This fund's winning formula is diversified -2-

The Hennessey Cornerstone Mid Cap 30 Fund has two share classes, both of which are rated five stars (the highest rating) within Morningstar's "Small Value" category. The Investor class shares HFMDX have total annual expenses of 1.34% of assets under management, while the Institutional shares HIMDX have an expense ratio of 0.97%. Here's a 20-year chart showing the fund's total return (after expenses) for its investor class (the one with the higher fees) against those of the S&P 500, the S&P MidCap 400 Index MID and the S&P Small Cap 600 Index SML:

The fund has been quite an outperformer over the 20-year period, despite its expenses. And of course, the index performance figures include no expenses. Now let's look at performance in two other ways for various periods.

First, here are the total returns for both of the fund's share classes for various periods against the same indexes through June 14:

   Hennessy Cornerstone Mid Cap 30 Fund - institutional shares    1-year return  3-year return  5-year return  10-year return  15-year return  20-year return 
   Hennessy Cornerstone Mid Cap 30 Fund - Investor shares                   57%            57%           167%            199%            679%            873% 
   Hennessy Cornerstone Mid Cap 30 Fund - institutional shares              59%            59%           172%            209%            720%             N/A 
   S&P 500                                                                  26%            34%           104%            238%            668%            615% 
   S&P Mid Cap 400                                                          15%            11%            65%            142%            512%            566% 
   S&P Small Cap 600                                                         8%            -4%            49%            121%            467%            493% 
                                                                                                                                              Source: FactSet 

And here are the average annual returns:

   Fund or index                                                  3 year avg. return  5 year avg. return  10 year avg. return  15 year avg. return  20 year avg. return 
   Hennessy Cornerstone Mid Cap 30 Fund - Investor shares                      16.3%               21.7%                11.6%                14.7%                12.0% 
   Hennessy Cornerstone Mid Cap 30 Fund - Institutional shares                 16.7%               22.1%                11.9%                15.1%                  N/A 
   S&P 500                                                                     10.2%               15.4%                12.9%                14.6%                10.3% 
   S&P Mid Cap 400                                                              3.7%               10.5%                 9.2%                12.8%                 9.9% 
   S&P Small Cap 600                                                           -1.2%                8.3%                 8.3%                12.3%                 9.3% 
                                                                                                                                                        Source: FactSet 

It is good to consider stock-selection processes that are different from those of indexes. This fund has been a good performer with a process that aims for a combination of value, improving quality and price momentum, while sticking with a formula that keeps bias and emotion out of the annual investment selection.

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-Philip van Doorn

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06-17-24 1046ET

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