The Big Potential of Smaller Companies

Here are four reasons we believe investors should take another look at this segment of the market and the Hennessy Cornerstone Mid Cap 30 Fund.

1. An Attractive Combination of Size and Potential.

Mid-cap companies may offer a compelling balance of scale and growth potential. They are often large and established enough to survive a sustained market sell off, pursue acquisitions or become attractive acquisition targets themselves.

2. Valuation Gap in Mid-Caps Has Rarely Been Wider.

While investors have concentrated capital in a handful of mega-cap stocks, valuations across much of the rest of the market remain compelling. Today, mid-cap companies trade at meaningful discounts to the S&P 500 based on both price-to-earnings (P/E) and price-to-sales (P/S) ratios.

3. A Portfolio Focused on Value and Momentum.

The Hennessy Cornerstone Mid Cap 30 Fund uses a disciplined, time-tested quantitative process to identify companies with attractive valuations, improving earnings, and strong price momentum. By combining these characteristics, the Fund traded at lower price-to-sales and forward price-to-earnings multiples than the Russell Midcap® Index.

4. Long-Term Track Record - Smaller Company Outperformance

Regardless of stylebox—growth or value, mid or small—the Fund outperformed the Russell indices for the 3-, 5- and 10-year periods ended 6/30/26.

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. Other share classes may have different performance. One cannot invest directly in a market index. Performance data current to the most recent month end may be obtained by visiting hennessyfunds.com.

For investors seeking to diversify beyond familiar mega-cap names, mid-cap stocks may provide exposure to a broader range of businesses and return drivers. With an attractive combination of size and scale and lower valuations than their large-cap peers, mid-cap companies may help create a more balanced equity portfolio.

Consider the Hennessy Cornerstone Mid Cap 30 Fund as a way to access these potential opportunities.