Discovery Fund

Discovery Fund

Quick Facts
InvestorInstitutional
Ticker:BUFTXBUITX
Inception Date:4/16/20017/1/2019
Expense Ratio:1.02%0.87%
Total Net Assets:$1.37 Billion  (3/31/20)
Category:Mid Cap Growth
Benchmark:Morningstar U.S. Mid Growth
Related Material:
   Fund Fact Sheet Q1 2020
   PM Commentary Q1 2020
   Summary Prospectus
FUND OBJECTIVE & INVESTMENT PROCESS

The investment objective of the Buffalo Discovery Fund is long-term growth of capital.

The Fund managers seek to identify companies expected to benefit from innovation and experience growth based on the identification of long-term, measurable secular trends, and which, as a result, the managers believe may have potential revenue growth in excess of the gross domestic product growth rate.

Companies engaged in innovative strategies are those who, in the Fund managers’ opinion, are engaged in the pursuit and practical application of knowledge to discover, develop, and commercialize products, services, or intellectual property.

Companies are screened using in-depth, in-house research to identify those which the Fund managers believe have favorable attributes, including attractive valuation, strong management, conservative debt, free cash flow, scalable business models, and competitive advantages.

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To us, innovation means to discover and transform new ideas into meaningful commercial value. The greater the economic impact and the longer the staying power, the better.

We seek under-appreciated stock opportunities in companies where thoughtful management teams are in a favorable position to use innovation for market advantage and sustained shareholder value creation.

Dave Carlsen, CFA, Co-Portfolio Manager

Morningstar Rating

       

Overall Morningstar Rating™ of BUFTX based on risk-adjusted returns among 565 Midcap Growth funds as of 4/30/20.

Investment Style

Performance (%)

As of 4/30/203 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
(4/16/01)
BUFFALO DISCOVERY FUND - Investor-8.11-6.97-1.529.158.2412.4311.068.95
BUFFALO DISCOVERY FUND - Institutional-8.07-6.93-1.379.318.4012.5911.239.11
Morningstar U.S. Mid Growth Index-5.14-3.454.5613.379.6712.3810.488.01
Morningstar Mid-Cap Growth Category-9.93-8.79-2.088.977.5110.659.096.52
As of 3/31/203 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
(4/16/01)
BUFFALO DISCOVERY FUND - Investor-17.95-17.95-9.645.375.6011.1310.048.27
BUFFALO DISCOVERY FUND - Institutional-17.90-17.90-9.485.545.7711.3010.218.43
Morningstar U.S. Mid Growth Index-17.00-17.00-6.738.526.2211.109.027.19
Morningstar Mid-Cap Growth Category-20.64-20.64-11.174.664.339.467.725.78
For performance prior to 7/1/19 (Inception Date of Institutional Class), performance of the Investor Class shares is used and includes expenses not applicable and lower than those of Investor Class shares. 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 of higher than the performance quoted and can be obtained here. Performance is annualized for periods greater than 1 year. Each Morningstar category average represents a universe of funds with similar objectives.
3 Year Risk Metrics
BUFTX vs Morningstar U.S. Mid Growth Index (As of 3/31/20)
Upside Capture81.38
Downside Capture97.39
Alpha-2.40
Beta0.93
Sharpe Ratio0.23
Hypothetical Growth of $10,000
This chart illustrates the performance of a hypothetical $10,000 investment made in the Fund on the Inception Date. Assumes reinvestment of dividends and capital gains. This chart does not imply future performance.

Portfolio

Portfolio Characteristics
(As of 3/31/20) 
 
# of Holdings94
Median Market Cap$14.65 B
Weighted Average Market Cap$20.53 B
3-Yr Annualized Turnover Ratio80.68%
% of Holdings with Free Cash Flow86.96%
Active Share63.56%
Top 10 Holdings
HoldingTickerSector% of Net
Assets
The Cooper Cos.COOHealth Care1.78%
NasdaqNDAQFinancial Services1.65%
IHS MarkitINFOIndustrials1.64%
Global PaymentsGPNIndustrials1.54%
Align TechnologyALGNHealth Care1.51%
Bio-TechneTECHHealth Care1.50%
MSCIMSCIFinancial Services1.50%
WEXWEXTechnology1.46%
Vail ResortsMTNConsumer Discretionary1.44%
PRA Health SciencesPRAHHealth Care1.42%
TOP 10 HOLDINGS TOTAL15.44%
As of 12/31/19. Top 10 Holdings for the quarter are not disclosed until 60 days after quarter end. Fund holdings are subject to change and are not recommendations to buy or sell any securities.
Sector Weighting
As of 3/31/20. Security weightings are subject to change and are not recommendations to buy or sell any securities. Sector Allocation may not equal 100% due to rounding.
Market Capitalization
As of 3/31/20. Market Cap percentages may not equal 100% due to rounding.

Management

Dave Carlsen, CFA
Portfolio Manager

27 Years of Experience

 View full bio

Jamie Cuellar, CFA
Portfolio Manager

28 Years of Experience

 View full bio

Ken Laudan
Portfolio Manager

27 Years of Experience

 View full bio

  Click here to read about the recent portfolio manager changes for the Buffalo Discovery Fund.

Commentary

CAPITAL MARKET OVERVIEW

(As of 3/31/20) — Global equity markets fell sharply in the 1st quarter of 2020 in reaction to the global spread of COVID-19. As the case count increased exponentially, the only effective response was for countries to go into lockdown. The economic impact of these actions became clear as the quarter progressed and virtually all asset classes suffered as a result. From February 19 through March 23, the U.S. stock market, as measured by the S&P 500 Index, declined around 34%, which was the fastest meltdown in history. Central banks and governments responded quickly to this event, with the U.S. Federal Reserve (the “Fed”) cutting interest rates twice in March and announcing unlimited quantitative easing. The U.S. Senate passed a $2 trillion stimulus package, providing assistance to individuals and businesses in distress. Optimism around these efforts helped the market rally into quarter end, leaving the S&P 500 Index down 19.60% from the start of the year.

The broad market Russell 3000 Index declined 20.90% in the 1st quarter. Growth outperformed value, with the Russell 3000 Growth Index declining 14.85% compared to the Russell 3000 Value Index decline of 27.32%. By capitalization size, large cap stocks held up best, with a -20.22% return in the quarter, represented by the Russell 1000 Index. The Russell Mid Cap Index fell -27.07%, followed by the smaller cap Russell 2000 Index which declined -30.61%. Best performing sectors were the Technology, Health Care, and Consumer Staples sectors. The Energy sector was hit hardest as falling demand and rising supply from Saudi Arabia caused oil prices to crater. The economically-sensitive Financial and Industrial sectors were also among the worst performing sectors in the quarter.

PERFORMANCE COMMENTARY

(As of 3/31/20) — The Buffalo Discovery Fund (BUFTX) fell 17.95% during the quarter versus the Morningstar U.S. Mid Growth Index’s decline of 17.00% and the Morningstar Mid Cap Growth Peer Group decline of 20.64%. The Fund outperformed the benchmark in the Energy, Industrials, Financials, Real Estate, Telecom Services, and Materials sectors, while the Consumer Discretionary, Health Care, and Technology sectors weighed on relative returns. Cyclically-dependent and financially-leveraged stocks performed worst in the Fund and Index with energy, materials, travel, entertainment, and consumer retail stocks particularly hard hit. The Energy sector, where the Fund is underweight, was the worst-performing sector, suffering from a nasty combination of excess supply and diminished global energy demand. The Fund continues to invest in innovative growth companies with relatively-attractive valuations – a strategy we believe should be a key driver of above-index, risk-adjusted returns over the long term.

TOP CONTRIBUTORS

Dexcom Inc. is a leading manufacturer of continuous glucose monitoring devices for the management of diabetes. The company’s differentiated products excel at accuracy, comfort, and ease of use, resulting in share gains and a favorable long-term outlook within the diabetes care industry. Its stock price was one of few that rose in the quarter, as investors flocked to Dexcom’s durable growth, low elective procedure risk, and
relatively recession-resistant business model.

MSCI Inc. is a leading Index and ETF provider. The company continues to benefit from the shift to low-cost passive investing, while, in the near term, investors cheered the
resiliency of the subscription business, high switching costs inherent in the benchmark index business segment, and the exciting potential of the newer analytics and Environmental, Social, and Governance (ESG) focused business initiatives.

