Quick Facts
Investor Institutional
Daily Pricing:  
As of 2/7/2023  
NAV: $16.20 $16.31
$ Change: $0.12 $0.12
% Change:
0.75% 0.74%
15.38% 15.43%
Inception Date: 5/21/2004 7/1/2019
Expense Ratio: 1.46% 1.33%
Total Net Assets: $81.94 Million  (12/31/22)
Morningstar Category: Small Cap Growth
Benchmark Index: Russell 2000 Growth
Related Material:
   Fund Fact Sheet Q4 2022
   PM Commentary Q4 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 576 Small Growth funds as of 12/31/22.

Investment Style

Performance (%)

As of 1/31/233 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO EARLY STAGE GROWTH FUND - Investor6.2712.39-11.677.279.2611.2410.268.81
BUFFALO EARLY STAGE GROWTH FUND - Institutional6.3712.46-11.507.449.4311.4110.438.98
  Russell 2000 Growth Index4.569.95-6.504.264.689.548.648.54
  Morningstar U.S. Small Growth Index6.1910.67-13.811.643.958.908.288.15
  Morningstar Small Growth Category5.559.52-9.357.227.6910.559.158.28
As of 12/31/223 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO EARLY STAGE GROWTH FUND - Investor2.99-30.76-30.763.307.2510.528.828.17
BUFFALO EARLY STAGE GROWTH FUND - Institutional2.97-30.66-30.663.467.4110.698.988.33
  Russell 2000 Growth Index4.13-26.36-26.360.653.519.207.268.03
  Morningstar U.S. Small Growth Index1.75-33.31-33.31-1.782.668.426.767.60
  Morningstar Small Growth Category4.18-27.77-27.774.056.6010.207.817.79

BUFFALO EARLY STAGE GROWTH FUND - Investor61.70-7.38-9.4111.0527.18-3.9534.0347.697.79-30.76
BUFFALO EARLY STAGE GROWTH FUND - Institutional61.94-7.24-9.2811.2227.37-3.8134.2047.967.94-30.66
  Russell 2000 Growth Index43.305.60-1.3811.3222.17-9.3128.4834.632.83-26.36
  Morningstar U.S. Small Growth Index41.862.46-0.189.6123.77-5.6727.6043.52-1.00-33.31
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 12/31/22)
Upside Capture107.73
Downside Capture98.39
Sharpe Ratio0.10
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 12/31/22) 
# of Holdings65
Median Market Cap$1.05 B
Weighted Average Market Cap$1.90 B
3-Yr Annualized Turnover Ratio31.89%
% of Holdings with Free Cash Flow64.62%
Active Share95.04%
Top 10 Holdings
HoldingTickerSector% of Net
Kinsale Capital GroupKNSLFinancial Services3.38%
NV5 GlobalNVEEIndustrials3.30%
ICF IntlICFIIndustrials2.77%
Federal Signal CorpFSSIndustrials2.71%
Absolute Software CorpABSTTechnology2.65%
Paya HoldingsPAYATechnology2.56%
Compass DiversifiedCODIIndustrials2.47%
i3 VerticalsIIIVTechnology2.45%
As of 9/30/22. 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 12/31/22. 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 12/31/22. Market Cap percentages may not equal 100% due to rounding.


Craig Richard, CFA
Portfolio Manager

21 Years of Experience

 View full bio

Doug Cartwright, CFA
Portfolio Manager

17 Years of Experience

 View full bio



(As of 12/31/22) — Capital markets rallied modestly in the 4th quarter as the S&P 500 Index gained 7.56%, the only positive quarter for 2022. Cooler inflation readings, resilient consumer spending, and better-than-expected corporate earnings buoyed markets during the first two months of the 4th quarter before pulling back in December. Much of the focus remains on the path of future interest rates, recession fears, and the economic and market impact those events may generate in 2023.

Despite the 4th quarter advance, the stock market recorded its worst calendar year since 2008, with a decline of -18.11% for the S&P 500 Index, and a loss of -32.54% for the growth-oriented and technology-heavy Nasdaq Composite Index. Large cap technology stocks and the more interest-rate sensitive assets suffered the most, while value stocks outperformed. In the end, nine of the S&P 500 Index’s 11 economic sectors declined. Energy stocks were the bright spot, recording a gain of 65.72% for the sector while Utilities eked out a gain of 1.57% in 2022.

The damage wasn’t isolated to the stock market as the investment-grade bond indices suffered double-digit losses for the year as well. In fact, a traditional balanced investment portfolio of 60% stocks and 40% bonds suffered the 4th worst drawdown in the past 100 years.

