“Industry Perspectives” 3Q 2020

Letter to Shareholders

October 2020

As we approach the end of a tumultuous year, our economy is still reeling under the effects of the COVID-19 coronavirus pandemic, even with many parts of the country reopening to a “new normal” of face masks and limited public interaction. The upcoming Presidential election will add even more uncertainty to the markets, especially if Biden wins the election. While we can’t know for sure how the election will turn out or the long-lasting effects the pandemic will have on the global economy, we do know all we can do is prepare as best we can for whichever scenarios play out.

Here at the Buffalo Funds we remain diligent in our fight to keep our employees safe from the coronavirus. Most of our staff is still working from home. While historically we’ve held in-person meetings with company management teams and discussed new investment opportunities in our office, the advent of remote video conferencing has allowed us to operate normally. Our portfolio managers and analysts have a lengthy research call every Monday afternoon, and we have due diligence calls with companies nearly every day. Our message is that productivity remains high and it shows in the results of the Buffalo Funds year-to-date.

With Congressional and the Presidential elections just a week away, the possibility of a reacceleration of COVID-19 cases in the U.S. and parts of Europe, and the highly debated shape and strength of the U.S. economic recovery off the bottom – our crystal ball is particularly cloudy. Therefore, we have decided to make our quarterly newsletter very brief. In our year-end letter we will provide our normal outlook for growth of U.S. and global GDP (gross domestic product), interest rates, inflation, unemployment, oil prices, tax rates, corporate profits, government spending, the value of the U.S. dollar, and stock valuations. We will also offer our own healthcare manager’s latest expert view on the status of vaccines and expected longevity of the pandemic. All the above factors will play a role in our outlook for the stock market in 2021 and beyond.

November’s election will eventually provide resolution, COVID-19 will eventually become managed, and a sense of normalcy will eventually return. Until then, your team at the Buffalo Funds remains tenacious in working hard for you this quarter, next year, and in the decades beyond. We sincerely hope you are able to return to at least some of your family’s holiday traditions this Fall and Winter, whether they be in-person or virtual.

Sincerely,

Buffalo Funds Portfolio Management Team

Average annual total return represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate and redemption value may be more or less than original cost. Current fund performance may be lower or higher than the performance quoted. Performance data current to the most recent month-end can be obtained here. For standardized performance click here.