Information on the Hennessy Cornerstone Growth Fund
Hennessy Cornerstone Growth Fund

Fund Objective
The goal of the Cornerstone Growth Fund is long-term growth of capital.

Investor Profile
The Cornerstone Growth Fund utilizes a combination of growth and value characteristics in the selection of stocks that may be suitable for investors who are willing to have an investment horizon of five years or more. In addition, investors should be willing to accept higher short-term risk along with higher potential for long-term growth of capital since the Fund primarily invests in small cap stocks.

Fund Strategy
Every year the Fund will buy the 50 stocks that meet the following criteria: At the time of purchase, the companies that have the highest one-year price appreciation as of the date of purchase; have a price-to-sales ratio below 1.5; annual earnings higher than in the previous year, and positive relative strength over the past three and six month periods with acceptable liquidity. The Fund's portfolio is rebalanced once a year.

Stock Selection Process
The following chart illustrates how stocks are selected for the Cornerstone Growth Fund. The stock selection process is clear and rigorous.

  1. Compustat Database
  2. Market Capitalization greater than $175 Million
  3. Price to Sales Ratio Below 1.5
  4. Annual Earnings higher than the previous year
  5. Select 50 stocks with the best 12 month, 6 month and 3 month relative strength

The fund is then rebalanced once a year.

Historical Performance

Average Annual Total Returns as of 06/30/08
 
YTD
1 Yr
3 Yr
5 Yr
10 Yr
Since Inception
11/1/96
HFCGX
-11.20%
-20.87%
2.28%
9.70%
9.62%
12.34%
S&P 500 Index
-11.91%
-13.12%
4.41%
7.58%
2.88%
7.01%
             
Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by clicking here. Performance shown does not include a 1.5% redemption fee on shares held less than 90 days. If it did, total returns would be reduced.

Year by Year Total Returns
HFCGX
S&P 500 Index
  
1997
31.33%
33.36%
  
1998
3.67%
28.58%
  
1999
37.72%
21.04%
  
2000
5.30%
-9.10%
  
2001
12.15%
-11.89%
  
2002
-4.71%
-22.10%
  

2003
45.82%
28.68%
  
2004
16.65%
10.88%
  
2005
11.96%
4.91%
  
2006
10.42%
15.80%
  
2007
-2.18%
5.49%
  

Fund Information (as of 06/30/08)
Total Net Assets $555 million
Beta (vs. S&P 500) 1.25
Expense Ratio 1.20%
CUSIP 425 888 104
Ticker HFCGX
SEC Fund Identifier Series S000000838; Class C000002453
Inception 11/1/96
Min Investment $2500
Min Investment (IRAs) $250
Dividends Paid Annually
Portfolio Composition  
Equity 98.8%
Cash 1.2%

Equity Sector Weighting (as of 06/30/08)

Industry
Weight
Consumer Discretionary
1.6%
Consumer Staples
13.3%
Energy
19.5%
Financials
6.0%
Health Care
16.8%
Industrials
23.6%
Information Technology
3.3%
Materials
8.5%
Telecommunication Services
2.1%
Utilities
5.3%

Top 10 Equity Fund Holdings (as of 06/30/08)

Company Name
Percentage of Assets
ALPHA NATURAL RESOURCES INC.
7.4%
MASSEY ENERGY CO.
5.8%
FLOWSERVE CORP.
3.1%
STEEL DYNAMICS INC.
3.0%
ENERSYS INC.
2.5%
COCA-COLA FEMSA DE C V  (ADR)
2.4%
AZZ INC
2.4%
ENBRIDGE INC.
2.2%
STANLEY INC
2.1%
AON CORP
2.1%

International Holdings (as of 06/30/08)

Brazil
2.0%
Canada
4.1%
Grand Cayman
1.4%
France
2.0%
Germany
5.3%
Japan
1.6%
Mexico
2.4%
Netherlands
1.5%
South Korea
1.5%
USA
78.2%
Total
100.0%

 
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The performance returns assume all dividends and capital gains were reinvested in the Fund.

The Fund's composition and sector weightings are shown as a percentage of the Fund's total net assets. Portfolio composition and sector weightings are subject to change at any time and should not be considered a recommendation to buy or sell a particular security.

The S&P 500 Index is a broad based unmanaged index of 500 stocks which is widely recognized as representative of the equity market in general. The Russell 2000 Index is a recognized small-cap index of 2000 smallest securities of the Russell 3000 Index, which is comprised of the 3,000 largest U.S. securities as determined by total market capitalization. The Index figures do not reflect any fees or expenses. You cannot invest directly in an index.

The advisor had an agreement in place to limit expenses through June 2005. The expense levels were not been exceeded during this time.

Small- and Medium-capitalization companies tend to have limited liquidity and greater price volatility than large-capitalization companies. Investments in foreign securities involve greater volatility and political, economic and currency risk and different accounting methods.

** Beta is a measure of a portfolio's sensitivity to market movements (as represented by the S&P 500). The index has a beta of 1.0. A beta of more (less) than 1.0 indicates that a fund's historical returns have fluctuated more (less) than the index.

Please refer to the prospectus for important information about the investment company including investment objectives, risks, charges and expenses. The prospectus should be read carefully before investing. Please call 800-966-4354 to request a hard copy of the prospectus.

Quasar Distributors, LLC, Distributor.


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