TOP DETRACTORS

Align Technology is a leading supplier of clear aligners for dental malocclusion. Its stock price fell on expectations that COVID-19 fears will lead to lower case volume growth in the near term, which could make it more challenging for the company to fend off new entrants in its market. We believe prosperous growth is sustainable over the intermediate-to-long-term, as the company has expanded its products to address nearly 70% of the orthodontic market, which continues to convert from metal braces to clear aligners.

IAC/Interactive is a diversified internet services company offering dating websites, a digital home services marketplace, and other emerging internet businesses. Social distancing and shelter at home initiatives have negatively impacted demand for home services and advertising on their branded internet sites.

OUTLOOK

(As of 3/31/20) — The fiscal and monetary response to the COVID-19 pandemic has been relatively swift and expansive, with indications that if conditions do not improve, world leaders and global central banks will do whatever is necessary to revive growth. Their efforts so far are encouraging, and markets have begun to stabilize and become more hopeful. In the near term, investors appear myopically focused on the state of new case volumes,
resulting in high stock correlations. Upcoming earnings results seem far less important than an assessment of 2021-2022 earnings power. Over the intermediate term, the revival of global growth will depend on how soon the pandemic can be contained through a combination of social distancing, better testing, improved therapies, vaccine development, and perhaps seasonal curtailment. Time will tell.

In the meantime, global economic uncertainty and low business and consumer confidence is weighing on the market and near term corporate fundamentals. This is opening up attractive buying opportunities for some of our favorite secular growth beneficiaries on the wish list.

We are not blindly buying on lower stock prices, but instead we are mindful of the macroeconomic backdrop, the sensitivity of our companies to discretionary spending, and the negative effect unfavorable leverage can have on corporate profit cycles in bad-time scenarios. We keep a keen eye on the degree of contraction that current prices discount and the degree to which management teams can protect profits and shed risk, while still retaining the competitive advantages that position them to excel on the upturn. Our work is beginning to tell us growing reward and upside opportunity trumps downside risk in many instances. We are patiently waiting for these good-odds situations and strike when we get them.

Economic conditions may ebb and flow, but our focus is steady – to invest in attractively-priced, financially-strong, well-managed companies that can benefit from innovative strategies and disruptive megatrends.

The opinions expressed are those of the Portfolio Manager(s) and are subject to change, are not guaranteed and should not be considered recommendations to buy or sell any security. Investing in both actively and passively managed mutual funds involves risk and principal loss is possible. Earnings growth is not representative of the fund’s future performance.
DISCOVERY FUND NEWS

Discovery Fund

Total Assets $1.37 Billion  (3/31/20)
Expense Ratio 1.02% / 0.87%
Benchmark Morningstar U.S. Mid Growth

Literature

General Account
Forms
Investor
Class
Institutional
Class
Both
  New Account Application
  New Account Application - Entity
  Change or Add Account Details
  Cost Basis Method Election
  Power of Attorney
Individual Retirement Account (IRA) Forms
  RMD Waiver   NEW
  IRA Account Application
  IRA Beneficiary Addition / Change
  IRA Required Minimum Distribution (RMD)
  IRA / Qualified Plan Distribution Request
  IRA Transfer
Coverdell Education Savings Accounts (ESA) Forms
  Coverdell ESA Application
  Coverdell ESA Distribution Request
  Coverdell ESA Transfer
Retirement Information
  Retirement Savings Options for Individuals

Fundamental Approach

We get to know the companies we invest in and learn how they run their business.

Top-Down & Bottom-Up

We identify Top-Down broad, secular growth trends and search for companies from the Bottom-Up.

Proprietary Philosophy

We construct our portfolios based on our own proprietary investment strategy.

Disciplined Investing

Sticking to our disciplined investment strategy ensures we maintain a consistent, balanced approach.

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating™ for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating™ metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

The Buffalo Discovery Fund (BUFTX) received 3 stars among 565 for the 3-year, 4 stars among 503 for the 5-year, and 4 stars among 387 Mid-Cap Growth funds for the 10-year period ending 4/30/20.

In each Morningstar Category, the 10% of funds with the lowest measured risk are described as Low Risk, the next 22.5% Below Average, the middle 35% Average, the next 22.5% Above Average, and the top 10% High. Morningstar Risk is measured for up to three time periods (three, five, and 10 years). These separate measures are then weighted and averaged to produce an overall measure for the fund. Funds with less than three years of performance history are not rated. ©2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar Style Box™ reveals a fund’s investment strategy by showing its investment style and market capitalization based on the fund’s portfolio holdings.

Dividend Focus Fund

Dividend Focus Fund

Quick Facts
InvestorInstitutional
Ticker:BUFDXBUIDX
Inception Date:12/3/20127/1/2019
Expense Ratio:0.96%0.81%
Total Net Assets:$65.63 Million  (3/31/20)
Category:Large Cap Blend
Benchmark:Morningstar U.S. Large-Mid Cap
Dividend Distribution:Quarterly
Related Material:
   Fund Fact Sheet Q1 2020
   PM Commentary Q1 2020
   Summary Prospectus
FUND OBJECTIVE & INVESTMENT PROCESS

The investment objective of the Buffalo Dividend Focus Fund is primarily current income, with long-term growth of capital as a secondary objective.

To pursue its investment objective, the Fund invests in dividend-paying equity securities, consisting of domestic common stocks, preferred stocks, and convertible securities. During normal market conditions, at least 80% of the Fund’s assets will be invested in dividend-paying equity securities, companies that declare and pay cash dividends on at least an annual basis.

While the Fund may invest in securities of companies of any size, the Fund managers expect the majority of common stocks purchased will be of large-cap companies, those with market capitalizations in excess of $10 billion at the time of initial purchase. In addition to investments in domestic securities, the Fund may invest up to 20% of its net assets in sponsored or unsponsored ADRs and securities of foreign companies that are traded on U.S. stock exchanges.

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We are focused on buying dividend-paying companies that can have sustainable competitive advantages, generate strong return on capital and free cash flow, have conservative balance sheets, and have great management teams.

We seek to buy these companies at reasonable valuations and believe that holding them for the long-term will generate favorable risk adjusted returns.

Paul Dlugosch, Portfolio Manager

Morningstar Rating

       

Overall Morningstar Rating™ of BUFDX based on risk-adjusted returns among 1,231 Large Blend funds as of 4/30/20.

Investment Style

Performance (%)

As of 4/30/203 MOYTD1 YR3 YR5 YRSince Inception
(12/3/12)
BUFFALO DIVIDEND FOCUS FUND - Investor-10.17-10.12-1.116.077.1210.97
BUFFALO DIVIDEND FOCUS FUND - Institutional-10.12-10.07-0.966.237.2811.14
  Morningstar U.S. Large-Mid Cap Index-9.43-9.220.749.018.8412.52
  S&P 500 Index-9.26-9.290.869.049.1212.59
  Morningstar Large Blend Category-10.91-11.40-2.856.476.8110.19
As of 3/31/203 MOYTD1 YR3 YR5 YRSince Inception
(12/3/12)
BUFFALO DIVIDEND FOCUS FUND - Investor-20.35-20.35-8.322.264.649.29
BUFFALO DIVIDEND FOCUS FUND - Institutional-20.31-20.31-8.172.414.799.45
  Morningstar U.S. Large-Mid Cap Index-19.75-19.75-7.354.986.3510.78
  S&P 500 Index-19.60-19.60-6.985.106.7310.90
  Morningstar Large Blend Category-20.92-20.92-9.972.804.468.64

* Partial year. Inception to year-end.

