Quick Facts
Inception Date:12/3/2012
Total Net Assets:$61.34 Million  (9/30/18)
Expense Ratio:0.95%
Dividend Distribution:Quarterly
Category:Large Cap Blend
Benchmark:Morningstar U.S. Large-Mid Cap
Related Material:
   Fund Fact Sheet Q3 2018
   PM Commentary Q3 2018
   Summary Prospectus

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.


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™ based on risk-adjusted returns among 1,207 Large Blend funds as of 11/30/18.

Investment Style

Performance (%)

As of 11/30/183 MOYTD1 YR3 YR5 YRSince Inception
BUFFALO DIVIDEND FOCUS FUND-3.793.945.0910.7211.3312.84
  Morningstar U.S. Large-Mid Cap Index-4.704.986.1011.9010.9214.10
  S&P 500 Index-4.405.116.2712.1611.1214.22
  Lipper Equity Income Funds Index-
  Morningstar Large Blend Category-4.653.034.2610.389.2412.09
As of 9/30/183 MOYTD1 YR3 YR5 YRSince Inception
BUFFALO DIVIDEND FOCUS FUND7.688.8515.8815.2113.6614.14
  Morningstar U.S. Large-Mid Cap Index7.4810.6117.8616.9113.6815.56
  S&P 500 Index7.7110.5617.9117.3113.9515.66
  Lipper Equity Income Funds Index5.554.6710.4413.6310.2812.21
  Morningstar Large Blend Category6.678.4215.3515.1711.9313.44

* Partial year. Inception to year-end.

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.

As of July 27, 2018 the Morningstar U.S. Large-Mid Cap Index has replaced the S&P 500 Index as the Fund’s primary benchmark. The Advisor believes that the new index is more appropriate given the Fund’s holdings.

3 Year Risk Metrics
vs Morningstar U.S. Large-Mid Cap Index (As of 9/30/18)
Upside Capture90.29
Downside Capture94.35
Sharpe Ratio1.68
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.

Net Investment
Short-Term Capital
Long-Term Capital
2018 Distribution Dates:

Record Date: December 17 | Payable Date: December 18


Portfolio Characteristics
(As of 9/30/18) 
# of Holdings88
Median Market Cap$84.31 B
Weighted Average Market Cap$236.56 B
3-Yr Annualized Turnover Ratio24.52%
30-day SEC Yield1.38%
% of Holdings with Free Cash Flow71.26%
Top 10 Holdings
HoldingTickerSector% of Net
VisaVFinancial Services2.90%
JPMorgan ChaseJPMFinancial Services2.73%
Bank of AmericaBACFinancial Services2.42%
BB&TBBTFinancial Services1.99%
Twenty First Century FoxFOXAConsumer Discretionary1.89%
American Electric PowerAEPUtilities1.84%
S&P GlobalSPGIFinancial Services1.78%
Berkshire HathawayBRK/BFinancial Services1.77%
As of 6/30/18. Top 10 Holdings for the quarter are not disclosed until 60 days after quarter end. Those listed are for the previous quarter. Fund holdings are subject to change and are not recommendations to buy or sell any securities.
Sector Weighting

As of 9/30/18. 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 9/30/18. Market Cap percentages may not equal 100% due to rounding.


Paul Dlogosch, CFA
Portfolio Manager

21 Years of Experience

 View full bio

Jeff Sitzmann, CFA
Portfolio Manager

31 Years of Experience

 View full bio

Jeff Deardorff, CFA
Portfolio Manager

20 Years of Experience

 View full bio



(As of 9/30/18) — U.S. economic strength and solid corporate earnings growth drove healthy equity returns in the 3rd quarter. The widely-followed S&P 500 Index had a total return of 7.71%, its best quarterly gain since 2013. In September, initial jobless claims fell to the lowest level since 1969, wages grew at the fastest rate since 2009, consumer confidence reached the highest level since 2000, and the National Federation of Independent Business (NFIB) survey of small business optimism was at an all-time high (the survey dates back to 1974). Against this strong economic backdrop, the Federal Reserve raised the targeted federal funds rate by another 25 basis points to a range of 2.00% to 2.25%. Slowly rising interest rates led to flat bond returns.

The divergence between domestic and international equity market performance continued during the quarter, with the MSCI EAFE Index advancing just 1.35%. The Russell 3000 Index gained 7.12% in the 3rd quarter. By style, growth continued to outperform value, with the Russell 3000 Growth Index increasing 8.88% compared to the Russell 3000 Value Index’s advance of 5.39%. Large caps did better than small caps as the Russell 1000 Index returned 7.42%, the Russell Midcap Index returned 5.00%, and the Russell 2000 Index returned 3.58% in the quarter. Every economic sector was positive this quarter, with Health Care and Industrials the top performers, while Materials and Energy lagged the indexes.


(As of 9/30/18) — The Buffalo Dividend Focus Fund posted a return of 7.68%, which slightly outperformed the Morningstar U.S. Large-Mid Cap Index return of 7.48% and above the Lipper Equity Income Funds Index return of 5.55%. The Fund’s performance was aided by sector weightings and security selection. Sectors with highest weightings in the Fund, including Financials, Health Care, and Information Technology, contributed to positive returns. The Fund’s least-weighted sector, Materials, was the only sector to produce negative returns.

Top Contributors
Specific securities that contributed most positively to performance include AMC Entertainment Holdings (AMC), Microsoft (MSFT), and Apple (AAPL). Shares of AMC improved on a strong earnings report, a robust summer box office, and healthy enrollment in its movie subscription service program (Stubs A-List). Microsoft advanced on a favorable earnings release led by its cloud services segment. Apple was up on a solid earning’s result and anticipation of new product releases.

Top Detractors
Specific securities that detracted most from performance include Twenty-First Century Fox (FOXA), Kraft Heinz (KHC), and Cedar Fair (FUN). FOXA stock had a strong run during the previous quarter as Disney and Comcast battled to acquire certain FOXA assets; however, the stock traded off in the 3rd quarter as Comcast dropped out of the bidding. Kraft Heinz declined due to fading merger and acquisition expectations and a large equity investor selling some of their holding. Cedar Fair declined on a weakened earnings outlook due to soft attendance levels.


(As of 9/30/18) — We expect the market to experience continued volatility in the coming quarters as the Federal Reserve continues to normalize interest rates. Other concerns include acceleration in inflation, potential strengthening of the U.S. dollar, geopolitical issues, increase protectionism efforts from the Administration, evolving geopolitical risks, and the mid-term elections.

Valuation metrics are also above historical market averages, leading us to believe that stocks, broadly speaking, may have a difficult time achieving further multiple expansion. On the other hand prospective tailwinds for the economy include further job growth, wage increases, lower tax rates, robust business, and consumer confidence, all of which could lead to higher Gross Domestic Product (GDP) growth.

Despite the expectation of continued volatility, we continue to focus on wide-moat, large-capitalization companies trading at reasonable valuations, in our view. As always, the Fund will continue to focus on competitively-advantaged companies that can be purchased at a fair value, in our opinion. As the stock market has continued to climb, it has become more difficult to find companies that fit our investment criteria, but we continue to follow our disciplined investment process and will be ready when market declines provide better opportunities.

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.

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 received 3 stars among 1207 for the three-year period and 5 stars among 1068 Large Blend funds for the five-year period ending 11/30/18.

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. ©2018 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.