,886
|
3.17
|
%
|
||||||||
Guess, Inc.
|
920,600
|
19,792,900
|
3.35
|
%
|
||||||||
Modine Manufacturing Co. (a)
|
430,800
|
17,016,600
|
2.88
|
%
|
||||||||
|
100,222,452
|
16.95
|
%
|
|||||||||
|
||||||||||||
Consumer Staples – 6.50%
|
||||||||||||
Coca-Cola Consolidated, Inc.
|
30,056
|
19,127,939
|
3.24
|
%
|
||||||||
Sprouts Farmers Market, Inc. (a)
|
459,100
|
19,291,382
|
3.26
|
%
|
||||||||
|
38,419,321
|
6.50
|
%
|
|||||||||
|
||||||||||||
Energy – 25.37%
|
||||||||||||
California Resources Corp.
|
348,700
|
18,338,133
|
3.10
|
%
|
||||||||
CONSOL Energy, Inc.
|
190,600
|
17,514,234
|
2.96
|
%
|
||||||||
EnLink Midstream LLC
|
1,619,700
|
19,906,113
|
3.37
|
%
|
||||||||
Liberty Energy, Inc.
|
1,079,800
|
21,272,060
|
3.60
|
%
|
||||||||
Oceaneering International, Inc. (a)
|
763,100
|
16,780,569
|
2.84
|
%
|
||||||||
Par Pacific Holdings, Inc. (a)
|
558,900
|
18,343,098
|
3.10
|
%
|
||||||||
PBF Energy, Inc., Class A
|
385,934
|
18,343,443
|
3.10
|
%
|
||||||||
Plains GP Holdings LP, Class A
|
1,245,000
|
19,521,600
|
3.30
|
%
|
||||||||
|
150,019,250
|
25.37
|
%
|
|||||||||
|
||||||||||||
Financials – 1.39%
|
||||||||||||
NCR Atleos Corp. (a)
|
371,450
|
8,194,187
|
1.39
|
%
|
||||||||
|
||||||||||||
Industrials – 35.57%
|
||||||||||||
Applied Industrial Technologies, Inc.
|
123,500
|
18,958,485
|
3.20
|
%
|
||||||||
Comfort Systems USA, Inc.
|
115,200
|
20,949,120
|
3.54
|
%
|
||||||||
EMCOR Group, Inc.
|
93,500
|
19,321,775
|
3.27
|
%
|
||||||||
Flowserve Corp.
|
498,500
|
18,304,920
|
3.10
|
%
|
||||||||
Fluor Corp. (a)
|
550,200
|
18,316,158
|
3.10
|
%
|
||||||||
MillerKnoll, Inc.
|
805,400
|
18,926,900
|
3.20
|
%
|
||||||||
MSC Industrial Direct Co., Inc.
|
196,900
|
18,656,275
|
3.16
|
%
|
||||||||
Oshkosh Corp.
|
203,100
|
17,817,963
|
3.01
|
%
|
||||||||
Parsons Corp. (a)
|
353,300
|
19,979,115
|
3.39
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Industrials (Continued)
|
||||||||||||
Sterling Infrastructure, Inc. (a)
|
266,000
|
$
|
19,378,100
|
3.28
|
%
|
|||||||
XPO, Inc. (a)
|
259,200
|
19,649,952
|
3.32
|
%
|
||||||||
|
210,258,763
|
35.57
|
%
|
|||||||||
Information Technology – 5.17%
|
||||||||||||
Kyndryl Holdings, Inc. (a)
|
1,284,400
|
18,790,772
|
3.18
|
%
|
||||||||
NCR Voyix Corp. (a)
|
771,400
|
11,794,706
|
1.99
|
%
|
||||||||
|
30,585,478
|
5.17
|
%
|
|||||||||
Materials – 3.13%
|
||||||||||||
Carpenter Technology Corp.
|
295,400
|
18,527,488
|
3.13
|
%
|
||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $571,285,807)
|
573,465,585
|
97.00
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS – 2.95%
|
||||||||||||
Money Market Funds – 2.95%
|
||||||||||||
First American Treasury Obligations Fund – Class X, 5.275% (b)
|
17,459,708
|
17,459,708
|
2.95
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $17,459,708)
|
17,459,708
|
2.95
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $588,745,515) – 99.95%
|
590,925,293
|
99.95
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.05%
|
316,929
|
0.05
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
591,242,222
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
17,238,646
|
$
|
—
|
$
|
—
|
$
|
17,238,646
|
||||||||
Consumer Discretionary
|
100,222,452
|
—
|
—
|
100,222,452
|
||||||||||||
Consumer Staples
|
38,419,321
|
—
|
—
|
38,419,321
|
||||||||||||
Energy
|
150,019,250
|
—
|
—
|
150,019,250
|
||||||||||||
Financials
|
8,194,187
|
—
|
—
|
8,194,187
|
||||||||||||
Industrials
|
210,258,763
|
—
|
—
|
210,258,763
|
||||||||||||
Information Technology
|
30,585,478
|
—
|
—
|
30,585,478
|
||||||||||||
Materials
|
18,527,488
|
—
|
—
|
18,527,488
|
||||||||||||
Total Common Stocks
|
$
|
573,465,585
|
$
|
—
|
$
|
—
|
$
|
573,465,585
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
17,459,708
|
$
|
—
|
$
|
—
|
$
|
17,459,708
|
||||||||
Total Short-Term Investments
|
$
|
17,459,708
|
$
|
—
|
$
|
—
|
$
|
17,459,708
|
||||||||
Total Investments
|
$
|
590,925,293
|
$
|
—
|
$
|
—
|
$
|
590,925,293
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $588,745,515)
|
$
|
590,925,293
|
||
Dividends and interest receivable
|
147,215
|
|||
Receivable for fund shares sold
|
1,015,462
|
|||
Return of capital receivable
|
535,500
|
|||
Prepaid expenses and other assets
|
63,536
|
|||
Total assets
|
592,687,006
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
855,170
|
|||
Payable to advisor
|
375,407
|
|||
Payable to administrator
|
98,864
|
|||
Payable to auditor
|
22,746
|
|||
Accrued distribution fees
|
42,563
|
|||
Accrued service fees
|
25,655
|
|||
Accrued trustees fees
|
9,078
|
|||
Accrued expenses and other payables
|
15,301
|
|||
Total liabilities
|
1,444,784
|
|||
NET ASSETS
|
$
|
591,242,222
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
527,846,078
|
||
Total distributable earnings
|
63,396,144
|
|||
Total net assets
|
$
|
591,242,222
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
297,365,047
|
||
Shares issued and outstanding
|
15,717,108
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
18.92
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
293,877,175
|
||
Shares issued and outstanding
|
14,762,286
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
19.91
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2023
|
INVESTMENT INCOME:
|
||||
Distributions received from master limited partnerships
|
$
|
855,171
|
||
Return of capital on distributions received
|
(855,171
|
)
|
||
Dividend income from common stock
|
5,909,259
|
|||
Interest income
|
629,683
|
|||
Total investment income
|
6,538,942
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
3,415,249
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
505,543
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
175,557
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
433,690
|
|||
Distribution fees – Investor Class (See Note 5)
|
371,567
|
|||
Service fees – Investor Class (See Note 5)
|
247,711
|
|||
Federal and state registration fees
|
41,004
|
|||
Reports to shareholders
|
34,534
|
|||
Trustees’ fees and expenses
|
26,241
|
|||
Audit fees
|
22,747
|
|||
Compliance expense (See Note 5)
|
22,676
|
|||
Legal fees
|
9,220
|
|||
Other expenses
|
70,335
|
|||
Total expenses
|
5,376,074
|
|||
NET INVESTMENT INCOME
|
$
|
1,162,868
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
63,162,651
|
||
Net change in unrealized appreciation/depreciation on investments
|
(36,349,926
|
)
|
||
Net gain on investments
|
26,812,725
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
27,975,593
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2023
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
1,162,868
|
$
|
3,718,695
|
||||
Net realized gain on investments
|
63,162,651
|
112,575,778
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(36,349,926
|
)
|
(90,874,972
|
)
|
||||
Net increase in net assets resulting from operations
|
27,975,593
|
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
|
118,407,401
|
15,003,867
|
||||||
Proceeds from shares subscribed – Institutional Class
|
149,518,551
|
31,051,642
|
||||||
Dividends reinvested – Investor Class
|
36,888,250
|
3,639,869
|
||||||
Dividends reinvested – Institutional Class
|
29,290,877
|
2,742,901
|
||||||
Cost of shares redeemed – Investor Class
|
(52,168,702
|
)
|
(33,887,466
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(40,806,405
|
)
|
(36,606,351
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
241,129,972
|
(18,055,538
|
)
|
|||||
TOTAL INCREASE IN NET ASSETS
|
201,621,726
|
853,245
|
||||||
NET ASSETS:
|
||||||||
Beginning of year
|
389,620,496
|
388,767,251
|
||||||
End of year
|
$
|
591,242,222
|
$
|
389,620,496
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
6,016,089
|
762,770
|
||||||
Shares sold – Institutional Class
|
7,194,865
|
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
|
(2,782,892
|
)
|
(1,726,740
|
)
|
||||
Shares redeemed – Institutional Class
|
(2,066,940
|
)
|
(1,822,025
|
)
|
||||
Net increase (decrease) in shares outstanding
|
12,162,848
|
(972,115
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
20.83
|
$
|
19.78
|
$
|
13.27
|
$
|
12.01
|
$
|
16.87
|
|||||||||
0.01
|
0.17
|
(0.14
|
)
|
(0.03
|
)
|
(0.02
|
)
|
|||||||||||
1.68
|
1.22
|
6.65
|
1.29
|
(0.34
|
)
|
|||||||||||||
1.69
|
1.39
|
6.51
|
1.26
|
(0.36
|
)
|
|||||||||||||
—
|
(0.34
|
)
|
—
|
—
|
—
|
|||||||||||||
(3.60
|
)
|
—
|
—
|
—
|
(4.50
|
)
|
||||||||||||
(3.60
|
)
|
(0.34
|
)
|
—
|
—
|
(4.50
|
)
|
|||||||||||
$
|
18.92
|
$
|
20.83
|
$
|
19.78
|
$
|
13.27
|
$
|
12.01
|
|||||||||
10.03
|
%
|
7.12
|
%
|
49.06
|
%
|
10.49
|
%
|
-1.22
|
%
|
|||||||||
$
|
297.37
|
$
|
215.00
|
$
|
219.58
|
$
|
188.71
|
$
|
206.11
|
|||||||||
1.34
|
%
|
1.35
|
%
|
1.36
|
%
|
1.37
|
%
|
1.36
|
%
|
|||||||||
0.09
|
%
|
0.84
|
%
|
(0.74
|
)%
|
(0.27
|
)%
|
(0.15
|
)%
|
|||||||||
120
|
%
|
176
|
%
|
0
|
%
|
94
|
%
|
70
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
21.84
|
$
|
20.66
|
$
|
13.81
|
$
|
12.46
|
$
|
17.38
|
|||||||||
0.09
|
0.24
|
(0.07
|
)
|
0.01
|
0.03
|
|||||||||||||
1.76
|
1.29
|
6.92
|
1.34
|
(0.36
|
)
|
|||||||||||||
1.85
|
1.53
|
6.85
|
1.35
|
(0.33
|
)
|
|||||||||||||
—
|
(0.35
|
)
|
—
|
—
|
—
|
|||||||||||||
(3.78
|
)
|
—
|
—
|
—
|
(4.59
|
)
|
||||||||||||
(3.78
|
)
|
(0.35
|
)
|
—
|
—
|
(4.59
|
)
|
|||||||||||
$
|
19.91
|
$
|
21.84
|
$
|
20.66
|
$
|
13.81
|
$
|
12.46
|
|||||||||
10.43
|
%
|
7.52
|
%
|
49.60
|
%
|
10.83
|
%
|
-0.84
|
%
|
|||||||||
$
|
293.88
|
$
|
174.62
|
$
|
169.19
|
$
|
136.09
|
$
|
168.79
|
|||||||||
0.97
|
%
|
1.00
|
%
|
0.99
|
%
|
1.01
|
%
|
1.00
|
%
|
|||||||||
0.44
|
%
|
1.18
|
%
|
(0.38
|
)%
|
0.09
|
%
|
0.20
|
%
|
|||||||||
120
|
%
|
176
|
%
|
0
|
%
|
94
|
%
|
70
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash
sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains
distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax regulations,
permanent differences between book and tax basis for reporting are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2023 are as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$1,988,545
|
$(1,988,545)
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund for
the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax
benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or
decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of
the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to a
specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets. Distributions received from the Fund’s investments in master limited partnerships (“MLPs”)
generally consist of ordinary income, capital gains, and return of capital. The Fund records investment income on the ex-date of the distributions. For financial statement purposes, the Fund uses return of capital and income estimates to
allocate the dividend income received. Such estimates are based on historical information available from the MLPs and other industry sources. These estimates may subsequently be revised based on information received from the MLPs after
their tax reporting periods are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Fund.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared
and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption price per
share for the Fund is equal to the Fund’s NAV per share.
|
HENNESSY FUNDS
|
1-800-966-4354
|
i).
|
Partnership Accounting Policy – To the extent the Fund receives distributions from underlying partnerships in which it invests, the Fund records its pro rata share of income/loss and capital gains/losses and
accordingly adjusts the cost basis of the underlying partnerships for return of capital.
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that the
Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven calendar
days or less without the sale or disposition significantly changing the market value of the investment.
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds and
Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight key
information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and available for delivery
free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of
Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not
considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and
interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that are not
active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit risk curves,
default rates, and similar data).
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable inputs are
unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, exchange-traded funds, closed-end mutual funds, partnerships, rights, MLPs, and real
estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on which the securities are
listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for which a
last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in Level 1
of the fair value hierarchy.
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending NAV
provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S. government
agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently
executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate observable market data,
such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified in Level 2 of the fair value
hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as of
the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below.
Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
588,796,241
|
|||
Gross tax unrealized appreciation
|
$
|
26,472,783
|
|||
Gross tax unrealized depreciation
|
(24,343,731
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
2,129,052
|
|||
Undistributed ordinary income
|
$
|
—
|
|||
Undistributed long-term capital gains
|
61,267,092
|
||||
Total distributable earnings
|
$
|
61,267,092
|
|||
Other accumulated gain/(loss)
|
$
|
—
|
|||
Total accumulated gain/(loss)
|
$
|
63,396,144
|
Year Ended
|
Year Ended
|
||||||||
October 31, 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
|
Long-term
|
|||
Investor Class
|
1.89834
|
||
Institutional Class
|
1.99820
|
HENNESSY FUNDS
|
1-800-966-4354
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the Investment Manager or of
any predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,081.80
|
$6.93
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.55
|
$6.72
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,083.80
|
$4.99
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,020.42
|
$4.84
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.32% for Investor Class shares or 0.95% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund has
historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future during both
normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to a highly
liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make or recommend any material changes to the Liquidity Program during the review period.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was operating as
intended during the review period.
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income, and date
of birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis information, and
other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
27
|
|
Trustees and Officers of the Fund
|
28
|
|
Expense Example
|
32
|
|
Proxy Voting Policy and Proxy Voting Records
|
34
|
|
Availability of Quarterly Portfolio Schedule
|
34
|
|
Federal Tax Distribution Information
|
34
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
34
|
|
Electronic Delivery
|
34
|
|
Liquidity Risk Management Program
|
35
|
|
Privacy Policy
|
35
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The acronym, MT. FAANNG, refers to the following companies: Microsoft Corporation, Tesla, Inc., Meta Platforms, Inc., Amazon.com, Inc., Apple, Inc., Netflix, Inc., NVIDIA Corporation, and Alphabet, Inc.
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Cornerstone Large Growth Fund –
|
|||
Investor Class (HFLGX)
|
9.48%
|
8.63%
|
8.88%
|
Hennessy Cornerstone Large Growth Fund –
|
|||
Institutional Class (HILGX)
|
9.85%
|
8.95%
|
9.15%
|
Russell 1000® Index
|
9.48%
|
10.71%
|
10.88%
|
S&P 500® Index
|
10.14%
|
11.01%
|
11.18%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Dell Technologies, Inc.
|
3.33%
|
Jabil, Inc.
|
3.17%
|
Builders FirstSource, Inc.
|
2.78%
|
PulteGroup, Inc.
|
2.64%
|
KLA Corp.
|
2.41%
|
Applied Materials, Inc.
|
2.35%
|
Lam Research Corp.
|
2.33%
|
Cencora, Inc.
|
2.31%
|
Coterra Energy, Inc
|
2.31%
|
Diamondback Energy, Inc.
|
2.29%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 97.43%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 1.50%
|
||||||||||||
Sirius XM Holdings, Inc.
|
450,200
|
$
|
1,926,856
|
1.50
|
%
|
|||||||
Consumer Discretionary – 14.92%
|
||||||||||||
Bath & Body Works, Inc.
|
56,200
|
1,666,330
|
1.30
|
%
|
||||||||
Best Buy Co., Inc.
|
29,900
|
1,997,918
|
1.55
|
%
|
||||||||
Darden Restaurants, Inc.
|
18,100
|
2,634,093
|
2.05
|
%
|
||||||||
DR Horton, Inc.
|
26,800
|
2,797,920
|
2.17
|
%
|
||||||||
Lowe’s Companies., Inc.
|
12,700
|
2,420,239
|
1.88
|
%
|
||||||||
NVR, Inc. (a)
|
500
|
2,706,310
|
2.10
|
%
|
||||||||
PulteGroup, Inc.
|
46,100
|
3,392,499
|
2.64
|
%
|
||||||||
Tapestry, Inc.
|
57,300
|
1,579,188
|
1.23
|
%
|
||||||||
|
19,194,497
|
14.92
|
%
|
|||||||||
Energy – 20.48%
|
||||||||||||
APA Corp.
|
62,300
|
2,474,556
|
1.92
|
%
|
||||||||
Chesapeake Energy Corp.
|
31,300
|
2,694,304
|
2.09
|
%
|
||||||||
ConocoPhillips
|
22,500
|
2,673,000
|
2.08
|
%
|
||||||||
Coterra Energy, Inc.
|
107,800
|
2,964,500
|
2.31
|
%
|
||||||||
Devon Energy Corp.
|
42,800
|
1,993,196
|
1.55
|
%
|
||||||||
Diamondback Energy, Inc.
|
18,400
|
2,949,888
|
2.29
|
%
|
||||||||
EOG Resources, Inc.
|
20,800
|
2,626,000
|
2.04
|
%
|
||||||||
Ovintiv, Inc.
|
56,400
|
2,707,200
|
2.10
|
%
|
||||||||
Pioneer Natural Resources Co.
|
11,800
|
2,820,200
|
2.19
|
%
|
||||||||
Valero Energy Corp.
|
19,300
|
2,451,100
|
1.91
|
%
|
||||||||
|
26,353,944
|
20.48
|
%
|
|||||||||
Financials – 6.63%
|
||||||||||||
Ameriprise Financial, Inc.
|
7,500
|
2,359,275
|
1.83
|
%
|
||||||||
Equitable Holdings, Inc.
|
82,400
|
2,189,368
|
1.70
|
%
|
||||||||
Principal Financial Group, Inc.
|
28,900
|
1,955,952
|
1.52
|
%
|
||||||||
T. Rowe Price Group, Inc.
|
22,400
|
2,027,200
|
1.58
|
%
|
||||||||
|
8,531,795
|
6.63
|
%
|
|||||||||
Health Care – 4.64%
|
||||||||||||
Cencora, Inc.
|
16,100
|
2,980,915
|
2.31
|
%
|
||||||||
Moderna, Inc. (a)
|
15,400
|
1,169,784
|
0.91
|
%
|
||||||||
Pfizer, Inc.
|
59,600
|
1,821,376
|
1.42
|
%
|
||||||||
|
5,972,075
|
4.64
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Industrials – 15.40%
|
||||||||||||
Builders FirstSource, Inc. (a)
|
32,900
|
$
|
3,570,308
|
2.78
|
%
|
|||||||
C.H. Robinson Worldwide, Inc.
|
26,000
|
2,127,580
|
1.65
|
%
|
||||||||
Caterpillar, Inc.
|
10,600
|
2,396,130
|
1.86
|
%
|
||||||||
Deere & Co.
|
6,200
|
2,265,232
|
1.76
|
%
|
||||||||
Expeditors International of Washington, Inc.
|
23,500
|
2,567,375
|
2.00
|
%
|
||||||||
J.B. Hunt Transport Services, Inc.
|
13,500
|
2,320,245
|
1.80
|
%
|
||||||||
Masco Corp.
|
48,600
|
2,531,574
|
1.97
|
%
|
||||||||
United Parcel Service, Inc., Class B
|
14,400
|
2,034,000
|
1.58
|
%
|
||||||||
|
19,812,444
|
15.40
|
%
|
|||||||||
Information Technology – 23.23%
|
||||||||||||
Applied Materials, Inc.
|
22,800
|
3,017,580
|
2.35
|
%
|
||||||||
Cisco Systems, Inc.
|
54,800
|
2,856,724
|
2.22
|
%
|
||||||||
Dell Technologies, Inc.
|
64,000
|
4,282,240
|
3.33
|
%
|
||||||||
HP, Inc.
|
89,500
|
2,356,535
|
1.83
|
%
|
||||||||
Jabil, Inc.
|
33,200
|
4,076,960
|
3.17
|
%
|
||||||||
KLA Corp.
|
6,600
|
3,100,020
|
2.41
|
%
|
||||||||
Lam Research Corp.
|
5,100
|
2,999,922
|
2.33
|
%
|
||||||||
NetApp, Inc.
|
39,700
|
2,889,366
|
2.25
|
%
|
||||||||
ON Semiconductor Corp. (a)
|
35,000
|
2,192,400
|
1.70
|
%
|
||||||||
QUALCOMM, Inc.
|
19,400
|
2,114,406
|
1.64
|
%
|
||||||||
|
29,886,153
|
23.23
|
%
|
|||||||||
Materials – 10.63%
|
||||||||||||
CF Industries Holdings, Inc.
|
30,600
|
2,441,268
|
1.90
|
%
|
||||||||
Cleveland-Cliffs, Inc. (a)
|
122,800
|
2,060,584
|
1.60
|
%
|
||||||||
Mosaic Co.
|
53,000
|
1,721,440
|
1.34
|
%
|
||||||||
Nucor Corp.
|
15,300
|
2,261,187
|
1.76
|
%
|
||||||||
Reliance Steel & Aluminum Co.
|
11,500
|
2,925,370
|
2.27
|
%
|
||||||||
Steel Dynamics, Inc.
|
21,300
|
2,268,663
|
1.76
|
%
|
||||||||
|
13,678,512
|
10.63
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $127,256,847)
|
125,356,276
|
97.43
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 2.59%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 2.59%
|
||||||||||||
First American Treasury Obligations Fund – Class X, 5.275% (b)
|
3,327,934
|
$
|
3,327,934
|
2.59
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $3,327,934)
|
3,327,934
|
2.59
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $130,584,781) – 100.02%
|
128,684,210
|
100.02
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.02)%
|
(22,932
|
)
|
(0.02
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
128,661,278
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2023.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
1,926,856
|
$
|
—
|
$
|
—
|
$
|
1,926,856
|
||||||||
Consumer Discretionary
|
19,194,497
|
—
|
—
|
19,194,497
|
||||||||||||
Energy
|
26,353,944
|
—
|
—
|
26,353,944
|
||||||||||||
Financials
|
8,531,795
|
—
|
—
|
8,531,795
|
||||||||||||
Health Care
|
5,972,075
|
—
|
—
|
5,972,075
|
||||||||||||
Industrials
|
19,812,444
|
—
|
—
|
19,812,444
|
||||||||||||
Information Technology
|
29,886,153
|
—
|
—
|
29,886,153
|
||||||||||||
Materials
|
13,678,512
|
—
|
—
|
13,678,512
|
||||||||||||
Total Common Stocks
|
$
|
125,356,276
|
$
|
—
|
$
|
—
|
$
|
125,356,276
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
3,327,934
|
$
|
—
|
$
|
—
|
$
|
3,327,934
|
||||||||
Total Short-Term Investments
|
$
|
3,327,934
|
$
|
—
|
$
|
—
|
$
|
3,327,934
|
||||||||
Total Investments
|
$
|
128,684,210
|
$
|
—
|
$
|
—
|
$
|
128,684,210
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $130,584,781)
|
$
|
128,684,210
|
||
Dividends and interest receivable
|
123,640
|
|||
Receivable for fund shares sold
|
2,144
|
|||
Prepaid expenses and other assets
|
22,748
|
|||
Total assets
|
128,832,742
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
999
|
|||
Payable to advisor
|
83,534
|
|||
Payable to administrator
|
22,734
|
|||
Payable to auditor
|
22,746
|
|||
Accrued distribution fees
|
17,285
|
|||
Accrued service fees
|
9,902
|
|||
Accrued trustees fees
|
6,531
|
|||
Accrued expenses and other payables
|
7,733
|
|||
Total liabilities
|
171,464
|
|||
NET ASSETS
|
$
|
128,661,278
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
125,206,274
|
||
Total distributable earnings
|
3,455,004
|
|||
Total net assets
|
$
|
128,661,278
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
112,889,870
|
||
Shares issued and outstanding
|
11,221,550
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
10.06
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
15,771,408
|
||
Shares issued and outstanding
|
1,549,484
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
10.18
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2023
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
3,105,507
|
||
Interest income
|
99,598
|
|||
Total investment income
|
3,205,105
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
997,824
|
|||
Distribution fees – Investor Class (See Note 5)
|
178,273
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
134,324
|
|||
Service fees – Investor Class (See Note 5)
|
118,849
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
96,251
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
8,165
|
|||
Federal and state registration fees
|
35,242
|
|||
Audit fees
|
22,747
|
|||
Compliance expense (See Note 5)
|
22,672
|
|||
Trustees’ fees and expenses
|
21,562
|
|||
Reports to shareholders
|
11,267
|
|||
Legal fees
|
3,466
|
|||
Interest expense (See Note 7)
|
2,215
|
|||
Other expenses
|
26,649
|
|||
Net expenses
|
1,679,506
|
|||
NET INVESTMENT INCOME
|
$
|
1,525,599
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
4,429,506
|
||
Net change in unrealized appreciation/depreciation on investments
|
6,248,824
|
|||
Net gain on investments
|
10,678,330
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
12,203,929
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2023
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
1,525,599
|
$
|
1,161,757
|
||||
Net realized gain on investments
|
4,429,506
|
22,369,171
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
6,248,824
|
(43,346,819
|
)
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
12,203,929
|
(19,815,891
|
)
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(19,315,909
|
)
|
(18,524,443
|
)
|
||||
Distributable earnings – Institutional Class
|
(2,556,836
|
)
|
(2,507,385
|
)
|
||||
Total distributions
|
(21,872,745
|
)
|
(21,031,828
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
1,360,431
|
3,741,686
|
||||||
Proceeds from shares subscribed – Institutional Class
|
1,393,373
|
1,400,184
|
||||||
Dividends reinvested – Investor Class
|
18,623,426
|
17,953,867
|
||||||
Dividends reinvested – Institutional Class
|
2,501,083
|
2,397,570
|
||||||
Cost of shares redeemed – Investor Class
|
(13,722,728
|
)
|
(13,588,755
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(1,777,358
|
)
|
(2,613,279
|
)
|
||||
Net increase in net assets derived
|
||||||||
from capital share transactions
|
8,378,227
|
9,291,273
|
||||||
TOTAL DECREASE IN NET ASSETS
|
(1,290,589
|
)
|
(31,556,446
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of year
|
129,951,867
|
161,508,313
|
||||||
End of year
|
$
|
128,661,278
|
$
|
129,951,867
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
131,258
|
304,353
|
||||||
Shares sold – Institutional Class
|
131,707
|
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
|
(1,344,112
|
)
|
(1,132,049
|
)
|
||||
Shares redeemed – Institutional Class
|
(171,833
|
)
|
(218,737
|
)
|
||||
Net increase in shares outstanding
|
885,386
|
643,890
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
The Fund had an expense limitation agreement in place through November 30, 2019.
|
(3)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
10.92
|
$
|
14.35
|
$
|
10.21
|
$
|
10.54
|
$
|
12.24
|
|||||||||
0.11
|
0.09
|
0.09
|
0.09
|
0.13
|
||||||||||||||
0.87
|
(1.66
|
)
|
4.64
|
(0.15
|
)
|
0.56
|
||||||||||||
0.98
|
(1.57
|
)
|
4.73
|
(0.06
|
)
|
0.69
|
||||||||||||
(0.08
|
)
|
(0.08
|
)
|
(0.10
|
)
|
(0.14
|
)
|
(0.09
|
)
|
|||||||||
(1.76
|
)
|
(1.78
|
)
|
(0.49
|
)
|
(0.13
|
)
|
(2.30
|
)
|
|||||||||
(1.84
|
)
|
(1.86
|
)
|
(0.59
|
)
|
(0.27
|
)
|
(2.39
|
)
|
|||||||||
$
|
10.06
|
$
|
10.92
|
$
|
14.35
|
$
|
10.21
|
$
|
10.54
|
|||||||||
9.48
|
%
|
-12.76
|
%
|
48.00
|
%
|
-0.75
|
%
|
7.84
|
%
|
|||||||||
$
|
112.89
|
$
|
115.15
|
$
|
143.11
|
$
|
103.11
|
$
|
117.62
|
|||||||||
1.28
|
%
|
1.30
|
%
|
1.29
|
%
|
1.31
|
%
|
1.31
|
%
|
|||||||||
1.28
|
%
|
1.30
|
%
|
1.29
|
%
|
1.31
|
%(2)
|
1.29
|
%
|
|||||||||
1.10
|
%
|
0.76
|
%
|
0.69
|
%
|
0.93
|
%
|
1.24
|
%
|
|||||||||
1.10
|
%
|
0.76
|
%
|
0.69
|
%
|
0.93
|
%
|
1.26
|
%
|
|||||||||
53
|
%
|
76
|
%
|
68
|
%
|
62
|
%
|
57
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
The Fund had an expense limitation agreement in place through November 30, 2019.
|
(3)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
11.05
|
$
|
14.51
|
$
|
10.33
|
$
|
10.65
|
$
|
12.38
|
|||||||||
0.14
|
0.13
|
0.12
|
0.13
|
0.16
|
||||||||||||||
0.89
|
(1.68
|
)
|
4.68
|
(0.15
|
)
|
0.56
|
||||||||||||
1.03
|
(1.55
|
)
|
4.80
|
(0.02
|
)
|
0.72
|
||||||||||||
(0.12
|
)
|
(0.11
|
)
|
(0.13
|
)
|
(0.17
|
)
|
(0.12
|
)
|
|||||||||
(1.78
|
)
|
(1.80
|
)
|
(0.49
|
)
|
(0.13
|
)
|
(2.33
|
)
|
|||||||||
(1.90
|
)
|
(1.91
|
)
|
(0.62
|
)
|
(0.30
|
)
|
(2.45
|
)
|
|||||||||
$
|
10.18
|
$
|
11.05
|
$
|
14.51
|
$
|
10.33
|
$
|
10.65
|
|||||||||
9.85
|
%
|
-12.52
|
%
|
48.30
|
%
|
-0.40
|
%
|
8.12
|
%
|
|||||||||
$
|
15.77
|
$
|
14.80
|
$
|
18.39
|
$
|
12.60
|
$
|
18.42
|
|||||||||
1.00
|
%
|
0.99
|
%
|
1.04
|
%
|
1.01
|
%
|
1.00
|
%
|
|||||||||
1.00
|
%
|
0.99
|
%
|
1.04
|
%
|
1.01
|
%(2)
|
0.98
|
%
|
|||||||||
1.37
|
%
|
1.08
|
%
|
0.91
|
%
|
1.23
|
%
|
1.56
|
%
|
|||||||||
1.37
|
%
|
1.08
|
%
|
0.91
|
%
|
1.23
|
%
|
1.58
|
%
|
|||||||||
53
|
%
|
76
|
%
|
68
|
%
|
62
|
%
|
57
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash
sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains
distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax
regulations, permanent differences between book and tax basis for reporting are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2023 are as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(589,871)
|
$589,871
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund
for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or
decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value of
the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses attributable to
a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are declared
and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption
price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that the
Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven
calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to
|
HENNESSY FUNDS
|
1-800-966-4354
|
Tailored Shareholder Reports for Mutual Funds and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit
concise and visually engaging shareholder reports that highlight key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more
in-depth information be made available online and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the
amendment.
|
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of
Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not
considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023,
and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that are not
active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit risk curves,
default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable inputs
are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, exchange-traded funds, closed-end mutual funds, partnerships, rights, and real estate
investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on which the securities are listed.
Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for which a last-quoted
sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
securities are actively traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy.
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending NAV
provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S. government
agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently
executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may incorporate observable market
data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are generally classified in Level 2 of the
fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term debt
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the values as of
the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below.
Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
130,596,135
|
|||
Gross tax unrealized appreciation
|
$
|
13,428,574
|
|||
Gross tax unrealized depreciation
|
(15,340,499
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
(1,911,925
|
)
|
||
Undistributed ordinary income
|
$
|
1,525,599
|
|||
Undistributed long-term capital gains
|
3,841,330
|
||||
Total distributable earnings
|
$
|
5,366,929
|
|||
Other accumulated gain/(loss)
|
$
|
—
|
|||
Total accumulated gain/(loss)
|
$
|
3,455,004
|
HENNESSY FUNDS
|
1-800-966-4354
|
Year Ended
|
Year Ended
|
||||||||
October 31, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
1,161,564
|
$
|
1,496,384
|
|||||
Long-term capital gains
|
20,711,181
|
19,535,444
|
|||||||
Total distributions
|
$
|
21,872,745
|
$
|
21,031,828
|
|||||
(1) Ordinary income includes short-term capital gains.
|
Long-term
|
|||
Investor Class
|
0.30276
|
||
Institutional Class
|
0.30642
|
WWW.HENNESSYFUNDS.COM
|
NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
TAIT, WELLER & BAKER LLP
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the Investment Manager or of
any predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,025.50
|
$6.48
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.80
|
$6.46
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,027.20
|
$5.06
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,020.21
|
$5.04
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.27% for Investor Class shares or 0.99% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
|
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund has
historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future during both
normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to a highly
liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make or recommend any material changes to the Liquidity Program during the review period.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was operating as
intended during the review period.
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income, and
date of birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis information, and
other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
28
|
|
Trustees and Officers of the Fund
|
29
|
|
Expense Example
|
34
|
|
Proxy Voting Policy and Proxy Voting Records
|
36
|
|
Availability of Quarterly Portfolio Schedule
|
36
|
|
Federal Tax Distribution Information
|
36
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
36
|
|
Electronic Delivery
|
36
|
|
Liquidity Risk Management Program
|
37
|
|
Privacy Policy
|
37
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The acronym, MT. FAANNG, refers to the following companies: Microsoft Corporation, Tesla, Inc., Meta Platforms, Inc., Amazon.com, Inc., Apple, Inc., Netflix, Inc., NVIDIA Corporation, and Alphabet, Inc.
