Quick Facts
Investor Institutional
Daily Pricing:  
As of 9/29/2022  
NAV: $13.88 $13.96
$ Change: $-0.25 $-0.26
% Change:
-1.77% -1.83%
-32.33% -32.27%
Inception Date: 5/21/2004 7/1/2019
Expense Ratio: 1.46% 1.33%
Total Net Assets: $89.40 Million  (6/30/22)
Morningstar Category: Small Cap Growth
Benchmark Index: Russell 2000 Growth
Related Material:
   Fund Fact Sheet Q2 2022
   PM Commentary Q2 2022
   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 Russell 2000 Growth Index 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 583 Small Growth funds as of 8/31/22.

Investment Style

Performance (%)

As of 8/31/223 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO EARLY STAGE GROWTH FUND - Investor-2.42-25.35-29.6910.0510.5311.668.498.77
BUFFALO EARLY STAGE GROWTH FUND - Institutional-2.41-25.28-29.6010.2310.7011.828.658.94
  Russell 2000 Growth Index3.33-22.29-25.265.936.6910.167.708.50
  Morningstar U.S. Small Growth Index-0.15-28.06-31.742.606.149.527.448.19
  Morningstar Small Growth Category-0.31-24.57-25.927.809.3110.858.168.21
As of 6/30/223 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO EARLY STAGE GROWTH FUND - Investor-19.44-30.28-34.976.029.1111.417.628.45
BUFFALO EARLY STAGE GROWTH FUND - Institutional-19.39-30.23-34.886.189.2711.587.788.61
  Russell 2000 Growth Index-19.25-29.45-33.431.404.809.306.808.01
  Morningstar U.S. Small Growth Index-22.41-32.79-36.23-0.144.979.056.847.87
  Morningstar Small Growth Category-19.80-29.98-30.574.247.7910.267.447.84

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
  Russell 2000 Growth Index14.5943.305.60-1.3811.3222.17-9.3128.4834.632.83
  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 Russell 2000 Growth Index (As of 6/30/22)
Upside Capture113.24
Downside Capture96.23
Sharpe Ratio0.21
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 6/30/22) 
# of Holdings64
Median Market Cap$1.13 B
Weighted Average Market Cap$1.81 B
3-Yr Annualized Turnover Ratio37.29%
% of Holdings with Free Cash Flow65.63%
Active Share95.03%
Top 10 Holdings
HoldingTickerSector% of Net
NV5 GlobalNVEEIndustrials3.22%
i3 VerticalsIIIVTechnology2.52%
Kinsale Capital GroupKNSLFinancial Services2.49%
Compass DiversifiedCODIIndustrials2.40%
Air Transport Services GroupATSGIndustrials2.35%
Establishment LabsESTAHealth Care2.19%
Cadre HoldingsCDREIndustrials2.18%
Willdan GroupWLDNIndustrials2.16%
Open LendingLPROFinancial Services2.09%
As of 3/31/22. 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 6/30/22. 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 6/30/22. 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 6/30/22) — The stock market extended year-to-date losses during the 2nd quarter. Inflation, rising interest rates, and economic uncertainty continued to be major headwinds for investors as recession talks gained traction. The S&P 500 Index fell -16.10% during the quarter, bringing the total return for the first half of the year to -19.96%. News headlines, which included energy shortages, the war in Ukraine, China’s COVID lockdowns, and the potential for softer corporate earnings next quarter, added to the pessimistic market sentiment. However, the Federal Reserve’s hawkish stance on inflation, expectations for additional interest rate increases, and a reduction in the size of its balance sheet, continued to signal confidence in the U.S. economy moving forward.

The broad-based Russell 3000 Index declined -16.70% in the quarter. Value stocks fell less than growth stocks as the Russell 3000 Value Index returned -12.41%, versus a return of -20.83% for the Russell 3000 Growth Index. Relative performance slightly favored market cap size as large caps outperformed small caps in the quarter. Larger cap stocks, as measured by the Russell 1000 Index, returned -16.67% compared to the smaller cap Russell 2000 Index return of -17.20% and the Russell Microcap Index return of -18.96%. There were no advancing economic sectors for the quarter, but Consumer Staples, Energy, Utilities, and Healthcare held up better on a relative basis. Consumer Discretionary, Information Technology and Communication Services areas lagged.

