Quick Facts
Investor Institutional
Daily Pricing:  
As of   
$ Change:
% Change:
Inception Date: 4/16/2001 7/1/2019
Expense Ratio: 1.01% 0.86%
Total Net Assets: $1.46 Billion  (3/31/22)
Morningstar Category: Mid Cap Growth
Benchmark Index: Russell Midcap Growth
Related Material:
   Fund Fact Sheet Q1 2022
   PM Commentary Q1 2022
   Summary Prospectus

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.


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 Ratings


Overall Morningstar Rating™ of BUFTX based on risk-adjusted returns among 538 Midcap Growth funds as of 4/30/22.

Morningstar Sustainability Rating™ of BUFTX out of 1,565 U.S. Equity Mid Cap funds as of 3/31/22, based on 96% of AUM

Carbon Metric Rating of BUFTX as of 3/31/22 in the Mid Cap Growth category, based on 93% of AUM; long positions only


Historical Sustainability Score Rank of BUFTX

Performance (%)

As of 4/30/223 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO DISCOVERY FUND - Investor-11.54-22.25-18.597.2210.2311.7810.1710.379.22
BUFFALO DISCOVERY FUND - Institutional-11.52-22.21-18.497.3810.4011.9510.3310.549.38
  Russell Midcap Growth Index-10.93-22.42-16.738.7212.0612.179.229.819.09
  Morningstar U.S. Mid Growth Index-13.71-26.31-18.7910.2813.3212.439.36--
  Morningstar Mid-Cap Growth Category-11.21-22.13-18.499.5111.8111.458.809.017.32
As of 3/31/223 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO DISCOVERY FUND - Investor-12.42-12.42-4.5813.0413.3413.0511.3710.289.88
BUFFALO DISCOVERY FUND - Institutional-12.40-12.40-4.4613.2113.5113.2211.5410.4410.04
  Russell Midcap Growth Index-12.58-12.58-0.8914.8115.1013.5210.4110.179.75
  Morningstar U.S. Mid Growth Index-16.01-16.01-1.8516.6216.7913.8210.64--
  Morningstar Mid-Cap Growth Category-12.35-12.35-4.0015.3414.7912.639.869.407.96

BUFFALO DISCOVERY FUND - Investor19.7336.6110.685.645.5625.44-6.5431.6333.8111.90
BUFFALO DISCOVERY FUND - Institutional19.9136.8210.855.805.7225.62-6.4031.8234.0312.07
  Russell Midcap Growth Index15.8135.7411.90-0.207.3325.27-4.7535.4735.5912.73
  Morningstar U.S. Mid Growth Index15.8134.079.77-0.716.4625.67-3.1636.0146.1714.97
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 Russell Midcap Growth Index (As of 3/31/22)
Upside Capture73.65
Downside Capture88.16
Sharpe Ratio0.63
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 Characteristics
(As of 3/31/22) 
# of Holdings86
Median Market Cap$18.99 B
Weighted Average Market Cap$26.20 B
3-Yr Annualized Turnover Ratio82.81%
% of Holdings with Free Cash Flow86.05%
Active Share81.19%
Top 10 Holdings
HoldingTickerSector% of Net
IHS MarkitINFOIndustrials2.41%
Tenable HoldingsTENBTechnology2.25%
Builders FirstSourceBLDRIndustrials2.04%
Martin Marietta MaterialsMLMMaterials1.89%
Keysight TechnologiesKEYSTechnology1.87%
CopartCPRTConsumer Discretionary1.82%
ICONICONHealth Care1.82%
As of 12/31/21. 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 3/31/22. 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 3/31/22. Market Cap percentages may not equal 100% due to rounding.


Dave Carlsen, CFA
Portfolio Manager

30 Years of Experience

 View full bio

Jamie Cuellar, CFA
Portfolio Manager

30 Years of Experience

 View full bio

Ken Laudan
Portfolio Manager

29 Years of Experience

 View full bio

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



(As of 3/31/22) — The equity market, as measured by the S&P 500 Index, suffered its second quarterly decline since the onset of the COVID-19 pandemic, over two years ago, producing a return of -4.60% during the January–March period. Weak capital market performance can be largely attributed to the Federal Reserve’s decision to raise interest rates and reduce the size of its balance sheet, also known as quantitative tightening. Other headwinds, including the war in Ukraine, significant inflation, and persistent supply chain bottlenecks, only added to the backdrop of uncertainty for domestic and global markets.

The broad-based Russell 3000 Index fell -5.28% in the quarter. Value stocks outperformed growth stocks by a large amount, as the Russell 3000 Value Index returned -0.85% compared to a decline of -9.25% for the Russell 3000 Growth Index. Large cap stocks fell less than smaller cap stocks during the quarter, as the Russell 1000 Index declined -5.13%, followed by a return of -5.68% for the Russell Midcap Index, and -7.53% for the small cap Russell 2000 Index. Energy stocks surged during the period on rising oil prices while the more defensive Utilities and Telecommunication Services sectors were also modestly positive. The Consumer Discretionary and Technology areas of the market were the largest underperformers due to inflation and rising rates.


