Hennessy Advisors, Inc. (HNNA): BCG Matrix [Dec-2025 Updated]

You're looking at Hennessy Advisors, Inc. (HNNA)'s portfolio as of late 2025, and the picture is one of dynamic tension: while legacy funds provide a solid fee base, the real story is the explosive growth in their Stars, fueled by domestic equity funds posting returns like 22.58% YTD, all while the firm saw a 136% surge in Q1 2025 Net Income supporting assets now nearing $4.8 billion. To make smart decisions about where to place capital next, you need to know which products are the reliable Cash Cows, which niche bets are the high-risk Question Marks like the small ~$78.9 million ETF segment, and which units are simply draining resources.

Background of Hennessy Advisors, Inc. (HNNA)

You're looking at Hennessy Advisors, Inc. (HNNA), which is an investment management firm based in Novato, California. Honestly, their core business revolves around managing and marketing a suite of open-end mutual funds known as the Hennessy Funds. They stick to a buy-and-hold philosophy, which means they aren't trying to time the market; they focus on disciplined, long-term investing for their shareholders. The firm offers a broad range of products, including domestic equity, specialty, balanced, and fixed income funds. They also provide the necessary investment advisory and shareholder services to keep those funds running smoothly.

To get a sense of their scale as of late 2025, we can look at the numbers coming out of their third fiscal quarter, which ended June 30, 2025. The estimated Assets Under Management (AUM) as of November 28, 2025, was sitting right around $4.2 Billion. For the trailing twelve months (TTM) ending around that time, Hennessy Advisors generated revenue of about $35.82 million. This represents solid growth, especially when you compare it to the $29.65 million in revenue they posted for the full fiscal year 2024.

The profitability picture in the first half of 2025 looked quite strong, showing the benefits of that growing AUM base. For instance, in the first fiscal quarter of 2025 (ending December 31, 2024), the company reported net income of $2.8 million, which was a 136.2% increase year-over-year, pushing diluted Earnings Per Share (EPS) to $0.36. Even with some market volatility noted in the second quarter (ending March 31, 2025), they still managed a diluted EPS of $0.33, showing resilience. Plus, the firm has been consistent with shareholder returns, declaring a quarterly dividend of $0.1375 per share in their August 2025 announcement.

Hennessy Advisors, Inc. (HNNA) - BCG Matrix: Stars

You're looking at the engine room of Hennessy Advisors, Inc. (HNNA) portfolio right now, the area where high market growth meets high relative market share. These are the businesses units or products that are leaders, but they demand serious capital to maintain that lead. Honestly, they consume about as much cash as they bring in, which is typical for a Star.

The overall firm's recent financial momentum definitely reflects this high-growth segment. Look at the Q1 2025 Net Income; it surged 136% year-over-year to hit $2.834 million. That kind of jump shows the power of these market leaders reinvesting in themselves. If Hennessy Advisors, Inc. (HNNA) can keep this market share as the market matures, these Stars are set up to become the next generation of Cash Cows.

We see this growth reflected in the balance sheet, too. Total Assets Under Management (AUM) climbed 45.7% to $4.8 billion as of December 31, 2024. That growth came from both market appreciation and, crucially, net inflows, which is the organic sign of a strong product capturing investor interest.

The high-performing domestic equity funds are the primary fuel here, capturing market gains and driving the Trailing Twelve Month (TTM) revenue up to $35.82 million. These funds are the ones demanding the investment for promotion and placement you read about in the theory. Here's the quick math: that TTM revenue is the direct result of market leadership in growing segments.