For performance prior to 7/1/19 (Inception Date of Institutional Class), performance of the Investor Class shares is used and includes expenses not applicable and lower than those of Investor Class shares.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 of higher than the performance quoted and can be obtained here. Performance is annualized for periods greater than 1 year. Each Morningstar category average represents a universe of funds with similar objectives.
3 Year Risk Metrics
BUFDX vs Morningstar U.S. Large-Mid Cap Index (As of 3/31/20)
Upside Capture81.74
Downside Capture97.79
Alpha-2.35
Beta0.94
Sharpe Ratio0.04
Hypothetical Growth of $10,000
This chart illustrates the performance of a hypothetical $10,000 investment made in the Fund on the Inception Date. Assumes reinvestment of dividends and capital gains. This chart does not imply future performance.
Distributions
Payable
Date
Distribution
NAV
Net Investment
Income
Short-Term Capital
Gains
Long-Term Capital
Gains
Distribution
Total
3/18/20$14.07 (Inv)

$14.07 (Inst)
$0.03107063

$0.03831320
-

-
-

-
$0.03107063

$0.03831320
12/18/19$18.82 (Inv)

$18.82 (Inst)
$0.04196909

$0.04964262
-

-
-

-
$0.04196909

$0.04964262
9/18/19$17.80 (Inv)

$17.80 (Inst)
$0.04731858

$0.05327159
-

-
-

-
$0.04731858

$0.05327159
6/18/19$17.20$0.06566509--$0.06566509
3/19/19$16.72$0.05232873--$0.05232873
12/18/18$15.33$0.08791977$0.02500$0.51339$0.62630977
9/18/18$17.96$0.05499230--$0.05499230
6/19/18$16.99$0.05791680--$0.05791680
3/20/18$16.72$0.04369471--$0.04369471
12/19/17$16.73$0.05315489$0.15204-$0.20519489
9/19/17$15.79$0.05107348--$0.05107348
6/20/17$15.53$0.04405814--$0.04405814
3/20/17$15.37$0.04662158--$0.04662158
12/20/16$14.58$0.04502534$0.06489$0.03508$0.14499534
9/20/16$13.78$0.04538819--$0.04538819
6/20/16$13.34$0.04391608--$0.04391608
3/18/16$13.15$0.04845082--$0.04845082
12/18/15$12.88$0.04061333$0.14263$0.11942$0.30266333
9/18/15$12.94$0.03816853--$0.03816853
6/18/15$14.29$0.04120635--$0.04120635
3/18/15$13.89$0.04200730--$0.04200730
12/18/14$13.53$0.03066401$0.54808$0.10086$0.67960401
9/18/14$13.50$0.02424009--$0.02424009
6/18/14$13.05$0.03496855--$0.03496855
3/18/14$12.11$0.03702784--$0.03702784
12/18/13$11.56$0.04725764$0.38271-$0.42996764
9/18/13$11.47$0.03960545--$0.03960545
6/18/13$11.13$0.03967611--$0.03967611
3/19/13$10.36$0.01492578--$0.01492578
2020 Distribution Dates:

Record Date: June 17, 2020 | Payable Date: June 18, 2020

Record Date: September 17, 2020 | Payable Date: September 18, 2020

Record Date: December 17, 2020 | Payable Date: December 18, 2020


Portfolio

Portfolio Characteristics
(As of 3/31/20) 
 
# of Holdings77
Median Market Cap$57.07 B
Weighted Average Market Cap$254.60 B
3-Yr Annualized Turnover Ratio24.31%
% of Holdings with Free Cash Flow66.67%
30-day SEC Yield1.55%
Top 10 Holdings
HoldingTicker / MaturitySector% of Net
Assets
MicrosoftMSFTTechnology4.04%
AppleAAPLTechnology3.36%
VisaVFinancial Services3.04%
Edison IntlEIXUtilities2.55%
JPMorgan ChaseJPMFinancial Services1.92%
American Electric PowerAEPUtilities1.86%
Bank of AmericaBACFinancial Services1.76%
S&P GlobalSPGIFinancial Services1.76%
UnitedHealth GroupUNHHealth Care1.69%
Truist FinancialTFCFinancial Services1.64%
TOP 10 HOLDINGS TOTAL23.62%
As of 12/31/19. Top 10 Holdings for the quarter are not disclosed until 60 days after quarter end. Fund holdings are subject to change and are not recommendations to buy or sell any securities.
Sector Weighting
As of 3/31/20. Security weightings are subject to change and are not recommendations to buy or sell any securities. Sector Allocation may not equal 100% due to rounding.
Market Capitalization
As of 3/31/20. Market Cap percentages may not equal 100% due to rounding.

Management

Paul Dlugosch, CFA
Portfolio Manager

22 Years of Experience

 View full bio

Jeff Sitzmann, CFA
Portfolio Manager

32 Years of Experience

 View full bio

Jeff Deardorff, CFA
Portfolio Manager

21 Years of Experience

 View full bio

Commentary

CAPITAL MARKET OVERVIEW

(As of 3/31/20) — Global equity markets fell sharply in the 1st quarter of 2020 in reaction to the global spread of COVID-19. As the case count increased exponentially, the only effective response was for countries to go into lockdown. The economic impact of these actions became clear as the quarter progressed and virtually all asset classes suffered as a result. From February 19 through March 23, the U.S. stock market, as measured by the S&P 500 Index, declined around 34%, which was the fastest meltdown in history. Central banks and governments responded quickly to this event, with the U.S. Federal Reserve (the “Fed”) cutting interest rates twice in March and announcing unlimited quantitative easing. The U.S. Senate passed a $2 trillion stimulus package, providing assistance to individuals and businesses in distress. Optimism around these efforts helped the market rally into quarter end, leaving the S&P 500 Index down 19.60% from the start of the year.

The broad market Russell 3000 Index declined 20.90% in the 1st quarter. Growth outperformed value, with the Russell 3000 Growth Index declining 14.85% compared to the Russell 3000 Value Index decline of 27.32%. By capitalization size, large cap stocks held up best, with a -20.22% return in the quarter, represented by the Russell 1000 Index. The Russell Mid Cap Index fell -27.07%, followed by the smaller cap Russell 2000 Index which declined -30.61%. Best performing sectors were the Technology, Health Care, and Consumer Staples sectors. The Energy sector was hit hardest as falling demand and rising supply from Saudi Arabia caused oil prices to crater. The economically-sensitive Financial and Industrial sectors were also among the worst performing sectors in the quarter.

PERFORMANCE COMMENTARY

(As of 3/31/20) — The Buffalo Dividend Focus Fund (BUFDX) posted a return of -20.35%, slightly underperforming the Morningstar U.S. Large-Mid Cap Index return of -19.75% and the S&P 500 Index return of -19.60%. All sectors in the benchmark index posted double-digit
negative returns. The Fund’s sector performance experienced similar negative returns, with the exception of the Real Estate sector, which delivered a single-digit positive return. The Fund’s sectors with the highest weightings had mixed performance relative to the Index. Information Technology and Financials posted favorable relative performance compared to the benchmark, while Health Care experienced lagging relative returns. In addition to Real Estate, our Consumer Discretionary and Consumer Staples holdings also delivered constructive performance relative to the benchmark. Areas of the Fund that
detracted from performance included Utilities, Industrials, and Energy.

Top Contributors

Specific securities that contributed most positively to performance included Community Healthcare Trust (CHCT), Amazon (AMZN), and Digital Realty Trust (DLR). Fund management initiated a new position in Community Healthcare Trust, a health care real estate company, in the quarter during the general market sell-off. Shares of Amazon advanced, as the company’s operations are expected to benefit from the trend in consumers increasingly shifting to on-line buying as they work from home due to shelter-in-place orders. Digital Realty Trust, a provider of data centers, is another recently-added position that contributed to Fund results through timely purchases of
shares during the volatile quarter.

Top Detractors

Specific securities that detracted from performance included Energy Transfer, L.P. (ET), Viper Energy Partners L.P. (VNOM), and Truist Financial Corporation (TFC, formerly known as BB&T). Energy Transfer, an energy transportation services company, and Viper Energy Partners, a leased oil and gas properties company, dropped as energy prices plunged in response to the failure of an agreement between the Organization of the Petroleum Exporting Countries (OPEC) members on production cutbacks as well as the drop in demand caused by the Coronavirus pandemic. Meanwhile shares of Truist Financial Corporation fell on general economic decline and as a result of lower interest rates, as the Fed cut its benchmark lending rate to zero.

OUTLOOK

(As of 3/31/20) — The primary driver of the sharp decline in the stock market during the quarter was the Covid-19 pandemic and efforts to contain it, which has inflicted economic damage. Governments and healthcare experts have responded to the crisis by issuing stay at home orders to try to curtail the spread of the disease, new infections, and fatalities. The economic impact has resulted in a sharp decline in spending and an explosion in unemployment. To limit the economic damage, governments have passed and
are passing various financial aid programs in addition to health care measures to combat the pandemic. Central Banks have also cut benchmark lending rates and have expanded their balance sheets as they buy various assets of eligible securities. The fiscal and monetary response to the pandemic has been relatively swift and expansive, with indications that, if conditions do not improve, they will do “whatever it takes.”
Their efforts so far are encouraging and markets have begun to rebound. Over the intermediate term, the pandemic will need to be contained through a combination of better testing, improved therapies, vaccine development, and seasonal curtailment.
Hopefully, through these measures, the economy may begin to recover and generate sustainable growth.

Despite the uncertainty, we remain focused on wide moat, competitively-advantaged large capitalization companies trading at reasonable valuations, in our view. As stock market volatility spikes, we will look for opportunities to buy shares of companies that fit our investment criteria, as we continue to follow our process of finding new investment ideas and to be ready when market declines provide better entry points.