(As of 3/31/22) — The Buffalo Discovery Fund (BUFTX) declined 12.42% during the quarter versus a decline of 16.01% for the Morningstar U.S. Mid Growth Index. Outperformance was realized in the Technology, Consumer Discretionary, and Financials sectors, while Health Care was a laggard. For a second consecutive quarter, the Fund benefited from its relative underweight to high-priced, speculative growth companies. These types of stocks often struggle when interest rates move higher, and during the quarter, the yield of the 10-year U.S. Treasury Bond rose an astounding 80 basis points. Investors are grappling with a number of issues: inflation at a 40-year high, expectations for slower economic growth, and fallout from the war in Ukraine. It remains to be seen whether the Federal Reserve can choke off inflation without sending the economy into a recession. Yet, through all this uncertainty, management of the Buffalo Discovery Fund remains focused on its core mission: to invest in disruptive growth companies that use innovation to create competitive advantage, all while maintaining a consistent discipline around valuation and risk. We believe this is a strategy that has the best probability to deliver attractive risk-adjusted returns over time.


HealthEquity (HQY) was the largest contributor to portfolio results during the quarter. HealthEquity offers a digital platform that allows consumers and employers to manage health savings accounts and other benefits programs, including flexible savings accounts, health reimbursement arrangements, and the administration of COBRA benefits. The company is seeing double-digit growth in accounts and interchange fees behind the tailwinds of an economic recovery and the increased use of tax-advantaged health savings plans. HealthEquity also benefits from rising interest rates, which increase the yield the company is able to generate on customer deposits.

Cleveland Cliffs (CLF) was another strong contributor for the quarter. Cleveland Cliffs is a vertically-integrated U.S. steel manufacturer with innovative products and manufacturing processes. Earnings expectations have steadily increased over the past six months as the company implemented new supply contracts at higher prices. In addition, the stock saw a sharp move to the upside following Russia’s invasion of Ukraine. Those two countries have historically supplied approximately two-thirds of the world’s pig iron, and Cleveland Cliffs captures the benefit of higher commodity prices through its mining operations.


Natera (NTRA) was the largest detractor from portfolio results during the quarter. The company’s proprietary molecular and bioinformatics technology is currently used for prenatal testing, cancer screening, and assessing rejection risks in organ transplant recipients. Shares moved lower after a short-selling firm published a negative report on the company. The management team hosted a call with investors to rebut the short report, and the company has not changed its expectation for 25% revenue growth in 2022. We have reviewed the short report and believe the selloff is greatly overdone.

Bandwidth (BAND) was also a detractor during the quarter. Bandwidth operates a cloud-based communications platform that allows enterprises to embed voice, video, and messaging features into their existing business software. The company’s network was overwhelmed by hackers in a coordinated attack during the fall of 2021. The company also experienced an increase in customer churn due to the attack, and management had been overly optimistic in its initial assessment of when those customers would return.


(As of 3/31/22) — The market’s rotation into quality and stability accelerated during the quarter. This move was initially driven by a more hawkish Federal Reserve, but picked up steam following Russia’s invasion of Ukraine. Looking ahead, economic growth will almost certainly slow in the coming quarters, yet some of the factors driving inflation remain persistent. Those include tight labor markets, COVID-related supply chains disruptions, bans on Russian commodities, and a shortage of affordable housing. The Federal Reserve (the “Fed”) simply does not have the tools to tackle many of these issues. While the rate of inflation could peak in the first half of 2022, it will not be anywhere close to the Fed’s official 2% target, in our view. We expect the Fed’s tightening cycle to last. Against that backdrop, we continue to focus on companies with scale advantages and pricing power, as they are best positioned to maintain profit margins, reinvest in their businesses, grow earnings, and take market share.

Sentiment around equities has clearly become more pessimistic since the Fed made its “hawkish pivot” in mid-December, but these types of markets often create opportunities for long-term investors. The positive news is that consumer and corporate balance sheets are in excellent shape, unemployment is back to pre-pandemic levels, COVID vaccines are widely available, and the labor participation rate is showing sequential improvement. Valuations for growth stocks have become somewhat less frothy, as well. Many of 2021’s high-flying, speculative growth stocks have fallen 50% or more over the past six months. To the extent we can find innovative, well-managed companies with durable competitive advantages that we believe will evolve into profitable industry leaders, we will certainly look to take advantage of the recent sell-off. Thank you for your continued trust and support.

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.

7 Buffalo Funds Named to IBD Best Mutual Funds 2021 List

Seven Buffalo Funds were named to Investor’s Business Daily Best Mutual Funds 2021 list, including the Best U.S. Diversified, Growth, Large Cap, Mid Cap, Small Cap, International, and U.S. Taxable Bond Fund categories.


General Account
  New Account Application
  New Account Application - Entity
  Change or Add Account Details
  Cost Basis Method Election
  Power of Attorney
Individual Retirement Account (IRA) Forms
  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.

Morningstar Rating™

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 Morningstar Rating does not include any adjustment for sales loads. 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.

