Quick Facts
InvestorInstitutional
Ticker:BUFBXBUIBX
Inception Date:8/12/19947/1/2019
Expense Ratio:1.01%0.86%
Total Net Assets:$428.57 Million  (9/30/21)
Morningstar Category:Large Cap Value
Benchmark Index:Morningstar Moderately Aggressive Target Risk
Dividend Distribution:Monthly
Related Material:
   Fund Fact Sheet Q3 2021
   PM Commentary Q3 2021
   Summary Prospectus
Fund Objective & Investment Process

The investment objective of the Buffalo Flexible Income Fund is primarily the generation of high current income and, as a secondary objective, the long-term growth of capital. To pursue its investment objectives, the Flexible Income Fund invests in both debt and equity securities.

The allocation of assets invested in each type of security is designed to balance income and long-term capital appreciation with reduced volatility of returns. The Flexible Income Fund expects to change its allocation mix over time based on the Fund managers’ view of economic conditions and underlying security values.

The Fund maintains a flexible investment policy which allows it to invest in debt securities with varying maturities. However, it is anticipated that the dollar-weighted average maturity of debt securities that the Fund purchases will not exceed 15 years.

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Our investment strategy seeks to generate yield for any investor needing monthly income with capital appreciation, and we use many methods to address potential downside risks.

John Kornitzer, Portfolio Manager

Morningstar Rating

       

Overall Morningstar Rating™ of BUFBX based on risk-adjusted returns among 174 Allocation 85%+ Equity funds as of 11/30/21.

Investment Style

Performance (%)

As of 11/30/213 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO FLEXIBLE INCOME FUND - Investor3.4022.8126.719.249.218.236.837.167.44
BUFFALO FLEXIBLE INCOME FUND - Institutional3.4522.9926.899.389.368.386.987.327.60
  Morningstar Moderately Aggressive Target Risk Index-2.469.9614.3013.2411.6010.217.358.09-
  Lipper Mixed-Asset Target Allocation Moderate Funds Index-1.229.4212.8511.639.578.496.116.287.30
  Morningstar Allocation 85%+ Equity Category-1.8114.2519.6415.1212.6611.467.127.307.91
As of 9/30/213 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO FLEXIBLE INCOME FUND - Investor-0.6316.9328.896.218.328.356.807.527.30
BUFFALO FLEXIBLE INCOME FUND - Institutional-0.5417.1429.156.378.488.526.967.687.46
  Morningstar Moderately Aggressive Target Risk Index-0.949.1723.8111.2311.3610.897.708.53-
  Lipper Mixed-Asset Target Allocation Moderate Funds Index-0.357.7718.129.829.168.966.296.477.28
  Morningstar Allocation 85%+ Equity Category-1.0512.2530.0011.6812.1812.377.457.697.87

 2011201220132014201520162017201820192020
BUFFALO FLEXIBLE INCOME FUND - Investor9.6310.3116.683.59-1.979.9013.21-7.0018.76-2.24
BUFFALO FLEXIBLE INCOME FUND - Institutional9.7910.4716.853.75-1.8310.0713.38-6.8618.87-2.10
  Morningstar Moderately Aggressive Target Risk Index-1.9314.3320.184.97-2.4010.2118.89-6.7422.9513.51
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.
Hypothetical Growth of $10,000
This chart illustrates the performance of a hypothetical $10,000 investment made in the Fund on the inception date of the benchmark index (1/1/99). Assumes reinvestment of dividends and capital gains. This chart does not imply future performance.
Distributions
2021 Distribution Dates:

— Record Date (12/17/21); Payment Date (12/20/21) – Ordinary Income, if any
Record
Date
Payable
Date
Distribution
NAV
Net Investment
Income
Short-Term Capital
Gains
Long-Term Capital
Gains
Distribution
Total
12/2/2112/3/21$17.51 (Inv)

$17.51 (Inst)
-

-
$0.05270

$0.05270
$0.63786

$0.63786
$0.69056

$0.69056
11/18/2111/19/21$18.59 (Inv)

$18.58 (Inst)
$0.03251913

$0.03502901
-

-
-

-
$0.03251913

$0.03502901
10/18/2110/19/21$18.08 (Inv)

$18.07 (Inst)
$0.00571524

$0.00798681
-

-
-

-
$0.00571524

$0.00798681
9/17/219/20/21$17.05 (Inv)

$17.04 (Inst)
$0.03791136

$0.04015465
-

-
-

-
$0.03791136

$0.04015465
8/17/218/18/21$17.28 (Inv)

$17.27 (Inst)
$0.03512588

$0.03721368
-

-
-

-
$0.03512588

$0.03721368
7/19/217/20/21$17.09 (Inv)

$17.08 (Inst)
$0.00589869

$0.00819299
-

-
-

-
$0.00589869

$0.00819299
6/17/216/18/21$16.99 (Inv)

$16.98 (Inst)
$0.03934585

$0.04149178
-

-
-

-
$0.03934585

$0.04149178
5/17/215/18/21$17.19 (Inv)

$17.18 (Inst)
$0.02426012

$0.02622444
-

-
-

-
$0.02426012

$0.02622444
4/19/214/20/21$16.65 (Inv)

$16.64 (Inst)
$0.00847721

$0.01071978
-

-
-

-
$0.00847721

$0.01071978
3/17/213/18/21$16.01 (Inv)

$16.00 (Inst)
$0.03984988

$0.04170871
-

-
-

-
$0.03984988

$0.04170871
2/17/212/18/21$15.82 (Inv)

$15.82 (Inst)
$0.03172344

$0.03362171
-

-
-

-
$0.03172344

$0.03362171
1/19/211/20/21$15.71 (Inv)

$15.70 (Inst)
$0.01013286

$0.01221186
-

-
-

-
$0.01013286

$0.01221186
For historical distributions, click here.

