Meanwhile, most investors are concentrating on bond and fixed income funds. Fixed income enjoyed more than $1 trillion in flows this year. In contrast, equity funds have seen around $500 billion in outflows.
But Hennessy stressed the potential of equity funds, warning against pooling too much money in a limited selection of popular sectors.
"When everybody starts to go one way, that's not where you want to be, especially in a near-zero interest rate environment," said the chief investment officer and portfolio manager of Hennessy Funds, during a press luncheon in Midtown New York today.
But investors may not see real action until after companies have "received clarity" from the government regarding a number of key issues affecting the industry, not least of which is the fiscal cliff, said Hennessy.
And Hennessy's thoughts on the fiscal cliff?
"Personally, I think [the government] should let [the U.S.] go over the cliff," he said, explaining that the government needs more time to reach a compromise on potential tax increases. "People think I'm crazy," he said.