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Cornerstone Value Fund –
|
|||
Investor Class (HFCVX)
|
-1.45%
|
6.75%
|
7.21%
|
Hennessy Cornerstone Value Fund –
|
|||
Institutional Class (HICVX)
|
-1.26%
|
6.96%
|
7.42%
|
Russell 1000® Value Index
|
0.13%
|
6.60%
|
7.60%
|
S&P 500® Index
|
10.14%
|
11.01%
|
11.18%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Petroleo Brasileiro SA – ADR
|
3.09%
|
Canadian Natural Resources Ltd.
|
2.46%
|
Equinor ASA – ADR
|
2.42%
|
International Business Machines Corp.
|
2.33%
|
Shell PLC – ADR
|
2.32%
|
TotalEnergies SE – ADR
|
2.32%
|
Comcast Corp.
|
2.29%
|
Union Pacific Corp.
|
2.21%
|
MetLife, Inc.
|
2.20%
|
JPMorgan Chase & Co.
|
2.19%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 98.75%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 7.50%
|
||||||||||||
AT&T, Inc.
|
273,860
|
$
|
4,217,444
|
1.66
|
%
|
|||||||
BCE, Inc.
|
115,100
|
4,273,663
|
1.68
|
%
|
||||||||
Comcast Corp.
|
140,500
|
5,801,245
|
2.29
|
%
|
||||||||
Verizon Communications, Inc.
|
135,300
|
4,753,089
|
1.87
|
%
|
||||||||
|
19,045,441
|
7.50
|
%
|
|||||||||
Consumer Discretionary – 3.70%
|
||||||||||||
Ford Motor Co.
|
442,600
|
4,315,350
|
1.70
|
%
|
||||||||
The Home Depot, Inc.
|
17,800
|
5,067,482
|
2.00
|
%
|
||||||||
|
9,382,832
|
3.70
|
%
|
|||||||||
Consumer Staples – 13.01%
|
||||||||||||
Altria Group, Inc.
|
116,300
|
4,671,771
|
1.84
|
%
|
||||||||
British American Tobacco PLC – ADR
|
146,100
|
4,362,546
|
1.72
|
%
|
||||||||
Colgate-Palmolive Co.
|
70,400
|
5,288,448
|
2.08
|
%
|
||||||||
Philip Morris International, Inc.
|
56,000
|
4,992,960
|
1.97
|
%
|
||||||||
The Coca-Cola Co.
|
84,400
|
4,767,756
|
1.88
|
%
|
||||||||
The Kraft Heinz Co.
|
135,100
|
4,250,246
|
1.67
|
%
|
||||||||
Unilever PLC – ADR
|
99,200
|
4,697,120
|
1.85
|
%
|
||||||||
|
33,030,847
|
13.01
|
%
|
|||||||||
Energy – 22.69%
|
||||||||||||
BP PLC – ADR
|
138,600
|
5,069,988
|
2.00
|
%
|
||||||||
Canadian Natural Resources Ltd.
|
98,200
|
6,238,646
|
2.46
|
%
|
||||||||
Chevron Corp.
|
32,675
|
4,761,728
|
1.88
|
%
|
||||||||
Devon Energy Corp.
|
108,200
|
5,038,874
|
1.98
|
%
|
||||||||
Equinor ASA – ADR
|
184,100
|
6,143,417
|
2.42
|
%
|
||||||||
Exxon Mobil Corp.
|
48,910
|
5,177,123
|
2.04
|
%
|
||||||||
Petroleo Brasileiro SA – ADR
|
524,900
|
7,873,500
|
3.09
|
%
|
||||||||
Shell PLC – ADR
|
90,300
|
5,882,142
|
2.32
|
%
|
||||||||
Suncor Energy, Inc.
|
170,700
|
5,530,680
|
2.18
|
%
|
||||||||
TotalEnergies SE – ADR
|
88,600
|
5,900,760
|
2.32
|
%
|
||||||||
|
57,616,858
|
22.69
|
%
|
|||||||||
Financials – 19.75%
|
||||||||||||
Bank of America Corp.
|
187,400
|
4,936,116
|
1.94
|
%
|
||||||||
Citigroup, Inc.
|
116,300
|
4,592,687
|
1.81
|
%
|
||||||||
HSBC Holdings PLC – ADR
|
151,000
|
5,485,830
|
2.17
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Financials (Continued)
|
||||||||||||
JPMorgan Chase & Co.
|
39,900
|
$
|
5,548,494
|
2.19
|
%
|
|||||||
Manulife Financial Corp.
|
284,800
|
4,961,216
|
1.95
|
%
|
||||||||
MetLife, Inc.
|
93,100
|
5,586,931
|
2.20
|
%
|
||||||||
Morgan Stanley
|
58,900
|
4,171,298
|
1.64
|
%
|
||||||||
Royal Bank of Canada
|
54,600
|
4,361,448
|
1.72
|
%
|
||||||||
Toronto-Dominion Bank
|
89,700
|
5,008,848
|
1.97
|
%
|
||||||||
Wells Fargo & Co.
|
138,100
|
5,492,237
|
2.16
|
%
|
||||||||
|
50,145,105
|
19.75
|
%
|
|||||||||
Health Care – 16.48%
|
||||||||||||
AbbVie, Inc.
|
32,500
|
4,588,350
|
1.81
|
%
|
||||||||
Bristol-Myers Squibb Co.
|
75,500
|
3,890,515
|
1.53
|
%
|
||||||||
CVS Health Corp.
|
69,800
|
4,816,898
|
1.90
|
%
|
||||||||
Gilead Sciences, Inc.
|
64,200
|
5,042,268
|
1.99
|
%
|
||||||||
GSK PLC – ADR
|
143,560
|
5,125,092
|
2.02
|
%
|
||||||||
Johnson & Johnson
|
33,400
|
4,954,556
|
1.95
|
%
|
||||||||
Medtronic PLC
|
65,200
|
4,600,512
|
1.81
|
%
|
||||||||
Merck & Co., Inc.
|
48,500
|
4,980,950
|
1.96
|
%
|
||||||||
Pfizer, Inc.
|
125,800
|
3,844,448
|
1.51
|
%
|
||||||||
|
41,843,589
|
16.48
|
%
|
|||||||||
Industrials – 3.73%
|
||||||||||||
Union Pacific Corp.
|
27,100
|
5,626,231
|
2.21
|
%
|
||||||||
United Parcel Service, Inc., Class B
|
27,300
|
3,856,125
|
1.52
|
%
|
||||||||
|
9,482,356
|
3.73
|
%
|
|||||||||
Information Technology – 10.03%
|
||||||||||||
Cisco Systems, Inc.
|
101,600
|
5,296,408
|
2.09
|
%
|
||||||||
Hewlett Packard Enterprise Co.
|
354,200
|
5,447,596
|
2.15
|
%
|
||||||||
HP, Inc.
|
182,300
|
4,799,959
|
1.89
|
%
|
||||||||
International Business Machines Corp.
|
41,000
|
5,930,240
|
2.33
|
%
|
||||||||
Texas Instruments, Inc.
|
28,000
|
3,976,280
|
1.57
|
%
|
||||||||
|
25,450,483
|
10.03
|
%
|
|||||||||
Materials – 1.86%
|
||||||||||||
Dow, Inc.
|
97,900
|
4,732,486
|
1.86
|
%
|
||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $233,921,521)
|
250,729,997
|
98.75
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 0.94%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 0.94%
|
||||||||||||
First American Treasury Obligations Fund – Class X, 5.275% (a)
|
2,379,919
|
$
|
2,379,919
|
0.94
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $2,379,919)
|
2,379,919
|
0.94
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $236,301,440) – 99.69%
|
253,109,916
|
99.69
|
%
|
|||||||||
Other Assets in Excess of Liabilities - 0.31%
|
789,007
|
0.31
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS — 100.00%
|
$
|
253,898,923
|
100.00
|
%
|
(a)
|
The rate listed is the fund’s seven-day yield as of October 31, 2023.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
19,045,441
|
$
|
—
|
$
|
—
|
$
|
19,045,441
|
||||||||
Consumer Discretionary
|
9,382,832
|
—
|
—
|
9,382,832
|
||||||||||||
Consumer Staples
|
33,030,847
|
—
|
—
|
33,030,847
|
||||||||||||
Energy
|
57,616,858
|
—
|
—
|
57,616,858
|
||||||||||||
Financials
|
50,145,105
|
—
|
—
|
50,145,105
|
||||||||||||
Health Care
|
41,843,589
|
—
|
—
|
41,843,589
|
||||||||||||
Industrials
|
9,482,356
|
—
|
—
|
9,482,356
|
||||||||||||
Information Technology
|
25,450,483
|
—
|
—
|
25,450,483
|
||||||||||||
Materials
|
4,732,486
|
—
|
—
|
4,732,486
|
||||||||||||
Total Common Stocks
|
$
|
250,729,997
|
$
|
—
|
$
|
—
|
$
|
250,729,997
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
2,379,919
|
$
|
—
|
$
|
—
|
$
|
2,379,919
|
||||||||
Total Short-Term Investments
|
$
|
2,379,919
|
$
|
—
|
$
|
—
|
$
|
2,379,919
|
||||||||
Total Investments
|
$
|
253,109,916
|
$
|
—
|
$
|
—
|
$
|
253,109,916
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $236,301,440)
|
$
|
253,109,916
|
||
Dividends and interest receivable
|
1,006,869
|
|||
Dividend tax reclaim receivable
|
94,933
|
|||
Receivable for fund shares sold
|
6,220
|
|||
Prepaid expenses and other assets
|
34,786
|
|||
Total assets
|
254,252,724
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
42,148
|
|||
Payable to advisor
|
163,522
|
|||
Payable to administrator
|
42,961
|
|||
Payable to auditor
|
22,746
|
|||
Accrued distribution fees
|
38,601
|
|||
Accrued service fees
|
21,439
|
|||
Accrued trustees fees
|
7,973
|
|||
Accrued expenses and other payables
|
14,411
|
|||
Total liabilities
|
353,801
|
|||
NET ASSETS
|
$
|
253,898,923
|
||
NET ASSETS CONSIST OF:
|
||||
Capital stock
|
$
|
234,402,207
|
||
Total distributable earnings
|
19,496,716
|
|||
Total net assets
|
$
|
253,898,923
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
246,397,258
|
||
Shares issued and outstanding
|
13,579,698
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
18.14
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
7,501,665
|
||
Shares issued and outstanding
|
412,807
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
18.17
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2023
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
12,744,731
|
||
Interest income
|
169,355
|
|||
Total investment income
|
12,914,086
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
2,108,250
|
|||
Distribution fees – Investor Class (See Note 5)
|
403,515
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
270,200
|
|||
Service fees – Investor Class (See Note 5)
|
269,010
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
198,023
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
25,065
|
|||
Federal and state registration fees
|
36,312
|
|||
Trustees’ fees and expenses
|
24,818
|
|||
Audit fees
|
22,747
|
|||
Compliance expense (See Note 5)
|
22,678
|
|||
Reports to shareholders
|
19,207
|
|||
Legal fees
|
6,747
|
|||
Interest expense (See Note 7)
|
5,266
|
|||
Other expenses
|
54,078
|
|||
Total expenses
|
3,465,916
|
|||
NET INVESTMENT INCOME
|
$
|
9,448,170
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized loss on investments
|
$
|
(3,834,975
|
)
|
|
Net change in unrealized appreciation/depreciation on investments
|
(8,473,514
|
)
|
||
Net loss on investments
|
(12,308,489
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(2,860,319
|
)
|
(1)
|
Net of foreign taxes withheld and issuance fees of $458,525.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2023
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
9,448,170
|
$
|
7,863,624
|
||||
Net realized gain (loss) on investments
|
(3,834,975
|
)
|
22,098,599
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(8,473,514
|
)
|
(8,218,181
|
)
|
||||
Net increase (decrease) in net assets
|
||||||||
resulting from operations
|
(2,860,319
|
)
|
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
|
11,286,745
|
14,142,871
|
||||||
Proceeds from shares subscribed – Institutional Class
|
6,698,572
|
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
|
(29,291,239
|
)
|
(20,443,989
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(23,714,925
|
)
|
(10,861,538
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
(7,833,748
|
)
|
24,259,085
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(39,260,769
|
)
|
33,438,506
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
293,159,692
|
259,721,186
|
||||||
End of year
|
$
|
253,898,923
|
$
|
293,159,692
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
577,984
|
699,608
|
||||||
Shares sold – Institutional Class
|
332,692
|
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
|
(1,532,736
|
)
|
(1,029,071
|
)
|
||||
Shares redeemed – Institutional Class
|
(1,233,563
|
)
|
(539,739
|
)
|
||||
Net increase (decrease) in shares outstanding
|
(448,688
|
)
|
1,181,288
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
20.30
|
$
|
19.59
|
$
|
13.69
|
$
|
17.43
|
$
|
19.29
|
|||||||||
0.63
|
0.55
|
0.44
|
0.41
|
0.47
|
||||||||||||||
(0.84
|
)
|
1.10
|
5.87
|
(3.01
|
)
|
0.30
|
||||||||||||
(0.21
|
)
|
1.65
|
6.31
|
(2.60
|
)
|
0.77
|
||||||||||||
(0.50
|
)
|
(0.51
|
)
|
(0.41
|
)
|
(0.47
|
)
|
(0.41
|
)
|
|||||||||
(1.45
|
)
|
(0.43
|
)
|
—
|
(0.67
|
)
|
(2.22
|
)
|
||||||||||
(1.95
|
)
|
(0.94
|
)
|
(0.41
|
)
|
(1.14
|
)
|
(2.63
|
)
|
|||||||||
$
|
18.14
|
$
|
20.30
|
$
|
19.59
|
$
|
13.69
|
$
|
17.43
|
|||||||||
-1.45
|
%
|
8.68
|
%
|
46.82
|
%
|
-16.22
|
%
|
5.22
|
%
|
|||||||||
$
|
246.40
|
$
|
268.81
|
$
|
254.23
|
$
|
189.60
|
$
|
253.95
|
|||||||||
1.23
|
%
|
1.23
|
%
|
1.23
|
%
|
1.30
|
%
|
1.23
|
%
|
|||||||||
3.31
|
%
|
2.74
|
%
|
2.43
|
%
|
2.71
|
%
|
2.75
|
%
|
|||||||||
31
|
%
|
36
|
%
|
41
|
%
|
32
|
%
|
27
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
20.34
|
$
|
19.63
|
$
|
13.71
|
$
|
17.45
|
$
|
19.33
|
|||||||||
0.67
|
0.58
|
0.48
|
0.44
|
0.50
|
||||||||||||||
(0.84
|
)
|
1.12
|
5.88
|
(3.01
|
)
|
0.29
|
||||||||||||
(0.17
|
)
|
1.70
|
6.36
|
(2.57
|
)
|
0.79
|
||||||||||||
(0.55
|
)
|
(0.56
|
)
|
(0.44
|
)
|
(0.49
|
)
|
(0.45
|
)
|
|||||||||
(1.45
|
)
|
(0.43
|
)
|
—
|
(0.68
|
)
|
(2.22
|
)
|
||||||||||
(2.00
|
)
|
(0.99
|
)
|
(0.44
|
)
|
(1.17
|
)
|
(2.67
|
)
|
|||||||||
$
|
18.17
|
$
|
20.34
|
$
|
19.63
|
$
|
13.71
|
$
|
17.45
|
|||||||||
-1.26
|
%
|
8.92
|
%
|
47.19
|
%
|
-16.06
|
%
|
5.37
|
%
|
|||||||||
$
|
7.50
|
$
|
24.35
|
$
|
5.50
|
$
|
4.29
|
$
|
6.44
|
|||||||||
1.06
|
%
|
1.00
|
%
|
0.99
|
%
|
1.08
|
%
|
1.08
|
%
|
|||||||||
3.48
|
%
|
2.92
|
%
|
2.67
|
%
|
2.94
|
%
|
2.92
|
%
|
|||||||||
31
|
%
|
36
|
%
|
41
|
%
|
32
|
%
|
27
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of wash
sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains
distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax
regulations, permanent differences between book and tax basis for reporting are identified and appropriately reclassified
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
in the Statement of Assets and Liabilities, as needed. As of October 31, 2023, no such reclassifications were required for fiscal year 2023.
|
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the Fund
for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase or
decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair value
of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than expenses
attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are
declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things, that
the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions in seven
calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
HENNESSY FUNDS
|
1-800-966-4354
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds and
Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight key
information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and available for
delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of
Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not
considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023,
and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that are not
active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit risk curves,
default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable inputs
are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, 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
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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
|
$
|
237,059,447
|
|||
Gross tax unrealized appreciation
|
$
|
35,165,236
|
|||
Gross tax unrealized depreciation
|
(19,114,767
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
16,050,469
|
|||
Undistributed ordinary income
|
$
|
7,752,370
|
|||
Undistributed long-term capital gains
|
—
|
||||
Total distributable earnings
|
$
|
7,752,370
|
|||
Other accumulated gain/(loss)
|
$
|
(4,306,123
|
)
|
||
Total accumulated gain/(loss)
|
$
|
19,496,716
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Year Ended
|
Year Ended
|
||||||||
October 31, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
7,801,294
|
$
|
6,908,914
|
|||||
Long-term capital gains
|
20,765,408
|
5,655,707
|
|||||||
Total distributions
|
$
|
28,566,702
|
$
|
12,654,621
|
|||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the Investment Manager or
of any predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 946.30
|
$6.03
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.00
|
$6.26
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 947.30
|
$5.25
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.81
|
$5.45
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.23% for Investor Class shares or 1.07% for Institutional Class shares, as applicable, multiplied by the average account value over the period,
multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund has
historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future during both
normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to a highly
liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make or recommend any material changes to the Liquidity Program during the review period.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was operating
as intended during the review period.
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income, and
date of birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis information, and
other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Statement of Cash Flows
|
16
|
|
Financial Highlights
|
18
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
29
|
|
Trustees and Officers of the Fund
|
30
|
|
Expense Example
|
34
|
|
Proxy Voting Policy and Proxy Voting Records
|
35
|
|
Availability of Quarterly Portfolio Schedule
|
35
|
|
Federal Tax Distribution Information
|
35
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
35
|
|
Electronic Delivery
|
35
|
|
Liquidity Risk Management Program
|
36
|
|
Privacy Policy
|
36
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The acronym, MT. FAANNG, refers to the following companies: Microsoft Corporation, Tesla, Inc., Meta Platforms, Inc., Amazon.com, Inc., Apple, Inc., Netflix, Inc., NVIDIA Corporation, and Alphabet, Inc.
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Total Return Fund (HDOGX)
|
0.53%
|
3.20%
|
5.05%
|
75/25 Blended DJIA/Treasury Index
|
3.72%
|
6.72%
|
8.20%
|
Dow Jones Industrial Average
|
3.17%
|
7.96%
|
10.34%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
U.S. Treasury Bill, 5.340%, 01/11/2024
|
31.22%
|
U.S. Treasury Bill, 5.290%, 11/09/2023
|
18.91%
|
U.S. Treasury Bill, 5.295%, 12/14/2023
|
18.81%
|
Intel Corp.
|
7.72%
|
International Business Machines Corp.
|
7.64%
|
Cisco Systems, Inc.
|
7.07%
|
Verizon Communications, Inc.
|
7.04%
|
JPMorgan Chase & Co.
|
6.96%
|
Dow, Inc.
|
6.56%
|
Chevron Corp.
|
6.44%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 68.66%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 7.04%
|
||||||||||||
Verizon Communications, Inc.
|
95,300
|
$
|
3,347,889
|
7.04
|
%
|
|||||||
Consumer Staples – 8.52%
|
||||||||||||
The Coca-Cola Co.
|
32,800
|
1,852,872
|
3.90
|
%
|
||||||||
Walgreens Boots Alliance, Inc.
|
104,300
|
2,198,644
|
4.62
|
%
|
||||||||
|
4,051,516
|
8.52
|
%
|
|||||||||
Energy – 6.44%
|
||||||||||||
Chevron Corp.
|
21,000
|
3,060,330
|
6.44
|
%
|
||||||||
Financials – 7.35%
|
||||||||||||
JPMorgan Chase & Co.
|
23,800
|
3,309,628
|
6.96
|
%
|
||||||||
The Goldman Sachs Group, Inc.
|
600
|
182,166
|
0.39
|
%
|
||||||||
|
3,491,794
|
7.35
|
%
|
|||||||||
Health Care – 4.22%
|
||||||||||||
Amgen, Inc.
|
7,100
|
1,815,470
|
3.81
|
%
|
||||||||
Johnson & Johnson
|
1,300
|
192,842
|
0.41
|
%
|
||||||||
|
2,008,312
|
4.22
|
%
|
|||||||||
Industrials – 6.10%
|
||||||||||||
3M Co.
|
31,900
|
2,901,305
|
6.10
|
%
|
||||||||
Information Technology – 22.43%
|
||||||||||||
Cisco Systems, Inc.
|
64,500
|
3,362,385
|
7.07
|
%
|
||||||||
Intel Corp.
|
100,600
|
3,671,900
|
7.72
|
%
|
||||||||
International Business Machines Corp.
|
25,100
|
3,630,464
|
7.64
|
%
|
||||||||
|
10,664,749
|
22.43
|
%
|
|||||||||
Materials – 6.56%
|
||||||||||||
Dow, Inc.
|
64,500
|
3,117,930
|
6.56
|
%
|
||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $33,990,420)
|
32,643,825
|
68.66
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 73.24%
|
Number of Shares/
|
% of
|
||||||||||
|
Par Amount
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 4.30%
|
||||||||||||
First American Treasury Obligations Fund – Class X, 5.275% (a)
|
2,045,029
|
$
|
2,045,029
|
4.30
|
%
|
|||||||
|
||||||||||||
U.S. Treasury Bills – 68.94%
|
||||||||||||
5.290%, 11/09/2023 (b)(c)
|
9,000,000
|
8,989,480
|
18.91
|
%
|
||||||||
5.295%, 12/14/2023 (b)(c)
|
9,000,000
|
8,943,133
|
18.81
|
%
|
||||||||
5.340%, 01/11/2024 (b)(c)
|
15,000,000
|
14,843,503
|
31.22
|
%
|
||||||||
|
32,776,116
|
68.94
|
%
|
|||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $34,820,258)
|
34,821,145
|
73.24
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $68,810,678) – 141.90%
|
67,464,970
|
141.90
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (41.90)%
|
(19,921,669
|
)
|
(41.90
|
)%
|
||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
47,543,301
|
100.00
|
%
|
(a)
|
The rate listed is the fund’s seven-day yield as of October 31, 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 $21,850,742.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
3,347,889
|
$
|
—
|
$
|
—
|
$
|
3,347,889
|
||||||||
Consumer Staples
|
4,051,516
|
—
|
—
|
4,051,516
|
||||||||||||
Energy
|
3,060,330
|
—
|
—
|
3,060,330
|
||||||||||||
Financials
|
3,491,794
|
—
|
—
|
3,491,794
|
||||||||||||
Health Care
|
2,008,312
|
—
|
—
|
2,008,312
|
||||||||||||
Industrials
|
2,901,305
|
—
|
—
|
2,901,305
|
||||||||||||
Information Technology
|
10,664,749
|
—
|
—
|
10,664,749
|
||||||||||||
Materials
|
3,117,930
|
—
|
—
|
3,117,930
|
||||||||||||
Total Common Stocks
|
$
|
32,643,825
|
$
|
—
|
$
|
—
|
$
|
32,643,825
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
2,045,029
|
$
|
—
|
$
|
—
|
$
|
2,045,029
|
||||||||
U.S. Treasury Bills
|
—
|
32,776,116
|
—
|
32,776,116
|
||||||||||||
Total Short-Term Investments
|
$
|
2,045,029
|
$
|
32,776,116
|
$
|
—
|
$
|
34,821,145
|
||||||||
Total Investments
|
$
|
34,688,854
|
$
|
32,776,116
|
$
|
—
|
$
|
67,464,970
|
HENNESSY FUNDS
|
1-800-966-4354
|
Principal
|
Maturity
|
Maturity
|
||||||||||||
Face Value
|
Counterparty
|
Rate
|
Trade Date
|
Date
|
Amount
|
|||||||||
$
|
5,397,000
|
Jefferies LLC
|
5.60%
|
|
8/10/23
|
11/9/23
|
$
|
5,472,558
|
||||||
5,397,000
|
Jefferies LLC
|
5.65%
|
|
9/14/23
|
12/14/23
|
5,473,232
|
||||||||
8,995,000
|
Jefferies LLC
|
5.70%
|
|
10/12/23
|
1/11/24
|
9,123,179
|
||||||||
$
|
19,789,000
|
$
|
20,068,969
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $68,810,678)
|
$
|
67,464,970
|
||
Dividends and interest receivable
|
71,647
|
|||
Receivable for fund shares sold
|
31
|
|||
Prepaid expenses and other assets
|
12,338
|
|||
Total assets
|
67,548,986
|
|||
LIABILITIES:
|
||||
Payable to advisor
|
24,373
|
|||
Payable to administrator
|
9,477
|
|||
Payable to auditor
|
22,746
|
|||
Accrued distribution fees
|
7,806
|
|||
Accrued service fees
|
4,062
|
|||
Reverse repurchase agreements
|
19,789,000
|
|||
Accrued interest payable
|
135,712
|
|||
Accrued trustees fees
|
5,813
|
|||
Accrued expenses and other payables
|
6,696
|
|||
Total liabilities
|
20,005,685
|
|||
NET ASSETS
|
$
|
47,543,301
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
46,821,718
|
||
Total distributable earnings
|
721,583
|
|||
Total net assets
|
$
|
47,543,301
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
47,543,301
|
||
Shares issued and outstanding
|
3,793,030
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
12.53
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2023
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
1,598,510
|
||
Interest income
|
1,760,408
|
|||
Total investment income
|
3,358,918
|
|||
EXPENSES:
|
||||
Interest expense (See Notes 7 and 9)
|
1,111,239
|
|||
Investment advisory fees (See Note 5)
|
313,920
|
|||
Distribution fees – Investor Class (See Note 5)
|
78,480
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
59,808
|
|||
Service fees – Investor Class (See Note 5)
|
52,320
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
39,739
|
|||
Compliance expense (See Note 5)
|
22,668
|
|||
Audit fees
|
22,747
|
|||
Federal and state registration fees
|
21,560
|
|||
Trustees’ fees and expenses
|
20,493
|
|||
Reports to shareholders
|
10,154
|
|||
Legal fees
|
1,687
|
|||
Other expenses
|
9,517
|
|||
Total expenses
|
1,764,332
|
|||
NET INVESTMENT INCOME
|
$
|
1,594,586
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
2,437,331
|
||
Net change in unrealized appreciation/depreciation on investments
|
(3,681,426
|
)
|
||
Net loss on investments
|
(1,244,095
|
)
|
||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
350,491
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2023
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
1,594,586
|
$
|
870,240
|
||||
Net realized gain on investments
|
2,437,331
|
3,139,523
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(3,681,426
|
)
|
(3,362,849
|
)
|
||||
Net increase in net assets resulting from operations
|
350,491
|
646,914
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(4,133,781
|
)
|
(852,484
|
)
|
||||
Total distributions
|
(4,133,781
|
)
|
(852,484
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
4,112,285
|
3,818,336
|
||||||
Dividends reinvested – Investor Class
|
3,946,628
|
810,781
|
||||||
Cost of shares redeemed – Investor Class
|
(10,088,636
|
)
|
(5,519,799
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(2,029,723
|
)
|
(890,682
|
)
|
||||
TOTAL DECREASE IN NET ASSETS
|
(5,813,013
|
)
|
(1,096,252
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of year
|
53,356,314
|
54,452,566
|
||||||
End of year
|
$
|
47,543,301
|
$
|
53,356,314
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
308,055
|
278,708
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
299,644
|
60,970
|
||||||
Shares redeemed – Investor Class
|
(774,401
|
)
|
(402,382
|
)
|
||||
Net decrease in shares outstanding
|
(166,702
|
)
|
(62,704
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Cash Flows for the year ended October 31, 2023
|
Cash flows from operating activities:
|
||||
Net increase in net assets from operations
|
$
|
350,491
|
||
Adjustments to reconcile net increase in net assets resulting
|
||||
from operations to net cash provided by operating activities:
|
||||
Payments to purchase securities
|
(13,336,644
|
)
|
||
Proceeds from sale of securities
|
17,037,438
|
|||
Proceeds from securities litigation
|
122
|
|||
Net sale of short term investments
|
4,349,095
|
|||
Realized gain on investments in securities
|
(2,437,331
|
)
|
||
Net accretion of discount on securities
|
(1,696,612
|
)
|
||
Change in unrealized appreciation/depreciation on investments in securities
|
3,681,426
|
|||
(Increases) decreases in operating assets:
|
||||
Increase in dividends and interest receivable
|
(18,050
|
)
|
||
Increase in prepaid expenses and other assets
|
(1,037
|
)
|
||
Increases (decreases) in operating liabilities:
|
||||
Decrease in payable to advisor
|
(1,408
|
)
|
||
Decrease in payable to administrator
|
(1,976
|
)
|
||
Decrease in payable for distribution fees
|
(12,846
|
)
|
||
Decrease in payable for service fees
|
(235
|
)
|
||
Increase in accrued interest payable
|
49,190
|
|||
Decrease in accrued audit fees
|
(3
|
)
|
||
Increase in accrued trustee fees
|
687
|
|||
Decrease in other accrued expenses and payables
|
(2,764
|
)
|
||
Net cash provided by operating securities
|
7,959,543
|
|||
Cash flows from financing activities:
|
||||
Decrease in reverse repurchase agreements
|
(1,799,000
|
)
|
||
Proceeds on shares sold
|
4,118,452
|
|||
Payment on shares redeemed
|
(10,091,842
|
)
|
||
Distributions paid in cash, net of reinvestments
|
(187,153
|
)
|
||
Net cash used for financing activities
|
(7,959,543
|
)
|
||
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
|
$
|
3,946,628
|
||
Cash paid for interest
|
$
|
1,062,049
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF CASH FLOWS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
13.47
|
$
|
13.54
|
$
|
11.97
|
$
|
13.98
|
$
|
13.57
|
|||||||||
0.40
|
0.22
|
0.20
|
0.27
|
0.24
|
||||||||||||||
(0.30
|
)
|
(0.07
|
)
|
2.33
|
(1.99
|
)
|
0.81
|
|||||||||||
0.10
|
0.15
|
2.53
|
(1.72
|
)
|
1.05
|
|||||||||||||
(0.38
|
)
|
(0.22
|
)
|
(0.20
|
)
|
(0.29
|
)
|
(0.24
|
)
|
|||||||||
(0.66
|
)
|
—
|
(0.76
|
)
|
—
|
(0.40
|
)
|
|||||||||||
(1.04
|
)
|
(0.22
|
)
|
(0.96
|
)
|
(0.29
|
)
|
(0.64
|
)
|
|||||||||
$
|
12.53
|
$
|
13.47
|
$
|
13.54
|
$
|
11.97
|
$
|
13.98
|
|||||||||
0.53
|
%
|
1.12
|
%
|
21.72
|
%
|
-12.36
|
%
|
7.93
|
%
|
|||||||||
$
|
47.54
|
$
|
53.36
|
$
|
54.45
|
$
|
50.67
|
$
|
72.94
|
|||||||||
3.37
|
%
|
1.77
|
%
|
1.35
|
%
|
1.73
|
%
|
2.31
|
%
|
|||||||||
3.05
|
%
|
1.62
|
%
|
1.52
|
%
|
2.05
|
%
|
1.74
|
%
|
|||||||||
36
|
%
|
24
|
%
|
19
|
%
|
39
|
%
|
30
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and realized
gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the treatment of
wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized gains for book
purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and profits, including net
realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax
regulations, permanent differences between book and tax basis for reporting are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2023 are as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(475,365)
|
$475,365
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the
Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion of
discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding increase
or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at the fair
value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of
the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Reverse Repurchase Agreements – Transactions involving reverse repurchase agreements are treated as collateralized financing transactions and are recorded at their contracted resell or repurchase amounts,
which approximates fair value. Upon entering into a reverse repurchase agreement transaction, the Fund establishes a segregated account in which it maintains liquid assets in an amount at least equal to the repurchase price marked
to market daily (including accrued interest), and the Fund subsequently monitors the account to ensure that it maintains such equivalent value. Interest on reverse repurchase agreements is included in interest payable.
|
HENNESSY FUNDS
|
1-800-966-4354
|
As of October 31, 2023, securities with a fair value of $21,850,742, 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 counterparty, the Fund is considered an unsecured creditor with respect to excess collateral and, as such, the return of excess collateral may be delayed. In the event the buyer of securities under an MRA files for bankruptcy or
becomes insolvent, the Fund’s use of the proceeds of the MRA may be restricted while the other party, or its trustee or receiver, determines whether or not to enforce the Fund’s obligation to repurchase the securities. For
additional information regarding the offsetting of assets and liabilities as of October 31, 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 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds and
Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight key
information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and available for
delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement
of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore,
is not considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December
15, 2023, and interim periods within those fiscal years.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that are
not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit risk
curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable
inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, exchange-traded funds, closed-end mutual funds, partnerships, rights, and real
estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on which the securities are
listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for which a
last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in
Level 1 of the fair value hierarchy.
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the ending
NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may
consider recently executed 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
|
HENNESSY FUNDS
|
1-800-966-4354
|
investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds
60 days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value
would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
68,876,602
|
|||
Gross tax unrealized appreciation
|
$
|
4,317,858
|
|||
Gross tax unrealized depreciation
|
(5,729,490
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
(1,411,632
|
)
|
||
Undistributed ordinary income
|
$
|
124,312
|
|||
Undistributed long-term capital gains
|
2,008,903
|
||||
Total distributable earnings
|
$
|
2,133,215
|
|||
Other accumulated gain/(loss)
|
$
|
—
|
|||
Total accumulated gain/(loss)
|
$
|
721,583
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Year Ended
|
Year Ended
|
||||||||
October 31, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
1,508,864
|
$
|
852,484
|
|||||
Long-term capital gains
|
2,624,917
|
—
|
|||||||
Total distributions
|
$
|
4,133,781
|
$
|
852,484
|
|||||
(1) Ordinary income includes short-term capital gains.
|
Maturity Date
|
Amount
|
Interest Rate
|
||
November 9, 2023
|
$5,397,000
|
5.60%
|
||
December 14, 2023
|
$5,397,000
|
5.65%
|
||
January 11, 2024
|
$8,995,000
|
5.70%
|
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
|
||||||||||||||||||
$
|
19,789,000
|
$
|
—
|
$
|
19,789,000
|
$
|
19,789,000
|
$
|
—
|
$
|
—
|
||||||||||||
$
|
19,789,000
|
$
|
—
|
$
|
19,789,000
|
$
|
19,789,000
|
$
|
—
|
$
|
—
|
HENNESSY FUNDS
|
1-800-966-4354
|
Long-term
|
|||
Investor Class
|
0.53706
|
WWW.HENNESSYFUNDS.COM
|
NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
TAIT, WELLER & BAKER LLP
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the Investment Manager or
of any predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 979.60
|
$18.11
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,006.91
|
$18.36
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 3.63%, multiplied by the average account value over the period, multiplied by 184/365 days (to reflect the half-year period).
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE — ELECTRONIC DELIVERY
|
|
|
HENNESSY FUNDS
|
1-800-966-4354
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund has
historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future during
both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to a
highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make or recommend any material changes to the Liquidity Program during the review period.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income,
and date of birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis information,
and other financial information; and
|
WWW.HENNESSYFUNDS.COM
|
LIQUIDITY RISK MANAGEMENT PROGRAM/PRIVACY POLICY
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
10
|
|
Statement of Assets and Liabilities
|
19
|
|
Statement of Operations
|
20
|
|
Statements of Changes in Net Assets
|
21
|
|
Financial Highlights
|
22
|
|
Notes to the Financial Statements
|
26
|
|
Report of Independent Registered Public Accounting Firm
|
35
|
|
Trustees and Officers of the Fund
|
36
|
|
Expense Example
|
40
|
|
Proxy Voting Policy and Proxy Voting Records
|
42
|
|
Availability of Quarterly Portfolio Schedule
|
42
|
|
Federal Tax Distribution Information
|
42
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
42
|
|
Electronic Delivery
|
42
|
|
Liquidity Risk Management Program
|
43
|
|
Privacy Policy
|
43
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The acronym, MT. FAANNG, refers to the following companies: Microsoft Corporation, Tesla, Inc., Meta Platforms, Inc., Amazon.com, Inc., Apple, Inc., Netflix, Inc., NVIDIA Corporation, and Alphabet, Inc.
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Equity and Income Fund –
|
|||
Investor Class (HEIFX)
|
3.67%
|
4.32%
|
5.00%
|
Hennessy Equity and Income Fund –
|
|||
Institutional Class (HEIIX)
|
3.99%
|
4.70%
|
5.39%
|
S&P 500® Index
|
10.14%
|
11.01%
|
11.18%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
Schedule of Investments as of October 31, 2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Apple, Inc.
|
4.80%
|
Berkshire Hathaway, Inc., Class B
|
4.54%
|
Alphabet, Inc., Class C
|
4.07%
|
The Progressive Corp.
|
2.88%
|
Martin Marietta Materials, Inc.
|
2.86%
|
Visa, Inc., Class A
|
2.80%
|
BlackRock, Inc.
|
2.72%
|
NewMarket Corp.
|
2.33%
|
FedEx Corp.
|
2.28%
|
Starbucks Corp.
|
2.28%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS – 66.29%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 4.07%
|
||||||||||||
Alphabet, Inc., Class C (a)
|
22,437
|
$
|
2,811,356
|
4.07
|
%
|
|||||||
Consumer Discretionary – 9.09%
|
||||||||||||
CarMax, Inc. (a)
|
11,619
|
709,805
|
1.03
|
%
|
||||||||
Lowe’s Companies., Inc.
|
4,739
|
903,111
|
1.31
|
%
|
||||||||
O’Reilly Automotive, Inc. (a)
|
1,621
|
1,508,243
|
2.19
|
%
|
||||||||
Starbucks Corp.
|
17,072
|
1,574,722
|
2.28
|
%
|
||||||||
The Home Depot, Inc.
|
5,531
|
1,574,620
|
2.28
|
%
|
||||||||
|
6,270,501
|
9.09
|
%
|
|||||||||
Consumer Staples – 5.90%
|
||||||||||||
Altria Group, Inc.
|
33,266
|
1,336,295
|
1.94
|
%
|
||||||||
Church & Dwight Co., Inc.
|
15,430
|
1,403,204
|
2.03
|
%
|
||||||||
Nestlé S.A. – ADR
|
12,399
|
1,336,116
|
1.93
|
%
|
||||||||
|
4,075,615
|
5.90
|
%
|
|||||||||
Energy – 2.04%
|
||||||||||||
Chevron Corp.
|
9,659
|
1,407,606
|
2.04
|
%
|
||||||||
Financials – 17.21%
|
||||||||||||
Berkshire Hathaway, Inc., Class B (a)
|
9,192
|
3,137,504
|
4.54
|
%
|
||||||||
BlackRock, Inc.
|
3,066
|
1,877,250
|
2.72
|
%
|
||||||||
Fiserv, Inc. (a)
|
13,437
|
1,528,459
|
2.22
|
%
|
||||||||
The Charles Schwab Corp.
|
27,202
|
1,415,592
|
2.05
|
%
|
||||||||
The Progressive Corp.
|
12,563
|
1,986,085
|
2.88
|
%
|
||||||||
Visa, Inc., Class A
|
8,207
|
1,929,466
|
2.80
|
%
|
||||||||
|
11,874,356
|
17.21
|
%
|
|||||||||
Health Care – 2.69%
|
||||||||||||
Johnson & Johnson
|
7,657
|
1,135,840
|
1.65
|
%
|
||||||||
Pfizer, Inc.
|
23,527
|
718,985
|
1.04
|
%
|
||||||||
|
1,854,825
|
2.69
|
%
|
|||||||||
Industrials – 8.32%
|
||||||||||||
FedEx Corp.
|
6,570
|
1,577,457
|
2.28
|
%
|
||||||||
Norfolk Southern Corp.
|
6,567
|
1,252,918
|
1.82
|
%
|
||||||||
Old Dominion Freight Line, Inc.
|
3,882
|
1,462,194
|
2.12
|
%
|
||||||||
Republic Services, Inc.
|
9,746
|
1,447,184
|
2.10
|
%
|
||||||||
|
5,739,753
|
8.32
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Information Technology – 8.49%
|
||||||||||||
Apple, Inc.
|
19,398
|
$
|
3,312,596
|
4.80
|
%
|
|||||||
Cisco Systems, Inc.
|
21,713
|
1,131,899
|
1.64
|
%
|
||||||||
Texas Instruments, Inc.
|
9,967
|
1,415,414
|
2.05
|
%
|
||||||||
|
5,859,909
|
8.49
|
%
|
|||||||||
Materials – 8.48%
|
||||||||||||
Air Products and Chemicals, Inc.
|
4,789
|
1,352,605
|
1.96
|
%
|
||||||||
Albemarle Corp.
|
7,253
|
919,535
|
1.33
|
%
|
||||||||
Martin Marietta Materials, Inc.
|
4,810
|
1,967,002
|
2.86
|
%
|
||||||||
NewMarket Corp.
|
3,339
|
1,609,899
|
2.33
|
%
|
||||||||
|
5,849,041
|
8.48
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $28,795,840)
|
45,742,962
|
66.29
|
%
|
|||||||||
|
||||||||||||
PREFERRED STOCKS – 1.15%
|
||||||||||||
Consumer Staples – 0.03%
|
||||||||||||
CHS, Inc., Series 4, 7.500%, Perpetual
|
940
|
23,688
|
0.03
|
%
|
||||||||
Financials – 1.08%
|
||||||||||||
AEGON Funding Co. LLC, 5.100%, 12/15/2049
|
985
|
18,351
|
0.03
|
%
|
||||||||
Allstate Corp., Series H, 5.100%, Perpetual
|
1,120
|
21,280
|
0.03
|
%
|
||||||||
American International Group, Inc., Series A, 5.850%, Perpetual
|
1,015
|
22,736
|
0.03
|
%
|
||||||||
Arch Capital Group Ltd., Series F, 5.450%, Perpetual
|
726
|
14,818
|
0.02
|
%
|
||||||||
Axis Capital Holdings Ltd., Series E, 5.500%, Perpetual
|
1,005
|
19,587
|
0.03
|
%
|
||||||||
Bank of America Corp., Series KK, 5.375%, Perpetual
|
1,675
|
34,605
|
0.06
|
%
|
||||||||
Bank of Hawaii Corp., Series A, 4.375%, Perpetual
|
770
|
10,095
|
0.01
|
%
|
||||||||
Capital One Financial Corp., Series I, 5.000%, Perpetual
|
1,900
|
30,951
|
0.04
|
%
|
||||||||
Carlyle Finance LLC, 4.625%, 05/15/2061
|
630
|
10,294
|
0.01
|
%
|
||||||||
Citigroup, Inc., Series K, 6.875% to 11/15/2023 then
|
||||||||||||
3 Month CME Term SOFR + 4.392%, Perpetual (b)
|
780
|
19,789
|
0.03
|
%
|
||||||||
Citizens Financial Group, Inc., Series D, 6.350% to 04/06/2024
|
||||||||||||
then 3 Month CME Term SOFR + 3.904%, Perpetual (b)
|
1,180
|
27,128
|
0.04
|
%
|
||||||||
Cullen/Frost Bankers, Inc., Series B, 4.450%, Perpetual
|
860
|
13,803
|
0.02
|
%
|
||||||||
Equitable Holdings, Inc., Series A, 5.250%, Perpetual
|
1,190
|
21,456
|
0.03
|
%
|
||||||||
Federal Agricultural Mortgage Corp., Series F, 5.250%, Perpetual
|
585
|
11,168
|
0.02
|
%
|
||||||||
Fifth Third Bancorp, Series I, 6.625% to 12/31/2023 then
|
||||||||||||
3 Month CME Term SOFR + 3.972%, Perpetual (b)
|
765
|
18,643
|
0.03
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
PREFERRED STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Financials (Continued)
|
||||||||||||
First Citizens BancShares, Inc., Series C, 5.625%, Perpetual
|
675
|
$
|
13,001
|
0.02
|
%
|
|||||||
First Horizon Corp., Series B, 6.625% to 08/01/2025 then
|
||||||||||||
3 Month LIBOR USD + 4.262%, Perpetual (b)
|
575
|
12,420
|
0.02
|
%
|
||||||||
Hartford Financial Services Group, Inc., Series G, 6.000%, Perpetual
|
1,125
|
25,706
|
0.04
|
%
|
||||||||
Huntington Bancshares, Inc., Series J, 6.875% to 04/15/2028 then
|
||||||||||||
5 Year CMT Rate + 2.704%, Perpetual (b)
|
1,325
|
29,349
|
0.04
|
%
|
||||||||
JPMorgan Chase & Co.
|
||||||||||||
Series JJ, 4.550%, Perpetual
|
1,310
|
24,065
|
0.03
|
%
|
||||||||
Series LL, 4.625%, Perpetual
|
1,285
|
24,119
|
0.03
|
%
|
||||||||
KeyCorp
|
||||||||||||
Series G, 5.625%, Perpetual
|
955
|
14,421
|
0.02
|
%
|
||||||||
Series E, 6.125% to 12/15/2026 then
|
||||||||||||
3 Month CME Term SOFR + 4.154%, Perpetual (b)
|
512
|
9,139
|
0.01
|
%
|
||||||||
MetLife, Inc., Series F, 4.750%, Perpetual
|
1,720
|
32,215
|
0.05
|
%
|
||||||||
Morgan Stanley, Series O, 4.250%, Perpetual
|
2,365
|
38,809
|
0.07
|
%
|
||||||||
Regions Financial Corp., Series C, 5.700% to 05/15/2029 then
|
||||||||||||
3 Month LIBOR USD + 3.148%, Perpetual (b)
|
1,035
|
18,475
|
0.03
|
%
|
||||||||
Reinsurance Group of America, Inc., 7.125% to 10/15/2027 then
|
||||||||||||
5 Year CMT Rate + 3.456%,10/15/2052 (b)
|
610
|
15,555
|
0.02
|
%
|
||||||||
Synchrony Financial, Series A, 5.625%, Perpetual
|
1,255
|
18,536
|
0.03
|
%
|
||||||||
Synovus Financial Corp., Series E, 5.875% to 07/01/2024 then
|
||||||||||||
5 Year CMT Rate + 4.127%, Perpetual (b)
|
920
|
20,902
|
0.03
|
%
|
||||||||
The Charles Schwab Corp., Series J, 4.450%, Perpetual
|
1,495
|
26,387
|
0.04
|
%
|
||||||||
The Goldman Sachs Group, Inc., Series K, 6.375% to 05/10/2024 then
|
||||||||||||
3 Month CME Term SOFR + 3.812%, Perpetual (b)
|
895
|
22,518
|
0.03
|
%
|
||||||||
Truist Financial Corp., Series O, 5.250%, Perpetual
|
1,625
|
32,662
|
0.05
|
%
|
||||||||
US Bancorp, Series O, 4.500%, Perpetual
|
1,295
|
21,834
|
0.03
|
%
|
||||||||
Wells Fargo & Co.