The opinions expressed are those of the Portfolio Manager(s) and are subject to change, are not guaranteed and should not be considered recommendations to buy or sell any security. Earnings growth is not representative of the fund’s future performance.

Literature

General Account
Forms
Investor
Class
Institutional
Class
Both
  New Account Application
  New Account Application - Entity
  Change or Add Account Details
  Cost Basis Method Election
  Power of Attorney
Individual Retirement Account (IRA) Forms
  RMD Waiver   NEW
  IRA Account Application
  IRA Beneficiary Addition / Change
  IRA Required Minimum Distribution (RMD)
  IRA / Qualified Plan Distribution Request
  IRA Transfer
Coverdell Education Savings Accounts (ESA) Forms
  Coverdell ESA Application
  Coverdell ESA Distribution Request
  Coverdell ESA Transfer
Retirement Information
  Retirement Savings Options for Individuals

Fundamental Approach

We get to know the companies we invest in and learn how they run their business.

Top-Down & Bottom-Up

We identify Top-Down broad, secular growth trends and search for companies from the Bottom-Up.

Proprietary Philosophy

We construct our portfolios based on our own proprietary investment strategy.

Disciplined Investing

Sticking to our disciplined investment strategy ensures we maintain a consistent, balanced approach.

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating™ for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating™ metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

The Buffalo Dividend Focus Fund (BUFDX) received 3 stars among 1,231 for the 3-year period and 3 stars among 1,052 Large Blend funds for the 5-year period ending 4/30/20.

In each Morningstar Category, the 10% of funds with the lowest measured risk are described as Low Risk, the next 22.5% Below Average, the middle 35% Average, the next 22.5% Above Average, and the top 10% High. Morningstar Risk is measured for up to three time periods (three, five, and 10 years). These separate measures are then weighted and averaged to produce an overall measure for the fund. Funds with less than three years of performance history are not rated. ©2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar Style Box™ reveals a fund’s investment strategy by showing its investment style and market capitalization based on the fund’s portfolio holdings.

Emerging Opportunities Fund

Emerging Opportunities Fund

Quick Facts
InvestorInstitutional
Ticker:BUFOXBUIOX
Inception Date:5/21/20047/1/2019
Expense Ratio:1.49%1.34%
Total Net Assets:$66.84 Million  (3/31/20)
Category:Small Cap Growth
Benchmark:Morningstar U.S. Small Growth
Related Material:
   Fund Fact Sheet Q1 2020
   PM Commentary Q1 2020
   Summary Prospectus
Recent Media Coverage
Fund Objective & Investment Process

The investment objective of the Buffalo Emerging Opportunities Fund is long-term growth of capital. The Fund invests primarily in equity securities, consisting of a portfolio of between 50-70 domestic common stocks, preferred stocks, convertible securities, warrants and rights, of companies that, at the time of purchase by the Fund, have market capitalizations of $1.5 billion or less.

The Fund managers seek to identify companies for the Fund’s portfolio that are expected to experience growth based on the identification of long-term, measurable secular trends, and which, as a result, may have potential revenue growth in excess of the gross domestic product growth rate. Companies are screened using in-depth, in-house research to identify premier early-stage growth companies which generally demonstrate:

  • Strong management teams
  • Little or no debt
  • Potential for increasing free cash flow
  • Scalable business models with a competitive advantage
  • Potential for increasing margins
  • Attractive risk/reward given the market framework
|
We believe investing in an actively-managed portfolio of premier, early-stage, growth companies could lead to growth of capital over time. We look for companies that could benefit from long-term industrial, technological, or general market trends, and are trading at what we view as attractive valuations.

Craig Richard, Portfolio Manager

Morningstar Rating

       

Overall Morningstar Rating™ of BUFOX based on risk-adjusted returns among 581 Small Growth funds as of 4/30/20.

Investment Style

Performance (%)

As of 4/30/203 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
(5/21/04)
BUFFALO EMERGING OPPORTUNITIES FUND - Investor-11.61-11.29-2.979.557.1312.508.658.12
BUFFALO EMERGING OPPORTUNITIES FUND - Institutional-11.59-11.22-2.829.727.2912.678.818.28
  Morningstar U.S. Small Growth Index-9.54-9.66-6.217.897.3010.969.168.61
  Morningstar Small Growth Category-12.63-12.76-8.246.106.259.958.577.60
As of 3/31/203 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
(5/21/04)
BUFFALO EMERGING OPPORTUNITIES FUND - Investor-25.33-25.33-14.384.503.4810.806.987.00
BUFFALO EMERGING OPPORTUNITIES FUND - Institutional-25.31-25.31-14.284.643.6310.967.147.16
  Morningstar U.S. Small Growth Index-21.45-21.45-16.073.433.719.797.737.70
  Morningstar Small Growth Category-24.59-24.59-17.661.692.778.817.136.66
For performance prior to 7/1/19 (Inception Date of Institutional Class), performance of the Investor Class shares is used and includes expenses not applicable and lower than those of Investor Class shares.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 of higher than the performance quoted and can be obtained here. Performance is annualized for periods greater than 1 year. Each Morningstar category average represents a universe of funds with similar objectives.
3 Year Risk Metrics
BUFOX vs Morningstar U.S. Small Growth Index (As of 3/31/20)
Upside Capture97.58
Downside Capture95.41
Alpha1.36
Beta0.95
Sharpe Ratio0.14
Hypothetical Growth of $10,000
This chart illustrates the performance of a hypothetical $10,000 investment made in the Fund on the Inception Date. Assumes reinvestment of dividends and capital gains. This chart does not imply future performance.

Portfolio

Portfolio Characteristics
(As of 3/31/20) 
 
# of Holdings58
Median Market Cap$829.52 M
Weighted Average Market Cap$1.37 B
3-Yr Annualized Turnover Ratio36.80%
% of Holdings with Free Cash Flow60.34%
% of Holdings with No Net Debt48.28%
Active Share94.42%
Top 10 Holdings
HoldingTickerSector% of Net
Assets
CerenceCRNCTechnology2.70%
i3 VerticalsIIIVTechnology2.43%
MimecastMIMETechnology2.36%
EnvestnetENVTechnology2.28%
8x8EGHTCommunications2.26%
Kornit DigitalKRNTIndustrials2.26%
Compass Diversified HoldingsCODIIndustrials2.12%
Community Healthcare TrustCHCTReal Estate2.05%
Air Transport Services GroupATSGIndustrials2.05%
Playa Hotels & ResortsPLYAConsumer Discretionary2.05%
TOP 10 HOLDINGS TOTAL22.56%
As of 12/31/19. Top 10 Holdings for the quarter are not disclosed until 60 days after quarter end. Fund holdings are subject to change and are not recommendations to buy or sell any securities.
Sector Weighting
As of 3/31/20. Security weightings are subject to change and are not recommendations to buy or sell any securities. Sector Allocation may not equal 100% due to rounding.
Market Capitalization
As of 3/31/20. Market Cap percentages may not equal 100% due to rounding.

Management

Craig Richard, CFA
Portfolio Manager

17 Years of Experience

 View full bio

Doug Cartwright, CFA
Portfolio Manager

13 Years of Experience

 View full bio

Commentary

CAPITAL MARKET OVERVIEW

(As of 3/31/20) — Global equity markets fell sharply in the 1st quarter of 2020 in reaction to the global spread of COVID-19. As the case count increased exponentially, the only effective response was for countries to go into lockdown. The economic impact of these actions became clear as the quarter progressed and virtually all asset classes suffered as a result. From February 19 through March 23, the U.S. stock market, as measured by the S&P 500 Index, declined around 34%, which was the fastest meltdown in history. Central banks and governments responded quickly to this event, with the U.S. Federal Reserve (the “Fed”) cutting interest rates twice in March and announcing unlimited quantitative easing. The U.S. Senate passed a $2 trillion stimulus package, providing assistance to individuals and businesses in distress. Optimism around these efforts helped the market rally into quarter end, leaving the S&P 500 Index down 19.60% from the start of the year.

The broad market Russell 3000 Index declined 20.90% in the 1st quarter. Growth outperformed value, with the Russell 3000 Growth Index declining 14.85% compared to the Russell 3000 Value Index decline of 27.32%. By capitalization size, large cap stocks held up best, with a -20.22% return in the quarter, represented by the Russell 1000 Index. The Russell Mid Cap Index fell -27.07%, followed by the smaller cap Russell 2000 Index which declined -30.61%. Best performing sectors were the Technology, Health Care, and Consumer Staples sectors. The Energy sector was hit hardest as falling demand and rising supply from Saudi Arabia caused oil prices to crater. The economically-sensitive Financial and Industrial sectors were also among the worst performing sectors in the quarter.

