Hussman Investment Trust N-CSRSCertified semi-annual shareholder report (management investment company)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Hussman Investment Trust

(Exact name of registrant as specified in charter)

6021 University Boulevard, Suite 490 Ellicott City, Maryland 21043

(Address of principal executive offices) (Zip code)

John F. Splain

Ultimus Fund Solutions, LLC 225 Pictoria Drive, Suite 450 Cincinnati, Ohio 45246

(Name and address of agent for service)

Registrant's telephone number, including area code: (513) 587-3400

Date of fiscal year end: June 30, 2022

Date of reporting period: December 31, 2021

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Reports to Stockholders.

(a) 

HUSSMAN INVESTMENT TRUST

HUSSMAN STRATEGIC GROWTH FUND

HUSSMAN STRATEGIC ALLOCATION FUND

HUSSMAN STRATEGIC TOTAL RETURN FUND

HUSSMAN STRATEGIC INTERNATIONAL FUND

SEMI-ANNUAL REPORT

December 31, 2021
(Unaudited)

Table of Contents

Hussman Strategic Growth Fund

Comparison of the Change in Value of a $10,000 Investment in
Hussman Strategic Growth Fund versus the S&P 500 Index^(a) (Unaudited)

Hussman Strategic Allocation Fund

Comparison of the Change in Value of a $10,000 Investment in Hussman Strategic Allocation Fund
versus Benchmark Fixed Allocation Composite^(a) (Unaudited)

Hussman Strategic Total Return Fund

Comparison of the Change in Value of a $10,000 Investment in Hussman Strategic Total Return Fund
versus the Bloomberg U.S. Aggregate Bond Index^(a) (Unaudited)

Hussman Strategic International Fund

Comparison of the Change in Value of a $10,000 Investment in
Hussman Strategic International Fund versus the MSCI EAFE Index^(a) (Unaudited)

Dear Shareholder,

The U.S. stock market entered 2022 at the most steeply overvalued speculative extreme in the nation’s history. Based on the gauges that we find best-correlated with actual subsequent total returns for the Standard & Poor’s 500 Index across a century of market cycles, the S&P 500 stood nearly 3.6 times the level of valuation that has historically been consistent with expected long-term market returns of 10% annually.

The chart below presents several of our most reliable valuation measures, each as a multiple to its own historical norm. The lines are nearly indistinguishable, and that is exactly the point. A color version of this chart is presented in the online version of this Semi-Annual Report (www.hussmanfunds.com).

Faced with short-term interest rates near zero, it may be reasonable for investors to expect stock market valuations to stand well-above their historical norms. It is also not impossible for the stock market to “grow its way out” of extreme valuations. The main difficulty with valuations at 3.6 times their historical norms is arithmetic. If these valuation measures were simply to touch those norms 30 years from today, prices would have to grow 4% slower than fundamentals, on average, during that period (1/3.6 ^ 1/30 – 1 = -4.18%). Given that S&P 500 revenues, nonfinancial gross value-added, and nominal GDP have all grown at a rate of only about 4% over the past

10, 20, and 30 years, the same economic growth, coupled with that 4% valuation headwind, would combine to leave the S&P 500 Index unchanged over those 30 years.

Indeed, even at the 2000 bubble peak – which was followed by nearly 12 years of negative S&P 500 total returns – these same valuation measures stood an average of “only” 2.5 times their historical norms. Now, as then, we estimate that these valuation extremes will be followed by more than a decade of negative total returns for the S&P 500. To avoid such an outcome, investors must rely on valuations to sustain a “permanently high plateau.”

It bears repeating that the S&P 500 lagged Treasury bills from 1929-1947, 1966-1985, and 2000-2013. These spans comprise 50 years out of an 84-year period. When the investment horizon begins at extreme valuations, and does not end at the same extremes, the retreat in valuations acts as a headwind that consumes the return that would otherwise be provided by dividends and growth in fundamentals.

It is common for investors to “justify” current valuation extremes by appealing to low interest rates and elevated profit margins, and it is true that these factors often accompany steep market valuations. However, once extreme market valuations have been established, neither low interest rates nor high profit margins have been enough to prevent the dismal long-term market returns that have historically followed. Moreover, much of the recent expansion in corporate profit margins reflects the impact of temporary pandemic-related deficits, as every deficit of government must, in equilibrium, emerge as a surplus to some other sector.

