Hennessy Advisors HNNA faces headwinds in the increasingly competitive asset-management industry. Founded in 1989, the firm’s business model centers around acquiring assets and folding them into existing Hennessy mutual funds or rebranding acquired funds but hiring the existing management team to subadvise. While it’s a plus that the firm gives subadvisors autonomy, none of the funds in Hennessy’s lineup—either subadvised or in house—stand out as strong investment options. What’s more, the funds are expensive: Over 90% of assets are priced High or Above Average relative to similarly distributed peers. With the firm experiencing outflows in recent years, it’s unlikely fees will decline. Assets dropped to $3.2 billion as of August 2022, down from a peak of $7.5 billion in January 2018. The lineup is heavily concentrated in two strategies, Hennessy Focus and Hennessy Gas Utility, which comprised 45% of the firm’s assets and have also experienced outflows. The firm is trying to expand into new areas. An acquisition of the $42 million Stance Equity ESG Large Cap Core ETF is expected to close in 2022’s fourth quarter, though the exchange-traded fund is expensive at its current price. The firm has prepared for founder Neil Hennessy’s eventual retirement, a plus given he boasts a 44-year career. But on the whole, the firm’s shortcomings underlie Hennessy’s Parent rating downgrade to Below Average from Average.
MarketUS Open-end ex MM ex FoF ex Feeder
Total Net Assets2.89 Bil
Investment Flows (TTM)−657.20 Mil
Asset Growth Rate (TTM)−17.40%
# of Share Classes30
# of Share Classes
Morningstar Rating Overall
5-Year Category Rank
|Hennessy Cornerstone Mid Cap 30 Instl||9|
|Hennessy Cornerstone Mid Cap 30 Inv||13|
|Hennessy Japan Small Cap Investor||58|
|Hennessy Cornerstone Growth Inst||17|
|Hennessy Small Cap Financial Instl||36|
The Morningstar Star Rating for Funds is a purely quantitative measure of a fund's past performance, measured from one to five stars. Star ratings are calculated at the end of every month. Investments must have at least 36 continuous months of total returns to receive a rating.
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