|
||||||||||||
Series Y, 5.625%, Perpetual
|
780
|
16,708
|
0.02
|
%
|
||||||||
Series Z, 4.750%, Perpetual
|
1,555
|
27,679
|
0.04
|
%
|
||||||||
|
739,204
|
1.08
|
%
|
|||||||||
Industrials – 0.02%
|
||||||||||||
WESCO International, Inc., Series A, 10.625% to 06/22/2025 then
|
||||||||||||
5 Year CMT Rate + 10.325%, Perpetual (b)
|
595
|
15,863
|
0.02
|
%
|
||||||||
Utilities – 0.02%
|
||||||||||||
Entergy Arkansas LLC, 4.875%, 09/01/2066
|
770
|
15,577
|
0.02
|
%
|
||||||||
|
||||||||||||
Total Preferred Stocks
|
||||||||||||
(Cost $1,008,789)
|
794,332
|
1.15
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
REITS – 0.03%
|
Number of Shares/
|
% of
|
||||||||||
|
Par Amount
|
Value
|
Net Assets
|
|||||||||
Real Estate – 0.03%
|
||||||||||||
Public Storage, Series P, 4.000%, Perpetual
|
1,185
|
$
|
18,711
|
0.03
|
%
|
|||||||
|
||||||||||||
Total REITS
|
||||||||||||
(Cost $24,228)
|
18,711
|
0.03
|
%
|
|||||||||
|
||||||||||||
CORPORATE BONDS – 15.71%
|
||||||||||||
Communication Services – 1.87%
|
||||||||||||
AT&T, Inc., 4.250%, 03/01/2027
|
$
|
980,000
|
930,211
|
1.35
|
%
|
|||||||
Comcast Corp., 4.650%, 02/15/2033
|
250,000
|
226,897
|
0.33
|
%
|
||||||||
T-Mobile USA, Inc., 3.875%, 04/15/2030
|
150,000
|
130,857
|
0.19
|
%
|
||||||||
|
1,287,965
|
1.87
|
%
|
|||||||||
Consumer Discretionary – 0.91%
|
||||||||||||
Lowe’s Companies, Inc., 2.625%, 04/01/2031
|
325,000
|
257,305
|
0.37
|
%
|
||||||||
Starbucks Corp., 3.500%, 03/01/2028
|
400,000
|
367,733
|
0.54
|
%
|
||||||||
|
625,038
|
0.91
|
%
|
|||||||||
Energy – 0.96%
|
||||||||||||
Canadian Natural Resources Ltd., 3.900%, 02/01/2025
|
300,000
|
291,740
|
0.42
|
%
|
||||||||
The Williams Companies, Inc., 2.600%, 03/15/2031
|
475,000
|
371,281
|
0.54
|
%
|
||||||||
|
663,021
|
0.96
|
%
|
|||||||||
Financials – 7.25%
|
||||||||||||
Aflac, Inc., 3.600%, 4/1/2030
|
300,000
|
261,959
|
0.38
|
%
|
||||||||
Bank of America Corp., 2.299% to 07/21/2031 then
|
||||||||||||
SOFR + 1.220%, 07/21/2032 (b)
|
575,000
|
425,246
|
0.62
|
%
|
||||||||
Fifth Third Bancorp, 3.650%, 01/25/2024
|
225,000
|
223,403
|
0.32
|
%
|
||||||||
Huntington Bancshares, Inc.
|
||||||||||||
2.550%, 02/04/2030
|
525,000
|
404,773
|
0.59
|
%
|
||||||||
4.000%, 05/15/2025
|
365,000
|
349,804
|
0.51
|
%
|
||||||||
JPMorgan Chase & Co., 2.069% to 06/01/2028 then
|
||||||||||||
SOFR + 1.015%, 06/01/2029 (b)
|
325,000
|
270,364
|
0.39
|
%
|
||||||||
Marsh & McLennan Companies, Inc., 4.375%, 03/15/2029
|
275,000
|
257,368
|
0.37
|
%
|
||||||||
Morgan Stanley
|
||||||||||||
1.593% to 05/04/2026 then SOFR + 0.879%, 05/04/2027 (b)
|
295,000
|
262,122
|
0.38
|
%
|
||||||||
2.239% to 07/21/2031 then SOFR + 1.178%, 07/21/2032 (b)
|
330,000
|
244,008
|
0.35
|
%
|
||||||||
PayPal Holdings, Inc., 2.850%, 10/1/2029
|
750,000
|
638,665
|
0.93
|
%
|
||||||||
Prudential Financial, Inc., 3.878%, 03/27/2028
|
260,000
|
241,715
|
0.35
|
%
|
||||||||
Regions Financial Corp., 1.800%, 08/12/2028
|
325,000
|
254,362
|
0.37
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
CORPORATE BONDS
|
% of
|
|||||||||||
|
Par Amount
|
Value
|
Net Assets
|
|||||||||
Financials (Continued)
|
||||||||||||
State Street Corp., 4.821% to 01/26/2033 then
|
||||||||||||
SOFR + 1.567%,01/26/2034 (b)
|
$
|
175,000
|
$
|
155,591
|
0.23
|
%
|
||||||
The Goldman Sachs Group, Inc., 4.223% to 05/01/2028 then
|
||||||||||||
3 Month CME Term SOFR + 1.563%,05/01/2029 (b)
|
300,000
|
274,081
|
0.40
|
%
|
||||||||
Willis North America, Inc., 3.600%, 05/15/2024
|
750,000
|
739,464
|
1.06
|
%
|
||||||||
|
5,002,925
|
7.25
|
%
|
|||||||||
Health Care – 2.41%
|
||||||||||||
Edwards Lifesciences Corp., 4.300%, 06/15/2028
|
700,000
|
656,599
|
0.95
|
%
|
||||||||
Evernorth Health, Inc., 3.500%, 06/15/2024
|
700,000
|
686,839
|
0.99
|
%
|
||||||||
Regeneron Pharmaceuticals, Inc., 1.750%, 09/15/2030
|
425,000
|
321,051
|
0.47
|
%
|
||||||||
|
1,664,489
|
2.41
|
%
|
|||||||||
Industrials – 0.93%
|
||||||||||||
General Electric Co., 3.625%, 05/01/2030
|
380,000
|
324,633
|
0.47
|
%
|
||||||||
The Boeing Co., 2.196%, 02/04/2026
|
225,000
|
206,775
|
0.30
|
%
|
||||||||
The Timken Co., 6.875%, 05/08/2028
|
110,000
|
110,111
|
0.16
|
%
|
||||||||
|
641,519
|
0.93
|
%
|
|||||||||
Information Technology – 1.38%
|
||||||||||||
Autodesk, Inc., 2.850%, 01/15/2030
|
675,000
|
564,562
|
0.81
|
%
|
||||||||
Broadcom, Inc., 4.110%, 09/15/2028
|
425,000
|
390,133
|
0.57
|
%
|
||||||||
|
954,695
|
1.38
|
%
|
|||||||||
|
||||||||||||
Total Corporate Bonds
|
||||||||||||
(Cost $12,414,668)
|
10,839,652
|
15.71
|
%
|
|||||||||
|
||||||||||||
MORTGAGE-BACKED SECURITIES – 2.75%
|
||||||||||||
Federal Agency Mortgage-Backed Obligations – 2.75%
|
||||||||||||
Fannie Mae Pool
|
||||||||||||
3.000%, 10/01/2043
|
790,014
|
664,550
|
0.96
|
%
|
||||||||
3.500%, 01/01/2042
|
144,001
|
126,742
|
0.18
|
%
|
||||||||
6.000%, 10/01/2037
|
73,359
|
72,807
|
0.11
|
%
|
||||||||
Fannie Mae REMICS
|
||||||||||||
Series 2013-52, 1.250%, 06/25/2043
|
36,754
|
28,516
|
0.04
|
%
|
||||||||
Series 2012-16, 2.000%, 11/25/2041
|
33,663
|
28,291
|
0.04
|
%
|
||||||||
Freddie Mac Gold Pool
|
||||||||||||
3.000%, 05/01/2042
|
420,723
|
356,255
|
0.52
|
%
|
||||||||
3.000%, 09/01/2042
|
526,591
|
446,243
|
0.65
|
%
|
||||||||
5.500%, 04/01/2037
|
28,394
|
27,970
|
0.04
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
MORTGAGE-BACKED SECURITIES
|
% of
|
|||||||||||
|
Par Amount
|
Value
|
Net Assets
|
|||||||||
Federal Agency Mortgage-Backed Obligations (Continued)
|
||||||||||||
Freddie Mac REMICS
|
||||||||||||
Series 4146, 1.500%, 10/15/2042
|
$
|
8,454
|
$
|
8,071
|
0.01
|
%
|
||||||
Series 4309, 2.000%, 10/15/2043
|
29,720
|
26,024
|
0.04
|
%
|
||||||||
Series 3870, 2.750%, 01/15/2041
|
9,074
|
8,569
|
0.01
|
%
|
||||||||
Series 4322, 3.000%, 05/15/2043
|
41,730
|
39,298
|
0.06
|
%
|
||||||||
Government National Mortgage Association,
|
||||||||||||
Series 2013-24, 1.750%, 2/16/2043
|
78,183
|
64,524
|
0.09
|
%
|
||||||||
|
||||||||||||
Total Mortgage-Backed Securities
|
||||||||||||
(Cost $2,224,280)
|
1,897,860
|
2.75
|
%
|
|||||||||
|
||||||||||||
U.S. TREASURY OBLIGATIONS – 12.20%
|
||||||||||||
U.S. Treasury Notes – 12.20%
|
||||||||||||
0.250%, 08/31/2025
|
1,250,000
|
1,144,580
|
1.66
|
%
|
||||||||
0.625%, 03/31/2027
|
450,000
|
390,551
|
0.57
|
%
|
||||||||
0.750%, 04/30/2026
|
1,500,000
|
1,353,633
|
1.96
|
%
|
||||||||
1.250%, 12/31/2026
|
625,000
|
559,595
|
0.81
|
%
|
||||||||
1.500%, 02/15/2025
|
200,000
|
190,559
|
0.28
|
%
|
||||||||
1.875%, 07/31/2026
|
1,550,000
|
1,429,875
|
2.07
|
%
|
||||||||
2.500%, 03/31/2027
|
300,000
|
277,980
|
0.40
|
%
|
||||||||
2.625%, 04/15/2025
|
300,000
|
289,072
|
0.42
|
%
|
||||||||
2.750%, 08/15/2032
|
550,000
|
466,426
|
0.68
|
%
|
||||||||
3.000%, 10/31/2025
|
450,000
|
432,308
|
0.63
|
%
|
||||||||
3.375%, 05/15/2033
|
400,000
|
354,625
|
0.51
|
%
|
||||||||
3.500%, 02/15/2033
|
225,000
|
201,938
|
0.29
|
%
|
||||||||
3.625%, 05/15/2026
|
350,000
|
339,021
|
0.49
|
%
|
||||||||
4.125%, 09/30/2027
|
275,000
|
267,792
|
0.39
|
%
|
||||||||
4.125%, 11/15/2032
|
500,000
|
472,168
|
0.68
|
%
|
||||||||
4.250%, 05/31/2025
|
250,000
|
246,396
|
0.36
|
%
|
||||||||
|
||||||||||||
Total U.S. Treasury Obligations
|
||||||||||||
(Cost $9,106,280)
|
8,416,519
|
12.20
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 1.91%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 1.91%
|
||||||||||||
First American Treasury Obligations Fund – Class X, 5.275% (c)
|
1,314,593
|
$
|
1,314,593
|
1.91
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $1,314,593)
|
1,314,593
|
1.91
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $54,888,678) – 100.04%
|
69,024,629
|
100.04
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.04)%
|
(24,151
|
)
|
(0.04
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
69,000,478
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
Variable rate security; rate disclosed is the rate as of October 31, 2023
|
(c)
|
The rate listed is the fund’s seven-day yield as of October 31, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
2,811,356
|
$
|
—
|
$
|
—
|
$
|
2,811,356
|
||||||||
Consumer Discretionary
|
6,270,501
|
—
|
—
|
6,270,501
|
||||||||||||
Consumer Staples
|
4,075,615
|
—
|
—
|
4,075,615
|
||||||||||||
Energy
|
1,407,606
|
—
|
—
|
1,407,606
|
||||||||||||
Financials
|
11,874,356
|
—
|
—
|
11,874,356
|
||||||||||||
Health Care
|
1,854,825
|
—
|
—
|
1,854,825
|
||||||||||||
Industrials
|
5,739,753
|
—
|
—
|
5,739,753
|
||||||||||||
Information Technology
|
5,859,909
|
—
|
—
|
5,859,909
|
||||||||||||
Materials
|
5,849,041
|
—
|
—
|
5,849,041
|
||||||||||||
Total Common Stocks
|
$
|
45,742,962
|
$
|
—
|
$
|
—
|
$
|
45,742,962
|
||||||||
Preferred Stocks
|
||||||||||||||||
Consumer Staples
|
$
|
23,688
|
$
|
—
|
$
|
—
|
$
|
23,688
|
||||||||
Financials
|
739,204
|
—
|
—
|
739,204
|
||||||||||||
Industrials
|
15,863
|
—
|
—
|
15,863
|
||||||||||||
Utilities
|
15,577
|
—
|
—
|
15,577
|
||||||||||||
Total Preferred Stocks
|
$
|
794,332
|
$
|
—
|
$
|
—
|
$
|
794,332
|
||||||||
REITS
|
||||||||||||||||
Real Estate
|
$
|
18,711
|
$
|
—
|
$
|
—
|
$
|
18,711
|
||||||||
Total REITS
|
$
|
18,711
|
$
|
—
|
$
|
—
|
$
|
18,711
|
||||||||
Corporate Bonds
|
||||||||||||||||
Communication Services
|
$
|
—
|
$
|
1,287,965
|
$
|
—
|
$
|
1,287,965
|
||||||||
Consumer Discretionary
|
—
|
625,038
|
—
|
625,038
|
||||||||||||
Energy
|
—
|
663,021
|
—
|
663,021
|
||||||||||||
Financials
|
—
|
5,002,925
|
—
|
5,002,925
|
||||||||||||
Health Care
|
—
|
1,664,489
|
—
|
1,664,489
|
||||||||||||
Industrials
|
—
|
641,519
|
—
|
641,519
|
||||||||||||
Information Technology
|
—
|
954,695
|
—
|
954,695
|
||||||||||||
Total Corporate Bonds
|
$
|
—
|
$
|
10,839,652
|
$
|
—
|
$
|
10,839,652
|
||||||||
Mortgage-Backed Securities
|
||||||||||||||||
Federal Agency Mortgage-Backed Obligations
|
$
|
—
|
$
|
1,897,860
|
$
|
—
|
$
|
1,897,860
|
||||||||
Total Mortgage-Backed Securities
|
$
|
—
|
$
|
1,897,860
|
$
|
—
|
$
|
1,897,860
|
||||||||
U.S. Treasury Obligations
|
||||||||||||||||
U.S. Treasury Notes
|
$
|
—
|
$
|
8,416,519
|
$
|
—
|
$
|
8,416,519
|
||||||||
Total U.S. Treasury Obligations
|
$
|
—
|
$
|
8,416,519
|
$
|
—
|
$
|
8,416,519
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
1,314,593
|
$
|
—
|
$
|
—
|
$
|
1,314,593
|
||||||||
Total Short-Term Investments
|
$
|
1,314,593
|
$
|
—
|
$
|
—
|
$
|
1,314,593
|
||||||||
Total Investments
|
$
|
47,870,598
|
$
|
21,154,031
|
$
|
—
|
$
|
69,024,629
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $54,888,678)
|
$
|
69,024,629
|
||
Dividends and interest receivable
|
211,629
|
|||
Receivable for fund shares sold
|
39,053
|
|||
Prepaid expenses and other assets
|
21,055
|
|||
Total assets
|
69,296,366
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
182,494
|
|||
Payable to advisor
|
48,233
|
|||
Payable to administrator
|
13,329
|
|||
Payable to auditor
|
22,752
|
|||
Accrued distribution fees
|
6,665
|
|||
Accrued service fees
|
2,970
|
|||
Accrued trustees fees
|
6,073
|
|||
Accrued expenses and other payables
|
13,372
|
|||
Total liabilities
|
295,888
|
|||
NET ASSETS
|
$
|
69,000,478
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
49,392,170
|
||
Total distributable earnings
|
19,608,308
|
|||
Total net assets
|
$
|
69,000,478
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
34,290,347
|
||
Shares issued and outstanding
|
2,432,734
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
14.10
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
34,710,131
|
||
Shares issued and outstanding
|
2,624,343
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
13.23
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2023
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
1,071,574
|
||
Interest income
|
749,892
|
|||
Total investment income
|
1,821,466
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
652,474
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
78,752
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
39,594
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
87,437
|
|||
Distribution fees – Investor Class (See Note 5)
|
56,928
|
|||
Service fees – Investor Class (See Note 5)
|
37,952
|
|||
Federal and state registration fees
|
31,313
|
|||
Audit fees
|
22,753
|
|||
Compliance expense (See Note 5)
|
22,672
|
|||
Trustees’ fees and expenses
|
20,712
|
|||
Reports to shareholders
|
13,000
|
|||
Legal fees
|
2,164
|
|||
Interest expense (See Note 7)
|
97
|
|||
Other expenses
|
14,845
|
|||
Total expenses
|
1,080,693
|
|||
NET INVESTMENT INCOME
|
$
|
740,773
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments:
|
$
|
6,577,550
|
||
Net change in unrealized appreciation/depreciation on investments:
|
(3,501,366
|
)
|
||
Net gain on investments
|
3,076,184
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
3,816,957
|
(1)
|
Net of foreign taxes withheld and issuance fees of $7,955.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2023
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
740,773
|
$
|
757,118
|
||||
Net realized gain on investments
|
6,577,550
|
2,841,084
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(3,501,366
|
)
|
(17,205,736
|
)
|
||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
3,816,957
|
(13,607,534
|
)
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(1,298,637
|
)
|
(3,654,611
|
)
|
||||
Distributable earnings – Institutional Class
|
(1,743,953
|
)
|
(4,723,563
|
)
|
||||
Total distributions
|
(3,042,590
|
)
|
(8,378,174
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
316,740
|
1,881,768
|
||||||
Proceeds from shares subscribed – Institutional Class
|
1,100,458
|
2,382,337
|
||||||
Dividends reinvested – Investor Class
|
1,260,827
|
3,556,955
|
||||||
Dividends reinvested – Institutional Class
|
1,285,409
|
3,602,091
|
||||||
Cost of shares redeemed – Investor Class
|
(6,701,151
|
)
|
(10,361,778
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(15,950,410
|
)
|
(12,193,431
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(18,688,127
|
)
|
(11,132,058
|
)
|
||||
TOTAL DECREASE IN NET ASSETS
|
(17,913,760
|
)
|
(33,117,766
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of year
|
86,914,238
|
120,032,004
|
||||||
End of year
|
$
|
69,000,478
|
$
|
86,914,238
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
22,144
|
115,566
|
||||||
Shares sold – Institutional Class
|
81,665
|
160,649
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
88,230
|
217,125
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
95,776
|
234,876
|
||||||
Shares redeemed – Investor Class
|
(462,960
|
)
|
(673,769
|
)
|
||||
Shares redeemed – Institutional Class
|
(1,168,441
|
)
|
(853,794
|
)
|
||||
Net decrease in shares outstanding
|
(1,343,586
|
)
|
(799,347
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
14.06
|
$
|
17.26
|
$
|
15.12
|
$
|
15.72
|
$
|
15.82
|
|||||||||
0.10
|
0.08
|
0.09
|
0.16
|
0.18
|
||||||||||||||
0.42
|
(2.09
|
)
|
3.01
|
0.40
|
1.02
|
|||||||||||||
0.52
|
(2.01
|
)
|
3.10
|
0.56
|
1.20
|
|||||||||||||
(0.10
|
)
|
(0.08
|
)
|
(0.10
|
)
|
(0.16
|
)
|
(0.17
|
)
|
|||||||||
(0.38
|
)
|
(1.11
|
)
|
(0.86
|
)
|
(1.00
|
)
|
(1.13
|
)
|
|||||||||
(0.48
|
)
|
(1.19
|
)
|
(0.96
|
)
|
(1.16
|
)
|
(1.30
|
)
|
|||||||||
$
|
14.10
|
$
|
14.06
|
$
|
17.26
|
$
|
15.12
|
$
|
15.72
|
|||||||||
3.67
|
%
|
-12.60
|
%
|
21.24
|
%
|
3.74
|
%
|
8.39
|
%
|
|||||||||
$
|
34.29
|
$
|
39.17
|
$
|
53.97
|
$
|
51.29
|
$
|
93.51
|
|||||||||
1.52
|
%
|
1.51
|
%
|
1.49
|
%
|
1.49
|
%
|
1.46
|
%
|
|||||||||
0.71
|
%
|
0.53
|
%
|
0.54
|
%
|
1.08
|
%
|
1.16
|
%
|
|||||||||
11
|
%
|
15
|
%
|
26
|
%
|
22
|
%
|
16
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
13.21
|
$
|
16.22
|
$
|
14.22
|
$
|
14.80
|
$
|
14.93
|
|||||||||
0.15
|
0.13
|
0.14
|
0.20
|
0.22
|
||||||||||||||
0.38
|
(1.97
|
)
|
2.83
|
0.38
|
0.96
|
|||||||||||||
0.53
|
(1.84
|
)
|
2.97
|
0.58
|
1.18
|
|||||||||||||
(0.15
|
)
|
(0.13
|
)
|
(0.16
|
)
|
(0.22
|
)
|
(0.24
|
)
|
|||||||||
(0.36
|
)
|
(1.04
|
)
|
(0.81
|
)
|
(0.94
|
)
|
(1.07
|
)
|
|||||||||
(0.51
|
)
|
(1.17
|
)
|
(0.97
|
)
|
(1.16
|
)
|
(1.31
|
)
|
|||||||||
$
|
13.23
|
$
|
13.21
|
$
|
16.22
|
$
|
14.22
|
$
|
14.80
|
|||||||||
3.99
|
%
|
-12.25
|
%
|
21.68
|
%
|
4.16
|
%
|
8.76
|
%
|
|||||||||
$
|
34.71
|
$
|
47.74
|
$
|
66.06
|
$
|
61.75
|
$
|
80.40
|
|||||||||
1.15
|
%
|
1.13
|
%
|
1.12
|
%
|
1.12
|
%
|
1.09
|
%
|
|||||||||
1.08
|
%
|
0.90
|
%
|
0.91
|
%
|
1.44
|
%
|
1.53
|
%
|
|||||||||
11
|
%
|
15
|
%
|
26
|
%
|
22
|
%
|
16
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with
the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and
realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the
treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized
gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and
profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax regulations, permanent differences between book and tax basis for
reporting are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2023 are as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(858,254)
|
$858,254
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of the
Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion
of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding
increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income at
the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other than
expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of
the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
REIT Equity Securities – Distributions received from real estate investment trusts (“REITs”) may be classified as dividends, capital gains, or return of capital. Investments in REITs may require the Fund
to accrue and distribute income not yet received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that
it otherwise would have continued to hold. At other times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings. If the Fund distributes these amounts, these distributions could
constitute a return of capital to Fund shareholders for U.S. federal income tax
|
HENNESSY FUNDS
|
1-800-966-4354
|
purposes. Dividends received by the Fund from a REIT generally do not constitute qualified dividend income and do not qualify for the dividends-received deduction.
|
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things,
that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions
in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds
and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight
key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and available
for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual
Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring the fair
value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within
those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that are
not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit risk
curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable
inputs are unavailable.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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 security’s fair value would be determined
as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
55,103,252
|
|||
Gross tax unrealized appreciation
|
$
|
18,175,094
|
|||
Gross tax unrealized depreciation
|
(4,253,750
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
13,921,344
|
|||
Undistributed ordinary income
|
$
|
14,821
|
|||
Undistributed long-term capital gains
|
5,672,143
|
||||
Total distributable earnings
|
$
|
5,686,964
|
|||
Other accumulated gain/(loss)
|
$
|
—
|
|||
Total accumulated gain/(loss)
|
$
|
19,608,308
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Year Ended
|
Year Ended
|
||||||||
October 31, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
743,879
|
$
|
779,687
|
|||||
Long-term capital gains
|
2,298,711
|
7,598,487
|
|||||||
Total distributions
|
$
|
3,042,590
|
$
|
8,378,174
|
|||||
(1) Ordinary income includes short-term capital gains.
|
Long-term
|
|||
Investor Class
|
1.21186
|
||
Institutional Class
|
1.13754
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
TAIT, WELLER & BAKER LLP
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the Investment Manager
or of any predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 971.30
|
$7.55
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,017.54
|
$7.73
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 973.60
|
$5.62
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.51
|
$5.75
|
(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 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund has
historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future during
both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to a
highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make or recommend any material changes to the Liquidity Program during the review period.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets, income,
and date of birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis information,
and other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
8
|
|
Statement of Assets and Liabilities
|
11
|
|
Statement of Operations
|
12
|
|
Statements of Changes in Net Assets
|
13
|
|
Financial Highlights
|
14
|
|
Notes to the Financial Statements
|
16
|
|
Report of Independent Registered Public Accounting Firm
|
23
|
|
Trustees and Officers of the Fund
|
24
|
|
Expense Example
|
28
|
|
Proxy Voting Policy and Proxy Voting Records
|
29
|
|
Availability of Quarterly Portfolio Schedule
|
29
|
|
Federal Tax Distribution Information
|
29
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
29
|
|
Electronic Delivery
|
29
|
|
Liquidity Risk Management Program
|
30
|
|
Privacy Policy
|
30
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The acronym, MT. FAANNG, refers to the following companies: Microsoft Corporation, Tesla, Inc., Meta Platforms, Inc., Amazon.com, Inc., Apple, Inc., Netflix, Inc., NVIDIA Corporation, and Alphabet,
Inc.
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Balanced Fund (HBFBX)
|
-0.22%
|
2.11%
|
3.28%
|
50/50 Blended DJIA/Treasury Index
|
3.86%
|
5.15%
|
5.90%
|
Dow Jones Industrial Average
|
3.17%
|
7.96%
|
10.34%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
Schedule of Investments as of October 31, 2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
U.S. Treasury Bill, 5.310%, 01/25/2024
|
20.08%
|
U.S. Treasury Bill, 5.325%, 11/30/2023
|
10.54%
|
U.S. Treasury Bill, 4.930%, 06/13/2024
|
9.45%
|
U.S. Treasury Bill, 4.645%, 05/16/2024
|
7.90%
|
International Business Machines Corp.
|
5.12%
|
Cisco Systems, Inc.
|
5.05%
|
Verizon Communications, Inc.
|
5.00%
|
Amgen, Inc.
|
4.78%
|
3M Co.
|
4.48%
|
Dow, Inc.
|
4.46%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS – 46.66%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 5.00%
|
||||||||||||
Verizon Communications, Inc.
|
17,500
|
$
|
614,775
|
5.00
|
%
|
|||||||
Consumer Staples – 6.59%
|
||||||||||||
The Coca-Cola Co.
|
6,100
|
344,589
|
2.81
|
%
|
||||||||
Walgreens Boots Alliance, Inc.
|
22,050
|
464,814
|
3.78
|
%
|
||||||||
|
809,403
|
6.59
|
%
|
|||||||||
Energy – 4.03%
|
||||||||||||
Chevron Corp.
|
3,400
|
495,482
|
4.03
|
%
|
||||||||
Financials – 4.24%
|
||||||||||||
JPMorgan Chase & Co.
|
1,350
|
187,731
|
1.53
|
%
|
||||||||
The Goldman Sachs Group, Inc.
|
1,100
|
333,971
|
2.71
|
%
|
||||||||
|
521,702
|
4.24
|
%
|
|||||||||
Health Care – 4.78%
|
||||||||||||
Amgen, Inc.
|
2,300
|
588,110
|
4.78
|
%
|
||||||||
Industrials – 4.48%
|
||||||||||||
3M Co.
|
6,050
|
550,248
|
4.48
|
%
|
||||||||
Information Technology – 13.08%
|
||||||||||||
Cisco Systems, Inc.
|
11,900
|
620,347
|
5.05
|
%
|
||||||||
Intel Corp.
|
9,800
|
357,700
|
2.91
|
%
|
||||||||
International Business Machines Corp.
|
4,350
|
629,184
|
5.12
|
%
|
||||||||
|
1,607,231
|
13.08
|
%
|
|||||||||
Materials – 4.46%
|
||||||||||||
Dow, Inc.
|
11,350
|
548,659
|
4.46
|
%
|
||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $6,026,118)
|
5,735,610
|
46.66
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 53.52%
|
Number of Shares/
|
% of
|
||||||||||
|
Par Amount
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 5.55%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.276% (a)
|
68,320
|
$
|
68,320
|
0.56
|
%
|
|||||||
First American Treasury Obligations Fund – Class X, 5.275% (a)
|
614,000
|
614,000
|
4.99
|
%
|
||||||||
|
682,320
|
5.55
|
%
|
|||||||||
U.S. Treasury Bills – 47.97%
|
||||||||||||
5.325%, 11/30/2023 (b)
|
1,300,000
|
1,295,329
|
10.54
|
%
|
||||||||
5.310%, 01/25/2024 (b)
|
2,500,000
|
2,468,670
|
20.08
|
%
|
||||||||
4.645%, 05/16/2024 (b)
|
1,000,000
|
971,297
|
7.90
|
%
|
||||||||
4.930%, 06/13/2024 (b)
|
1,200,000
|
1,161,169
|
9.45
|
%
|
||||||||
|
5,896,465
|
47.97
|
%
|
|||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $6,588,920)
|
6,578,785
|
53.52
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $12,615,038) – 100.18%
|
12,314,395
|
100.18
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.18)%
|
(22,646
|
)
|
(0.18
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
12,291,749
|
100.00
|
%
|
(a)
|
The rate listed is the fund’s seven-day yield as of October 31, 2023.
|
(b)
|
The rate listed is the discount rate at issue.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
614,775
|
$
|
—
|
$
|
—
|
$
|
614,775
|
||||||||
Consumer Staples
|
809,403
|
—
|
—
|
809,403
|
||||||||||||
Energy
|
495,482
|
—
|
—
|
495,482
|
||||||||||||
Financials
|
521,702
|
—
|
—
|
521,702
|
||||||||||||
Health Care
|
588,110
|
—
|
—
|
588,110
|
||||||||||||
Industrials
|
550,248
|
—
|
—
|
550,248
|
||||||||||||
Information Technology
|
1,607,231
|
—
|
—
|
1,607,231
|
||||||||||||
Materials
|
548,659
|
—
|
—
|
548,659
|
||||||||||||
Total Common Stocks
|
$
|
5,735,610
|
$
|
—
|
$
|
—
|
$
|
5,735,610
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
682,320
|
$
|
—
|
$
|
—
|
$
|
682,320
|
||||||||
U.S. Treasury Bills
|
—
|
5,896,465
|
—
|
5,896,465
|
||||||||||||
Total Short-Term Investments
|
$
|
682,320
|
$
|
5,896,465
|
$
|
—
|
$
|
6,578,785
|
||||||||
Total Investments
|
$
|
6,417,930
|
$
|
5,896,465
|
$
|
—
|
$
|
12,314,395
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $12,615,038)
|
$
|
12,314,395
|
||
Dividends and interest receivable
|
14,011
|
|||
Receivable for fund shares sold
|
33
|
|||
Prepaid expenses and other assets
|
8,045
|
|||
Total assets
|
12,336,484
|
|||
LIABILITIES:
|
||||
Payable to advisor
|
6,205
|
|||
Payable to administrator
|
4,061
|
|||
Payable to auditor
|
22,746
|
|||
Accrued distribution fees
|
1,654
|
|||
Accrued service fees
|
1,034
|
|||
Accrued trustees fees
|
5,422
|
|||
Accrued expenses and other payables
|
3,613
|
|||
Total liabilities
|
44,735
|
|||
NET ASSETS
|
$
|
12,291,749
|
||
NET ASSETS CONSIST OF:
|
||||
Capital stock
|
$
|
12,578,067
|
||
Accumulated deficit
|
(286,318
|
)
|
||
Total net assets
|
$
|
12,291,749
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
12,291,749
|
||
Shares issued and outstanding
|
1,105,839
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
11.12
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2023
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
266,928
|
||
Interest income
|
243,792
|
|||
Total investment income
|
510,720
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
74,697
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
23,939
|
|||
Audit fees
|
22,747
|
|||
Compliance expense (See Note 5)
|
22,676
|
|||
Trustees’ fees and expenses
|
19,763
|
|||
Distribution fees – Investor Class (See Note 5)
|
18,674
|
|||
Federal and state registration fees
|
18,171
|
|||
Service fees – Investor Class (See Note 5)
|
12,450
|
|||
Reports to shareholders
|
6,641
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
3,331
|
|||
Legal fees
|
1,034
|
|||
Other expenses
|
4,637
|
|||
Total expenses
|
228,760
|
|||
NET INVESTMENT INCOME
|
$
|
281,960
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
24,850
|
||
Net change in unrealized appreciation/depreciation on investments
|
(338,727
|
)
|
||
Net loss on investments
|
(313,877
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(31,917
|
)
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2023
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
281,960
|
$
|
66,939
|
||||
Net realized gain on investments
|
24,850
|
492,822
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(338,727
|
)
|
(683,111
|
)
|
||||
Net decrease in net assets resulting from operations
|
(31,917
|
)
|
(123,350
|
)
|
||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(743,448
|
)
|
(524,145
|
)
|
||||
Total distributions
|
(743,448
|
)
|
(524,145
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
1,168,635
|
2,103,328
|
||||||
Dividends reinvested – Investor Class
|
729,717
|
519,982
|
||||||
Cost of shares redeemed – Investor Class
|
(1,723,755
|
)
|
(2,614,494
|
)
|
||||
Net increase in net assets
|
||||||||
derived from capital share transactions
|
174,597
|
8,816
|
||||||
TOTAL DECREASE IN NET ASSETS
|
(600,768
|
)
|
(638,679
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of year
|
12,892,517
|
13,531,196
|
||||||
End of year
|
$
|
12,291,749
|
$
|
12,892,517
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
102,839
|
173,711
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
63,200
|
43,919
|
||||||
Shares redeemed – Investor Class
|
(150,502
|
)
|
(219,333
|
)
|
||||
Net increase (decrease) in shares outstanding
|
15,537
|
(1,703
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
11.82
|
$
|
12.39
|
$
|
10.84
|
$
|
12.38
|
$
|
12.34
|
|||||||||
0.26
|
0.06
|
0.02
|
0.12
|
0.13
|
||||||||||||||
(0.27
|
)
|
(0.15
|
)
|
1.56
|
(1.04
|
)
|
0.59
|
|||||||||||
(0.01
|
)
|
(0.09
|
)
|
1.58
|
(0.92
|
)
|
0.72
|
|||||||||||
(0.25
|
)
|
(0.05
|
)
|
(0.03
|
)
|
(0.12
|
)
|
(0.13
|
)
|
|||||||||
(0.44
|
)
|
(0.43
|
)
|
—
|
(0.50
|
)
|
(0.55
|
)
|
||||||||||
(0.69
|
)
|
(0.48
|
)
|
(0.03
|
)
|
(0.62
|
)
|
(0.68
|
)
|
|||||||||
$
|
11.12
|
$
|
11.82
|
$
|
12.39
|
$
|
10.84
|
$
|
12.38
|
|||||||||
-0.22
|
%
|
-0.70
|
%
|
14.62
|
%
|
-7.84
|
%
|
6.05
|
%
|
|||||||||
$
|
12.29
|
$
|
12.89
|
$
|
13.53
|
$
|
11.99
|
$
|
12.30
|
|||||||||
1.84
|
%
|
1.80
|
%
|
1.85
|
%
|
1.89
|
%
|
1.88
|
%
|
|||||||||
2.26
|
%
|
0.49
|
%
|
0.17
|
%
|
1.05
|
%
|
1.04
|
%
|
|||||||||
22
|
%
|
29
|
%
|
31
|
%
|
42
|
%
|
52
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with
the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and
realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the
treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized
gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and
profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax
regulations, permanent differences between book and tax basis for reporting are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2023 are as
follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(11,865)
|
$11,865
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of
the Fund for the prior three fiscal years are
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized
tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion
of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding
increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income
at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if
any, are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost
of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things,
that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions
in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds
and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight
key information. The amendments also will require that funds tag information in a structured data format. In addition, the
|
HENNESSY FUNDS
|
1-800-966-4354
|
rule amendments will require that certain more in-depth information be made available online and available for delivery free of charge to investors on request. The amendments became effective January
24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value
Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security
and, therefore, is not considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years
beginning after December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that
are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit
risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable
inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, exchange-traded funds, closed-end mutual funds, partnerships, rights, and real
estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary exchange on which the securities
are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported. Securities traded on a securities exchange for
which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are
classified in Level 1 of the fair value hierarchy.
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the
ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may
consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may
incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are
generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term
debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the
values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be
determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
12,638,263
|
|||
Gross tax unrealized appreciation
|
$
|
698,724
|
|||
Gross tax unrealized depreciation
|
(1,022,592
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
(323,868
|
)
|
||
Undistributed ordinary income
|
$
|
24,233
|
|||
Undistributed long-term capital gains
|
13,317
|
||||
Total distributable earnings
|
$
|
37,550
|
|||
Other accumulated gain/(loss)
|
$
|
—
|
|||
Total accumulated gain/(loss)
|
$
|
(286,318
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Year Ended
|
Year Ended
|
||||||||
October 31, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
265,250
|
$
|
70,052
|
|||||
Long-term capital gains
|
478,198
|
454,093
|
|||||||
Total distributions
|
$
|
743,448
|
$
|
524,145
|
|||||
(1) Ordinary income includes short-term capital gains.
|
Long-term
|
|||
Investor Class
|
0.01216
|
WWW.HENNESSYFUNDS.COM
|
NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
TAIT, WELLER & BAKER LLP
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the Investment
Manager or of any predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 988.30
|
$9.37
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,015.78
|
$9.50
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.87%, multiplied by the average account value over the period, multiplied by 184/365 days (to reflect the half-year period).
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE — ELECTRONIC DELIVERY
|
|
HENNESSY FUNDS
|
1-800-966-4354
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund
has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future
during both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to a
highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make or recommend any material changes to the Liquidity Program during the review period.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets,
income, and date of birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
WWW.HENNESSYFUNDS.COM
|
LIQUIDITY RISK MANAGEMENT PROGRAM/PRIVACY POLICY
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
10
|
|
Statement of Assets and Liabilities
|
14
|
|
Statement of Operations
|
15
|
|
Statements of Changes in Net Assets
|
17
|
|
Financial Highlights
|
18
|
|
Notes to the Financial Statements
|
22
|
|
Report of Independent Registered Public Accounting Firm
|
30
|
|
Trustees and Officers of the Fund
|
31
|
|
Expense Example
|
36
|
|
Proxy Voting Policy and Proxy Voting Records
|
38
|
|
Availability of Quarterly Portfolio Schedule
|
38
|
|
Federal Tax Distribution Information
|
38
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
38
|
|
Electronic Delivery
|
38
|
|
Liquidity Risk Management Program
|
39
|
|
Privacy Policy
|
39
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The acronym, MT. FAANNG, refers to the following companies: Microsoft Corporation, Tesla, Inc., Meta Platforms, Inc., Amazon.com, Inc., Apple, Inc., Netflix, Inc., NVIDIA Corporation, and Alphabet,
Inc.