In my view, the financial markets presently have little to do with “investment” – at least not by Benjamin Graham’s definition as “an operation that, upon thorough analysis, promises safety of principal and an adequate return.” It may be true that zero interest rates provide investors “no alternative” but to speculate. But as Graham emphasized, there are many ways in which speculation can be unintelligent. The first of these is speculating when one believes one is investing. Accepting exposure to market risk in a steeply overvalued market requires historically-informed criteria, position limits, and safety nets to be anything other than unintelligent speculation.

On that front, despite what I view as the broadest and most extreme level of market overvaluation in history, we have made adaptations to our discipline in recent years to navigate this environment. We can even allow for the unlikely possibility that it will continue indefinitely, and valuations will never again revisit their historical norms.

“Investment” and “speculative” opportunities – and their associated risks – constantly evolve as market conditions change. We gauge “investment merit” by valuation – the relationship between the price of a security and the long-term stream of expected cash flows that we expect that security to deliver over time. In contrast, speculation is concerned mainly with changes in price, and rests heavily on investor psychology. When investors are inclined to speculate, they tend to be indiscriminate about it, so we gauge “speculative merit” based on the uniformity or divergence that we observe across thousands of individual securities, industries, sectors, and security-types, including debt securities of varying creditworthiness. Since 1988, this measure of “market internals” has remained our most reliable gauge of speculation versus risk-aversion.

Our investment discipline is to align our market outlook with the measurable, observable conditions that we define. For example, we seek to be more constructive when valuations are depressed and more defensive when they are elevated. We seek to be more constructive – not bearish – when market internals are uniformly favorable. We want to be more defensive – not leveraged or completely unhedged – when market internals are deteriorating or divergent. We want to be more constructive after sharp market declines when short-term price behavior is “compressed,” and more defensive after sharp market advances when short-term price behavior is “overextended.”

The main adaptation that unprecedented Federal Reserve policies required of our own discipline in this cycle was to abandon our pre-emptive bearish response to historically-reliable “limits” to speculation, and to instead prioritize the condition of market internals. Essentially, we became content to gauge the presence or absence of speculation or risk-aversion, without assuming that there remains any well-defined limit to either.

A more recent – though minor – adaptation has been to adopt a slightly more permissive threshold in our gauge of market internals when interest rates are near zero and certain measures of risk-aversion are well-behaved. Given that we use market internals to gauge speculative psychology, a more permissive threshold captures the idea that zero-interest monetary policy boosts the implications of a given improvement in market internals. We expect that the main effect of that adaptation will be to promote an earlier and more constructive shift following material market losses.

In short, we have made considerable efforts to find ways to move away from a persistently defensive position, despite historically unprecedented valuations. I expect these adaptations to result in more frequent opportunities to accept market exposure, coupled with position limits and safety nets to constrain risk – even if market valuations

remain extreme and continue to imply poor long-term stock market returns. These adaptations fall into what Ben Graham would describe as “intelligent speculation” – disciplined, historically-informed, and kept within careful limits.

Fund Performance

Amid extreme valuations and measurable deterioration in market action suggesting growing risk-aversion among investors, we adopted an increasingly defensive investment stance during the second half of 2021, particularly late in the year. Although the S&P 500 declined by -9.8% in the early weeks of 2022, this decline has done little to-date to relieve the extremes that we continue to observe.

Strategic Growth Fund

For the year ended December 31, 2021, the total return of Strategic Growth Fund was -0.23%, compared with a total return of 28.71% for the S&P 500 Index.

Strategic Allocation Fund

For the year ended December 31, 2021, the total return of Strategic Allocation Fund was 7.22%, compared with a total return of 15.81% in the benchmark fixed allocation composite index which is weighted 60% S&P 500 Index, 30% Bloomberg U.S. Treasury Unhedged Index and 10% Bloomberg U.S. Treasury Bills Index.

Strategic Total Return Fund

For the year ended December 31, 2021, the total return of Strategic Total Return Fund was 1.21%, compared with a total return of -1.54% for the Bloomberg U.S. Aggregate Bond Index.

Strategic International Fund

For the year ended December 31, 2021, the total return of Strategic International Fund was -5.12%, compared with a total return of 11.26% in the MSCI EAFE Index.

