Quick Facts
Investor Institutional
Ticker: BUFDX BUIDX
Daily Pricing:  
As of 6/8/2023  
NAV: $24.93 $24.94
$ Change: $0.06 $0.06
% Change:
0.24% 0.24%
YTD:
7.36% 7.45%
Inception Date: 12/3/2012 7/1/2019
Expense Ratio: 0.93% 0.78%
Total Net Assets: $120.17 Million  (3/31/23)
Morningstar Category: Large Cap Blend
Benchmark Index: Russell 1000
Dividend Distribution: Quarterly
Related Material:
   Fund Fact Sheet Q1 2023
   PM Commentary Q1 2023
   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.

|

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

CFRA Research and Dividend.com recently hosted a webinar with the topic “Dividend Funds: Do we even need bonds?“. Buffalo Dividend Focus Fund co-portfolio manager Jeff Deardorff, CFA, was a featured presenter on the panel.

To learn more about what was discussed during the webinar and to access a free replay, click here.

Morningstar Rating

       

Overall Morningstar Rating™ of BUFDX based on risk-adjusted returns among 1,268 Large Blend funds as of 4/30/23.

Performance (%)

As of 4/30/233 MOYTD1 YR3 YR5 YR10 YRSince Inception
BUFFALO DIVIDEND FOCUS FUND - Investor1.086.554.1015.1310.9311.6612.16
BUFFALO DIVIDEND FOCUS FUND - Institutional1.156.634.3015.3211.1011.8312.33
  Russell 1000 Index1.968.791.8214.2211.0711.9512.94
  Morningstar U.S. Large-Mid Cap Index2.228.941.7813.9411.0911.9412.93
  S&P 500 Index2.729.172.6614.5211.4512.2013.14
  Morningstar Large Blend Category0.876.871.8013.729.9410.8111.04
As of 3/31/233 MOYTD1 YR3 YR5 YR10 YRSince Inception
BUFFALO DIVIDEND FOCUS FUND - Investor3.663.66-4.2218.7810.5511.7611.96
BUFFALO DIVIDEND FOCUS FUND - Institutional3.703.70-4.0418.9510.7211.9212.13
  Russell 1000 Index7.467.46-8.3918.5510.8712.0112.91
  Morningstar U.S. Large-Mid Cap Index7.577.57-8.5818.2310.8712.0212.90
  S&P 500 Index7.507.50-7.7318.6011.1912.2413.09
  Morningstar Large Blend Category5.675.67-7.3617.689.6810.8511.01

2013201420152016201720182019202020212022
BUFFALO DIVIDEND FOCUS FUND - Investor23.9320.810.1312.0618.02-5.0527.6616.6420.97-8.75
BUFFALO DIVIDEND FOCUS FUND - Institutional24.1220.980.2812.2318.20-4.9127.8516.8321.15-8.62
  Russell 1000 Index33.1113.240.9212.0521.69-4.7831.4320.9626.45-19.13
  Morningstar U.S. Large-Mid Cap Index33.2013.320.9211.5921.71-4.5231.6121.1126.44-19.50
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 Russell 1000 Index (As of 3/31/23)
Upside Capture80.50
Downside Capture81.50
Alpha2.78
Beta0.84
Sharpe Ratio1.07
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
2023 Distribution Dates:

Net Investment Income, if any – Record Date (6/20/23); Payment Date (6/21/23)

Net Investment Income, if any – Record Date (9/18/23); Payment Date (9/19/23)

Capital Gains, if any – Record Date (12/4/23); Payment Date (12/5/23)

Net Investment Income, if any – Record Date (12/18/23); Payment Date (12/19/23)
Payable
Date
Distribution
NAV
Net Investment
Income
Short-Term Capital
Gains
Long-Term Capital
Gains
Distribution
Total
3/20/23$23.12 (Inv)

$23.12 (Inst)
$0.05969832

$0.06839440
-

-
-

-
$0.05969832

$0.06839440
12/20/22$23.08 (Inv)

$23.08 (Inst)
$0.05908577

$0.06777300
-

-
-

-
$0.05908577

$0.06777300
12/5/22$23.89 (Inv)

$23.90 (Inst)
-

-
-

-
$0.38214

$0.38214
$0.38214

$0.38214
9/20/22$23.27 (Inv)

$23.27 (Inst)
$0.05162443

$0.06073302
-

-
-

-
$0.05162443

$0.06073302
6/21/22$22.72 (Inv)

$22.72 (Inst)
$0.06141577

$0.06934834
-

-
-

-
$0.06141577

$0.06934834
3/18/22$25.56 (Inv)

$25.56 (Inst)
$0.05379801

$0.06334236
-

-
-

-
$0.05379801

$0.06334236
12/20/21$25.24 (Inv)

$25.24 (Inst)
$0.02757485

$0.03722365
-

-
-

-
$0.02757485

$0.03722365
12/3/21$24.99 (Inv)

$24.99 (Inst)
-

-
$0.10327

$0.10327
$0.20964

$0.20964
$0.31291

$0.31291
9/20/21$24.79 (Inv)

$24.79 (Inst)
$0.03057741

$0.04007525
-

-
-

-
$0.03057741

$0.04007525
6/18/21$24.27 (Inv)

$24.26 (Inst)
$0.02933960

$0.03839857
-

-
-

-
$0.02933960

$0.03839857
3/18/21$23.16 (Inv)

