Quick Facts
Inception Date:5/21/20047/1/2019
Expense Ratio:1.51%1.37%
Total Net Assets:$119.69 Million  (12/31/20)
Category:Small Cap Growth
Benchmark:Morningstar U.S. Small Growth
Related Material:
   Fund Fact Sheet Q4 2020
   PM Commentary Q4 2020
   Summary Prospectus
Recent Media Coverage
Fund Objective & Investment Process

As of October 16, 2020, the name of the Buffalo Emerging Opportunities Fund changed to the Early Stage Growth Fund.

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 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 below the median of the Fund’s benchmark index of $3.4 billion or less (as of September 30, 2020) and are companies that are starting to develop a new product or service or have recently developed a new product or service.

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 574 Small Growth funds as of 1/31/21.

Investment Style

Performance (%)

As of 1/31/213 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO EARLY STAGE GROWTH FUND - Investor33.473.3852.1424.2625.6717.6110.8011.30
BUFFALO EARLY STAGE GROWTH FUND - Institutional33.563.4252.3824.4625.8617.7910.9611.47
  Morningstar U.S. Small Growth Index30.204.5050.1820.1822.3914.8810.8811.54
  Morningstar Small Growth Category30.083.3943.7318.7021.0613.9910.3810.41
As of 12/31/203 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO EARLY STAGE GROWTH FUND - Investor30.5447.6947.6923.8821.8417.2210.9011.14
BUFFALO EARLY STAGE GROWTH FUND - Institutional30.5847.9647.9624.0722.0317.3911.0711.31
  Morningstar U.S. Small Growth Index28.1243.5243.5219.9818.5714.4411.2311.30
  Morningstar Small Growth Category27.2538.6238.6218.7617.7513.6910.7410.24

*As of October 16, 2020, the name of the Buffalo Emerging Opportunities Fund changed to the Early Stage Growth Fund.

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 12/31/20)
Upside Capture102.99
Downside Capture92.34
Sharpe Ratio0.90
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 12/31/20) 
# of Holdings65
Median Market Cap$1.55 B
Weighted Average Market Cap$2.28 B
3-Yr Annualized Turnover Ratio34.88%
% of Holdings with Free Cash Flow55.38%
Active Share93.39%
Top 10 Holdings
HoldingTickerSector% of Net
Open Lending Corp.LPROFinancial Services3.17%
Community Healthcare TrustCHCTReal Estate2.54%
Varonis SystemsVRNSTechnology2.48%
Air Transport Services GroupATSGIndustrials2.39%
Advanced Drainage SystemsWMSIndustrials2.22%
LovesacLOVEConsumer Discretionary2.04%
Compass DiversifiedCODIIndustrials1.96%
As of 9/30/20. 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 12/31/20. 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 12/31/20. Market Cap percentages may not equal 100% due to rounding.


Craig Richard, CFA
Portfolio Manager

19 Years of Experience

 View full bio

Doug Cartwright, CFA
Portfolio Manager

15 Years of Experience

 View full bio



(As of 12/31/20) — Equity markets extended their rally in the 4th quarter, with the S&P 500 Index returning 12.15%. This capped the end to a historic year in which the S&P advanced 18.40% despite the world suffering through a global pandemic. The biggest news in the quarter was the U.S. Food and Drug Administration’s (FDA) approval of two separate vaccines, following very encouraging clinical results. This helped investors look beyond worsening COVID-19 trends and provided hope that an end to the pandemic could be in sight.

The Russell 3000 Index increased 14.68% in the quarter. Value stocks led the advance, as the Russell 3000 Value Index advanced 17.21% compared to the Russell 3000 Growth Index return of 12.41% during the period. Relative performance was inversely correlated by market cap in the quarter (i.e., small caps outperformed big caps). The Russell 1000 Index delivered a return of 13.69% compared to the Russell Mid Cap Index return of 19.91%. Smaller market cap indexes surged even more as the Russell 2000 Index returned 31.37% and the Russell Micro Cap Index returned 31.39%. Cyclically-sensitive sectors such as Energy, Financials, Industrials, and Materials performed best in the quarter. The more defensive areas like Telecom Services, Consumer Staples, Utilities, and Healthcare lagged. All sectors produced positive absolute results.


(As of 12/31/20) — Gains were quite strong across the board in another memorable quarter for calendar 2020. With the approval of several vaccine candidates for COVID-19 in November and the U.S. elections concluding, cash-rich investors pushed markets to all-time highs. Small cap markets were particularly strong as vaccine news pointed towards further improvement in economic growth in 2021. During the quarter, the Fund generated a return of 30.54%, a result that outperformed the Morningstar U.S. Small Growth Index return of 28.12% and the Russell 2000 Growth Index return of 29.61%. For calendar year 2020, the Fund returned 47.69%, which compared favorably to the primary benchmark return of 43.52% for the Morningstar U.S. Small Growth Index and the Russell 2000 Growth Index return of 34.63%. Outperformance in the quarter was driven by solid returns in the Consumer Discretionary and Telecommunications sectors, with returns of 30.9% and 119.7%, respectively by the Fund.

Individual standouts included 8×8 and Establishment Labs. 8×8 is a cloud software provider of voice, video, chat, and contact center solutions for business customers across the globe. Transforming the global communications landscape and moving these services to the cloud represents a large addressable market with leading players such as Zoom and RingCentral growing rapidly in this environment and trading at very high valuations. 8×8’s previous leadership had missed on some opportunities to match this growth, and, during the quarter, 8×8 appointed a new CEO who had been very instrumental in leading RingCentral over the past decade. The market approved of this management change in rewarding 8×8 with a higher valuation on the potential for growth rates to accelerate under new leadership.

Additionally, Establishment Labs was a strong contributor to quarterly gains as elective medical procedures have begun to rebound. Establishment Labs is a disruptor in the breast augmentation market, bringing innovation to the industry that has been absent of advances for the past 20 years. Its technology has resulted in an improved safety profile for breast implants, lowering the probability of re-operation from 15-20% to less than 1% with their implants. Establishment Labs is expected to enter the largest markets in the world for breast augmentation (China and the U.S.) in the next several years. Additionally, they are working on bringing to market minimally-invasive breast implants (an industry first) that would significantly reduce operation time, scarring, and recovery time.

The Fund ended the quarter with 65 holdings, adding five new positions and moving on from five in the period.


(As of 12/31/20) — 2020 will forever live in our memories as investors, given all that we have experienced both personally and professionally in the past 12 months. As of this update, further fiscal stimulus is in the pipeline as the new administration takes over. Coupled with continued monetary policy support, the U.S. government continues to put record levels of money into the hands of U.S. households. Personal incomes, checking/savings account balances, and money market fund balances are at record levels. This continues to provide strong support for equity prices in the near future.

As the vaccine rollout gains steam, we would expect headlines, including hospitalizations and deaths, to begin to improve. Those industries most impacted by COVID-19, including travel, hospitality, and retail, should begin to see traction back towards 2019 levels. However, given strong stock price gains in many sectors over the past nine months, we remain vigilant of valuation multiples both across our holdings and in the market generally.

Regardless of the macro noise, 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 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 Buffalo Early Stage Growth Fund is focused primarily on identifying innovation within U.S. companies with primarily North American revenue bases. With an active share of greater than 93%, 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.


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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 574 for the three-year, 4 stars among 503 for the five-year, and 5 stars among 379 Small Growth funds for the ten-year period ending 1/31/21.

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.