©2021 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 Buffalo Discovery Fund (BUFTX) received 3 stars among 538 for the 3-year, 3 stars among 502 for the 5-year, and 3 stars among 385 Mid-Cap Growth funds for the 10-year period ending 4/30/22. Other share classes may have different performance characteristics.
Morningstar Sustainability Rating™

The Morningstar Sustainability Rating™ is intended to measure how well the issuing companies of the securities within a fund’s portfolio holdings are managing their financially material environmental, social and governance, or ESG, risks relative to the fund’s Morningstar Global Category peers. The Morningstar Sustainability Rating calculation is a five -step process. First, each fund with at least 67% of assets covered by a company-level ESG Risk Score from Sustainalytics receives a Morningstar Portfolio Sustainability Score. The Morningstar Portfolio Sustainability Score is an asset weighted average of company-level ESG Risk Scores. The Portfolio Sustainability Score ranges between 0 to 100, with a higher score indicating that a fund has, on average, more of its assets invested in companies with high ESG Risk. Second, the Historical Sustainability Score is an exponential weighted moving average of the Portfolio Sustainability Scores over the past 12 months. The process rescales the current Portfolio Sustainability Score to reflect the consistency of the scores. The Historical Sustainability Score ranges between 0 to 100, with a higher score indicating that a fund has, on average, more of its assets invested in companies with high ESG Risk, on a consistent historical basis. Third, the Morningstar Sustainability Rating is then assigned to all scored funds within Morningstar Global Categories in which at least thirty (30) funds receive a Historical Sustainability Score and is determined by each fund’s Morningstar Sustainability Rating Score rank within the following distribution: High (highest 10%), Above Average (next 22.5%), Average (next 35%), Below Average (next 22.5%), and Low (lowest 10%). Fourth, Morningstar applies a 1% rating buffer from the previous month to increase rating stability. This means a fund must move 1% beyond the rating breakpoint to change ratings. Fifth, they adjust downward positive Sustainability Ratings to funds with high ESG Risk scores. The logic is as follows: If Portfolio Sustainability score is above 40, then the fund receives a Low Sustainability Rating. If Portfolio Sustainability score is above 35 and preliminary rating is Average or better, then the fund is downgraded to Below Average. If the Portfolio Sustainability score is above 30 and preliminary rating is Above Average, then the fund is downgraded to Average. If the Portfolio Sustainability score is below 30, then no adjustment is made. The Morningstar Sustainability Rating is depicted by globe icons where High equals 5 globes and Low equals 1 globe. Since a Sustainability Rating is assigned to all funds that meet the above criteria, the rating it is not limited to funds with explicit sustainable or responsible investment mandates. Morningstar updates its Sustainability Ratings monthly. The Portfolio Sustainability Score is calculated when Morningstar receives a new portfolio. Then, the Historical Sustainability Score and the Sustainability Rating is calculated one month and six business days after the reported as-of date of the most recent portfolio. As part of the evaluation process, Morningstar uses Sustainalytics’ ESG scores from the same month as the portfolio as-of date. Please click on for more detailed information about the Morningstar Sustainability Rating methodology and calculation frequency. Sustainalytics is an independent ESG and corporate governance research, ratings, and analysis firm. Morningstar, Inc. holds a non-controlling ownership interest in Sustainalytics.

Morningstar Low Carbon Designation™

The Morningstar® Low Carbon Designation™ is intended to allow investors to easily identify low-carbon funds across the global universe. The designation is an indicator that the companies held in a portfolio are in general alignment with the transition to a low-carbon economy. The designation is given to portfolios that have low carbon-risk scores and low levels of exposure to fossil fuels. To determine carbon-risk scores and fossil fuel involvement, Morningstar uses Sustainalytics' company-level data. The Morningstar® Portfolio Carbon Risk Score™ measures the risk that companies in a portfolio face from the transition to a low-carbon economy. The Morningstar® Portfolio Fossil Fuel Involvement™ percentage assesses the degree to which a portfolio is exposed to thermal coal extraction and power generation as well as oil and gas production, power generation, and products & services. To receive a Morningstar Portfolio Carbon Risk Score, at least 67% of portfolio assets must have a carbon-risk rating from Sustainalytics. The percentage of assets covered is rescaled to 100% before calculating the score. To receive the designation, a portfolio must meet two criteria: 1) a 12-month trailing average Morningstar Portfolio Carbon Risk Score below 10 and 2) a 12-month trailing average exposure to fossil fuels less than 7% of assets, which is approximately a 33% underweighting to the global equity universe. Funds receive the Low Carbon designation based on the most recent quarterly calculations of their 12- month trailing average Morningstar Portfolio Carbon Risk Scores and Morningstar Portfolio Fossil Fuel Involvement. Funds holding the Low Carbon designation that no longer meet the criteria will not receive the designation for the subsequent quarter. All Morningstar Portfolio Carbon Metrics, including the Morningstar Portfolio Carbon Risk Score, Morningstar Portfolio Fossil Fuel Involvement, and the Morningstar Low Carbon Designation, are calculated quarterly. Please visit for more detail information about the Morningstar Low Carbon Designation and its calculation. Sustainalytics is an independent ESG and corporate governance research, ratings, and analysis firm. Morningstar, Inc. holds a non-controlling ownership interest in Sustainalytics.