To map out the performance characteristics of these leading business units, consider this snapshot:

The Hennessy Focus Fund (HFCIX) is a prime example of a product operating in this Star quadrant. It's a leader, but it still requires active management and capital deployment to fend off competitors. What this estimate hides is the exact cost of that required support, but the performance speaks for itself:

• Hennessy Focus Fund (HFCIX) YTD return: 22.58%
• Category Ranking: 2nd percentile
• Market Position: Leader in a high-growth space
• Strategic Need: Continued investment for market share defense

A key tenet of a Boston Consulting Group strategy for growth is to invest heavily in these Stars. If Hennessy Advisors, Inc. (HNNA) sustains this success until the high-growth market slows down, HFCIX and similar products will transition into Cash Cows, providing stable income later. For now, though, they are cash consumers funding their own success. Finance: draft the capital allocation plan for the top three domestic equity funds by next Wednesday.

Hennessy Advisors, Inc. (HNNA) - BCG Matrix: Cash Cows

Hennessy Cornerstone Growth Fund (HFCGX), a legacy product, holds an Assets Under Management (AUM) up to $474.21 million, establishing a large, stable fee base for Hennessy Advisors, Inc.

Hennessy Total Return Fund (HDOGX), a long-standing multi-asset fund, employs the 'Dogs of the Dow' strategy, allocating approximately 50% of its assets to the equity strategy and approximately 50% to U.S. Treasury securities with a maturity of less than one year.

The core suite of domestic equity and multi-asset mutual funds operates within mature markets, generating predictable advisory fee revenue, as evidenced by the firm's overall performance metrics from the period ended December 31, 2024, which are indicative of stable cash generation.

The firm's consistent dividend payout is supported by a cash position net of debt that strengthened by nearly 30% in the 12 months leading up to Q1 2025. As of the end of Q1 2025, this cash and cash equivalents, net of gross debt, stood at $24.729 million, marking a 28% increase year-over-year.

The stability of the product line is further supported by long-term performance metrics:

• All 17 Hennessy Funds posted positive returns for the year ended December 31, 2024.
• All 16 Hennessy Funds with at least 10 years of history achieved positive returns for the five-year and ten-year periods ended December 31, 2024.
• The Investor Class of HFCGX returned 19.1% per year over the past five years (Grade A).
• HDOGX 12-Mo. Yield was reported at 2.22% as of November 21, 2025.

Hennessy Advisors, Inc. (HNNA) - BCG Matrix: Dogs

Dogs, are units or products with a low market share and low growth rates. They frequently break even, neither earning nor consuming much cash. Dogs are generally considered cash traps because businesses have money tied up in them, even though they bring back almost nothing in return. These business units are prime candidates for divestiture.

For Hennessy Advisors, Inc. (HNNA), the 'Dogs' quadrant likely contains niche offerings or high-cost legacy products where the market has moved toward lower-cost alternatives, or where active management is failing to justify its fee structure. You see this pressure most clearly in funds that carry a high expense ratio without delivering commensurate performance or shareholder distributions.

Consider the Hennessy Japan Small Cap Fund (HJPSX). As of November 24, 2025, this fund carried a Negative Morningstar Medalist Rating. This rating resulted from strength in the People Pillar being offset by an Average Process Pillar rating. The fund invests at least 80% of its net assets in equity securities of smaller Japanese companies. Its Investment Class expense ratio stood at 1.530% as of October 31, 2025, which is priced within the most expensive quintile among peers, with a 2025 category average expense ratio of 0.842% for Japan Stock funds. That's a significant hurdle to clear, honestly.

The high-cost structure is a recurring theme for potential Dogs. Take the Cornerstone Growth Investor Class (HFCGX). Its gross expense ratio is listed at 1.29% as of February 28, 2025. That expense ratio is 24% higher than its Small Blend category average. While Hennessy Advisors, Inc. (HNNA) boasts strong People and Process Pillar ratings for HFCGX, the fees remain a weakness, leading to a Neutral Morningstar Medalist Rating. Furthermore, this fund exhibits a high portfolio turnover rate of 94%, compared to the category average of 63%.

The lack of capital gain realization in certain funds further signals low turnover or poor profitability, characteristic of a Dog. As of the scheduled December 4, 2025, distribution date, both the Small Cap Financial Fund (HSFNX) and the Technology Fund (HTECX) had no capital gain distributions paid in 2025.

