Quick Facts
Inception Date:5/21/20047/1/2019
Expense Ratio:1.51%1.36%
Total Net Assets:$132.43 Million  (12/31/21)
Morningstar Category:Small Cap Growth
Benchmark Index:Morningstar U.S. Small Growth
Related Material:
   Fund Fact Sheet Q4 2021
   PM Commentary Q4 2021
   Summary Prospectus
Recent Media Coverage
Fund Objective & Investment Process

The investment objective of the Buffalo Early Stage Growth Fund is long-term growth of capital. The Fund invests primarily in equity securities, consisting of common stocks, preferred stocks, convertible securities, warrants and rights, of companies that, at the time of purchase by the Fund, are defined as early stage growth companies. Early stage growth companies are defined by the Fund as companies that, at the time of purchase by the Fund, have market capitalizations below the median of the Morningstar US Small Growth Index and are companies that are starting to develop a new product or service or have recently developed a new product or service. As of June 30, 2021, the median market capitalization of the Morningstar U.S. Small Growth Index was $4.2 billion.

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 580 Small Growth funds as of 12/31/21.

Investment Style

Performance (%)

As of 12/31/213 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO EARLY STAGE GROWTH FUND - Investor-2.707.797.7928.7421.1217.1810.5810.95
BUFFALO EARLY STAGE GROWTH FUND - Institutional-2.657.947.9428.9321.3017.3510.7511.11
  Morningstar U.S. Small Growth Index-0.65-1.00-1.0021.9316.1814.4410.4510.57
  Morningstar Small Growth Category1.7411.8911.8925.8718.0915.1610.7410.30
As of 12/31/213 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO EARLY STAGE GROWTH FUND - Investor-2.707.797.7928.7421.1217.1810.5810.95
BUFFALO EARLY STAGE GROWTH FUND - Institutional-2.657.947.9428.9321.3017.3510.7511.11
  Morningstar U.S. Small Growth Index-0.65-1.00-1.0021.9316.1814.4410.4510.57
  Morningstar Small Growth Category1.7411.8911.8925.8718.0915.1610.7410.30

BUFFALO EARLY STAGE GROWTH FUND - Investor24.3061.70-7.38-9.4111.0527.18-3.9534.0347.697.79
BUFFALO EARLY STAGE GROWTH FUND - Institutional24.4861.94-7.24-9.2811.2227.37-3.8134.2047.967.94
  Morningstar U.S. Small Growth Index14.5041.862.46-0.189.6123.77-5.6727.6043.52-1.00
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 12/31/21)
Upside Capture114.97
Downside Capture92.83
Sharpe Ratio1.17
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 12/31/21) 
# of Holdings70
Median Market Cap$1.46 B
Weighted Average Market Cap$2.45 B
3-Yr Annualized Turnover Ratio36.04%
% of Holdings with Free Cash Flow61.76%
Active Share92.30%
Top 10 Holdings
HoldingTickerSector% of Net
Open Lending Corp.LPROFinancial Services2.64%
NV5 GlobalNVEEIndustrials2.56%
OmnicellOMCLHealth Care2.47%
Overstock.comOSTKConsumer Discretionary2.43%
Compass DiversifiedCODIIndustrials2.27%
As of 9/30/21. 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 12/31/21. 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 12/31/21. Market Cap percentages may not equal 100% due to rounding.


Craig Richard, CFA
Portfolio Manager

20 Years of Experience

 View full bio

Doug Cartwright, CFA
Portfolio Manager

16 Years of Experience

 View full bio



(As of 9/30/21) — Equity market returns were somewhat mixed in the 3rd quarter, but the S&P 500 Index etched out a modestly positive return of 0.58%. The global recovery hit a speed bump during the period as the world dealt with rising COVID-19 Delta variant infections, an energy price spike, and supply chain issues that continued to constrain economic growth. After trading lower earlier in the quarter, interest rates increased later in the period in response to higher-than-expected inflation data and an admission from the Federal Reserve (the “Fed”) that they would need to begin removing monetary stimulus from the economy sometime soon.

The Russell 3000 Index declined -0.10% in the quarter. Growth stocks outperformed Value stocks as the Russell 3000 Growth Index returned 0.69% versus a drop of -0.93% for the Russell 3000 Value Index. Relative performance was correlated with market cap size as large caps outperformed small caps in the quarter. The large cap Russell 1000 Index returned 0.21% compared to the Russell Midcap Index return of -0.93%. Smaller market cap indices were even more negative, with the Russell 2000 Index returning -4.36% and the Russell Microcap Index returning -4.98%. Financials were the top performing sector for the quarter, while Industrials and Materials were lagging sectors.