Portfolio Composition

As of December 31, 2021, Strategic Growth Fund had net assets of $357,727,617, and held 280 stocks in a wide variety of industries. The largest sector holdings as a percent of net assets were consumer discretionary (19.3%), health care (17.5%), technology (15.4%), consumer staples (14.0%), financials (11.9%), communications (9.5%) and materials (5.4%). The smallest sector holdings as a percent of net assets were industrials (4.0%), energy (3.5%), real estate (1.4%), exchange-traded funds (0.9%) and utilities (0.4%).

Strategic Growth Fund’s holdings of individual stocks and ETFs as of December 31, 2021 were valued at $368,913,180. Against these stock positions, the Fund also held 425 option combinations (long put option/short call option) on the S&P 500 Index, 15 long put option contracts on the S&P 500 Index and 700 option combinations on the Russell 2000 Index. Each option combination behaves as a short sale on the underlying index, with a notional value of $100 times the index value. On December 31, 2021, the S&P 500 Index closed at 4,766.18, while the Russell 2000 Index closed at 2,245.313. The Fund’s total hedge therefore represented a short position of $366,883,830, thereby hedging 99.4% of the dollar value of the Fund’s investment positions in individual stocks.

Though the performance of Strategic Growth Fund’s diversified portfolio cannot be attributed to any narrow group of stocks, the following equity holdings achieved gains in excess of $1 million during the six months ended December 31, 2021: Clearfield, Macy’s, United Natural Foods, Stamps.com and Customers Bancorp. Equity holdings with a loss in excess of $1 million during this period were recognized in AMC Networks, ViacomCBS, Express, Cambium Networks, Inogen, Big Lots, Sleep Number, Jazz Pharmaceuticals and Sage Therapeutics.

As of December 31, 2021, Strategic Allocation Fund had net assets of $19,725,473 and held 278 stocks in a wide variety of industries. The largest sector holdings as a percent of net assets were consumer discretionary (13.4%), health care (12.3%), technology (11.1%), consumer staples (9.8%), financials (8.2%), and communications (6.8%). The smallest sector weights were materials (3.9%), industrials (2.7%), energy (2.4%), real estate (1.0%), exchange-traded funds (0.5%) and utilities (0.2%). Treasury notes and money market funds represented 42.6% of the Fund’s net assets.

Strategic Allocation Fund’s holdings of individual stocks and ETFs as of December 31, 2021 were valued at $14,262,881, representing 72.3% of the Fund’s net assets. Against these stock positions, the Fund also held 15 option combinations (long put option/short call option) on the S&P 500 and 25 option combinations on the Russell 2000 Index. The notional value of this hedge was $12,762,553, hedging 89.5% of the value of equity investments held by the Fund. The Fund’s holdings in long-term Treasury obligations represented 10.3% of the Fund’s net assets.

In Strategic Allocation Fund, during the six months ended December 31, 2021, the only individual equity with a portfolio gain in excess of $50,000 was Clearfield. Individual equity portfolio losses in excess of $50,000 during this period were recognized in AMC Networks and ViacomCBS.

As of December 31, 2021, Strategic Total Return Fund had net assets of $270,917,498. Treasury notes, Treasury Inflation-Protected Securities (TIPS) and money market funds represented 73.0% of the Fund’s net assets. Sector holdings of equities as a percent of net assets were precious metals shares (13.8%), exchange-traded funds (5.0%), energy (3.7%), utilities (3.1%), and real estate (1.2%).

In Strategic Total Return Fund, during the six months ended December 31, 2021, the following holdings achieved portfolio gains in excess of $250,000: U.S. Treasury Note (0.625%, due 8/15/2030), Newmont Mining, U.S. Treasury Inflation Note (0.125%, due 1/15/2031), SM Energy and AngloGold Ashanti ADR. Portfolio losses in excess of $250,000 during this period were recognized in Nabors Industries, U.S. Treasury Note (1.50%, due 8/15/2026), Laredo Petroleum, Barrick Gold, U.S. Treasury Note (2.00%, due 5/31/2024), Coeur Mining and Royal Gold.

