Quick Facts
Inception Date:5/21/20047/1/2019
Expense Ratio:1.51%1.37%
Total Net Assets:$92.08 Million  (9/30/20)
Category:Small Cap Growth
Benchmark:Morningstar U.S. Small Growth
Related Material:
   Fund Fact Sheet Q3 2020
   PM Commentary Q3 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 573 Small Growth funds as of 10/31/20.

Investment Style

Performance (%)

As of 10/31/203 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO EARLY STAGE GROWTH FUND - Investor3.9114.4024.5814.1515.7715.689.569.55
BUFFALO EARLY STAGE GROWTH FUND - Institutional3.9014.5724.6814.3215.9515.859.729.71
  Morningstar U.S. Small Growth Index4.9015.1922.7612.2313.2213.1810.009.94
  Morningstar Small Growth Category4.0410.0218.2111.0112.1812.319.418.83
As of 9/30/203 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO EARLY STAGE GROWTH FUND - Investor7.7413.1427.4113.8516.1515.719.249.52
BUFFALO EARLY STAGE GROWTH FUND - Institutional7.7813.3127.5914.0316.3315.899.409.69
  Morningstar U.S. Small Growth Index7.3512.0222.2312.3513.7913.399.569.81
  Morningstar Small Growth Category8.178.4118.7311.0812.8812.639.098.79

*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 9/30/20)
Upside Capture96.33
Downside Capture93.52
Sharpe Ratio0.53
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 9/30/20) 
# of Holdings65
Median Market Cap$1.00 B
Weighted Average Market Cap$1.68 B
3-Yr Annualized Turnover Ratio32.09%
% of Holdings with Free Cash Flow56.92%
Active Share94.78%
Top 10 Holdings
HoldingTickerSector% of Net
Open Lending Corp.LPROFinancial Services3.01%
Air Transport Services GroupATSGIndustrials2.54%
Varonis SystemsVRNSTechnology2.41%
Community Healthcare TrustCHCTReal Estate2.30%
LovesacLOVEConsumer Discretionary2.18%
Patrick IndustriesPATKConsumer Discretionary2.06%
As of 6/30/20. 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 9/30/20. 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 9/30/20. Market Cap percentages may not equal 100% due to rounding.


Craig Richard, CFA
Portfolio Manager

17 Years of Experience

 View full bio

Doug Cartwright, CFA
Portfolio Manager

13 Years of Experience

 View full bio



(As of 9/30/20) — Equity markets sustained their momentum in the 3rd quarter, with the S&P 500 Index returning 8.93%. Macro data continued to improve, and companies broadly reported earnings that proved to be more resilient than expectations. While the U.S. experienced another spike in COVID-19 cases during the quarter and tragically surpassed 200,000 deaths, positive news on vaccines and therapy fronts continued to provide hope for investors.

The Russell 3000 Index increased 9.21% in the quarter. Growth continued to outperform value, as the Russell 3000 Growth Index advanced 12.86%, compared to the Russell 3000 Value Index return of 5.41%. Relative performance was correlated with market cap size in the quarter, with the large cap Russell 1000 Index delivering a return of 9.47%, compared to the Russell Mid Cap Index return of 7.46%, the smaller cap Russell 2000 Index return of 4.93%, and the Russell Micro Cap Index return of 3.69%. More cyclically-exposed Consumer Discretionary, Materials, and Industrial sectors performed best in the quarter. Energy was the sole declining sector, hurt by lingering weakness in oil demand.


(As of 9/30/20) — During the quarter ended September 30, 2020, the Fund generated a positive return of 7.74%. This return represented modest upside compared to the Fund’s primary benchmark, the Morningstar U.S. Small Growth Index, return of 7.35%. The Russell 2000 Growth Index produced a return 7.16%.