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
|
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Since Inception
|
|
Year
|
Years
|
(12/31/13)
|
|
Hennessy Energy Transition Fund –
|
|||
Investor Class (HNRGX)
|
0.81%
|
8.50%
|
3.59%
|
Hennessy Energy Transition Fund –
|
|||
Institutional Class (HNRIX)
|
1.14%
|
8.82%
|
3.87%
|
S&P 500® Energy Index
|
-2.03%
|
10.23%
|
3.65%
|
S&P 500® Index
|
10.14%
|
11.01%
|
10.75%
|
Expense ratios:
|
Gross 2.42%, Net 2.25%(1) (Investor Class);
|
Gross 2.09%, Net 1.92%(1) (Institutional Class)
|
(1)
|
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
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
Schedule of Investments as of October 31,
2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% TOTAL ASSETS
|
Canadian Natural Resources Ltd.
|
5.53%
|
Cheniere Energy, Inc.
|
5.45%
|
Pioneer Natural Resources Co.
|
5.20%
|
EOG Resources, Inc.
|
4.95%
|
Antero Resources Corp.
|
4.88%
|
Diamondback Energy, Inc.
|
4.80%
|
ConocoPhillips
|
4.79%
|
Suncor Energy, Inc.
|
4.71%
|
EQT Corp.
|
4.68%
|
Exxon Mobile Corp.
|
4.66%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS – 95.13%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Downstream – 4.88%
|
||||||||||||
Phillips 66
|
4,000
|
$
|
456,280
|
2.24
|
%
|
|||||||
Valero Energy Corp.
|
4,250
|
539,750
|
2.64
|
%
|
||||||||
|
996,030
|
4.88
|
%
|
|||||||||
Exploration & Production – 46.68%
|
||||||||||||
Antero Resources Corp. (a)
|
33,900
|
998,016
|
4.89
|
%
|
||||||||
Canadian Natural Resources Ltd.
|
17,800
|
1,130,834
|
5.54
|
%
|
||||||||
Comstock Resources, Inc.
|
47,000
|
592,200
|
2.90
|
%
|
||||||||
ConocoPhillips
|
8,245
|
979,506
|
4.80
|
%
|
||||||||
Diamondback Energy, Inc.
|
6,120
|
981,158
|
4.81
|
%
|
||||||||
EOG Resources, Inc.
|
8,030
|
1,013,788
|
4.97
|
%
|
||||||||
EQT Corp.
|
22,600
|
957,788
|
4.70
|
%
|
||||||||
Marathon Oil Corp.
|
30,800
|
841,148
|
4.12
|
%
|
||||||||
Pioneer Natural Resources Co.
|
4,450
|
1,063,550
|
5.22
|
%
|
||||||||
Suncor Energy, Inc.
|
29,760
|
964,224
|
4.73
|
%
|
||||||||
|
9,522,212
|
46.68
|
%
|
|||||||||
Integrated – 9.07%
|
||||||||||||
Chevron Corp.
|
6,157
|
897,260
|
4.40
|
%
|
||||||||
Exxon Mobil Corp.
|
9,000
|
952,650
|
4.67
|
%
|
||||||||
|
1,849,910
|
9.07
|
%
|
|||||||||
Midstream – 5.47%
|
||||||||||||
Cheniere Energy, Inc.
|
6,700
|
1,115,014
|
5.47
|
%
|
||||||||
Oil Services – 22.39%
|
||||||||||||
Halliburton Co.
|
21,650
|
851,711
|
4.18
|
%
|
||||||||
NOV, Inc.
|
19,500
|
389,220
|
1.91
|
%
|
||||||||
Schlumberger Ltd.
|
16,810
|
935,644
|
4.59
|
%
|
||||||||
Solaris Oilfield Infrastructure, Inc.
|
87,920
|
812,381
|
3.98
|
%
|
||||||||
TechnipFMC PLC
|
36,840
|
792,797
|
3.89
|
%
|
||||||||
Tenaris SA – ADR
|
25,000
|
783,000
|
3.84
|
%
|
||||||||
|
4,564,753
|
22.39
|
%
|
|||||||||
Utility – 6.64%
|
||||||||||||
Freeport-McMoRan, Inc.
|
18,420
|
622,227
|
3.05
|
%
|
||||||||
NextEra Energy, Inc.
|
12,570
|
732,831
|
3.59
|
%
|
||||||||
|
1,355,058
|
6.64
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $13,254,787)
|
19,402,977
|
95.13
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
PARTNERSHIPS & TRUSTS – 2.01%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Midstream – 2.01%
|
||||||||||||
Plains All American Pipeline LP
|
27,010
|
$
|
409,201
|
2.01
|
%
|
|||||||
|
||||||||||||
Total Partnerships & Trusts
|
||||||||||||
(Cost $203,624)
|
409,201
|
2.01
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS– 3.08%
|
||||||||||||
Money Market Funds – 3.08%
|
||||||||||||
First American Treasury Obligations Fund – Class X, 5.275% (b)
|
629,221
|
629,221
|
3.08
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $629,221)
|
629,221
|
3.08
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $14,087,632) – 100.22%
|
20,441,399
|
100.22
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.22)%
|
(44,093
|
)
|
(0.22
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
20,397,306
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2023.
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Downstream
|
$
|
996,030
|
$
|
—
|
$
|
—
|
$
|
996,030
|
||||||||
Exploration & Production
|
9,522,212
|
—
|
—
|
9,522,212
|
||||||||||||
Integrated
|
1,849,910
|
—
|
—
|
1,849,910
|
||||||||||||
Midstream
|
1,115,014
|
—
|
—
|
1,115,014
|
||||||||||||
Oil Services
|
4,564,753
|
—
|
—
|
4,564,753
|
||||||||||||
Utility
|
1,355,058
|
—
|
—
|
1,355,058
|
||||||||||||
Total Common Stocks
|
$
|
19,402,977
|
$
|
—
|
$
|
—
|
$
|
19,402,977
|
||||||||
Partnerships & Trusts
|
||||||||||||||||
Midstream
|
$
|
409,201
|
$
|
—
|
$
|
—
|
$
|
409,201
|
||||||||
Total Partnerships & Trusts
|
$
|
409,201
|
$
|
—
|
$
|
—
|
$
|
409,201
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
629,221
|
$
|
—
|
$
|
—
|
$
|
629,221
|
||||||||
Total Short-Term Investments
|
$
|
629,221
|
$
|
—
|
$
|
—
|
$
|
629,221
|
||||||||
Total Investments
|
$
|
20,441,399
|
$
|
—
|
$
|
—
|
$
|
20,441,399
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $14,087,632)
|
$
|
20,441,399
|
||
Dividends and interest receivable
|
4,240
|
|||
Receivable for fund shares sold
|
597
|
|||
Return of capital receivable
|
7,225
|
|||
Prepaid expenses and other assets
|
8,481
|
|||
Total assets
|
20,461,942
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
4,649
|
|||
Payable to advisor
|
21,965
|
|||
Payable to auditor
|
23,401
|
|||
Accrued distribution fees
|
2,041
|
|||
Accrued service fees
|
759
|
|||
Accrued trustees fees
|
5,496
|
|||
Accrued expenses and other payables
|
6,325
|
|||
Total liabilities
|
64,636
|
|||
NET ASSETS
|
$
|
20,397,306
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
53,216,583
|
||
Accumulated deficit
|
(32,819,277
|
)
|
||
Total net assets
|
$
|
20,397,306
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
8,964,410
|
||
Shares issued and outstanding
|
370,173
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
24.22
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
11,432,896
|
||
Shares issued and outstanding
|
463,200
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
24.68
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS
|
Statement of Operations for the year ended October 31, 2023
|
INVESTMENT INCOME:
|
||||
Distributions received from master limited partnerships
|
$
|
51,371
|
||
Return of capital on distributions received
|
(51,371
|
)
|
||
Dividend income from common stock(1)
|
608,225
|
|||
Interest income
|
10,649
|
|||
Total investment income
|
618,874
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
257,907
|
|||
Federal and state registration fees
|
31,654
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
18,518
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
13,062
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
30,885
|
|||
Audit fees
|
23,396
|
|||
Compliance expense (See Note 5)
|
22,664
|
|||
Trustees’ fees and expenses
|
19,978
|
|||
Distribution fees – Investor Class (See Note 5)
|
13,607
|
|||
Reports to shareholders
|
9,670
|
|||
Service fees – Investor Class (See Note 5)
|
9,071
|
|||
Interest expense (See Note 7)
|
1,468
|
|||
Legal fees
|
920
|
|||
Other expenses
|
6,662
|
|||
Total expenses before waiver
|
459,462
|
|||
Service provider expense waiver (See Note 5)
|
(30,885
|
)
|
||
Net expenses
|
428,577
|
|||
NET INVESTMENT INCOME
|
$
|
190,297
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
1,977,506
|
||
Net change in unrealized appreciation/depreciation on investments
|
(2,314,370
|
)
|
||
Net loss on investments
|
(336,864
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(146,567
|
)
|
(1)
|
Net of foreign taxes withheld of $12,817.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2023
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
190,297
|
$
|
203,796
|
||||
Net realized gain on investments
|
1,977,506
|
1,336,639
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(2,314,370
|
)
|
6,207,910
|
|||||
Net increase (decrease) in
|
||||||||
net assets resulting from operations
|
(146,567
|
)
|
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
|
3,946,163
|
8,234,369
|
||||||
Proceeds from shares subscribed – Institutional Class
|
2,359,407
|
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
|
(5,037,219
|
)
|
(7,622,351
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(4,259,986
|
)
|
(7,693,364
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
(2,857,114
|
)
|
1,479,960
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(3,142,450
|
)
|
7,288,982
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
23,539,756
|
16,250,774
|
||||||
End of year
|
$
|
20,397,306
|
$
|
23,539,756
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
166,878
|
394,224
|
||||||
Shares sold – Institutional Class
|
100,869
|
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
|
(221,723
|
)
|
(387,313
|
)
|
||||
Shares redeemed – Institutional Class
|
(183,343
|
)
|
(371,343
|
)
|
||||
Net increase (decrease) in shares outstanding
|
(131,403
|
)
|
85,147
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
The Fund had an expense limitation agreement in place through October 25, 2020.
|
(3)
|
Certain service provider expenses were voluntarily waived during the fiscal year.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
24.15
|
$
|
18.31
|
$
|
8.74
|
$
|
14.08
|
$
|
18.32
|
|||||||||
0.17
|
0.16
|
0.06
|
0.04
|
(0.07
|
)
|
|||||||||||||
0.02
|
7.74
|
9.51
|
(5.38
|
)
|
(4.17
|
)
|
||||||||||||
0.19
|
7.90
|
9.57
|
(5.34
|
)
|
(4.24
|
)
|
||||||||||||
(0.12
|
)
|
(2.06
|
)
|
—
|
—
|
—
|
||||||||||||
(0.12
|
)
|
(2.06
|
)
|
—
|
—
|
—
|
||||||||||||
$
|
24.22
|
$
|
24.15
|
$
|
18.31
|
$
|
8.74
|
$
|
14.08
|
|||||||||
0.81
|
%
|
49.24
|
%
|
109.50
|
%
|
-37.93
|
%
|
-23.14
|
%
|
|||||||||
$
|
8.96
|
$
|
10.21
|
$
|
6.80
|
$
|
2.50
|
$
|
6.83
|
|||||||||
2.42
|
%
|
2.42
|
%
|
2.96
|
%
|
2.59
|
%
|
1.97
|
%
|
|||||||||
2.27
|
%(3)
|
2.25
|
%(3)
|
2.74
|
%(3)
|
2.03
|
%(2)(3)
|
1.97
|
%
|
|||||||||
0.59
|
%
|
0.64
|
%
|
0.16
|
%
|
(0.18
|
)%
|
(0.46
|
)%
|
|||||||||
0.74
|
%
|
0.81
|
%
|
0.38
|
%
|
0.38
|
%
|
(0.46
|
)%
|
|||||||||
28
|
%
|
31
|
%
|
74
|
%
|
73
|
%
|
87
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
The Fund had an expense limitation agreement in place through October 25, 2020.
|
(3)
|
Certain service provider expenses were voluntarily waived during the fiscal year.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
24.59
|
$
|
18.60
|
$
|
8.85
|
$
|
14.26
|
$
|
18.50
|
|||||||||
0.25
|
0.23
|
0.07
|
0.12
|
(0.02
|
)
|
|||||||||||||
0.02
|
7.87
|
9.68
|
(5.50
|
)
|
(4.22
|
)
|
||||||||||||
0.27
|
8.10
|
9.75
|
(5.38
|
)
|
(4.24
|
)
|
||||||||||||
(0.18
|
)
|
(2.11
|
)
|
—
|
(0.03
|
)
|
—
|
|||||||||||
(0.18
|
)
|
(2.11
|
)
|
—
|
(0.03
|
)
|
—
|
|||||||||||
$
|
24.68
|
$
|
24.59
|
$
|
18.60
|
$
|
8.85
|
$
|
14.26
|
|||||||||
1.14
|
%
|
49.71
|
%
|
110.17
|
%
|
-37.80
|
%
|
-22.92
|
%
|
|||||||||
$
|
11.43
|
$
|
13.33
|
$
|
9.45
|
$
|
3.82
|
$
|
44.37
|
|||||||||
2.08
|
%
|
2.09
|
%
|
2.61
|
%
|
2.01
|
%
|
1.66
|
%
|
|||||||||
1.93
|
%(3)
|
1.92
|
%(3)
|
2.39
|
%(3)
|
1.77
|
%(2)(3)
|
1.66
|
%
|
|||||||||
0.92
|
%
|
0.96
|
%
|
0.22
|
%
|
0.79
|
%
|
(0.12
|
)%
|
|||||||||
1.07
|
%
|
1.13
|
%
|
0.44
|
%
|
1.03
|
%
|
(0.12
|
)%
|
|||||||||
28
|
%
|
31
|
%
|
74
|
%
|
73
|
%
|
87
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with
the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and
realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the
treatment of wash sales for tax reporting purposes and investments in companies organized as partnerships for tax purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of
Operations as an income tax expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize
equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax
regulations, permanent differences between book and tax basis for reporting are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2023 are as
follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$2,975
|
$(2,975)
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of
the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion
of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding
increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income
at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other
than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets. Distributions received from the Fund’s investments
in master limited partnerships (“MLPs”) generally consist of ordinary income, capital gains, and return of capital. The Fund records investment income on the ex-date of the distributions. For financial statement purposes, the
Fund uses return of capital and income estimates to allocate the dividend income received. Such estimates are based on historical information available from the MLPs and other industry sources. These estimates may subsequently
be revised based on information received from the MLPs after their tax reporting periods are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Fund.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any, are
declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost
of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
HENNESSY FUNDS
|
1-800-966-4354
|
i).
|
Partnership Accounting Policy – To the extent the Fund receives distributions from underlying partnerships in which it invests, the Fund records its pro rata share of income/loss and capital
gains/losses and accordingly adjusts the cost basis of the underlying partnerships for return of capital.
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things,
that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions
in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds
and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight
key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and
available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value
Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security
and, therefore, is not considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years
beginning after December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that
are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit
risk curves, default rates, and similar data).
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable
inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual funds,
partnerships, rights, MLPs, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the
primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported.
Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and
valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV because most foreign
markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In certain circumstances, it
may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected by events occurring after the close of the market in which the security is
principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack
that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the
ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may
consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may
incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are
generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term
debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the
values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would
|
HENNESSY FUNDS
|
1-800-966-4354
|
be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be determined as described below. Short-term securities are generally classified in
Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
14,577,040
|
|||
Gross tax unrealized appreciation
|
$
|
6,659,122
|
|||
Gross tax unrealized depreciation
|
(794,763
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
5,864,359
|
|||
Undistributed ordinary income
|
$
|
—
|
|||
Undistributed long-term capital gains
|
—
|
||||
Total distributable earnings
|
$
|
—
|
|||
Other accumulated gain/(loss)
|
$
|
(38,683,636
|
)
|
||
Total accumulated gain/(loss)
|
$
|
(32,819,277
|
)
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Year Ended
|
Year Ended
|
||||||||
October 31, 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
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the Investment
Manager or of any predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,103.90
|
$12.14
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,013.66
|
$11.62
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,105.70
|
$10.35
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,015.38
|
$ 9.91
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 2.29% for Investor Class shares or 1.95% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund
has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future
during both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to a
highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make or recommend any material changes to the Liquidity Program during the review period.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets,
income, and date of birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
5
|
|
Financial Statements
|
||
Schedule of Investments
|
10
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
30
|
|
Trustees and Officers of the Fund
|
31
|
|
Expense Example
|
36
|
|
Proxy Voting Policy and Proxy Voting Records
|
38
|
|
Availability of Quarterly Portfolio Schedule
|
38
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
38
|
|
Electronic Delivery
|
38
|
|
Liquidity Risk Management Program
|
39
|
|
Privacy Policy
|
39
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The acronym, MT. FAANNG, refers to the following companies: Microsoft Corporation, Tesla, Inc., Meta Platforms, Inc., Amazon.com, Inc., Apple, Inc., Netflix, Inc., NVIDIA Corporation, and Alphabet,
Inc.
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS/PERFORMANCE OVERVIEW
|
One
|
Five
|
Since Inception
|
|
Year
|
Years
|
(12/31/13)
|
|
Hennessy Midstream Fund –
|
|||
Investor Class (HMSFX)
|
16.39%
|
6.91%
|
1.54%
|
Hennessy Midstream Fund –
|
|||
Institutional Class (HMSIX)
|
16.67%
|
7.16%
|
1.79%
|
Alerian US Midstream Energy Index
|
11.22%
|
10.70%
|
4.25%
|
S&P 500® Index
|
10.14%
|
11.01%
|
10.75%
|
Expense ratios:
|
Gross 2.05%, Net 1.76%(1)(2) (Investor Class);
|
Gross 1.69%, Net 1.51%(1)(2) (Institutional Class)
|
(1)
|
The Fund’s investment advisor has contractually agreed to limit expenses until February 28, 2024.
|
(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.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
Schedule of Investments as of October 31,
2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% TOTAL ASSETS
|
Energy Transfer LP
|
14.16%
|
Enterprise Products Partners LP
|
12.76%
|
Plains All American Pipeline LP
|
11.05%
|
MPLX LP
|
10.14%
|
Antero Midstream Corp.
|
7.87%
|
ONEOK, Inc.
|
7.24%
|
Western Midstream Partners LP
|
5.96%
|
The Williams Companies, Inc.
|
5.82%
|
Equitrans Midstream Corp.
|
5.52%
|
TC Energy Corp.
|
3.80%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS – 40.99%
|
Number of
|
% of
|
||||||||||
|
Shares
|
Value
|
Net Assets
|
|||||||||
Gathering & Processing – 18.34%
|
||||||||||||
Antero Midstream Corp.
|
346,600
|
$
|
4,277,044
|
7.88
|
%
|
|||||||
EnLink Midstream LLC
|
109,000
|
1,339,610
|
2.47
|
%
|
||||||||
Equitrans Midstream Corp.
|
338,500
|
3,002,495
|
5.54
|
%
|
||||||||
Targa Resources Corp.
|
15,900
|
1,329,399
|
2.45
|
%
|
||||||||
|
9,948,548
|
18.34
|
%
|
|||||||||
Natural Gas/NGL Transportation – 22.65%
|
||||||||||||
DT Midstream, Inc.
|
19,800
|
1,068,606
|
1.97
|
%
|
||||||||
Kinder Morgan, Inc.
|
126,690
|
2,052,378
|
3.79
|
%
|
||||||||
ONEOK, Inc.
|
60,345
|
3,934,494
|
7.25
|
%
|
||||||||
TC Energy Corp.
|
60,000
|
2,067,000
|
3.81
|
%
|
||||||||
The Williams Companies, Inc.
|
91,952
|
3,163,149
|
5.83
|
%
|
||||||||
|
12,285,627
|
22.65
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $15,663,676)
|
22,234,175
|
40.99
|
%
|
|||||||||
|
||||||||||||
PARTNERSHIPS & TRUSTS – 55.14%
|
||||||||||||
Crude Oil and Refined Products – 21.23%
|
||||||||||||
MPLX LP
|
152,949
|
5,512,282
|
10.16
|
%
|
||||||||
Plains All American Pipeline LP
|
396,426
|
6,005,854
|
11.07
|
%
|
||||||||
|
11,518,136
|
21.23
|
%
|
|||||||||
Gathering & Processing – 5.97%
|
||||||||||||
Western Midstream Partners LP
|
120,700
|
3,238,381
|
5.97
|
%
|
||||||||
Natural Gas/NGL Transportation – 27.94%
|
||||||||||||
Cheniere Energy Partners LP
|
9,300
|
518,568
|
0.96
|
%
|
||||||||
Energy Transfer LP
|
585,500
|
7,699,325
|
14.19
|
%
|
||||||||
Enterprise Products Partners LP
|
266,400
|
6,937,056
|
12.79
|
%
|
||||||||
|
15,154,949
|
27.94
|
%
|
|||||||||
|
||||||||||||
Total Partnerships & Trusts
|
||||||||||||
(Cost $17,261,815)
|
29,911,466
|
55.14
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 2.56%
|
Number of
|
% of
|
||||||||||
|
Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 2.56%
|
||||||||||||
First American Treasury Obligations Fund – Class X, 5.275% (a)
|
1,390,442
|
$
|
1,390,442
|
2.56
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $1,390,442)
|
1,390,442
|
2.56
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $34,315,933) – 98.69%
|
53,536,083
|
98.69
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 1.31%
|
711,720
|
1.31
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
54,247,803
|
100.00
|
%
|
(a)
|
The rate listed is the fund’s seven-day yield as of October 31, 2023.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Gathering & Processing
|
$
|
9,948,548
|
$
|
—
|
$
|
—
|
$
|
9,948,548
|
||||||||
Natural Gas/NGL Transportation
|
12,285,627
|
—
|
—
|
12,285,627
|
||||||||||||
Total Common Stocks
|
$
|
22,234,175
|
$
|
—
|
$
|
—
|
$
|
22,234,175
|
||||||||
Partnerships & Trusts
|
||||||||||||||||
Crude Oil and Refined Products
|
$
|
11,518,136
|
$
|
—
|
$
|
—
|
$
|
11,518,136
|
||||||||
Gathering & Processing
|
3,238,381
|
—
|
—
|
3,238,381
|
||||||||||||
Natural Gas/NGL Transportation
|
15,154,949
|
—
|
—
|
15,154,949
|
||||||||||||
Total Partnerships & Trusts
|
$
|
29,911,466
|
$
|
—
|
$
|
—
|
$
|
29,911,466
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
1,390,442
|
$
|
—
|
$
|
—
|
$
|
1,390,442
|
||||||||
Total Short-Term Investments
|
$
|
1,390,442
|
$
|
—
|
$
|
—
|
$
|
1,390,442
|
||||||||
Total Investments
|
$
|
53,536,083
|
$
|
—
|
$
|
—
|
$
|
53,536,083
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $34,315,933)
|
$
|
53,536,083
|
||
Dividends and interest receivable
|
87,851
|
|||
Receivable for fund shares sold
|
127,203
|
|||
Return of capital receivable
|
603,427
|
|||
Deferred income tax
|
—
|
|||
Prepaid expenses and other assets
|
11,171
|
|||
Total assets
|
54,365,735
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
7,725
|
|||
Payable to advisor
|
48,287
|
|||
Payable to auditor
|
41,298
|
|||
Accrued distribution fees
|
2,429
|
|||
Accrued service fees
|
1,419
|
|||
Accrued trustees fees
|
5,720
|
|||
Accrued expenses and other payables
|
11,054
|
|||
Total liabilities
|
117,932
|
|||
NET ASSETS
|
$
|
54,247,803
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
58,128,279
|
||
Accumulated deficit
|
(3,880,476
|
)
|
||
Total net assets
|
$
|
54,247,803
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
16,789,064
|
||
Shares issued and outstanding
|
1,675,645
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
10.02
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
37,458,739
|
||
Shares issued and outstanding
|
3,593,059
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
10.43
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2023
|
INVESTMENT INCOME:
|
||||
Distributions received from master limited partnerships
|
$
|
2,693,875
|
||
Return of capital on distributions received
|
(2,693,875
|
)
|
||
Dividend income(1)
|
707,540
|
|||
Interest income
|
29,223
|
|||
Total investment income
|
736,763
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
530,344
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
32,152
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
31,865
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
55,789
|
|||
Audit fees
|
41,297
|
|||
Federal and state registration fees
|
34,838
|
|||
Compliance expense (See Note 5)
|
22,664
|
|||
Distribution fees – Investor Class (See Note 5)
|
20,828
|
|||
Trustees’ fees and expenses
|
20,364
|
|||
Reports to shareholders
|
13,944
|
|||
Service fees – Investor Class (See Note 5)
|
13,885
|
|||
Franchise tax expense
|
12,000
|
|||
Interest expense (See Note 7)
|
2,072
|
|||
Legal fees
|
1,554
|
|||
Income tax expense
|
900
|
|||
Other expenses
|
13,485
|
|||
Total expenses before waivers and reimbursements
|
847,981
|
|||
Service provider expense waiver (See Note 5)
|
(55,789
|
)
|
||
Expense reimbursement by advisor – Investor Class (See Note 5)
|
(19,218
|
)
|
||
Expense reimbursement by advisor – Institutional Class (See Note 5)
|
(93
|
)
|
||
Net expenses
|
772,881
|
|||
NET INVESTMENT LOSS
|
$
|
(36,118
|
)
|
|
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
4,940,132
|
||
Net change in unrealized appreciation/depreciation on investments
|
2,693,911
|
|||
Income tax expense
|
—
|
|||
Net gain on investments
|
7,634,043
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
7,597,925
|
(1)
|
Net of foreign taxes withheld of $5,024.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2023
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment loss
|
$
|
(36,118
|
)
|
$
|
(246,112
|
)
|
||
Net realized gain on investments
|
4,940,132
|
2,241,454
|
||||||
Net change in unrealized
|
||||||||
appreciation/deprecation on investments
|
2,693,911
|
6,041,810
|
||||||
Net increase in net assets resulting from operations
|
7,597,925
|
8,037,152
|
||||||
DISTRIBUTIONS TO SHAREHOLDERS FROM:
|
||||||||
Distributable earnings – Investor Class
|
(1,196,626
|
)
|
(56,001
|
)
|
||||
Return of capital – Investor Class
|
(266,609
|
)
|
(932,728
|
)
|
||||
Distributable earnings – Institutional Class
|
(2,875,616
|
)
|
(205,718
|
)
|
||||
Return of capital – Institutional Class
|
(640,689
|
)
|
(3,426,419
|
)
|
||||
Total distributions
|
(4,979,540
|
)
|
(4,620,866
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
6,315,025
|
5,720,090
|
||||||
Proceeds from shares subscribed – Institutional Class
|
6,346,640
|
11,963,118
|
||||||
Dividends reinvested – Investor Class
|
1,090,514
|
840,503
|
||||||
Dividends reinvested – Institutional Class
|
3,298,865
|
3,393,598
|
||||||
Cost of shares redeemed – Investor Class
|
(2,904,969
|
)
|
(2,598,309
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(7,050,850
|
)
|
(15,368,206
|
)
|
||||
Net increase in net assets derived
|
||||||||
from capital share transactions
|
7,095,225
|
3,950,794
|
||||||
TOTAL INCREASE IN NET ASSETS
|
9,713,610
|
7,367,080
|
||||||
NET ASSETS:
|
||||||||
Beginning of year
|
44,534,193
|
37,167,113
|
||||||
End of year
|
$
|
54,247,803
|
$
|
44,534,193
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
662,994
|
634,991
|
||||||
Shares sold – Institutional Class
|
637,501
|
1,295,385
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
114,390
|
93,668
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
334,274
|
369,848
|
||||||
Shares redeemed – Investor Class
|
(299,262
|
)
|
(307,053
|
)
|
||||
Shares redeemed – Institutional Class
|
(716,204
|
)
|
(1,747,350
|
)
|
||||
Net increase in shares outstanding
|
733,693
|
339,489
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Includes current and deferred tax benefit/expense from net investment income/loss only.
|
(3)
|
Certain service provider expenses were voluntarily waived during the fiscal year.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
9.58
|
$
|
8.66
|
$
|
5.55
|
$
|
10.90
|
$
|
12.66
|
|||||||||
(0.02
|
)
|
(0.07
|
)
|
(0.07
|
)
|
(0.10
|
)
|
(0.10
|
)
|
|||||||||
1.49
|
2.02
|
4.21
|
(4.22
|
)
|
(0.63
|
)
|
||||||||||||
1.47
|
1.95
|
4.14
|
(4.32
|
)
|
(0.73
|
)
|
||||||||||||
(0.84
|
)
|
(0.06
|
)
|
—
|
—
|
—
|
||||||||||||
(0.19
|
)
|
(0.97
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
|||||||||
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
|||||||||
$
|
10.02
|
$
|
9.58
|
$
|
8.66
|
$
|
5.55
|
$
|
10.90
|
|||||||||
16.39
|
%
|
24.03
|
%
|
78.41
|
%
|
-42.13
|
%
|
-6.28
|
%
|
|||||||||
$
|
16.79
|
$
|
11.47
|
$
|
6.72
|
$
|
3.81
|
$
|
9.20
|
|||||||||
2.03
|
%
|
2.05
|
%
|
2.11
|
%
|
2.12
|
%
|
1.89
|
%
|
|||||||||
1.78
|
%(3)
|
1.76
|
%(3)
|
1.76
|
%(3)
|
1.76
|
%(3)
|
1.76
|
%
|
|||||||||
(0.50
|
)%
|
(1.08
|
)%
|
(1.26
|
)%
|
(1.63
|
)%
|
(0.92
|
)%
|
|||||||||
(0.25
|
)%
|
(0.79
|
)%
|
(0.91
|
)%
|
(1.27
|
)%
|
(0.79
|
)%
|
|||||||||
16
|
%
|
33
|
%
|
40
|
%
|
53
|
%
|
41
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Includes current and deferred tax benefit/expense from net investment income/loss only.
|
(3)
|
Amount is between $(0.005) and $0.005.
|
(4)
|
Certain service provider expenses were voluntarily waived during the fiscal year.
|
(5)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
9.91
|
$
|
8.90
|
$
|
5.68
|
$
|
11.09
|
$
|
12.83
|
|||||||||
(0.00
|
)(3)
|
(0.05
|
)
|
(0.05
|
)
|
(0.10
|
)
|
(0.09
|
)
|
|||||||||
1.55
|
2.09
|
4.30
|
(4.28
|
)
|
(0.62
|
)
|
||||||||||||
1.55
|
2.04
|
4.25
|
(4.38
|
)
|
(0.71
|
)
|
||||||||||||
(0.84
|
)
|
(0.06
|
)
|
—
|
—
|
—
|
||||||||||||
(0.19
|
)
|
(0.97
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
|||||||||
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
(1.03
|
)
|
|||||||||
$
|
10.43
|
$
|
9.91
|
$
|
8.90
|
$
|
5.68
|
$
|
11.09
|
|||||||||
16.67
|
%
|
24.41
|
%
|
78.57
|
%
|
-41.93
|
%
|
-6.10
|
%
|
|||||||||
$
|
37.46
|
$
|
33.06
|
$
|
30.45
|
$
|
18.33
|
$
|
31.78
|
|||||||||
1.65
|
%
|
1.69
|
%
|
1.74
|
%
|
1.79
|
%
|
1.56
|
%
|
|||||||||
1.53
|
%(4)
|
1.51
|
%(4)
|
1.51
|
%(4)
|
1.51
|
%(4)
|
1.51
|
%
|
|||||||||
(0.12
|
)%
|
(0.71
|
)%
|
(0.89
|
)%
|
(1.55
|
)%
|
(0.76
|
)%
|
|||||||||
(0.00
|
)%(3)
|
(0.53
|
)%
|
(0.66
|
)%
|
(1.27
|
)%
|
(0.71
|
)%
|
|||||||||
16
|
%
|
33
|
%
|
40
|
%
|
53
|
%
|
41
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund is taxed as a corporation and is obligated to pay U.S. federal and state income tax on its taxable income. Currently, the maximum marginal regular federal income tax
rate for a corporation is 21%. The Fund invests a substantial portion of its assets in master limited partnerships (“MLPs”), which are treated as partnerships for federal income tax purposes. As a limited partner in MLPs, the
Fund reports its allocable share of each MLP’s taxable income in computing its own taxable income.
|
The Fund includes any tax expense or benefit in the Statement of Operations based on the component of income or gains/losses to
which such expense or benefit relates. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the carrying amount of
assets and liabilities for income tax purposes. The Fund recognizes a valuation allowance if, based on the weight of available evidence, it is more likely than not that the Fund will not realize some portion or all of the
deferred income tax assets. As of October 31, 2023, the Fund has placed a full valuation allowance on its deferred tax assets.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of
the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund files U.S. federal income tax returns and various state income tax returns.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion
of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding
increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income
at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other
than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets. Distributions received from the Fund’s investments
in MLPs generally consist of ordinary income, capital gains, and return of capital. The Fund records investment income on the ex-date of the distributions. For financial statement purposes, the Fund uses return of capital and
income estimates to allocate the dividend income received. Such estimates are based on historical information available from the MLPs and other industry sources. These estimates may subsequently be revised based on information
received from the MLPs after their tax reporting periods are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Fund.
|
e).
|
Distributions to Shareholders – The Fund typically makes cash distributions to its shareholders quarterly at the beginning of the months of March, June, September, and December. Due to the tax
treatment of the Fund’s allocations and distributions from MLPs, a significant portion of the Fund’s distributions to shareholders typically is treated as return of capital to shareholders for U.S. federal income tax purposes
(i.e., as distributions in excess of the Fund’s current and accumulated earnings and profits as described below). However, no assurance can be given in this regard; just as the Fund’s corporate income tax liability can fluctuate
materially from year to year, the extent to which the Fund is able to make return-of-capital distributions also can vary materially from year to year depending on a number of different factors, including the composition of the
Fund’s portfolio, the level of allocations of net income and other tax items for the Fund from its underlying MLP investments, the length of time the Fund has owned the MLP equity securities in its portfolio, and the extent to
which the Fund disposes of MLP equity securities during a particular year, including to meet Fund shareholder redemption requests as necessary.
|
In general, a distribution constitutes a return of capital to a shareholder rather than a dividend to the extent such distribution
exceeds the Fund’s current and accumulated earnings and profits. The portion of any distribution treated as a return of capital constitutes a tax-free return of capital to the extent of a shareholder’s cost basis in Fund shares
and thereafter generally is taxable to the shareholder as a capital gain. A return-of-capital distribution also reduces the shareholder’s cost basis in Fund
|
HENNESSY FUNDS
|
1-800-966-4354
|
shares (but not below zero). A lower cost basis means that a shareholder recognizes more gain or less loss when the shareholder eventually sells Fund shares, which increases the shareholder’s tax
liability.
|
|
The Fund attempts to maintain a stable distribution rate and therefore may distribute more or less than the actual amount of cash
it receives from its investments in a particular period. Any undistributed cash would be available to supplement future distributions, and until distributed would increase the Fund’s net asset value (“NAV”). Correspondingly,
such amounts, once distributed, decrease the Fund’s NAV. In addition, the Fund may opt not to make distributions in quarters in which the Fund believes that a distribution could cause adverse tax consequences to shareholders,
including when the Fund believes that a distribution may not constitute a tax-free return of capital as described above.
|
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost
of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The NAV per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated
accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and redemption price per
share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Partnership Accounting Policy – To the extent the Fund receives distributions from underlying partnerships in which it invests, the Fund records its pro rata share of income/loss and capital
gains/losses and accordingly adjusts the cost basis of the underlying partnerships for return of capital.
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things,
that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions
in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds
and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight
key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and
available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value
Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security
and, therefore, is not considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years
beginning after December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that
are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit
risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable
inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual funds,
partnerships, rights, MLPs, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the
primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported.
Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and ask prices. To the extent these securities are actively traded and
valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign exchanges generally are not valued at the same time the Fund calculates its NAV because most foreign
markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. In certain circumstances, it
may be determined that a foreign security needs to be fair valued because it appears that the value of the security might have been materially affected
|
HENNESSY FUNDS
|
1-800-966-4354
|
by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that affects an entire market or
region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the
ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and U.S.
government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may
consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the model may
incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These securities are
generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities. Short-term
debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60 days, then the
values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value would be
determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Fiscal Year
|
Fiscal Year
|
Fiscal Year
|
|||
2024
|
2025
|
2026
|
Total
|
||
Investor Class
|
$12,376
|
$13,391
|
$19,218
|
$44,985
|
|
Institutional Class
|
$26,693
|
$11,840
|
$ 2,585
|
$41,118
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
30,493,623
|
|||
Gross tax unrealized appreciation
|
$
|
23,069,245
|
|||
Gross tax unrealized depreciation
|
(26,785
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
23,042,460
|
|||
As of October 31, 2023, deferred tax assets consisted of the following:
|
|||||
Deferred tax assets (liabilities):
|
|||||
Net operating losses
|
$
|
635,317
|
|||
Capital loss
|
3,540,860
|
||||
Unrealized (gain) loss on investments
|
(3,807,967
|
)
|
|||
Total deferred tax assets, net
|
368,210
|
||||
Valuation allowance
|
(368,210
|
)
|
|||
Net
|
$
|
—
|
HENNESSY FUNDS
|
1-800-966-4354
|
Amount
|
Expiration
|
||
$8,590,317
|
10/31/2024
|
||
7,178,863
|
10/31/2025
|
Amount
|
Expiration
|
||
$2,856,952
|
Indefinite
|
Tax expense (benefit) at statutory rates
|
$
|
1,598,084
|
|||
State income tax expense, net of federal benefit
|
56,626
|
||||
Tax expense (benefit) on permanent items(1)
|
(58,741
|
)
|
|||
Tax expense (benefit) due to change in effective state rates
|
—
|
||||
Total current tax expense (benefit)
|
—
|
||||
Change in valuation allowance
|
(1,595,969
|
)
|
|||
Total tax expense
|
$
|
—
|
|||
(1) Permanent items consist of dividends-received deductions.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Year Ended
|
Year Ended
|
||||||||
October 31, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
4,072,242
|
$
|
261,719
|
|||||
Long-term capital gains
|
—
|
—
|
|||||||
Return of capital
|
907,298
|
4,359,147
|
|||||||
Total distributions
|
$
|
4,979,540
|
$
|
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
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the Investment
Manager or of any predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,132.30
|
$9.46
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,016.33
|
$8.94
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,133.70
|
$8.12
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,017.59
|
$7.68
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.76% for Investor Class shares or 1.51% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund
has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future
during both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to a
highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make or recommend any material changes to the Liquidity Program during the review period.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets,
income, and date of birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
28
|
|
Trustees and Officers of the Fund
|
29
|
|
Expense Example
|
34
|
|
Proxy Voting Policy and Proxy Voting Records
|
36
|
|
Availability of Quarterly Portfolio Schedule
|
36
|
|
Federal Tax Distribution Information
|
36
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
36
|
|
Electronic Delivery
|
36
|
|
Liquidity Risk Management Program
|
37
|
|
Privacy Policy
|
37
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The acronym, MT. FAANNG, refers to the following companies: Microsoft Corporation, Tesla, Inc., Meta Platforms, Inc., Amazon.com, Inc., Apple, Inc., Netflix, Inc., NVIDIA Corporation, and Alphabet,
Inc.