PERFORMANCE COMMENTARY

(As of 3/31/20) —The Buffalo Emerging Opportunities Fund (BUFOX) posted a negative 25.33% return in the quarter ending March 31, 2020. This compares to the Morningstar U.S. Small Growth Index’s (Funds’ primary benchmark) return of negative 21.45%. The Russell 2000 Growth Index and the Russell MicroCap Growth Index returned negative 25.76% and negative 26.59%, respectively.

The spread of SARS-CoV2 and the resulting pandemic created a new chapter in history books in the first quarter of 2020. The major issues just a few quarters ago that included U.S./China trade war and flare ups in geopolitical issues between U.S./Iran have become nearly irrelevant as COVID-19 has taken center stage and created an environment few of us could have ever foreseen. The market sell-off as the virus spread throughout the European Union and the U.S. was the swiftest in history, with the S&P 500 Index falling 35% from peak to trough in just over one month. Even worse was the performance of smaller growth stocks as measured by the Russell 2000 Growth Index, declining 43% from peak to trough.

However, final first quarter returns were less ugly than the peak-to-trough declines, given a strong start to the year and a sharp rebound that began in the final week of the quarter. During the 1st quarter, investors preferred the perceived relative safety of larger companies. This is best illustrated by the fact that the large cap Russell 1000 Index dramatically outperformed both the small cap Russell 2000 Growth Index and the Russell Microcap Growth Index. Domestically, growth stocks outperformed value stocks by a wide margin. As an example, the Russell 2000 Value Index declined 35.66% in the 1st quarter, nearly 10% worse than its growth counterpart.

With shelter-in-place orders across the U.S. and the world affecting close to half the global population, numerous industries saw sales and profits decrease dramatically. At the time of this writing in late April, states in the U.S. and countries in Europe are beginning to ease restrictions on households and businesses. However, it remains unknown as to how consumers and businesses will rebound. Additionally, there is significant risk that COVID-19 cases could spike again as a result of the loosening of these restrictions and the potential government response the second time around. In this environment, almost universally, companies are withdrawing previous financial guidance and declining to give updated financial guidance for upcoming quarters and the remainder of the year.

However, investor enthusiasm has come roaring back, perhaps because of the significant stimulus packages provided by the U.S. government. The U.S. Treasury Department and the Fed have combined to create approximate $3 trillion of new money, which has been given to businesses and individuals through payroll protection programs, enhanced unemployment benefits, and stimulus checks. Additionally, the Fed has completed record levels of various asset purchase/backing programs in an effort to support credit markets. The chart below indicates the spike in the Fed’s balance sheet (buying U.S. treasuries and other financial assets) just in the last month. In the last two months, the Fed’s balance sheet has grown from $4.2 trillion to $6.7 trillion as seen in the chart below from the St. Louis Federal Reserve.

This expansion of the Fed’s balance sheet is correlated with a sharp spike in the money supply. In particular, the M2 money supply metric has spiked in the last month. M2 measures the amount of money held at households in the form of cash, checking accounts, savings accounts, money market accounts, and other accounts easily converted to cash. The chart below from the St. Louis Fed depicts this growth with this metric increasing from $15.5 trillion to $16.9 trillion in one month, a 10% increase in the money in the hands of households in the U.S. Some of this excess capital is likely finding its way into the stock market.

With this backdrop, the broader market as measured by the Russell 3000 Growth Index is now down just 2% year-to-date as of this writing. The sharp rebound (up 36% off the lows for this particular index) and resilience of the market in the face of COVID-19 has been nearly as spectacular as the sell-off.

As has been the case over the last decade, the Fed has shown its ability to support and boost markets, and it appears to have been successful in the short-term again at this point in time. However, disciplined investors believe that a rational market should be driven more by earnings than the multiple investors will pay for those earnings. As we will be in a recessionary environment for the 14th time since 1935, it is important to look at historical results. On average, it has taken the market 2.5 years to regain its prior peak earnings. The range has been as short as 6 months to as long as 4+ years. This recession is obviously unique in that it is event-driven, and the economy was not showing real weakness prior to COVID-19, but the challenges COVID-19 has created are real. Time will tell as to the shape of the recovery curve.

With regards to the Fund, management exited investments where the outlook was more challenged than most, particularly those linked to travel/leisure and the aerospace industries. Additionally, we scrubbed the Fund for balance sheet/cash flow related problems, given the drastic nature of the downturn and the financials issues it could create. The Fund ended the quarter with 58 holdings, down from 66 in the previous quarter.

During the quarter, a new position was initiated in NIC, Inc. NIC dominates the market of enabling online transactions to occur between state government agencies and its citizens and businesses. Driver license record retrievals for insurance companies, hunting and fishing licenses for consumers, business registrations, and property lien filings are just a few of the online services made available by NIC for its state partners. NIC has no competition outside of states providing the services themselves and has a very stable track record of generating 10% organic growth and solid cash flows. With the stock down in tandem with the market, we built a position during the 1st quarter, given we felt the market was under-appreciating the stability of the business model.

The Fund remains overweight the Technology sector. We continue to have high conviction that through market cycles, small cap technology companies with solid fundamentals (solid growth potential, recurring revenue, high margins or the potential for high margins) that are disrupting previous ways of conducting business could be the place to concentrate a small cap growth portfolio, as long as valuations remain reasonable.

OUTLOOK

(As of 3/31/20) — There remains a lot of uncertainty regarding the path back to a new normal. As covered above, we know the federal government has and appears willing to continue to do what is necessary to support the economy and especially the financial markets. Additionally, market risk exists around the coming U.S. elections in November.

While we acknowledge the challenging macro-economic backdrop, our job continues to be to find attractive small cap companies that have not been fully appreciated by the market or are mispriced due to recent results or events. We believe less investor interest in our segment of the market creates opportunity to uncover value. Given recent volatility, this is perhaps even more true today.

The Fund typically invests at the smaller end of the small cap growth spectrum, and the managers continue to seek companies with sustainable growth due to secular growth trends or innovative or disruptive products.

The Buffalo Emerging Opportunities Fund is focused primarily on identifying innovation within U.S. companies with primarily North American revenue bases. Finally, with an active share of greater than 95%, the Fund will continue to offer a distinct offering from the Index and category peers.

The opinions expressed are those of the Portfolio Manager(s) and are subject to change, are not guaranteed and should not be considered recommendations to buy or sell any security. Earnings growth is not representative of the fund’s future performance.

Literature

General Account
Forms
Investor
Class
Institutional
Class
Both
  New Account Application
  New Account Application - Entity
  Change or Add Account Details
  Cost Basis Method Election
  Power of Attorney
Individual Retirement Account (IRA) Forms
  RMD Waiver   NEW
  IRA Account Application
  IRA Beneficiary Addition / Change
  IRA Required Minimum Distribution (RMD)
  IRA / Qualified Plan Distribution Request
  IRA Transfer
Coverdell Education Savings Accounts (ESA) Forms
  Coverdell ESA Application
  Coverdell ESA Distribution Request
  Coverdell ESA Transfer
Retirement Information
  Retirement Savings Options for Individuals

Fundamental Approach

We get to know the companies we invest in and learn how they run their business.

Top-Down & Bottom-Up

We identify Top-Down broad, secular growth trends and search for companies from the Bottom-Up.

Proprietary Philosophy

We construct our portfolios based on our own proprietary investment strategy.

Disciplined Investing

Sticking to our disciplined investment strategy ensures we maintain a consistent, balanced approach.

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating™ for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating™ metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

The Buffalo Emerging Opportunities Fund (BUFOX) received 4 stars among 581 for the three-year, 3 stars among 500 for the five-year, and 4 stars among 381 Small Growth funds for the ten-year period ending 4/30/20.

In each Morningstar Category, the 10% of funds with the lowest measured risk are described as Low Risk, the next 22.5% Below Average, the middle 35% Average, the next 22.5% Above Average, and the top 10% High. Morningstar Risk is measured for up to three time periods (three, five, and 10 years). These separate measures are then weighted and averaged to produce an overall measure for the fund. Funds with less than three years of performance history are not rated. ©2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar Style Box™ reveals a fund’s investment strategy by showing its investment style and market capitalization based on the fund’s portfolio holdings.