Recapping quarterly results, the broad-based Russell 3000 Index advanced 7.18% in the period. Value stocks significantly outperformed growth stocks to close out 2022, as the Russell 3000 Value Index returned 12.18% versus a return of just 2.31% for the Russell 3000 Growth Index. Relative performance was mixed going down in market cap size as small caps advanced less than large caps in the quarter, while mid cap stocks outperformed both large and small caps. Larger cap stocks returned 7.24%, as measured by the Russell 1000 Index, compared to the smaller cap Russell 2000 Index return of 6.23%, while the Russell Midcap Index produced a return of 9.18% in the quarter.


(As of 12/31/22) —The Buffalo Early Stage Growth Fund (BUFOX) generated a positive return of 2.99% for the quarter compared to the Russell 2000 Growth Index return of positive 4.13%.

Small cap growth stocks ended calendar 2022 with a modest rally in the 4th quarter which was probably subdued due to tax loss selling in the month of December. For the full year, the index suffered its 3rd worst year in the past 40 years, declining -26.36%. The Fund generated a return of -30.76% for the year, marking the first calendar year since 2016 that the Buffalo Early Stage Growth Fund failed to outperform the index.

In 2022, the Fund was pressured by the general trend of smaller companies underperforming their larger counterparts in the index (as measured by market capitalization). The Fund is positioned on the smaller end of the small cap spectrum with a portfolio weighted average market cap approximately 35-40% below the index. Additionally, the Fund has not been involved in Energy companies given the underlying commodity exposure and, more generally, the sector not aligning with the spirit of the Fund’s philosophy of investing in non-cyclical, innovative growth stories. Within the Russell 2000 Growth Index, Energy advanced more than 30% on the year, causing a large headwind to the relative performance of the Fund. Additionally, the portfolio had some large performance drags from a few individual investments in a difficult year overall.

Top Contributors

Examining Fund performance for the quarter, Paya Holdings represented the largest contributor to results. Paya is an integrated payments company, combining software and payment processing capabilities in a bundled solution. They have focused on building their business to serve less cyclical end markets including healthcare, government agencies, education, and non-profits with close to 90% of their processing volumes being card-not-present. Paya generated low teens growth and communicated continued strength going forward on their 3rd quarter conference call. This was in contrast to other payments related companies seeing signs of macro slowdowns causing some pressure on their growth rates. Confidence in Paya’s ability to continue to deliver consistent growth, along with some renewed speculation of a previously rumored takeout, led to strong performance in the quarter. In the first week of 2023, Paya was indeed acquired by a strategic buyer, lending credence to rumors that began earlier in 2022.

Top Detractors

On the other hand, Advanced Drainage Systems (WMS) was a significant detractor from performance results in the quarter. Advanced Drainage has been an innovator in the water management solutions industry, addressing stormwater and on-site septic water needs for both residential and non-residential customers. The company has been a serial share gainer, using a high density, specialized material made from recycled plastic for their portfolio of drainage solutions to allow developers/builders to offer a more cost effective and durable solution. The weakness in residential construction markets and choppiness in non-residential end markets resulted in the company lowering revenue guidance. While the end markets may remain challenged for the time being, WMS is 5x the size of its closest domestic competitor, and we believe the company’s plastic pipe will continue to take market share from concrete and steel pipe in the storm and wastewater industry.


(As of 12/31/22) — The Russell 2000 Growth Index has now seen a 38% drawdown from November 2021 levels. Declines of this magnitude historically would suggest that much of the pain is behind us. Many of our Consumer Discretionary holdings are now trading below 6 times annual EBITDA (a cash flow-like metric), multiples which would have been virtually unheard of in years past. Similarly, many recurring revenue software companies have seen their valuations compress by 60-70% or more. However, many of these companies have not yet cut their earnings expectations, a change that we believe is coming as companies look toward 2023 and the macro environment they face. We believe some of the decline in valuation multiples we see already anticipates these coming revisions.

With that said, the economy is at full employment, personal balance sheets remain strong, and corporate balance sheets and margins are at very healthy levels. This should provide a solid foundation in an economic downturn.

Regardless of the macroeconomic headwinds we face, 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% and a lower turnover strategy with 50-70 holdings, we believe 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 3 stars among 576 for the three-year, 3 stars among 530 for the five-year, and 3 stars among 399 Small Growth funds for the ten-year period ending 12/31/22.

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.