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
|
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Gas Utility Fund –
|
|||
Investor Class (GASFX)
|
-5.01%
|
4.82%
|
5.36%
|
Hennessy Gas Utility Fund –
|
|||
Institutional Class (HGASX)(1)
|
-4.74%
|
5.15%
|
5.58%
|
AGA Stock Index
|
-4.31%
|
5.89%
|
6.48%
|
S&P 500® Index
|
10.14%
|
11.01%
|
11.18%
|
(1)
|
The inception date of Institutional Class shares is March 1, 2017. Performance shown prior to the inception of Institutional Class shares reflects the performance of Investor Class shares and includes
expenses that are not applicable to, and are higher than, those of Institutional Class shares.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31,
2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
EQT Corp.
|
5.27%
|
Sempra
|
5.12%
|
The Southern Co.
|
5.06%
|
Atmos Energy Corp.
|
5.02%
|
ONEOK, Inc.
|
5.02%
|
TC Energy Corp.
|
4.99%
|
Cheniere Energy, Inc.
|
4.90%
|
Kinder Morgan, Inc.
|
4.82%
|
Berkshire Hathaway, Inc., Class A
|
4.81%
|
Enbridge, Inc.
|
4.79%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 99.52%
|
Number of
|
% of
|
||||||||||
|
Shares
|
Value
|
Net Assets
|
|||||||||
Energy – 31.88%
|
||||||||||||
Cheniere Energy, Inc.
|
129,817
|
$
|
21,604,145
|
4.90
|
%
|
|||||||
DT Midstream, Inc.
|
164,000
|
8,851,080
|
2.01
|
%
|
||||||||
Enbridge, Inc.
|
659,765
|
21,138,871
|
4.79
|
%
|
||||||||
EQT Corp.
|
549,500
|
23,287,810
|
5.27
|
%
|
||||||||
Kinder Morgan, Inc.
|
1,313,801
|
21,283,576
|
4.82
|
%
|
||||||||
ONEOK, Inc.
|
339,500
|
22,135,400
|
5.02
|
%
|
||||||||
TC Energy Corp.
|
638,400
|
21,992,880
|
4.99
|
%
|
||||||||
Tellurian, Inc. (a)
|
503,190
|
347,201
|
0.08
|
%
|
||||||||
|
140,640,963
|
31.88
|
%
|
|||||||||
Financials – 4.81%
|
||||||||||||
Berkshire Hathaway, Inc., Class A (a)
|
41
|
21,230,825
|
4.81
|
%
|
||||||||
Industrials – 0.80%
|
||||||||||||
MDU Resources Group, Inc.
|
190,707
|
3,549,057
|
0.80
|
%
|
||||||||
Utilities – 62.03%
|
||||||||||||
Algonquin Power & Utilities Corp.
|
111,964
|
563,179
|
0.13
|
%
|
||||||||
ALLETE, Inc.
|
375
|
20,078
|
0.00
|
%
|
||||||||
Alliant Energy Corp.
|
33,900
|
1,653,981
|
0.37
|
%
|
||||||||
Ameren Corp.
|
45,840
|
3,470,546
|
0.79
|
%
|
||||||||
Atmos Energy Corp.
|
205,686
|
22,144,155
|
5.02
|
%
|
||||||||
Avangrid, Inc.
|
89,900
|
2,685,313
|
0.61
|
%
|
||||||||
Avista Corp.
|
26,072
|
826,222
|
0.19
|
%
|
||||||||
Black Hills Corp.
|
64,547
|
3,120,847
|
0.71
|
%
|
||||||||
CenterPoint Energy, Inc.
|
493,028
|
13,252,593
|
3.00
|
%
|
||||||||
Chesapeake Utilities Corp.
|
22,358
|
1,981,142
|
0.45
|
%
|
||||||||
CMS Energy Corp.
|
186,898
|
10,156,037
|
2.30
|
%
|
||||||||
Consolidated Edison, Inc.
|
138,936
|
12,197,191
|
2.77
|
%
|
||||||||
Dominion Energy, Inc.
|
327,777
|
13,215,969
|
3.00
|
%
|
||||||||
DTE Energy Co.
|
56,204
|
5,416,942
|
1.23
|
%
|
||||||||
Duke Energy Corp.
|
118,887
|
10,567,865
|
2.40
|
%
|
||||||||
Entergy Corp.
|
3,760
|
359,418
|
0.08
|
%
|
||||||||
Essential Utilities, Inc.
|
182,300
|
6,099,758
|
1.38
|
%
|
||||||||
Eversource Energy
|
87,875
|
4,726,796
|
1.07
|
%
|
||||||||
Exelon Corp.
|
157,531
|
6,134,257
|
1.39
|
%
|
||||||||
Fortis, Inc.
|
127,176
|
5,052,702
|
1.15
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number of
|
% of
|
||||||||||
|
Shares
|
Value
|
Net Assets
|
|||||||||
Utilities (Continued)
|
||||||||||||
MGE Energy, Inc.
|
10,779
|
$
|
772,100
|
0.18
|
%
|
|||||||
National Fuel Gas Co.
|
88,424
|
4,505,203
|
1.02
|
%
|
||||||||
National Grid PLC
|
172,344
|
10,366,492
|
2.34
|
%
|
||||||||
New Jersey Resources Corp.
|
129,934
|
5,272,722
|
1.20
|
%
|
||||||||
NiSource, Inc.
|
439,481
|
11,057,342
|
2.51
|
%
|
||||||||
Northwest Natural Holding Co.
|
54,503
|
2,000,805
|
0.45
|
%
|
||||||||
Northwestern Energy Group, Inc.
|
19,298
|
926,497
|
0.21
|
%
|
||||||||
ONE Gas, Inc.
|
94,775
|
5,724,410
|
1.30
|
%
|
||||||||
PG&E Corp. (a)
|
922,149
|
15,031,029
|
3.41
|
%
|
||||||||
PPL Corp.
|
124,619
|
3,061,889
|
0.69
|
%
|
||||||||
Public Service Enterprise Group, Inc.
|
193,090
|
11,903,999
|
2.70
|
%
|
||||||||
RGC Resources, Inc.
|
17,154
|
268,289
|
0.06
|
%
|
||||||||
Sempra
|
322,380
|
22,576,270
|
5.12
|
%
|
||||||||
Southwest Gas Holdings, Inc.
|
78,917
|
4,625,325
|
1.05
|
%
|
||||||||
Spire, Inc.
|
61,791
|
3,437,433
|
0.78
|
%
|
||||||||
The Southern Co.
|
331,700
|
22,323,410
|
5.06
|
%
|
||||||||
UGI Corp.
|
97,752
|
2,033,242
|
0.46
|
%
|
||||||||
Unitil Corp.
|
16,898
|
771,732
|
0.17
|
%
|
||||||||
WEC Energy Group, Inc.
|
199,540
|
16,240,561
|
3.68
|
%
|
||||||||
Xcel Energy, Inc.
|
118,899
|
7,047,144
|
1.60
|
%
|
||||||||
|
273,590,885
|
62.03
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $255,079,825)
|
439,011,730
|
99.52
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 0.42%
|
Number of
|
% of
|
||||||||||
|
Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 0.42%
|
||||||||||||
First American Treasury Obligations Fund – Class X, 5.275% (b)
|
1,844,630
|
$
|
1,844,630
|
0.42
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $1,844,630)
|
1,844,630
|
0.42
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $256,924,455) – 99.94%
|
440,856,360
|
99.94
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 0.06%
|
265,748
|
0.06
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
441,122,108
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2023.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Energy
|
$
|
140,640,963
|
$
|
—
|
$
|
—
|
$
|
140,640,963
|
||||||||
Financials
|
21,230,825
|
—
|
—
|
21,230,825
|
||||||||||||
Industrials
|
3,549,057
|
—
|
—
|
3,549,057
|
||||||||||||
Utilities
|
273,590,885
|
—
|
—
|
273,590,885
|
||||||||||||
Total Common Stocks
|
$
|
439,011,730
|
$
|
—
|
$
|
—
|
$
|
439,011,730
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
1,844,630
|
$
|
—
|
$
|
—
|
$
|
1,844,630
|
||||||||
Total Short-Term Investments
|
$
|
1,844,630
|
$
|
—
|
$
|
—
|
$
|
1,844,630
|
||||||||
Total Investments
|
$
|
440,856,360
|
$
|
—
|
$
|
—
|
$
|
440,856,360
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $256,924,455)
|
$
|
440,856,360
|
||
Dividends and interest receivable
|
691,000
|
|||
Receivable for fund shares sold
|
27,701
|
|||
Return of capital receivable
|
175,080
|
|||
Prepaid expenses and other assets
|
41,875
|
|||
Total assets
|
441,792,016
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
230,678
|
|||
Payable to advisor
|
150,868
|
|||
Payable to administrator
|
81,983
|
|||
Payable to auditor
|
22,746
|
|||
Accrued distribution fees
|
60,885
|
|||
Accrued service fees
|
32,787
|
|||
Accrued trustees fees
|
9,881
|
|||
Accrued expenses and other payables
|
80,080
|
|||
Total liabilities
|
669,908
|
|||
NET ASSETS
|
$
|
441,122,108
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
262,922,778
|
||
Total distributable earnings
|
178,199,330
|
|||
Total net assets
|
$
|
441,122,108
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
384,374,147
|
||
Shares issued and outstanding
|
17,033,515
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
22.57
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
56,747,961
|
||
Shares issued and outstanding
|
2,521,517
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
22.51
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2023
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
15,977,224
|
||
Interest income
|
138,651
|
|||
Total investment income
|
16,115,875
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
2,005,569
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
724,410
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
86,424
|
|||
Distribution fees – Investor Class (See Note 5)
|
646,278
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
475,622
|
|||
Service fees – Investor Class (See Note 5)
|
430,852
|
|||
Reports to shareholders
|
43,628
|
|||
Federal and state registration fees
|
43,243
|
|||
Trustees’ fees and expenses
|
28,585
|
|||
Audit fees
|
22,747
|
|||
Compliance expense (See Note 5)
|
22,676
|
|||
Interest expense (See Note 7)
|
14,649
|
|||
Legal fees
|
11,281
|
|||
Other expenses
|
273,099
|
|||
Total expenses
|
4,829,063
|
|||
NET INVESTMENT INCOME
|
$
|
11,286,812
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
20,986,535
|
||
Net change in unrealized appreciation/depreciation on investments
|
(54,552,818
|
)
|
||
Net loss on investments
|
(33,566,283
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(22,279,471
|
)
|
(1)
|
Net of foreign taxes withheld and issuance fees of $559,768.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2023
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
11,286,812
|
$
|
10,843,179
|
||||
Net realized gain on investments
|
20,986,535
|
49,402,174
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(54,552,818
|
)
|
(11,790,358
|
)
|
||||
Net increase (decrease) in
|
||||||||
net assets resulting from operations
|
(22,279,471
|
)
|
48,454,995
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||
Distributable earnings – Investor Class
|
(38,297,319
|
)
|
(46,296,164
|
)
|
||||
Distributable earnings – Institutional Class
|
(6,775,915
|
)
|
(7,042,572
|
)
|
||||
Total distributions
|
(45,073,234
|
)
|
(53,338,736
|
)
|
||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||
Proceeds from shares subscribed – Investor Class
|
8,286,887
|
38,263,106
|
||||||
Proceeds from shares subscribed – Institutional Class
|
13,926,472
|
60,525,251
|
||||||
Dividends reinvested – Investor Class
|
36,097,085
|
43,695,547
|
||||||
Dividends reinvested – Institutional Class
|
6,392,644
|
6,632,283
|
||||||
Cost of shares redeemed – Investor Class
|
(61,097,011
|
)
|
(77,677,738
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(48,130,570
|
)
|
(33,930,524
|
)
|
||||
Net increase (decrease) in net assets derived
|
||||||||
from capital share transactions
|
(44,524,493
|
)
|
37,507,925
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
(111,877,198
|
)
|
32,624,184
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
552,999,306
|
520,375,122
|
||||||
End of year
|
$
|
441,122,108
|
$
|
552,999,306
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
335,314
|
1,378,820
|
||||||
Shares sold – Institutional Class
|
578,892
|
2,219,309
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
1,467,946
|
1,762,321
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
260,586
|
266,844
|
||||||
Shares redeemed – Investor Class
|
(2,499,516
|
)
|
(2,942,205
|
)
|
||||
Shares redeemed – Institutional Class
|
(1,939,801
|
)
|
(1,288,690
|
)
|
||||
Net increase (decrease) in shares outstanding
|
(1,796,579
|
)
|
1,396,399
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
25.91
|
$
|
26.09
|
$
|
24.08
|
$
|
29.64
|
$
|
28.68
|
|||||||||
0.54
|
0.50
|
0.52
|
0.58
|
0.56
|
||||||||||||||
(1.70
|
)
|
1.98
|
4.00
|
(4.14
|
)
|
3.50
|
||||||||||||
(1.16
|
)
|
2.48
|
4.52
|
(3.56
|
)
|
4.06
|
||||||||||||
(0.53
|
)
|
(0.50
|
)
|
(0.57
|
)
|
(0.56
|
)
|
(0.62
|
)
|
|||||||||
(1.65
|
)
|
(2.16
|
)
|
(1.94
|
)
|
(1.44
|
)
|
(2.48
|
)
|
|||||||||
(2.18
|
)
|
(2.66
|
)
|
(2.51
|
)
|
(2.00
|
)
|
(3.10
|
)
|
|||||||||
$
|
22.57
|
$
|
25.91
|
$
|
26.09
|
$
|
24.08
|
$
|
29.64
|
|||||||||
-5.01
|
%
|
10.14
|
%
|
19.91
|
%
|
-12.49
|
%
|
15.28
|
%
|
|||||||||
$
|
384.37
|
$
|
459.41
|
$
|
457.31
|
$
|
483.56
|
$
|
764.10
|
|||||||||
1.00
|
%
|
1.00
|
%
|
1.00
|
%
|
1.02
|
%
|
1.00
|
%
|
|||||||||
2.21
|
%
|
1.88
|
%
|
2.06
|
%
|
2.24
|
%
|
1.98
|
%
|
|||||||||
12
|
%
|
31
|
%
|
15
|
%
|
16
|
%
|
12
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
25.84
|
$
|
26.01
|
$
|
24.01
|
$
|
29.56
|
$
|
28.65
|
|||||||||
0.62
|
0.57
|
0.59
|
0.66
|
0.64
|
||||||||||||||
(1.70
|
)
|
1.99
|
3.99
|
(4.13
|
)
|
3.50
|
||||||||||||
(1.08
|
)
|
2.56
|
4.58
|
(3.47
|
)
|
4.14
|
||||||||||||
(0.60
|
)
|
(0.58
|
)
|
(0.65
|
)
|
(0.64
|
)
|
(0.73
|
)
|
|||||||||
(1.65
|
)
|
(2.15
|
)
|
(1.93
|
)
|
(1.44
|
)
|
(2.50
|
)
|
|||||||||
(2.25
|
)
|
(2.73
|
)
|
(2.58
|
)
|
(2.08
|
)
|
(3.23
|
)
|
|||||||||
$
|
22.51
|
$
|
25.84
|
$
|
26.01
|
$
|
24.01
|
$
|
29.56
|
|||||||||
-4.74
|
%
|
10.53
|
%
|
20.29
|
%
|
-12.22
|
%
|
15.63
|
%
|
|||||||||
$
|
56.75
|
$
|
93.58
|
$
|
63.06
|
$
|
66.46
|
$
|
107.18
|
|||||||||
0.71
|
%
|
0.68
|
%
|
0.69
|
%
|
0.70
|
%
|
0.69
|
%
|
|||||||||
2.52
|
%
|
2.13
|
%
|
2.35
|
%
|
2.57
|
%
|
2.25
|
%
|
|||||||||
12
|
%
|
31
|
%
|
15
|
%
|
16
|
%
|
12
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with
the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and
realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the
treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized
gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and
profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax
regulations, permanent differences between book and tax basis for reporting are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2023 are as
follows:
|
Total Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(2,841,901)
|
$2,841,901
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of
the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion
of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding
increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income
at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees. Income, expenses (other
than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid at the end of each calendar quarter. Distributions of net realized capital gains, if
any, are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost
of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things,
that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions
in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
HENNESSY FUNDS
|
1-800-966-4354
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds
and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight
key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and
available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value
Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security
and, therefore, is not considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years
beginning after December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that
are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit
risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable
inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, 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
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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
|
$
|
280,951,523
|
|||
Gross tax unrealized appreciation
|
$
|
205,117,524
|
|||
Gross tax unrealized depreciation
|
(45,212,687
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
159,904,837
|
|||
Undistributed ordinary income
|
$
|
276,605
|
|||
Undistributed long-term capital gains
|
18,017,888
|
||||
Total distributable earnings
|
$
|
18,294,493
|
|||
Other accumulated gain/(loss)
|
$
|
—
|
|||
Total accumulated gain/(loss)
|
$
|
178,199,330
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Year Ended
|
Year Ended
|
||||||||
October 31, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
13,981,342
|
$
|
10,974,058
|
|||||
Long-term capital gains
|
31,091,892
|
42,364,678
|
|||||||
Total distributions
|
$
|
45,073,234
|
$
|
53,338,736
|
|||||
(1) Ordinary income includes short-term capital gains.
|
Long-term
|
|||
Investor Class
|
0.93724
|
||
Institutional Class
|
0.93500
|
HENNESSY FUNDS
|
1-800-966-4354
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the Investment
Manager or of any predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 922.10
|
$4.84
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,020.16
|
$5.09
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 923.30
|
$3.39
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,021.68
|
$3.57
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.00% for Investor Class shares or 0.70% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 184/365 days (to reflect the half-year period.
|
HENNESSY FUNDS
|
1-800-966-4354
|
|
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund
has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future
during both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to a
highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make or recommend any material changes to the Liquidity Program during the review period.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets,
income, and date of birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
7
|
|
Statement of Assets and Liabilities
|
11
|
|
Statement of Operations
|
12
|
|
Statements of Changes in Net Assets
|
13
|
|
Financial Highlights
|
14
|
|
Notes to the Financial Statements
|
18
|
|
Report of Independent Registered Public Accounting Firm
|
27
|
|
Trustees and Officers of the Fund
|
28
|
|
Expense Example
|
32
|
|
Proxy Voting Policy and Proxy Voting Records
|
34
|
|
Availability of Quarterly Portfolio Schedule
|
34
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
34
|
|
Electronic Delivery
|
34
|
|
Liquidity Risk Management Program
|
35
|
|
Privacy Policy
|
35
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
Tadahiro Fujimura
|
Masakazu Takeda
|
Portfolio Manager,
|
Portfolio Manager,
|
Hennessy Japan Small Cap Fund;
|
Hennessy Japan Fund;
|
Chief Investment Officer
|
Fund Manager
|
SPARX Asset Management Co., Ltd.
|
SPARX Asset Management Co., Ltd.
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Japan Fund –
|
|||
Investor Class (HJPNX)
|
18.89%
|
1.01%
|
6.04%
|
Hennessy Japan Fund –
|
|||
Institutional Class (HJPIX)
|
19.36%
|
1.41%
|
6.41%
|
Russell/Nomura Total Market™ Index
|
17.77%
|
3.18%
|
4.56%
|
Tokyo Stock Price Index (TOPIX)
|
17.58%
|
2.89%
|
4.36%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31,
2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Hitachi Ltd.
|
7.40%
|
Mitsubishi Corp.
|
7.04%
|
Mitsubishi UF J Financial Group, Inc.
|
5.69%
|
Shin-Etsu Chemical Co., Ltd.
|
5.41%
|
Seven & i Holdings Co., Ltd.
|
5.32%
|
Sony Group Corp.
|
5.29%
|
ORIX Corp.
|
5.22%
|
Recruit Holdings Co., Ltd.
|
4.84%
|
Tokyo Electron Ltd.
|
4.70%
|
Tokyo Marine Holdings, Inc.
|
4.57%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 98.58%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 2.96%
|
||||||||||||
Nippon Telegraph & Telephone Corp.
|
7,023,000
|
$
|
8,264,496
|
2.96
|
%
|
|||||||
Consumer Discretionary – 10.62%
|
||||||||||||
Asics Corp.
|
152,500
|
4,830,740
|
1.73
|
%
|
||||||||
Fast Retailing Co., Ltd.
|
45,400
|
10,051,397
|
3.60
|
%
|
||||||||
Sony Group Corp.
|
177,400
|
14,748,838
|
5.29
|
%
|
||||||||
|
29,630,975
|
10.62
|
%
|
|||||||||
Consumer Staples – 11.75%
|
||||||||||||
Rohto Pharmaceutical Co., Ltd.
|
510,600
|
11,912,966
|
4.27
|
%
|
||||||||
Seven & i Holdings Co., Ltd.
|
405,000
|
14,838,678
|
5.32
|
%
|
||||||||
Unicharm Corp.
|
177,900
|
6,044,842
|
2.16
|
%
|
||||||||
|
32,796,486
|
11.75
|
%
|
|||||||||
Financials – 22.74%
|
||||||||||||
Japan Exchange Group, Inc.
|
322,300
|
6,373,417
|
2.28
|
%
|
||||||||
Mitsubishi UFJ Financial Group, Inc.
|
1,892,000
|
15,872,266
|
5.69
|
%
|
||||||||
MS&AD Insurance Group Holdings, Inc.
|
199,200
|
7,298,795
|
2.62
|
%
|
||||||||
ORIX Corp.
|
800,700
|
14,561,812
|
5.22
|
%
|
||||||||
Sompo Holdings, Inc.
|
152,200
|
6,593,299
|
2.36
|
%
|
||||||||
Tokio Marine Holdings, Inc.
|
570,600
|
12,765,598
|
4.57
|
%
|
||||||||
|
63,465,187
|
22.74
|
%
|
|||||||||
Health Care – 8.64%
|
||||||||||||
Hoya Corp.
|
35,900
|
3,456,044
|
1.24
|
%
|
||||||||
Olympus Corp.
|
852,700
|
11,388,108
|
4.08
|
%
|
||||||||
Santen Pharmaceutical Co., Ltd.
|
640,100
|
5,551,938
|
1.99
|
%
|
||||||||
Terumo Corp.
|
136,200
|
3,726,186
|
1.33
|
%
|
||||||||
|
24,122,276
|
8.64
|
%
|
|||||||||
Industrials – 22.06%
|
||||||||||||
Daikin Industries, Ltd.
|
44,500
|
6,415,963
|
2.30
|
%
|
||||||||
Hitachi Ltd.
|
325,700
|
20,645,025
|
7.40
|
%
|
||||||||
MISUMI Group, Inc.
|
88,700
|
1,342,799
|
0.48
|
%
|
||||||||
Mitsubishi Corp.
|
421,500
|
19,648,459
|
7.04
|
%
|
||||||||
Recruit Holdings Co., Ltd.
|
470,600
|
13,493,376
|
4.84
|
%
|
||||||||
|
61,545,622
|
22.06
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Information Technology – 12.57%
|
||||||||||||
Keyence Corp.
|
21,600
|
$
|
8,361,764
|
3.00
|
%
|
|||||||
Renesas Electronics Corp. (a)
|
586,800
|
7,707,982
|
2.76
|
%
|
||||||||
Rohm Co. Ltd.
|
18,700
|
299,611
|
0.11
|
%
|
||||||||
Socionext, Inc.
|
57,100
|
5,569,369
|
2.00
|
%
|
||||||||
Tokyo Electron Ltd.
|
99,300
|
13,121,273
|
4.70
|
%
|
||||||||
|
35,059,999
|
12.57
|
%
|
|||||||||
Materials – 7.24%
|
||||||||||||
Nissan Chemical Corp.
|
125,300
|
5,110,384
|
1.83
|
%
|
||||||||
Shin-Etsu Chemical Co., Ltd.
|
504,700
|
15,092,235
|
5.41
|
%
|
||||||||
|
20,202,619
|
7.24
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $225,142,204)
|
275,087,660
|
98.58
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS – 0.00%
|
||||||||||||
Money Market Funds – 0.00%
|
||||||||||||
First American Treasury Obligations Fund - Class X, 5.275% (b)
|
320
|
320
|
0.00
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $320)
|
320
|
0.00
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $225,142,524) – 98.58%
|
275,087,980
|
98.58
|
%
|
|||||||||
Other Assets in Excess of Liabilities - 1.42%
|
3,960,990
|
1.42
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
279,048,970
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
—
|
$
|
8,264,496
|
$
|
—
|
$
|
8,264,496
|
||||||||
Consumer Discretionary
|
—
|
29,630,975
|
—
|
29,630,975
|
||||||||||||
Consumer Staples
|
—
|
32,796,486
|
—
|
32,796,486
|
||||||||||||
Financials
|
—
|
63,465,187
|
—
|
63,465,187
|
||||||||||||
Health Care
|
—
|
24,122,276
|
—
|
24,122,276
|
||||||||||||
Industrials
|
—
|
61,545,622
|
—
|
61,545,622
|
||||||||||||
Information Technology
|
—
|
35,059,999
|
—
|
35,059,999
|
||||||||||||
Materials
|
—
|
20,202,619
|
—
|
20,202,619
|
||||||||||||
Total Common Stocks
|
$
|
—
|
$
|
275,087,660
|
$
|
—
|
$
|
275,087,660
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
320
|
$
|
—
|
$
|
—
|
$
|
320
|
||||||||
Total Short-Term Investments
|
$
|
320
|
$
|
—
|
$
|
—
|
$
|
320
|
||||||||
Total Investments
|
$
|
320
|
$
|
275,087,660
|
$
|
—
|
$
|
275,087,980
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $225,142,524)
|
$
|
275,087,980
|
||
Dividends and interest receivable
|
2,494,041
|
|||
Receivable for fund shares sold
|
220,122
|
|||
Receivable for securities sold
|
5,246,872
|
|||
Prepaid expenses and other assets
|
109,070
|
|||
Total assets
|
283,158,085
|
|||
LIABILITIES:
|
||||
Loans payable
|
3,640,000
|
|||
Payable for fund shares redeemed
|
162,375
|
|||
Payable to advisor
|
196,873
|
|||
Payable to administrator
|
50,565
|
|||
Payable to auditor
|
22,750
|
|||
Accrued distribution fees
|
7,982
|
|||
Accrued service fees
|
3,979
|
|||
Accrued trustees fees
|
7,463
|
|||
Accrued expenses and other payables
|
17,128
|
|||
Total liabilities
|
4,109,115
|
|||
NET ASSETS
|
$
|
279,048,970
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
213,501,457
|
||
Total distributable earnings
|
65,547,513
|
|||
Total net assets
|
$
|
279,048,970
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
45,607,762
|
||
Shares issued and outstanding
|
1,303,532
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
34.99
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
233,441,208
|
||
Shares issued and outstanding
|
6,426,892
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
36.32
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2023
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
5,011,845
|
||
Interest income
|
473,684
|
|||
Total investment income
|
5,485,529
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
2,288,901
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
273,192
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
94,245
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
145,604
|
|||
Distribution fees – Investor Class (See Note 5)
|
68,570
|
|||
Federal and state registration fees
|
47,792
|
|||
Service fees – Investor Class (See Note 5)
|
45,714
|
|||
Interest expense (See Note 7)
|
44,693
|
|||
Reports to shareholders
|
28,245
|
|||
Audit fees
|
22,747
|
|||
Compliance expense (See Note 5)
|
22,676
|
|||
Trustees’ fees and expenses
|
19,754
|
|||
Legal fees
|
5,983
|
|||
Other expenses
|
58,588
|
|||
Total expenses
|
3,166,704
|
|||
NET INVESTMENT INCOME
|
$
|
2,318,825
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
42,400,692
|
||
Net change in unrealized appreciation/depreciation on investments
|
6,442,668
|
|||
Net gain on investments
|
48,843,360
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
51,162,185
|
(1)
|
Net of foreign taxes withheld of $557,038.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2023
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
2,318,825
|
$
|
4,811
|
||||
Net realized gain (loss) on investments
|
42,400,692
|
(12,342,481
|
)
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
6,442,668
|
(265,779,808
|
)
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
51,162,185
|
(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
|
20,718,473
|
15,554,341
|
||||||
Proceeds from shares subscribed – Institutional Class
|
125,835,127
|
190,629,014
|
||||||
Dividends reinvested – Investor Class
|
—
|
703,285
|
||||||
Dividends reinvested – Institutional Class
|
—
|
10,598,719
|
||||||
Cost of shares redeemed – Investor Class
|
(21,606,576
|
)
|
(30,693,545
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(211,849,600
|
)
|
(395,706,790
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(86,902,576
|
)
|
(208,914,976
|
)
|
||||
TOTAL DECREASE IN NET ASSETS
|
(35,740,391
|
)
|
(498,795,151
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of year
|
314,789,361
|
813,584,512
|
||||||
End of year
|
$
|
279,048,970
|
$
|
314,789,361
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
585,760
|
403,264
|
||||||
Shares sold – Institutional Class
|
3,442,909
|
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
|
(626,166
|
)
|
(876,884
|
)
|
||||
Shares redeemed – Institutional Class
|
(6,060,158
|
)
|
(10,842,081
|
)
|
||||
Net decrease in shares outstanding
|
(2,657,655
|
)
|
(6,098,009
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
29.43
|
$
|
47.78
|
$
|
42.79
|
$
|
37.17
|
$
|
33.63
|
|||||||||
0.23
|
(0.11
|
)
|
(0.23
|
)
|
(0.14
|
)
|
0.05
|
|||||||||||
5.33
|
(17.83
|
)
|
5.22
|
5.81
|
3.50
|
|||||||||||||
5.56
|
(17.94
|
)
|
4.99
|
5.67
|
3.55
|
|||||||||||||
—
|
(0.41
|
)
|
—
|
(0.02
|
)
|
(0.01
|
)
|
|||||||||||
—
|
—
|
—
|
(0.03
|
)
|
—
|
|||||||||||||
—
|
(0.41
|
)
|
—
|
(0.05
|
)
|
(0.01
|
)
|
|||||||||||
$
|
34.99
|
$
|
29.43
|
$
|
47.78
|
$
|
42.79
|
$
|
37.17
|
|||||||||
18.89
|
%
|
-37.86
|
%
|
11.66
|
%
|
15.27
|
%
|
10.60
|
%
|
|||||||||
$
|
45.61
|
$
|
39.55
|
$
|
86.11
|
$
|
142.30
|
$
|
87.22
|
|||||||||
1.44
|
%
|
1.44
|
%
|
1.43
|
%
|
1.43
|
%
|
1.43
|
%
|
|||||||||
0.65
|
%
|
(0.30
|
)%
|
(0.49
|
)%
|
(0.37
|
)%
|
0.14
|
%
|
|||||||||
57
|
%
|
21
|
%
|
16
|
%
|
23
|
%
|
9
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
30.43
|
$
|
49.54
|
$
|
44.19
|
$
|
38.37
|
$
|
34.67
|
|||||||||
0.30
|
0.02
|
(0.03
|
)
|
0.02
|
0.21
|
|||||||||||||
5.59
|
(18.39
|
)
|
5.38
|
5.99
|
3.60
|
|||||||||||||
5.89
|
(18.37
|
)
|
5.35
|
6.01
|
3.81
|
|||||||||||||
—
|
(0.74
|
)
|
(0.00
|
)(2)
|
(0.16
|
)
|
(0.11
|
)
|
||||||||||
—
|
—
|
—
|
(0.03
|
)
|
—
|
|||||||||||||
—
|
(0.74
|
)
|
(0.00
|
)(2)
|
(0.19
|
)
|
(0.11
|
)
|
||||||||||
$
|
36.32
|
$
|
30.43
|
$
|
49.54
|
$
|
44.19
|
$
|
38.37
|
|||||||||
19.36
|
%
|
-37.63
|
%
|
12.11
|
%
|
15.72
|
%
|
11.02
|
%
|
|||||||||
$
|
233.44
|
$
|
275.24
|
$
|
727.47
|
$
|
608.11
|
$
|
611.41
|
|||||||||
1.04
|
%
|
1.05
|
%
|
1.04
|
%
|
1.04
|
%
|
1.03
|
%
|
|||||||||
0.84
|
%
|
0.04
|
%
|
(0.07
|
)%
|
0.04
|
%
|
0.59
|
%
|
|||||||||
57
|
%
|
21
|
%
|
16
|
%
|
23
|
%
|
9
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply
with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment
income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily
the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions
from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and
designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax
regulations, permanent differences between book and tax basis for reporting are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2023 are as
follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$3,146,828
|
$(3,146,828)
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of
the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as
investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original
cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Foreign Currency – Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market exchange rate at the time of valuation. Purchases and sales of
investments and income are translated into U.S. dollars using the spot market exchange rate prevailing on the respective dates of such transactions. The Fund does not isolate the portion of the results of operations resulting
from fluctuations in foreign exchange rates on investments from fluctuations resulting from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain/loss on
investments. Foreign investments present additional risks due to currency fluctuations, economic and political factors, lower liquidity, government regulations, differences in accounting standards, and other factors.
|
HENNESSY FUNDS
|
1-800-966-4354
|
j).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market
conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
k).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual
Funds and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that
highlight key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online
and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value
Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security
and, therefore, is not considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years
beginning after December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that
are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds,
credit risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable
inputs are unavailable.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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 security’s fair value
would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
226,792,994
|
|||
Gross tax unrealized appreciation
|
$
|
60,153,235
|
|||
Gross tax unrealized depreciation
|
(11,916,315
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
48,236,920
|
|||
Undistributed ordinary income
|
$
|
—
|
|||
Undistributed long-term capital gains
|
17,310,593
|
||||
Total distributable earnings
|
$
|
17,310,593
|
|||
Other accumulated gain/(loss)
|
$
|
—
|
|||
Total accumulated gain/(loss)
|
$
|
65,547,513
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Year Ended
|
Year Ended
|
||||||||
October 31, 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
|
Long-term
|
|||
Investor Class
|
2.17988
|
||
Institutional Class
|
2.26393
|
WWW.HENNESSYFUNDS.COM
|
NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
TAIT, WELLER & BAKER LLP
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the Investment
Manager or of any predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,015.70
|
$7.16
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.10
|
$7.17
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,017.70
|
$4.98
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,020.27
|
$4.99
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.41% for Investor Class shares or 0.98% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund
has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future
during both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to
a highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make or recommend any material changes to the Liquidity Program during the review period.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets,
income, and date of birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
HENNESSY FUNDS
|
1-800-966-4354
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
4
|
|
Financial Statements
|
||
Schedule of Investments
|
7
|
|
Statement of Assets and Liabilities
|
12
|
|
Statement of Operations
|
13
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
29
|
|
Trustees and Officers of the Fund
|
30
|
|
Expense Example
|
34
|
|
Proxy Voting Policy and Proxy Voting Records
|
36
|
|
Availability of Quarterly Portfolio Schedule
|
36
|
|
Federal Tax Distribution Information
|
36
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
36
|
|
Electronic Delivery
|
37
|
|
Liquidity Risk Management Program
|
37
|
|
Privacy Policy
|
38
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
Tadahiro Fujimura
|
Masakazu Takeda
|
Portfolio Manager,
|
Portfolio Manager,
|
Hennessy Japan Small Cap Fund;
|
Hennessy Japan Fund;
|
Chief Investment Officer
|
Fund Manager
|
SPARX Asset Management Co., Ltd.
|
SPARX Asset Management Co., Ltd.
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Japan Small Cap Fund –
|
|||
Investor Class (HJPSX)
|
13.22%
|
0.82%
|
7.19%
|
Hennessy Japan Small Cap Fund –
|
|||
Institutional Class (HJSIX)(1)
|
13.60%
|
1.23%
|
7.52%
|
Russell/Nomura Small Cap™ Index
|
14.33%
|
0.22%
|
4.19%
|
Tokyo Stock Price Index (TOPIX)
|
17.58%
|
2.89%
|
4.36%
|
(1)
|
The inception date of Institutional Class shares is June 15, 2015. Performance shown prior to the inception of Institutional Class shares reflects the performance of Investor Class shares and includes
expenses that are not applicable to, and are higher than, those of Institutional Class shares.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31,
2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Saizeriya Co. Ltd.
|
3.10%
|
Towa Corp.
|
2.87%
|
Musashino Bank Ltd.
|
2.29%
|
Iwatani Corp.
|
2.25%
|
Penta-Ocean Construction Co. Ltd.
|
2.17%
|
Takasago Thermal Engineering Co. Ltd.
|
2.17%
|
Nishimoto Co. Ltd.
|
2.15%
|
Asia Pile Holdings Corp.
|
2.07%
|
Tsubakimoto Chain Co.
|
2.07%
|
Tsukishima Holdings Co. Ltd.
|
2.06%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 95.37%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 3.19%
|
||||||||||||
Imagica Group, Inc.
|
259,600
|
$
|
1,019,209
|
0.99
|
%
|
|||||||
Kufu Co., Inc. (a)
|
201,600
|
407,460
|
0.39
|
%
|
||||||||
Macromill, Inc.
|
200,000
|
888,643
|
0.86
|
%
|
||||||||
ValueCommerce Co. Ltd.
|
118,600
|
985,901
|
0.95
|
%
|
||||||||
|
3,301,213
|
3.19
|
%
|
|||||||||
Consumer Discretionary – 15.97%
|
||||||||||||
Aeon Fantasy Co. Ltd.
|
90,400
|
1,617,718
|
1.56
|
%
|
||||||||
Benesse Holdings, Inc.
|
106,100
|
1,254,461
|
1.21
|
%
|
||||||||
J Front Retailing Co. Ltd.
|
196,800
|
1,876,154
|
1.81
|
%
|
||||||||
Matsuoka Corp.
|
127,500
|
1,350,595
|
1.30
|
%
|
||||||||
Musashi Seimitsu Industry Co. Ltd.
|
177,000
|
1,703,572
|
1.65
|
%
|
||||||||
Nojima Corp.
|
216,900
|
1,931,764
|
1.87
|
%
|
||||||||
Onward Holdings Co. Ltd.
|
446,200
|
1,412,832
|
1.36
|
%
|
||||||||
Sac’s Bar Holdings, Inc.
|
167,400
|
930,401
|
0.90
|
%
|
||||||||
Saizeriya Co. Ltd.
|
78,900
|
3,205,833
|
3.10
|
%
|
||||||||
Topre Corp.
|
115,900
|
1,248,872
|
1.21
|
%
|
||||||||
|
16,532,202
|
15.97
|
%
|
|||||||||
Consumer Staples – 3.80%
|
||||||||||||
Ariake Japan Co. Ltd.
|
36,600
|
1,157,480
|
1.12
|
%
|
||||||||
Cosmos Pharmaceutical Corp.
|
5,300
|
551,558
|
0.53
|
%
|
||||||||
Nishimoto Co. Ltd.
|
56,000
|
2,221,230
|
2.15
|
%
|
||||||||
|
3,930,268
|
3.80
|
%
|
|||||||||
Energy – 2.25%
|
||||||||||||
Iwatani Corp.
|
48,700
|
2,329,249
|
2.25
|
%
|
||||||||
Financials – 4.12%
|
||||||||||||
Musashino Bank Ltd.
|
125,600
|
2,368,236
|
2.29
|
%
|
||||||||
Nishi-Nippon Financial Holdings, Inc.
|
159,000
|
1,898,956
|
1.83
|
%
|
||||||||
|
4,267,192
|
4.12
|
%
|
|||||||||
Health Care – 4.46%
|
||||||||||||
Nihon Kohden Corp.
|
81,300
|
1,920,205
|
1.86
|
%
|
||||||||
PeptiDream, Inc. (a)
|
134,900
|
983,399
|
0.95
|
%
|
||||||||
Ship Healthcare Holdings, Inc.
|
111,100
|
1,715,285
|
1.65
|
%
|
||||||||
|
4,618,889
|
4.46
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Industrials – 37.07%
|
||||||||||||
Amada Co. Ltd.
|
218,300
|
$
|
2,117,610
|
2.05
|
%
|
|||||||
Benefit One, Inc.
|
148,400
|
1,064,084
|
1.03
|
%
|
||||||||
Creek & River Co. Ltd.
|
96,300
|
1,256,174
|
1.21
|
%
|
||||||||
Daihen Corp.
|
62,200
|
1,960,422
|
1.89
|
%
|
||||||||
Furukawa Co. Ltd.
|
84,400
|
1,184,144
|
1.14
|
%
|
||||||||
Glory Ltd.
|
66,700
|
1,243,576
|
1.20
|
%
|
||||||||
Hanwa Co. Ltd.
|
34,500
|
1,039,937
|
1.00
|
%
|
||||||||
Integrated Design & Engineering Holdings Co. Ltd.
|
80,100
|
1,778,019
|
1.72
|
%
|
||||||||
Keihan Holdings Co. Ltd.
|
78,400
|
1,917,504
|
1.85
|
%
|
||||||||
Kyudenko Corp.
|
51,800
|
1,547,317
|
1.49
|
%
|
||||||||
Mitsubishi Logisnext Co. Ltd.
|
183,000
|
1,435,710
|
1.39
|
%
|
||||||||
Nichiha Corp.
|
71,700
|
1,415,788
|
1.37
|
%
|
||||||||
Nissei ASB Machine Co. Ltd.
|
54,700
|
1,688,091
|
1.63
|
%
|
||||||||
Nittoku Co. Ltd.
|
80,200
|
1,175,980
|
1.14
|
%
|
||||||||
Penta-Ocean Construction Co. Ltd.
|
381,900
|
2,245,162
|
2.17
|
%
|
||||||||
Raksul, Inc. (a)
|
137,300
|
1,153,850
|
1.11
|
%
|
||||||||
SBS Holdings, Inc.
|
96,200
|
1,707,874
|
1.65
|
%
|
||||||||
Tadano Ltd.
|
278,400
|
2,093,046
|
2.02
|
%
|
||||||||
Takasago Thermal Engineering Co. Ltd.
|
113,700
|
2,244,963
|
2.17
|
%
|
||||||||
Tanseisha Co. Ltd.
|
299,900
|
1,685,128
|
1.63
|
%
|
||||||||
Tocalo Co. Ltd.
|
55,000
|
497,132
|
0.48
|
%
|
||||||||
TRE Holdings Corp.
|
212,700
|
1,660,313
|
1.60
|
%
|
||||||||
Tsubakimoto Chain Co.
|
84,900
|
2,146,125
|
2.07
|
%
|
||||||||
Tsukishima Holdings Co. Ltd.
|
251,200
|
2,132,782
|
2.06
|
%
|
||||||||
|
38,390,731
|
37.07
|
%
|
|||||||||
Information Technology – 13.20%
|
||||||||||||
Macnica Holdings, Inc.
|
26,100
|
1,060,428
|
1.02
|
%
|
||||||||
Maxell Ltd.
|
190,500
|
2,037,544
|
1.97
|
%
|
||||||||
Mimaki Engineering Co., Ltd.
|
285,200
|
1,397,597
|
1.35
|
%
|
||||||||
NEC Networks & System Integration Corp.
|
87,900
|
1,189,609
|
1.15
|
%
|
||||||||
Nippon Signal Co. Ltd.
|
212,300
|
1,312,823
|
1.27
|
%
|
||||||||
SIIX Corp.
|
196,400
|
1,839,978
|
1.78
|
%
|
||||||||
Towa Corp.
|
86,700
|
2,973,819
|
2.87
|
%
|
||||||||
WingArc1st, Inc.
|
72,500
|
1,296,981
|
1.25
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Information Technology (Continued)
|
||||||||||||
Yamaichi Electronics Co. Ltd.
|
48,600
|
$
|
562,129
|
0.54
|
%
|
|||||||
|
13,670,908
|
13.20
|
%
|
|||||||||
Materials – 8.30%
|
||||||||||||
Asia Pile Holdings Corp.
|
434,900
|
2,138,029
|
2.07
|
%
|
||||||||
Daicel Corp.
|
97,300
|
827,408
|
0.80
|
%
|
||||||||
Kyoei Steel Ltd.
|
89,400
|
1,134,076
|
1.10
|
%
|
||||||||
Maeda Kosen Co. Ltd.
|
87,700
|
1,708,541
|
1.65
|
%
|
||||||||
Tokyo Ohka Kogyo Co. Ltd.
|
34,800
|
2,010,772
|
1.94
|
%
|
||||||||
Toyobo Co. Ltd.
|
114,800
|
770,243
|
0.74
|
%
|
||||||||
|
8,589,069
|
8.30
|
%
|
|||||||||
Real Estate – 2.26%
|
||||||||||||
Star Mica Holdings Co. Ltd.
|
165,400
|
663,718
|
0.64
|
%
|
||||||||
Tosei Corp.
|
141,900
|
1,676,787
|
1.62
|
%
|
||||||||
|
2,340,505
|
2.26
|
%
|
|||||||||
Utilities – 0.75%
|
||||||||||||
EF-ON, Inc.
|
244,900
|
776,534
|
0.75
|
%
|
||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $100,785,561)
|
98,746,760
|
95.37
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS – 3.54%
|
||||||||||||
Money Market Funds – 3.54%
|
||||||||||||
First American Treasury Obligations Fund – Class X, 5.275% (b)
|
3,667,081
|
3,667,081
|
3.54
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $3,667,081)
|
3,667,081
|
3.54
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $104,452,642) – 98.91%
|
102,413,841
|
98.91
|
%
|
|||||||||
Other Assets in Excess of Liabilities – 1.09%
|
1,130,882
|
1.09
|
%
|
|||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
103,544,723
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2023.