Here's a quick look at the metrics highlighting these low-share, high-cost situations:

You should also be watching for small, non-diversified funds that concentrate assets in niche or volatile sectors, which often struggle to gain significant market share against larger, more diversified peers. The Hennessy Technology Fund (HTECX) maintains a relatively concentrated portfolio of 60 stocks. When combined with the lack of 2025 capital gain distributions, this suggests low realized gains or minimal asset movement, tying up capital without generating significant cash flow.

These units fit the profile because:

• The Hennessy Japan Small Cap Fund (HJPSX) has a Negative Morningstar Medalist Rating.
• The Cornerstone Growth Investor Class (HFCGX) carries a 1.29% expense ratio.
• The Small Cap Financial Fund and Technology Fund paid no capital gain distributions in 2025.
• The expense ratio for HJPSX is nearly double the 2025 category average of 0.842%.

Expensive turn-around plans usually do not help. For these assets, divestiture is often the clearest path to redeploying capital where Hennessy Advisors, Inc. (HNNA) has Stars or strong Cash Cows. Finance: draft 13-week cash view by Friday.

Hennessy Advisors, Inc. (HNNA) - BCG Matrix: Question Marks

You're looking at the products within Hennessy Advisors, Inc. (HNNA) that are fighting for traction in rapidly expanding markets. These are the Question Marks-high potential, but currently demanding cash without delivering significant returns. They need a decisive strategy: heavy investment to capture market share or divestiture.

The Hennessy Sustainable ETF (STNC) exemplifies this quadrant. As an actively-managed fund in the high-growth ESG market, its Assets Under Management (AUM) were reported at only ~$78.9 million based on Q2 2025 13F filings. Still, other data points suggest a slightly larger scale, with one source reporting its Fund AUM at $94.76M and another at $93.96M as of late 2025. This product operates in a space where environmental, social, and governance investing is seeing massive inflows, but STNC itself holds a small slice of that growing pie.

A clear strategic move to bolster the firm's ETF presence is the planned acquisition of additional ETF assets. Hennessy Advisors, Inc. signed a definitive agreement to acquire the STF Tactical Growth ETF (TUG) and the STF Tactical Growth & Income ETF (TUGN). These combined assets total approximately $220 million, with the transaction expected to close in the third quarter of 2025. This is a direct attempt to quickly shift the market share position of the firm's ETF offerings.

The entire ETF segment for Hennessy Advisors, Inc. is a Question Mark. While the overall Hennessy Funds AUM was estimated at $4,157,304,511 as of November 28, 2025, the ETF portion represents a relatively small market share in the broader, high-growth exchange-traded fund space. These products consume capital for marketing, distribution, and operational scaling to compete effectively against established giants.

Specialty funds, such as the Hennessy Energy Transition Fund (HNRGX), also fit this profile due to their narrow focus and inherent volatility. This fund, which invests across the energy value chain, requires capital to build out a competitive track record against broader sector funds. Its high expense ratio, listed at 2.440% for the Investor Class, acts as a hurdle that must be overcome by superior performance or increased asset gathering.

Here is a comparison of the capital demands and current scale for these Question Mark products:

To manage these units effectively, Hennessy Advisors, Inc. must decide where to allocate resources for rapid growth. The core challenge is converting these high-potential ventures into Stars before they become Dogs. The immediate actions revolve around integration and investment:

• Finalize the TUG/TUGN acquisition by Q3 2025.
• Invest heavily in STNC to grow AUM past the $100 million threshold.
• Monitor HNRGX expense ratio against peer performance.
• Ensure the ETF segment gains share in the overall market.

The decision to invest in a Question Mark is a bet on future market share capture. If the market adoption for STNC accelerates post-ESG trend stabilization, it could become a Star. If the TUG/TUGN integration fails to attract new assets quickly, those funds risk falling into the Dog quadrant.