As of December 31, 2021, Strategic International Fund had net assets of $14,206,590 and held 170 stocks in a wide variety of industries. The largest sector holdings as a percent of net assets were consumer discretionary (19.5%), financials (13.8%), communications (13.1%), industrials (10.6%), technology (9.0%), health care (7.9%), consumer staples (7.2%) and materials (5.2%), The smallest sector weights were utilities (1.9%), real estate (1.8%) and energy (1.1%). Investment in shares of money market funds accounted for 2.5% of net assets.

Strategic International Fund’s holdings of individual stocks as of December 31, 2021 were valued at $12,952,301. In order to hedge the impact of general market fluctuations, as of December 31, 2021, Strategic International Fund was long 8 put option contracts on the S&P 500 Index and short 75 futures on the Mini MSCI EAFE Index. The notional value of this hedge was $12,573,207, hedging 97.1% of the value of equity investments held by the Fund. When the Fund is in a hedged investment position, the primary driver of Fund returns is the difference in performance between the stocks owned by the Fund and the indices that are used to hedge.

While Strategic International Fund’s investment portfolio is diversified and the Fund’s performance is affected by numerous investment positions, the hedging strategy of the Fund was primarily responsible for the reduced sensitivity of the Fund to market fluctuations from the Fund’s inception through December 31, 2021. Individual equity holdings having portfolio gains in excess of $40,000 during the six months ended December 31, 2021 included Clas Ohlson AB, Swedish Orphan Biovitrum, Hornbach Holding AG and Iliad SA. Equity holdings with portfolio losses in excess of $40,000 during this period were recognized in Enigmo and Draegerwerk AG.

Supplementary performance information for the Funds is available on the Hussman Funds website: www.hussmanfunds.com

Current Outlook

In recent months, inflation pressures have become pronounced, with U.S. consumer price inflation reaching 7.5% by January 2022. Given that the rate of unemployment has declined to 4%, there is growing pressure on the Federal Reserve to step back from its aggressively easy monetary policy stance. Yet because recent inflationary pressure seems partly driven by pandemic-related supply disruptions, some observers believe that tightening policy would amount to a “policy error.”

In my view, the most important issue facing the Fed here is not how quickly to taper its asset purchases, or when the next rate hike should occur. The real problem for the Fed is that it has completely abandoned any semblance to a systematic policy framework, in apparent preference for a purely discretionary one. The “policy error” of the Fed is long behind us. It can be measured by the gap between what the Fed has actually done, and what any reasonable basket of systematic policy guidelines would have suggested instead.

Systematic policy means that monetary policy variables are correlated with, and informed by, current, lagged, and projected data on output, employment, and inflation. There are numerous systematic policy benchmarks, or a basket of them, that could be used – even as very loose guidelines – to tether Fed policy decisions to observable data. It is easy to estimate whether deviations from systematic policy benchmarks have a large effect on subsequent economic activity – they do not. Yet the modern Federal Reserve has committed itself to operating monetary policy purely by discretion.

A systematic policy would allow individuals and financial markets to anticipate the general stance of monetary policy based on observable data. Instead, having taught the financial markets that they will be continually appeased, regardless of the long-term consequences, even a “taper” is now met with wails of surprise, crisis, and tantrum.

By relentlessly depriving investors of risk-free return over the past decade, the Federal Reserve has spawned an all-asset speculative bubble that we estimate will provide investors little but return-free risk over the coming decade.

Understanding quantitative easing and zero-interest monetary policy

“Quantitative easing” is a simple operation with profound financial consequences. The Fed purchases interest-bearing Treasury securities from investors and replaces them with zero-interest base money (bank reserves and currency) which some investor must hold, at every moment in time, until the Fed removes it. When the Fed “increases its balance sheet,” it holds more Treasury securities as assets, and issues more base money as liabilities (see the top line of a dollar bill). As a result, the public holds fewer interest-bearing Treasury securities as assets, and more zero-interest base money instead.

Fed policy is not, and cannot be, “independent” of fiscal policy. When the government runs a deficit, it issues liabilities in return for goods and services. These liabilities must show up as somebody’s “savings” (which they received in return for producing goods and services that they did not consume). The government liabilities take the form of either Treasury securities or base money. Congress determines the size of the deficits, and thus the total quantity of government liabilities. The Fed determines how much of these liabilities must be held by the public as base money rather than Treasury securities. While Fed policy is often described as “pumping money into the economy,” it only exchanges interest-bearing government liabilities with zero-interest ones. These liabilities must be held by someone until they are retired.