Flexible Income Fund

Flexible Income Fund

Quick Facts
InvestorInstitutional
Ticker:BUFBXBUIBX
Inception Date:8/12/19947/1/2019
Expense Ratio:1.01%0.86%
Total Net Assets:$412.32 Million  (3/31/20)
Category:Large Cap Value
Benchmark:Morningstar Moderately Aggressive Target Risk
Dividend Distribution:Monthly
Related Material:
   Fund Fact Sheet Q1 2020
   PM Commentary Q1 2020
   Summary Prospectus
Fund Objective & Investment Process

The investment objective of the Buffalo Flexible Income Fund is primarily the generation of high current income and, as a secondary objective, the long-term growth of capital.

To pursue its investment objectives, the Flexible Income Fund invests in both debt and equity securities.

The allocation of assets invested in each type of security is designed to balance income and long-term capital appreciation with reduced volatility of returns. The Flexible Income Fund expects to change its allocation mix over time based on the Fund managers’ view of economic conditions and underlying security values.

 ▼
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Our investment strategy seeks to generate yield for any investor needing monthly income with capital appreciation, and we use many methods to address potential downside risks.

John Kornitzer, Portfolio Manager

Morningstar Rating

       

Overall Morningstar Rating™ of BUFBX based on risk-adjusted returns among 155 Allocation 85%+ Equity funds as of 4/30/20.

Investment Style

Performance (%)

As of 4/30/203 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
(8/12/94)
BUFFALO FLEXIBLE INCOME FUND - Investor-12.82-14.21-9.972.072.416.055.985.436.52
BUFFALO FLEXIBLE INCOME FUND - Institutional-12.73-14.11-9.842.222.566.216.145.596.68
  Morningstar Moderately Aggressive Target Risk Index-10.47-11.31-3.944.294.647.196.695.74-
  Combined Index
    Morningstar U.S. Large Cap Index (60%)
    ICE BofAML U.S. High Yield Index (40%)
-8.54
-7.69
-9.82
-8.27
-7.23
-9.82
0.12
3.70
-5.26
6.85
10.46
1.43
7.26
9.97
3.19
9.51
12.08
5.66
7.90
8.80
6.56
5.72
5.18
6.54
8.44
9.41
6.98
  Lipper Mixed-Asset Target Allocation Moderate Funds Index-7.11-7.18-0.953.843.936.135.344.866.59
  Morningstar Allocation 85%+ Equity Category-13.52-14.65-8.062.113.087.245.884.546.67
As of 3/31/203 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
(8/12/94)
BUFFALO FLEXIBLE INCOME FUND - Investor-24.32-24.32-19.63-2.340.224.895.014.696.02
BUFFALO FLEXIBLE INCOME FUND - Institutional-24.24-24.24-19.51-2.190.375.055.164.846.18
  Morningstar Moderately Aggressive Target Risk Index-18.59-18.59-9.601.763.236.435.955.16-
  Combined Index
    Morningstar U.S. Large Cap Index (60%)
    ICE BofAML U.S. High Yield Index (40%)
-15.96
-17.86
-13.12
-15.96
-17.86
-13.12
-5.60
-4.37
-7.45
4.10
6.47
0.55
5.61
7.57
2.67
8.72
10.86
5.50
7.18
7.82
6.22
5.15
4.36
6.34
8.09
8.92
6.84
  Lipper Mixed-Asset Target Allocation Moderate Funds Index-13.19-13.19-5.431.882.745.554.804.466.33
  Morningstar Allocation 70-85% Equity Category-19.68-19.68-11.750.001.665.805.044.016.16
For performance prior to 7/1/19 (Inception Date of Institutional Class), performance of the Investor Class shares is used and includes expenses not applicable and lower than those of Investor Class shares.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 of higher than the performance quoted and can be obtained here. Performance is annualized for periods greater than 1 year. Each Morningstar category average represents a universe of funds with similar objectives.
Hypothetical Growth of $10,000
This chart illustrates the performance of a hypothetical $10,000 investment made in the Fund on the Inception Date. Assumes reinvestment of dividends and capital gains. This chart does not imply future performance.
Distributions
2020 Distribution Dates:

Record Date: June 17, 2020 | Payable Date: June 18, 2020

Record Date: July 17, 2020 | Payable Date: July 20, 2020

Record Date: August 17, 2020 | Payable Date: August 18, 2020

Record Date: September 17, 2020 | Payable Date: September 18, 2020

Record Date: October 19, 2020 | Payable Date: October 20, 2020

Record Date: November 17, 2020 | Payable Date: November 18, 2020

Record Date: December 17, 2020 | Payable Date: December 18, 2020


Record
Date
Payable
Date
Distribution
NAV
Net Investment
Income
Short-Term Capital
Gains
Long-Term Capital
Gains
Distribution
Total
5/18/205/19/20$13.31 (Inv)

$13.31 (Inst)
$0.03550457

$0.03721941
-

-
-

-
$0.03550457

$0.03721941
4/17/204/20/20$13.02 (Inv)

$13.02 (Inst)
$0.00378510

$0.00533692
-

-
-

-
$0.00378510

$0.00533692
3/17/203/18/20$11.18 (Inv)

$11.17 (Inst)
$0.02710948

$0.02877999
-

-
-

-
$0.02710948

$0.02877999
2/18/202/19/20$16.01 (Inv)

$16.01 (Inst)
$0.02114417

$0.02219948
-

-
-

-
$0.02114417

$0.02219948
1/17/201/21/20$16.04 (Inv)

$16.04 (Inst)
$0.01794007

$0.02027910
-

-
-

-
$0.01794007

$0.02027910
For historical distributions, click here.

Portfolio

Portfolio Characteristics
(As of 3/31/20) 
 
# of Equity Holdings58
# of Fixed Holdings4
Median Market Cap$40.19 B
Weighted Average Market Cap$179.21 B
3-Yr Annualized Turnover Ratio4.51%
Average Duration1.89 years
Average Maturity10.37 years
30-day SEC Yield3.28%
Top 10 Holdings
HoldingTickerSector% of Net
Assets
MicrosoftMSFTTechnology4.81%
BoeingBAIndustrials3.86%
ChevronCVXEnergy3.06%
IntelINTCTechnology3.04%
Procter & GamblePGConsumer Staples2.75%
Johnson & JohnsonJNJHealth Care2.72%
Coca ColaKOConsumer Staples2.58%
VerizonVZTelecommunication2.50%
Costco WholesaleCOSTConsumer Staples2.49%
Truist FinancialTFCFinancials2.48%
TOP 10 HOLDINGS TOTAL30.29%
As of 12/31/19. Top 10 Holdings for the quarter are not disclosed until 60 days after quarter end. Fund holdings are subject to change and are not recommendations to buy or sell any securities.
Sector Weighting
As of 3/31/20. Security weightings are subject to change and are not recommendations to buy or sell any securities. Sector Allocation may not equal 100% due to rounding.
Asset Allocation
As of 3/31/20. Allocation percentages may not equal 100% due to rounding.

Management

John Kornitzer
Portfolio Manager

51 Years of Experience

 View full bio

Paul Dlugosch, CFA
Portfolio Manager

22 Years of Experience

 View full bio

Commentary

CAPITAL MARKET OVERVIEW

(As of 12/31/19) — The combination of a U.S. Federal Reserve (Fed) interest rate cut, an improving economic outlook, and easing trade tensions, sent equity markets sharply higher in the 4th quarter. The S&P 500 Index advanced 9.10% during the period, which brought the full-year (2019) gain to 31.49%. The Fed cut interest rates three times in 2019, erasing the brief yield curve inversion and assuaging fears of a recession. The economy continued to add new jobs at a strong pace and unemployment declined to 3.5%. Consumer spending remained healthy, and there is optimism for better business investment following the announced “phase one” trade deal with China.

Similar to the S&P 500 Index, the broad-based Russell 3000 Index returned 9.04% during the quarter. Growth outperformed value, as the Russell 3000 Growth Index returned 10.62% compared to a return of 7.41% for the Russell 3000 Value Index. Smaller companies outperformed larger companies, as one would expect in a “risk-on” period. The Russell Microcap Index surged 13.45% and the Russell 2000 Index advanced 9.94%. Large company benchmarks such as the Russell 1000 Index advanced 9.04% while the Russell Midcap Index produced a return of 7.06%. Technology and Health Care were the best performing sectors in the quarter, while more defensive areas of the market lagged such as Real Estate and Utilities. Higher long-term interest rates weighed on high-quality bond proxies – the safe haven 10-year U.S. Treasury Bond produced a return of -1.74% during the quarter.