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
—
|
$
|
3,301,213
|
$
|
—
|
$
|
3,301,213
|
||||||||
Consumer Discretionary
|
—
|
16,532,202
|
—
|
16,532,202
|
||||||||||||
Consumer Staples
|
—
|
3,930,268
|
—
|
3,930,268
|
||||||||||||
Energy
|
—
|
2,329,249
|
—
|
2,329,249
|
||||||||||||
Financials
|
—
|
4,267,192
|
—
|
4,267,192
|
||||||||||||
Health Care
|
—
|
4,618,889
|
—
|
4,618,889
|
||||||||||||
Industrials
|
—
|
38,390,731
|
—
|
38,390,731
|
||||||||||||
Information Technology
|
—
|
13,670,908
|
—
|
13,670,908
|
||||||||||||
Materials
|
—
|
8,589,069
|
—
|
8,589,069
|
||||||||||||
Real Estate
|
—
|
2,340,505
|
—
|
2,340,505
|
||||||||||||
Utilities
|
—
|
776,534
|
—
|
776,534
|
||||||||||||
Total Common Stocks
|
$
|
—
|
$
|
98,746,760
|
$
|
—
|
$
|
98,746,760
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
3,667,081
|
$
|
—
|
$
|
—
|
$
|
3,667,081
|
||||||||
Total Short-Term Investments
|
$
|
3,667,081
|
$
|
—
|
$
|
—
|
$
|
3,667,081
|
||||||||
Total Investments
|
$
|
3,667,081
|
$
|
98,746,760
|
$
|
—
|
$
|
102,413,841
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $104,452,642)
|
$
|
102,413,841
|
||
Foreign currencies
|
21,604
|
|||
Dividends and interest receivable
|
623,938
|
|||
Receivable for fund shares sold
|
147,273
|
|||
Receivable for securities sold
|
384,569
|
|||
Dividend tax reclaim receivable
|
204,251
|
|||
Prepaid expenses and other assets
|
27,954
|
|||
Total assets
|
103,823,430
|
|||
LIABILITIES:
|
||||
Payable for fund shares redeemed
|
142,038
|
|||
Payable to advisor
|
71,640
|
|||
Payable to administrator
|
18,692
|
|||
Payable to auditor
|
22,746
|
|||
Accrued distribution fees
|
5,289
|
|||
Accrued service fees
|
2,787
|
|||
Accrued trustees fees
|
6,295
|
|||
Accrued expenses and other payables
|
9,220
|
|||
Total liabilities
|
278,707
|
|||
NET ASSETS
|
$
|
103,544,723
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
106,183,441
|
||
Accumulated deficit
|
(2,638,718
|
)
|
||
Total net assets
|
$
|
103,544,723
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
32,557,416
|
||
Shares issued and outstanding
|
2,208,315
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
14.74
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
70,987,307
|
||
Shares issued and outstanding
|
4,874,808
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
14.56
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS
|
Statement of Operations for the year ended October 31, 2023
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
2,314,973
|
||
Interest income
|
294,838
|
|||
Total investment income
|
2,609,811
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
824,948
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
73,636
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
47,519
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
105,681
|
|||
Distribution fees – Investor Class (See Note 5)
|
50,867
|
|||
Federal and state registration fees
|
39,755
|
|||
Service fees – Investor Class (See Note 5)
|
33,912
|
|||
Audit fees
|
22,747
|
|||
Compliance expense (See Note 5)
|
22,664
|
|||
Trustees’ fees and expenses
|
21,057
|
|||
Reports to shareholders
|
15,033
|
|||
Legal fees
|
3,095
|
|||
Other expenses
|
19,864
|
|||
Total expenses
|
1,280,778
|
|||
NET INVESTMENT INCOME
|
$
|
1,329,033
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
207,238
|
||
Net change in unrealized appreciation/depreciation on investments
|
9,306,806
|
|||
Net gain on investments
|
9,514,044
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
10,843,077
|
(1)
|
Net of foreign taxes withheld of $257,562.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2023
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
1,329,033
|
$
|
949,649
|
||||
Net realized gain (loss) on investments
|
207,238
|
(2,110,306
|
)
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
9,306,806
|
(29,078,282
|
)
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
10,843,077
|
(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
|
5,265,277
|
6,437,217
|
||||||
Proceeds from shares subscribed – Institutional Class
|
44,132,157
|
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
|
(7,954,407
|
)
|
(8,822,706
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(27,597,536
|
)
|
(39,666,483
|
)
|
||||
Net increase (decrease) in net assets
|
||||||||
derived from capital share transactions
|
14,678,519
|
(2,832,591
|
)
|
|||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
24,664,604
|
(33,847,021
|
)
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
78,880,119
|
112,727,140
|
||||||
End of year
|
$
|
103,544,723
|
$
|
78,880,119
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
350,407
|
424,356
|
||||||
Shares sold – Institutional Class
|
3,029,428
|
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
|
(538,838
|
)
|
(598,751
|
)
|
||||
Shares redeemed – Institutional Class
|
(1,876,510
|
)
|
(2,693,301
|
)
|
||||
Net increase (decrease) in shares outstanding
|
1,025,159
|
(200,127
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
13.10
|
$
|
18.12
|
$
|
15.73
|
$
|
15.43
|
$
|
14.99
|
|||||||||
0.14
|
0.12
|
0.03
|
0.01
|
0.03
|
||||||||||||||
1.58
|
(5.07
|
)
|
2.40
|
0.50
|
0.88
|
|||||||||||||
1.72
|
(4.95
|
)
|
2.43
|
0.51
|
0.91
|
|||||||||||||
(0.08
|
)
|
(0.00
|
)(2)
|
(0.04
|
)
|
(0.21
|
)
|
—
|
||||||||||
—
|
(0.07
|
)
|
—
|
—
|
(0.47
|
)
|
||||||||||||
(0.08
|
)
|
(0.07
|
)
|
(0.04
|
)
|
(0.21
|
)
|
(0.47
|
)
|
|||||||||
$
|
14.74
|
$
|
13.10
|
$
|
18.12
|
$
|
15.73
|
$
|
15.43
|
|||||||||
13.22
|
%
|
-27.41
|
%
|
15.46
|
%
|
3.27
|
%
|
6.30
|
%
|
|||||||||
$
|
32.56
|
$
|
31.23
|
$
|
46.15
|
$
|
46.41
|
$
|
66.30
|
|||||||||
1.51
|
%
|
1.57
|
%
|
1.53
|
%
|
1.55
|
%
|
1.52
|
%
|
|||||||||
0.97
|
%
|
0.83
|
%
|
0.16
|
%
|
0.09
|
%
|
0.23
|
%
|
|||||||||
32
|
%
|
45
|
%
|
24
|
%
|
17
|
%
|
21
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
12.97
|
$
|
17.94
|
$
|
15.58
|
$
|
15.28
|
$
|
14.83
|
|||||||||
0.21
|
0.18
|
0.11
|
0.07
|
0.09
|
||||||||||||||
1.54
|
(4.99
|
)
|
2.37
|
0.50
|
0.86
|
|||||||||||||
1.75
|
(4.81
|
)
|
2.48
|
0.57
|
0.95
|
|||||||||||||
(0.16
|
)
|
(0.09
|
)
|
(0.12
|
)
|
(0.27
|
)
|
(0.04
|
)
|
|||||||||
—
|
(0.07
|
)
|
—
|
—
|
(0.46
|
)
|
||||||||||||
(0.16
|
)
|
(0.16
|
)
|
(0.12
|
)
|
(0.27
|
)
|
(0.50
|
)
|
|||||||||
$
|
14.56
|
$
|
12.97
|
$
|
17.94
|
$
|
15.58
|
$
|
15.28
|
|||||||||
13.60
|
%
|
-27.05
|
%
|
15.90
|
%
|
3.69
|
%
|
6.73
|
%
|
|||||||||
$
|
70.99
|
$
|
47.65
|
$
|
66.58
|
$
|
34.58
|
$
|
63.78
|
|||||||||
1.11
|
%
|
1.17
|
%
|
1.13
|
%
|
1.13
|
%
|
1.12
|
%
|
|||||||||
1.44
|
%
|
1.22
|
%
|
0.63
|
%
|
0.45
|
%
|
0.61
|
%
|
|||||||||
32
|
%
|
45
|
%
|
24
|
%
|
17
|
%
|
21
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply with
the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment income/loss and
realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily the result of the
treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions from net realized
gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and designate earnings and
profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax
regulations, permanent differences between book and tax basis for reporting are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. As of October 31, 2023, no such reclassifications
were required for fiscal year 2023.
|
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of
the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected
to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and accretion
of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a corresponding
increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as investment income
at the fair value of the property received. 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.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments in REITs may require the Fund to accrue and distribute income not yet received. To generate sufficient cash to make any required distributions, the Fund may be required to sell securities
in its portfolio (including when it is not advantageous to do so) that it otherwise would have continued to hold. At other times, investments in a REIT may result in the Fund’s receipt of cash in excess of the REIT’s earnings.
If the Fund distributes these amounts, these distributions could constitute a return of capital to Fund shareholders for U.S. federal income tax purposes. Dividends received by the Fund from a REIT generally do not constitute
qualified dividend income and do not qualify for the dividends-received deduction.
|
|
k).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other things,
that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market conditions
in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
l).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual Funds
and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder reports that highlight
key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be made available online and
available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value
Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security
and, therefore, is not considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years
beginning after December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that
are not active for identical or similar instruments, and model-derived valuations in which all
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds, credit risk curves, default rates, and similar data).
|
||
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable
inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, 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
|
$
|
105,018,160
|
|||
Gross tax unrealized appreciation
|
$
|
12,719,525
|
|||
Gross tax unrealized depreciation
|
(15,360,514
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
(2,640,989
|
)
|
||
Undistributed ordinary income
|
$
|
1,194,105
|
|||
Undistributed long-term capital gains
|
—
|
||||
Total distributable earnings
|
$
|
1,194,105
|
|||
Other accumulated gain/(loss)
|
$
|
(1,191,834
|
)
|
||
Total accumulated gain/(loss)
|
$
|
(2,638,718
|
)
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Year Ended
|
Year Ended
|
||||||||
October 31, 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
|
NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
TAIT, WELLER & BAKER LLP
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the Investment
Manager or of any predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 964.70
|
$7.43
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,017.64
|
$7.63
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 966.80
|
$5.40
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.71
|
$5.55
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.50% for Investor Class shares or 1.09% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
Country
|
Gross Foreign Income
|
Foreign Tax Paid
|
||
Japan
|
$2,572,534
|
$257,562
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — LIQUIDITY RISK MANAGEMENT PROGRAM
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund
has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future
during both normal and reasonably foreseeable stressed conditions.
|
HENNESSY FUNDS
|
1-800-966-4354
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to a
highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make or recommend any material changes to the Liquidity Program during the review period.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets,
income, and date of birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
LIQUIDITY RISK MANAGEMENT PROGRAM/PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
12
|
|
Statement of Operations
|
13
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
28
|
|
Trustees and Officers of the Fund
|
29
|
|
Expense Example
|
34
|
|
Proxy Voting Policy and Proxy Voting Records
|
36
|
|
Availability of Quarterly Portfolio Schedule
|
36
|
|
Federal Tax Distribution Information
|
36
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
36
|
|
Electronic Delivery
|
36
|
|
Liquidity Risk Management Program
|
37
|
|
Privacy Policy
|
37
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The acronym, MT. FAANNG, refers to the following companies: Microsoft Corporation, Tesla, Inc., Meta Platforms, Inc., Amazon.com, Inc., Apple, Inc., Netflix, Inc., NVIDIA Corporation, and Alphabet,
Inc.
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
|
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Large Cap Financial Fund –
|
|||
Investor Class (HLFNX)
|
-19.62%
|
0.13%
|
4.14%
|
Hennessy Large Cap Financial Fund –
|
|||
Institutional Class (HILFX)(1)
|
-19.41%
|
0.46%
|
4.45%
|
Russell 1000® Index Financials
|
-1.43%
|
9.37%
|
10.44%
|
Russell 1000® Index
|
9.48%
|
10.71%
|
10.88%
|
(1)
|
The inception date of Institutional Class shares is June 15, 2015. Performance shown prior to the inception of Institutional Class shares reflects the performance of Investor Class shares and
includes expenses that are not applicable to, and are higher than, those of Institutional Class shares.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31,
2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Berkshire Hathaway, Inc., Class B
|
5.80%
|
Visa, Inc., Class A
|
5.60%
|
Wells Fargo & Co.
|
5.41%
|
JPMorgan Chase & Co.
|
5.19%
|
Mastercard, Inc., Class A
|
5.11%
|
Bank of America Corp.
|
5.10%
|
KeyCorp
|
5.10%
|
Fifth Third Bancorp.
|
4.99%
|
Webster Financial Corp.
|
4.90%
|
Citizens Financial Group, Inc.
|
4.85%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 91.62%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Financials – 91.62%
|
||||||||||||
Bank of America Corp.
|
57,000
|
$
|
1,501,380
|
5.10
|
%
|
|||||||
Berkshire Hathaway, Inc., Class B (a)
|
5,000
|
1,706,650
|
5.80
|
%
|
||||||||
Capital One Financial Corp.
|
6,000
|
607,740
|
2.06
|
%
|
||||||||
Charles Schwab Corp.
|
13,000
|
676,520
|
2.30
|
%
|
||||||||
Citigroup, Inc.
|
20,000
|
789,800
|
2.68
|
%
|
||||||||
Citizens Financial Group, Inc.
|
61,000
|
1,429,230
|
4.85
|
%
|
||||||||
Comerica, Inc.
|
14,000
|
551,600
|
1.87
|
%
|
||||||||
Fidelity National Information Services, Inc.
|
9,000
|
441,990
|
1.50
|
%
|
||||||||
Fifth Third Bancorp
|
62,000
|
1,470,020
|
4.99
|
%
|
||||||||
Fiserv, Inc. (a)
|
4,000
|
455,000
|
1.54
|
%
|
||||||||
JPMorgan Chase & Co.
|
11,000
|
1,529,660
|
5.19
|
%
|
||||||||
KeyCorp
|
147,000
|
1,502,340
|
5.10
|
%
|
||||||||
M&T Bank Corp.
|
10,500
|
1,183,875
|
4.02
|
%
|
||||||||
Mastercard, Inc., Class A
|
4,000
|
1,505,400
|
5.11
|
%
|
||||||||
Morgan Stanley
|
20,000
|
1,416,400
|
4.81
|
%
|
||||||||
New York Community Bancorp, Inc.
|
144,000
|
1,365,120
|
4.63
|
%
|
||||||||
PayPal Holdings, Inc. (a)
|
21,000
|
1,087,800
|
3.69
|
%
|
||||||||
SoFi Technologies, Inc. (a)
|
70,000
|
528,500
|
1.79
|
%
|
||||||||
The Goldman Sachs Group, Inc.
|
2,500
|
759,025
|
2.58
|
%
|
||||||||
Truist Financial Corp.
|
31,000
|
879,160
|
2.98
|
%
|
||||||||
U.S. Bancorp
|
26,000
|
828,880
|
2.81
|
%
|
||||||||
Visa, Inc., Class A
|
7,000
|
1,645,700
|
5.60
|
%
|
||||||||
Webster Financial Corp.
|
38,000
|
1,442,860
|
4.90
|
%
|
||||||||
Wells Fargo & Co.
|
40,000
|
1,590,800
|
5.41
|
%
|
||||||||
Zions Bancorp NA
|
3,000
|
92,550
|
0.31
|
%
|
||||||||
|
26,988,000
|
91.62
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $26,100,283)
|
26,988,000
|
91.62
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 9.01%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 9.01%
|
||||||||||||
First American Government Obligations Fund – Class X, 5.276% (b)
|
1,196,274
|
$
|
1,196,274
|
4.06
|
%
|
|||||||
First American Treasury Obligations Fund – Class X, 5.275% (b)
|
1,457,135
|
1,457,135
|
4.95
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $2,653,409)
|
2,653,409
|
9.01
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $28,753,692) – 100.63%
|
29,641,409
|
100.63
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.63)%
|
(185,816
|
)
|
(0.63
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
29,455,593
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2023.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Financials
|
$
|
26,988,000
|
$
|
—
|
$
|
—
|
$
|
26,988,000
|
||||||||
Total Common Stocks
|
$
|
26,988,000
|
$
|
—
|
$
|
—
|
$
|
26,988,000
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
2,653,409
|
$
|
—
|
$
|
—
|
$
|
2,653,409
|
||||||||
Total Short-Term Investments
|
$
|
2,653,409
|
$
|
—
|
$
|
—
|
$
|
2,653,409
|
||||||||
Total Investments
|
$
|
29,641,409
|
$
|
—
|
$
|
—
|
$
|
29,641,409
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $28,753,692)
|
$
|
29,641,409
|
||
Dividends and interest receivable
|
54,824
|
|||
Receivable for fund shares sold
|
108
|
|||
Prepaid expenses and other assets
|
16,116
|
|||
Total assets
|
29,712,457
|
|||
LIABILITIES:
|
||||
Payable for securities purchased
|
186,771
|
|||
Payable to advisor
|
23,233
|
|||
Payable to administrator
|
6,897
|
|||
Payable to auditor
|
22,746
|
|||
Accrued distribution fees
|
2,719
|
|||
Accrued service fees
|
1,476
|
|||
Accrued trustees fees
|
5,660
|
|||
Accrued expenses and other payables
|
7,362
|
|||
Total liabilities
|
256,864
|
|||
NET ASSETS
|
$
|
29,455,593
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
32,900,724
|
||
Accumulated deficit
|
(3,445,131
|
)
|
||
Total net assets
|
$
|
29,455,593
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
16,879,577
|
||
Shares issued and outstanding
|
909,160
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
18.57
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
12,576,016
|
||
Shares issued and outstanding
|
670,273
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
18.76
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS
|
Statement of Operations for the year ended October 31, 2023
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
1,164,455
|
||
Interest income
|
122,299
|
|||
Total investment income
|
1,286,754
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
336,344
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
38,906
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
20,133
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
46,217
|
|||
Federal and state registration fees
|
31,958
|
|||
Distribution fees – Investor Class (See Note 5)
|
30,385
|
|||
Audit fees
|
22,747
|
|||
Compliance expense (See Note 5)
|
22,664
|
|||
Service fees – Investor Class (See Note 5)
|
20,257
|
|||
Trustees’ fees and expenses
|
20,020
|
|||
Reports to shareholders
|
10,435
|
|||
Legal fees
|
1,749
|
|||
Other expenses
|
11,176
|
|||
Total expenses
|
612,991
|
|||
NET INVESTMENT INCOME
|
$
|
673,763
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized loss on investments:
|
$
|
(3,665,381
|
)
|
|
Net change in unrealized appreciation/deprecation on investments:
|
(4,861,309
|
)
|
||
Net loss on investments
|
(8,526,690
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(7,852,927
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2023
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
673,763
|
$
|
415,244
|
||||
Net realized gain (loss) on investments
|
(3,665,381
|
)
|
3,448,215
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(4,861,309
|
)
|
(23,178,978
|
)
|
||||
Net decrease in net assets resulting from operations
|
(7,852,927
|
)
|
(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
|
760,547
|
2,685,032
|
||||||
Proceeds from shares subscribed – Institutional Class
|
1,148,806
|
11,877,575
|
||||||
Dividends reinvested – Investor Class
|
1,514,582
|
1,636,787
|
||||||
Dividends reinvested – Institutional Class
|
1,483,154
|
1,782,399
|
||||||
Cost of shares redeemed – Investor Class
|
(3,144,689
|
)
|
(6,195,638
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(7,157,957
|
)
|
(14,692,333
|
)
|
||||
Net decrease in net assets derived
|
||||||||
from capital share transactions
|
(5,395,557
|
)
|
(2,906,178
|
)
|
||||
TOTAL DECREASE IN NET ASSETS
|
(16,320,998
|
)
|
(25,707,339
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of year
|
45,776,591
|
71,483,930
|
||||||
End of year
|
$
|
29,455,593
|
$
|
45,776,591
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
38,167
|
92,861
|
||||||
Shares sold – Institutional Class
|
54,558
|
380,400
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
66,892
|
50,270
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
64,811
|
54,242
|
||||||
Shares redeemed – Investor Class
|
(148,352
|
)
|
(221,850
|
)
|
||||
Shares redeemed – Institutional Class
|
(331,352
|
)
|
(536,409
|
)
|
||||
Net decrease in shares outstanding
|
(255,276
|
)
|
(180,486
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
24.80
|
$
|
35.32
|
$
|
22.33
|
$
|
22.63
|
$
|
21.43
|
|||||||||
0.35
|
0.15
|
(0.15
|
)
|
(0.05
|
)
|
(0.05
|
)
|
|||||||||||
(4.92
|
)
|
(9.02
|
)
|
13.14
|
(0.25
|
)
|
1.84
|
|||||||||||
(4.57
|
)
|
(8.87
|
)
|
12.99
|
(0.30
|
)
|
1.79
|
|||||||||||
(0.13
|
)
|
—
|
—
|
—
|
—
|
|||||||||||||
(1.53
|
)
|
(1.65
|
)
|
—
|
—
|
(0.59
|
)
|
|||||||||||
(1.66
|
)
|
(1.65
|
)
|
—
|
—
|
(0.59
|
)
|
|||||||||||
$
|
18.57
|
$
|
24.80
|
$
|
35.32
|
$
|
22.33
|
$
|
22.63
|
|||||||||
-19.62
|
%
|
-26.22
|
%
|
58.17
|
%
|
-1.33
|
%
|
8.75
|
%
|
|||||||||
$
|
16.88
|
$
|
23.63
|
$
|
36.42
|
$
|
22.51
|
$
|
23.63
|
|||||||||
1.79
|
%
|
1.69
|
%
|
1.68
|
%
|
1.75
|
%
|
1.82
|
%
|
|||||||||
1.64
|
%
|
0.55
|
%
|
(0.47
|
)%
|
(0.21
|
)%
|
(0.23
|
)%
|
|||||||||
114
|
%
|
78
|
%
|
62
|
%
|
88
|
%
|
83
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
25.11
|
$
|
35.63
|
$
|
22.44
|
$
|
22.68
|
$
|
21.39
|
|||||||||
0.43
|
0.25
|
(0.03
|
)
|
0.02
|
0.01
|
|||||||||||||
(4.99
|
)
|
(9.10
|
)
|
13.22
|
(0.26
|
)
|
1.87
|
|||||||||||
(4.56
|
)
|
(8.85
|
)
|
13.19
|
(0.24
|
)
|
1.88
|
|||||||||||
(0.24
|
)
|
—
|
—
|
—
|
—
|
|||||||||||||
(1.55
|
)
|
(1.67
|
)
|
—
|
—
|
(0.59
|
)
|
|||||||||||
(1.79
|
)
|
(1.67
|
)
|
—
|
—
|
(0.59
|
)
|
|||||||||||
$
|
18.76
|
$
|
25.11
|
$
|
35.63
|
$
|
22.44
|
$
|
22.68
|
|||||||||
-19.41
|
%
|
-25.95
|
%
|
58.78
|
%
|
-1.06
|
%
|
9.16
|
%
|
|||||||||
$
|
12.58
|
$
|
22.15
|
$
|
35.06
|
$
|
21.15
|
$
|
21.97
|
|||||||||
1.46
|
%
|
1.33
|
%
|
1.32
|
%
|
1.45
|
%
|
1.43
|
%
|
|||||||||
1.99
|
%
|
0.89
|
%
|
(0.11
|
)%
|
0.08
|
%
|
0.05
|
%
|
|||||||||
114
|
%
|
78
|
%
|
62
|
%
|
88
|
%
|
83
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply
with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment
income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily
the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions
from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and
designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax
regulations, permanent differences between book and tax basis for reporting are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. As of October 31, 2023, no such reclassifications
were required for fiscal year 2023.
|
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns of
the Fund for the prior three fiscal years are
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as
investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original
cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities
(including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The offering and
redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current market
conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual
Funds and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually
|
HENNESSY FUNDS
|
1-800-966-4354
|
engaging shareholder reports that highlight key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require
that certain more in-depth information be made available online and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after
the effective date of the amendment.
|
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value
Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security
and, therefore, is not considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years
beginning after December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets that
are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment speeds,
credit risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable
inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual
funds, partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the
primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price 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
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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
|
$
|
30,980,881
|
|||
Gross tax unrealized appreciation
|
$
|
4,621,781
|
|||
Gross tax unrealized depreciation
|
(5,961,253
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
(1,339,472
|
)
|
||
Undistributed ordinary income
|
$
|
462,310
|
|||
Undistributed long-term capital gains
|
—
|
||||
Total distributable earnings
|
$
|
462,310
|
|||
Other accumulated gain/(loss)
|
$
|
(2,567,969
|
)
|
||
Total accumulated gain/(loss)
|
$
|
(3,445,131
|
)
|
Year Ended
|
Year Ended
|
||||||||
October 31, 2023
|
October 31, 2022
|
||||||||
Ordinary income(1)
|
$
|
338,619
|
$
|
—
|
|||||
Long-term capital gains
|
2,733,895
|
3,485,642
|
|||||||
Total distributions
|
$
|
3,072,514
|
$
|
3,485,642
|
|||||
(1) Ordinary income includes short-term capital gains.
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the Investment
Manager or of any predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 950.80
|
$8.95
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,016.03
|
$9.25
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$ 952.30
|
$7.33
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,017.69
|
$7.58
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.82% for Investor Class shares or 1.49% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the Fund
has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the future
during both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding to
a highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make or recommend any material changes to the Liquidity Program during the review period.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets,
income, and date of birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
12
|
|
Statement of Operations
|
13
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
28
|
|
Trustees and Officers of the Fund
|
29
|
|
Expense Example
|
34
|
|
Proxy Voting Policy and Proxy Voting Records
|
36
|
|
Availability of Quarterly Portfolio Schedule
|
36
|
|
Federal Tax Distribution Information
|
36
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
36
|
|
Electronic Delivery
|
36
|
|
Liquidity Risk Management Program
|
37
|
|
Privacy Policy
|
37
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The acronym, MT. FAANNG, refers to the following companies: Microsoft Corporation, Tesla, Inc., Meta Platforms, Inc., Amazon.com, Inc., Apple, Inc., Netflix, Inc., NVIDIA Corporation, and Alphabet,
Inc.
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Small Cap Financial Fund –
|
|||
Investor Class (HSFNX)
|
-24.53%
|
2.71%
|
4.82%
|
Hennessy Small Cap Financial Fund –
|
|||
Institutional Class (HISFX)
|
-24.32%
|
3.06%
|
5.20%
|
Russell 2000® Index Financials
|
-17.55%
|
1.42%
|
5.28%
|
Russell 2000® Index
|
-8.56%
|
3.31%
|
5.63%
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Midland States Bancorp, Inc.
|
4.62%
|
Flushing Financial Corp.
|
4.54%
|
Texas Capital Bancshares, Inc.
|
4.39%
|
Western New England Bancorp, Inc.
|
4.26%
|
ConnectOne Bancorp, Inc.
|
4.19%
|
Wintrust Financial Corp.
|
4.13%
|
Associated Banc-Corp
|
4.11%
|
BankUnited, Inc.
|
4.08%
|
Pacific Premier Bancorp, Inc.
|
3.89%
|
WaFD, Inc.
|
3.69%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 88.07%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Financials – 88.07%
|
||||||||||||
Associated Banc-Corp.
|
156,000
|
$
|
2,528,760
|
4.11
|
%
|
|||||||
BankUnited, Inc.
|
115,000
|
2,508,150
|
4.08
|
%
|
||||||||
Banner Corp.
|
20,000
|
844,200
|
1.37
|
%
|
||||||||
Brookline Bancorp, Inc.
|
245,000
|
1,994,300
|
3.24
|
%
|
||||||||
Cambridge Bancorp
|
40,000
|
2,148,400
|
3.50
|
%
|
||||||||
Columbia Banking System, Inc.
|
68,000
|
1,337,560
|
2.18
|
%
|
||||||||
ConnectOne Bancorp, Inc.
|
158,000
|
2,573,820
|
4.19
|
%
|
||||||||
Dime Community Bancshares, Inc.
|
90,000
|
1,655,100
|
2.69
|
%
|
||||||||
Eastern Bankshares, Inc.
|
190,000
|
2,091,900
|
3.40
|
%
|
||||||||
First BanCorp.
|
105,000
|
1,401,750
|
2.28
|
%
|
||||||||
First Citizens BancShares, Inc.
|
700
|
966,518
|
1.57
|
%
|
||||||||
Flushing Financial Corp.
|
226,000
|
2,788,840
|
4.54
|
%
|
||||||||
Hancock Whitney Corp.
|
60,000
|
2,065,800
|
3.36
|
%
|
||||||||
Hingham Institution for Savings
|
7,500
|
1,114,350
|
1.81
|
%
|
||||||||
HomeTrust Bancshares, Inc.
|
70,000
|
1,442,700
|
2.35
|
%
|
||||||||
Independent Bank Corp.
|
26,000
|
1,268,800
|
2.06
|
%
|
||||||||
Lakeland Bancorp, Inc.
|
180,000
|
2,030,400
|
3.30
|
%
|
||||||||
Midland States Bancorp, Inc.
|
130,000
|
2,836,600
|
4.62
|
%
|
||||||||
Northeast Community Bancorp, Inc.
|
100,000
|
1,524,000
|
2.48
|
%
|
||||||||
OceanFirst Financial Corp.
|
160,000
|
2,025,600
|
3.30
|
%
|
||||||||
Old National Bancorp
|
126,000
|
1,726,200
|
2.81
|
%
|
||||||||
Orange County Bancorp, Inc.
|
12,000
|
529,200
|
0.86
|
%
|
||||||||
Pacific Premier Bancorp, Inc.
|
126,000
|
2,394,000
|
3.89
|
%
|
||||||||
PacWest Bancorp
|
165,000
|
1,168,200
|
1.90
|
%
|
||||||||
Texas Capital Bancshares, Inc. (a)
|
49,000
|
2,697,940
|
4.39
|
%
|
||||||||
Valley National Bancorp
|
135,000
|
1,050,300
|
1.71
|
%
|
||||||||
WaFd, Inc.
|
92,000
|
2,270,560
|
3.69
|
%
|
||||||||
Western New England Bancorp, Inc.
|
365,000
|
2,617,050
|
4.26
|
%
|
||||||||
Wintrust Financial Corp.
|
34,000
|
2,539,460
|
4.13
|
%
|
||||||||
|
54,140,458
|
88.07
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $54,745,608)
|
54,140,458
|
88.07
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
SHORT-TERM INVESTMENTS – 12.56%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 12.56%
|
||||||||||||
Fidelity Government Portfolio – Class I, 5.240% (b)
|
1,540,376
|
$
|
1,540,376
|
2.50
|
%
|
|||||||
First American Government Obligations Fund – Class X, 5.276% (b)
|
3,091,000
|
3,091,000
|
5.03
|
%
|
||||||||
First American Treasury Obligations Fund – Class X, 5.275% (b)
|
3,091,000
|
3,091,000
|
5.03
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $7,722,376)
|
7,722,376
|
12.56
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $62,467,984) – 100.63%
|
61,862,834
|
100.63
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.63)%
|
(387,049
|
)
|
(0.63
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
61,475,785
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2023.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Financials
|
$
|
54,140,458
|
$
|
—
|
$
|
—
|
$
|
54,140,458
|
||||||||
Total Common Stocks
|
$
|
54,140,458
|
$
|
—
|
$
|
—
|
$
|
54,140,458
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
7,722,376
|
$
|
—
|
$
|
—
|
$
|
7,722,376
|
||||||||
Total Short-Term Investments
|
$
|
7,722,376
|
$
|
—
|
$
|
—
|
$
|
7,722,376
|
||||||||
Total Investments
|
$
|
61,862,834
|
$
|
—
|
$
|
—
|
$
|
61,862,834
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $62,467,984)
|
$
|
61,862,834
|
||
Dividends and interest receivable
|
47,096
|
|||
Receivable for fund shares sold
|
767
|
|||
Receivable for securities sold
|
178,912
|
|||
Prepaid expenses and other assets
|
20,405
|
|||
Total assets
|
62,110,014
|
|||
LIABILITIES:
|
||||
Payable for securities purchased
|
510,746
|
|||
Payable for fund shares redeemed
|
7,402
|
|||
Payable to advisor
|
48,824
|
|||
Payable to administrator
|
11,989
|
|||
Payable to auditor
|
22,754
|
|||
Accrued distribution fees
|
9,131
|
|||
Accrued service fees
|
4,810
|
|||
Accrued trustees fees
|
6,092
|
|||
Accrued expenses and other payables
|
12,481
|
|||
Total liabilities
|
634,229
|
|||
NET ASSETS
|
$
|
61,475,785
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
61,472,198
|
||
Total distributable earnings
|
3,587
|
|||
Total net assets
|
$
|
61,475,785
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
54,603,386
|
||
Shares issued and outstanding
|
2,674,402
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
20.42
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
6,872,399
|
||
Shares issued and outstanding
|
581,369
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
11.82
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF ASSETS AND LIABILITIES/STATEMENT OF OPERATIONS
|
Statement of Operations for the year ended October 31, 2023
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
2,584,148
|
||
Interest income
|
262,186
|
|||
Total investment income
|
2,846,334
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
743,349
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
134,651
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
15,094
|
|||
Distribution fees – Investor Class (See Note 5)
|
104,321
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
86,804
|
|||
Service fees – Investor Class (See Note 5)
|
69,547
|
|||
Federal and state registration fees
|
37,659
|
|||
Audit fees
|
22,755
|
|||
Compliance expense (See Note 5)
|
22,674
|
|||
Trustees’ fees and expenses
|
20,675
|
|||
Reports to shareholders
|
15,099
|
|||
Legal fees
|
2,518
|
|||
Other expenses
|
20,101
|
|||
Total expenses
|
1,295,247
|
|||
NET INVESTMENT INCOME
|
$
|
1,551,087
|
||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
2,691,655
|
||
Net change in unrealized appreciation/depreciation on investments
|
(28,455,053
|
)
|
||
Net loss on investments
|
(25,763,398
|
)
|
||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
(24,212,311
|
)
|
(1)
|
Net of foreign taxes withheld of $11,580.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2023
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
1,551,087
|
$
|
1,056,994
|
||||
Net realized gain on investments
|
2,691,655
|
12,617,156
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(28,455,053
|
)
|
(22,730,488
|
)
|
||||
Net decrease in net assets resulting from operations
|
(24,212,311
|
)
|
(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
|
2,129,827
|
21,043,349
|
||||||
Proceeds from shares subscribed – Institutional Class
|
2,747,009
|
13,669,099
|
||||||
Dividends reinvested – Investor Class
|
7,283,862
|
1,243,912
|
||||||
Dividends reinvested – Institutional Class
|
1,825,197
|
549,827
|
||||||
Cost of shares redeemed – Investor Class
|
(20,718,495
|
)
|
(60,100,417
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(11,825,149
|
)
|
(24,017,634
|
)
|
||||
Net decrease in net assets
|
||||||||
derived from capital share transactions
|
(18,557,749
|
)
|
(47,611,864
|
)
|
||||
TOTAL DECREASE IN NET ASSETS
|
(52,099,217
|
)
|
(58,532,381
|
)
|
||||
NET ASSETS:
|
||||||||
Beginning of year
|
113,575,002
|
172,107,383
|
||||||
End of year
|
$
|
61,475,785
|
$
|
113,575,002
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
86,638
|
685,704
|
||||||
Shares sold – Institutional Class
|
172,929
|
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
|
(855,557
|
)
|
(1,998,475
|
)
|
||||
Shares redeemed – Institutional Class
|
(879,954
|
)
|
(1,345,808
|
)
|
||||
Net decrease in shares outstanding
|
(1,083,479
|
)
|
(1,830,717
|
)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
29.47
|
$
|
31.52
|
$
|
17.46
|
$
|
21.60
|
$
|
21.96
|
|||||||||
0.43
|
0.22
|
0.25
|
0.16
|
0.10
|
||||||||||||||
(7.13
|
)
|
(1.96
|
)
|
14.01
|
(3.55
|
)
|
0.93
|
|||||||||||
(6.70
|
)
|
(1.74
|
)
|
14.26
|
(3.39
|
)
|
1.03
|
|||||||||||
(0.19
|
)
|
(0.22
|
)
|
(0.20
|
)
|
(0.09
|
)
|
(0.07
|
)
|
|||||||||
(2.16
|
)
|
(0.09
|
)
|
—
|
(0.66
|
)
|
(1.32
|
)
|
||||||||||
(2.35
|
)
|
(0.31
|
)
|
(0.20
|
)
|
(0.75
|
)
|
(1.39
|
)
|
|||||||||
$
|
20.42
|
$
|
29.47
|
$
|
31.52
|
$
|
17.46
|
$
|
21.60
|
|||||||||
-24.53
|
%
|
-5.60
|
%
|
82.20
|
%
|
-16.37
|
%
|
5.27
|
%
|
|||||||||
$
|
54.60
|
$
|
93.40
|
$
|
140.03
|
$
|
54.96
|
$
|
89.36
|
|||||||||
1.62
|
%
|
1.59
|
%
|
1.58
|
%
|
1.65
|
%
|
1.58
|
%
|
|||||||||
1.83
|
%
|
0.72
|
%
|
0.90
|
%
|
0.96
|
%
|
0.47
|
%
|
|||||||||
72
|
%
|
27
|
%
|
28
|
%
|
75
|
%
|
46
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
17.24
|
$
|
18.57
|
$
|
10.37
|
$
|
12.92
|
$
|
13.28
|
|||||||||
0.30
|
0.20
|
0.21
|
0.13
|
0.10
|
||||||||||||||
(4.14
|
)
|
(1.14
|
)
|
8.26
|
(2.10
|
)
|
0.54
|
|||||||||||
(3.84
|
)
|
(0.94
|
)
|
8.47
|
(1.97
|
)
|
0.64
|
|||||||||||
(0.31
|
)
|
(0.34
|
)
|
(0.27
|
)
|
(0.19
|
)
|
(0.18
|
)
|
|||||||||
(1.27
|
)
|
(0.05
|
)
|
—
|
(0.39
|
)
|
(0.82
|
)
|
||||||||||
(1.58
|
)
|
(0.39
|
)
|
(0.27
|
)
|
(0.58
|
)
|
(1.00
|
)
|
|||||||||
$
|
11.82
|
$
|
17.24
|
$
|
18.57
|
$
|
10.37
|
$
|
12.92
|
|||||||||
-24.32
|
%
|
-5.21
|
%
|
82.88
|
%
|
-16.05
|
%
|
5.57
|
%
|
|||||||||
$
|
6.87
|
$
|
20.17
|
$
|
32.08
|
$
|
10.61
|
$
|
20.74
|
|||||||||
1.29
|
%
|
1.22
|
%
|
1.20
|
%
|
1.29
|
%
|
1.23
|
%
|
|||||||||
2.13
|
%
|
1.13
|
%
|
1.31
|
%
|
1.27
|
%
|
0.84
|
%
|
|||||||||
72
|
%
|
27
|
%
|
28
|
%
|
75
|
%
|
46
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise comply
with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net investment
income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences are primarily
the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax expense. Distributions
from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting for tax purposes and
designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax
regulations, permanent differences between book and tax basis for reporting are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. The adjustments for fiscal year 2023 are as
follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(986,204)
|
$986,204
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns
of the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability
resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as
investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if any,
are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original
cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all
liabilities (including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading. The
offering and redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current
market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to
|
HENNESSY FUNDS
|
1-800-966-4354
|
Tailored Shareholder Reports for Mutual Funds and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs
to transmit concise and visually engaging shareholder reports that highlight key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will
require that certain more in-depth information be made available online and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition
period after the effective date of the amendment.
|
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value
Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity
security and, therefore, is not considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for
fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets
that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment
speeds, credit risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when
observable inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual
funds, partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by
the primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price reported.