Investors hold base money indirectly, mainly as bank deposits. The problem is that the only way for an investor to get rid of zero-interest base money is by trading it for something else – stocks for example. Yet the moment a share of stock is delivered from the seller to the buyer, the zero-interest base money goes from the buyer to the seller. In aggregate, someone still has to hold that zero-interest cash. It can change hands, but it can’t “go into” something else without coming right back “out.”

As long as investor psychology is not risk-averse (which we gauge using market internals), investors view zero-interest cash as an “inferior” asset rather than a desirable one. They seek riskier alternatives in the hope of avoiding “zero,” and seem to pay no attention to the valuation of these alternatives. This maddening psychological discomfort with “zero” is how the Fed has created what we view as the broadest and most extreme speculative financial bubble in history.

Just as every dollar of base money must be held by someone until it is retired, the same is true for stock certificates. Investors cannot “get out” of the stock market in aggregate – someone has to hold every share of stock outstanding. Market capitalization is nothing but the price at which the most recent buyer and seller traded even a single share, multiplied by the total number of shares outstanding. As

of December 31, 2021, the market capitalization of U.S. financial and nonfinancial equities stood at nearly $68 trillion, almost three times the $24 trillion level of U.S. GDP. At the 2000 market peak, the record was about 1.9 times GDP. Indeed, the present ratio of U.S. market cap to GDP is nearly 50% above levels that were never observed prior to last year.

This bloated market capitalization is not “wealth.” It is simply the latest price multiplied by the number of shares outstanding. Ultimately, the wealth inherent in a security is the future stream of cash flows it will deliver to its holder, or series of holders, over time. Price fluctuations do not change those underlying cash flows. They only provide opportunities for the transfer of savings between investors. High valuations favor the sellers. Low valuations favor the buyers. Investors have never paid higher prices for those future cash flows or accepted prospective returns so low.

Put simply, the recent bubble has not changed national wealth, and a collapse will not change national wealth. The wealth is in the cash flows. What will change is the market capitalization. I suspect that the erasure of market cap in the coming years, and possibly the coming quarters, may be brutal. Still, no forecasts are required, and our own attention will remain on observable valuations, market internals, and other factors. Meanwhile, even if an investor sells at these extremes, the only thing that will change is who holds the bag.

Investing amid economic distortion

Probably the best way to characterize present economic and financial conditions is to recognize their distortion. During the recent pandemic, the U.S. government ran a deficit amounting to 19% of GDP. In equilibrium, every deficit of government must emerge as the saving of some other sector (households, corporations, or foreign countries). In aggregate, this saving must be held in precisely the same securities that the government issued in order to finance the deficit. This is not theory – it is arithmetic – and it provides insight into several features that we currently observe.

For example, by mathematical necessity, the enormous deficit of the U.S. government during the pandemic was matched by a mirror-image surplus in the sum of corporate earnings, personal savings, and the U.S. current account deficit (foreign savings). As the federal deficit has abated, personal savings have narrowed even more rapidly than the deficit itself, and enough to leave corporate profits intact. As the savings rate has collapsed, consumption expenditures have surged well-beyond the pre-pandemic trend. In my view, this demand from households has contributed to recent inflation pressure but has also contributed to a temporary and misleading elevation of corporate profit margins. Given that government deficits in the coming

quarters are projected to contract further, the combination of smaller deficits and a diminished reservoir of household savings may place surprisingly strong downward pressure on corporate profits in the quarters ahead.

Meanwhile, many Wall Street narratives relating to inflation are simply inconsistent with historical evidence in U.S. data. For example, though stocks are often cited as desirable “inflation hedges” (securities that benefit from rising inflation), the fact is that the S&P 500 has historically lagged Treasury bills during periods when U.S. inflation was anywhere above 2% and rising (compared with the inflation rate 6 months earlier). Indeed, stocks have earned their reputation as “inflation hedges” primarily during periods when the rate of inflation is declining from previous highs.

