Hennessy Funds to Add FBR Funds to Line-Up

September 7, 2012 - Hennessy Funds is pleased to announce that definitive proxy/prospectus materials related to the reorganization of the FBR Funds into the Hennessy Funds have been filed with the SEC and are being sent to shareholders of the FBR Funds for their vote of approval. Pending shareholder approval, this transaction is expected to take place on October 29, 2012.

Seven of the ten FBR Funds will move under the Hennessy investment management umbrella but will continue to be managed by the portfolio managers that oversee the portfolios today, and the investment objectives will remain the same:

FBR Focus Fund → Hennessy Focus Fund

FBR Gas Utility Index Fund → Hennessy Gas Utility Index Fund

FBR Large Cap Financial Fund → Hennessy Large Cap Financial Fund

FBR Small Cap Financial → Hennessy Small Cap Financial Fund

FBR Technology Fund → Hennessy Technology Fund

FBR Balanced Fund → Hennessy Equity and Income Fund

FBR Core Bond Fund → Hennessy Core Bond Fund

It is anticipated that the expense ratio for each of these seven Funds will be the same or slightly lower following the proposed reorganization into the Hennessy Funds. Ticker symbols and CUSIP numbers for these Funds will also change upon the close of the transaction.

The remaining three FBR Funds will be transferred into one of the existing Hennessy Funds with a similar investment objective:

FBR Large Cap Fund → Hennessy Cornerstone Large Growth Fund

FBR Mid Cap Fund → Hennessy Cornerstone 30 Fund

FBR Small Cap Fund → Hennessy Cornerstone Growth Fund

FBR shareholders in these three Funds will receive the lowest cost Hennessy Funds shares available, and the expense ratio of each of these Funds is lower than that of the transferring FBR Fund.

The 1% redemption fee currently charged on all FBR Funds will be eliminated following the reorganization, as the Hennessy Funds do not carry redemption fees. For income tax purposes, shareholders, the FBR Funds, and the Hennessy Funds should not be required to recognize gain or loss in the reorganization.

“We are genuinely excited to welcome FBR shareholders to the Hennessy family of funds and to bring such talented portfolio managers onto our investment team,” said Neil Hennessy, President and Chief Investment Officer of Hennessy Funds. “We are thrilled to add these well-managed specialty and fixed-income funds to our product line-up, and we are eager to begin offering them to our existing Hennessy Funds shareholders,” he added.

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The Funds' investment objectives, risks, charges, and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company. Please read it carefully before investing. A hard copy of the prospectus can be requested by calling 1-800-966-4354.

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 and can be found here. Performance data current to the most recent month end may be obtained from HennessyFunds.com Hennessy Funds Standardized Performance

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Mutual fund investing involves risk. Principal loss is possible. Current and future holdings are subject to risk. Small and medium-sized companies may have more limited liquidity and greater price volatility than larger companies. Investments in foreign securities may involve political, economic, and currency risks, greater volatility, and differences in accounting methods. The Focus, Total Return, Balanced, Large Cap Financial, Small Cap Financial, and Midstream Funds are considered non-diversified funds. A non-diversified fund, which may concentrate its assets in fewer individual holdings than a diversified fund, is more exposed to individual stock volatility than a diversified fund. A fund that concentrates its investments within one country, one sector, or a small group of industries, such as Japan, Technology, Financials, or Energy, may be subject to a higher degree of market risk. Investments in debt securities typically decrease in value when interest rates rise. The risk is greater for longer-term debt securities. Investments in lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities. Mortgage- and asset-backed securities are subject to prepayment risk, which is the risk that the borrower will prepay some or all of the principal owed to the issuer. Funds that invest in pooled investment vehicles (including ETFs) may experience higher fees. The formula-based strategy employed by some Funds may cause those Funds to buy or sell securities at times when it may not be advantageous.

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Master Limited Partnerships (MLPs) and MLP investments have unique characteristics. A Fund does not receive the same tax benefits as a direct investment in an MLP.

The prices of MLP units may fluctuate abruptly and trading volume may be low, making it difficult for a Fund to sell its units at a favorable price. MLP general partners have the power to take actions that adversely affect the interests of unit holders. Most MLPs do not pay U.S. federal income tax at the partnership level, but an adverse change in tax laws could result in MLPs being treated as corporations for federal income tax purposes, which could reduce or eliminate distributions paid by MLPs to the Fund. If the Energy Transition Fund’s MLP investments exceed 25% of its assets, it may not qualify for treatment as a regulated investment company (“RIC”) under the Internal Revenue Code (“Code”), and the Fund would be taxed as an ordinary corporation, which could substantially reduce its net assets and its distributions to shareholders. The Midstream Fund is treated as a regular corporation, or “C” corporation, for U.S. federal income tax purposes, and therefore, is subject to U.S. federal income tax on its taxable income at the graduated rates applicable to corporations (currently a maximum rate of 21%) as well as state and local income taxes. The Midstream Fund will not benefit from current favorable federal income tax rates on long-term capital gains, and Fund income and losses will not be passed on to shareholders. The Midstream Fund accrues deferred income taxes for future tax liabilities associated with the portion of MLP distributions considered to be a tax-deferred return of capital and for any net operating gains as well as capital appreciation of its investments. This deferred tax liability is reflected in the daily NAV, and as a result, the Fund’s after-tax performance could differ significantly from the underlying assets even if the pre-tax performance is closely tracked.

Glossary of Terms contains definitions and additional information.

To view the top 10 holdings of a Fund, please click the Fund name: Cornerstone Growth, Focus, Cornerstone Mid Cap 30, Cornerstone Large Growth, Cornerstone Value, Total Return, Equity and Income, Balanced, Energy Transition, Midstream, Gas Utility, Japan, Japan Small Cap, Large Cap Financial, Small Cap Financial, Technology. Fund holdings are subject to change and not recommendations to buy or sell any security.

Opinions expressed are subject to change at any time, are not guaranteed, and should not be considered investment advice.

News and Media Page:

To view the Morningstar ratings for the Japan Fund, please click here. (Media - TD Ameritrade)

To view the Morningstar ratings for the Focus Fund, please click here. (Media - CNBC-B. Macualey).

1 USD = 105.36 Yen as of 07/27/2020 (Media - Ticker - M. Takeda)

Tom White is a TD Ameritrade Network contributor and is not affiliated with the Hennessy Funds. Content is not investment advice, or a recommendation of any security, strategy, or account type. Options involve risks and are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses.(Media - TD Ameritrade-Rothberg)

To view the Morningstar ratings, please click here.

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