PERFORMANCE COMMENTARY

(As of 12/31/19) — The Buffalo Flexible Income Fund produced a return of 4.64% for the quarter, underperforming the Morningstar Moderately Aggressive Target Risk Index return of 6.87%. The Fund’s peer group index, the Lipper Mixed-Asset Allocation Moderate Funds Index, produced a return of 4.69% for the quarter.

PORTFOLIO PERFORMANCE

The equity portion of the portfolio produced a return of 4.62%. The top three contributors to the Fund’s performance during the quarter were Home Depot, Schlumberger, and McDonald’s. Relative underperformance compared to the Morningstar U.S. Large Cap Index was primarily driven by stock selection in the Information Technology, Consumer Staples, and Industrial sectors. Underperformance within the Information Technology segment was driven by an underweight position to the sector and the fact that Fund did not own Apple, a large weight in the benchmark, which negatively-influenced relative performance. The underperformance within the Consumer Staples segment was driven by security selection and included General Mills, Clorox, and Kimberly Clark. Meanwhile, Boeing drove underperformance within the Industrial sector. The company has been negatively impacted by the grounding of the 737 MAX airplane and the uncertainty of when it will return to production, delivery, and service.

OUTLOOK

(As of 12/31/19) — The healthy gains in the stock market during the quarter were primarily driven by expansion in market valuation metrics, as corporate earnings have been relatively flat. Key drivers for further stock market advancement are likely to be driven by how Middle East conflicts play out, the upcoming domestic election cycle, and improved corporate earnings growth.

We continue to be diligent in our process of seeking wide moat, large capitalization, income-producing securities trading at reasonable valuations, by our analysis. Given that we believe the U.S. is in the later stages of the current economic cycle, we find ourselves confronted with relatively low spread and yield levels. This backdrop has resulted in a bond allocation that is close to the low end of our expected range in terms of the Fund’s overall asset mix of stocks, bonds, and cash. Within the fixed income portion of the portfolio, we continue to focus on high-quality, non-investment grade issuers with defensive business models and manageable credit metrics. As always, we appreciate your support and confidence in our investment process over the long term.

The opinions expressed are those of the Portfolio Manager(s) and are subject to change, are not guaranteed and should not be considered recommendations to buy or sell any security. Earnings growth is not representative of the fund’s future performance.

Literature

General Account
Forms
Investor
Class
Institutional
Class
Both
  New Account Application
  New Account Application - Entity
  Change or Add Account Details
  Cost Basis Method Election
  Power of Attorney
Individual Retirement Account (IRA) Forms
  RMD Waiver   NEW
  IRA Account Application
  IRA Beneficiary Addition / Change
  IRA Required Minimum Distribution (RMD)
  IRA / Qualified Plan Distribution Request
  IRA Transfer
Coverdell Education Savings Accounts (ESA) Forms
  Coverdell ESA Application
  Coverdell ESA Distribution Request
  Coverdell ESA Transfer
Retirement Information
  Retirement Savings Options for Individuals

Fundamental Approach

We get to know the companies we invest in and learn how they run their business.

Top-Down & Bottom-Up

We identify Top-Down broad, secular growth trends and search for companies from the Bottom-Up.

Proprietary Philosophy

We construct our portfolios based on our own proprietary investment strategy.

Disciplined Investing

Sticking to our disciplined investment strategy ensures we maintain a consistent, balanced approach.

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating™ for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating™ metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

The Buffalo Flexible Income Fund (BUFBX) received 3 stars among 155 for the 3-year, 2 stars among 138 for the 5-year, and 3 stars among 100 Allocation 85%+ Equity funds for the 10-year period ending 4/30/20.

In each Morningstar Category, the 10% of funds with the lowest measured risk are described as Low Risk, the next 22.5% Below Average, the middle 35% Average, the next 22.5% Above Average, and the top 10% High. Morningstar Risk is measured for up to three time periods (three, five, and 10 years). These separate measures are then weighted and averaged to produce an overall measure for the fund. Funds with less than three years of performance history are not rated. ©2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar Style Box™ reveals a fund’s investment strategy by showing its investment style and market capitalization based on the fund’s portfolio holdings.

Bond ratings are grades given to bonds that indicates their credit quality as determined by a private independent rating service such as [Standard & Poor’s or Moody’s, etc.]. The firm evaluates a bond issuer’s financial strength, or its ability to pay a bond’s principal and interest in a timely fashion. Ratings are expressed as letters ranging from ‘AAA’, which is the highest grade, to ‘D’, which is the lowest grade. Not Rated category includes holdings that are not rated by any rating agencies.
Growth Fund

Growth Fund

Quick Facts
InvestorInstitutional
Ticker:BUFGXBIIGX
Inception Date:5/19/19957/1/2019
Expense Ratio:0.92%0.77%
Total Net Assets:$148.50 Million  (3/31/20)
Category:Large Cap Growth
Benchmark:Morningstar U.S. Growth
Related Material:
   Fund Fact Sheet Q1 2020
   PM Commentary Q1 2020
   Summary Prospectus
Fund Objective & Investment Process

The investment objective of the Buffalo Growth Fund is long-term growth of capital. The Growth Fund invests in domestic common stocks and other U.S. equity securities, including preferred stock, convertible securities, warrants and rights, with a goal of maintaining at least 75% of the equity weighting of the Fund’s portfolio in companies with market capitalizations greater than $5 billion or the median of the Morningstar U.S. Growth Index, whichever is lower. Capitalization of the Morningstar U.S. Growth Index changes due to market conditions and index composition.

With respect to the remaining 25% of the equity weighting of the Fund’s portfolio, the Fund may invest in companies of any size, including, but not limited to, those with market capitalizations less than the lower of the median of the Morningstar U.S. Growth Index or $5 billion.

The Fund managers seek to identify companies that are expected to experience growth based on the identification of long-term, measurable secular trends, and which, as a result, the managers believe may have potential revenue growth in excess of the gross domestic product growth rate. Companies are screened using in-depth, in-house research to identify those which the managers believe have favorable attributes, including attractive valuation, strong management, conservative debt, free cash flow, scalable business models, and competitive advantages.

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The Growth Fund invest in secular trend leaders: attractively-priced, financially-strong, well-managed companies across all market cap segments, which we believe are favorably positioned to harvest the lion’s share of big secular growth trends.

Dave Carlsen, CFA, Co-Portfolio Manager

Morningstar Rating

       

Overall Morningstar Rating™ of BUFGX based on risk-adjusted returns among 1,237 Large Growth funds as of 4/30/20.

Investment Style

Performance (%)

As of 4/30/203 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
(5/19/95)
BUFFALO GROWTH FUND - Investor-5.88-4.164.2112.28
9.6811.949.836.5410.11
BUFFALO GROWTH FUND - Institutional-5.84-4.124.3612.449.8412.119.996.7010.27
  Morningstar U.S. Growth Index-0.642.6812.8517.3313.3814.4610.863.65-
  Lipper Large Cap Growth Fund Index-2.95-0.699.3515.3312.3113.009.744.168.52
  Morningstar Large Growth Category-5.24-3.485.3412.7210.5112.289.555.438.49
As of 3/31/203 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
(5/19/95)
BUFFALO GROWTH FUND - Investor-16.01-16.01-3.908.17
7.2010.828.815.799.56
BUFFALO GROWTH FUND - Institutional-16.01-16.01-3.798.327.3510.988.975.959.72
  Morningstar U.S. Growth Index-11.50-11.501.4512.809.9712.969.542.49-
  Lipper Large Cap Growth Fund Index-13.47-13.47-0.5511.219.2611.578.573.037.95
  Morningstar Large Growth Category-15.48-15.48-3.728.657.6410.998.404.427.95
For performance prior to 7/1/19 (Inception Date of Institutional Class), performance of the Investor Class shares is used and includes expenses not applicable and lower than those of Investor Class shares.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 of higher than the performance quoted and can be obtained here. Performance is annualized for periods greater than 1 year. Each Morningstar category average represents a universe of funds with similar objectives.
3 Year Risk Metrics
BUFGX vs Morningstar U.S. Growth Index (As of 3/31/20)
Upside Capture79.93
Downside Capture100.70
Alpha-3.38
Beta0.93
Sharpe Ratio0.43
Hypothetical Growth of $10,000
This chart illustrates the performance of a hypothetical $10,000 investment made in the Fund on the inception date of the benchmark index (6/30/97). This chart does not imply future performance.