Securities traded on a securities exchange for which a last-quoted sales price is not readily available generally are valued at the mean between the bid and
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified in Level 1 of the fair value hierarchy. Securities traded on foreign
exchanges generally are not valued at the same time the Fund calculates its NAV because most foreign markets close well before such time. The earlier close of most foreign markets gives rise to the possibility that
significant events, including broad market moves, may have occurred in the interim. In certain circumstances, it may be determined that a foreign security needs to be fair valued because it appears that the value of the
security might have been materially affected by events occurring after the close of the market in which the security is principally traded, but before the time the Fund calculates its NAV, such as by a development that
affects an entire market or region (e.g., a weather-related event) or a potentially global development (e.g., a terrorist attack that may be expected to have an effect on investor expectations worldwide).
|
|
Registered Investment Companies – Investments in open-end registered investment companies, commonly referred to as mutual funds, generally are priced at the
ending NAV provided by the applicable mutual fund’s service agent and are classified in Level 1 of the fair value hierarchy.
|
|
Debt Securities – Debt securities, including corporate bonds, asset-backed securities, mortgage-backed securities, municipal bonds, U.S. Treasuries, and
U.S. government agency issues, are generally valued at market on the basis of valuations furnished by an independent pricing service that utilizes both dealer-supplied valuations and formula-based techniques. The pricing
service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. In addition, the
model may incorporate observable market data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued primarily using dealer quotations. These
securities are generally classified in Level 2 of the fair value hierarchy.
|
|
Short-Term Securities – Short-term equity investments, including money market funds, are valued in the manner specified above for equity securities.
Short-term debt investments with an original term to maturity of 60 days or less are valued at amortized cost, which approximates fair market value. If the original term to maturity of a short-term debt investment exceeds 60
days, then the values as of the 61st day prior to maturity are amortized. Amortized cost is not used if its use would be inappropriate due to credit or other impairments of the issuer, in which case the security’s fair value
would be determined as described below. Short-term securities are generally classified in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
64,777,154
|
|||
Gross tax unrealized appreciation
|
$
|
7,591,484
|
|||
Gross tax unrealized depreciation
|
(10,505,804
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
(2,914,320
|
)
|
||
Undistributed ordinary income
|
$
|
807,532
|
|||
Undistributed long-term capital gains
|
2,110,375
|
||||
Total distributable earnings
|
$
|
2,917,907
|
|||
Other accumulated gain/(loss)
|
$
|
—
|
|||
Total accumulated gain/(loss)
|
$
|
3,587
|
Year Ended
|
Year Ended
|
||||||||
October 31, 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
|
Long-term
|
|||
Investor Class
|
0.71216
|
||
Institutional Class
|
0.41247
|
HENNESSY FUNDS
|
1-800-966-4354
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the Investment
Manager or of any predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,001.00
|
$8.27
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,016.94
|
$8.34
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,002.50
|
$6.76
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,018.45
|
$6.82
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.64% for Investor Class shares or 1.34% for Institutional Class shares, as applicable, multiplied by the average account value over the
period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the
Fund has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in the
future during both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding
to a highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make or recommend any material changes to the Liquidity Program during the review period.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and was
operating as intended during the review period.
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets,
income, and date of birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
20
|
|
Report of Independent Registered Public Accounting Firm
|
29
|
|
Trustees and Officers of the Fund
|
30
|
|
Expense Example
|
34
|
|
Proxy Voting Policy and Proxy Voting Records
|
36
|
|
Availability of Quarterly Portfolio Schedule
|
36
|
|
Federal Tax Distribution Information
|
36
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
36
|
|
Electronic Delivery
|
36
|
|
Liquidity Risk Management Program
|
37
|
|
Privacy Policy
|
37
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The acronym, MT. FAANNG, refers to the following companies: Microsoft Corporation, Tesla, Inc., Meta Platforms, Inc., Amazon.com, Inc., Apple, Inc., Netflix, Inc., NVIDIA Corporation, and
Alphabet, Inc.
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
One
|
Five
|
Ten
|
|
Year
|
Years
|
Years
|
|
Hennessy Technology Fund –
|
|||
Investor Class (HTECX)
|
14.47%
|
10.40%
|
9.12%
|
Hennessy Technology Fund –
|
|||
Institutional Class (HTCIX)
|
14.77%
|
10.67%
|
9.42%
|
Nasdaq Composite Index
|
17.99%
|
12.94%
|
13.76%
|
S&P 500® Index
|
10.14%
|
11.01%
|
11.18%
|
Expense ratios:
|
Gross 3.06%, Net 1.23%(1)(2) (Investor Class);
|
Gross 2.73%, Net 0.98%(1)(2) (Institutional Class)
|
(1)
|
The Fund’s investment advisor has contractually agreed to limit expenses until February 28, 2024.
|
(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
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Logitech International SA
|
1.97%
|
Microsoft Corp.
|
1.83%
|
Shutterstock, Inc.
|
1.81%
|
ServiceNow, Inc.
|
1.80%
|
Crowdstrike Holdings, Inc.
|
1.78%
|
Seagate Technology Holdings PLC
|
1.77%
|
Adobe, Inc.
|
1.76%
|
ASML Holding NV
|
1.76%
|
Motorola Solutions, Inc.
|
1.76%
|
Palo Alto Networks, Inc.
|
1.76%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 97.03%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 6.86%
|
||||||||||||
Cargurus, Inc. (a)
|
6,283
|
$
|
108,256
|
1.71
|
%
|
|||||||
Meta Platforms, Inc., Class A (a)
|
357
|
107,553
|
1.69
|
%
|
||||||||
Shutterstock, Inc.
|
2,832
|
115,206
|
1.81
|
%
|
||||||||
Ziff Davis, Inc. (a)
|
1,730
|
104,596
|
1.65
|
%
|
||||||||
|
435,611
|
6.86
|
%
|
|||||||||
Information Technology – 90.17%
|
||||||||||||
Accenture PLC, Class A
|
356
|
105,764
|
1.67
|
%
|
||||||||
Adobe, Inc. (a)
|
210
|
111,733
|
1.76
|
%
|
||||||||
Apple, Inc.
|
628
|
107,243
|
1.69
|
%
|
||||||||
Applied Materials, Inc.
|
775
|
102,571
|
1.62
|
%
|
||||||||
Arrow Electronics, Inc. (a)
|
871
|
98,780
|
1.56
|
%
|
||||||||
ASE Technology Holding Co. Ltd.
|
14,502
|
108,040
|
1.70
|
%
|
||||||||
ASML Holding NV
|
187
|
111,977
|
1.76
|
%
|
||||||||
Atlassian Corp. (a)
|
546
|
98,629
|
1.55
|
%
|
||||||||
Autodesk, Inc. (a)
|
523
|
103,360
|
1.63
|
%
|
||||||||
Avnet, Inc.
|
2,253
|
104,381
|
1.64
|
%
|
||||||||
Broadcom, Inc.
|
131
|
110,219
|
1.74
|
%
|
||||||||
Cadence Design Systems, Inc. (a)
|
460
|
110,331
|
1.74
|
%
|
||||||||
CDW Corp.
|
546
|
109,418
|
1.72
|
%
|
||||||||
Cellebrite DI Ltd. (a)
|
14,435
|
96,426
|
1.52
|
%
|
||||||||
Check Point Software Technologies Ltd. (a)
|
819
|
109,951
|
1.73
|
%
|
||||||||
Cisco Systems, Inc.
|
2,038
|
106,241
|
1.67
|
%
|
||||||||
CommVault Systems, Inc. (a)
|
1,598
|
104,429
|
1.65
|
%
|
||||||||
Crowdstrike Holdings, Inc. (a)
|
638
|
112,780
|
1.78
|
%
|
||||||||
DXC Technology Co. (a)
|
5,174
|
104,360
|
1.64
|
%
|
||||||||
Enphase Energy, Inc. (a)
|
925
|
73,612
|
1.16
|
%
|
||||||||
Extreme Networks, Inc. (a)
|
4,411
|
90,955
|
1.43
|
%
|
||||||||
Fortinet, Inc. (a)
|
1,839
|
105,136
|
1.66
|
%
|
||||||||
Gartner, Inc. (a)
|
313
|
103,929
|
1.64
|
%
|
||||||||
Hackett Group, Inc.
|
4,599
|
102,512
|
1.62
|
%
|
||||||||
Hewlett Packard Enterprise Co.
|
6,248
|
96,094
|
1.51
|
%
|
||||||||
Infosys Ltd.
|
6,392
|
104,957
|
1.65
|
%
|
||||||||
Insight Enterprises, Inc. (a)
|
760
|
108,908
|
1.72
|
%
|
||||||||
Jabil, Inc.
|
859
|
105,485
|
1.66
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Information Technology (Continued)
|
||||||||||||
KLA Corp.
|
235
|
$
|
110,380
|
1.74
|
%
|
|||||||
Lam Research Corp.
|
171
|
100,586
|
1.59
|
%
|
||||||||
Logitech International SA
|
1,580
|
124,235
|
1.97
|
%
|
||||||||
MACOM Technology Solutions Holdings, Inc. (a)
|
1,326
|
93,536
|
1.47
|
%
|
||||||||
Microchip Technology, Inc.
|
1,390
|
99,093
|
1.56
|
%
|
||||||||
Microsoft Corp.
|
341
|
115,297
|
1.83
|
%
|
||||||||
Motorola Solutions, Inc.
|
401
|
111,663
|
1.76
|
%
|
||||||||
NetApp, Inc.
|
1,439
|
104,730
|
1.65
|
%
|
||||||||
NVIDIA Corp.
|
243
|
99,095
|
1.56
|
%
|
||||||||
NXP Semiconductors NV
|
545
|
93,974
|
1.48
|
%
|
||||||||
Palo Alto Networks, Inc. (a)
|
460
|
111,788
|
1.76
|
%
|
||||||||
Pure Storage, Inc. (a)
|
3,040
|
102,782
|
1.62
|
%
|
||||||||
QUALCOMM, Inc.
|
981
|
106,919
|
1.68
|
%
|
||||||||
Sanmina Corp. (a)
|
2,012
|
102,350
|
1.61
|
%
|
||||||||
ScanSource, Inc. (a)
|
3,579
|
108,802
|
1.71
|
%
|
||||||||
Seagate Technology Holdings PLC
|
1,645
|
112,271
|
1.77
|
%
|
||||||||
ServiceNow, Inc. (a)
|
196
|
114,044
|
1.80
|
%
|
||||||||
STMicroelectronics NV
|
2,536
|
96,317
|
1.52
|
%
|
||||||||
Super Micro Computer, Inc. (a)
|
375
|
89,801
|
1.42
|
%
|
||||||||
Taiwan Semiconductor Manufacturing Co. Ltd.
|
1,238
|
106,852
|
1.68
|
%
|
||||||||
Telefonaktiebolaget LM Ericsson
|
22,956
|
102,384
|
1.61
|
%
|
||||||||
Teradata Corp. (a)
|
2,409
|
102,912
|
1.62
|
%
|
||||||||
Texas Instruments, Inc.
|
684
|
97,135
|
1.53
|
%
|
||||||||
United Microelectronics Corp. – ADR
|
15,466
|
110,118
|
1.74
|
%
|
||||||||
Vishay Intertechnology, Inc.
|
4,337
|
96,455
|
1.52
|
%
|
||||||||
VMware, Inc., Class A (a)
|
654
|
95,255
|
1.50
|
%
|
||||||||
Vontier Corp.
|
3,549
|
104,908
|
1.65
|
%
|
||||||||
|
5,721,903
|
90.17
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $5,551,359)
|
6,157,514
|
97.03
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
SHORT-TERM INVESTMENTS – 3.12%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Money Market Funds – 3.12%
|
||||||||||||
First American Treasury Obligations Fund – Class X, 5.275% (b)
|
197,774
|
$
|
197,774
|
3.12
|
%
|
|||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $197,774)
|
197,774
|
3.12
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $5,749,133) – 100.15%
|
6,355,288
|
100.15
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.15)%
|
(9,495
|
)
|
(0.15
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS– 100.00%
|
$
|
6,345,793
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2023.
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
435,611
|
$
|
—
|
$
|
—
|
$
|
435,611
|
||||||||
Information Technology
|
5,721,903
|
—
|
—
|
5,721,903
|
||||||||||||
Total Common Stocks
|
$
|
6,157,514
|
$
|
—
|
$
|
—
|
$
|
6,157,514
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
197,774
|
$
|
—
|
$
|
—
|
$
|
197,774
|
||||||||
Total Short-Term Investments
|
$
|
197,774
|
$
|
—
|
$
|
—
|
$
|
197,774
|
||||||||
Total Investments
|
$
|
6,355,288
|
$
|
—
|
$
|
—
|
$
|
6,355,288
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $5,749,133)
|
$
|
6,355,288
|
||
Dividends and interest receivable
|
3,926
|
|||
Prepaid expenses and other assets
|
15,097
|
|||
Due from advisor
|
4,946
|
|||
Total assets
|
6,379,257
|
|||
LIABILITIES:
|
||||
Payable to auditor
|
22,756
|
|||
Accrued distribution fees
|
775
|
|||
Accrued service fees
|
382
|
|||
Accrued trustees fees
|
5,373
|
|||
Accrued expenses and other payables
|
4,178
|
|||
Total liabilities
|
33,464
|
|||
NET ASSETS
|
$
|
6,345,793
|
||
NET ASSETS CONSISTS OF:
|
||||
Capital stock
|
$
|
6,601,101
|
||
Accumulated deficit
|
(255,308
|
)
|
||
Total net assets
|
$
|
6,345,793
|
||
NET ASSETS:
|
||||
Investor Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
4,353,849
|
||
Shares issued and outstanding
|
256,978
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
16.94
|
||
Institutional Class
|
||||
Shares authorized (no par value)
|
Unlimited
|
|||
Net assets applicable to outstanding shares
|
$
|
1,991,944
|
||
Shares issued and outstanding
|
114,266
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
17.43
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations for the year ended October 31, 2023
|
INVESTMENT INCOME:
|
||||
Dividend income(1)
|
$
|
61,374
|
||
Interest income
|
8,021
|
|||
Total investment income
|
69,395
|
|||
EXPENSES:
|
||||
Investment advisory fees (See Note 5)
|
44,596
|
|||
Federal and state registration fees
|
29,219
|
|||
Audit fees
|
22,759
|
|||
Compliance expense (See Note 5)
|
22,664
|
|||
Trustees’ fees and expenses
|
19,646
|
|||
Administration, accounting, custody, and transfer agent fees (See Note 5)
|
17,695
|
|||
Reports to shareholders
|
6,702
|
|||
Distribution fees – Investor Class (See Note 5)
|
6,576
|
|||
Sub-transfer agent expenses – Investor Class (See Note 5)
|
5,159
|
|||
Sub-transfer agent expenses – Institutional Class (See Note 5)
|
871
|
|||
Service fees – Investor Class (See Note 5)
|
4,384
|
|||
Legal fees
|
858
|
|||
Interest expense (See Note 7)
|
114
|
|||
Other expenses
|
4,745
|
|||
Total expenses before waivers and reimbursements
|
185,988
|
|||
Service provider expense waiver (See Note 5)
|
(17,695
|
)
|
||
Expense reimbursement from advisor – Investor Class
|
(72,197
|
)
|
||
Expense reimbursement from advisor – Institutional Class
|
(25,964
|
)
|
||
Net expenses
|
70,132
|
|||
NET INVESTMENT LOSS
|
$
|
(737
|
)
|
|
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||
Net realized gain on investments
|
$
|
42,670
|
||
Net change in unrealized appreciation/depreciation on investments
|
724,024
|
|||
Net increase on investments
|
766,694
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
765,957
|
(1)
|
Net of foreign taxes withheld and issuance fees of $5,254.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
October 31, 2023
|
October 31, 2022
|
|||||||
OPERATIONS:
|
||||||||
Net investment income (loss)
|
$
|
(737
|
)
|
$
|
5,524
|
|||
Net realized gain (loss) on investments
|
42,670
|
(867,706
|
)
|
|||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
724,024
|
(1,169,054
|
)
|
|||||
Net increase (decrease) in net
|
||||||||
assets resulting from operations
|
765,957
|
(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
|
371,996
|
265,541
|
||||||
Proceeds from shares subscribed – Institutional Class
|
522,804
|
89,997
|
||||||
Dividends reinvested – Investor Class
|
2,743
|
1,465,101
|
||||||
Dividends reinvested – Institutional Class
|
6,429
|
513,645
|
||||||
Cost of shares redeemed – Investor Class
|
(569,642
|
)
|
(779,866
|
)
|
||||
Cost of shares redeemed – Institutional Class
|
(121,520
|
)
|
(262,162
|
)
|
||||
Net increase in net assets derived
|
||||||||
from capital share transactions
|
212,810
|
1,292,256
|
||||||
TOTAL INCREASE (DECREASE) IN NET ASSETS
|
969,536
|
(2,750,801
|
)
|
|||||
NET ASSETS:
|
||||||||
Beginning of year
|
5,376,257
|
8,127,058
|
||||||
End of year
|
$
|
6,345,793
|
$
|
5,376,257
|
||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||
Shares sold – Investor Class
|
21,312
|
16,191
|
||||||
Shares sold – Institutional Class
|
29,720
|
5,427
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Investor Class
|
189
|
73,365
|
||||||
Shares issued to holders as reinvestment
|
||||||||
of dividends – Institutional Class
|
433
|
25,019
|
||||||
Shares redeemed – Investor Class
|
(33,810
|
)
|
(45,743
|
)
|
||||
Shares redeemed – Institutional Class
|
(6,780
|
)
|
(14,199
|
)
|
||||
Net increase in shares outstanding
|
11,064
|
60,060
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Amount is between $(0.005) and $0.005.
|
(3)
|
Certain service provider expenses were voluntarily waived during the fiscal year.
|
(4)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INVESTOR CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
14.81
|
$
|
26.89
|
$
|
20.50
|
$
|
18.90
|
$
|
18.04
|
|||||||||
(0.01
|
)
|
0.00
|
(2)
|
(0.02
|
)
|
0.02
|
(0.03
|
)
|
||||||||||
2.15
|
(5.38
|
)
|
8.82
|
2.10
|
3.15
|
|||||||||||||
2.14
|
(5.38
|
)
|
8.80
|
2.12
|
3.12
|
|||||||||||||
(0.01
|
)
|
—
|
(0.04
|
)
|
—
|
—
|
||||||||||||
—
|
(6.70
|
)
|
(2.37
|
)
|
(0.52
|
)
|
(2.26
|
)
|
||||||||||
(0.01
|
)
|
(6.70
|
)
|
(2.41
|
)
|
(0.52
|
)
|
(2.26
|
)
|
|||||||||
$
|
16.94
|
$
|
14.81
|
$
|
26.89
|
$
|
20.50
|
$
|
18.90
|
|||||||||
14.47
|
%
|
-26.44
|
%
|
45.11
|
%
|
11.42
|
%
|
20.47
|
%
|
|||||||||
$
|
4.35
|
$
|
3.99
|
$
|
6.06
|
$
|
4.26
|
$
|
3.89
|
|||||||||
3.17
|
%
|
3.06
|
%
|
2.79
|
%
|
3.45
|
%
|
3.84
|
%
|
|||||||||
1.23
|
%(3)
|
1.23
|
%(3)
|
1.23
|
%(3)
|
1.23
|
%(3)
|
1.23
|
%
|
|||||||||
(2.02
|
)%
|
(1.81
|
)%
|
(1.64
|
)%
|
(2.12
|
)%
|
(2.80
|
)%
|
|||||||||
(0.08
|
)%
|
0.02
|
%
|
(0.08
|
)%
|
0.10
|
%
|
(0.19
|
)%
|
|||||||||
101
|
%
|
151
|
%
|
200
|
%
|
192
|
%
|
185
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Calculated using the average shares outstanding method.
|
(2)
|
Certain service provider expenses were voluntarily waived during the fiscal year.
|
(3)
|
Calculated on the basis of the Fund as a whole.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS — INSTITUTIONAL CLASS
|
Year Ended October 31,
|
||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||
$
|
15.26
|
$
|
27.65
|
$
|
21.08
|
$
|
19.40
|
$
|
18.47
|
|||||||||
0.03
|
0.05
|
0.05
|
0.07
|
0.01
|
||||||||||||||
2.21
|
(5.55
|
)
|
9.06
|
2.15
|
3.23
|
|||||||||||||
2.24
|
(5.50
|
)
|
9.11
|
2.22
|
3.24
|
|||||||||||||
(0.07
|
)
|
—
|
(0.11
|
)
|
(0.01
|
)
|
—
|
|||||||||||
—
|
(6.89
|
)
|
(2.43
|
)
|
(0.53
|
)
|
(2.31
|
)
|
||||||||||
(0.07
|
)
|
(6.89
|
)
|
(2.54
|
)
|
(0.54
|
)
|
(2.31
|
)
|
|||||||||
$
|
17.43
|
$
|
15.26
|
$
|
27.65
|
$
|
21.08
|
$
|
19.40
|
|||||||||
14.77
|
%
|
-26.28
|
%
|
45.49
|
%
|
11.67
|
%
|
20.77
|
%
|
|||||||||
$
|
1.99
|
$
|
1.39
|
$
|
2.06
|
$
|
1.47
|
$
|
1.34
|
|||||||||
2.85
|
%
|
2.73
|
%
|
2.44
|
%
|
3.08
|
%
|
3.47
|
%
|
|||||||||
0.98
|
%(2)
|
0.98
|
%(2)
|
0.98
|
%(2)
|
0.98
|
%(2)
|
0.98
|
%
|
|||||||||
(1.70
|
)%
|
(1.48
|
)%
|
(1.29
|
)%
|
(1.74
|
)%
|
(2.43
|
)%
|
|||||||||
0.17
|
%
|
0.27
|
%
|
0.17
|
%
|
0.36
|
%
|
0.06
|
%
|
|||||||||
101
|
%
|
151
|
%
|
200
|
%
|
192
|
%
|
185
|
%
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise
comply with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net
investment income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences
are primarily the result of the treatment of wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations as an income tax
expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize equalization accounting
for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax purposes.
|
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income
tax regulations, permanent differences between book and tax basis for reporting are identified and appropriately reclassified in the Statement of Assets and Liabilities, as needed. As of October 31, 2023, no such
reclassifications were required for fiscal year 2023.
|
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax returns
of the Fund for the prior three fiscal years are
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from
unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized as
investment income at the fair value of the property received. The Fund is charged for those expenses that are directly attributable to its portfolio, such as advisory, administration, and certain shareholder service fees.
Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains/losses on investments are allocated to each class of shares based on such class’s net assets.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if
any, are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment and shareholder transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original
cost of the security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The net asset value (“NAV”) per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all
liabilities (including estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading.
The offering and redemption price per share for the Fund is equal to the Fund’s NAV per share.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of by the Fund in current
market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for Mutual
Funds and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually
|
HENNESSY FUNDS
|
1-800-966-4354
|
engaging shareholder reports that highlight key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require
that certain more in-depth information be made available online and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period
after the effective date of the amendment.
|
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value
Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity
security and, therefore, is not considered in measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for
fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in markets
that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates, prepayment
speeds, credit risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when
observable inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual
funds, partnerships, rights, and real estate investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by
the primary exchange on which the securities are listed. Securities listed on The Nasdaq Stock Market (“Nasdaq”) generally are valued at the Nasdaq Official Closing Price, which may differ from the last sales price
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
|
Fiscal Year
|
Fiscal Year
|
Fiscal Year
|
|||||||||||||||
2024
|
2025
|
2026
|
Total
|
||||||||||||||
Investor Class
|
$
|
75,956
|
$
|
73,628
|
$
|
72,197
|
$
|
221,781
|
|||||||||
Institutional Class
|
$
|
23,799
|
$
|
23,122
|
$
|
25,964
|
$
|
72,885
|
HENNESSY FUNDS
|
1-800-966-4354
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
5,762,718
|
|||
Gross tax unrealized appreciation
|
$
|
961,825
|
|||
Gross tax unrealized depreciation
|
(369,255
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
592,570
|
|||
Undistributed ordinary income
|
$
|
—
|
|||
Undistributed long-term capital gains
|
—
|
||||
Total distributable earnings
|
$
|
—
|
|||
Other accumulated gain/(loss)
|
$
|
(847,878
|
)
|
||
Total accumulated gain/(loss)
|
$
|
(255,308
|
)
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Year Ended
|
Year Ended
|
||||||||
October 31, 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
|
NOTES/REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
TAIT, WELLER & BAKER LLP
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the Investment
Manager or of any predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$1,068.80
|
$6.41
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,019.00
|
$6.26
|
Institutional Class
|
|||
Actual
|
$1,000.00
|
$1,070.00
|
$5.11
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,020.27
|
$4.99
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 1.23% for Investor Class shares or 0.98% for Institutional Class shares, as applicable, multiplied by the average account value over
the period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — PRIVACY POLICY
|
1.
|
The Program Administrator reviewed daily historical net redemption activity during the review period and during prior periods with higher-than-average redemption activity and concluded that the
Fund has historically been able to meet requests to redeem Fund shares without significant dilution to the Fund’s remaining shareholders, and the Program Administrator expects the Fund to be able to continue to do so in
the future during both normal and reasonably foreseeable stressed conditions.
|
|
2.
|
The Fund primarily holds assets that are highly liquid investments and is not required to establish a highly liquid investment minimum for the Fund or adopt policies and procedures for responding
to a highly liquid investment minimum shortfall.
|
|
3.
|
The Program Administrator did not make or recommend any material changes to the Liquidity Program during the review period.
|
|
4.
|
The Program Administrator concluded that the Liquidity Program was reasonably designed to assess and manage the Fund’s liquidity risk, complies with the requirements of the Liquidity Rule, and
was operating as intended during the review period.
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number, assets,
income, and date of birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
HENNESSY FUNDS
|
1-800-966-4354
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
Letter to Shareholders
|
2
|
|
Performance Overview
|
6
|
|
Financial Statements
|
||
Schedule of Investments
|
9
|
|
Statement of Assets and Liabilities
|
13
|
|
Statement of Operations
|
14
|
|
Statements of Changes in Net Assets
|
15
|
|
Financial Highlights
|
16
|
|
Notes to the Financial Statements
|
18
|
|
Report of Independent Registered Public Accounting Firm
|
28
|
|
Trustees and Officers of the Fund
|
29
|
|
Expense Example
|
33
|
|
Proxy Voting Policy and Proxy Voting Records
|
34
|
|
Availability of Quarterly Portfolio Schedule
|
34
|
|
Federal Tax Distribution Information
|
34
|
|
Premium/Discount Information
|
34
|
|
Important Notice Regarding Delivery of Shareholder Documents
|
35
|
|
Privacy Policy
|
36
|
HENNESSY FUNDS
|
1-800-966-4354
|
(1)
|
The acronym, MT. FAANNG, refers to the following companies: Microsoft Corporation, Tesla, Inc., Meta Platforms, Inc., Amazon.com, Inc., Apple, Inc., Netflix, Inc., NVIDIA Corporation, and
Alphabet, Inc.
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Ryan C. Kelley, CFA
|
|
Chief Investment Officer,
|
|
Senior Vice President, and Portfolio Manager
|
WWW.HENNESSYFUNDS.COM
|
LETTER TO SHAREHOLDERS
|
HENNESSY FUNDS
|
1-800-966-4354
|
Since
|
|||
Two
|
One
|
Inception
|
|
Months(1)(2)
|
Year
|
(3/15/21)
|
|
Hennessy Stance ESG ETF
|
|||
(STNC) – NAV(3)
|
-10.31%
|
-5.99%
|
-1.24%
|
Hennessy Stance ESG ETF
|
|||
(STNC) – Market Price(3)
|
-10.34%
|
-5.97%
|
-1.22%
|
S&P 500® Index
|
-6.77%
|
10.14%
|
3.70%
|
(1)
|
The period from September 1, 2023, to October 31, 2023, consists of two months because the Fund changed its fiscal year end from August 31 to October 31, effective October 8, 2023.
|
(2)
|
Periods of less than one year are not annualized.
|
(3)
|
Fund performance is shown based on both a net asset value (“NAV”) and market price basis. The Fund’s per share NAV is the value of one share of the Fund. NAV is calculated by taking the Fund’s
total assets (including the fair value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV return is based on the NAV of the Fund, and the market price return is based
on the market price per share of the Fund. The price used to calculate market price return is determined using the official closing price of the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not
represent the returns you would receive if shares were traded at other times. NAV and market price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and market price,
respectively.
|
(4)
|
The Fund’s investment advisor has contractually agreed to limit expenses until December 31, 2024.
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PERFORMANCE OVERVIEW/SCHEDULE OF INVESTMENTS
|
Schedule of Investments as of October 31, 2023
|
TOP TEN HOLDINGS (EXCLUDING MONEY MARKET FUNDS)
|
% NET ASSETS
|
Nike Inc., Class A
|
3.85%
|
The Cigna Group
|
3.81%
|
Microsoft Corp.
|
3.78%
|
A. O. Smith Corp.
|
3.74%
|
Adobe, Inc.
|
3.69%
|
Synopsys, Inc.
|
3.54%
|
Apple, Inc.
|
3.53%
|
Marriott International, Inc., Class A
|
3.50%
|
Masco Corp.
|
3.48%
|
Yum! Brands, Inc.
|
3.47%
|
HENNESSY FUNDS
|
1-800-966-4354
|
COMMON STOCKS – 99.22%
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Communication Services – 3.11%
|
||||||||||||
Alphabet, Inc., Class A (a)
|
10,136
|
$
|
1,257,675
|
3.11
|
%
|
|||||||
Consumer Discretionary – 17.01%
|
||||||||||||
AutoZone, Inc. (a)
|
384
|
951,218
|
2.35
|
%
|
||||||||
Expedia Group, Inc. (a)
|
14,194
|
1,352,546
|
3.35
|
%
|
||||||||
Marriott International, Inc., Class A
|
7,492
|
1,412,692
|
3.50
|
%
|
||||||||
Nike Inc., Class A
|
15,107
|
1,552,546
|
3.85
|
%
|
||||||||
Tesla, Inc. (a)
|
987
|
198,229
|
0.49
|
%
|
||||||||
Yum! Brands, Inc.
|
11,610
|
1,403,185
|
3.47
|
%
|
||||||||
|
6,870,416
|
17.01
|
%
|
|||||||||
Financials – 11.48%
|
||||||||||||
Aon PLC
|
4,501
|
1,392,609
|
3.44
|
%
|
||||||||
Mastercard, Inc., Class A
|
3,669
|
1,380,828
|
3.42
|
%
|
||||||||
MSCI, Inc.
|
1,265
|
596,511
|
1.48
|
%
|
||||||||
PayPal Holdings, Inc. (a)
|
24,494
|
1,268,789
|
3.14
|
%
|
||||||||
|
4,638,737
|
11.48
|
%
|
|||||||||
Health Care – 23.55%
|
||||||||||||
Agilent Technologies, Inc.
|
13,085
|
1,352,596
|
3.35
|
%
|
||||||||
Biogen, Inc. (a)
|
5,601
|
1,330,462
|
3.29
|
%
|
||||||||
DaVita, Inc. (a)
|
15,400
|
1,189,342
|
2.94
|
%
|
||||||||
Edwards Lifesciences Corp. (a)
|
3,559
|
226,779
|
0.56
|
%
|
||||||||
Regeneron Pharmaceuticals, Inc. (a)
|
1,658
|
1,293,058
|
3.20
|
%
|
||||||||
The Cigna Group
|
4,969
|
1,536,415
|
3.81
|
%
|
||||||||
Waters Corp. (a)
|
5,347
|
1,275,420
|
3.16
|
%
|
||||||||
Zoetis, Inc.
|
8,338
|
1,309,066
|
3.24
|
%
|
||||||||
|
9,513,138
|
23.55
|
%
|
|||||||||
Industrials – 18.53%
|
||||||||||||
A. O. Smith Corp.
|
21,689
|
1,513,025
|
3.74
|
%
|
||||||||
Fortive Corp.
|
19,090
|
1,246,195
|
3.09
|
%
|
||||||||
Generac Holdings, Inc. (a)
|
2,254
|
189,494
|
0.47
|
%
|
||||||||
Masco Corp.
|
26,981
|
1,405,440
|
3.48
|
%
|
||||||||
Pentair PLC
|
22,422
|
1,303,167
|
3.23
|
%
|
||||||||
Verisk Analytics, Inc.
|
6,122
|
1,391,898
|
3.45
|
%
|
||||||||
WW Grainger, Inc.
|
594
|
433,519
|
1.07
|
%
|
||||||||
|
7,482,738
|
18.53
|
%
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS
|
COMMON STOCKS
|
Number
|
% of
|
||||||||||
|
of Shares
|
Value
|
Net Assets
|
|||||||||
Information Technology – 24.36%
|
||||||||||||
Adobe, Inc. (a)
|
2,799
|
$
|
1,489,236
|
3.69
|
%
|
|||||||
Amphenol Corp., Class A
|
17,412
|
1,402,537
|
3.47
|
%
|
||||||||
Apple, Inc.
|
8,341
|
1,424,393
|
3.53
|
%
|
||||||||
Enphase Energy, Inc. (a)
|
4,744
|
377,528
|
0.93
|
%
|
||||||||
Fortinet, Inc. (a)
|
6,888
|
393,787
|
0.97
|
%
|
||||||||
Microsoft Corp.
|
4,503
|
1,522,509
|
3.78
|
%
|
||||||||
Palo Alto Networks, Inc. (a)
|
5,168
|
1,255,927
|
3.11
|
%
|
||||||||
SolarEdge Technologies, Inc. (a)
|
4,261
|
323,623
|
0.80
|
%
|
||||||||
Synopsys, Inc. (a)
|
3,050
|
1,431,792
|
3.54
|
%
|
||||||||
Texas Instruments, Inc.
|
1,535
|
217,985
|
0.54
|
%
|
||||||||
|
9,839,317
|
24.36
|
%
|
|||||||||
Materials – 1.18%
|
||||||||||||
Nucor Corp.
|
1,576
|
232,917
|
0.58
|
%
|
||||||||
Steel Dynamics, Inc.
|
2,293
|
244,227
|
0.60
|
%
|
||||||||
|
477,144
|
1.18
|
%
|
|||||||||
|
||||||||||||
Total Common Stocks
|
||||||||||||
(Cost $42,354,009)
|
40,079,165
|
99.22
|
%
|
|||||||||
|
||||||||||||
SHORT-TERM INVESTMENTS – 0.79%
|
||||||||||||
Money Market Funds – 0.79%
|
||||||||||||
First American Treasury Obligations Fund – Class X, 5.275% (b)
|
319,802
|
319,802
|
0.79
|
%
|
||||||||
|
||||||||||||
Total Short-Term Investments
|
||||||||||||
(Cost $319,802)
|
319,802
|
0.79
|
%
|
|||||||||
|
||||||||||||
Total Investments
|
||||||||||||
(Cost $42,673,811) – 100.01%
|
40,398,967
|
100.01
|
%
|
|||||||||
Liabilities in Excess of Other Assets – (0.01)%
|
(3,814
|
)
|
(0.01
|
)%
|
||||||||
|
||||||||||||
TOTAL NET ASSETS – 100.00%
|
$
|
40,395,153
|
100.00
|
%
|
(a)
|
Non-income producing security.
|
(b)
|
The rate listed is the fund’s seven-day yield as of October 31, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Common Stocks
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Communication Services
|
$
|
1,257,675
|
$
|
—
|
$
|
—
|
$
|
1,257,675
|
||||||||
Consumer Discretionary
|
6,870,416
|
—
|
—
|
6,870,416
|
||||||||||||
Financials
|
4,638,737
|
—
|
—
|
4,638,737
|
||||||||||||
Health Care
|
9,513,138
|
—
|
—
|
9,513,138
|
||||||||||||
Industrials
|
7,482,738
|
—
|
—
|
7,482,738
|
||||||||||||
Information Technology
|
9,839,317
|
—
|
—
|
9,839,317
|
||||||||||||
Materials
|
477,144
|
—
|
—
|
477,144
|
||||||||||||
Total Common Stocks
|
$
|
40,079,165
|
$
|
—
|
$
|
—
|
$
|
40,079,165
|
||||||||
Short-Term Investments
|
||||||||||||||||
Money Market Funds
|
$
|
319,802
|
$
|
—
|
$
|
—
|
$
|
319,802
|
||||||||
Total Short-Term Investments
|
$
|
319,802
|
$
|
—
|
$
|
—
|
$
|
319,802
|
||||||||
Total Investments
|
$
|
40,398,967
|
$
|
—
|
$
|
—
|
$
|
40,398,967
|
WWW.HENNESSYFUNDS.COM
|
SCHEDULE OF INVESTMENTS/STATEMENT OF ASSETS AND LIABILITIES
|
Statement of Assets and Liabilities as of October 31, 2023
|
ASSETS:
|
||||
Investments in securities, at value (cost $42,673,811)
|
$
|
40,398,967
|
||
Dividends and interest receivable
|
26,100
|
|||
Total assets
|
40,425,067
|
|||
LIABILITIES:
|
||||
Payable to advisor
|
29,914
|
|||
Total liabilities
|
29,914
|
|||
NET ASSETS
|
$
|
40,395,153
|
||
NET ASSETS CONSIST OF:
|
||||
Par Value
|
$
|
1,685
|
||
Capital stock
|
46,823,850
|
|||
Accumulated deficit
|
(6,430,382
|
)
|
||
Total net assets
|
$
|
40,395,153
|
||
NET ASSETS:
|
||||
Shares authorized ($0.001 par value)
|
100,000,000
|
|||
Net assets applicable to outstanding shares
|
$
|
40,395,153
|
||
Shares issued and outstanding
|
1,685,000
|
|||
Net asset value, offering price, and redemption price per share
|
$
|
23.97
|
HENNESSY FUNDS
|
1-800-966-4354
|
Statement of Operations
|
Two-Month
|
||||||||
Period Ended
|
Year Ended
|
|||||||
October 31, 2023(1)
|
August 31, 2023
|
|||||||
INVESTMENT INCOME:
|
||||||||
Dividend income
|
$
|
58,240
|
$
|
487,041
|
(2)
|
|||
Interest income
|
1,532
|
5,240
|
||||||
Total investment income
|
59,772
|
492,281
|
||||||
EXPENSES:
|
||||||||
Investment advisory fees (See Note 5)
|
67,243
|
418,300
|
||||||
Total expenses before waivers
|
67,243
|
418,300
|
||||||
Expense reimbursement from advisor
|
(7,067
|
)
|
(44,032
|
)
|
||||
Net expenses
|
60,176
|
374,268
|
||||||
NET INVESTMENT INCOME (LOSS)
|
$
|
(404
|
)
|
$
|
118,013
|
|||
REALIZED AND UNREALIZED GAINS (LOSSES):
|
||||||||
Net realized gain (loss) on investments
|
$
|
(2,649,850
|
)
|
$
|
2,720,539
|
|||
Net realized gain from redemption in-kind
|
12,471
|
228,423
|
||||||
Net change in unrealized
|
||||||||
appreciation/depreciation on investments
|
(1,930,821
|
)
|
454,119
|
|||||
Net gain (loss) on investments
|
(4,568,200
|
)
|
3,403,081
|
|||||
NET INCREASE (DECREASE) IN NET ASSETS
|
||||||||
RESULTING FROM OPERATIONS
|
$
|
(4,568,604
|
)
|
$
|
3,521,094
|
(1)
|
The period ended October 31, 2023, consists of 2 months due to the Fund’s fiscal year end change from August 31 to October 31, effective October 8, 2023.
|
(2)
|
Net of foreign taxes and issuance fees withheld of $195.
|
WWW.HENNESSYFUNDS.COM
|
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
|
Statements of Changes in Net Assets
|
Two-Month
|
||||||||||||
Period Ended
|
Year Ended
|
Year Ended
|
||||||||||
October 31, 2023(1)
|
August 31, 2023
|
August 31, 2022
|
||||||||||
OPERATIONS:
|
||||||||||||
Net investment income (loss)
|
$
|
(404
|
)
|
$
|
118,013
|
$
|
285,024
|
|||||
Net realized gain (loss) on investments
|
(2,637,379
|
)
|
2,948,962
|
(1,557,093
|
)
|
|||||||
Net change in unrealized
|
||||||||||||
appreciation/depreciation on investments
|
(1,930,821
|
)
|
454,119
|
(3,140,125
|
)
|
|||||||
Net increase (decrease) in net assets
|
||||||||||||
resulting from operations
|
(4,568,604
|
)
|
3,521,094
|
(4,412,194
|
)
|
|||||||
DISTRIBUTIONS TO SHAREHOLDERS:
|
||||||||||||
Distributable earnings
|
—
|
(247,449
|
)
|
(164,737
|
)
|
|||||||
Total distributions
|
—
|
(247,449
|
)
|
(164,737
|
)
|
|||||||
CAPITAL SHARE TRANSACTIONS:
|
||||||||||||
Proceeds from shares subscribed
|
596,298
|
4,008,931
|
34,013,802
|
|||||||||
Cost of shares redeemed
|
(938,382
|
)
|
(4,506,305
|
)
|
(24,191,858
|
)
|
||||||
Net increase (decrease) in net assets
|
||||||||||||
derived from capital share transactions
|
(342,084
|
)
|
(497,374
|
)
|
9,821,944
|
|||||||
TOTAL INCREASE
|
||||||||||||
(DECREASE) IN NET ASSETS
|
(4,910,688
|
)
|
2,776,271
|
5,245,013
|
||||||||
NET ASSETS:
|
||||||||||||
Beginning of period
|
45,305,841
|
42,529,570
|
37,284,557
|
|||||||||
End of period
|
$
|
40,395,153
|
$
|
45,305,841
|
$
|
42,529,570
|
||||||
CHANGES IN SHARES OUTSTANDING:
|
||||||||||||
Shares sold
|
25,000
|
155,000
|
1,245,000
|
|||||||||
Shares redeemed
|
(35,000
|
)
|
(175,000
|
)
|
(870,000
|
)
|
||||||
Net increase (decrease)
|
||||||||||||
in shares outstanding
|
(10,000
|
)
|
(20,000
|
)
|
375,000
|
(1)
|
The period ended October 31, 2023, consists of 2 months due to the Fund’s fiscal year end change from August 31 to October 31, effective October 8, 2023.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Financial Highlights
|
(1)
|
Inception date of the Fund was March 15, 2021.