Third quarter gains were more modest compared to the historic 2nd quarter returns but continued the strong market recovery off the March 2020 lows, following the onset of the COVID-19 global pandemic. The Russell 2000 Growth Index troughed out at down 43% in late March 2020 from its 2020 high watermark but has since posted a rebound of 82%, at the time of this writing. Year-to-date the Russell 2000 Growth Index is sitting at a 10% return.

The Fund’s outperformance in the quarter was driven by solid returns versus the benchmark in the Financials and Information Technology sectors. Outsized gains were realized in several holdings including Opening Lending (LPRO) and Laird Superfood (LSF).

Open Lending is a financial technology player for the automotive finance market. Specifically, Open Lending provides a credit decision platform to credit unions, banks, and auto manufacturer’s finance units that makes lending decisions for “near-prime” consumers purchasing both new and used automobiles. This platform allows the lender to maximize the yield on its auto loan portfolio while controlling risk. Near-prime lending is a large potential market that has largely been ignored historically, but is currently being addressed by Open Lending. Previously, lenders have not had sufficient data analytics to correctly price loans to consumers whose credit rating or history is insufficient to qualify for a prime loan, but not poor enough to qualify as sub-prime. We believe the company is in the early stages here with only processing 1-2% of all auto loan volumes for consumers in this near-prime category.

As discussed in previous commentary, the Fund can from time to time participate in initial public offerings (IPOs). During the quarter, the Fund was involved in the IPO of Laird Superfood, a plant- based food company. With new product introductions, expanding distribution into more grocery chains, and strong growth from their e-commerce platform, this early stage company has a strong growth outlook. However, the stock price appreciated significantly shortly after its debut and Fund management sold its position. While positive on the growth opportunity set, we believed several years of strong business execution were being priced into the shares already at these levels.

Much has been written recently on the strong IPO market in 2020, including the significant rise in the number of special purpose acquisition companies (SPACs) raising capital through the IPO process. SPACs, also referred to as blank check companies, raise capital for the purpose of acquiring an existing private company. The Fund has and will likely continue to look at SPACs. We typically will wait until after the SPAC has identified a target company to acquire which allows us the ability to do our proper due diligence. Our due diligence and standards we set for SPAC inclusion in the Fund will be in-line with other prospective holdings.

The Fund ended the quarter with 65 holdings, adding four positions and moving on from one holding in the quarter.


(As of 9/30/20) — While COVID-19 continues to linger, most industries (outside of travel, hospitality, and select retail among others) have staged a strong rebound. We believe it is likely that Congress, regardless of election results, will provide additional fiscal stimulus given the unbalanced economy, and we note that markets have responded resoundingly well to fiscal stimulus during these past several months. From a market perspective, there has not been a downside to the Federal Reserve balance sheet expanding by $3 trillion, an astounding number in such a short time period. The transfer of funds into individual’s hands has resulted in record personal incomes and record money supply in the U.S., which bodes well for the economy and stock market going forward. Longer term, we maintain some caution as the results of these record deficits is less clear.

The market seems to have digested the potential election outcomes fairly well to-date and expect this to continue outside of a prolonged, contested presidential election. While we would expect additional stimulus to have a positive impact on the market, we would also note that a significant change in capital gains tax rates could have a profound negative impact on the market.

On the COVID-19 front, the market has digested a second wave in July, the potential of a third wave, and optimism on treatments and vaccines in development. While hospitalizations have risen to approximately 37,000 in the U.S., this remains well below prior peaks of 60,000.

Regardless of all of these macro factors, 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 managers continue to seek companies with sustainable growth due to secular growth trends or innovative or disruptive products.

The Buffalo Emerging Opportunities Fund is focused primarily on identifying innovation within U.S. companies with primarily North American revenue bases. With an active share of greater than 95%, 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
  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 Early Stage Growth Fund (BUFOX) received 4 stars among 573 for the three-year, 4 stars among 509 for the five-year, and 5 stars among 383 Small Growth funds for the ten-year period ending 10/31/20.

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. ©2020 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.