(As of 9/30/21) — During the quarter the Buffalo Early Stage Growth Fund (BUFOX) generated a return of -4.14%, exceeding the Morningstar U.S. Small Growth Index’s return of -4.50%. On a calendar year-to-date basis, the Fund has seen a return of 10.78%. This compared favorably to the primary benchmark return of -0.35%.

The 3rd quarter saw a small pullback in the small cap universe after a solid start to the year. This marked the first quarter, since the onset of COVID-19 in early 2020, that we have seen a negative return, following five strong quarters of positive returns. The Delta variant was a dominant story for much of the quarter and contributed to the pullback. As of this writing, 68.1% of individuals in the U.S. over the age of 18 have been fully vaccinated. Additionally, the primary metric we have watched during the global pandemic, hospitalizations, stands at 55,000 individuals in the U.S. We began the 3rd quarter with only 12,000 hospitalized and saw the Delta variant quickly take this number to 95,000 by the first week of September. Hospitalizations have been on a downward trajectory since then.

The Fund’s slight outperformance in the quarter was a combination of small contributions amongst a number of sectors. The largest positive attribution came from the Healthcare sector where our underweight helped, given the sector outpaced the Index on the downside, returning -9.07% in the quarter on average.

Individual standouts in the quarter included Intelligent Systems Corp. on the upside and Open Lending on the downside.

Intelligent Systems’ operations primarily surround its CoreCard Software business. This business offers a comprehensive back office offering for financial institutions, program managers, and retailers looking to offer debit cards, credit cards, private label cards, etc. Their systems maintain individual account level data, assess fees, record payments, resolve disputes, compute interest, etc. The CoreCard platform and their extensive offshore development team has allowed them to win significant clients, including Goldman Sachs. Goldman Sachs has made an aggressive first step into the consumer credit card business with the partnership with Apple in launching the Apple Card. Intelligent Systems offers a way to participate directly in Goldman Sach’s credit card launch with Apple and other partners over time as they pursue growth in this platform. With EBITDA (earnings before interest, taxes, depreciation, amortization) margins approaching 40% and the only growth limiting factor being how fast they can hire software engineers, we continue to like the set-up for Intelligent Systems. It remains a smaller weighting in the Fund given the customer concentration with Goldman Sachs providing a higher risk factor.

Open Lending has been a nice contributor to Fund returns over the past 15 months but was a drag on results in the 3rd quarter. The company stands alone currently in providing real-time decision automation tools for lenders in the near-prime consumer segment for auto loans. With over 20 years of data and operations, there are currently no competitive threats to Open Lending. Along with signing up credit unions and banks as customers, Open Lending has signed up two car manufacturers and their captive finance units to use the company’s platform for consumers in the near-prime credit score category. These dealerships and their finance departments will use the Open Lending platform for both new and used car financing. We believe the concern around the story in the quarter is transitory, as the delays in bringing on additional car manufacturers and their finance units and the pressure on automotive sales from supply chain disruptions should clear up over time. We continue to like the stock longer term given the long runway for growth, as Open Lending currently processes less than 2% of the over 10 million car loans that are made annually to this consumer set.

The Fund ended the quarter with 66 holdings.


(As of 9/30/21) —The current market concerns are primarily focused on supply chain issues across sectors, along with inflation that appears to not be as transitory as the Federal Reserve would like us to believe. This leads to market concerns over the Federal Reserve letting off the gas pedal and starting to apply pressure to the brake pedal.

While lack of monetary stimulus is of concern, we continue to point to the U.S. consumer balance sheet overall as one of the most important data points in providing positive direction for the economy and financial markets. In particular, personal incomes are well above pre-COVID levels, the M2 money supply is at record levels at $21 trillion, and household net worth is also at record levels. Thus, while the market might become unsettled from time to time, we believe there remains a strong backstop given the excess funds held by U.S. households. We also note that, despite a potential decline in monetary stimulus, more fiscal stimulus seems possible.

Regardless of all the headlines we are presented with, our job remains 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 for us to uncover value.

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

The Fund is focused primarily on identifying innovation within U.S. companies with primarily North American revenue bases. With an active share of greater than 90% and a lower turnover strategy with 50-70 holdings, 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.


General Account
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Retirement Information
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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 Early Stage Growth Fund (BUFOX) received 4 stars among 580 for the three-year, 4 stars among 513 for the five-year, and 4 stars among 385 Small Growth funds for the ten-year period ending 12/31/21.

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. ©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 Morningstar Style Box™ reveals a fund’s investment strategy by showing its investment style and market capitalization based on the fund’s portfolio holdings.