|
(2)
|
Calculated using the average shares outstanding method.
|
(3)
|
Amount is between $(0.005) and $0.005.
|
(4)
|
Total investment return/(loss) on net asset value is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes
reinvestments of dividends and distributions, if any.
|
(5)
|
Total investment return/(loss) on market price is calculated assuming an initial investment made at the market price on the first day of the period, reinvestment of dividends and distributions
at market price during the period, and redemption at market price on the last day of the period.
|
(6)
|
Not annualized.
|
(7)
|
Annualized.
|
(8)
|
Excludes effect of in-kind transfers.
|
WWW.HENNESSYFUNDS.COM
|
FINANCIAL HIGHLIGHTS
|
Two-Month
|
|||||||||||||||
Period Ended
|
Year Ended August 31,
|
Period Ended
|
|||||||||||||
October 31,
|
August 31,
|
||||||||||||||
2023
|
2023
|
2022
|
2021(1)
|
||||||||||||
$
|
26.73
|
$
|
24.80
|
$
|
27.82
|
$
|
25.00
|
||||||||
(0.00
|
)(3)
|
0.07
|
0.20
|
0.02
|
|||||||||||
(2.76
|
)
|
2.01
|
(3.10
|
)
|
2.80
|
||||||||||
(2.76
|
)
|
2.08
|
(2.90
|
)
|
2.82
|
||||||||||
—
|
(0.15
|
)
|
(0.10
|
)
|
—
|
||||||||||
—
|
—
|
(0.02
|
)
|
—
|
|||||||||||
—
|
(0.15
|
)
|
(0.12
|
)
|
—
|
||||||||||
$
|
23.97
|
$
|
26.73
|
$
|
24.80
|
$
|
27.82
|
||||||||
$
|
23.98
|
$
|
26.74
|
$
|
24.83
|
$
|
27.91
|
||||||||
-10.31
|
%(6)
|
8.39
|
%
|
-10.50
|
%
|
11.23
|
%(6)
|
||||||||
-10.34
|
%(6)
|
8.32
|
%
|
-10.63
|
%
|
11.56
|
%(6)
|
||||||||
$
|
40.40
|
$
|
45.31
|
$
|
42.53
|
$
|
37.29
|
||||||||
0.95
|
%(7)
|
0.95
|
%
|
0.95
|
%
|
0.95
|
%(7)
|
||||||||
0.85
|
%(7)
|
0.85
|
%
|
0.85
|
%
|
0.85
|
%(7)
|
||||||||
(0.11
|
)%(7)
|
0.17
|
%
|
0.64
|
%
|
0.09
|
%(7)
|
||||||||
(0.01
|
)%(7)
|
0.27
|
%
|
0.74
|
%
|
0.19
|
%(7)
|
||||||||
62
|
%(6)
|
274
|
%
|
290
|
%
|
180
|
%(6)
|
HENNESSY FUNDS
|
1-800-966-4354
|
Notes to the Financial Statements October 31, 2023
|
a).
|
Securities Valuation – All investments in securities are valued in accordance with the Fund’s valuation policies and procedures, as described in Note 3.
|
b).
|
Federal Income Taxes – The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all of its taxable income to its shareholders and otherwise
comply with the provisions of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. As a result, the Fund has made no provision for federal income taxes or excise taxes. Net
investment income/loss and realized gains/losses for federal income tax purposes may differ from those reported in the financial statements because of temporary book-basis and tax-basis differences. Temporary differences
are primarily the result of the treatment of partnership income and wash sales for tax reporting purposes. The Fund recognizes interest and penalties related to income tax benefits, if any, in the Statement of Operations
as an income tax expense. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income to shareholders for tax purposes. The Fund may utilize
equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on redemption of shares, as part of the dividends paid deduction for income tax
purposes.
|
Due to inherent differences in the recognition of income, expenses, and realized gains/losses under GAAP and federal income tax regulations, permanent differences
between book and tax basis for reporting are identified and appropriately reclassified
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
in the Statement of Assets and Liabilities, as needed. The adjustments for the period ended October 31, 2023, are as follows:
|
Total
|
|||
Distributable
|
|||
Earnings
|
Capital Stock
|
||
$(208,980)
|
$208,980
|
c).
|
Accounting for Uncertainty in Income Taxes – The Fund has accounting policies regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The tax
returns of the Fund for the prior three fiscal years are open for examination. The Fund has reviewed all open tax years in major tax jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax
liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund’s major tax jurisdictions are U.S. federal and Delaware.
|
d).
|
Income and Expenses – Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund. Interest income, which includes the amortization of premium and
accretion of discount, is recognized on an accrual basis. Market discounts, original issue discounts, and market premiums on debt securities are accreted or amortized to interest income over the life of a security with a
corresponding increase or decrease, as applicable, in the cost basis of such security using the yield-to-maturity method or, where applicable, the first call date of the security. Other non-cash dividends are recognized
as investment income at the fair value of the property received. Expenses and fees, including investment advisory fees, are accrued daily and taken into account for the purpose of determining the net asset value (“NAV”)
of the Fund. As discussed further in Note 5, most expenses of the Fund are paid by Hennessy Advisors, Inc. (the “Advisor”) under a unitary fee arrangement.
|
e).
|
Distributions to Shareholders – Dividends from net investment income for the Fund, if any, are declared and paid annually, usually in December. Distributions of net realized capital gains, if
any, are declared and paid annually, usually in December.
|
f).
|
Security Transactions – Investment transactions are recorded on the trade date. The Fund determines the realized gain/loss from an investment transaction by comparing the original cost of the
security lot sold with the net sale proceeds. Discounts and premiums on securities purchased are accreted or amortized, respectively, over the life of each such security.
|
g).
|
Use of Estimates – Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported change in net assets during the reporting period. Actual results could differ from those estimates.
|
h).
|
Share Valuation – The NAV per share of the Fund is calculated by dividing (i) the total value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including
estimated accrued expenses) by (ii) the total number of Fund shares outstanding, rounded to the nearest $0.01. Fund shares are not priced on days the New York Stock Exchange is closed for trading.
|
i).
|
Illiquid Securities – Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Liquidity Risk Management Program (the “Liquidity Program”). The Liquidity Program requires, among other
things, that the Fund limit its illiquid investments to no more than 15% of its net assets. An illiquid investment is any
|
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.
|
|
j).
|
Recent Accounting Pronouncements and Regulatory Updates – In October 2022, the Securities and Exchange Commission (“SEC”) adopted a final rule relating to Tailored Shareholder Reports for
Mutual Funds and Exchange-Traded Funds (ETFs); Fee Information in Investment Company Advertisements. The rule and form amendments will require mutual funds and ETFs to transmit concise and visually engaging shareholder
reports that highlight key information. The amendments also will require that funds tag information in a structured data format. In addition, the rule amendments will require that certain more in-depth information be
made available online and available for delivery free of charge to investors on request. The amendments became effective January 24, 2023. There is an 18-month transition period after the effective date of the amendment.
|
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to
Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in
measuring the fair value. The amendments also require additional disclosures related to equity securities subject to contractual sale restrictions. The ASU is effective for fiscal years beginning after December 15, 2023,
and interim periods within those fiscal years.
|
Level 1 –
|
Unadjusted, quoted prices in active markets for identical instruments that the Fund has the ability to access at the date of measurement.
|
|
Level 2 –
|
Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar instruments, quoted prices in
markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets, such as interest rates,
prepayment speeds, credit risk curves, default rates, and similar data).
|
|
Level 3 –
|
Significant unobservable inputs (including the Fund’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when
observable inputs are unavailable.
|
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange- traded funds, and real estate
investment trusts, that are traded on a securities exchange for which a last-quoted sales price is readily available generally are valued at the last sales price as reported by the primary
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
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
|
August 31,
|
October 31,
|
|||
2026
|
2026
|
Total
|
||
$30,660
|
$7,067
|
$37,727
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Investments
|
|||||
Cost of investments for tax purposes
|
$
|
42,691,300
|
|||
Gross tax unrealized appreciation
|
$
|
542,957
|
|||
Gross tax unrealized depreciation
|
(2,835,290
|
)
|
|||
Net tax unrealized appreciation/(depreciation)
|
$
|
(2,292,333
|
)
|
||
Undistributed ordinary income
|
$
|
50,006
|
|||
Undistributed long-term capital gains
|
—
|
||||
Total distributable earnings
|
$
|
50,006
|
|||
Other accumulated gain/(loss)
|
$
|
(4,188,055
|
)
|
||
Total accumulated gain/(loss)
|
$
|
(6,430,382
|
)
|
Two-Month Period Ended
|
Year Ended
|
Year Ended
|
|||||||||||
October 31, 2023
|
August 31, 2023
|
August 31, 2022
|
|||||||||||
Ordinary income(1)
|
$
|
—
|
$
|
247,449
|
$
|
134,419
|
|||||||
Long-term capital gains
|
—
|
—
|
30,318
|
||||||||||
Total distributions
|
$
|
—
|
$
|
247,449
|
$
|
164,737
|
|||||||
(1) Ordinary income includes short-term capital gains.
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
NOTES TO THE FINANCIAL STATEMENTS
|
Shares Issued to
|
||||||
Predecessor
|
Shareholders of
|
Fund
|
Combined
|
Tax Status
|
||
Fund Net Assets
|
Predecessor Fund
|
Net Assets
|
Net Assets
|
of Transfer
|
||
$42,147,609(1)
|
1,670,000
|
$0
|
$42,147,609
|
Non-taxable
|
(1)
|
Includes accumulated net investment income, accumulated realized gains, and unrealized appreciation in the amounts of $14,189, $5,465,299, and $2,059,710, respectively.
|
Record Date
|
Ex-Date
|
Payable Date
|
Ordinary Income Rate
|
||
12/15/2023
|
12/14/2023
|
12/18/2023
|
0.02314927
|
HENNESSY FUNDS
|
1-800-966-4354
|
TAIT, WELLER & BAKER LLP
|
WWW.HENNESSYFUNDS.COM
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM/TRUSTEES AND OFFICERS
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Disinterested Trustees(1) and Disinterested Advisers
|
|||
J. Dennis DeSousa
|
January 1996
|
Mr. DeSousa is a real estate investor.
|
None.
|
87
|
|||
Trustee
|
|||
Robert T. Doyle
|
January 1996
|
Mr. Doyle is retired. He served as the
|
None.
|
76
|
Sheriff of Marin County, California
|
||
Trustee
|
from 1996 to June 2022.
|
||
Doug Franklin
|
March 2016
|
Mr. Franklin is a retired insurance
|
None.
|
59
|
as an Adviser
|
industry executive. From 1987
|
|
Trustee
|
to the Board
|
through 2015, he was employed by
|
|
and June 2023
|
the Allianz-Fireman’s Fund Insurance
|
||
as a Trustee
|
Company in various positions,
|
||
including as its Chief Actuary and
|
|||
Chief Risk Officer.
|
|||
Claire Garvie
|
December 2015
|
Ms. Garvie is a founder of Kiosk and
|
None.
|
49
|
as an Adviser
|
has served as its Chief Operating
|
|
Trustee
|
to the Board and
|
Officer since 2004. Kiosk is a
|
|
December 2021
|
full-service marketing agency with
|
||
as a Trustee
|
offices in the San Francisco Bay Area
|
||
and Liverpool, UK and staff across
|
|||
nine states in the U.S.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Other
|
|||
Directorships
|
|||
Held Outside
|
|||
Name, Age,
|
of Fund
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
Complex During
|
with the Trust
|
of Service
|
During Past Five Years
|
Past Five Years
|
Gerald P. Richardson
|
May 2004
|
Mr. Richardson is an independent
|
None.
|
78
|
consultant in the securities industry.
|
||
Trustee
|
|||
Brian Alexander
|
March 2015
|
Mr. Alexander has served as the
|
None.
|
42
|
Chief Operating Officer of Solis
|
||
Adviser to the Board
|
Mammography since March 2023.
|
||
Prior to that, he worked for the
|
|||
Sutter Health organization from
|
|||
2011 to 2023 in various positions.
|
|||
He served as the Chief Executive
|
|||
Officer of the North Valley Hospital
|
|||
Area from 2021 to March 2023.
|
|||
From 2018 to 2021, he served as the
|
|||
Chief Executive Officer of Sutter
|
|||
Roseville Medical Center. From 2016
|
|||
through 2018, he served as the Vice
|
|||
President of Strategy for the Sutter
|
|||
Health Valley Area, which includes
|
|||
11 hospitals, 13 ambulatory surgery
|
|||
centers, 16,000 employees, and
|
|||
1,900 physicians.
|
|||
Interested Trustee and Interested Adviser(2)
|
|||
Neil J. Hennessy
|
January 1996 as
|
Mr. Neil Hennessy has been employed
|
Hennessy
|
67
|
a Trustee and
|
by Hennessy Advisors, Inc. since
|
Advisors, Inc.
|
Chairman of the Board,
|
June 2008 as
|
1989 and currently serves as its
|
|
Chief Market Strategist,
|
an Officer
|
Chairman and Chief Executive Officer.
|
|
Portfolio Manager,
|
|||
and President
|
|||
A.J. Hennessy
|
December 2022
|
Mr. A.J. Hennessy has been employed
|
None.
|
37
|
by Hennessy Advisors, Inc. since 2011.
|
||
Adviser to the Board
|
|||
and Vice President,
|
|||
Corporate Development
|
|||
and Operations
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
Officers
|
||
Teresa M. Nilsen
|
January 1996
|
Ms. Nilsen has been employed by Hennessy Advisors, Inc.
|
57
|
since 1989 and currently serves as its President, Chief
|
|
Executive Vice President
|
Operating Officer, and Secretary.
|
|
and Treasurer
|
||
Daniel B. Steadman
|
March 2000
|
Mr. Steadman has been employed by Hennessy Advisors, Inc.
|
67
|
since 2000 and currently serves as its Executive Vice President.
|
|
Executive Vice President
|
||
and Secretary
|
||
Brian Carlson
|
December 2013
|
Mr. Carlson has been employed by Hennessy Advisors, Inc.
|
51
|
since December 2013 and currently serves as its Chief
|
|
Senior Vice President
|
Compliance Officer and Senior Vice President.
|
|
and Head of Distribution
|
||
David Ellison(3)
|
October 2012
|
Mr. Ellison has been employed by Hennessy Advisors, Inc.
|
65
|
since October 2012. He has served as a Portfolio Manager of
|
|
Senior Vice President
|
the Hennessy Large Cap Financial Fund and the Hennessy
|
|
and Portfolio Manager
|
Small Cap Financial Fund since their inception. Mr. Ellison also
|
|
served as a Portfolio Manager of the Hennessy Technology
|
||
Fund from its inception until February 2017. Mr. Ellison served
|
||
as Director, CIO, and President of FBR Fund Advisers, Inc.
|
||
from December 1999 to October 2012.
|
||
Jennifer Emerson(4)
|
June 2013
|
Ms. Emerson has been employed by Hennessy Advisors, Inc.
|
46
|
as its General Counsel since June 2013.
|
|
Senior Vice President and
|
||
Chief Compliance Officer
|
||
Ryan Kelley(5)
|
March 2013
|
Mr. Kelley has been employed by Hennessy Advisors, Inc. since
|
51
|
October 2012. He has served as Chief Investment Officer of the
|
|
Senior Vice President,
|
Hennessy Funds since March 2021 and has served as a Portfolio
|
|
Chief Investment Officer,
|
Manager of the Hennessy Gas Utility Fund, the Hennessy Large
|
|
and Portfolio Manager
|
Cap Financial Fund, and the Hennessy Small Cap Financial Fund
|
|
since October 2014. Mr. Kelley served as Co-Portfolio Manager
|
||
of these same funds from March 2013 through September
|
||
2014 and as a Portfolio Analyst for the Hennessy Funds from
|
||
October 2012 through February 2013. He has also served as a
|
||
Portfolio Manager of the Hennessy Cornerstone Growth Fund,
|
||
the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy
|
||
Cornerstone Large Growth Fund, and the Hennessy
|
||
Cornerstone Value Fund since February 2017 and as a Portfolio
|
||
Manager of the Hennessy Total Return Fund, the Hennessy
|
||
Balanced Fund, and the Hennessy Technology Fund since May
|
||
2018. He previously served as Co-Portfolio Manager of the
|
||
Hennessy Technology Fund from February 2017 until May 2018.
|
||
Mr. Kelley served as Portfolio Manager of FBR Fund
|
||
Advisers, Inc. from January 2008 to October 2012.
|
HENNESSY FUNDS
|
1-800-966-4354
|
Name, Age,
|
||
and Position Held
|
Start Date
|
Principal Occupation(s)
|
with the Trust
|
of Service
|
During Past Five Years
|
L. Joshua Wein(5)
|
September 2018
|
Mr. Wein has been employed by Hennessy Advisors, Inc. since
|
50
|
2018. He has served as Portfolio Manager of the Hennessy
|
|
Vice President and
|
Cornerstone Growth Fund, the Hennessy Cornerstone Mid Cap
|
|
Portfolio Manager
|
30 Fund, the Hennessy Cornerstone Large Growth Fund, the
|
|
Hennessy Cornerstone Value Fund, Hennessy Total Return Fund,
|
||
the Hennessy Balanced Fund, the Hennessy Gas Utility Fund,
|
||
and the Hennessy Technology Fund since February 2021, and
|
||
as the Co-Portfolio Manager of these Funds since February
|
||
2019. He served as a Senior Analyst of those same Funds from
|
||
September 2018 through February 2019. He also has served as
|
||
a Portfolio Manager of the Hennessy Energy Transition Fund
|
||
and the Hennessy Midstream Fund since January 2022.
|
||
Mr. Wein served as Director of Alternative Investments and
|
||
Co-Portfolio Manager at Sterling Capital Management
|
||
from 2008 to 2018.
|
(1)
|
The Funds have determined that Mr. DeSousa, Mr. Doyle, Mr. Franklin, Ms. Garvie, and Mr. Richardson are not interested persons, as defined in the 1940 Act, of the
Investment Manager or of any predecessor investment adviser for purposes of Section 15(f) of the 1940 Act.
|
(2)
|
Each of Neil J. Hennessy and A.J. Hennessy is considered an interested person, as defined in the 1940 Act, because he is an officer of the Trust.
|
(3)
|
The address of this officer is 101 Federal Street, Suite 1615B, Boston, MA 02110.
|
(4)
|
The address of this officer is 4800 Bee Caves Road, Suite 100, Austin, TX 78746.
|
(5)
|
The address of this officer is 1340 Environ Way, Chapel Hill, NC 27517.
|
WWW.HENNESSYFUNDS.COM
|
TRUSTEES AND OFFICERS OF THE FUND/EXPENSE EXAMPLE
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period(1)
|
|
Account Value
|
Account Value
|
May 1, 2023 –
|
|
May 1, 2023
|
October 31, 2023
|
October 31, 2023
|
|
Investor Class
|
|||
Actual
|
$1,000.00
|
$ 896.40
|
$4.06
|
Hypothetical (5% return before expenses)
|
$1,000.00
|
$1,020.92
|
$4.33
|
(1)
|
Expenses are equal to the Fund’s annualized expense ratio of 0.85, multiplied by the average account value over the period, multiplied by 184/365 days (to reflect the half-year period).
|
HENNESSY FUNDS
|
1-800-966-4354
|
WWW.HENNESSYFUNDS.COM
|
PROXY VOTING — IMPORTANT NOTICE
|
|
HENNESSY FUNDS
|
1-800-966-4354
|
1.
|
Information we receive from you in applications or other forms, correspondence, or conversations, including, but not limited to, your name, address, phone number, social security number,
assets, income, and date of birth;
|
|
2.
|
Information about your transactions with us, our affiliates, or others, including, but not limited to, your account number and balance, payments history, parties to transactions, cost basis
information, and other financial information; and
|
|
3.
|
Other personal information we collect from various sources, even if you have not entered into a prior transaction with us, including the following:
|
•
|
Name, alias, address, unique personal identifier, online identifier, IP address, email address, telephone number, account name, and other similar identifiers;
|
||
•
|
Age and marital status;
|
||
•
|
Commercial information, including records of products purchased;
|
||
•
|
Browsing history, search history, and information on interaction with our website;
|
||
•
|
Geolocation data;
|
||
•
|
Employment and employment history, educational history, financial information, and purchasing and consuming histories or tendencies; and
|
||
•
|
Inferences drawn from the above-listed information to create a profile about your preferences, characteristics, predispositions, and behavior.
|
WWW.HENNESSYFUNDS.COM
|
PRIVACY POLICY
|
HENNESSY FUNDS
|
1-800-966-4354
|
(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.
|
|
|
|
|
|
|
FYE 10/31/2023
|
FYE 8/31/2023(1)
|
FYE 10/31/2022
|
FYE 8/31/2022(2)
|
|
(a) Audit Fees
|
$322,300
|
$12,500
|
$315,800
|
$22,155
|
(b) Audit-Related Fees
|
-
|
-
|
-
|
-
|
(c) Tax Fees
|
$69,900
|
-
|
$67,400
|
$4,220
|
(d) All Other Fees
|
-
|
-
|
-
|
-
|
(1)
|
Fees relate to the audit for the Hennessy Stance ESG ETF for the fiscal year ended August 31, 2023. At a meeting of the Board of Trustees of the registrant held on October 8, 2023,
the Board of Trustees approved changing the fiscal year end of the Hennessy Stance ESG ETF for financial reporting purposes from August 31 to October 31.
|
(2)
|
Fees relate to the predecessor of the Hennessy Stance ESG ETF, the Stance Equity ESG Large Cap Core ETF, which was audited by a previous independent registered public accounting
firm.
|
FYE 10/31/2023
|
FYE 8/31/2023
|
FYE 10/31/2022
|
|
Audit-Related Fees
|
0%
|
0%
|
0%
|
Tax Fees
|
0%
|
0%
|
0%
|
All Other Fees
|
0%
|
0%
|
0%
|
FYE 8/31/2022
|
|
Audit-Related Fees
|
0%
|
Tax Fees
|
0%
|
All Other Fees
|
0%
|
(a)
|
The registrant’s principal executive officer and principal financial officer have reviewed the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a
date within 90 days of the filing date of this report, as required by Rule 30a‑3(b) under the Act and Rules 13a-15(b) or 15d‑15(b) under the Exchange Act. Based on their review, such officers have concluded that the disclosure controls
and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the registrant and by the
registrant’s service providers.
|
(b)
|
There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over financial reporting.
|
By: /s/Neil J. Hennessy
Neil J. Hennessy, President and Principal Executive Officer |
Date: January 4, 2024
|
By: /s/Teresa M. Nilsen
Teresa M. Nilsen, Treasurer and Principal Financial Officer
|
Date: January 4, 2024
|
Page
|
|||
I.
|
GENERAL
|
1
|
|
A.
|
Introduction
|
1
|
|
B.
|
Definitions
|
1
|
|
II.
|
STANDARDS OF BUSINESS CONDUCT
|
3
|
|
A.
|
General Standards
|
3
|
|
B.
|
Specific Duties and Responsibilities
|
3
|
|
C.
|
Reporting Violations
|
4
|
|
III.
|
PERSONAL SECURITIES INVESTMENT TRANSACTIONS POLICY
|
5
|
|
A.
|
General
|
5
|
|
B.
|
Accounts Covered
|
6
|
|
C.
|
Exempt Securities and Transactions
|
6
|
|
D.
|
Restrictions and Limitations on Personal Securities Transactions
|
7
|
|
E.
|
Reporting Procedures
|
8
|
|
IV.
|
INSIDER TRADING POLICY
|
11
|
|
A.
|
What is Material Information?
|
11
|
|
B.
|
What is Non Public Information?
|
12
|
|
C.
|
What are the Penalties for Insider Trading?
|
12
|
|
D.
|
Compliance Procedures
|
13
|
|
E.
|
Securities Issued by the Adviser
|
14
|
|
V.
|
COMPLIANCE
|
16
|
|
A.
|
Approval of the Code of Ethics
|
16
|
|
B.
|
Annual Certification
|
17
|
|
C.
|
Prohibition on Self Clearance
|
17
|
|
D.
|
Other Obligations
|
17
|
|
E.
|
Maintenance of Records
|
17
|
|
F.
|
Interpretation and Enforcement
|
17
|
1.
|
“Access Person” means any director, trustee, officer, or
employee of HFT or the Adviser, but excluding (a) any summer associate or other temporary employee of HFT or the Adviser and (b) any director of the Adviser who meets independence requirements under applicable law.
|
2.
|
“Adviser” has the meaning set forth in Section I.A.
|
3.
|
A Covered Security is “being considered for purchase or sale”
when a recommendation to purchase or sell such Covered Security has been made and communicated and, with respect to the person making the recommendation, when such person seriously considers making such a recommendation.
|
4.
|
“beneficial ownership” shall be interpreted in the same
manner as it would be under Rule 16a-1(a)(2) under the Exchange Act in determining whether a person has a pecuniary interest in a security for purposes of Section 16 of the Exchange Act.
|
5.
|
“CCO” means Chief Compliance Officer per Rule 38a-1 of
the Investment Company Act and Rule 206(4)-7 of the Investment Advisers Act.
|
6.
|
“control” has the meaning set forth in Section 2(a)(9) of
the Investment Company Act.
|
7.
|
“Covered Security” means a security as defined in Section
2(a)(36) of the Investment Company Act, except that it does not include:
|
a.
|
direct obligations of the Government of the United States;
|
b.
|
bankers’ acceptances, bank certificates of deposit, commercial paper, and high quality short-term debt instruments, including repurchase agreements;
and
|
c.
|
shares issued by open-end registered investment companies (but not exchange‑traded funds) other than HFT.
|
8.
|
“Disinterested Trustee” means a trustee of HFT who is not
an “interested person” of HFT within the meaning of Section 2(a)(19) of the Investment Company Act.
|
9.
|
“Exchange Act” means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
|
10.
|
“Fund” means, individually, any series of HFT and
collectively all such series shall be referred to as the “Funds.”
|
11.
|
“HFT” has the meaning set forth in Section I.A.
|
12.
|
“Initial Public Offering” means an offering of securities
registered under the Securities Act of 1933, as amended, the issuer of which, immediately before the registration, was not subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act.
|
13.
|
“Investment Advisers Act” means the Investment Advisers
Act of 1940, as amended, and the rules and regulations promulgated thereunder.
|
14.
|
“Investment Company Act” means the Investment Company Act
of 1940, as amended, and the rules and regulations promulgated thereunder.
|
15.
|
“Investment Personnel” means (a) any employee of HFT or
the Adviser or of any company in a control relationship to HFT or the Adviser who, in connection with his or her regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of securities by a
Fund and (b) any natural person who controls HFT or the Adviser and who obtains information concerning recommendations made to a Fund regarding the purchase or sale of securities by such Fund.
|
16.
|
“Laws” means the laws, rules, and regulations of U.S. and
foreign federal, state, and local governments and other applicable regulatory agencies.
|
17.
|
“personal securities transaction” has the meaning set
forth in Section III.A.
|
18.
|
“SEC” means the Securities and Exchange Commission.
|
1.
|
They shall always act in an honest and ethical manner, including in connection with the handling and avoidance of actual or apparent conflicts of
interest between personal and professional relationships.
|
2.
|
They shall fully comply with all applicable Laws.
|
3.
|
They shall proactively promote full, fair, accurate, timely, and understandable disclosure in reports and documents that HFT or the Adviser file
with or submit to the SEC and in other public communications made by HFT or the Adviser.
|
4.
|
They shall proactively promote ethical and honest behavior with HFT and the Adviser, including, without limitation, by adhering to and promptly
reporting violations of this Code.
|
1.
|
They shall handle all conflicts of interest between personal and professional relationships in an ethical and honest manner. They shall disclose in
advance to the CCO of HFT or the Adviser, as applicable, the relevant details of any transaction or relationship that reasonably could be expected to give rise to an actual or apparent conflict of interest between themselves and HFT or the
Adviser. Such CCO shall, as appropriate, discuss such disclosures with the Board of Trustees of HFT or the Board of Directors of the Adviser, as applicable, which Board shall thereafter take such action with respect to the conflict of
interest as it deems appropriate. The general policy of HFT and the Adviser is to avoid conflicts of interest whenever practicable.
|
2.
|
They shall use their best efforts to ensure the timely and understandable disclosure of information that, in all material respects, is accurate,
complete, objective, and relevant in all reports and documents HFT or the Adviser file with or submit to the SEC or in any other public communications made by HFT or the Adviser.
|
3.
|
They shall use their best efforts to ensure compliance in all material respects with all applicable Laws by HFT and the Adviser.
|
4.
|
They shall respect the confidentiality of information acquired in the course of their work and shall not disclose confidential information, except
when they believe they are authorized for business purposes or legally obliged to disclose confidential information. They may not use confidential information acquired in the course of their work for their personal advantage.
|
5.
|
They shall not take or direct or allow any other person to take or direct any action to fraudulently influence, coerce, manipulate, or mislead the
independent auditing firm of HFT or the Adviser.
|
6.
|
They may not engage the auditing firms of HFT or the Adviser to perform audit or non-audit services without the prior approval of the Board of
Trustees of HFT or the Board of Directors or Audit Committee of the Adviser, as applicable.
|
7.
|
The independent directors of the Adviser shall not have access to, and shall not seek from any employee of the Adviser, any non‑public information
regarding the portfolio holdings of the Funds, except that certain limited access to such information may be granted with advance permission from the CCO of HFT.
|
8.
|
If they are Investment Personnel, they shall not, without the prior approval of the CCO of HFT or the Adviser, as applicable, receive any gift or
participate in any entertainment event of more than de minimis value from or with any person or entity that does or is seeking to do business with or on behalf of a Fund or the Adviser. The annual receipt of gifts from the same source
valued at $100 or less shall be considered de minimis, while the annual receipt of entertainment from the same source valued at $1,000 or less shall be considered de minimis. Additionally, the receipt of an occasional dinner, a ticket to a
sporting event or the theater, or comparable entertainment event also shall be considered to be of de minimis value.
|
9.
|
If they are Investment Personnel, except for service that began prior to March 2, 1996, they shall not serve on the board of directors of publicly
traded companies absent prior authorization of the Board of Trustees of HFT. The Board of Trustees of HFT may so authorize such board service only if it determines that such board service is consistent with the interests of the Funds and
their shareholders.
|
10.
|
They shall promptly report any suspected violations of this Code to the CCOs of HFT and the Adviser in accordance with Section II.C below.
|
•
|
a violation or potential violation of a Law by HFT or the Adviser;
|
•
|
a belief that such director, trustee, officer, or employee is being asked to violate this Code or any Law in the performance of his or her duties
for HFT or the Adviser; or
|
•
|
any other violation or potential violation of this Code by any person.
|
•
|
such Access Person has obtained preclearance of such transaction in accordance with the procedures described in Section III.D.7 below; and
|
•
|
the transaction is reported in writing to the CCOs of HFT and the Adviser on a quarterly basis in accordance with the requirements of
Section III.E.3 below.
|
•
|
such person;
|
•
|
such person’s spouse or minor child;
|
•
|
a relative (including in‑laws, stepchildren, or stepparents) sharing the same house; or
|
•
|
anyone else if such person is able to:
|
o
|
obtain benefits substantially equivalent to ownership of the securities; or
|
o
|
obtain ownership of the securities immediately or at some future time.
|
1.
|
Exemptions from Preclearance and Reporting Requirements
|
a.
|
purchases or sales effected in any account over which the Access Person has no direct or indirect influence or control; and
|
b.
|
purchases or sales that are non-volitional on the part of the Access Person.
|
2.
|
Exemptions from Preclearance Requirements Only
|
a.
|
purchases that are part of an automatic dividend reinvestment plan;
|
b.
|
purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights
were acquired from such issuer, and sales of such rights so acquired;
|
c.
|
purchases, sales, or gifts of common stock of issuers in the Dow Jones Industrial Average provided that the number of shares purchased or sold of
any one such issuer on any day does not exceed 5,000 shares;
|
d.
|
purchases, sales, or gifts of shares issued by HFT;
|
e.
|
purchases, sales, or gifts of exchange‑traded funds; and
|
f.
|
in‑kind transfers.
|
1.
|
Participation in Initial Public Offerings
|
2.
|
Participation in Private Placements
|
3.
|
Trading in a Security on a Day When There Is a “Buy” or “Sell” Order or Serious Consideration Thereof
|
4.
|
Blackout Period
|
5.
|
Short‑Swing Profits
|
6.
|
Restricted List
|
7.
|
Preclearance Requirements
|
1.
|
Limited Reporting Obligations for Disinterested Trustees
|
2.
|
Initial Holdings Report
|
a.
|
the title and type of security, the exchange ticker symbol or CUSIP number, number of shares, and principal amount of each Covered Security in which
such Access Person had any direct or indirect beneficial ownership at the time the person became an Access Person;
|
b.
|
the name of any broker, dealer, or bank with whom such Access Person maintained an account in which any securities (regardless of whether such
securities were Covered Securities) were held for the direct or indirect benefit of such Access Person; and
|
c.
|
the date the report is submitted by such Access Person.
|
3.
|
Quarterly Transaction Report
|
a.
|
with respect to any personal securities transaction during the quarter in a Covered Security in which the Access Person had any direct or indirect
beneficial ownership (except that personal securities transactions pursuant to an automatic dividend reinvestment plan do not need to be reported in a quarterly transaction report):
|
i.
|
the date of the personal securities transaction, the title, exchange ticker symbol or CUSIP number, interest rate and maturity date, number of
shares, and the principal amount of each security involved;
|
ii.
|
the nature of the personal securities transaction (i.e., purchase, sale, or any other type of acquisition or disposition);
|
iii.
|
the price of the Covered Security at which the personal securities transaction was effected;
|
iv.
|
the name of the broker, dealer, or bank with or through whom the personal securities transaction was effected; and
|
v.
|
the date that the report is submitted by such Access Person.
|
b.
|
with respect to any account established by such Access Person during the quarter in which any securities (regardless of whether such securities were
Covered Securities) were held for the direct or indirect benefit of such Access Person:
|
i.
|
the name of the broker, dealer, or bank with whom such Access Person established the account;
|
ii.
|
the date the account was established; and
|
iii.
|
the date the report is submitted by such Access Person.
|
4.
|
Annual Holdings Report
|
a.
|
the title and type of security, the exchange ticker symbol or CUSIP number, number of shares, and principal amount of each Covered Security in which
such Access Person had any direct or indirect beneficial ownership;
|
b.
|
the name of any broker, dealer, or bank with whom such Access Person maintains an account in which any securities (regardless of whether such
securities were Covered Securities) are held for the direct or indirect benefit of such Access Person; and
|
c.
|
the date the report is submitted by such Access Person.
|
5.
|
Review of Periodic Reports; Identification of Access Person
|
•
|
earnings estimates or changes in previously released earnings estimates;
|
•
|
pending changes in corporate policy (such as dividend changes or stock splits);
|
•
|
significant new products, services, or processes;
|
•
|
pending large commercial or government contracts;
|
•
|
the gain or loss of a substantial customer;
|
•
|
pending litigation or changes in the status of litigation;
|
•
|
a significant refinancing transaction;
|
•
|
news of a pending acquisition or sale of assets or a proposed merger or tender offer;
|
•
|
government investigations; or
|
•
|
changes in management.
|
•
|
termination of such individual’s employment or other relationship with HFT and the Adviser;
|
•
|
criminal sanctions, which may include a fine of up to $5 million and up to 20 years imprisonment;
|
•
|
disgorgement of the profits gained or losses avoided through insider trading and a penalty of up to three times such amount;
|
•
|
an SEC order permanently barring such individual from the securities industry; and
|
•
|
a lawsuit by investors seeking to recover damages for insider trading violations.
|
•
|
civil penalties of up to the greater of $1 million or three times the amount of profits gained or losses avoided by such individual;
|
•
|
criminal fines of up to $25 million; and
|
•
|
restrictions on their ability to conduct their business activities.
|
1.
|
Identifying Inside Information
|
a.
|
Is the information material? Would an investor consider this information important in making his or her investment decision? If disclosed, would
this information substantially affect the market price of the securities?
|
b.
|
Is the information non‑public? Has the information been effectively communicated to the marketplace by appearing in publications of general
circulation? Is the information readily available to a significant number of other investors in the market? How much time has passed since the information was disseminated?
|
a. |
immediately report the information to the CCO of HFT or the Adviser;
|
b. |
refrain from purchasing or selling any securities to which the information is relevant; and
|
c. |
refrain from communicating the information to anyone inside or outside of HFT and the Adviser other than the CCOs of HFT and the Adviser and other individuals who “need
to know” such information in order to perform their job responsibilities.
|
2.
|
Restricting Access to Material Non‑Public Information
|
a.
|
Communications
|
b.
|
Information Handling
|
1.
|
General
|
•
|
tips about material non‑public information regarding the Adviser should never be given to anyone who may, directly or indirectly, use such
information to derive an improper personal benefit through personal trading in the Adviser’s stock or by passing the tip on to others; and
|
•
|
all inquiries regarding the Adviser from the press or other news media must be referred to the Chief Executive Officer or President of the Adviser
(who may authorize any employee to speak to the press or other news media outlet about the Adviser on a case‑by‑case basis).
|
2.
|
Quiet Period
|
3.
|
Reporting of Stock Transactions to SEC
|
4.
|
No Short Sales
|
5.
|
Rule 10b5‑1 Plans
|
1.
|
The Board of Trustees of HFT, including a majority of the Disinterested Trustees, and the Board of Directors of the Adviser shall approve this Code
and any material changes thereto. Prior to approving this Code and any material changes thereto, the Board of Trustees of HFT, including a majority of the Disinterested Trustees, must determine that this Code contains provisions reasonably
necessary to prevent Access Persons from violating Rule 17j-1(b) under the Investment Company Act.
|
2.
|
No less frequently than annually, the CCOs of HFT and the Adviser shall furnish a report to the Board of Trustees of HFT and the Board of Directors
of the Adviser that includes the following:
|
a.
|
a description of all issues arising under the Code since the last report to such Boards, including, but not limited to, information about material
violations of this Code and sanctions imposed in response to such material violations;
|
b.
|
a list of Access Persons under this Code; and
|
c.
|
a certification that HFT and the Adviser have adopted such procedures as are reasonably necessary to prevent Access Persons from violating this
Code.
|
3.
|
Any explicit or implied waivers of this Code for directors, trustees, or executive officers must be approved by the Board of Trustees of HFT and the
Board of Directors or Audit Committee of the Adviser, as applicable, and must be promptly disclosed.
|
1.
|
This is a combined Code of Ethics for HFT and the Adviser. The Board of Directors of the Adviser (or a committee thereof) is responsible for
overseeing the interpretation and enforcement of this Code in all matters related to the Adviser. The Board of Trustees of HFT is responsible for overseeing the interpretation and enforcement of this Code in all matters related to HFT.
|
2.
|
Each director, trustee, officer, and employee will be held accountable for his or her adherence to this Code by the Board of Trustees of HFT or the
Board of Directors of the Adviser, as applicable. Directors, trustees, officers, and employees who fail to adhere to this Code will be subject to appropriate disciplinary action, ranging from warnings to possible termination or removal.
|
1.
|
I have reviewed this report on Form N-CSR of Hennessy Funds Trust;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if
the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the
filing date of this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and
report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: January 4, 2024
|
/s/Neil J. Hennessy
Neil J. Hennessy President and Principal Executive Officer
|
1.
|
I have reviewed this report on Form N-CSR of Hennessy Funds Trust;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if
the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the
filing date of this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and
report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: January 4, 2024
|
/s/Teresa M. Nilsen
Teresa M. Nilsen Treasurer and Principal Financial Officer
|
/s/Neil J. Hennessy
Neil J. Hennessy
President and Principal Executive Officer
Hennessy Funds Trust
|
/s/Teresa M. Nilsen
Teresa M. Nilsen
Treasurer and Principal Financial Officer
Hennessy Funds Trust
|
Date: January 4, 2024
|
Date: January 4, 2024
|
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