$23.16 (Inst)
$0.05098388

$0.05942821
-

-
-

-
$0.05098388

$0.05942821
12/18/20$21.72 (Inv)

$21.72 (Inst)
$0.00905139

$0.01801390
-

-
-

-
$0.00905139

$0.01801390
9/18/20$19.13 (Inv)

$19.13 (Inst)
$0.03170945

$0.03903915
-

-
-

-
$0.03170945

$0.03903915
6/18/20$18.26 (Inv)

$18.26 (Inst)
$0.03034499

$0.03590278
-

-
-

-
$0.03034499

$0.03590278
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

Portfolio

Portfolio Characteristics
(As of 3/31/23) 
 
# of Holdings91
Median Market Cap$56.22 B
Weighted Average Market Cap$385.06 B
3-Yr Annualized Turnover Ratio8.94%
% of Holdings with Free Cash Flow67.47%
30-day SEC Yield1.52%
Top 10 Holdings
HoldingTicker / MaturitySector% of Net
Assets
Viper Energy PartnersVNOMEnergy4.18%
MicrosoftMSFTTechnology3.92%
AppleAAPLTechnology3.54%
CVS HealthCVSHealth Care2.69%
UnitedHealth GroupUNHHealth Care2.60%
Horizon TherapeuticsHZNPHealth Care2.46%
VisaVFinancial Services2.35%
S&P GlobalSPGIFinancial Services2.10%
Arthur J Gallagher & CoAJGFinancial Services1.91%
Bank of AmericaBACFinancial Services1.83%
TOP 10 HOLDINGS TOTAL27.58%
As of 12/31/22. 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 3/31/23. 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 3/31/23. Market Cap percentages may not equal 100% due to rounding.

Management

Paul Dlugosch, CFA
Portfolio Manager

26 Years of Experience

 View full bio

Jeff Sitzmann, CFA
Portfolio Manager

36 Years of Experience

 View full bio

Jeff Deardorff, CFA
Portfolio Manager

26 Years of Experience

 View full bio

Commentary

CAPITAL MARKET OVERVIEW

(As of 3/31/23) — Capital markets moved higher in the first quarter of 2023 as the S&P 500 Index gained 7.50% and the Bloomberg Aggregate Bond Index advanced 3.0%. Big swings in expectations for the Federal Reserve’s monetary policy drove market volatility during the period. Initially investors were concerned with data showing stubbornly high inflation and the prospect of additional interest rate hikes. However, during the final days of the quarter bank failures from Silicon Valley Bank, Signature Bank, and Credit Suisse, dramatically changed market expectations towards monetary policy and the impact that a banking crisis could have on the broader economy. As a result, shorter term Treasury yields fell, and large cap growth stocks rallied in a flight to quality. The view was that growth companies would be the biggest beneficiaries of lower rates, a reversal of the headwinds faced throughout 2022. Technology stocks were by far the leading contributors to broad market performance during the quarter while value stocks and dividend payers lagged. Excluding the technology sector, the S&P 500 Index return would have only been 2.70% during the period.

Recapping quarterly results, the broad-based Russell 3000 Index advanced 7.18%. Growth stocks significantly outperformed value stocks to start out the year, as the Russell 3000 Value Index returned just 0.91% versus a return of 13.85% for the Russell 3000 Growth Index. Relative performance improved going up in market capitalization (size) as large caps advanced more than small caps in the quarter. Larger cap stocks returned 7.46%, as measured by the Russell 1000 Index, compared to the smaller cap Russell 2000 Index return of 2.74%, while the Russell Microcap Index returned -2.83% in the quarter.

PERFORMANCE COMMENTARY
(As of 3/31/23) — The Buffalo Dividend Focus Fund posted a return of 3.66% for the quarter, underperforming the Russell 1000 Index return of 7.46%. Compared to the benchmark, the fund’s underweight to the Information Technology sector accounted for the bulk of the underperformance. Consumer Discretionary, Health Care, Industrials, and the Materials segments also detracted from the relative performance. Meanwhile the fund’s exposure to Communication Services, Consumer Staples, Energy, Financials, Real Estate, and Utilities delivered constructive performance relative to the index.

Top Contributors

Specific securities that contributed most positively to performance include Apple (AAPL), Meta Platforms (META), and Microsoft (MSFT). The big tech companies rallied on announced cost cuts, expectations that the Fed is nearing the end of interest rate hikes, and growth opportunities in AI (artificial intelligence).

Top Detractors

CVS Health (CVS), Viper Energy (VNOM), and Enviva (EVA) detracted from the fund’s performance. CVS, health care and retail pharmacy services, fell on prospects for regulatory changes for PBM (pharmacy benefit managers) and healthcare reimbursement reductions. Viper Energy, oil and gas mineral rights, declined as energy pricing softened during the quarter. Enviva, manufacturer of biomass fuel, slumped on soft earnings and an equity raise.

OUTLOOK
(As of 3/31/23) — Despite the uncertainty created by the hawkish Fed, and geo-political tensions, we remain focused on wide moat, large capitalization companies trading at reasonable valuations, in our view. As always, the fund will continue to emphasize competitively advantaged companies that can be purchased at a fair value, in our opinion. As stock market volatility spikes, we will look for opportunities to find 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
  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 4 stars among 1,268 for the 3-year period, 4 stars among 1,169 for the 5-year period, and 4 stars among 867 Large Blend funds for the 10-year period ending 4/30/23.

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. ©2022 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.