Portfolio

Portfolio Characteristics
(As of 3/31/20) 
 
# of Holdings55
Median Market Cap$57.44 B
Weighted Average Market Cap$299.26 B
3-Yr Annualized Turnover Ratio26.81%
% of Holdings with Free Cash Flow89.09%
Active Share55.98%
Top 10 Holdings
Name of HoldingTickerSector% of Net
Assets
MicrosoftMSFTTechnology6.53%
AmazonAMZNConsumer Discretionary3.63%
MastercardMAFinancials2.95%
Alphabet (C)GOOGTechnology2.94%
Abbott LabsABTHealth Care2.73%
AppleAAPLTechnology2.73%
AlphabetGOOGLTechnology2.63%
LindeLINMaterials2.54%
Danaher CorpDHRHealth Care2.32%
NikeNKEConsumer Discretionary2.26%
TOP 10 HOLDINGS TOTAL28.53%
As of 12/31/19. Top 10 Holdings for the quarter are not disclosed until 60 days after quarter end. Fund holdings are subject to change and are not recommendations to buy or sell any securities.
Sector Weighting
As of 3/31/20. Security weightings are subject to change and are not recommendations to buy or sell any securities. Sector Allocation may not equal 100% due to rounding.
Market Capitalization
As of 3/31/20. Market Cap percentages may not equal 100% due to rounding.

Management

Dave Carlsen, CFA
Portfolio Manager

27 Years of Experience

 View full bio

Josh West, CFA
Portfolio Manager

15 Years of Experience

 View full bio

Commentary

CAPITAL MARKET OVERVIEW

(As of 3/31/20) — Global equity markets fell sharply in the 1st quarter of 2020 in reaction to the global spread of COVID-19. As the case count increased exponentially, the only effective response was for countries to go into lockdown. The economic impact of these actions became clear as the quarter progressed and virtually all asset classes suffered as a result. From February 19 through March 23, the U.S. stock market, as measured by the S&P 500 Index, declined around 34%, which was the fastest meltdown in history. Central banks and governments responded quickly to this event, with the U.S. Federal Reserve (the “Fed”) cutting interest rates twice in March and announcing unlimited quantitative easing. The U.S. Senate passed a $2 trillion stimulus package, providing assistance to individuals and businesses in distress. Optimism around these efforts helped the market rally into quarter end, leaving the S&P 500 Index down 19.60% from the start of the year.

The broad market Russell 3000 Index declined 20.90% in the 1st quarter. Growth outperformed value, with the Russell 3000 Growth Index declining 14.85% compared to the Russell 3000 Value Index decline of 27.32%. By capitalization size, large cap stocks held up best, with a -20.22% return in the quarter, represented by the Russell 1000 Index. The Russell Mid Cap Index fell -27.07%, followed by the smaller cap Russell 2000 Index which declined -30.61%. Best performing sectors were the Technology, Health Care, and Consumer Staples sectors. The Energy sector was hit hardest as falling demand and rising supply from Saudi Arabia caused oil prices to crater. The economically-sensitive Financial and Industrial sectors were also among the worst performing sectors in the quarter.

PERFORMANCE COMMENTARY

(As of 3/31/20) — The Buffalo Growth Fund (BUFGX) declined 16.01% versus the Morningstar U.S. Growth Index’s decline of 11.50% and the Morningstar Large Cap Growth Peer Group decline of 15.48%. The Consumer Discretionary, Technology, Financials, and Health Care sectors in the Fund accounted for most of the relative underperformance. Cyclically-dependent stocks performed worst in the Fund and Index. Consumer Discretionary and Information Technology stocks were particularly hard hit, as the coronavirus pandemic brought the world economy to a standstill.

TOP CONTRIBUTORS

Amazon continues to have significant runway for growth as it continues to find ways to evolve its business model.

Equinix is the largest provider of colocation data centers in the world. While the company reported a strong quarter in February, the increased reliance of remote connectivity for work and school played a strong role in company’s stock price performance during the quarter. The company continues to be well position for secular growth going forward as more software services move to the cloud. Additionally, the company has developed network-dense locations in major cities that would be extremely difficult for competitors to replicate.

TOP DETRACTORS

Disney has been negatively impacted by the global pandemic, which is keeping Disney’s theme parks, resorts, retail stores, global theatrical exhibition, and live sports
broadcasts largely closed or postponed through the end of June 2020. While it is unknown how long the COVID-19 pandemic will last, Disney’s portfolio of offerings are unreplaceable brands. In early April, Disney reported 50 million subscribers to its Disney+ streaming products, as consumers sought entertainment content while sheltering at home. We believe that once the economy “normalizes”, Disney’s stock price will continue to recover from its recent lows.

Wells Fargo, one of the largest banks in the U.S., declined largely due to the impact of the COVID-19 pandemic on the global economy and lower interest rates, as the Fed cut its benchmark lending rate to zero during the quarter. Despite the difficult near-term environment, the company remains profitable and should maintain adequate capital levels, even after modeling for the Fed’s severely adverse stress test in a worst case scenario. We are monitoring developments closely, but current valuation of the company’s stock makes a relatively compelling risk-reward trade-off longer term.

OUTLOOK

(As of 3/31/20) — The fiscal and monetary response to the COVID-19 pandemic has been relatively swift and expansive, with indications that if conditions do not improve, world leaders and global central banks will do whatever is necessary to revive growth. Their efforts so far are encouraging and markets have begun to stabilize. In the near term, everyone seems focused on the pace and magnitude of the virus spread, resulting in high stock
correlations. Upcoming earnings results seem far less important than an assessment of 2021-2022 earnings power. Over the intermediate term, the revival of global growth
will depend on how soon the pandemic can be contained through a combination of better testing, improved therapies, vaccine development, and maybe seasonal curtailment. Time will tell.

In the meantime, global economic uncertainty and low investor confidence are weighing on the market and near-term corporate fundamentals. This is opening up attractive buying opportunities for some of our favorite secular growth beneficiaries on the wish list. We are not blindly buying on lower stock prices, but instead we are mindful of the macroeconomic backdrop, the sensitivity of our companies to
discretionary spending and the negative effect unfavorable leverage can have on corporate profit cycles in bad-times scenarios. We keep a keen eye on the degree of contraction that current prices discount and the degree to which management teams can protect profits and shed risk. Our work is beginning to tell us that reward and growing upside opportunity trumps downside risk in many instances. We are patiently waiting for these good-odds situations and will strike when we get them.

Economic conditions may ebb and flow, but our focus is steady – to invest in attractively-priced, financially-strong, well-managed companies that can benefit from innovative strategies and disruptive megatrends.

The opinions expressed are those of the Portfolio Manager(s) and are subject to change, are not guaranteed and should not be considered recommendations to buy or sell any security. Investing in both actively and passively managed mutual funds involves risk and principal loss is possible. Earnings growth is not representative of the fund’s future performance.

Literature

General Account
Forms
Investor
Class
Institutional
Class
Both
  New Account Application
  New Account Application - Entity
  Change or Add Account Details
  Cost Basis Method Election
  Power of Attorney
Individual Retirement Account (IRA) Forms
  RMD Waiver   NEW
  IRA Account Application
  IRA Beneficiary Addition / Change
  IRA Required Minimum Distribution (RMD)
  IRA / Qualified Plan Distribution Request
  IRA Transfer
Coverdell Education Savings Accounts (ESA) Forms
  Coverdell ESA Application
  Coverdell ESA Distribution Request
  Coverdell ESA Transfer
Retirement Information
  Retirement Savings Options for Individuals

Fundamental Approach

We get to know the companies we invest in and learn how they run their business.

Top-Down & Bottom-Up

We identify Top-Down broad, secular growth trends and search for companies from the Bottom-Up.

Proprietary Philosophy

We construct our portfolios based on our own proprietary investment strategy.

Disciplined Investing

Sticking to our disciplined investment strategy ensures we maintain a consistent, balanced approach.

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating™ for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating™ metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

The Buffalo Growth Fund (BUFGX) received 3 stars among 1,237 for the 3-year, 3 stars among 1,084 for the 5-year, and 3 stars among 813 Large Growth funds for the 10-year period ending 4/30/20.

In each Morningstar Category, the 10% of funds with the lowest measured risk are described as Low Risk, the next 22.5% Below Average, the middle 35% Average, the next 22.5% Above Average, and the top 10% High. Morningstar Risk is measured for up to three time periods (three, five, and 10 years). These separate measures are then weighted and averaged to produce an overall measure for the fund. Funds with less than three years of performance history are not rated. ©2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar Style Box™ reveals a fund’s investment strategy by showing its investment style and market capitalization based on the fund’s portfolio holdings.