(As of 6/30/22) — The Buffalo Early Stage Growth Fund (BUFOX) generated a return of -19.44% for the quarter, a result that was in-line with the Russell 2000 Growth Index return of -19.25% during the period.

Equities saw broad based declines across the market cap spectrum in the 2nd quarter, with year-to-date results for the broader market, as measured by the S&P 500 Index, seeing the worst declines in 50 years. After years of the Federal Reserve providing monetary support through both interest rate policy and asset purchases, persistent and rampant inflation generated an aggressive response from the Federal Reserve to attempt to drive inflation back to the 2% target. Small cap growth stocks, being further out on the risk spectrum, have seen the most material declines. The Russell 2000 Growth Index experienced a drawdown of 37% from November 2021 highs through June 30, 2022. In general, returns worsened moving down the market cap spectrum. Growth underperformed value in the small cap sector for the 7th consecutive quarter.

Two of the larger detractors from the Fund’s performance in the quarter included Open Lending and LoveSac. Open Lending is a provider of automated decisioning technology for credit unions and banks, who are underwriting near prime auto loans. Investors lack of experience with Open Lending going through a consumer credit cycle that is deteriorating has pushed the shares down to multi-year lows. Credit unions and banks use the Open Lending platform to protect their credit risk, as the company has paired its underwriting technology with three insurance carriers that offer auto loan default coverage. Open Lending is not taking on balance sheet risk but does earn a profit share split with the insurance partners, so the performance (repayment) of these auto loans is important. To date, there have been no issues with loan performance; rather the lack of inventory of both new and used cars has pushed down volumes of loans coming through their platform, as the near-prime consumers has been priced out of the market. With a gradual easing of used car prices and a return of new vehicle production numbers, the environment for Open Lending should improve. The company provides a solution that benefits the consumer (lower rates), benefits the loan provider (default protection and increased loan volumes), and benefits the insurance carriers (high margin offering). We look forward to Open Lending proving their durability to investors in various credit cycles.

LoveSac, a provider of modular couches called Sactionals, has experienced 16 consecutive quarters of greater than 25% revenue growth. The shares have been under pressure as investors have rotated away from perceived COVID-19 beneficiaries including home goods manufacturers/retailers. LoveSac may well see some slowdown in demand and muted growth as it faces tougher comparisons, but the concept and word of mouth continue to grow. Inventory will never go bad as the Sactional consists of just two standard pieces (seats and sides) that can be designed in 100s of possible formations and these pieces have not changed in more than 10 years. LoveSac recently expanded its distribution into Best Buy (with recent innovation for surround sound in the couch) and we expect execution on this front. Gross margins have the potential to be 60% or higher and we believe that, at maturity, LoveSac will have 20% or higher EBITDA margins. As a result, we see the potential for $150 million in EBITDA. With the current valuation of the company at less than $500 million, we like the positioning of this differentiated home goods player longer term.

The Fund ended the quarter with 63 holdings.


(As of 6/30/22) — With the Russell 2000 Growth Index having already experienced a 37% drawdown from November 2021 levels, history (outside of the financial crisis era of 2008-09) would suggest most of the pain is behind us. In fact, data from previous six month sell-offs have seen the next six months generate positive returns in the mid-teens. With inflation still running at 8-9%, and the Federal Reserve trying to pull back on the reigns rather aggressively, the environment is something many current investors have never experienced.

Given expectations for a slowdown in economic growth, we would expect downward earnings revisions for the remainder of 2022 and into 2023 over the next several quarters. We would note that the economy is at full employment and personal balance sheets are strong. Additionally, corporate balance sheets and margin profiles are generally strong, providing a solid foundation with which to navigate a downturn.

Regardless of the macroeconomic headwinds, 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 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 90%, a lower turnover strategy, and a portfolio of 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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  Coverdell ESA Application
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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 3 stars among 583 for the three-year, 4 stars among 534 for the five-year, and 3 stars among 399 Small Growth funds for the ten-year period ending 8/31/22.

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.