Similarly, while precious metals have also behaved as inflation hedges over the long-term, shares of precious metals companies have historically enjoyed their strongest performance during periods when the economy is weak and nominal 10-year Treasury yields are declining. While we view the valuations of precious metals shares as relatively depressed, and all of the Hussman Funds currently hold investment positions in this sector, my impression is that the highest return/risk profile for precious metals shares is likely to accompany periods of economic weakness. This may be particularly true if economic weakness is accompanied by somewhat persistent inflation, yet reluctance on the part of the Federal Reserve to materially raise interest rates. This sort of “stagflationary” environment would align with my personal expectations, but nothing in our investment discipline relies on such an outcome.

As usual, no forecasts are necessary. Our investment discipline is to align our market outlook with measurable conditions including valuations, market internals, and the observable behavior of interest rates, inflation, and other factors. There is no question that we view stock market valuations as perilously high, and likely to be followed by more than a decade of negative total returns. Yet we constantly gauge the condition of investor psychology – speculative versus risk-averse – based on the uniformity of market internals across thousands of securities. Our investment approach does not require valuations to return to their historical norms, though we constantly hold that possibility in mind. We have broadened the range of conditions in which we expect to adopt a constructive market exposure, with position limits and safety nets that reduce the risk that we believe is inherent in a hypervalued market.

Emphatically, nothing in our investment discipline relies on a market collapse, or even any change in Federal Reserve policy. Although years of Fed-induced yield-seeking speculation forced us to abandon the view that recklessness has “limits,” our confidence in the core elements of our discipline has strengthened.

For example, in Strategic Growth Fund, the performance of our stock selection approach has continued to outpace the S&P 500 Index in recent years. Indeed, excluding the impact of hedging, the stock selection approach of Strategic Growth Fund has outperformed the total return of the S&P 500 by an average of 341 basis points (3.41%) annually from its inception on July 24, 2000 through December 31, 2021.

Meanwhile, our valuation measures have remained well-correlated with actual subsequent market returns over the complete market cycle, and our key gauge of market internals has continued to distinguish periods of speculation from periods of risk-aversion and price vulnerability. Prior to the Federal Reserve’s experiment with zero interest rate policy, our hedging approach performed as intended – both contributing returns and reducing risk over the complete market cycle. I believe that our adaptations in recent years have restored that potential. These same elements were responsible for our gratifying performance over complete market cycles prior to quantitative easing. I expect that they will serve us well during the completion of the current cycle, and those in the future.

As always, I remain grateful for your trust.

Sincerely,

John P. Hussman, Ph.D.

Past performance is not predictive of future performance. There is no assurance that the Hussman Funds will achieve their investment objectives. Investment results and principal value will fluctuate so that shares of the Funds, when redeemed, may be worth more or less than their original cost. It is possible to lose money when investing in securities. Current performance may be higher or lower than the performance data quoted.

Periodic updates regarding market conditions and investment strategy, as well as special reports, analysis, and performance data current to the most recent month end, are available at the Hussman Funds website www.hussmanfunds.com.

An investor should consider the investment objectives, risks, charges and expenses of the Funds carefully before investing. The Funds’ prospectuses contain this and other important information. To obtain a copy of the Hussman Funds’ prospectuses please visit our website at www.hussmanfunds.com or call 1-800-487-7626 and a copy will be sent to you free of charge. Please read the prospectus carefully before you invest. The Hussman Funds are distributed by Ultimus Fund Distributors, LLC.

Estimates of prospective return and risk for equities, bonds and other financial markets are forward-looking statements based the analysis and reasonable beliefs of Hussman Strategic Advisors (the “Adviser”), which serves as the investment adviser

of the Funds. They are not a guarantee of future performance and are not indicative of the prospective returns of any of the Hussman Funds. Actual returns may differ substantially from the estimates provided. Estimates of prospective long-term returns for the S&P 500 reflect valuation methods focusing on the relationship between current market prices and earnings, dividends and other fundamentals, adjusted for variability over the economic cycle.

This Letter to Shareholders seeks to describe some of the Adviser’s current opinions and views of the financial markets. Although the Adviser believes it has a reasonable basis for the opinions or views expressed, actual results may differ, sometimes significantly so, from those expected or expressed. The securities held by the Funds that are discussed in this Letter to Shareholders were held during the period covered by this Report. They do not comprise the entire investment portfolios of the Funds, may be sold at any time and may no longer be held by the Funds. The opinions of the Adviser with respect to those securities may change at any time.

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