Portfolio

Portfolio Characteristics
(As of 9/30/21) 
 
# of Holdings49
Median Market Cap$68.31 B
Weighted Average Market Cap$314.92 B
3-Yr Annualized Turnover Ratio4.02%
30-day SEC Yield1.85%
Top 10 Holdings
HoldingTicker / MaturitySector% of Net
Assets
MicrosoftMSFTTechnology8.23%
Nuance Communications11/1/35, 1.500%Communications4.58%
ChevronCVXEnergy3.42%
Hess CorpHESEnergy3.24%
Costco WholesaleCOSTConsumer Staples3.12%
ConocoPhillipsCOPEnergy3.00%
QualcommQCOMTechnology2.89%
Digital Realty TrustDLRReal Estate2.89%
Eli Lilly & CoLLYHealth Care2.84%
AllstateALLFinancial Services2.79%
TOP 10 HOLDINGS TOTAL37.00%
As of 6/30/21. 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 9/30/21. 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.
Asset Allocation
As of 9/30/21. Allocation percentages may not equal 100% due to rounding.

Management

John Kornitzer
Portfolio Manager

53 Years of Experience

 View full bio

Paul Dlugosch, CFA
Portfolio Manager

24 Years of Experience

 View full bio

Commentary

CAPITAL MARKET OVERVIEW

(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.

PERFORMANCE COMMENTARY

(As of 9/30/21) — The Buffalo Flexible Income Fund (BUFBX) returned -0.63% for the 3rd quarter, compared to a return of -0.94% for the Morningstar Moderately Aggressive Target Risk Index.

Top Contributors

The top three contributors to the Fund’s performance during the quarter were Costco, ConocoPhillips, and Microsoft. Costco’s advance reflected good 2nd quarter earnings, which reflected market share gains as well as strong ancillary sales from areas like gas, food court, and optical department. ConocoPhillips share price appreciation reflects improved commodity prices, its acquisition of Shell’s Permian acreage, and higher cash returns to shareholders. Meanwhile, Microsoft reported strong 2nd quarter earnings results, with all segments reporting above the higher end of the prior guidance range.

Top Detractors

The top three detractors were Hess Corporation, Lions Gate Entertainment, and Qualcomm. While Hess reported good 2nd quarter earnings, the company’s stock declined in the period on concerns around a global growth slowdown due to the Delta variant of COVID-19 (and its potential negative impact on oil prices) and uncertainty around OPEC desire to increase production. Lions Gate Entertainment’s decline primarily reflects a slower start to the year for Starz, which reported larger subscriber losses versus expectations on its earnings call. Qualcomm’s decline in the quarter primarily reflects concerns about the company’s content on Apple’s iPhones.

OUTLOOK

(As of 9/30/21) — The stock market continued to advance in June and July reaching record highs, however September traded off and gave up most of the market’s early quarter gains. The rise in the first months of the quarter was due to expectations that the economy would continue to recover from the pandemic. At the time, new COVID-19 infections, hospitalizations, and deaths were declining. However, a late summer surge in cases coincided with severe weather events (hurricanes, flooding, fires, etc.), supply chain delays, key parts shortages, and inflation pressures, all of which led to reduced estimates for economic growth. Investors are also watching politics in Washington as Congress works on the budget, an infrastructure plan, and the debt ceiling. The Federal Reserve continued to indicate that it views elevated levels of inflation as transitory, and not likely to trigger interest rates increases in the near term. However, they did forecast a taper in their bond buying activity, with a modest monthly decline in purchases.

As always, we remain focused on wide moat, large capitalization dividend-paying companies trading at reasonable valuations, in our view. As stock market volatility spikes, we will look for opportunities to find companies that fit our investment criteria, as we continue to follow our process of finding new investment ideas and to be ready when market declines provide better entry points.

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.

Literature

General Account
Forms
Investor
Class
Institutional
Class
Both
  New Account Application
  New Account Application - Entity
  Change or Add Account Details
  Cost Basis Method Election
  Power of Attorney
Individual Retirement Account (IRA) Forms
  IRA Account Application
  IRA Beneficiary Addition / Change
  IRA Required Minimum Distribution (RMD)
  IRA / Qualified Plan Distribution Request
  IRA Transfer
Coverdell Education Savings Accounts (ESA) Forms
  Coverdell ESA Application
  Coverdell ESA Distribution Request
  Coverdell ESA Transfer
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 Flexible Income Fund (BUFBX) received 1 star among 174 for the 3-year, 1 star among 159 for the 5-year, and 1 star among 99 Allocation 85%+ Equity funds for the 10-year period ending 11/30/21.

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.

Bond ratings are grades given to bonds that indicates their credit quality as determined by a private independent rating service such as [Standard & Poor’s or Moody’s, etc.]. The firm evaluates a bond issuer’s financial strength, or its ability to pay a bond’s principal and interest in a timely fashion. Ratings are expressed as letters ranging from ‘AAA’, which is the highest grade, to ‘D’, which is the lowest grade. Not Rated category includes holdings that are not rated by any rating agencies.